Harry Jankowiak and Pam Jankowiak Individually and as Next Friend of Laci Jankowiak v. Allstate Property and Casualty Insurance Company

Reversed and Remanded and Opinion filed August 8, 2006

Reversed and

Remanded and Opinion filed

August 8, 2006.

In The

Fourteenth Court of

Appeals

____________

NO. 14-05-00072-CV

____________

HARRY JANKOWIAK and PAM JANKOWIAK,

Individually and as next Friend of LACY JANKOWIAK , Appellants

V.

ALLSTATE PROPERTY & CASUALTY

INSURANCE COMPANY , Appellee

On Appeal from the 127 th

District Court

Harris County, Texas

Trial Court Cause No. 02-59935-A

O P I N I O N

This is an appeal from a summary judgment denying a claim

for uninsured motorist coverage. Harry and Pam Jankowiak, individually and as

next friends of their minor daughter, Laci Jankowiak, (the A Jankowiaks @ ) filed suit

against Allstate Property & Casualty Insurance Company ( A Allstate @ ) and others for bodily

injuries Laci suffered in a car accident. The trial court granted Allstate = s motion for

summary judgment and the Jankowiaks appeal, arguing (1) the trial court

improperly construed the insurance policy and, (2) if the trial court properly

construed this contract, it violates public policy. We reverse and remand.

Factual and Procedural Background

On June 9, 2002, Laci Jankowiak was a passenger in a car

being driven by Daniel Dellasala, Jr. when they were involved in a car accident

with Alejandra Salas, an uninsured motorist. The Jankowiaks sued Salas, Daniel

Dellasala, Sr. as next friend of Daniel Dellasala, Jr., Allstate (the Dellasala

insurer), and their own insurer. The Jankowiaks alleged both drivers were at

fault and that Laci suffered injuries greatly exceeding the full amount of the

Dellasala insurance policy = s liability and uninsured/underinsured

motorist ( A UM @ ) limits. [1]

The Jankowiaks settled with their own insurer for their

policy = s $20,000 maximum

UM coverage. The Jankowiaks also settled with Allstate for the Dellasala

policy = s $25,000 limit

for liability coverage. Despite these recoveries, the Jankowiaks allege these

payments fall short of Laci = s actual damages. Thus, the Jankowiaks

sought an additional $25,000 from Allstate under the policy = s limit of

liability for UM coverage.

Allstate moved for summary judgment, arguing the policy

allowed only one recovery for each person injured in one accident. The trial

court severed the Jankowiaks = claim for UM benefits and granted

Allstate = s motion for

summary judgment. On appeal, the Jankowiaks contend the trial court improperly

construed the policy and, if the trial court = s construction was

proper, the contract violates public policy. [2]

Standard of Review

To prevail on a traditional motion for summary judgment, a

defendant must establish the absence of a genuine issue of material fact, so

that judgment should be granted as a matter of law. Tex. R. Civ. P. 166a(c). We review the granting of a motion

for summary judgment de novo, taking as true all evidence favorable to the

nonmovant and making all reasonable inferences and resolving any doubts in the

nonmovant = s favor. Valence Operating Co. v. Dorsett , 164

S.W.3d 656, 661 (Tex. 2005). A defendant, as the movant, is entitled to

summary judgment if at least one element of the plaintiff = s theory of

recovery is disproved, or if the defendant pleads and conclusively establishes

each essential element of an affirmative defense, thereby rebutting the

plaintiff = s cause of action. Am. Tobacco Co., Inc. v.

Grinnell , 951 S.W.2d 420, 425 (Tex. 1997).

Legislative History OF Uninsured/Underinsured

Motorist Insurance

In 1967, the legislature mandated that no automobile

liability insurance policy could be issued in Texas without uninsured motorist

protection unless the insured expressly rejected such coverage. Act of May 3,

1967, 60th Leg., R.S., ch. 202, ' 1, 1967 Tex. Gen.

Laws 448 (amended 2005) (current version at Tex.

Ins. Code Ann. Art. 5.06-1 (Vernon Supp. 2005)). The stated intent of

the legislation was A to provide a means of protecting the

conscientious and thoughtful motorist against [a loss caused by negligent,

financially irresponsible motorists]. @ Id .

