PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY v. SALDIVAR (2025)

OPINION

Progressive County Mutual Insurance Company filed a motion for summary judgment, asserting that it was entitled to judgment as a matter of law on claims for uninsured/underinsured motorist benefits brought by Conrado Saldivar, Jr. and Alma Delia Saldivar (together, “Plaintiffs”). The trial court denied the motion, and this permissive interlocutory appeal followed. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014. For the reasons below, we reverse the trial court's denial of Progressive's summary judgment motion and render judgment that Plaintiffs take nothing on their claims for uninsured/underinsured motorist benefits.

Background

This appeal stems from a car accident in northwest Houston. In October 2018, Officer Louis Hooper was driving his Harris County Precinct Four Constable's truck when he attempted to turn left from a non-turning lane and collided with Plaintiffs’ vehicle. It is uncontested that Officer Hooper was on duty at the time of the accident.

Plaintiffs filed suit approximately two years later, asserting negligence claims against Harris County and Officer Hooper. Plaintiffs filed a notice of nonsuit with respect to Officer Hooper, and the trial court signed an order dismissing the claims against him. Plaintiffs then filed an amended petition and asserted claims against Progressive, alleging they were entitled to receive insurance benefits pursuant to the uninsured/underinsured motorist (“UM/UIM”) provision in their insurance policy issued by Progressive. Plaintiffs also requested a declaratory judgment stating that (1) Officer Hooper and/or Harris County was an underinsured motorist at the time of the accident, and (2) Plaintiffs therefore were entitled to recover UM/UIM benefits under the terms of their Progressive insurance policy.

Progressive filed a traditional summary judgment motion asserting it was entitled to judgment as a matter of law on Plaintiffs’ claims because the applicable UM/UIM provision excluded coverage if the vehicle involved in the accident was “owned by any governmental unit or agency.” Progressive argued that this exclusion precluded Plaintiffs’ claims because it was undisputed that Harris County is a governmental agency, Harris County owned the vehicle, and Officer Hooper was on duty at the time of the accident. Plaintiffs filed a response and a supplemental brief arguing that Progressive failed to meet its summary judgment burden. The trial court held a hearing and signed an order denying Progressive's summary judgment motion.

Progressive filed a motion to permit a permissive interlocutory appeal from the trial court's denial of its summary judgment motion. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(d). The trial court granted the motion and signed an amended summary judgment order concluding that the government-vehicle exclusion in Plaintiffs’ Progressive insurance policy did not preclude their claims for UM/UIM benefits.

Progressive filed with this Court a petition for permission to appeal an interlocutory order, which we granted. See id. § 51.014(f).

Analysis

On appeal, Progressive asserts the trial court erred in denying its summary judgment motion because the applicable UM/UIM provision precludes coverage for an accident involving a vehicle “owned by any governmental unit or agency.” Plaintiffs did not file a responsive appellate brief. For the reasons below, we sustain Progressive's challenge and reverse the trial court's order denying Progressive's summary judgment motion.

I. Standard of Review and Governing Law

We review de novo the trial court's decision to grant or deny a summary judgment motion. See Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184, 192 (Tex. 2007). To prevail on a traditional summary judgment motion, the movant 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); Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 257 (Tex. 2017) (per curiam). A defendant moving for summary judgment must either negate at least one essential element of a cause of action or conclusively establish each element of an affirmative defense. See Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995). Once the movant establishes its right to summary judgment on the issues expressly presented in its motion, the burden shifts to the nonmovant to present arguments or evidence precluding summary judgment. Stanfield v. Neubaum, 494 S.W.3d 90, 97 (Tex. 2016).

When we accept a permissive appeal, we must “do what the Legislature has authorized and ‘address the merits of the legal issues certified.’ ” Elephant Ins. Co., LLC v. Kenyon, 644 S.W.3d 137, 147 (Tex. 2022) (quoting Sabre Travel Int'l, Ltd. v. Deutsche Lufthansa AG, 567 S.W.3d 725, 733 (Tex. 2019)). This includes “addressing all fairly included subsidiary issues and ancillary issues pertinent to resolving the controlling legal issue.” Id.

Here, the controlling legal issue asks whether Plaintiffs’ insurance policy precludes their recovery of UM/UIM benefits because the vehicle Officer Hooper was driving at the time of the accident was owned by a governmental agency. This question necessarily depends on an interpretation of the relevant provisions in Plaintiffs’ insurance policy.

Under Texas law, we interpret insurance policies according to the rules of contract interpretation. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). Each insurance policy must be interpreted according to its own specific wording, provisions, and coverages. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 129 n.7 (Tex. 2010).

