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John H. Carney & Associates v. Texas Property and Casualty Insurance Guaranty Association

John H. Carney & Associates sued the Texas Property and Casualty Insurance Guaranty Association to recover damages it was awarded in a judgment against an insolvent insurance company, Texas Select Lloyds Insurance Co. Carney contends that the judgment constitutes a "covered claim" under former Texas Property and Casualty Insurance Guaranty Act article 21.28-C, §5(8) ("the Guaranty Act") because the judgment was based on an assigned interest in the proceeds of a first-party claim under a homeowner's policy that Texas Select issued. The association moved for summary judgment on a number of grounds, including that the Carney law firm is not entitled to seek compensation under the Guaranty Act as an assignee of the insured. The trial court granted the motion without specifying the grounds. The plain language of the Guaranty Act is silent concerning the right of an assignee to seek the limited remedy provided by the act, and principles of statutory construction could yield more than one reasonable interpretation of the act. The disparate treatment concerning the rights of assignees reflected in similar laws and the limited nature of the remedy provided in the act evidence the Legislature's intent to limit its remedy to insureds named in the underlying policy or those who are otherwise vested with legal title to the policy. Because it is undisputed that Carney is not an insured under the Texas Select policy, the remedy provided in the Guaranty Act is not available in this case. The trial court's judgment is affirmed. Austin Court of Appeals, No. 03-10-00385-CV, 08-26-2011.

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OPINION

John H. Carney & Associates (“Carney” or “the Carney law firm”) sued the Texas Property and Casualty Insurance Guaranty Association (“the Association”) to recover damages it was awarded in a judgment against an insolvent insurance company, Texas Select Lloyds Insurance Company (“Texas Select”). Carney contends that the judgment constitutes a “covered claim” under former article 21.28-C, section 5(8) of the Texas Property and Casualty Insurance Guaranty Act (“the Guaranty Act”)*fn1 because the judgment was based on an assigned interest in the proceeds of a first-party claim under a homeowners policy that Texas Select issued. The Association moved for summary judgment on a number of grounds, including that the Carney law firm is not entitled to seek compensation under the Guaranty Act as an assignee of the insured. The trial court granted the motion without specifying the grounds on which summary judgment was based. We will affirm the judgment.

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