The statute originally provided coverage only for bodily

injury sustained by an uninsured motorist. However, in 1977, the legislature

amended the statute to provide four distinct coverages: (1) uninsured

motorist bodily injury coverage; (2) uninsured motorist property

coverage; (3) underinsured motorist bodily injury coverage; and

(4) underinsured motorist property coverage. Act of May 6, 1977,

65th Leg., R.S., ch. 182, ' 1, 1977 Tex Gen. Laws 370 (amended 2005)

(current version at Tex. Ins. Code Ann.

art. 5.06-1). [3]

The amount of these coverages could not, then or now, be less than that

prescribed by the Texas Motor Vehicle Safety-Responsibility Act. Act of May 3,

1967, 60th Leg., R.S., ch. 202, ' 1, 1967 Tex. Gen

Laws 448 (amended 2005) (current version at Tex.

Ins. Code Ann. art. 5.06-1). However, the insured had the prerogative

to purchase additional UM coverage as long as such coverage did not exceed the A limits of

liability specified @ in the bodily injury or property damage A liability

provisions of the insured = s policy. @ Act of May 6,

1977, 65th Leg., R.S., ch. 182, ' 1, 1977 Tex. Gen.

Laws 370 .

Regarding the question of whether an insured could recover

under more than one coverage in a single policy, the statute expressly provided

for an insured, who purchased collision and UM property damage coverages, to

recover under either, but not both. Id . [4]

By its silence, the statute seemed to infer that all other combinations of

coverages were permissible. See Mid-Century Ins. Co. v. Kidd , 997

S.W.2d 265, 274 (Tex. 1999) (stating lack of statutory regulation of personal

injury protection (PIP) double recoveries suggests such issues should be

resolved by contract between the parties). Two years later, the prohibition

against combining collision and UM property damage coverages was amended to

provide that if A neither coverage is sufficient alone to

cover all damage resulting from a single occurrence, the insured may recover

under both coverages. @ Act of May 24, 1979, 66th Leg., R.S.,

ch. 626, ' 1, 1979 Tex. Gen. Laws 1418 (amended 2005) (current

version at Tex. Ins. Code Ann.

art. 5.06-1). Throughout the various permutations of the statute, the

legislature has neither intimated nor suggested that bodily injury liability

and UM bodily injury coverages cannot both be recovered where neither is

sufficient alone to cover the insured = s actual damages.

The legislature = s silence suggests this issue should be

determined by the contract. Kidd , 997 S.W.2d at 274 .

Contract Construction

In their first issue, the Jankowiaks claim the trial court

erred when it interpreted the Dellasala insurance policy to mean $25,000 is

Allstate = s maximum limit of

liability for Laci = s injuries under both the UM and liability

coverages. We interpret insurance policies according to the rules of

contractual construction. Am. Mfrs. Mut. Ins. Co. v. Schaefer , 124

S.W.3d 154, 157 (Tex. 2003). [5]

Policy provisions that are inconsistent with express statutory requirements or

purposes are invalid. Kidd , 997 S.W.2d at 271 B 72. [6]

Allstate rests its

position on the following language in the bodily injury liability section of

the policy:

The limit of

liability shown in the Declarations for A each person @ for bodily injury

liability is our maximum limit of liability for all damages for bodily injury

sustained by any one person in any one motor vehicle accident. . . . This is

the most we will pay regardless of the number of . . . [c]laims made . . . [or]

[v]ehicles involved in the accident.

This

language also appears in the policy = s UM coverage.

The declarations page lists the limits of liability for both UM and liability

coverages at $25,000 per person. Thus, Allstate contends that $25,000 is an

absolute policy limit. In other words, Allstate argues it satisfied both its

liability and UM bodily injury obligations under the policy by tendering a

single payment of $25,000 to the Jankowiaks.

When construing an insurance policy, we are obliged to read

the contract as a whole and, thus, give effect to the written expression of the

parties = true intent. State

Farm Life Ins. Co. v. Beaston , 907 S.W.2d 430, 433 (Tex. 1995). A Indeed, courts

must be particularly wary of isolating from its surroundings or considering

apart from other provisions a single phrase, sentence, or section of a

contract. @ Id . (citing Forbau v. Aetna Life Ins. Co. ,

876 S.W.2d 132 , 133 B 34 (Tex. 1994)). Here, the declarations

page lists separate policy limits for (1) liability coverage, (2)

uninsured/underinsured motorist coverage, (3) collision coverage, (4) other

than collision coverage, (5) towing and labor costs coverage, and (6) rental

reimbursement coverage. Each coverage specifies its own policy limit. For

example, the policy limit for A towing and labor costs coverage @ is $40.00, but it

would be absurd to suggest that a payment of $40.00 for towing would relieve

Allstate of its responsibility to pay damages under other coverages listed in

the policy. [7]