We determine whether a contract is ambiguous by looking at the contract as a whole, in light of the circumstances present when the parties entered into the contract. Universal Health Servs., Inc. v. Renaissance Women's Grp., P.A., 121 S.W.3d 742, 746 (Tex. 2003). A contract is ambiguous when it is susceptible to more than one reasonable interpretation. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). However, if the contract is so worded that it can be given a definite or certain legal meaning, then it is not ambiguous. Milner v. Milner, 361 S.W.3d 615, 619 (Tex. 2012). Further, an ambiguity does not exist “simply because the parties interpret a policy differently.” Gilbert Tex. Constr., L.P., 327 S.W.3d at 133.

We give the insurance policy's undefined words their common and ordinary meanings, unless the policy demonstrates that the parties intended a different or technical meaning. Anadarko Petroleum Corp. v. Hous. Cas. Co., 573 S.W.3d 187, 193 (Tex. 2019). “An interpretation that gives each word meaning is preferable to one that renders one surplusage.” U.S. Metals, Inc. v. Liberty Mut. Grp., Inc., 490 S.W.3d 20, 23-24 (Tex. 2015). If a term is susceptible to more than one reasonable interpretation, we resolve uncertainty in favor of the insured. Evanston Ins. Co. v. Legacy of Life, Inc., 370 S.W.3d 377, 380 (Tex. 2012). But if an insurance policy defines its terms, those definitions control. Id.

An intent to exclude coverage in an insurance policy must be expressed in “clear and unambiguous language.” Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex. 1991). We adopt the insured's construction of an exclusionary clause as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties’ intent. Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660, 668 (Tex. 2008); Gastar Expl. Ltd. v. U.S. Specialty Ins. Co., 412 S.W.3d 577, 583 (Tex. App.—Houston [14th Dist.] 2013, pet. denied).

II. Application

Applying these principles, we conclude Plaintiffs’ insurance policy with Progressive is not ambiguous and that, as a matter of law, it excludes UM/UIM coverage with respect to damages stemming from their collision with Officer Hooper.

Plaintiffs’ insurance policy provides that it will cover damages that an insured person is entitled to recover from an uninsured motor vehicle because of bodily injury caused by an accident:

If you pay the premium for this coverage, we will pay for damages that an insured person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury:

1. sustained by an insured person;

2. caused by an accident; and

3. arising out of the ownership, maintenance or use of an uninsured motor vehicle.

(emphasis in original). The policy's definition of “uninsured motor vehicle” includes “an underinsured motor vehicle,” which the policy defines as:

[O]ne to which a liability bond or policy applies at the time of the accident, but its limit of liability either

(i)  is not enough to pay the full amount the insured person is legally entitled to recover as damages; or

(ii) has been reduced by payment of claims to an amount which is not enough to pay the full amount the insured person is legally entitled to recover as damages.

(emphasis in original). The UM/UIM provision also states that an “uninsured motor vehicle” does not include a vehicle “owned by any governmental unit or agency[.]” (emphasis in original).

In the trial court, Plaintiffs asserted that the government-vehicle exclusion only excluded an uninsured motor vehicle. Pointing out that the policy defines “uninsured motor vehicle” to also include an “underinsured motor vehicle,” Plaintiffs argued that they were entitled to UM/UIM coverage because Officer Hooper was the operator of an underinsured motor vehicle to which the government-vehicle exception did not apply.

But analyzed under the applicable principles of contract construction, Plaintiffs’ interpretation of the UM/UIM provision is not reasonable. The provision is entitled “Uninsured/Underinsured Motorist Coverage” and, in the paragraph defining the extent of that coverage, states that damages will be paid for bodily injury sustained by an insured person “arising out of the ownership, maintenance or use of an uninsured motor vehicle.” (emphasis in original). The UM/UIM provision then provides the definition for what constitutes an “uninsured motor vehicle.” (emphasis in original). The definition includes an “underinsured motor vehicle” but expressly does not include a vehicle “owned by any governmental unit or agency.”

Here, it is undisputed that the vehicle Officer Hooper was driving at the time of the collision was owned by a governmental agency, i.e., the Harris County Precinct Four Constable's office. Therefore, under the plain language of the UM/UIM provision, Progressive is not required to pay UM/UIM damages to Plaintiffs stemming from their collision with Officer Hooper's vehicle because that vehicle was owned by a governmental agency and, thus, does not qualify as an “uninsured motor vehicle.”

This interpretation of the UM/UIM provision comports with that of other courts examining similar provisions. See, e.g., McQuinnie v. Am. Home Assurance Co., 400 F. App'x 801, 804 (5th Cir. 2010) (per curiam); Abramovitz v. Atl. Speciality Ins. Co., No. 23-CV-2076-JAR, 739 F.Supp.3d 937, 2024 WL 3273281, at *8-9 (D. Kan. July 2, 2024).

