Cantu v. State Farm Mutual Automobile Insurance Company, 4:16-cv-03703

Cantu was injured when he fell from a truck driven by an uninsured motorist and sued the driver, two other uninsured individuals, and his insurer State Farm in state court.
A default judgment for $65,095.12 was entered against the three individual defendants. Cantu then demanded State Farm pay the $30,000 uninsured-motorist policy limit; State Farm refused.
Cantu sued State Farm; State Farm removed the case to federal court based on diversity and moved for partial summary judgment that it is not bound by the default judgment.
Cantu cross-moved for partial summary judgment, arguing State Farm’s participation in the state-court case constituted consent or waiver of the policy’s consent-to-be-bound clause.
State Farm appeared in the state-court proceedings, took limited discovery (deposed the uninsured driver), and explicitly stated on the record that its appearance did not mean it agreed to be bound by any default judgment.
The district court granted State Farm’s motion and denied Cantu’s cross-motion, holding the insurer did not consent or waive the policy’s consent requirement and thus is not bound by the default judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether insurer consented to be bound by the default judgment	Cantu: State Farm’s participation (naming defendants, deposing driver, appearing at hearing) manifested consent	State Farm: Participation was limited and it expressly disclaimed being bound	Held: No consent; insurer expressly refused to be bound
Whether insurer waived the policy’s consent clause by participating	Cantu: Limited involvement and litigation conduct waived the clause	State Farm: No unconditional denial of rights; consistent refusal to be bound	Held: No waiver; mere knowledge/limited involvement insufficient
Whether collateral estoppel binds insurer to liability/damages from default judgment	Cantu: Default judgment should trigger insurer liability and preclude relitigation	State Farm: Without consent, default judgment is not binding and issues must be relitigated	Held: No collateral estoppel; insurer may relitigate liability and damages
Whether default judgment alone triggers contractual duty to pay policy limits	Cantu: Judgment exceeding policy limit triggers insurer duty to pay limit	State Farm: Contractual duty arises only after an adversarial judicial determination with insurer consent or binding procedure	Held: Duty to pay not triggered by default judgment absent insurer consent

Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006) (insurer liability under UM policy arises only after judicial determination)
State Farm Mut. Auto. Ins. Co. v. Azima, 896 S.W.2d 177 (Tex. 1995) (consent clauses protect carrier from default-judgment liability)
U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668 (Tex. App.—Houston [1st Dist.] 1993) (no insurer consent binds insurer to default judgment)
Gov’t Emp. Ins. Co. v. Lichte, 792 S.W.2d 546 (Tex. App.—El Paso 1990) (judgment against uninsured motorist not binding on insurer without consent)
Criterion Ins. Co. v. Brown, 469 S.W.2d 484 (Tex. Civ. App.—Austin 1971) (knowledge of suit does not equal consent to be bound)
Ford v. State Farm Mut. Auto. Ins. Co., 550 S.W.2d 663 (Tex. 1977) (waiver requires intentional relinquishment of a known right)