Republic Western Insurance Co. v. State

985 S.W.2d 698, 1999 Tex. App. LEXIS 1435, 1999 WL 106719
CourtCourt of Appeals of Texas
DecidedMarch 4, 1999
Docket03-98-00235-CV
StatusPublished
Cited by30 cases

This text of 985 S.W.2d 698 (Republic Western Insurance Co. v. State) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Republic Western Insurance Co. v. State, 985 S.W.2d 698, 1999 Tex. App. LEXIS 1435, 1999 WL 106719 (Tex. Ct. App. 1999).

Opinion

BEA ANN SMITH, Justice.

This is an interlocutory appeal from an order granting a temporary injunction. Appellants U-Haul of Texas, Inc. (“U-Haul”) and Republic Western Insurance Company brought a declaratory judgment action against appellees, the State of Texas and Dan Morales, Attorney General, individually and in his official capacity (collectively “the State”). Appellants sought a declaration that they were not acting in violation of article 1.14-1 of the Texas Insurance Code by offering various moving-related insurance packages to U-Haul’s customers. The State counterclaimed against U-Haul and Republic Western and filed a third-party action against appellant U-Haul International, Inc. (“UHI”), seeking to enjoin U-Haul’s practice of selling these packages to its customers. The trial court issued a temporary injunction against appellants, who now seek review of that order. We will affirm the trial court’s order.

FACTUAL AND PROCEDURAL BACKGROUND

Since 1962, U-Haul of Texas has been in the business of renting self-moving equipment, including cargo trucks, trailers, and trailer hitches, as well as self-storage space. U-Haul offers its rental customers three “Safe Protection” insurance packages: “Safe-move,” “Safetow,” and “Safestor.” These packages apply respectively to the rental of moving equipment, towing equipment, and storage spaces. Safemove and Safetow consist of a collision damage waiver (“CDW”) 1 and limited additional-insured protection for cargo damage, 2 medical expense, and accidental death. 3 Safestor provides additional- *700 insured protection against various dangers posed to items while stored in U-Haul storage facilities. 4

The insurance component for all three products is underwritten by appellant Republic Western, an insurance company licensed and authorized to write insurance in Texas. 5 For many years, Republic Western has issued a master insurance policy to U-Haul, allowing U-Haul to add its customers as additional insureds. When a U-Haul customer decides to purchase insurance, she initials the rental contract set out on the back of the rental agreement and pays U-Haul the applicable premium. The customer’s payment goes solely to Republic Western. UHI assists U-Haul in marketing the packages to U-Haul’s customers by providing counter-top writing mats and brochures that are displayed at all U-Haul centers.

After investigating U-Haul and Republic Western in July 1997, the Attorney General’s office sent a letter demanding that U-Haul representatives “with settlement authority” appear at a meeting with personnel from the Attorney General’s office and the Texas Department of Insurance to “resolve matters of potential litigation involving trade and insurance practices in Texas.” The parties met but were unable to reach a settlement. Later, the Attorney General’s office issued separate Civil Investigative Demands (“CIDs”) to U-Haul and Republic Western. Those appellants responded by filing a declaratory judgment action against the State, requesting a declaration that their activities did not violate the Insurance Code. The State counterclaimed, seeking a temporary injunction against U-Haul and Republic Western and adding a third party action against UHI.

Following the hearing on the State’s application for a temporary injunction, the trial court found that U-Haul, UHI, and Republic Western were each engaged in the unauthorized business of insurance in violation of article 1.14-1 of the Texas Insurance Code. Tex. Ins.Code Ann. art. 1.14-1 (West Supp. 1999). The trial court further determined that U-Haul was acting as an unlicensed local recording agent for Republic Western in violation of article 21.14 of the Insurance Code. Id. art. 21.14. Pursuant to authority granted by article 1.14-1, 6 the court issued an order enjoining U-Haul and UHI from, inter alia, advertising or selling Safemove, Safetow, Safestor or any other insurance products. This Court subsequently granted appellants’ Emergency Motion to Stay Temporary Injunction. See Republic Western Ins. Co. v. State, No. 3-98-235-CV (Tex. App.—Austin May 15, 1998) (written order not designated for publication).

Appellants challenge the temporary injunction by raising four issues on appeal. First, they assert that by selling the additional-insured protection packages, U-Haul and Republic Western are not engaged in the “unauthorized business of insurance” prohibited by article 1.14-1 of the Insurance Code. Second, they argue that U-Haul is not acting as an unlicensed local recording agent for Republic Western under article 21.14 of the Insurance Code. Third, appellants claim that the State is not entitled to a temporary injunction under either article 1.14-1 or article 21.14. Finally, appellants allege that the order granting the State injunctive relief is void because it is vague, overly broad, and lacks specific findings to support it.

DISCUSSION

Ordinarily, the “abuse of discretion” standard of review applies to a trial court’s order granting or denying a temporary injunction. See 2300, Inc. v. City of Arlington, 888 S.W.2d 123, 126 (Tex.App.—Fort Worth 1994, no writ); Valenzuela v. Aquino, 763 S.W.2d 43, 44 (Tex.App. — Corpus Christi 1988, no writ). In the instant case, however, the legislature has specified that the trial *701 court is required to order injunctive relief, if requested, upon determining that a party has violated article 1.14-1. See Tex.Ins.Code Ann. art. 1.14-1, § 3(f) (West Supp.1999) (“On application for injunctive relief and a finding that a person is violating or threatening to violate any provision of this Article, the district court shall grant the injunctive relief and the injunction shall be issued without bond.”). Because the mandatory language of section 3(f) appears to remove the trial court’s discretion in determining whether injunctive relief is proper, the issue is whether appellants’ conduct violates article 1.14-1. We will apply a de novo standard of review to this pure question of law. See State Farm Lloyds v. Kessler, 932 S.W.2d 732, 735 (Tex.App. — Fort Worth 1996, writ denied).

Unauthorized Insurance Business

The heart of the present dispute is whether U-Haul violates article 1.14-1 of the Insurance Code by offering the “Safe Protection” packages to its rental customers. We begin by examining the text of the statute. Section 3(b) of article 1.14-1 states: “No person or insurer shall directly or indirectly do any of the acts of an insurance business set forth in this Article except as provided by and in accordance with the specific authorization of statute.” Tex. Ins.Code Ann. art. 1.14-1, § 3(b) (West Supp.1999). Section 2(a) includes the following acts within the meaning of “doing an insurance business”:

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Bluebook (online)
985 S.W.2d 698, 1999 Tex. App. LEXIS 1435, 1999 WL 106719, Counsel Stack Legal Research, https://law.counselstack.com/opinion/republic-western-insurance-co-v-state-texapp-1999.