For example, in McQuinnie, the policy at issue stated that the insurer would pay UM/UIM damages an insured was legally entitled to recover from the operator of an “uninsured motor vehicle,” which the policy defined to include an “underinsured motor vehicle.” 400 F. App'x at 804. The policy expressly excluded from “uninsured motor vehicle” any vehicle “owned or operated by a self-insurer.” Finding the policy unambiguous, the court reasoned:

Because the Policy does not consider a vehicle “uninsured”—and thus provides no coverage—if it is owned or operated by a “self-insurer,” and an “underinsured vehicle” is a type of “uninsured vehicle,” it necessarily follows that if an owner or operator of an underinsured vehicle is a self-insurer, then the insured is not entitled to recover damages under the Policy.

Id.

The policy analyzed in Abramovitz was identical to the one at issue here and provided that (1) the insurer would pay UM/UIM damages to the insured stemming from a collision with an “uninsured motor vehicle,” (2) an “uninsured motor vehicle” included an “underinsured motor vehicle,” and (3) an “uninsured motor vehicle” did not include a vehicle “[o]wned by a governmental unit or agency.” 2024 WL 3273281, at *8, 739 F.Supp.3d 937. Reconciling these definitions, the court held that, “per the plain language of the policy, underinsured and uninsured vehicles owned by a government agency are excluded from coverage.” Id. (emphasis in original).

Plaintiffs asserted in the trial court that the analysis of the applicable UM/UIM provision should be governed by the reasoning in Progressive County Mutual Insurance Company v. Caltzonsing, 658 S.W.3d 384 (Tex. App.—Corpus Christi 2022, no pet.). There, the insured was injured in a collision with an underinsured vehicle leased from Enterprise Rent-A-Car; the insured sought to recover UM/UIM benefits under his Progressive policy for damages stemming from the accident. Id. at 389. Progressive asserted that it was not required to pay UM/UIM benefits because, similar to the provision at issue here, the applicable insurance policy excluded vehicles operated by a “self-insurer” from the definition of “uninsured motor vehicle.” Id. at 389-90. However, the “self-insurer” exclusion was limited by a qualification and would not apply if the self-insurer “is or becomes insolvent.” Id.

The bulk of the Caltzonsing opinion addressed whether Enterprise Rent-A-Car was an “insolvent” self-insurer under federal law and, thus, outside the applicable UM/UIM exclusion.¹ See id. at 390-96. The court concluded “that Enterprise is not a ‘self-insurer’ under the terms of the policy” because federal law ultimately insulated Enterprise Rent-A-Car from any liability stemming from the collision. Id. at 395. The Caltzonsing court did not consider the argument raised here, i.e., whether the fact that the collision was caused by an “underinsured” vehicle bypassed the application of any exclusion defined in conjunction with the term “uninsured.” Caltzonsing is therefore not relevant here.

Plaintiffs also argued in the trial court that the government-vehicle exclusion violates public policy. Texas law requires automobile insurers to include UM/UIM coverage in their policies to protect motorists from financial loss when they are involved in car accidents with uninsured or underinsured drivers. See Tex. Ins. Code Ann. § 1952.101(b). The underlying policy behind this statute is the state's interest in protecting conscientious and 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).

But we previously have rejected this public policy contention in a similar context involving an underinsured governmental actor. See Ohio Cas. Grp. of Ins. Cos. v. Chavez, 942 S.W.2d 654, 659-61 (Tex. App.—Houston [14th Dist.] 1997, writ denied). In Chavez, our consideration of this issue was guided by an earlier Texas Supreme Court decision holding that a sovereign immunity exclusion (which completely insulated the governmental actor from any liability) did not frustrate the purpose of the UM/UIM statute because the governmental actor was not considered “financially irresponsible.” Id. (citing Francis v. Int'l Serv. Ins. Co., 546 S.W.2d 57, 60-62 (Tex. 1976)). We held that the Texas Supreme Court's reasoning was “equally applicable to underinsured motorists,” and there was no basis to invalidate the government-vehicle exclusion in that context either. Id. at 660. Guided by this precedent, we conclude that the government-vehicle exclusion in the Progressive insurance policy issued to Plaintiffs does not violate public policy.

We sustain Progressive's challenge to the trial court's denial of its summary judgment motion.

Conclusion

We reverse the trial court's order denying Progressive's summary judgment motion and render judgment that Plaintiffs take nothing on their claims for UM/UIM benefits.

FOOTNOTES

1.   Specifically, the Graves Amendment provides that a car rental or leasing company cannot be held liable for harm caused by the driver of the rented or leased vehicle unless the company was negligent or engaged in criminal wrongdoing. See 49 U.S.C.A. § 30106(a).

Katy Boatman, Justice