      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN



                                      NO. 03-02-00641-CV



                        Kathryn Payne and Carnell Gulley, Appellants

                                                 v.

                    Mid-Century Insurance Company of Texas, Appellee




             FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY
            NO. 261,045, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING



                            MEMORANDUM OPINION


               This is an appeal from a summary judgment rendered against appellants Kathryn

Payne and Carnell Gulley. The parties stipulated to certain material facts. The dispute arose out of

a motor vehicle collision with a third party; both appellants were in Kathryn Payne’s automobile and

both were injured. The issue concerns whether appellants are entitled to personal injury protection

(“PIP”) benefits under the terms of a policy insuring Payne and issued by appellee Mid-Century

Insurance Company of Texas (hereafter “Mid-Century”). The trial court held that they were not.

We will affirm.


                                               Facts

               Eddie Lynn Garner, a Farmers Insurance Group agent, has written all of the insurance

policies for the Payne family since 1991. On or about April 11, 1994, Kathryn’s mother purchased
a Texas Farmers Insurance Company (hereinafter “Farmers”) policy naming Kathryn as the rated

driver and signed an agreement deleting PIP coverage. Thereafter, Kathryn Payne and her parents,

Wanda and Rodger Payne, were named insureds in Farmers policy number 3916 88 98 (hereinafter

“the Farmers policy”). On April 19, 1996, Kathryn signed an agreement rejecting PIP coverage in

connection with the Farmers policy. The waiver provided that the “rejection shall apply on this

policy and all future renewals or replacements of this policy.”

               On April 20, 2001, the Farmers policy was cancelled and the automobile insurance

policy number 3988 84 66 issued by Mid-Century insuring Kathryn became effective (hereinafter

“the Mid-Century policy”).1 This was the policy in effect at the time of the automobile accident;

both appellants were covered persons under the policy. Wanda Payne obtained the Mid-Century

policy covering Kathryn and signed an agreement deleting PIP coverage. Kathryn never signed a

subsequent agreement deleting PIP coverage nor did she ever request PIP coverage. The declarations

page sent to Kathryn reflected that she had no PIP coverage. The Paynes never paid a premium for

PIP coverage on any policy insuring Kathryn Payne, all of which were obtained through Garner as

their agent.

               The collision occurred on July 20, 2001. Mid-Century denied both appellants’ claims

for PIP benefits on the basis that the policy did not provide PIP coverage. Appellants filed this

action to construe the policy. Both sides filed motions for summary judgment; the trial court granted

Mid-Century’s motion and denied the motion of Payne and Gulley, who appeal.


        1
         Although the fact was not stipulated, the uncontroverted proof shows that the Mid-Century
policy provided Kathryn the same coverage and limits as the Farmers policy, but at a lower cost.
Wanda and Rodger Payne became insured under a separate Farmers policy.

                                                 2
                                       Standard of Review

               The propriety of a summary judgment is a question of law; we review the trial court’s

decision de novo. Natividad v. Alexis, Inc., 875 S.W.2d 695, 699 (Tex. 1994). The standards for

reviewing a motion for summary judgment are well established: (1) the movant has the burden of

showing that no genuine issue of material facts exists and that it is entitled to judgment as a matter

of law; (2) evidence favorable to the nonmovant will be taken as true; (3) every reasonable inference

must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Prop.

Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985); see Tex. R. Civ. P. 166a (c). A defendant who

moves for summary judgment has the burden of disproving one essential element of the plaintiff’s

cause of action or showing that the plaintiff cannot succeed on any theory pleaded. See San Antonio

Express News v. Dracos, 922 S.W.2d 242, 247 (Tex. App.—San Antonio 1996, no writ).


                                             Discussion

               Our disposition of the appeal turns on application of the insurance code’s provision

requiring that every automobile liability policy provide personal injury protection coverage except

as provided by statute. The relevant terms are as follows:


       No automobile liability insurance policy . . . covering liability arising out of the
       ownership, maintenance, or use of any motor vehicle shall be delivered or issued for
       delivery in this state unless personal injury protection coverage is provided therein
       or supplemental thereto. The coverage required by this article shall not be
       applicable if any insured named in the policy shall reject the coverage in writing;
       provided, unless the named insured thereafter requests such coverage in writing,
       such coverage need not be provided in or supplemental to a renewal policy if the
       named insured has rejected the coverage in connection with a policy previously
       issued to him by the same insurer or by an affiliated insurer.



