In Re Texas Property and Casualty Insurance Guaranty Association v. the State of Texas

CourtCourt of Appeals of Texas
DecidedAugust 21, 2025
Docket11-25-00191-CV
StatusPublished

This text of In Re Texas Property and Casualty Insurance Guaranty Association v. the State of Texas (In Re Texas Property and Casualty Insurance Guaranty Association v. the State of Texas) 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 Texas Property and Casualty Insurance Guaranty Association v. the State of Texas, (Tex. Ct. App. 2025).

Opinion

Opinion filed August 21, 2025

In The

Eleventh Court of Appeals __________

No. 11-25-00191-CV __________

IN RE TEXAS PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION

Original Mandamus Proceeding

MEMORANDUM OPINION Relator, Texas Property and Casualty Insurance Guaranty Association (TPCIGA), filed a petition for writ of mandamus in this court, seeking to compel the Honorable Jeffrey Todd Robnett, presiding judge of the 441st District Court of Midland County, Texas, to withdraw an order imposing a monetary sanction. After reviewing the petition, and the responses thereto filed by Real Parties in Interest (RPI), and considering the applicable law, we conclude that the trial court abused its discretion when it sanctioned Relator. Accordingly, we conditionally grant Relator’s petition for writ of mandamus. I. Factual and Procedural History In 2019, following an automobile accident, Christina Granado, individually and as next friend of I.G. and M.G. Jr., (RPI Plaintiffs) sued Tina Marie Jamison and James Evert Holt (RPI Defendants), alleging that RPI Plaintiffs’ damages were caused by the negligent operation of a vehicle by Jamison and negligent entrustment by Holt. In 2020, Holt’s automobile insurance carrier, ACCC Insurance Company, was placed into liquidation proceedings, and Relator became obligated to investigate, compromise, settle, and pay “covered claims” against the RPI Defendants pursuant to the Guaranty Act. See TEX. INS. CODE ANN. §§ 462.001–.351 (West 2022) (the Guaranty Act); 462.301–.311 (setting out TPCIGA’s duties relating to covered claims). RPI Defendants filed a notice of automatic stay of the proceedings on December 22, 2020. See id. § 462.309 (requiring a six-month stay in proceedings to permit TPCIGA to properly defend a pending cause of action). Presumably, the trial court proceedings were stayed from December 30, 2020, to June 30, 2021, in accordance with their motion and the statute. See id. On February 3, 2023, the parties entered into a Rule 11 Agreement. Nearly two years later, on January 6, 2025, RPI Defendants moved to enforce the agreement, arguing that RPI Plaintiffs had failed to execute the requisite affidavits regarding other insurance, a condition precedent to settlement and a requirement under the Guaranty Act. See id. § 462.251. The trial court issued an order on January 30, 2025, requiring (1) RPI Plaintiffs to complete the affidavits no later than thirty days from the issuance of the order, and (2) RPI Defendants to distribute the settlement funds as agreed upon in the Rule 11 Agreement within two weeks of receiving RPI Plaintiffs’ executed affidavits. On May 7, 2025, RPI Plaintiffs filed a motion to enforce the settlement agreement, asserting that they had provided the affidavits on January 28, 2025, two 2 days before the trial court’s order was issued, but had yet to receive any payment. On June 24, 2025, at a hearing on RPI Plaintiffs’ motion, the parties informed the court of two concerns. First, RPI Plaintiffs’ counsel explained that the hospital that provided care to one of the plaintiffs following the accident had filed a lien. Although the hospital has since “certified” to RPI Plaintiffs that they are not owed any more money, the lien remained. RPI Defendants’ trial counsel noted that the lien’s resolution was a condition precedent to the funding of the settlement under the Rule 11 Agreement. RPI Defendants’ trial counsel stated that Relator’s involvement in the case was “[t]he other issue that [was] making this very difficult.” RPI Defendants’ trial counsel complained of an ongoing dispute involving a “new adjustor on the file” but did not elaborate. When asked by the trial court whether it had “control over” Relator’s file adjuster, RPI Defendants’ counsel responded, “You should, Judge, yes.” The trial court thereafter issued a written order, requiring that “the claims adjuster individually assigned to the aforementioned file appear in person, and not through any assignee or agent, along with the parties.” At a hearing held three days later, RPI Defendants’ trial counsel notified the trial court that she had “passed along” the trial court’s order to Relator and was “informed that they d[id] not intend to have anybody” present. The following colloquy occurred: THE COURT: Well, let’s talk about this person not being here. Anything I can do about that? [PLAINTIFFS]: Your Honor, I would believe that you can order sanctions. That is a requirement that the Court entered on behalf of someone who is acting as representative and the one funding this. This is the second time that the TPCIGA has chosen to thumb their nose at this Court with regards to orders entered that would apply to them, and it would be my opinion you can enter a sanction.

