American National Insurance Company v. Bertha Arce, Individually and as Representative of All Others Similarly Situated

Supreme Court of Texas
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No. 21-0843
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American National Insurance Company,
Petitioner,

v.

Bertha Arce, Individually
and as Representative of All Others Similarly Situated,
Respondent

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On Petition for Review from the
Court of Appeals for the Seventh District of Texas
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JUSTICE YOUNG, concurring.

To defeat an insured’s recovery under a life-insurance policy on
the grounds of misrepresentation, § 705.051 of the Insurance Code lists
two elements that an insurer must establish: that the misrepresentation
(1) was of a material fact and (2) affected the risks assumed. The Court
holds today that the insurer must establish a third element: that the
misrepresentation was made with the intent to deceive. This third
element comes not from the statutory text but from the common law.
How can our text-centered approach to statutory interpretation
generate such an outcome? I write separately to address this question,
which implicates the interrelated roles of stare decisis, the common law,
and statutes. I also write to discuss what today’s decision does not
mean—specifically, it does not mean that courts may freely draw from
the common-law well to “supplement” statutory requirements.

I

A

Petitioner asks us to declare that the intent-to-deceive element is
no longer good law. According to petitioner, the common-law rule is
inconsistent with § 705.051 of the Insurance Code; the two cannot coexist;
and the statute must therefore take precedence. Yet the two have
coexisted—for over a century. The statute was enacted in 1909. See ante
at 2. If there is fatal inconsistency today, there was fatal inconsistency
then and at every point in between. Neither the statute nor the common
law (which, importantly, predated the statute) has changed in any
material way. If we were writing on a blank slate—if, for example,
§ 705.051 were enacted for the first time today—we would have to resolve
as a matter of first impression whether the statute’s enumeration of two
discrete requirements to defeat recovery would exclude an unenumerated
intent-to-deceive element. But that ship sailed long ago. As the Court’s
scholarly examination reflects, this Court’s cases have jointly applied
the statutory and common-law requirements from the start. Whether
those requirements can coexist is not an open question. As a matter of
law, they can, because that legal question was settled long ago.
This conclusion does not require me to believe (or disbelieve) that
it was correct to maintain the common-law intent-to-deceive element

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upon the enactment of the statute. Even conclusively establishing the
wrongness of that choice would be, in and of itself, insufficient to
overcome stare decisis.1 “After all, [that] doctrine exists to protect
wrongly decided cases.” Mitschke v. Borromeo, 645 S.W.3d 251, 260
(Tex. 2022). How could it be otherwise? Stare decisis would protect a
null set if it protects only precedents with which we already agree. To
overcome precedent, we need more than asserted (or even proven) error.
See id. at 263–66. Our traditional guideposts that direct our path when
considering overruling an erroneous precedent—efficiency, fairness, and
legitimacy—do not point toward a change in this context.
“Efficiency” does not support tearing down a longstanding
precedent that is clear and easily administrable. See id. at 263–64.
Insurers may find it challenging to prove intent, of course. But the
question is whether the substantive requirement of proving intent to
defeat recovery is clear, and it is.
Nor is there any “fairness” ground for changing course now.
Instead, “[o]ur reluctance [to unsettle precedent] is particularly acute in
property and contract cases,” like this one, because citizens are
especially entitled to rely on the stability of legal rules in such private-
law areas. Id. at 264. To the extent that a precedent involves statutory
construction (including interpreting a statute in a way that has allowed
this coexistence), stare decisis is at its peak. Id. at 265. “Even there,”
however, “circumstances may require the correction of seriously mistaken

1 As I describe in Part II, infra, I conclude that the courts were likely
correct to have maintained the intent-to-deceive element. But my vote in this
case would be the same even if I reached the opposite conclusion.

