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In re Germania Insurance Co.

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

April 23, 2018

IN RE GERMANIA INSURANCE COMPANY

          On Petition for Writ of Mandamus.

          Before Justices Rodriguez, Longoria, and Hinojosa

          MEMORANDUM OPINION

          Justice NORA L. LONGORIA [1]

         Real party in interest Nelda Garcia brought the underlying case[2] against her automobile insurer, relator Germania Insurance Company (Germania), asserting contractual and extra-contractual claims based on the uninsured motorist provisions of her insurance policy.[3] By one issue, Germania contends that the trial court abused its discretion by denying its motion to sever and abate Garcia's extra-contractual causes of action. We conditionally grant mandamus relief.

         I. Background

         The underlying lawsuit arose from a motor vehicle accident involving Garcia and the uninsured driver of another vehicle. The other driver is not a party to the lawsuit or this original proceeding. On or about May 14, 2016, Garcia was traveling on U.S. Highway 281 in Edinburg, Texas, when the uninsured motorist failed to control his speed, lost control of his vehicle, and collided with Garcia's vehicle. Garcia sustained personal injuries and damages resulting from the collision. On December 29, 2016, Garcia offered to settle her bodily injury claims with Germania under the uninsured motorist benefits provision of her insurance policy for $36, 594.00. On April 10, 2017, Garcia again offered to settle her claims with Germania for $67, 500.00, which represented the "discounted" sum of her economic damages, treble damages, and attorney's fees. On May 3, 2017, Germania responded to Garcia's settlement demands by making an offer to settle her claims for $6, 000.00.

         On June 12, 2017, Garcia sued Germania for uninsured motorist benefits. Garcia alleged causes of action for breach of contract, bad faith, violations of the prompt payment of claims act, violations of the unfair claim settlement act, and violations of the deceptive trade practices act. See generally Tex. Ins. Code Ann. §§ 541.060, 542.003, 542.058, 542.060 (West, Westlaw through 2017 1st C.S.); Tex. Bus. & Com. Code Ann. § 17.50 (West, Westlaw through 2017 1st C.S.).

         On November 27, 2017, Garcia presented a new settlement demand to Germania seeking $75, 750.00 to "fully resolve all [of her] claims." In response, on December 1, 2017, Germania reiterated its previous settlement offer of $6, 000.00.

         On December 1, 2017, Germania filed a motion to sever and abate Garcia's extra-contractual claims from her underlying claim for uninsured motorist benefits. Germania contended that severance and abatement was necessary because liability and damages had not been determined, and because it had engaged in settlement negotiations with Garcia and had made a settlement offer to Garcia. Germania argued, in relevant part:

Depending upon the outcome of the contractual claims, litigation of the extra-contractual claims may become unnecessary and moot. This will save significantly in terms of litigation expenses and judicial trial. Furthermore, allowing the information regarding settlement offers would unfairly prejudice the Defendant to the point where a fair trial is unlikely. As such it is logical, fair, and reasonable to sever and abate the extra-contractual claims in this matter.

         Based on our review of the record, Garcia did not file a response to Germania's motion to sever and abate.

         On January 23, 2018, the trial court held a non-evidentiary hearing on the motion to sever and abate and pending discovery issues regarding the deposition of Germania's corporate representative. On January 29, 2018, the trial court signed an order denying Germania's motion to sever and abate.

         This original proceeding ensued. By one issue, Germania contends that the trial court abused its discretion by refusing to sever and abate Garcia's extra-contractual claims where Germania had made prior offers to settle and compromise her claims. By order issued on February 27, 2018, this Court granted temporary relief, stayed the underlying proceedings, and requested that Garcia, or any others whose interest would be directly affected by the relief sought, file a response to the petition for writ of mandamus. See Tex. R. App. P. 52.2, 52.4. Nevertheless, Garcia did not file a response to the petition for writ of mandamus.

         II. ...


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