Progressive County Mutual Insurance Co. v. Kelley, No. 08-0073

Briefing Requested: May 30, 2008

In a case about automotive insurance, this is not the usual way for the fact section to begin:

“While riding her horse…”

Regan Kelley, while riding her horse, was struck by a motorist and seriously injured. She filed a claim under her own insurance policy’s provision for underinsured motorists. Her insurer paid a single policy limit (which was approximately $500,000).

It turns out, however, the the insurer had issued two separate documents of insurance to the Kelley family — splitting the automobile insurance for the family’s five cars across those two documents. Kelley sued seeking coverage under that second document.

The insurer contends that its issuing two separate documents was merely for its own administrative convenience and that these documents actually embodied only policy. Kelley contends that the policies mean what they say and that, in any event, the insurer’s own internal guidelines recognize that these are distinct policies.

The Waco Court agreed with Kelley, holding that summary judgment should have been granted to Kelley that these were separate policies. The court of appeals also struck down a provision of those policies that might have prohibited “stacking” of this coverage as violating public policy.

The opinion was a memorandum opinion. Chief Justice Gray dissented without a separate opinion.

The Texas Supreme Court has now requested merits briefing in the case.