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and harmful precedents.” Id.; see id. at 265 n.24 (noting cases in which
this Court and the U.S. Supreme Court overruled statutory-interpretation
precedents). But I see no plausible argument that the coexistence of the
statutory and common-law elements was especially wrong or harmful,
much less both.
This last point dovetails with “legitimacy,” the final stare decisis
guidepost. Legitimacy requires adhering to precedents for the sake of
stability and reliability, even if they were conceived in error, but
“adhering to or entrenching a precedent that is egregiously wrong or
that has lost its underpinnings does not foster legitimacy.” Id. at 266.
If subsequent law has shaken (or destroyed) a precedent’s foundations,
then the precedent may stand like a hollowed tree—ready to fall for lack
of vitality. That was the reason stare decisis did not impede overruling
the precedent at issue in Mitschke itself. Id. It is mistaken to think of
stare decisis as interested only in preserving a precedent at all costs; the
doctrine’s role is to help us determine, in a principled and neutral way,
what to preserve. But legitimacy interests do not support changing the
status quo here. The fact that the common law and the statute have
dwelled together in comparative quietude for so long supports the notion
that it was not egregious (even if it was wrong) to allow such coexistence.
Taken together, these points confirm that there is nothing
extraordinary about this corner of the law that warrants repudiating
longstanding precedent and practice. Accordingly, as I see it, the most
we could muster is a sense that, had we been the ones to make the
decision in the first instance, we may have decided things differently.
That cannot be enough. If retrospective doubts about statutory

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decisions justify overturning long-settled legal principles, there would
be no long-settled legal principles. “Every day would be a new day in
the life of the law; every case would present an opportunity to refashion
settled principles and a temptation both for parties and courts to
disregard disliked precedents.” Id. at 258.
Petitioner’s argument, however, largely depends on revisiting
decisions already made. Petitioner invokes principles—like our plain-
text approach to statutory interpretation—with which I agree and that
would require careful consideration if we were confronting a truly open
question. In my view, however, stare decisis applies and has not been
overcome. That is enough to resolve the case even if the statute would
otherwise not bear the reading that the Court gives it.

B

This conclusion would be true regardless of whether the intent-
to-deceive element, which originated in the common law, remains part
of the common law or if, like the inosculation of two trees, it has merged
into the statute by judicial interpretation and legislative consent.
Suppose that the intent-to-deceive requirement is still nothing
but a freestanding common-law doctrine. If so, we could abrogate it
using our own authority. All common-law courts can do that. See, e.g.,
Price v. Price, 732 S.W.2d 316, 319 (Tex. 1987) (abolishing the common-
law doctrine of interspousal tort immunity); Rogers v. Tennessee, 532
U.S. 451, 453–55 (2001) (describing the consequences of the Tennessee
Supreme Court’s abolition of the old common-law “year and a day rule,”
under which a defendant could not be convicted of murder if the victim
survived longer than that period of time).

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The question is not of authority but of propriety. Stare decisis
would counsel against doing so here, at least based on the arguments we
have before us. For one thing, petitioner has not asked us to simply
abrogate the common-law rule by exercising our common-law authority.
Instead, petitioner argues that the statute itself requires this result.
But this contention, too, implicates stare decisis. The relevant precedent
has at least two components: (1) the substantive principle (the part that
compels insurers to establish the insured’s intent to deceive) and (2) a
jurisprudential principle (under which the common law’s scienter
element permissibly stands alongside the statute’s requirements).
As Mitschke illustrates, even when stare decisis applies, its
default presumption of retaining a challenged precedent can be
rebutted. That is true in contexts like this one, where the common law
is challenged on the ground of its incompatibility with a statute. Indeed,
that is a very powerful ground because of the primacy of statutory law.
Under our constitutional system, in which the People govern themselves,
statutes enacted by elected political representatives are the chief vehicle
for the People to exert their authority. This Court can and should
overrule a common-law precedent when developments external to the
judicial system undermine the precedent’s vitality, as we did, for example,
in Texas Mutual Insurance Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012).
In Ruttiger, we recognized that intervening statutory law
provided a basis to doubt the viability of the cause of action that this
Court had created in Aranda v. Insurance Co. of North America, 748
S.W.2d 210 (Tex. 1988). See Ruttiger, 381 S.W.3d at 447. Significantly,
Aranda was followed by massive statutory revisions indicating legislative

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intent to achieve a comprehensive and exclusive method to resolve the
kind of claims that Aranda addressed. Id. at 441–44, 449–50. The new
statutory regime and the Court-created tort coexisted uneasily for a time.
In Ruttiger, we did not hold that the legislature had directly eliminated
the common-law action; rather, we concluded that the legislation so
thoroughly demolished the basis for our precedent that we should take
the step of overruling Aranda. Id. at 451. The decision was ours and
not compelled by the legislature. Id. at 450. But as Ruttiger illustrates,
the proper way for us to make such a decision is to account for the
separation of powers and the preeminence of statutory over common law.
This case is markedly different. Unlike in Ruttiger, no legislative
action has either expressly or functionally changed the status quo once
the courts made clear that the statutory and common-law requirements
would coexist. Unlike the highly reticulated statutory program that (at
best) fit awkwardly with the existence of the Aranda cause of action, the
intent-to-deceive requirement became no less compatible with the
Insurance Code. And whereas the short-term coexistence of Aranda and
the new statute was always fraught, the coexistence of the statutory and
common-law requirements at issue here has been lengthy and peaceful.
I agree with the Court that the intent-to-deceive element is not
fatally inconsistent with the statute. But, again, I believe that we could
reach this result without accepting petitioner’s invitation to relitigate it
“de novo.” Cf. ante at 11. Our standard application of stare decisis
presents a barrier that could be overcome upon showing something new
and material in statutory or other law or, even without that, on
identifying some exceptional irregularity in our precedent. But unlike