                                                  3
Tex. Ins. Code Ann. art. 5.06-3(a) (West 1981) (emphasis added). Thus, every automobile liability

policy must include PIP coverage as a matter of law unless effectively waived in accordance with

the statute. PIP is not required if any insured named in the policy rejects coverage in writing. See

Old Am. County Mut. Fire Ins. Co. v. Sanchez, 81 S.W.3d 452, 459-60 (Tex. App.—Austin 2002,

pet filed). The rejection must be express and clear, and must be signed by a person explicitly named

as an insured in the policy. Id. at 460. Further, unless the named insured thereafter requests the

coverage in writing, PIP need not be provided in a renewal policy if the named insured has rejected

PIP coverage in connection with a policy previously issued to the insured by an affiliated insurer.

Id. at 458-59 nn.5-6. The “named insured” is a term of art that refers specifically to the insured listed

on the declarations page of the insurance policy. Id. at 459. Absent a valid rejection, PIP coverage

applies as a matter of law. Id.

                Farmers and Mid-Century are affiliated companies as that term is defined in article

5.06-3 of the Texas Insurance Code. Kathryn was an insured named in the Farmers policy; she

rejected PIP coverage in connection with the Farmers policy and never requested PIP coverage

thereafter. Kathryn alone was the named insured in the Mid-Century policy. After the accident,

Mid-Century denied PIP coverage on the basis that its named insured had rejected PIP coverage in

a policy previously issued to her by an affiliated company. The first question becomes whether the

Mid-Century policy was a renewal of the Farmers policy. If so, Kathryn’s 1996 written rejection was

effective as to the Mid-Century policy.

                Mid-Century filed a motion for summary judgment alleging that it was entitled to

judgment for at least two reasons: (1) the Mid-Century policy was a renewal of the Farmers policy



                                                   4
by an affiliated company, therefore Kathryn Payne’s 1996 waiver of coverage in connection with the

Farmers policy applies to the Mid-Century policy, and (2) Wanda Payne’s 2001 waiver of PIP

coverage was effective as to the Mid-Century policy because she was both an “insured named in the

policy” and Kathryn Payne’s agent authorized to waive coverage on her behalf.2

               Appellants, on the other hand, responded that the written rejection Kathryn signed

in 1996 was ineffective as to the Mid-Century policy for two reasons. First, although the Mid-

Century policy might be considered a replacement of the Farmers policy, it could not be a renewal

of the Farmers policy because the earlier policy insured three persons, Kathryn and her parents, while

the Mid-Century policy covered only Kathryn. Further, Kathryn’s written rejection agreeing that it

applied to replacement policies was of no effect because the statute only provides that such a written

rejection applies to a renewal policy but does not expressly state that it can apply to a replacement

policy. Therefore, they argue, any earlier written waiver could not apply to the Mid-Century policy

and, because Kathryn never signed a new waiver, appellants were entitled to judgment that the Mid-

Century policy provided PIP coverage as a matter of law. Furthermore, they deny that Wanda was

an insured named in the Mid-Century policy or that she was Kathryn’s agent for the purpose of

rejecting PIP coverage and, therefore, Wanda’s 2001 waiver was ineffective as to the Mid-Century

policy.




          2
             Mid-Century also alleged that Wanda’s 1994 waiver was effective because it was in
connection with a policy previously issued by an affiliated insurer. The company does not assert this
basis on appeal; it relies instead on Kathryn’s 1996 waiver except in one reference at the end of its
argument in support of this ground in which it adds, “Furthermore, under the ruling promulgated by
Berry . . . the April 11, 1994, Agreement Deleting Personal Injury Protection signed by Wanda Payne
effectively rejects PIP coverage in the Mid-Century policy.”

                                                  5
                We hold that Kathryn’s 1996 written waiver effectively rejected PIP benefits under

the Mid-Century policy. The summary judgment will stand on this basis. For that reason, we need

not decide whether Wanda was authorized to reject coverage on Kathryn’s behalf or address any

remaining issues.