Moreover, the A maximum limit of

liability @ language upon which Allstate relies so heavily is

found not only in the liability coverage section of the policy C it is repeated

under numerous coverages. For example, just like the bodily injury liability

coverage section of the policy, the medical payments and personal injury

protection (PIP) coverages state:

The limit of liability shown in the

Declarations for this coverage is our maximum limit of liability for each

person injured in any one accident. This is the most we will pay regardless of

the number of . . . [c]laims made . . . [or] [v]ehicles involved in the

accident.

We must construe this policy as a whole. Beaston ,

907 S.W.2d at 433 . Because this A maximum limit of

liability @ language is repeated for each coverage, we interpret

it not as a maximum, policy-wide, or absolute global limit, but rather as a

maximum limit of recovery for each specific coverage. That is, this language

limits one person = s receipt of coverage benefits for bodily

injury to $25,000 and, in a separate section of the policy, it operates again

to limit one person = s recovery of UM benefits to $25,000 for

bodily injuries sustained in one accident.

For example, a policy limit for PIP of $2,500 would be the A maximum limit of

liability @ owed by the insurer for that coverage. But no one

could reasonably contend that a payment of $2,500 for PIP damages would relieve

the insurer of its responsibility to reimburse the insured for liability and UM

coverages up to their respective policy limits.

Nevertheless,

Allstate attempts to bolster its position by relying upon an offset provision

in the general liability coverage portion of the policy that states:

Any payment under

the Uninsured/Underinsured Motorists Coverage or the Personal Injury Protection

Coverage of this policy to or for a covered person will reduce any amount that

person is entitled to recover under this coverage.

Because

a recovery under UM coverage A will reduce any amount @ the insured is

entitled to recover under liability coverage, Allstate contends the intent of

the parties was to limit recovery under the policy to an absolute maximum of

$25,000.

We first observe that there are no express reciprocal

offset provisions in the policy. In other words, while payment under the UM

coverage will reduce any amount the insured is entitled to recover under the

liability coverage, payment under the liability coverage does not expressly

reduce the amount the insured is entitled to recover under the UM coverage. It

would seem a strange contract indeed that provides liability coverage may be

reduced by payments of UM damages, but UM coverage is not reduced by payments

of liability damages. Thus, if we were to adopt Allstate = s interpretation

of the offset provision, the issue of whether an insured could recover a

maximum of $25,000 or $50,000 would depend on the order of the payment of his

or her claims. If a $25,000 UM claim were paid first, it would offset any

potential responsibility to pay a liability claim. However, if a $25,000

liability claim were paid first (as is the case here), the insurer would still

be responsible for UM claims up to an additional $25,000. While we find

Allstate = s interpretation of

the offset provision to be unreasonable, we note that Allstate tendered $25,000

to satisfy the bodily injury liability claim. Thus, even under Allstate = s interpretation

of the contract, the offset provision does not absolve it of the Jankowiaks = UM claim. [8]

Further, we find a more reasonable construction of the

offset provision to simply prevent an insured from recovering in excess of his

or her actual damages. See Allstate Ins. Co. v. Bonner , 51 S.W.3d 289,

292 (Tex. 2001) (stating insurer would have been liable for UM claim after

paying damages under PIP coverage if insured = s actual damages

had exceeded amount already paid in PIP benefits). In other words, UM payments

for bodily injury and/or PIP payments will reduce the amount the insured is

entitled to recover under the policy = s bodily injury

liability coverage in the sense that an insured cannot obtain a windfall A double recovery. @ For example, if

the insured = s actual damages were $35,000, and the insurer paid

$5,000 in PIP coverage and $25,000 in UM bodily injury coverage, the most the

insured could recover under his or her bodily injury liability coverage would

be $5,000.

35,000.00 (actual

damages)

30,000.00 (5,000

PIP payment + 25,000 UM payment)

5,000.00 (remaining liability under bodily injury

liability coverage)

Thus, as the

policy states,

Any payment under

the Uninsured/Underinsured Motorists Coverage or the Personal Injury Protection

Coverage of this policy to or for a covered person will reduce any amount that

person is entitled to recover under this coverage.

