FARMERS TEXAS COUNTY MUTUAL INSURANCE COMPANY v. BLANEK (2025)

OPINION

This underinsured motorists insurance coverage dispute involves application of the policy's liability limit to a covered person's claim for bystander damages. Jamie Blanek sustained bodily injury as a pedestrian when she was struck by an underinsured motor vehicle. Jamie's mother, appellee Melodye Blanek, witnessed the accident and sustained mental anguish damages as a bystander. Melodye's automobile insurer, appellant Farmers Texas County Mutual Insurance Company, paid Jamie the maximum per person limit for uninsured/underinsured motorist bodily injury liability coverage, but denied Melodye's claim for bystander damages on the ground that the applicable per person limit was exhausted by the payment to Jamie. After Melodye sued, the trial court granted summary judgment against Farmers, ruling that the policy required it to pay an additional per person limit to Melodye. We disagree. We hold that under the policy's unambiguous language, only a single per person limit is triggered for Jamie's bodily injury, and Melodye's mental anguish bystander damages, though covered, are subject to that limit, which has been exhausted by the payment to Jamie. We reverse the trial court's judgment and render judgment that Melodye take nothing.

Factual Background

The parties stipulated the following facts.

1.  Jamie Blanek sustained serious bodily injury as a pedestrian in a motor vehicle accident on February 6, 2021 (hereinafter, “the accident”);

2.  Jamie Blanek's mother, Melodye Blanek, sustained mental anguish as a result of contemporaneously perceiving Jamie Blanek's bodily injury in the accident;

3.  Melodye Blanek did not sustain bodily injury as a result of the accident;

4.  The accident was caused by the negligence of Manuel Caro, Trish Menchu, Brooke Santiago and Donna Woodliff;

5.  Melodye Blanek settled with Manuel Caro for $50,000;

6.  Melodye Blanek settled with Trish Menchu, Brooke Santiago and Donna Woodliff for $50,000;

7.  There was no other liability insurance available to Manuel Caro, Trish Menchu, Brooke Santiago and/or Donna Woodliff for the accident;

8.  Although Melodye Blanek did not receive Farmers Texas County Mutual Insurance Company's consent to the settlements referenced in paragraphs 5 and 6, Farmers Texas County Mutual Insurance Company was not prejudiced by either settlement;

9.  Melodye Blanek recovered $100,055 in Uninsured/Underinsured Motorist Coverage benefits for the accident from Progressive County Mutual Insurance Company;

10. Farmers Texas County Mutual Insurance Company issued Texas Personal Auto Policy number 04365-73-53 to Joseph Harry Blanek with effective dates of 1/12/2021 to 7/12/2021 (hereinafter, “the policy”); ․

12. The policy was in force at the time of the accident and contained Part C - Uninsured/Underinsured Motorists Coverage with a bodily injury limit of liability of $50,000 each person and $100,000 each accident as more fully described in the policy;

13. Melodye Blanek and Jamie Blanek each qualify as a “covered person,” as that term is used in the Policy, Part C - Uninsured/Underinsured Motorists Coverage;

14. Manuel Caro, Trish Menchu, Brooke Santiago and Donna Woodliff each qualify as an “owner or operator of an uninsured motor vehicle,” as those terms are used in the Policy, Part C - Uninsured/Underinsured Motorists Coverage;

15. Farmers Texas County Mutual Insurance Company promptly paid Jaime [sic] Blanek $50,000 under the policy, Part C - Uninsured/Underinsured Motorists Coverage, for damages she sustained in the accident;

16. With respect to Melodye Blanek's claim under the policy for Part C - Uninsured/Underinsured Motorists Coverage benefits, Farmers Texas County Mutual Insurance Company is entitled to an offset of $200,055, consisting of the $50,000 settlement with Manuel Caro, the $50,000 settlement with Trish Menchu, Brooke Santiago and Donna Woodliff, and the $100,055 in Uninsured/Underinsured Motorist Coverage benefits paid by Progressive County Mutual Insurance Company; and

17. The amount which would fairly and reasonably compensate Melodye Blanek for all damages she sustained as a result of the accident is $250,055.