                It has long been the general rule that a renewal of a policy constitutes a separate and

distinct contract for the period of time covered by the renewal unless the renewal document shows

by clear and unambiguous terms that the parties’ intent was not to make a new contract but to

continue the original contract in force. Great Am. Indem. Co. v. State, 229 S.W.2d 850, 853 (Tex.

Civ. App.—Austin 1950, writ ref’d). The commonly accepted definition of the term “renew”

includes “to begin again,” “to reestablish,”“to recommence,” “to resume,” and “to replace.” Berry

v. Texas Farm Bureau Mut. Ins. Co., 782 S.W.2d 246, 248 (Tex. App.—Waco 1989, writ denied)

(quoting Black’s Law Dictionary 1165 (5th ed. 1979). Unless the parties expressly state otherwise,

a renewal constitutes a replacing of the old contract with a new contract for the term stated.

Berry,782 S.W.2d at 248. The term “envisions the creation of something new with a nexus to the

old.” Id. The legislature provided that a written rejection of benefits executed in connection with

one policy applies to a renewal policy. The term renewal policy does not include only a policy which

extends the initial or original policy; it includes every new, separate, and distinct successive contract

between parties connected in an unbroken chain of coverage back to the original or initial policy on

which coverage was rejected. Id.

                In a case very similar to the one before us, the court in Berry was called upon to

decide whether the named insured’s written rejection of uninsured motorist coverage made in



                                                   6
connection with one policy applied to a successive policy. 3 The court held that by using the term

“renewal policy” in the statute, the legislature intended the term to include a new contract between

parties that replaces a preceding policy without a lapse of coverage. Because the named insured had

rejected coverage in connection with the issuance of the initial policy, the company was not required

to provide uninsured motorist coverage in the later policy. Id.

                Appellants attempt to distinguish Berry on the basis that there “the contested policies

of insurance were identical except for the numbers.” Our reading of the opinion does not reveal this

fact or reflect that the court’s holding turns on this fact. Appellants argue that the Mid-Century

policy cannot be considered a renewal of the Farmers policy because the Farmers policy insured

Kathryn and her parents, while the Mid-Century policy insured only Kathryn. As they argue, “From

Wanda and Rodger Payne’s perspective, the Mid-Century policy was no insurance at all.”

Appellants do not address the summary judgment proof that identical coverage was provided

Kathryn in an unbroken chain under the two policies. They cite no authority for their assertion that

a renewal policy must have identical parties and terms as the earlier policy.

                The Berry opinion reflects that Berry was the named insured in an unbroken chain

of automobile liability coverage policies, and that she executed a written rejection of benefits form

initially but not in connection with the later policy in effect at the time of the incident giving rise to

her claim. The court held that each later policy created a new contract but that nevertheless each was




        3
         The statutory provision for rejecting uninsured/underinsured motorist coverage utilizes
almost identical language as the PIP statute. Tex. Ins. Code Ann. art. 5.06-1(1) (West 1981).

                                                    7
considered a renewal policy because it replaced the previous one in an unbroken chain, with no lapse

in coverage, back to the one on which coverage was rejected. Id..

                Kathryn signed a written rejection of PIP in connection with a policy in which she

was an insured named in the policy; she never requested PIP coverage; thereafter, an affiliated

company issued her a policy in which she was the named insured; the new policy replaced the older

one without a lapse of coverage. From Kathryn’s perspective, the Mid-Century policy was a renewal

policy.

                We hold that under these facts, the Mid-Century policy was a renewal policy. Thus,

Mid-Century was not required to provide PIP in its policy because Kathryn had rejected the coverage

in writing in connection with the issuance of the Farmers policy, a policy previously issued to her

by an affiliated insurer. For these reasons, the trial court did not err in granting summary judgment

in favor of Mid-Century and in overruling appellants’ motion.

                We overrule the appellants’ complaints on appeal and affirm the judgment.




                                              Marilyn Aboussie, Justice

Before Justice Kidd, B. A. Smith and Aboussie*

Affirmed

Filed: August 29, 2003
*
    Before Marilyn Aboussie, Chief Justice (retired), Third Court of Appeals, sitting by assignment.
    See Tex. Gov’t Code Ann. § 74.003(b) (West 1998).

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