SUPREME COURT DETERMINES NO SPECIAL RELATIONSHIP BETWEEN AN INSURED AND INSURER EXISTS TO CREATE A DUTY FOR THE INSURER TO ENSURE AN INSURED’S SAFETY.
Supreme Court of Texas: On a rainy night, Lorraine Kenyon lost control of her vehicle on the slick roads, and collided with a guardrail. While the accident rendered the vehicle inoperable, Kenyon was “scared . . . but . . . uninjured.” She “first called her husband, Theodore, and then her insurer Elephant Insurance Company, to report the accident.” The phone call to Elephant was recorded and transcribed. The “recording captured part of a brief exchange between Kenyon and an unknown person” and a conversation “between Kenyon and a firefighter, who stopped to inquire about her condition.” Kenyon then “raised the subject of photographs” asking if Elephant wanted her to “take pictures.” The representative answered in the affirmative and reminded Kenyon that they “always recommend that you get police involved but it’s up to you whether you call them or not.” Kenyon then told the representative that she had called Theodore first, “who was at their home, a short distance from the accident site.” The representative then “recapped” stating “you said you’re going to take pictures. And the vehicle is not drivable.” The representative noted they did “have roadside assistance towing on the policy” so she could “transfer [Kenyon] over to them” and they could help her “with getting the vehicle towed.” Unknown to the representative, sometime during the phone call with Kenyon, Theodore had arrived and began taking pictures of the accident scene. While taking the pictures, “another driver lost control on the wet road; struck Theodore . . . and collided with Kenyon’s vehicle.” Kenyon requested the representative call 911 and ended the call. Unfortunately Theodore died on the way to the hospital and Kenyon was also injured, though not fatally. Kenyon filed a wrongful death suit against Elephant and the other driver. Kenyon asserted that “Elephant failed to train its first-notice-of-loss representatives to instruct insureds at the scene of an auto accident in a safe and competent manner.” She further claimed that based upon the “special relationship” held “between an insurer and insured, Elephant had a general duty to act as a reasonable prudent insurance company and breached that duty when it instructed the insureds to take photographs from the scene.” During discovery, the representative “testified she was trained to obtain information about the accident . . . as well as to encourage the insured to take photographs of the accident scene.” She admitted she “was not trained to inquire about the insured’s safety or to ask whether the insured was in a safe location.” However, “Kenyon testified that she did not expect Elephant’s employee to provide safety guidance” and “that she believed she and Theodore were safe.” Kenyon further provided “they would have taken appropriate precautions” had they not felt safe. Elephant filed a motion for summary judgment, arguing that (1) Kenyon’s claimed “special relationship” between an insurer and insured did not give rise to duties outside the claim-processing context, (2) that “an insurer bears no duty to ensure an insured’s safety,” (3) that “Elephant owed no duty to ensure Theodore’s safety,” and (4) that “Kenyon could produce no evidence that Elephant breached any duty or standard of care imposed by Texas law.” The trial court rendered judgment in Elephant’s favor, concluding that the insurer owed no duty to the Kenyons with respect to Kenyon’s negligence and gross-negligence claims. Kenyon appealed and “in a split decision, the [appellate] panel affirmed the trial court’s summary judgment.” A rehearing was then held where the “court withdrew the panel opinion and reversed the trial court’s order as to all of Kenyon’s” negligence claims. Elephant then petitioned for review. The Supreme Court found that while the “risk of harm was foreseeable to someone in Elephant’s position, it was equally foreseeable – if not more so – to someone in Kenyon’s or Theodore’s position.” Therefore Elephant had no duty to warn Kenyon or Theodore “about [the] open and obvious condition.” The court further found “neither Elephant nor its [representative] engaged in an affirmative course of action necessary for the protection of the Kenyon’s person or property” precluding Kenyon’s claim for negligent undertaking. The Supreme Court concluded “the trial court properly granted summary judgment” on all of Keyon’s negligence claims and reversed the court of appeals’ judgment.
Elephant Ins. Co., LLC, v. Kenyon, 2022 Tex. LEXIS 344, 644 S.W.3d 137, 65 Tex. Sup. J. 810, 2022 WL 1202307.