This

construction of the offset provision would be consistent with the plain

language of the UM limit of liability provision limiting recovery of UM damages

to the lesser of: (1) A The difference between the amount of a

covered person = s damages for bodily injury . . . and the amount paid

or payable to that covered person for such damages, by or on behalf of persons

or organizations who may be legally responsible; and @ (2) A [t]he applicable

limit of liability for this coverage . @ (Emphasis

added).

Finally, Allstate cites the First Court of Appeals opinion Hanson

v. Republic Insurance Company to support its argument. 5 S.W.3d 324 (Tex.

App. C Houston [1st

Dist.] 1999, pet. denied). [9]

However, the opinion of our sister court is not controlling authority here; it

is useful only as persuasive authority. Eubanks v. Mullin , 909 S.W.2d

574 , 576 n.1 (Tex. App. C Fort Worth 1995, no writ). Moreover, we

find Hanson unpersuasive. Thus, we are not obliged to follow its

rationale.

In that case, Jon Hanson caused a car accident that left

his son, Danny, permanently disabled. Hanson , 5 S.W.3d at 326 . Danny

obtained a judgment against his father exceeding $7.7 million. Id. at

327 . The Hansons = insurance policy included liability and

UM coverages, [10]

each limited to $100,000. Republic Insurance Company deposited $100,000 into

the court = s registry as the full amount of its UM coverage

limits. Id. at 326 . The Hanson court found the $100,000

Republic tendered for payment of underinsured motorist claims precluded any

further recovery under the policy = s liability

coverage because its payment of liability coverage offset what could be recovered

under UM coverage, and vice versa. Id . at 330. The court relied on the

plain wording of the policy. Essentially, the court interpreted this policy as

providing a single, global policy maximum coverage of $100,000 for all damages

resulting from one accident. Id. at 332 B 33 (rejecting the

Hansons = argument that

paying separate premiums for each coverage should entitle them to complete

coverage under both sections by stating, A This argument

conflicts with the repeated provisions in the policy . . . which unequivocally

state that $100,000 is Republic = s maximum amount of liability for all

damages for any one auto accident. @ ). The Hanson court

explained this statement of maximum available coverage A is mandated and

thus expressly approved @ by Texas Insurance Code article

5.06-1(2)(d). [11]

Id. at 332 . However, the offset provisions cited by the court do not

offset liability coverage against UM coverage, or vice versa.

The liability

coverage offset provision relied upon by the Hanson court states:

PART A C LIABILITY

COVERAGE

INSURING AGREEMENT

We will pay damages for bodily injury . . . for which any covered

person becomes legally responsible because of an auto accident. . . . Our duty

to settle or defend ends when our limit of liability has been exhausted.

LIMIT OF LIABILITY

If the limit of liability shown in the Declarations for this coverage

is for combined bodily injury and property damage liability, it is our maximum

limit of liability for all damages resulting from any one auto accident.

This is the most we will pay regardless of the number of:

1. Covered persons;

2. Claims made;

3. Vehicles or premiums shown in the Declarations; or

4. Vehicles involved in the auto accident.

We will apply the limit of liability to provide any separate limits

required by law for bodily injury. . . . However, this provision will not

change the total limit of liability.

Any payment under

this coverage to or for a covered person will reduce any amount that person is

entitled to recover for the same damages under the Liability Coverage of this

policy.

Id . at 329 B 30. (Emphasis

added). It must be kept in mind that the liability coverage in the Hanson policy

was for combined bodily injury and property damage creating,

essentially, one limit of liability per coverage regardless of whether damages

were for injury to property or body; while, in a typical accident, an insured

would present two claims C one for bodily injury and one for property

damage. The italicized offset provision cited above simply provides that A [a]ny payment

under this [liability] coverage to a covered person will reduce any amount that

person is entitled to recover for the same damages under the Liability Coverage

of this policy. @ Thus, if the insurer paid $40,000 in

property damage, only $60,000 would remain to pay any subsequent bodily injury

claims.

Nothing in the Hansons = policy suggests

that payment of liability claims would reduce the amount recoverable under UM

claims. In short, we find the Hanson opinion was wrongly decided, and

we decline to follow it.

