## Facts

- State Farm Mutual Automobile Insurance Company issued Gillian M. McKay an auto policy covering her Chevrolet Blazer.
- McKay purchased comprehensive (“other than collision”) property-damage coverage, but did not purchase collision coverage.
- The policy promised to pay for “direct and accidental loss” to the covered auto, but stated it would pay “loss covered by collision only if” the declarations showed collision coverage.
- “Collision” was defined as the upset of the vehicle or “collision with another object.”
- The policy listed specified causes that were “not considered collision” and were covered only if comprehensive coverage was shown in the declarations, including “malicious mischief or vandalism” and “contact with bird or animal.”
- On March 24, 1995, McKay’s son was driving the Blazer at night on a Houston freeway when an intoxicated man ran onto the roadway; the Blazer struck him despite the driver’s attempt to avoid him.
- The man was later run over by two other vehicles and died; testing indicated a blood alcohol level of about 0.148 around the time of the incident.
- State Farm denied McKay’s claim for damage to the Blazer, taking the position that the loss resulted from a collision and McKay had not bought collision coverage.
- McKay sued, seeking a declaration of coverage and asserting breach of contract plus extra-contractual claims, including misrepresentation, fraud, failure to investigate and evaluate in good faith, breach of the duty of good faith and fair dealing, breach of fiduciary duty, mental anguish, and alleged violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA).
- McKay argued the loss was covered by comprehensive because (1) the pedestrian should be treated as an “animal” for “contact with bird or animal,” and (2) the pedestrian’s reckless conduct constituted “malicious mischief or vandalism.”
- State Farm moved for summary judgment on coverage and all other claims.

## Issues

1. Whether damage caused when the insured vehicle struck an intoxicated pedestrian was covered under comprehensive coverage as “contact with bird or animal” or “malicious mischief or vandalism,” despite the insured’s failure to purchase collision coverage.
2. Whether, given the coverage ruling, McKay could maintain extra-contractual and statutory claims based on State Farm’s denial of the claim.

## Decision

- The court granted State Farm’s motion for summary judgment.
- The court held the loss was a collision with “another object” and therefore fell within the policy’s collision definition.
- Because McKay did not purchase collision coverage, the policy did not provide coverage for the loss unless a listed comprehensive peril applied.
- The court rejected McKay’s argument that a human pedestrian is an “animal” within the meaning of “contact with bird or animal,” reading the term according to ordinary usage and the policy’s structure.
- The court also rejected the “malicious mischief or vandalism” theory because that peril contemplates intentional, wrongful property damage, and the record did not show the pedestrian intended to damage the vehicle.
- With no coverage and a reasonable basis for denial, the court ruled that McKay’s bad-faith and related extra-contractual theories failed as a matter of law.
- The court also rejected a fiduciary-duty theory, finding no general fiduciary relationship in ordinary insurer-insured claim handling.
- The court entered judgment for State Farm on the contract claim and on the Texas Insurance Code and DTPA claims tied to the denial of coverage.

## Legal Principles

- Unambiguous insurance policy terms are applied according to their plain, ordinary meaning; courts do not rewrite a policy to provide coverage not purchased.
- A collision with a pedestrian is a “collision with another object” within standard collision-coverage language.
- The comprehensive phrase “contact with bird or animal,” read as a layperson would read it and in light of the listed perils, does not include humans.
- “Malicious mischief or vandalism” in property coverage requires intentional conduct directed at damaging property; negligent or reckless behavior causing an accident is not enough.
- An insurer does not act in bad faith when it denies a claim based on a correct (or at least reasonable) construction of the policy.
- In typical first-party claims handling, Texas law does not treat the insurer as a fiduciary of the insured.
- Statutory and consumer claims seeking policy benefits generally fail where there is no coverage and no actionable misstatement of coverage.

## Conclusion

McKay’s vehicle damage resulted from a collision with a pedestrian and did not fall within the policy’s listed comprehensive perils for “contact with bird or animal” or “malicious mischief or vandalism.” Because McKay had not purchased collision coverage, State Farm owed no contract benefits and was entitled to summary judgment on the breach-of-contract claim and all related tort and statutory claims.


McKay v. State Farm Mutual Automobile Insurance Co., 933 F. Supp. 635 (1995)