Opinion ID: 1780555
Heading Depth: 1
Heading Rank: 6

Heading: Unfair Claims Settlement Practices Under Section 17.46 of the DTPA

Text: Section 16 of article 21.21 also prohibits an insurer from engaging in any practice defined by section 17.46 of the DTPA. Section 17.46 of the DTPA enumerates specific acts as false, misleading, or deceptive acts or practices, but this enumeration does not constitute an exclusive list of acts that violate the prohibition against deceptive trade practices. Spradling v. Williams, 566 S.W.2d 561, 564 (Tex.1978). Section 17.46 encompasses any type of business activity that deceives consumers. Id. at 563. When an unlisted practice is alleged, the plaintiff must obtain a finding that the act or practice occurred and that it was deceptive. Id. at 564. Article 21.21, § 16 of the Insurance Code makes actionable any violation of section 17.46 of the DTPA. Aetna Casualty & Surety Co. v. Marshall, 724 S.W.2d 770, 772 (Tex.1987). Thus, section 16 of article 21.21 incorporates any unlisted practice that is determined to be false, misleading, or deceptive. Allstate Ins. Co. v. Kelly, 680 S.W.2d 595, 605 (Tex.App.Tyler 1984, writ ref'd n.r.e.). The Vails assert that the failure to attempt to settle a claim promptly, fairly, and equitably when liability becomes reasonably clear is an unlisted deceptive trade practice under section 17.46 of the DTPA. The Vails further contend that they obtained a jury finding that Texas Farm had engaged in a deceptive act because the jury answered Special Issue No. 4 as follows: Do you find from a preponderance of the evidence that the defendant intentionally failed to exercise good faith in the investigation, processing, and denial of the claim made the basis of this lawsuit? Answer: We do. The jury made the requisite determination that Texas Farm had engaged in a deceptive act or practice when it found that Texas Farm had failed to exercise good faith in the handling of the Vails' claim. The jury also found that Texas Farm's failure was intentional, although no such finding is expressly required by the pre-1985 Insurance Code. Compare Tex.Ins. Code Ann. art. 21.21, § 16(b)(1) (Vernon Supp.1988) (requiring a finding of knowing conduct for recovery of treble damages). The Vails stated and proved a cause of action under section 17.50(a)(4) of the DTPA and article 21.21, § 16 of the Insurance Code by pleading and proving that Texas Farm had committed an unlisted deceptive trade practice under section 17.46 of the DTPA. We hold that the Vails stated and proved a cause of action for unfair claims settlement practices under section 17.50(a)(4) of the DTPA on any one of three alternative grounds: (1) by incorporating article 21.21, § 16 of the Insurance Code, section 4(a) of Board Order 18663, and the definition of an unfair claims settlement practice in article 21.21-2, § 2(d) of the Insurance Code; (2) by incorporating article 21.21, § 16 of the Insurance Code, section 4(b) of Board Order 18663, and the determinations made by this court in Arnold and Aranda ; and (3) by incorporating article 21.21, § 16 of the Insurance Code and section 17.46 of the DTPA.