Returning to the policy in this appeal, when read in its

entirety, the insurance contract does not limit Laci = s recovery to

$25,000; instead, the A maximum limit of liability @ language relied

upon by Allstate works only within its respective coverage to limit the amount

of liability under that particular coverage. Allstate, citing to Hanson ,

would have us read the limit of liability sections together to mean the limit

of liability for each coverage is really the limit of liability for both UM and

liability coverages. This, we cannot do. The limit of liability sections

appear to be purposefully separated. We are obliged to interpret this

unambiguous language as it is written. Purvis Oil Corp. v. Hillin , 890

S.W.2d 931, 935 (Tex. App. C El Paso 1994, no writ).

Thus, we find the A maximum limit of

liability @ language in the Dellasala policy does not reach

outside the bounds of each separate coverage to limit other coverages within

the policy. We also conclude that no other express provision limits UM coverage

once liability limits have been paid to one person for injuries sustained in

one accident. We hold the trial court erred in its construction of the

Dellasala policy. Accordingly, we sustain the Jankowiaks = first issue.

Public Policy

Even if our analysis above is incorrect and the trial court

properly construed the Dellasala policy, we find that construction violates

public policy.

Whether a contract violates public policy is a question of

law we review de novo. Lawrence v. CDB Servs., Inc. , 44 S.W.3d 544, 555

(Tex. 2001), superceded by statute on other grounds as stated in Storage

& Processors, Inc. v. Reyes , 134 S.W.3d 190, 192 (Tex. 2004). Texas

expresses its public policy through its statutes. Tex. Commerce Bank, N.A.

v. Grizzle , 96 S.W.3d 240, 250 (Tex. 2002). Therefore, A to determine

whether a contract violates public policy, we consider the policies underlying

any applicable statutes. @ Lawrence , 44 S.W.3d at 555 . The

appropriate test when considering whether a contract violates public policy A is whether the

tendency of the agreement is injurious to the public good, not whether its

application in a particular case results in actual injury. @ Hazelwood v.

Mandrell Indus. Co., Ltd. , 596 S.W.2d 204, 206 (Tex. Civ. App. C Houston [1st

Dist.] 1980, writ ref = d n.r.e.). Public policy can be a vague

and uncertain term, and it is up to the power of the lawmaking body to define.

Grizzle , 96 S.W.3d at 250 (quoting Lawrence , 44 S.W.3d at 553 ). A [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

rule of law. @ Id. (quoting Lawrence , 44 S.W.3d at

553 ).

The legislature has mandated a minimum of $20,000 in UM

coverage in every state automobile liability insurance policy, unless such

coverage has been waived by the insured in writing. [12]

Tex. Ins. Code Ann. art.

5.06-1(1); Kidd , 997 S.W.2d at 268 . UM coverage protects an insured who

is A legally entitled

to recover damages from owners or operators of uninsured or underinsured motor

vehicles because of bodily injury, sickness, or disease, including death, or

property damage @ resulting from an accident, but who

cannot recover from the person responsible for the accident. Tex. Ins. Code Ann. art. 5.06-1(1); Progressive

County Mut. Ins. Co. v. Sink , 107 S.W.3d 547, 554 (Tex. 2003). The purpose

of UM coverage is to protect conscientious motorists from financial loss caused

by negligent and financially irresponsible motorists. Stracener v. United

Servs. Auto. Ass = n , 777 S.W.2d 378, 382 (Tex. 1989).

UM coverage, therefore, is designed to place the injured claimant in a position

as though a financially irresponsible motorist had been insured. Kidd ,

997 S.W.2d at 272 . Article 5.06-1 is to be liberally construed to give full

effect to this public policy. Stracener , 777 S.W.2d at 382 . Any

insurance contract provision that is inconsistent with or does not further the

purpose of article 5.06-1 is invalid. See id. at 383 B 84 (finding

intermediate appellate courts = decisions involving article 5.06-1

operated to limit the possibility that an injured insured can recover actual

damages and therefore frustrated the purpose of that statute).

To recover UM

benefits, A the insured must be able to show fault on the part of

the uninsured motorist and the extent of the resulting damages. . . . @ Sprague v.

