Ruben and Anita Hernandez, Petitioners v. Gulf Group Lloyds, Respondent

Summary

The Texas Supreme Court held that an insurer cannot rely on a settlement‑without‑consent exclusion to deny an uninsured/underinsured motorist claim unless the insurer is actually prejudiced by the insured's settlement. Applying this rule, the Court reversed the Court of Appeals and affirmed the trial court's judgment awarding the Hernandezes the policy limits. A dissent argued that the case is one of coverage, not breach of contract, and would have affirmed the appellate decision.