3 Now, you may have to enter that sanction through [Defense counsel’s] firm with instructions that you expect them to pay it, as [Defense counsel] is the one here acting in its behalf, but I do believe that you can, in fact, enter sanctions. And I brought an order for that, if the Court chooses to do so. THE COURT: Okay. I think the Court has the discretion to order sanctions as well against the individual. [DEFENDANTS]: Judge, if I may respond briefly. THE COURT: Yeah. [DEFENDANTS]: I don’t have an opinion today as to the Court’s jurisdiction over TPCIGA or their individuals. I, as you know, am not here on their behalf. I do not represent TPCIGA. THE COURT: Right. [DEFENDANTS]: I’m here on behalf of the insureds. They were told of the Court’s order. Should the Court see fit to impose sanctions, again, I don’t have an opinion on that. I would say that I would not be the appropriate party, neither my firm, to impose the sanctions on because we do not represent them. We -- our ethical duty does not run to them. THE COURT: Who is your client? [DEFENDANTS]: My client is the insureds, Tina Marie Jamison and James Evert Holt. THE COURT: The insureds and the insurance. [DEFENDANTS]: Yes. 1

1 While we discuss infra how Relator differs statutorily from an insurer, the duty to defend relationship makes the following analogously applicable. A contractual relationship results where a defendant’s insurer honors its duty to defend by hiring a law firm to represent the insureds, but that does not make the insurer a party to the lawsuit, nor is the insurer the “client” in the sense of being a party to the tort action. Employers Casualty Co. v. Tilley, 496 S.W.2d 552 (Tex. 1973), yielded a body of law regarding the “tripartite relationship among an insurer, defense counsel, and insured in the context of insurance defense litigation.” In re Sassin, 511 S.W.3d 121, 126 (Tex. App.—El Paso 2014, no pet.). In a tort claim, the lawyer hired represents the insured, and counsel owes to the insured unqualified loyalty. See Unauthorized Practice of Law Comm. v. Am. Home Assur. Co., 261 S.W.3d 24, 26–29, 36–46 (Tex. 2008). Importantly, neither the insureds, RPI Defendants, nor RPI Plaintiffs had asserted a direct cause of action against Relator in the matter below. See Jun v. Lloyds & Other Various Insurers, 37 S.W.3d 59, 63 (Tex. App.—Austin 2000, pet. denied) (before judgment, generally plaintiffs have no third-party cause of action against a defendant’s insurance entity). 4 THE COURT: Okay. I don’t think -- [DEFENDANTS]: Any order that the Court does issue, I will pass it along. THE COURT: And these representatives are for -- are of Progressive? [DEFENDANTS]: No, Judge, of the Guaranty Fund. THE COURT: Okay. [DEFENDANTS]: Yes, Texas Property -- I have it here -- Casualty Insurance Guaranty Association, TPCIGA for short.

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In Re Texas Property and Casualty Insurance Guaranty Association v. the State of Texas, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-texas-property-and-casualty-insurance-guaranty-association-v-the-texapp-2025.