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in Ruttiger, no new developments have been added to the equation, and
there is nothing extraordinary about the precedent itself. There is no
real work for us to do here.

C

But there is more. Not only has nothing new happened that
would make this case like Ruttiger (or otherwise demonstrate the need
for the common-law rule to recede), but the contrary is true. The
legislature has not merely failed to do anything that would change the
status quo, but has taken no such action despite repeatedly revisiting,
revising, and recodifying the Insurance Code.
As the Court rightly notes, we presume that the legislature “acts
with full knowledge of . . . extant law.” Ante at 9 n.14. Thus, in the
legislature’s recurring visits to the Insurance Code, it has brought along
the knowledge that leaving § 705.051 intact amounted to leaving the
common-law requirement intact, too. Hence the significance of the
Court’s observation that, “[i]n over a hundred years, there has been no
indication that the Legislature disagrees with the common-law approach
to enforcement of insurance contracts.” Ante at 21.
This statutory history suggests that the common-law requirement
has never been foreign to the statute’s operation. Indeed, because of the
presumption of the retention of the common law, it would not have been
unreasonable (as I describe below, see infra Part II) for early twentieth-
century courts to have regarded the legislature’s enactment as embracing
the intent-to-deceive requirement from the start. One way or another,
one could conclude that the common-law requirement began as, or for
all practical purposes became, part of the larger statutory scheme.

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If so, the stare decisis analysis would be even stronger, because
adherence to a stable understanding of statutory precedents is especially
important. Mitschke, 645 S.W.3d at 265. The more tightly linked a
common-law principle is to the statute itself, the more cautious we
should be about disturbing it. One important reason even to have a
concept of legislative ratification or acceptance (whether formally
applicable here or not) is that uprooting law that is intertwined with
statutory enactments risks undermining the statutes. At the very least,
destabilizing preexisting common law of which the legislature was aware
should be done, if at all, with great care and for only compelling reasons.
Said differently: If preexisting common law has become closely
linked with the administration of a statutory program, and if the
legislature has revisited the general statutory terrain but done nothing
to change the specific part of the law at issue, further changes should
normally come from the legislature and not from the courts. The
legislature at any time could have, and at any time still may, abrogate
the intent-to-deceive element, either expressly or by necessary
implication. The affected public, relevant industries, bar organizations,
and other interested parties are always free to present their arguments
to the legislature whenever that body meets. If the legislature becomes
persuaded to change course, it need only say so, and the courts will apply
the new law as cheerfully as they applied the old.

II

The foregoing analysis can assume, at least for argument’s sake,
that Texas courts have been wrong all these years to retain the intent-
to-deceive requirement despite § 705.051’s silence regarding scienter.

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At the very least, petitioner’s textual arguments are far from trivial.
I conclude, however, that the Court’s reading is correct—not just,
or even primarily, because the statute uses the word “unless.” It would
be too much, and too judicially self-aggrandizing, to assert that any time
the legislature uses that conjunction, it leaves a gaping hole for the courts
to fill at will. Even if the statutory requirements are linguistically a
“floor” rather than a “ceiling,” that hardly means that the courts are
empowered to drag furniture onto the floor whenever the spirit moves
them. I do not understand the Court to say any such thing, of course;
instead, I join the opinion for its correct and properly modest holding
that the statute’s choice of language fails to expressly foreclose the
preexisting common-law requirements.
This holding is correct because new legislation, merely by its
passage, neither supplants existing common-law doctrines nor repeals
existing statutory provisions. To the contrary, either sort of law that
antedates a new enactment can serve as a useful reference point for
determining what that later law means.2 Historically, the common law
is especially valuable. “[W]e construe statutory language against the

2 See, e.g., Brown v. City of Houston, 660 S.W.3d 749, 755 (Tex. 2023)
(“Statutory history concerns how the law changed, which can help clarify what
the law means.”); Gilbert v. United States, 370 U.S. 650, 655 (1962) (“For in the
absence of anything to the contrary it is fair to assume that Congress used that
word [forgery] in the statute in its common-law sense.”); In re Soza, 542 F.3d
1060, 1071 (5th Cir. 2008) (Wiener, J., concurring) (“I can only justify providing
content to the Insurance Code’s fraud provision by giving ‘fraud’ its common
law meaning, not by torturing other incompatible statutes.”); Felix
Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum. L. Rev.
527, 537 (1947) (“[I]f a word is obviously transplanted from another legal source,
whether the common law or other legislation, it brings the old soil with it.”).

