*1 day alter one held on March petition and
Vaughan her first amended filed final of the October in advance
well unequivocally at
hearing stated date. Goff hearing that he would
the March 26 Nevertheless, from the case.
withdraw daughter to take action
Vaughan’s failed later, day half months on the
until six and a hearing. Vaughan’s hold that final We right disqualify Goff
daughter waived her failing timely file her motion. See Appeals, 797 Fourth Court
Spears v. (“[C]ourts (Tex.1990) must exacting consid to an standard when
adhere disqualify as to
ering motions to counsel so dilatory trial tac
discourage their use as
tic.”). trial court its hold that abused
We by ordering disqualification
discretion remedy by appeal would be
Goff and
inadequate. Tex. Nat’l Bank v. See NCNB (Tex.1989).2
Coker, Ac
cordingly, conditionally grant mandamus we
relief. only if
The writ will issue the trial court fails disqualification.
to vacate its order HERNANDEZ, and Anita
Ruben
Petitioners, LLOYDS, Respondent.
GULF GROUP
No. D-3795.
Supreme Court of Texas.
Argued 1993. Nov. April
Decided Zinn, Hardberger,
Larry Phillip D. San Antonio, petitioners. for Mishtal, Antonio, respon- Mary for San dent. Coker, 398, 400 Vaughan’s argu- Tex. Nat'l Bank We not reach alternative do apply (Tex.1989). the trial court failed ment "substantially related test" outlined NCNB
692
SPECTOR, Justice,
opinion
settling
delivered the
tain its
with
consent before
McCul-
Court,
PHILLIPS,
lough.1
in which
Chief
Justice,
GONZALEZ, HIGHTOWER,
and
trial,
trial court
After
bench
ren-
HECHT, DOGGETT,
CORNYN
judgment
dered
for the Hernandezes
GAMMAGE, Justices, join.
(the
$100,000
of
amount of
amount
the under-
cause,
In
an
this
we consider whether
plus pre-judgment
policy),
insured motorist
may deny an
insurer
uninsured/underinsured
interest,
interest,
post-judgment
and attor-
motorist claim on
of a
the basis
“settlement
law,
ney’s
In
trial
fees.
its conclusions of
any
without consent” exclusion clause absent
no mate-
court stated
Gulf had suffered
showing
that the settlement
prejudice
rial
because of the Hernandezes’
judgment
insurer. The trial court rendered
comply
failure to
with the settlement-with-
ap
court of
favor
the insureds. The
exclusion,
out-eonsent
and that invocation
reversed,
peals
reasoning that the insureds
deprive
the exclusion would
the Hernandezes
by
had violated their insurance contract
set
protection required by
the Texas Unin-
tling with the underinsured motorist without
Statute,
Motorist
Tex.
sured/Underinsured
the insurer’s consent.
Six weeks after the the Hernan- when one to a contract commits a dezes, Gulf, contract, of that without the consent of entered material breach the other McCullough party discharged any or into a settlement with for the is excused from State, McCullough’s policy. obligation perform. limits of State Farm See Jack v. sought (Tex.App March 398-99 Antonio On Hernandezes S.W.2d . —San n.r.e.) (citing 'd to recover from Gulf under the underinsured writ ref Mead John (Tex. Inc., coverage. coverage Group, denied son Gulf 1981)). upon based the Hernandezes’ failure to ob- any person payment
1. The
contract between the Hernan-
sentative or
entitled to
insurance
Group Lloyds
shall,
contained the fol-
dezes and Gulf
under this insurance
without written
lowing settlement-without-eonsent clause:
company,
consent of the
make
settlement
apply:
This insurance does not
any person
organization
who
or
be
a)
injury
properly damage
bodily
legally
therefor[.]
liable
insured,
repre-
respect
legal
his
situation —where
breach,
In the latter
materiality
has no value.
determining
of a
consider,
things,
by
among
other
the settle
courts will
the insurer
nonbreaching party will
extent
to which
is not material.
insured’s breach
ment —the
have
that it could
deprived of the benefit
therefore,
conclude,
that an insurer
We
perfor
reasonably
anticipated
from full
settlement
*3
an insured’s
(Second) of Con
mance. See Restatement
coverage
an unin
may
deny
under
not
241(a)
(1981);
Compo
§
Advance
tRACts
policy that con
sured/underinsured
Goodstein,
nents,
737
v.
Inc.
clause.4
tains a settlement-without-consent
1980, writ
ref'd
(Tex.Civ.App. — Dallas
n.r.e.).2
non-breaching party is
The less the
materiality principle to
Applying this
benefit,
expected
the less
deprived of the
case,
that
the
this
we conclude
the facts of
material
the breach.
Gulfs consent
failure to obtain
Hernandezes’
In
of an underinsured motorist
the context
a
McCullough was not
settling with
before
claim,
may
an in
there
be instances when
it
stipulated that
knew
breach. Gulf
material
con
without the insurer’s
sured’s settlement
in
it has refused its consent
of no case which
receiving
from
prevents
sent
the insurer
a
when an underinsured driver
to settle
claim
con
anticipated
from the insurance
benefit
full limits of his or her
has tendered the
tract;
may
specifically, the
extin
settlement
stipulated that McCul
policy.
parties
subrogation right.