Trial Court Proceedings

Melodye notified Farmers of her bystander claim for mental anguish damages, but Farmers did not pay. Melodye filed this suit, seeking a declaration that she is entitled to $50,000 in underinsured motorists coverage (“UIM”) benefits for the mental anguish she sustained while witnessing Jamie's injury, in addition to the $50,000 Farmers paid Jamie.

Farmers and Melodye filed competing motions for summary judgment. Farmers contended that it exhausted the applicable UIM bodily injury limit of liability by paying $50,000 to Jamie for her bodily injury and that Melodye's claim for mental anguish as a bystander does not entitle her to a second policy limit. Under Farmers’ interpretation of the policy, because only Jamie sustained bodily injury and Melodye did not, the policy's $50,000 “each person” limit is Farmers’ maximum limit of liability for all damages resulting from Jamie's bodily injury.

In her motion, Melodye argued that she established all elements of her bystander claim and that her claim is not derivative of Jamie's personal injury claim. For those reasons, Melodye asserted that she is entitled to a separate per person limit under the policy's uninsured/underinsured motorists bodily injury liability coverage.

The trial court granted Melodye's motion, denied Farmers’ motion, and signed a final judgment ordering that Melodye recover $50,000 from Farmers.

Farmers timely appealed to the Tenth Court of Appeals. The Supreme Court of Texas transferred the appeal to this court. See Tex. Gov't Code § 73.001.¹

Analysis

In two issues, Farmers asserts that the trial court erroneously granted summary judgment to Melodye when it should have granted summary judgment to Farmers. The dispositive legal question is whether Jamie's bodily injury together with Melodye's bystander mental anguish triggers two “each person” limits under the policy's uninsured/underinsured motorists coverage. Farmers insists only a single “each person” limit is triggered, which has been exhausted by its payment to Jamie.

A. Standard of Review

We review a trial court's ruling on a motion for summary judgment de novo. Tarr v. Timberwood Park Owners Ass'n, Inc., 556 S.W.3d 274, 278 (Tex. 2018); Texan Land & Cattle II, Ltd. v. ExxonMobil Pipeline Co., 579 S.W.3d 540, 542 (Tex. App.—Houston [14th Dist.] 2019, no pet.). Both parties sought a traditional summary judgment. “On cross-motions for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law.” Miles v. Tex. Cent. R.R. & Infrastructure, Inc., 647 S.W.3d 613, 619 (Tex. 2022). When both parties move for summary judgment on the same issue and the trial court grants one motion and denies the other, we consider the summary judgment evidence presented by both sides, determine all questions presented, and, if we determine that the trial court erred, render the judgment the trial court should have rendered. Tarr, 556 S.W.3d at 278; see also Wausau Underwriters Ins. Co. v. Wedel, 557 S.W.3d 554, 557 (Tex. 2018).

B. Policy Interpretation

We interpret insurance policies using the rules of contract construction. RSUI Indem. Co. v. Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015); see also Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 823 (Tex. 1997). We begin our analysis with the language of the contract because it is the best representation of what the parties mutually intended. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126 (Tex. 2010); see also Anglo-Dutch Petroleum Int'l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d 445, 451 (Tex. 2011). Unless the policy dictates otherwise, we give words and phrases their ordinary and generally accepted meaning, reading them in context and in light of the rules of grammar and common usage. See Gilbert Tex. Constr., 327 S.W.3d at 126; Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994). We strive to give effect to all of the words and provisions so that none is rendered meaningless. See Gilbert Tex. Constr., 327 S.W.3d at 126; Forbau, 876 S.W.2d at 133. “No one phrase, sentence, or section [of a contract] should be isolated from its setting and considered apart from the other provisions.” Forbau, 876 S.W.2d at 134. The contract's plain language controls, not what one side or the other alleges they intended to say but did not. Gilbert Tex. Constr., 327 S.W.3d at 127.

