Case: Auzenne v. Great Lakes Reinsurance
PLC
Tex.App.- Houston [14th Dist.] May 10, 2016
No. 14-15-00159-CV, 2016 Tex. App. LEXIS 4879
Texas, unlike Louisiana, does not allow a claimant to sue the insurer of a third party. This was recently tested in Auzenne v. Great Lakes Reinsurance PLC, 2016 Tex. App. LEXIS 4879. In Auzenne, the Fourteenth Court of Appeals examined whether a third party claimant had standing to bring a cause of action against an insurer that provided medical payments coverage to individuals injured in its insured's store.
Mr. Auzenne was injured when he slipped and fell in a Snowflake Donuts' store insured by a CGL policy issued by Great Lakes. The Great Lakes policy included medical payments coverage. Auzenne submitted his medical bills directly to Great Lakes for reimbursement, which Great Lakes declined to pay. Auzenne sued Great Lakes for breach of contract and violations of the Texas Insurance Code, arguing that the medical payments provision in the Great Lakes' policy required Great Lakes to pay medical expenses of anyone injured on the insured property regardless of fault. Great Lakes' insured, Snowflakes Donuts, was not named in the litigation. Great Lakes filed a motion to dismiss, arguing that Auzenne's action was precluded by Texas'no-direct-action rule. The trial court agreed, ruling that Auzenne lacked standing to sue Great Lakes directly without first obtaining a judgment or settlement determining Snowflake Donuts' liability.
On appeal, the Fourteenth Court of Appeals affirmed, noting that Texas courts have not deviated from the rule that an injured party generally has no direct claim against the tortfeasor's insurer until the insured tortfeasor is determined liable to the tort claimant. The Fourteenth Court of Appeals further rejected Auzenne's argument that he was a third party beneficiary to the Great Lakes Policy and held that any rights as a third-party beneficiary would not ripen until it has been established, by judgment or agreement, that the insured has a legal obligation to pay damages to the claimant.
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