Liberty Mutual Insurance Company v. Rickie Sims

• Court: Court of Appeals of Texas
• Decided: January 16, 2015
• Docket: 12-14-00123-CV
• Status: Published

Opinion

ACCEPTED 12-14-00123-CV TWELFTH COURT OF APPEALS TYLER, TEXAS 1/16/2015 4:39:11 PM CATHY LUSK CLERK

FILED IN NO. 12-14-00123-CV 12th COURT OF APPEALS TYLER, TEXAS 1/16/2015 4:39:11 PM CATHY S. LUSK IN THE TWELFTH COURT OF APPEALS Clerk TYLER, TEXAS

LIBERTY MUTUAL INSURANCE COMPANY, Appellant

v.

RICKIE SIMS, Appellee

Appeal from the 276th Judicial District Court Shelby County, Texas Cause No. 13CV32,286

APPELLANT’S REPLY BRIEF

David L. Plaut State Bar No. 16066030 Jeffrey C. Glass State Bar No. 08004000 HANNA & PLAUT, LLP 211 E. Seventh Street, Suite 600 Austin, Texas 78701 Telephone: (512) 472-7700 Facsimile: (512) 472-0205

ATTORNEYS FOR APPELLANT LIBERTY MUTUAL INSURANCE COMPANY TABLE OF CONTENTS Page TABLE OF CONTENTS....................................................................................... ii

TABLE OF AUTHORITIES ................................................................................ iv

SUMMARY OF ARGUMENT ............................................................................. 1

ARGUMENT AND AUTHORITIES .................................................................... 3

Issue One ............................................................................................................... 3 As a matter of law, the Chesapeake Policy unambiguously provides $250,000 in UM/UIM coverage. The trial court therefore erred in submitting the issue of policy limits to the jury, admitting evidence about policy limits at trial, and entering judgment on the jury’s answer to Question 1...........................................................................3

Issue Two ............................................................................................................ 14 The amount of policy limits was not relevant to any triable fact issue and determination of limits was material only to calculate the amount of the judgment after the verdict. Therefore, the trial court erred by, among other things, submitting the issue of policy limits to the jury, admitting evidence about policy limits, and in entering judgment on the jury’s answer to Question 1. .............................................14

Issue Three .......................................................................................................... 17 Even if it was proper to submit the policy limits issue to the jury, the trial court erred by failing to submit the relevant amendatory endorsements and by refusing Liberty’s offers of proof that it corrected all discovery errors prior to trial. .................................................17

Issue Four ............................................................................................................ 18 Allowing the jury to consider and determine UM/UIM limits improperly injected insurance in the trial violating Texas Rule of Evidence 411. .............................................................................................18

CONCLUSION ................................................................................................... 21

ii CERTIFICATE OF SERVICE............................................................................. 22

CERTIFICATE OF COMPLIANCE ................................................................... 22

iii TABLE OF AUTHORITIES

Cases Page Brainard v. Trinity Universal Insurance Co., 216 S.W.3d 809 (Tex. 2006)........................................................................6, 15

City of Amarillo v. Barnes, 1998 WL 609765 (Tex. App.–Amarillo 1998, no pet.)................................... 13

Dahl v. Dahl, 2009 WL 866199 (Tex. App.–Dallas 2009, no pet.).......................................... 4

Dallas Transit Co. v. Young, 370 S.W.2d 6 (Tex. Civ. App.–Dallas 1963, writ ref’d n.r.e.) ........................5, 6

Employers Insurance of Wausau v. Halton, 792 S.W.2d 462 (Tex. App.–Dallas 1990, writ denied)..................................... 5

Gaspar v. Lawnpro, Inc., 372 S.W.3d 754 (Tex. App.–Dallas 2012, no pet.).......................................... 11

Gore v. Cunningham, 297 S.W.2d 287 (Tex. Civ. App.–Beaumont 1956, writ ref'd n.r.e.)...............4, 7

Hathaway v. General Mills, Inc., 711 S.W.2d 227 (Tex. 1986)........................................................................... 17

Henson v. Southern Farm Bureau Casualty Insurance Co., 17 S.W.3d 652 (Tex. 2000)............................................................................. 16

Hercules Exploration, Inc. v. Halliburton Co., 658 S.W.2d 716 (Tex. App.–Corpus Christi 1983, writ ref’d n.r.e.).................. 4

Houston First American Savings v. Musick, 650 S.W.2d 764 (Tex. 1983)............................................................................. 4

iv In re Progressive County Mutual Insurance Co., 2014 WL 2618298 (Tex. App.–Houston [1st Dist.] 2014, no. pet.) ................ 15

In re Reynolds, 369 S.W.3d 638 (Tex. App.–Tyler 2012, no pet.) .......................... 14, 15, 19, 20

Industrial Disposal Supply Co., Inc. v. Perryman Brothers Trash Services, Inc., 664 S.W.2d 756 (Tex. App.–San Antonio 1983, writ ref’d n.r.e.) ..................... 4