“If policy language is worded so that it can be given a definite or certain legal meaning, it is not ambiguous and we construe it as a matter of law.” Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003). “An ambiguity does not arise merely because a party offers an alternative conflicting interpretation, but only when the contract is actually “susceptible to two or more reasonable interpretations.” Id. If only one party's construction of the relevant language is reasonable, the policy is unambiguous, and we will adopt that party's construction. See Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 459 (Tex. 1997). However, “if both constructions present reasonable interpretations of the policy's language, we must conclude that the policy is ambiguous.” RSUI Indem. Co., 466 S.W.3d at 118. A contract is ambiguous only when the application of pertinent rules of interpretation to the face of the instrument leaves it genuinely uncertain which one of two or more reasonable meanings is the proper meaning. See Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 157 (1951); see also Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 741 (Tex. 1998).

When construing an insurance policy, we are mindful of other courts’ interpretations of policy language that is identical or very similar to the policy language at issue. Trinity Universal Ins. Co., 945 S.W.2d at 824. “Courts usually strive for uniformity in construing insurance provisions, especially where ․ the contract provisions at issue are identical across the jurisdictions.” Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 522 (Tex. 1995); see also Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 496-97 (Tex. 2008).

C. Relevant Policy Terms

The policy at issue is a contract titled “Texas Personal Auto Policy.” It contains the following provisions:

Auto Insurance Declarations Page

Part C - Uninsured/Underinsured Motorists Coverage

Insuring Agreement

A. We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.

The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle. (Bold in original).

Part C also contains a “limit of liability” provision, which states:

Limit of Liability

A. I. If separate limits of liability for bodily injury and property damage liability are shown in the Declarations for this coverage, the limit of liability for “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. Subject to this limit for “each person,” the limit of liability shown in the Declarations for “each accident” for bodily injury liability is our maximum limit of liability for all damages for bodily injury resulting from any one motor vehicle accident․

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

a. Covered persons;

b. Claims made;

c. Policies or bonds applicable;

d. Vehicles or premium shown in the Declarations; or

e. Vehicles involved in the accident.

(Bold in original).

It is undisputed that both Jamie and Melodye are “covered persons”; that Melodye did not sustain “bodily injury” but rather sustained mental anguish as a bystander; and that Melodye's mental anguish damages are covered under the policy's insuring agreement for UIM coverage.

D. Application

We consider the policy's promise to pay damages in the context of the entire agreement, including the insuring agreement, the limit of liability section, and the declarations. See Gilbert Tex. Constr., 327 S.W.3d at 126. The policy's insuring agreement creates and circumscribes the scope of the coverage. Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 10 (Tex. 2007). Because both Jamie and Melodye are “covered persons” under the policy, Farmers agrees that Melodye “is legally entitled to recover” under the policy's UIM coverage provision and that her damages are “because of bodily injury sustained by a covered person [Jamie].” Farmers further agrees, in response to hypotheticals posed at oral argument, that if Jamie's bodily injury damages were, for example, only $15,000, then Farmers would owe Jamie $15,000 and owe Melodye the $35,000 balance of a single $50,000 “each person” limit for Melodye's bystander damages. Thus, the matter of coverage is not in question.

When a claim is covered, however, a limit of liability provision may come into play, as in this case. The policy's limit of liability section sets a maximum benefit payable for covered claims under the specific type of coverage provided for in the insuring agreement. See Jankowiak v. Allstate Prop. & Cas. Ins. Co., 201 S.W.3d 200, 206 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (recognizing that the limit of liability language provided “a maximum limit of recovery for each specific coverage”). The declarations show separate limits of liability for bodily injury liability and property damage liability for UIM coverage, so the parties agree that the “per person” or “each person” limit is $50,000. The UIM limit of liability section further states that the $50,000 limit is “our maximum limit of liability for all damages for bodily injury sustained by any one person in any one motor vehicle accident.” Our task is to interpret this language.