Lib
guish a valuable
Cf.
$25,000
other than the
lough had no assets
(in
(Tex.1994)
Cruz,
erty
Co. v.
Mut. Ins.
he did not be
policy,
Farm
and that
State
provide
preju
of suit
sured’s failure to
notice
change in
would
lieve his financial situation
law).3 In
diced insurer as a matter of
other
future;
stip
and Gulf further
the foreseeable
instances, however,
may
the insurer
not be
any financial
not incurred
benefit,
ulated that it “has
deprived
expected
of the contract’s
subrogation
regard
...
to its
any extinguished subrogation right
losses
with
because
Co.,
432,
(Fla.App.1990);
v.
433
Marsh
2.
courts consider in determin-
558 So.2d
The other factors
894,
(i)
Ill.App.3d
ing materiality
Prestige
Group,
16 Ill.Dec.
of a breach are:
the extent
Ins.
58
1268,
(1978);
injured
adequately
Rapa
parly
can be
374 N.E.2d
1270
Co.,
compensated
part
of that
of which
for
benefit
Risk Mut. Ins.
418 N.W.2d
dla v. Preferred
(ii)
848,
1988);
deprived;
(Iowa
he will be
the extent to which
MacInnis v. Aetna
&
852
Life
1255,
220,
party failing
perform
perform
Co.,
to
or to offer to
Casualty
526 N.E.2d
403 Mass.
forfeiture; (iii)
Co.,
that the
(1988);
will suffer
likelihood
v. Horace Mann Ins.
1257-58
Silvers
party failing
perform
perform
21,
(1989);
to
or to offer to
289,
Wheeler
378 S.E.2d
27
324 N.C.
failure, taking
660,
cure his
account of all the
Co.,
will
F.Supp.
Ins.
749
v. Nationwide Mut.
including any
assur-
circumstances
reasonable
(E.D.Penn.1990). But see Stevens v. Mer
663
ances; (iv) the extent to which the behavior of
26,
Co.,
ENOCH, Justice, dissenting. clause, impose the issue was whether to case, If this a breach of I were contract prejudice requirement. refusing im- agree Group would that for Gulf to avoid its pose prejudice requirement, this Court duty to injustice cover the Hernandezes’ underinsured though might stated that even an claim, claim, by it would have to a loss disallowing show of “ex- occur an valid otherwise pected benefit.” this Court should not overreach its bound- imply aries and new standards into insurance However, this case is not about a breach of at contracts. Id. coverage. contract. This case is about consistently upheld This Court has consent insuring agreement states: E.g., to settle exclusions. 845 S.W.2d apply: This insurance does not 811; at Farm Ford State Mut. Auto. Ins. a) bodily injury property damage Co., (Tex.1977); Dairy ..., insured, respect Roman, County land Mut. Ins. Co. v. company, without written consent of the (Tex.1973); also, see Huttle any person settlement with makefs] ston v. Beacon Nat’l Ins. ... may legally liable there- (Tex.App. Worth writ — Fort fore. ... denied). cases, Among these there were un doubtedly companies that not insurance were points The Hernandezes raise four of error prejudiced, point but the of the consent to points, though, All this Court. four ask usurp settle exclusion is to not the insurance question, may company an one insurance that companies’ subrogation rights. materially prejudiced by a settlement deny coverage case, under an person In this when an insured asks uninsured/underin- policy settle, sured motorist contains a consent a thor- for consent to Gulf conducts support posi- to settle exclusion. In of their ough financial of the motorist to en- check tion, argue satisfy judgment. Hernandezes that the exclu- It sure he cannot purposes sion is gainsaid inconsistent with the of the cannot be that most insureds do not an inves- Texas Uninsured or Underinsured Motorist have the resources to conduct such suggest preju- recovery, face a claim that the Gulf does not that it has been an insured Thus, passage delay prejudice. contrary diced of time between Her- caused itself filing suggestion dissenting opinion, an in- nandezes' settlement and the of their claim. of the by postponing delay might, To the extent that such a in other sured’s interests are not served circumstances, filing years of the claim until after a settlement. increase an insurer's difficulties Irrespective stipulations,1 tigation. asking Hernandezes are this Court
what the quickly all as
to do is allow insureds to settle fault, then, possible person at as case) (two years make a
years later in this against their underinsured motorists
claim claim,
policy. the insurance Without to investi-
company is unaware that it needs
gate negligent person and determine judgment proof. he is Con- or not
whether
comitantly, company how will the insurance accident, years
prove prejudice two after the negli- only trying faced with to locate the pro- civil
gent party, but without the aid of discovering tortfeasor’s
cess to assist approach way in This not the
assets? is
which uninsured/underinsured designed
provision was to work. *5 reasons,
For the above I would affirm the appeals. of the court I there-
fore dissent. Petitioner, NATIVIDAD,
Rosa
ALEXSIS, INC., and William
Steen, Respondents.
No. D-2786.
Supreme Court of Texas.
April 28, 1994.
Rehearing Overruled June away by taking literally additionally wary agreements, a case conceded 1. The court should upon position public policy consider- litigants. founded one of ations, insuring parties which thus affects all