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in Re: Allstate Insurance Company

CourtCourt of Appeals of Texas
DecidedMay 12, 2005
Docket06-05-00051-CV
StatusPublished

This text of in Re: Allstate Insurance Company (in Re: Allstate Insurance Company) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
in Re: Allstate Insurance Company, (Tex. Ct. App. 2005).

Opinion

6-96-028-CV Long Trusts v. Dowd


In The

Court of Appeals

Sixth Appellate District of Texas at Texarkana


______________________________


No. 06-05-00051-CV



IN RE: ALLSTATE INSURANCE COMPANY




                                                                                                                                                             

Original Mandamus Proceeding





                                                                                                                                                                                        



Before Morriss, C.J., Ross and Carter, JJ.

Memorandum Opinion by Chief Justice Morriss



MEMORANDUM OPINION


            Connie Young sued Allstate Insurance Company on the underinsured motorist (UIM) coverage Allstate issued to Young, alleging Allstate (a) owed her on the UIM coverage, (b) breached her insurance contract, (c) violated Texas Insurance Code Article 21.21, (d) violated the Texas Deceptive Trade Practices Act, and (e) handled her claim in bad faith. The trial court overruled Allstate's motion for severance of the coverage claim from the others and abatement of the others—items (b), (c), (d), and (e)—instead ordering the trial bifurcated, so the coverage claim would be tried first, then the others, if Young succeeded on her coverage claim. Allstate petitions this Court for a writ of mandamus to require the trial court to grant Allstate's motion to sever and abate. We decline.

            Allstate argues that, because they tendered an offer of settlement to Young, severance is mandated by Texas caselaw. Allstate contends that, if the matters are not severed, Young will be able to present the jury with evidence of Allstate's proffer of settlement, unfairly prejudicing Allstate.

            Trial courts have broad discretion in deciding whether to sever claims into separate cases. Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990) (op. on reh'g.); In  re  Koehn,  86  S.W.3d  363,  366  (Tex.  App.—Texarkana  2002,  orig.  proceeding).  Tex.  R. Civ. P. 41 grants the trial court "broad discretion in the matter of consolidation and severance of causes." McGuire v. Commercial Union Ins. Co., 431 S.W.2d 347, 351 (Tex. 1968). Severance is proper when (1) the controversy involves more than one cause of action, (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted, and (3) the severed claim is not so interwoven with the remaining action that it involves the same facts and issues. Id. The controlling reasons for a severance are to do justice, to avoid prejudice, and to further convenience. Tex. R. Civ. P. 174(b); Guar. Fed. Sav. Bank, 793 S.W.2d at 658.

            Mandamus will lie only to correct a clear abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). Further, there must be no adequate remedy at law. Id. An appellate court will not interfere with a trial court's exercise of discretion except in rare circumstances. For mandamus relief to be appropriate, the trial court must have clearly abused its discretion, issuing a decision without basis or guiding principle in law. Cf. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding). The relator, seeking mandamus, must establish that the trial court could reasonably have reached only one decision. Walker, 827 S.W.2d at 839–40.

We will reverse a trial court's determination regarding severance only if we find an abuse of discretion. Nevertheless, when all the facts and circumstances of the case unquestionably require a severance to prevent manifest injustice, there is no fact or circumstance supporting or tending to support a contrary conclusion, and the legal rights of the parties will not be prejudiced, there is no room for the exercise of discretion. In that situation, the trial court has a duty to order a severance.

Koene, 86 S.W.3d at 366 (citations omitted). "[C]lear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion, and may result in appellate reversal by extraordinary writ." Walker, 827 S.W.2d at 840.

            Allstate argues that Liberty Nat. Fire Ins. Co. v. Akin, 927 S.W.2d 627 (Tex. 1996), requires severance of Young's claims, and therefore the trial court abused its discretion in denying Allstate's motion. In Akin, the insurer tendered payment on the part of the insured's claims which were not in dispute. The insurance company then moved the trial court to sever the insured's coverage claim from the bad faith claim. Id. at 628.

            Akin does not require severance in each case in which a settlement offer is tendered. In fact, Akin denies severance. Writing for the majority, Justice Cornyn acknowledged that there may be bad faith cases in which severance is required, such as cases in which the insurer has made a settlement offer on a disputed contract claim. It is true, as Allstate points out, that the court agreed with certain intermediate appellate courts ordering severance. We conclude, however, that neither those cases, nor Akin, mandate severance in this case.

            Allstate directs us to State Farm Mut. Auto. Ins. Co. v. Wilborn, 835 S.W.2d 260 (Tex. App.—Houston [14th Dist.] 1992, orig. proceeding). In Wilborn, the insured sued, alleging State Farm denied coverage under the policy and acted in bad faith. See id. at 260–61. In that case, there was specific evidence before the trial court about the amount of the settlement offer; and the plaintiff-insured testified regarding why she alleged the insurer was in bad faith. Id. The record in the case before us lacks such evidence.

            Allstate also directs us to United States Fire Ins. v. Mallard, 847 S.W.2d 668

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