The phrase defines the circumstances when the $50,000 “each person” limit will apply. It provides that $50,000 is the maximum amount of UIM coverage available “for all damages for bodily injury sustained by any one person in any one motor vehicle accident.” In this sentence, Farmers says the word “for” in the clause “for bodily injury” means “resulting from.” Its position finds support in the word's ordinary meaning, which we may determine by consulting dictionaries. See Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 480 (Tex. 2019) (relying on Black's Law Dictionary for plain, ordinary, and generally accepted meaning of undefined contract term); Texan Land & Cattle II, 579 S.W.3d at 543 n.2. The word “for” may mean “as a result of” or “because of.” See “For,” Black's Law Dictionary 644 (6th ed. 1990) (“By reason of; with respect to; for benefit of; for use of; in consideration of․ Used in sense of ‘because of,’ ‘on account of,’ or ‘in consequence of.’ ․ By means of, or growing out of.”); “For,” Merriam-Webster Dictionary, https://www.merriam-webster.com/dictionary/for (“3: because of”); “For,” Webster's New College Dictionary 445 (3d ed. 2005) (“7. As a result of”).

Under Farmers’ interpretation, this phrase means that one $50,000 “each person” limit for UIM coverage applies to all damages resulting from or because of bodily injury sustained by any single covered person in any one motor vehicle accident, regardless of the number of claimants. Because Farmers’ interpretation of the limit of liability provision is based on the common and ordinary meaning of the words used, it is reasonable.

Melodye's contrary position is premised on the legal principle that her bystander claim is independent and not derivative of Jamie's claim. For this reason, she asserts, a covered person who has suffered bystander damages is entitled to recover her own set of policy limits not subject to the limit applicable to the physically injured person. In support of her argument, Melodye cites American Industries Life Ins. Co. v. Ruvalcaba, 64 S.W.3d 126 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (op. on reh'g); Hermann Hospital v. Martinez, 990 S.W.2d 476 (Tex. App.—Houston [14th Dist.] 1999, pet denied); Harris County v. White, 823 S.W.2d 385 (Tex. App.—Texarkana 1992, no writ); and City of Austin v. Davis, 693 S.W.2d 31 (Tex. App.—Austin 1985, writ ref'd n.r.e).

To be sure, these cases state that bystander damages, which result from witnessing the injury or death of a loved one, are not derivative of the related person's injury or death. But the characterization of a bystander claim as independent or derivative is not dispositive of the question presented, and the cases Melodye cites in support of her argument neither inform our analysis nor support the outcome Melodye urges. Both City of Austin and Hermann Hospital rely on statutory text—the Texas Tort Claims Act (“TTCA”)—that varies from the policy language and the stipulated facts at issue here. This court in Hermann Hospital and the Third Court of Appeals in City of Austin held that bystanders suffered their own “bodily injury” under the TTCA such that they were subject to independent statutory liability limits. See Hermann Hospital, 990 S.W.2d at 479-80 (citing Tex. Civ. Prac. & Rem. Code § 101.023(c)); City of Austin, 693 S.W.2d at 34. Here, in contrast, Melodye stipulated that she sustained no “bodily injury.”² Harris County is even less helpful to Melodye. That case involved whether wrongful death beneficiaries—not bystanders—were “injured persons” under the TTCA and thus entitled to damages subject to separate statutory liability limits. Harris County, 823 S.W.2d at 387. The court held they were not. Id. at 388. Finally, Ruvalcaba did not involve questions of insurance policy interpretation.

In supplemental briefing in response to questions during oral argument, Melodye relies on a federal court case, Haralson v. State Farm Mutual Automobile Insurance Co., 564 F. Supp. 2d 616 (N.D. Tex. 2008). Like the present matter, Haralson involved a claim for UIM coverage by a bystander who witnessed a family member injured in an auto accident. The relevant provisions of the State Farm auto policy in Haralson appear identical to the Farmers provisions at issue here. The court in Haralson concluded that a separate “each person” limit was available to the bystander in that case. See id. at 620-25. The result in Haralson, however, was driven by the jury's finding that the bystander had in fact suffered “bodily injury,” and further that the “bodily injury” finding was supported by evidence that the bystander manifested physical symptoms and did not suffer purely emotional injury. See id. Here, however, Melodye stipulated that she did not sustain any bodily injury. Thus, Haralson is not on point.

