Court of Appeals of Texas, Fourth District, San Antonio
From
the 288th Judicial District Court, Bexar County, Texas Trial
Court No. 2016-CI-21431 Honorable Stephani A. Walsh, Judge
Presiding
Sitting: Patricia O. Alvarez, Justice, Irene Rios, Justice
Liza A. Rodriguez, Justice
Liza
A. Rodriguez, Justice
AFFIRMED
IN PART; REVERSED AND RENDERED IN PART
This is
a permissive appeal of a trial court's order denying a
motion for summary judgment which presents the following two
controlling questions of law as set forth in the trial
court's order:
In Brainard v. Trinity Universal Ins. Co., 216
S.W.3d 809, 818 (Tex. 2006), the Texas Supreme Court
explained that an uninsured motorist (UM) insurer "is
under no contractual duty to pay benefits until the insured
obtains a judgment establishing the liability and
underinsured status of the other motorist."
Can a[] UM insured nonetheless sustain a common law or
statutory bad faith claim against a UM insurer that withholds
payment of UM benefits until such a judgment is obtained?
Can a UM insured sustain a prompt payment claim against a UM
insurer that timely pays UM benefits after such a judgment is
obtained?
State
Farm Mutual Automobile Association asserts the answer to
these questions is "no." With regard to the first
question, State Farm argues its liability for the UM claim is
not "reasonably clear" until such a judgment is
obtained, and no bad faith claim arises as a matter of law
until its liability becomes "reasonably clear."
With regard to the second question, State Farm argues its
liability to pay the claim did not arise until the date the
judgment was obtained, and its payment of the claim nine
business days after the judgment was entered conclusively
established prompt payment as a matter of law. We hold the
answer to the first question is "yes," while the
answer to the second question is "no."
Background
Appellee
Veatrice Cook was injured in an automobile accident when a
vehicle driven by Roger Cervantes, an uninsured motorist,
collided with her vehicle. Cook filed a claim with State Farm
seeking uninsured motorist benefits under her policy's
coverage. Cook demanded the full policy limit of $100,000,
while State Farm offered to pay $15,255.00. As a result, Cook
sued Cervantes and State Farm alleging Cervantes's
negligence caused her injuries. With regard to State Farm,
Cook asserted a breach of contract claim and
extra-contractual bad faith and prompt payment claims.
Cook's extra-contractual claims were severed and abated
pending a judgment establishing her entitlement to uninsured
motorist benefits.
At the
trial on Cook's negligence claim, State Farm stipulated
Cervantes's negligence proximately caused the accident
and Cervantes was an uninsured motorist. The question of
damages was submitted to the jury, and the jury awarded Cook:
(1) $18,989.05 for past medical expenses; (2) $119,525.00 for
future medical expenses; (3) $15,000.00 for past physical
pain and mental anguish; (4) $20,000.00 for future physical
pain and mental anguish; (5) $50,000.00 for past physical
impairment; and (6) $85,000.00 for future physical
impairment. Based on the policy limit, the trial court
entered a judgment against State Farm for $100,000.00. The
judgment was entered on April 12, 2018, and State Farm paid
the judgment in full on April 25, 2018.
On July
31, 2018, State Farm filed a motion for summary judgment in
the severed cause asserting it was entitled to a take-nothing
judgment on Cook's extra-contractual claims because it
was not liable for those claims as a matter of law. As
previously noted, the trial court denied State Farm's
motion but found an immediate appeal of the aforementioned
controlling questions of law would materially advance the
ultimate termination of the litigation. This court then
granted State Farm's petition for permission to appeal.
Standard
...