United States District Court, S.D. Texas, Corpus Christi Division
ORDER DENYING REMAND, DENYING MOTION TO DISMISS, AND
GONZALES RAMOS UNITED STATES DISTRICT JUDGE
the Court is Plaintiffs Edward Garza and Jose Villegas'
Motion to Remand (D.E. 12), along with Defendant Travelers
Casualty Insurance Company of America's (Travelers')
response (D.E. 14). Plaintiffs challenge the Court's
diversity jurisdiction on the sole basis that the direct
action portion of the diversity jurisdiction statute, 28
U.S.C. § 1332(c)(1), renders Travelers a citizen of
Texas, the same as the citizenship of its insured, despite
the fact that it is a foreign entity with its principal place
of business outside of Texas.
argument has been rejected because the direct action
provision applies only to cases in which an injured party
sues a tortfeasor's insurance company directly. It does
not apply to an insured's action against his own
insurance company. Chevalier v. Reliance Ins. Co. of
Illinois, 990 F.2d 625, 1993 WL 117787 (5th Cir. 1993)
(not designated); Ponton v. Allstate Texas
Lloyd's, No. CIV.A. H-10-4842, 2011 WL 2837592, at
*3 (S.D. Tex. July 18, 2011). The Court
DENIES the motion to remand (D.E. 12).
before the Court is Travelers' Motion to Dismiss (D.E.
11), along with Plaintiffs' response (D.E. 16) and
Travelers' reply (D.E. 17). Travelers seeks dismissal on
the basis that the claim is not ripe. It contends that
Plaintiffs, who have already filed their lawsuit against the
alleged tortfeasor, must obtain a judgment establishing
liability and damages, as well as insufficiency of the
tortfeasor's policy limits, before the contractual
obligation of indemnity is triggered with respect to
uninsured and underinsured motorist coverage. Plaintiffs
respond that this Court can determine liability and damages
such that the claim is ripe. In the alternative, Plaintiffs
seek to amend and/or ask that the Court stay the case rather
than dismiss it.
to Brainard v. Trinity Universal Insurance Co., 216
S.W.3d 809, 818 (Tex. 2006), the insurance company's
contractual obligation to pay pursuant to the insured's
underinsured motorist coverage is not triggered until
liability, damages, and the insufficient insurance coverage
of the tortfeasor has been established. Plaintiffs have filed
an action in Hidalgo County, Texas, upon which judgment
against a specific insured tortfeasor may be based. That
action has its own timeline by which the underinsured
motorist claim accrues.
Plaintiffs' claims arise from a large multi-vehicle
action and Plaintiffs have expressed the possibility that an
unknown third party caused Plaintiffs' injuries and
damages if the alleged tortfeasor is exonerated. In that
case, Plaintiffs appropriately seek to satisfy the statute of
limitations on their contractual uninsured motorist claim
against their insurance company by filing suit where there is
no external basis for determining when the claim accrued
other than the collision, itself. See generally, Franco
v. Allstate Ins. Co., 505 S.W.2d 789, 793 (Tex. 1974)
(treating uninsured motorist claims as contractual claims
subject to four-year statute of limitations).
as there is a claim that has already accrued, this Court has
jurisdiction. Thus the Court DENIES the
motion to dismiss (D.E. 11). The Court further
DENIES the motion for leave to amend
imbedded in Plaintiffs' response (D.E. 16) as inadequate
to address the practical issues driving this Court's
exercise of jurisdiction.
Plaintiffs have requested alternative relief in the form of a
stay of this litigation so that it may first be determined in
the state court action whether the alleged underinsured
motorist is the liable party, mooting the separate uninsured
unknown motorist claim. Travelers agrees that a stay is
appropriate. So as to avoid conflict with the state
court proceedings and to avoid the potential waste of the
parties' and judicial resources on a claim that may
become moot, the Court ORDERS that this action is stayed,
pending resolution of Edward Garza, et al v. Ricardo
Casillas, et al, in the Judicial District Court of
Hidalgo County, Texas.
Court ORDERS the parties to file status reports on November
1, 2019, and every six months thereafter, advising the Court
on the status of the Hidalgo County action and whether the
stay in this action should be lifted or whether this action
may be dismissed.
 Plaintiffs have also sued Defendant
Linnea Wernette Sheehan [a/k/a Sheeran], a Travelers
employee, for actions taken in the course and scope of her
employment and for which Travelers allegedly has respondeat
superior liability. Sheeran has filed a waiver of service and
her answer date is May 6, ...