State Farm Mut. Auto. Ins. Co. , 880 S.W.2d 415, 416 (Tex. App. C Houston [14th

Dist.] 1993, writ denied) (quoting Franco v. Allstate Ins. Co. , 505

S.W.2d 789, 792 (Tex. 1974)). Under the Dellasala policy = s UM coverage,

Allstate:

will pay damages

which a covered person is legally entitled to recover from the owner or

operator of an uninsured vehicle because of bodily injury sustained by a

covered person . . . caused by an accident.

Laci

is a A covered person @ under this policy

because she was an occupant of the Dellasala vehicle at the time of the

accident. The extent, if any, of Salas = fault in the

accident affects Laci = s ability to recover UM damages. Laci = s ability to

recover also depends upon the extent of her actual damages.

Despite these unresolved fact issues, Allstate contends the

trial court properly granted summary judgment because the Dellasala policy

prohibits recovery of any UM benefits once the liability coverage maximum for

bodily injury is paid to A one person @ in A one auto accident. @ Allstate argues

that the number of claims made or vehicles involved in the accident cannot be

used to duplicate recovery.

In Mid‑Century Insurance Company of Texas v. Kidd ,

the jury awarded $13,000 to the plaintiff in actual damages after the insurer

had already paid $10,000 in PIP benefits. 997 S.W.2d at 267 . The Texas

Supreme Court upheld a provision allowing the insurer to offset payment under

the UM coverage by the amount already paid under PIP coverage in order to

prevent recovery in excess of actual damages. [13]

Id. at 277 . Although the Kidd Court stated that offset

provisions are generally enforceable, it also held its prior relevant caselaw [14]

A stand[s] for the

proposition that offsets in the UM section of the policy are ineffective to

the extent that they prevent recovery of actual damages or reduce UM

protection below the minimum limits required by the UM statute. @ [15] Id. at

270 (emphasis added). Thus, UM protection must put the injured party in the

same position as if the uninsured driver had insurance coverage. While

Allstate has paid Lacy $25,000 as part of its liability coverage, it has

not paid any part of the UM coverage that Salas = insurance company

would have paid to Laci had he been insured. Moreover, Laci = s damages are

unknown and could greatly exceed amounts already paid by Allstate and other

responsible parties. See Am. Motorists Ins. Co. v. Briggs , 514 S.W.2d

233, 236 (Tex. 1974) (stating liability under more than one insurance policy is

joint and several to the extent of plaintiff = s actual damages).

An insured, when selecting and paying for coverage, shows

an intent to protect against a variety of risks. Liability coverage protects

an injured party against the insured driver = s negligence,

while UM coverage A indemnifies insureds against only those

damages proximately caused by the other [uninsured] driver = s negligence. @ See In re

Tex. Ass = n of Sch. Bds., Inc. , 169 S.W.3d 653,

660 (Tex. 2005) (quoting Kidd , 997 S.W.2d at 275 ) (stating UM and PIP

coverages are complementary and indemnify insureds against different risks and

that such coverage is consideration for the premiums paid). The Dellasala

policy reflects this by obligating Allstate to pay liability coverage when A any covered person

becomes legally responsible because of an auto accident, @ and to pay UM

coverage when A a covered person is legally entitled to recover from

the owner or operator of an uninsured motor vehicle because of bodily injury .

. . caused by an accident. @ Allstate = s argument that it

has exhausted the applicable policy limits by paying $25,000 in liability

coverage ignores the result that C although the

Dellasalas included UM coverage in their policy and did not waive that coverage

in writing as required by statute C Laci Jankowiak, an

insured, is allowed to recover only for Daniel Dellasala, Jr. = s legal

responsibility for the accident, and not for Salas = negligence in

causing the accident. See Stracener , 777 S.W.2d at 384 (stating that by

purchasing UM coverage along with basic liability coverage A the insured has

expressed an intent not only to protect others from his or her own negligence

but also to protect that person = s own family and guests from the

negligence of others @ ). The Jankowiaks are not seeking

recovery in excess of actual damages, They seek only to recover actual damages

incurred.

We consider this issue in terms of whether the Dellasala

policy, as read by Allstate and the trial court, contains terms that are injurious

to the public good, and in light of Texas public policy favoring the protection

of conscientious motorists from financial loss caused by negligent and

financially irresponsible motorists. Under this standard, Allstate = s argument that

any payment of UM coverage to Laci is barred by prior payment of the maximum

amount of liability coverage cannot stand. The Texas Supreme Court has made

it clear that policy provisions cannot be used to limit statutory financial

responsibility mandates or to limit the recovery of actual damages. Therefore,

to the extent the Dellasala policy can be properly construed to provide less

than the statutory minimum amount of coverage or to limit a covered person = s recovery of

actual damages, we find such limiting provisions violate public policy and are

therefore invalid. We sustain the Jankowiaks = second issue.

