Court of Appeals of Texas, Fourth District, San Antonio
the 224th Judicial District Court, Bexar County, Texas Trial
Court No. 2017CI03490 Honorable John D. Gabriel, Jr., Judge
Sitting: Sandee Bryan Marion, Chief Justice Luz Elena D.
Chapa, Justice Beth Watkins, Justice.
car wreck with an underinsured motorist (UIM), appellee
Daniel Wes Irwin sued appellant Allstate Insurance Company
("Allstate") seeking a declaration that he was
entitled to recover damages resulting from the wreck under
his UIM benefits policy. On appeal, Allstate argues the trial
court abused its discretion in awarding Irwin declaratory
relief and attorney's fees. We affirm the trial
car wreck with Brenda Alonso, Irwin settled with Alonso for
her $30, 000 policy limits. Then he sent a demand letter to
his own UIM insurer, Allstate, seeking to settle for his $50,
000 UIM policy limits for the remaining damages Alonso's
policy did not cover. At the time of the demand, Irwin's
medical bills alone exceeded the amount he recovered from
Alonso. Allstate offered to settle for $500. Irwin sued
Allstate seeking a declaration that he was entitled to
recover his remaining damages under his UIM policy. He also
sought attorney's fees under the Uniform Declaratory
Judgments Act ("UDJA").
sole issue presented to the jury was whether Irwin was
legally entitled to recover his excess damages. The parties
stipulated to coverage under the UIM policy and the $30, 000
offset from Irwin's settlement with Alonso. The jury
returned a verdict in Irwin's favor, awarding him $498,
968.36 in damages resulting from the wreck with Alonso. The
trial court signed a judgment awarding Irwin Allstate's
policy limit of $50, 000 plus $2, 002.28 in court costs. The
trial court also awarded Irwin $45, 540 in attorney's
fees. Allstate appealed.
appeal, Allstate claims the trial court abused its discretion
in awarding Irwin declaratory relief and attorney's fees
under the UDJA. It claims the UDJA is not the proper
procedural vehicle for pursuing claims for UIM coverage, and
because declaratory relief was inappropriate, Irwin cannot
recover his attorney's fees under the UDJA.
UIM Claim under the UDJA
on Brainard v. Trinity Universal Insurance Co.,
Allstate argues that an insured must file suit and establish
the amount he is legally entitled to recover from the other
motorist to trigger an insurer's contractual duty to pay
UIM benefits. It contends that only after the contractual
duty to pay is established may an insured pursue a breach of
contract claim against the insurer to recover UIM benefits.
According to Allstate, an insured cannot file a claim for
declaratory relief to obtain the judgment required by
counters that the UDJA is appropriate for pursuing his UIM
claim for coverage. According to Irwin, the UDJA must be
liberally administered and recovery is permitted under the
UDJA because he seeks a declaration of the validity of his
right to recover. He distinguishes Brainard, which
arose under Chapter 38 of the Texas Civil Practice and
Remedies Code ("the Code") governing the recovery
of attorney's fees for breach of contract, because he
never asserted a breach of contract claim. Irwin further
argues that nothing in Brainard precludes the use of
the UDJA to recover UIM benefits.
protect responsible motorists from financial loss when they
are involved in car wrecks with uninsured or underinsured
motorists (UM/UIM), Texas law requires automobile insurers to
include UM/UIM coverage in their policies unless their
insureds reject that coverage in writing. Tex. Ins. Code Ann.
§ 1952.101(b); Ortiz v. State Fin. Mut. Auto Ins.
Co.,955 S.W.2d 353, 356- 57 (Tex. App.-San Antonio
1997, writ denied). UM/UIM coverage provides payment to the
insured for all amounts the insured is "legally entitled
to recover" as damages from the UM/UIM. Tex. Ins. Code
Ann. § 1952.106. Recovery ...