Opinion ID: 1494727
Heading Depth: 2
Heading Rank: 2

Heading: Robert's Claim

Text: We next examine Robert's Stowers claim. A Stowers duty is triggered by a settlement demand when: (1) the claim against the insured is within the scope of coverage; (2) the demand is within the policy limits; and (3) the terms of the demand are such that an ordinarily prudent insurer would accept it, considering the likelihood and degree of the insured's potential exposure to an excess judgment. American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 849 (Tex.1994). A demand above policy limits, even though reasonable, does not trigger the Stowers duty to settle. Id. Therefore, Robert must show that Maldonado's demand of $1.3 million was somehow transformed into an unconditional offer to settle within the policy limits of $300,000. In APIE, the insured had been covered in consecutive years under four separate insurance policies, the largest of which provided a maximum $500,000 in coverage. The plaintiff's lowest settlement demand was for $600,000. We held that [e]ven if this demand were reasonable, it triggered no Stowers duty unless it was within the applicable policy limits. Id. at 852. Because the plaintiffs never did make a settlement demand within the $500,000 policy limits, no Stowers duty was triggered. In this case, State Farm claims that Maldonado never made an unconditional offer to settle within the State Farm policy limits. It is undisputed that Maldonado never made a settlement demand of less than $1.3 million. She nevertheless contends that Robert's offer to pay the $1 million above the policy limits converted the $1.3 million demand into a $300,000 policy-limits demand. [6] We disagree. Although Maldonado argues that it was understood that this $1.3 million settlement offer was bifurcated$300,000 from State Farm and $1 million from Robertthere is no evidence that State Farm knew, at a point when it had a reasonable amount of time to respond, that Robert had made an unconditional offer to pay the excess. As the dissenting justice at the court of appeals noted, The fact remains that Maldonado never made a demand within the policy limits. State Farm had no duty to respond to the demand in excess of policy limits; its failure to settle in response to that demand cannot be negligence. 935 S.W.2d at 826 (Rickhoff, J., dissenting) (citing Texas Farmers Ins. Co. v. Soriano, 881 S.W.2d 312, 314 (Tex.1994) and APIE, 876 S.W.2d at 849). We conclude that this demand was not an unconditional offer to settle within policy limits and therefore did not trigger the Stowers doctrine. As such, Maldonado's settlement demand did not impose a Stowers duty on State Farm. Without a tort duty, there can be no breach. Accordingly, Robert cannot recover from State Farm in tort. In light of our disposition of the preceding issues, we need not consider State Farm's remaining points of error.