The trial court = s judgment is

reversed and remanded.

/s/ J. Harvey Hudson

Justice

Judgment rendered

and Opinion filed August 8, 2006.

Panel consists of

Justices Hudson, Fowler, and Seymore.

[1] Allstate stipulated that the Jankowiaks claimed

Laci = s injuries exceed the policy coverage, and that A the nature of the claim to be appealed is as set out

in the Motion for Summary Judgment and the Plaintiffs = Response thereto. . . . @ The plaintiffs = response alleged both drivers were at fault. In its

Motion for Summary Judgment, Allstate did not mention fault or the extent of

Laci = s injuries. Allstate relied in part, however, upon

Plaintiff = s Third Amended Original Petition as summary judgment

evidence. See Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer , 904

S.W.2d 656 , 660 B 61 (Tex. 1995) (stating that pleadings, even if sworn

or verified, are generally not competent summary judgment evidence). This

petition described Laci = s injuries as significant, including disfigurement and

the possibility of another surgery to remove glass from her eye. The petition

also alleged Laci = s injuries were proximately caused by both drivers.

We treat these fact issues as undisputed for purposes of this appeal, as both

parties contest a purely legal issue dependent upon the existence of the facts

presented by the Jankowiaks.

[2] We take these issues in the order presented by the

Jankowiaks. See Tex. Farmers Ins. Co. v. Murphy , 996 S.W.2d 873, 878

(Tex. 1999) ( A . . . a court should not decide the question of public

policy without first determining the contractual rights of the parties under

the policy. @ ).

[3] Richard Geiger, who helped draft the legislation,

testified in favor of Senate Bill 1256 before the Economic Development

Committee and said the bill was intended to make a A distinction among the four coverages that are

available . . .[and] it was our intention in drafting the bill that [the

consumer] could buy all or any part of the package. @ Insurance Code: Hearings on S.B. 1256 Before the

Senate Comm. On Econ. Dev ., 65th Leg., R.S. 2 B 3 (May 2, 1977) (statement of Richard Geiger representing the Texas

Association of Fire and Casualty Companies) (transcript on file with the

Houston Public Library.)

[4] The Texas Department of Insurance defines collision

coverage as that which pays for damage to an insured = s car without regard as to who caused the accident.

The insurer must pay for the repair up to the actual cash value of the vehicle,

less the deductible. Texas Department of Insurance,

http://tdi.state.tx.us/consumer/glossary.html#U (last visited July 27, 2006).

Uninsured/underinsured coverage is defined as paying for the insured = s injuries and property damage caused by a hit-and-run

driver or a motorist without liability insurance. It also pays when medical

and car repair bills are higher than the other driver = s liability coverage. Id .

[5] In construing a written contract, the primary

concern is to ascertain the true intentions of the parties as expressed in the

instrument. Dorsett , 164 S.W.3d at 662 . Therefore, when construing

the policy = s language, we give effect to all contractual

provisions so that none are rendered meaningless. Schaefer , 124 S.W.3d

at 157 .

[6] Although we have no way of knowing whether the

insurance policy here was adopted in its entirety from a policy form issued by

the Texas Department of Insurance (TDI), A Insurance

Code article 5.06 mandates that the TDI adopt a policy form and endorsements

for each type of motor vehicle insurance governed by Insurance Code articles

5.01 through 5.12. @ Kidd , 997 S.W.2d at 271 . We note here that

Texas courts A are bound to interpret the statutes and TDI-approved

policy provisions as written. @ Id .

(citing Kemp v. Fidelity & Cas. Co. of N.Y. , 512 S.W.2d 688, 690

(Tex. 1964)).

[7] Likewise, we note that Allstate does not argue

payment of the maximum PIP coverage would preclude any duty to pay under the

liability or UM coverages of this policy. See Kidd , 997 S.W.2d at 272

(stating PIP offset against UM benefits simply prevents insured from

aggregating discrete subsections of one policy to recover in excess of actual

damages.)