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backdrop of common law, assuming the Legislature is familiar with
common-law traditions and principles.” Marino v. Lenoir, 526 S.W.3d
403, 409 (Tex. 2017). “Congress is understood to legislate against a
background of common-law . . . principles, and when a statute covers an
issue previously governed by the common law, we interpret the statute
with the presumption that Congress intended to retain the substance of
the common law.” Samantar v. Yousuf, 560 U.S. 305, 320 n.13 (2010)
(internal quotations omitted). This principle applies to all positive law—
not just statutes, but constitutional texts, too.3 And given this State’s
rich common-law history, see, e.g., JDH Pac., Inc. v. Precision-Hayes
Int’l, Inc., 659 S.W.3d 449, 450–51 (Tex. 2022) (Young, J., concurring),
law is seldom written on a blank slate.
The statute and the common law that existed at the time of the
statute’s enactment thus cannot be read as separate, independent rules
of decision. As we observed last year in Taylor v. Tolbert, “we follow an
‘opt-out’ approach that incorporates common-law principles absent the
Legislature’s clear repudiation.” 644 S.W.3d 637, 650 (Tex. 2022). We

3 See, e.g., D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 471 n.9 (1942)
(Jackson, J., concurring) (“Particularly in the clauses dealing with the rights
of the individual, the Constitution uses words and phrases borrowed from the
common law, meaningless without that background, and obviously meant to
carry their common-law implications.”); Stephen Sachs, Constitutional
Backdrops, 80 Geo. Wash. L. Rev. 1813, 1822 (2012) (“Our founding document
is firmly rooted in the common-law tradition, in which each new enactment is
layered on top of an existing and enormously complex body of written and
unwritten law.”); William Baude, Sovereign Immunity and the Constitutional
Text, 103 Va. L. Rev. 1, 9–22 (2017) (arguing that state sovereign immunity is
a “constitutional backdrop”—that is, a background rule of common law that
the Constitution insulates from change).

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must, therefore, essentially read the statute with a common-law gloss.4
It is only based on this understanding that I can make the assertions
that I made about stare decisis in Part I, supra, and that the Court can
rightly say that stare decisis “has its ‘greatest force’ in areas where the
Legislature may rightfully flex its constitutional power, like enactment
of the Insurance Code provisions at issue here.” Ante at 21 (quoting
Mitschke, 645 S.W.3d at 265).
The law of defenses to statutory actions—especially but not
exclusively in criminal prosecutions—is comfortable with statutory
silence. In Staples v. United States, the Supreme Court observed that a
federal statute
is silent concerning the mens rea required for a violation. . . .
Nevertheless, silence on this point by itself does not
necessarily suggest that Congress intended to dispense with
a conventional mens rea element . . . . On the contrary, we
must construe the statute in light of the background rules
of the common law, in which the requirement of some mens
rea for a crime is firmly embedded.

511 U.S. 600, 605 (1994) (internal citation omitted). And as Taylor put
it in a civil context, “[w]hen the Legislature makes [new] law, it does so
against a backdrop in which common-law defenses abound, and those

4 This concept is abstract but important, full of real-world implications.
One particularly prominent (and controversial) one is the defense of qualified
immunity in suits brought under 42 U.S.C. § 1983. I take no position on the
recent scholarly debates about that defense, but the conventional belief is that
in passing the Civil Rights Act of 1871 and providing individuals a cause of
action for violations of their constitutional rights, the Reconstruction Congress
did not abrogate—and thus incorporated into the law—the applicable and
preexisting common-law immunities that state officials could originally claim
in analogous tort suits. See, e.g., Pierson v. Ray, 386 U.S. 547, 555 (1967).

