Progressive County Mutual Insurance Company v. Artemiz Freeman

Reversed and Rendered and Majority and Dissenting Opinions filed May 14,
2024.

In The

Fourteenth Court of Appeals

NO. 14-22-00450-CV

PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Appellant
V.

ARTEMIZ FREEMAN, Appellee

On Appeal from the 113th District Court
Harris County, Texas
Trial Court Cause No. 2019-25906

MAJORITY OPINION
Appellee Artemiz Freeman sought to collect uninsured/underinsured
motorist benefits under her policy with appellant Progressive County Mutual
Insurance Co. (“Progressive”). Progressive denied coverage under the policy’s
regular-use exclusion and Freeman filed suit. Resolving the parties’ cross-motions
for summary judgment, the trial court concluded that the regular-use exclusion
violated public policy and Progressive appealed the trial court’s determination.
For the reasons below, we reverse the trial court’s summary judgment and render
judgment for Progressive.

BACKGROUND

Freeman is employed as a police officer with the City of Houston. On
February 13, 2018, Freeman was in her police vehicle when she was rear-ended by
another car. The driver of that car had an insurance policy that provided $50,000
in liability coverage to Freeman.

However, Freeman’s expenses from the accident exceeded $50,000.
Freeman filed for uninsured/underinsured motorist (“UM/UIM”) and personal
injury protection benefits under her personal automobile insurance policy issued by
Progressive. The policy provides UM/UIM motorist benefits and states that
Progressive “will pay for damages that an insured person is legally entitled to
recover from the owner or operator of an uninsured[1] motor vehicle because of
bodily injury” that is sustained by an insured person in an accident arising out of
the use of an uninsured motor vehicle. The policy also includes a regular-use
exclusion applicable to this coverage which states, in relevant part, as follows:

EXCLUSIONS — READ THE FOLLOWING EXCLUSIONS
CAREFULLY. IF AN EXCLUSION APPLIES, COVERAGE
WILL NOT BE AFFORDED UNDER THIS PART III.
Coverage under this Part III [regarding UI/UIM benefits] will not
apply:
1. to bodily injury sustained by any person using or occupying:
* * *
d. a motor vehicle that is owned by or available for the
regular use of you or a relative.

1
The policy’s definition of an “uninsured” motor vehicles includes an “underinsured”
motor vehicle.

2
(emphasis added).

Citing this exclusion, Progressive denied Freeman’s claim for UM/UIM
benefits on the grounds that her policy excluded bodily injury sustained while a
person was using or occupying a motor vehicle “owned by or available for the
regular use” of the insured. According to Progressive, Freeman’s police vehicle
fell within the exclusion’s definition of a vehicle “available for [her] regular use.”

Progressive paid Freeman personal injury protection benefits pursuant to her
policy. Freeman also received workers’ compensation benefits from the City of
Houston.

Freeman sued Progressive in June 2019, asserting claims for breach of
contract, breach of the duty of good faith and fair dealing, and violations of the
Texas Insurance Code. Freeman also requested a declaratory judgment stating that
she is entitled to an award of UM/UIM benefits.

The parties filed competing motions for traditional summary judgment
addressing a single issue: whether the police vehicle Freeman was in at the time of
the accident fell within her policy’s regular-use exclusion for UM/UIM benefits.
The trial court held a hearing on the motions and signed an order granting
summary judgment for Freeman, concluding that the policy’s regular-use exclusion
violated public policy.

Progressive filed a motion to sever and abate, requesting the trial court sever
and abate discovery on Freeman’s breach of contract and extra-contractual claims
until there was a determination as to the amount of UM/UIM benefits, if any, owed
to Freeman. The trial court signed an order granting the severance and abatement.

The parties then entered a Rule 11 agreement that disposed of certain claims
and reached an agreement as to a judgment preserving the right to appeal the

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summary judgment regular-use exclusion ruling. An agreed final judgment
consistent with the parties’ Rule 11 agreement was signed, which (1) provided for
conditional attorney’s fees, (2) dismissed the severed claims, and (3) preserved
Progressive’s rights to appeal the summary judgment ruling. The trial court
subsequently entered a housekeeping order denying Progressive’s summary
judgment motion and signed an amended final judgment on July 13, 2022.
Progressive timely filed its notice of appeal.

ANALYSIS

The trial court’s amended final judgment states, in relevant part, as follows:

The Court determined that although the patrol vehicle was available
for Ms. Freeman’s regular use, that the “regular use” exclusion as
applied in this case violates public policy since it operates to deprive
an insured of the protection required by the Texas Uninsured
Motorists Statute. As a result, the Court granted Artemiz Freeman’s
motion for summary judgment and motion for declaratory relief and
denied Progressive’s motion for summary judgment.

