In Re Allstate County Mutual Insurance Co.
2011 Tex. App. LEXIS 8319
| Tex. App. | 2011Background
- Juneau sued Allstate for UIM benefits and also asserted a contract claim along with extra-contractual bad-faith and deceptive-trade-practices claims.
- Allstate offered to settle the contract claim; offer was not accepted and Allstate moved to sever the extra-contractual claims and abate them until the contract claim was resolved.
- The trial court denied Allstate's motion to sever and abate.
- This original proceeding seeks a writ of mandamus directing the trial court to sever the extra-contractual claims and abate them, and to vacate the denial of severance.
- The court has repeatedly held that extra-contractual claims should be severed and abated when a settlement offer exists on the contract claim; the petition is conditionally granted.
- The decision directs the trial court to sever the extra-contractual claims and abate the bad-faith claims pending disposition of the UIM claim, with mandamus issued if the trial court fails to act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion by not severing extracontractual claims when a settlement offer existed. | Allstate argues severance was required. | Juneau contends no automatic severance rule applicable. | Abuse found; trial court should sever extracontractual claims. |
| Whether the trial court abused its discretion by not abating extracontractual claims. | Allstate urges abatement to avoid unrecoverable discovery burden. | Juneau argues abatement is not mandatory. | Abatement required or permitted; mandamus directs abatement under conditions. |
Key Cases Cited
- Mid-Century Ins. Co. v. Lerner, 901 S.W.2d 749 (Tex.App.-Houston [14th Dist.] 1995) (severance and abatement when contract and extra-contractual claims coexist after settlement Offer)
- Northwestern Nat'l Lloyds Ins. Co. v. Caldwell, 862 S.W.2d 44 (Tex.App.-Houston [14th Dist.] 1993) (abate extracontractual claims following contract settlement)
- State Farm Mut. Auto. Ins. Co. v. Wilborn, 835 S.W.2d 260 (Tex.App.-Houston [14th Dist.] 1992) (precedent for severance/abatement in parallel claims)
- Liberty National Fire Ins. Co. v. Akin, 927 S.W.2d 627 (Tex. 1996) (abatement not mandatory regardless of contract outcome)
- In re Allstate Ins. Co., 232 S.W.3d 340 (Tex.App.-Tyler 2007) (flexible approach to abatement considerations)
- Tex. Farmers Ins. Co. v. Cooper, 916 S.W.2d 698 (Tex.App.-El Paso 1996) (no ironclad rule mandating abatement at a fixed time)
- In re Progressive County Mut. Ins. Co., 2007 WL 416553 (Tex.App.-Beaumont 2007) (abatement accompanies severance because of discovery scope)