Notably, Melodye does not contend that the limit of liability provision is ambiguous. In fact, the Supreme Court of Texas has held—in answering a different question—that virtually identical language is unambiguous. Upshaw v. Trinity Cos., 842 S.W.2d 631, 633 (Tex. 1992). In Upshaw, the policy's UIM limit of liability provision stated, in relevant part: “If separate limits of liability for bodily injury and property damage liability are shown in the Declarations for this coverage the limit of liability for ‘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 accident.” Id. (emphasis added). The court held that the language was “certain and not reasonably susceptible to more than one interpretation.” Id. We consider Upshaw’s holding in our review.³ Trinity Universal Ins. Co., 945 S.W.2d at 824.

Moreover, Melodye has not proposed an alternative, reasonable interpretation favoring her view. Melodye asks us to read the limit of liability provision to mean that the “each person” limit applies to each person who “sustained damages” in the wreck. She reads the provision as if it said that the $50,000 “each person” limit is the maximum amount available “for all damages sustained by any one person in any one motor vehicle accident.” The provision's plain language renders Melodye's interpretation untenable. Adopting her position would require us to delete entirely the key words “for bodily injury” immediately following the clause “for all damages.” We must interpret contract language to harmonize and give effect to all provisions so that none will be rendered meaningless. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003); TotalEnergies Petrochemicals & Refining USA, Inc. v. Kinder Morgan Petcoke, LP, 658 S.W.3d 647, 663 n.28 (Tex. App.—Houston [14th Dist.] 2022, pet. denied). Because Melodye's interpretation would render contract words superfluous, it is unreasonable. See TotalEnergies, 658 S.W.3d at 670.

Referencing the UIM insuring agreement provision, Melodye further claims that her mental anguish damages are damages she is legally entitled to recover as a bystander because of bodily injury sustained by Jamie. This point, however, goes to the coverage question, and Farmers agrees that Melodye's mental anguish bystander damages are covered under Part C of the policy. Application of the limit of liability to covered claims is a different matter.

We hold that the policy is susceptible to only one reasonable interpretation: if only one covered person sustains bodily injury in an accident with an underinsured motor vehicle, then the “each person” UIM coverage limit applies to all damages resulting from the bodily injury sustained by that person, no matter the number of claimants. Because only Farmers’ interpretation of the relevant language is reasonable, we adopt its interpretation. See Grain Dealers, 943 S.W.2d at 459. Jamie is a covered person and is the only one who sustained bodily injury; thus, a $50,000 limit applies to all damages resulting from, or because of, Jamie's bodily injury, which includes Melodye's bystander mental anguish damages. Accordingly, Melodye's bystander damages must be compensated out of Jamie's “each person” limit. Because Farmers has exhausted the applicable limit by its payment to Jamie, there is no remaining UIM coverage available to Melodye.

Conclusion

We sustain Farmers’ appellate issues, reverse the trial court's judgment, and render a take-nothing judgment in favor of Farmers.

FOOTNOTES

1.   As a transferee court, we “must decide the case in accordance with the precedent of the transferor court under principles of stare decisis if the transferee court's decision otherwise would have been inconsistent with the precedent of the transferor court.” Tex. R. App. P. 41.3. We are unaware of any inconsistency between the precedent of this court and that of the Tenth Court of Appeals on any relevant, disputed matter. Nor have the parties cited any controlling cases from the Tenth Court of Appeals.

2.   The policy does not define “bodily injury,” but the supreme court has held that its common meaning is that of “physical, and not purely mental, emotional, or spiritual harm.” Trinity Universal Ins. Co., 945 S.W.2d at 823. It requires “an injury to the physical structure of the human body.” Id.

3.   During oral argument, Melodye suggested that the limit of liability provision is “confusing,” but unclear contract text does not create ambiguity. See Schaefer, 124 S.W.3d at 157; Universal Health Servs., Inc. v. Renaissance Women's Grp., P.A., 121 S.W.3d 742, 746 (Tex. 2003) (“Lack of clarity does not create an ambiguity, and [n]ot every difference in the interpretation of a contract ․ amounts to an ambiguity.”) (internal quotation omitted). The contract language must be actually susceptible to two or more reasonable interpretations for ambiguity to arise. See Schaefer, 124 S.W.3d at 157.

Kevin Jewell, Justice