Progressive challenges this holding on appeal and requests that we (1) reverse the
summary judgment for Freeman, and (2) render summary judgment for
Progressive. Responding to these arguments, Freeman asserts that the trial court
properly concluded that the regular-use exclusion violates public policy because it
deprived Freeman of the protections and guarantees mandated by the Texas
Insurance Code.

I. Standard of Review

A party moving for traditional summary judgment must establish that there
is no genuine issue of material fact and that it is entitled to judgment as a matter of
law. Tex. R. Civ. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128
S.W.3d 211, 215-16 (Tex. 2003). If the movant establishes its right to summary

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judgment, the burden shifts to the nonmovant to present evidence raising a material
issue of fact. See M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22,
23 (Tex. 2000) (per curiam).

We review a summary judgment de novo. Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In reviewing the trial court’s rulings
on cross-motions for summary judgment, we must consider all summary judgment
evidence, determine all issues presented, and render the judgment that the trial
court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d
868, 872 (Tex. 2000). We may consider the evidence presented by both parties in
determining whether to grant either motion. Expro Ams., LLC v. Sanguine Gas
Expl., LLC, 351 S.W.3d 915, 919 (Tex. App.—Houston [14th Dist.] 2011, pet.
denied).

As set out above, the trial court’s amended final judgment included the
grounds on which the trial court granted Freeman’s summary judgment motion and
denied Progressive’s motion. When a trial court grants summary judgment on
specific grounds, we generally limit our consideration on appeal to the grounds
upon which summary judgment was granted. See State Farm Fire & Cas. Co. v.
S.S., 858 S.W.2d 374, 380 (Tex. 1993); St. Anthony’s Minor Emergency Ctr.,
L.L.C. v. Ross Nicholson 2000 Separate Prop. Tr., 567 S.W.3d 792, 796-97 (Tex.
App.—Houston [14th Dist.] 2018, pet. denied).

II. Governing Law

To protect motorists from financial loss when they are involved in car
accidents with uninsured or underinsured motorists, Texas law requires automobile
insurers to include UM/UIM coverage in their policies unless the insureds reject
that coverage in writing. See Tex. Ins. Code Ann. § 1952.101(b). The underlying
policy behind this statute is the state’s interest in protecting conscientious and
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thoughtful motorists from financial loss. See Stracener v. United Servs. Auto.
Ass’n, 777 S.W.2d 378, 382 (Tex. 1989); Ortiz v. State Farm Mut. Auto. Ins. Co.,
955 S.W.2d 353, 356 (Tex. App.—San Antonio 1997, pet. denied). Accordingly,
UM/UIM coverage “is to be construed liberally to give full effect to the public
policy which led to its enactment.” Stracener, 777 S.W.2d at 382. However,
UM/UIM coverage “need not afford protection in every situation” involving
uninsured or underinsured motorists. Bergensen v. Hartford Ins. Co. of the
Midwest, 845 S.W.2d 374, 377 (Tex. App.—Houston [1st Dist.] 1992, writ ref’d).

Here, the trial court concluded that, although the patrol vehicle involved in
the accident was available for Freeman’s regular use, the “regular use” exclusion
as applied in this case violates public policy. Whether an insurance policy violates
public policy is a question of law we review de novo. Jankowiak v. Allstate Prop.
& Cas. Ins. Co., 201 S.W.3d 200, 209-10 (Tex. App.—Houston [14th Dist.] 2006,
no pet.). “Public policy can be a vague and uncertain term, and it is up to the
power of the lawmaking body to define.” Id. “[C]ourts are apt to encroach upon
the domain of that branch of the government if they characterize a transaction as
invalid because it is contrary to public policy, unless the transaction contravenes
some positive statute or some well-established law.” Tex. Com. Bank, N.A. v.
Grizzle, 96 S.W.3d 240, 250 (Tex. 2002).

III. Application

The burden of proving that public policy warrants non-enforcement of the
contract provision at issue falls on Freeman because she is the signatory who
opposes the contract. See Phila. Indem. Ins. Co. v. White, 490 S.W.3d 468, 475
(Tex. 2016); In re Poly-Am., L.P., 262 S.W.3d 337, 348 (Tex. 2008) (orig.
proceeding). However, Freeman failed to show how much she received in
workers’ compensation benefits and to show that she has suffered financial loss.

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Compare Tex. R. App. P. 38.2(a)(1) with id. 38.1(i). Thus, based on this record,
we cannot conclude that Freeman has met her burden, that she has suffered any
financial loss, or that Progressive’s policy violates the state’s interest in protecting
conscientious and thoughtful motorists from financial loss. See Stracener, 777
S.W.2d at 382. Therefore, the trial court erred when it held that the regular use
exclusion as applied in this case violates public policy.

CONCLUSION

We reverse the trial court’s July 13, 2022 amended final judgment and
render judgment that Freeman takes nothing on her claims for UM/UIM benefits
and attorney’s fees.

/s/ Meagan Hassan
Justice

Panel consists of Justices Bourliot, Hassan, and Poissant (Poissant, J., dissenting).

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