[8] We reject the Jankowiaks = argument that the lack of a reciprocal provision

offsetting UM coverage, especially when the offset is not reflected in the

declarations page, creates an ambiguity within the policy. Such reciprocal

clause could have been drafted into the policy just as easily as the clause

offsetting liability coverage, had the parties intended that result.

[9] Allstate also cites to Rosales v. State Farm

Mutual Automobile Insurance Company , but we find the analysis in that case

does not apply here. 835 S.W.2d 804 (Tex. App. C Austin 1992, writ denied) (precluding two passengers who received

benefits under the driver = s liability insurance coverage from receiving

underinsured benefits from the same policy when the driver caused the accident

and the policy specified its UM provisions did not include the driver-insured = s vehicle); see also State Farm Mut. Ins. Co. v.

Conn , 842 S.W.2d 350 , 350 B 51 (Tex. App. C Tyler 1992, writ denied) (finding definitional

exclusion precluded recovery of UM benefits when driver who caused collision

was not uninsured under the policy).

[10] Although we abbreviate Uninsured/Underinsured

Motorist Coverage as A UM, @ the Hanson

case involved underinsured coverage and not an uninsured motorist, as in this

case.

[11] Article 5.06-1, entitled A Uninsured or Underinsured Motorist Coverage, @ states:

. . . a

policy form adopted under Article 5.06 . . . shall include provisions that,

regardless of the number of persons injured, policies or bonds applicable,

vehicles involved, or claims made, the total aggregate limit of liability to

any one person who sustains bodily injury . . . as the result of any one

occurrence shall not exceed the limit of liability for these coverages as

stated in the policy. . . .

Tex. Ins. Code Ann. art. 5.06-1(2)(d) (Vernon Supp. 2005). This article

refers to the uninsured motorist coverages provided for in that

article. The A total aggregate limit of liability, @ therefore, refers to aggregating benefits under the

policy from more than one injured person, more than one applicable policy or

bond, more than one vehicle involved, or more than one claim made. To the

extent Hanson can be interpreted to mean article 5.06-1(2)(d) limits an

insured = s maximum amount of recovery under both UM and

liability coverages for bodily injuries sustained in one accident, we

disagree. The language of article 5.06-1(2)(d) does not refer to reaching

outside UM coverage mandated by that article to affect a policy = s other coverage limits.

[12] Texas law also requires automobile insurance

policies to contain a minimum of $20,000 in liability coverage that cannot be

waived. Tex. Transp. Code Ann. '' 601.051, 601.072 (Vernon 1999). Allstate argues,

without citing to any authority, that it appears the legislature is more

concerned that drivers have liability coverage than it is that they have UM

coverage because liability coverage cannot be waived, while drivers can waive

UM coverage . Allstate = s argument is unpersuasive at best. Without

attempting to balance the respective importance of each coverage, we recognize

that the legislature has clearly indicated the importance of both coverages by

mandating minimum amounts for each. Liability coverage cannot be waived

because the law generally requires drivers to maintain a minimum amount of

insurance in order to operate their vehicles. Sink , 107 S.W.3d at 553 .

UM coverage, therefore, is a failsafe that drivers must opt out of, not into,

to protect drivers from damages caused by financially irresponsible motorists.

Kidd , 997 S.W.2d at 272 .

[13] The insurance clause in Kidd provided that:

In order

to avoid insurance benefits payments in excess of actual damages sustained,

subject only to the limits set out in the Declarations . . . we will pay all

covered damages not paid or payable under any . . . Personal Injury Protection

Coverage.

997 S.W.2d at 267 .

[14] Am. Motorists Ins. Co. v. Briggs , 514 S.W.2d

233 (Tex. 1974); Westchester Fire Ins. Co. v. Tucker , 512 S.W.2d 679

(Tex. 1974); Am. Liberty Ins. Co. v. Ranzau , 481 S.W.2d 793 (Tex. 1972).

[15] The Dellasala policy language supports this outcome

by limiting UM coverage to the lesser of (1) actual damages not already paid or

payable to the injured by those legally responsible and (2) the A applicable limit of liability for this coverage. @ Allstate urges that Kidd does not control

because the interrelationship between PIP benefits and UM benefits is different

than that between UM and liability benefits. However, here, just as in Kidd ,

the insurer seeks to offset its UM liability against amounts already paid for

the same damages. Kidd = s discussion of

offsets in UM coverage applies to this case.