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In re Colonial County Mutual Insurance Co.

Court of Appeals of Texas, First District

November 5, 2019

IN RE COLONIAL COUNTY MUTUAL INSURANCE COMPANY, Relator

          Original Proceeding on Petition for Writ of Mandamus.

          Panel consists of Justices Lloyd, Goodman, and Landau.

          MEMORANDUM OPINION

          PER CURIAM.

         Relator, Colonial County Mutual Insurance Company ("Colonial"), has filed a petition for writ of mandamus challenging the trial court's order denying abatement of certain extra-contractual claims arising from an uninsured/underinsured motorist coverage dispute.[1] We conditionally grant relief.

         Background

         This original proceeding arises from a personal injury lawsuit filed by Abigail Shelger against Lisselotte Ortiz for damages arising from a motor vehicle accident. Shelger later added Colonial as a defendant, asserting that Colonial failed to pay uninsured/underinsured motorist (UIM) benefits under a policy issued by Colonial.[2]Shelger asserted causes of action against Colonial for breach of contract, as well as extra-contractual causes of action for breach of the common law duty of good faith and fair dealing, and violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act.

         Colonial filed a motion to sever and abate Shelger's extra-contractual claims from her underlying UIM claim. Shelger filed a response agreeing that severance and abatement of her common law bad faith claims was proper but requested that her claims for statutory violations only be severed and not abated. The then-presiding judge, the Honorable Caroline Baker, granted Colonial's motion in part, signing an order severing the extra-contractual claims but abating discovery only as to Shelger's common law bad faith claim. The order provides that discovery is not abated as to the severed causes of action for violation of Sections 541 and 542 of the Texas Insurance Code and violation of the Texas Deceptive Trade Practices Act (collectively, the "Statutory Extra-contractual Claims").

         Colonial later filed a motion to reconsider with the successor trial court judge, the Honorable Donna Roth, requesting that the court similarly abate the Statutory Extra-contractual Claims as it abated the common law bad faith claim. After a hearing on the motion, the trial court denied Colonial's motion to reconsider. This mandamus petition followed. Our Court requested a response to the petition from the real party in interest but no response was filed.

         Standard of Review

         Mandamus will issue only to correct a trial court's clear abuse of discretion for which the relator has no adequate remedy at law. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992) (orig. proceeding). A clear abuse of discretion occurs when the trial court's decision is so arbitrary and unreasonable that it amounts to clear error. See Walker, 827 S.W.2d at 839-40 (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985)). Because a trial court has no discretion in determining what the law is, the trial court abuses its discretion if it clearly fails to analyze or apply the law correctly. See id. at 840. "To satisfy the clear abuse of discretion standard, the relator must show 'that the trial court could reasonably have reached only one decision.'" Liberty Nat'l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 630 (Tex. 1996) (orig. proceeding) (quoting Walker, 827 S.W.2d at 840). "In determining whether appeal is an adequate remedy, [we] consider whether the benefits outweigh the detriments of mandamus review." In re BP Prods. N. Am., Inc., 244 S.W.3d 840, 845 (Tex. 2008) (orig. proceeding).

         Abatement of Extra-contractual Claims

         In most circumstances, a trial court's decision to grant or deny a motion to abate is within the court's discretion. See Project Eng'g USA Corp. v. Gator Hawk, Inc., 833 S.W.2d 716, 724 (Tex. App.-Houston [1st Dist.] 1992, no writ); In re Am. Nat. Cnty. Mut. Ins. Co., 384 S.W.3d 429, 435 (Tex. App.-Austin 2012, orig. proceeding). Colonial asserts that the trial court abused its discretion in denying abatement of discovery regarding the severed Statutory Extra-contractual Claims. We agree.

         Contractual UIM Claims

         Uninsured/underinsured motorist cases differ from other insurance disputes because, unlike most first-party cases in which the terms of the policy alone dictate the outcome, UIM coverage hinges on the liability of the alleged uninsured/underinsured, at-fault third-party motorist under applicable tort law. See Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006) (citing Henson v. S. Farm Bur. Cas. Ins. Co., 17 S.W.3d 652, 653-54 (Tex. 2000)). Consequently, "the insurer's contractual obligation to pay benefits does not arise until liability and damages are determined." Id.; see also In re United Fire Lloyds,327 S.W.3d 250, 255 (Tex. App.-San Antonio ...


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