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defenses are generally available unless the Legislature clearly indicates
otherwise.” Taylor, 644 S.W.3d at 650. The observation that lawmaking
bodies act in light of the common law’s well-established background
norms, often regarding defenses, is not novel. As Judge Easterbrook put
it, defenses like “justification,” which have been around for “thousands
of years,” operate as background assumptions baked into the law, much
like “grammar and diction.” Frank H. Easterbrook, The Case of the
Speluncean Explorers: Revisited, 112 Harv. L. Rev. 1913, 1913–14 (1999).
Here, the common law’s scienter requirement—which amounts to
a defense by the insured if an insurer seeks to invalidate the policy—
was clear when the legislature acted. The legislature easily could have
but did not exclude that requirement. We must assume that legislative
choice to have been purposeful; it was at least consequential. Much as
in the cases cited above, its result was to retain the common law. I thus
agree with the Court that petitioner’s plain-text arguments are
unavailing, because petitioner would need text that excludes the intent-
to-deceive element; silence is petitioner’s enemy, not its friend. This
result remains true even though the legislature expressly codified some
parts of the common law while leaving the intent element unwritten.
That pattern is not particularly rare; the statutes that draw from
criminal and civil common-law actions, yet are silent about intent, all
mimic it. Nor does the retention of the intent-to-deceive requirement
render the codified portions of the law superfluous. The very act of
codification ensures that no matter what this Court were to do with the
common law, the requirements’ presence in a statute book would prevent
further judicial modification; they would endure in the form that the

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legislature adopted.5 Thus, the legislature either left it to the courts to
determine the compatibility of the intent-to-deceive element or it assumed
the continuation of the existing standard without need of codification.
That is just an academic question now, since the courts reaffirmed that
the intent-to-deceive requirement would remain and the legislature has
never said otherwise. Stare decisis takes over at this point.
In saying all this, however, I distinguish between, on the one
hand, the intent-to-deceive requirement that the legislature knew was
already part of the common law (much as a car owner’s knowledge that
a key is also required to operate a car, see ante at 14) and, on the other,
some hypothetical wholly different and unexpected requirement. The
courts may not simply add whatever additional requirements they
desire based either on statutory silence about such a requirement or on
the use of “unless” in the statute’s text. Notably, this Court has not
purported to add new requirements—we have simply adhered to the
common-law principles that the legislature knew to already exist.
Equally important—and far more so today than in 1909—we
should be wary of new common-law innovations altogether, whether
framed as a “gloss” on a statute or a new cause of action. As I have
previously observed, “it is increasingly less likely than ever before that
there are [statutory or regulatory] gaps that judges alone can (much less
should) fill.” Elephant Ins. Co. v. Kenyon, 644 S.W.3d 137, 157 (Tex.
2022) (Young, J., concurring). By the same token, we must also be

5For similar reasons, I agree with the Court’s detailed explanation for
why § 705.104’s intent requirement does not become superfluous unless we
adopt petitioner’s construction of § 705.051. See ante 18–19.

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mindful of the truism that we may not “rewrite the statute under the
guise of interpreting it.” In re Ford Motor Co., 442 S.W.3d 265, 284 (Tex.
2014). But today’s decision involves no innovation of any sort, much less
any improper judicial adventurism. The Court merely leaves intact
principles that have been part of Texas law for the bulk of Texas history.
Indeed, for all the reasons I have described, I am persuaded that
any judicial impropriety would come not in retaining but in abandoning
the intent-to-deceive requirement. I say that not because of any policy
preference (I have none), but because dispensing with the scienter
element would unjustifiably destabilize settled law. Doing so would not
reflect judicial humility or deference to a statute, as it might seem at
first glance; it instead would be an aggressive flexing of judicial muscle.
* * *
At this point, the scienter element must be regarded as within the
legislature’s exclusive authority. That body, not this one, should hear
any arguments concerning the wisdom of requiring proof of intent to
deceive or complaints about Texas law not being in accord with the law
of other states. If and when the legislature determines that the intent-
to-deceive requirement has outlasted its usefulness, it can say so. Or it
could take other steps that, by necessary implication, may justify this
Court’s reconsideration of that requirement, comparable to the Court’s
analysis in Ruttiger. Either way, to avoid the common-law intent-to-
deceive element that has become part and parcel of the statutory scheme,
petitioner must have something from the legislature (and something
material—not a mere stylistic change in the statutory language).
Nothing less can surmount the formidable stare decisis obstacle of

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“unsettling that which has been settled so long and with such clarity.”
Ante at 21.
I therefore gladly join the Court’s opinion affirming the judgment
below.

Evan A. Young
Justice

OPINION FILED: April 28, 2023

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