United States District Court, W.D. Texas, San Antonio Division
RODRIGUEZ, UNITED STATES DISTRICT JUDGE
date, the Court considered Defendant's Partial Motion to
Dismiss. This case stems from Plaintiff seeking to collect
benefits from Defendant Allstate under her Underinsured
Motorist (“UIM”) Insurance policy after an
accident with an allegedly underinsured motorist. After
careful consideration, the Court DENIES Defendant's
to the facts pled in the petition, which the Court accepts as
true, on September 29, 2017, Plaintiff Laura Lee Green was
driving a white Mazda 6 on the IH-35 service road near
Toepperwein Road in Bexar County, Texas. Docket no. 1 at 2.
Non-party Samantha Kaye Dorsey rear-ended Plaintiff while
driving a gray Volkswagen Jetta, owned and entrusted by Shana
Lynne Dorsey. Id. Plaintiff alleges that Samantha
Kaye Dorsey negligently caused the accident by failing to
maintain a proper speed, lookout, and safe distance and that
Shana Lynne Dorsey negligently entrusted the vehicle.
Id. Plaintiff further alleges that the accident
caused her to sustain severe, disabling, and permanent
injuries. Id. Plaintiff submitted an underinsured
motorist claim to Defendant Allstate Fire and Casualty
Insurance Company, but Defendant allegedly failed to make an
offer of settlement, provide a reasonable explanation of the
basis for denying Plaintiff's claim, refused to affirm or
deny coverage within a reasonable time, refused to pay
Plaintiff's claim without conducting a proper
investigation, and refused to pay or delayed in paying the
claim after liability had become reasonably clear.
Id. at 3.
Plaintiff asks this Court to determine the negligence of the
underinsured motorist Samantha Kaye Dorsey, the respective
rights and duties arising under the policy, and the valuation
of damages incurred by Plaintiff through declaratory judgment
(First Cause of Action). Second, Plaintiff brings claims
against Defendant for breach of contract (Second Cause of
Action) because Defendant's actions and/or omissions
constituted breach or anticipatory breach pursuant to Texas
statutory and common law. Third, Plaintiff brings claims
against Defendant for the breach of good faith and fair
dealing (Third Cause of Action) for Defendant's refusal
to pay or delay in paying the claim to Plaintiff after
third-party liability became reasonably clear and
Defendant's malicious, intentional, fraudulent, and/or
grossly negligent investigation and adjustment of the claims.
Fourth, Plaintiff brings claims for statutory violations of
the Texas Insurance Code Chapters 541 and 542 and Texas
Administrative Code section 21.203(5) (Fourth Cause of
Allstate moves for dismissal of Plaintiff's breach of
contract (Second Cause of Action), common law bad faith
(Third Cause of Action), and Texas Insurance Code violations
(Fourth Cause of Action) claims on the basis that Plaintiff
fails to state a claim for these causes of action. Docket no.
2 at 1.
Standard of Review
Rule of Civil Procedure 12(b)(6) allows the dismissal of a
complaint for the “failure to state a claim upon which
relief can be granted.” Fed.R.Civ.P. 12(b)(6). To
survive a motion to dismiss, a plaintiff's complaint must
plead “enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). “A claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While
the complaint does not need to contain detailed factual
allegations, it must contain enough factual allegations to
“raise a right to relief above a speculative
level.” Twombly, 550 U.S. 544, 555 (2007). The
plaintiff has an obligation to present more than labels,
conclusions, and formulaic recitations of the elements to
avoid dismissal. Id. However, the court does not
accept conclusory allegations or unwarranted deductions of
fact as true. Tuchman v. DSC Commc'ns. Corp., 14
F.3d 1061, 1067 (5th Cir. 1994).
Breach of Contract Claim (Second Cause of Action)
brings a breach of contract claim (Second Cause of Action)
against Defendant for the alleged failure to pay benefits
owed despite meeting all conditions precedent for those
benefits. Docket no. 1 at 3. Defendant states that
Plaintiff's breach of contract claim should be dismissed
because Plaintiff has failed to state any legal entitlement
to UIM benefits. Docket no. 2 at 3. Defendant argues that the
insured is not entitled to receive underinsured motorist
insurance benefits until there is a judgment establishing
liability of the UIM and damages for the accident.
insurance “protects insureds who are legally entitled
to recover from owners or operators of uninsured or
underinsured motor vehicles.” Tex. Ins. Code Ann.
§ 1952.101(a). In order for a policy beneficiary of UIM
insurance to recover benefits, the insured must show
“(1) that the insured has underinsured motorist
coverage, (2) that the underinsured motorist negligently
caused the accident that resulted in the covered damages, (3)
the amount of the insured's damages, and (4) that the
underinsured motorist's insurance coverage is
deficient.” In re Liberty Cty. Mut. Ins. Co.,
537 S.W.3d 214, 220 (Tex. App.-Houston [1st Dist.] 2017,
orig. proc.). UIM insurance establishes an arrangement for
benefits to be “conditioned upon the insured's
legal entitlement to receive damages from a third
party.” Brainard v. Trinity Universal Ins.
Co., 216 S.W.3d 809, 818 (Tex. 2006).
first-party insurance contracts, tort law is used to
determine the contractual obligation to pay damages for UIM
insurance rather than the policy alone. In re Perry,
No. 13-18-00676-CV, 2019 WL 1723509, at *4 (citing Tex. Ins.
Code Ann. § 1952.105-08). Both filing suit against a UIM
insurer and demanding benefits are insufficient to trigger a
UIM insurer's duty to pay. Brainard, 216 S.W.3d
at 818. Thus, the insurer's duty does not arise until the
liability of the third party and damages are determined.
Id. According to the Supreme Court of Texas, neither
a settlement between the insured and tortfeasor nor an
admission of liability from the tortfeasor establish coverage
under UIM insurance because “a jury could find that the
other motorist was not at fault or award damages that do not
exceed the tortfeasor's liability insurance.”
Id. (citing Henson v. S. Farm Bureau Casualty
Ins. Co., 17 S.W.3d 652, 653 (Tex. 2000)).
based on other language in Brainard, this language
can only mean that settlement or an admission of liability
alone is not sufficient to establish the insurer's duty
to pay. The opinion states, “the insured is not
required to obtain a judgment against the tortfeasor”
and “[t]he insured may settle with the tortfeasor . . .
and then litigate UIM coverage with the insurer.”
Id. This clearly indicates that an insured can
litigate the issue of UIM coverage with ...