Mid-Century Insurance Co. of Texas v. McLain, 2010 WL 851407 (Tex. App.–Eastland, no pet.) ................................ 7, 8, 14, 16

Peralta v. Durham, 133 S.W.3d 339 (Tex. App.–Dallas 2004, no pet.)............................................ 3

Restelle v. Williford, 364 S.W.2d 444 (Tex. Civ. App.–Beaumont 1963, writ ref'd n.r.e.).................. 4

S & I Management, Inc. v. Choi, 331 S.W.3d 849 (Tex. App.–Dallas 2011, no pet.).......................................... 11

Starks v. City of Houston, 448 S.W.2d 698 (Tex. Civ. App.–Houston [1st Dist.] 1969, writ ref'd n.r.e.) .... 4

State Farm Mutual Auto Insurance Co. v. Norris, 216 S.W.3d 819 (Tex. 2006)........................................................................... 16

State Farm Mutual Auto Insurance Co. v. Grayson, 983 S.W.2d 769 (Tex. App.–San Antonio 1998, no pet.) ...........................14, 19

Stracener v. United Services Automobile Association, 777 S.W.2d 378 (Tex. 1989)........................................................................... 19

Thornhill v. Ronnie’s I-45 Truck Stop, Inc., 944 S.W.2d 780 (Tex. App.–Beaumont 1997, writ dism'd by agr.) ............18, 19

Thota v. Young, 366 S.W.3d 678 (Tex. 2012) ........................................................................................... 21

v Rules

Texas Rule of Appellate Procedure 33.1(a)(1) ..................................................... 13

Texas Rule of Appellate Procedure 44.1 .............................................................. 21

Texas Rule of Civil Procedure 198.3 ..................................................................... 5

Texas Rule of Evidence 411 ............................................................... 18, 19, 20, 21

Publication

1 Steven Goode, Olin Guy Wellborn III, and M. Michael Sharlot, Texas Practice Series: Guide to the Texas Rules of Evidence § 411.1 (3d ed. 2002)....................................................................................................18

vi SUMMARY OF ARGUMENT

This appeal begins and ends with the certified policy that unambiguously

provides $250,000 in UM/UIM coverage for the accident in which Sims was

involved. Because the unambiguous policy was provided to the trial court at

judgment when it first became relevant (as Sims concedes), the judgment of the

trial court must be reversed and rendered for Liberty.

Sims argues in his brief both that policy limits were $1 million as a matter of

law and that the amount of policy limits was a fact question. He cannot have it

both ways. In any case, he is wrong on both counts. This Court cannot find the

limits were $1 million as a matter of law because the trial court admitted

incomplete misleading evidence of policy limits, submitted the issue to the jury,

and relied on the jury verdict in entering judgment. By persuading the trial court to

try policy limits to the jury, Sims waived reliance on Liberty’s corrected

admission. Thus, even if the trial court had found policy limits were $1 million as

a matter of law – which it did not do – the judgment must be reversed.

Sims is also incorrect in arguing there was a fact question as to the amount

of policy limits that was properly submitted to the jury. The question of limits is a

question of law for the court to decide at the time of judgment and is never

submitted to the jury in the liability phase of a UM/UIM case. Permitting the jury

to consider the amount of policy limits is inherently prejudicial and requires, at the

Appellant’s Reply Brief Page 1 very least, a reversal and remand. In any event, the policy limits question was not

properly submitted as a question of fact because the court admitted only those

portions of the policy Sims designated and refused Liberty’s offer of the entire

policy. Again, even if Sims is correct on his second argument, the judgment must

be reversed.

This case was improperly tried. Either the question of policy limits was a

question of law, in which case limits were irrelevant until judgment when the trial

court was required to construe the entire certified policy Liberty submitted; or the

question was one of fact, in which case the trial court was required to submit the

entire policy to the jury, with all relevant endorsements, not just the misleading

few pages Sims submitted for self-serving reasons. The proper way to try the case,

as outlined in Liberty’s opening brief, was to set aside the policy limits question

until judgment, disregarding all incomplete documents, and then, at judgment,

construe the unambiguous certified policy showing limits of $250,000. Because

the evidence establishes that $250,000 policy limit as a matter of law, the judgment

must be reversed and judgment rendered in that amount. In the alternative, the

case must be remanded for trial on the policy limits question alone.

Appellant’s Reply Brief Page 2 ARGUMENT AND AUTHORITIES

Issue One

As a matter of law, the Chesapeake Policy unambiguously provides $250,000 in UM/UIM coverage. The trial court therefore erred in submitting the issue of policy limits to the jury, admitting evidence about policy limits at trial, and entering judgment on the jury’s answer to Question 1.

A. Sims waived reliance on the admission relating to policy limits by trying the issue as a factual dispute.

Sims’ argument that policy limits were $1 million as a matter of law relies

on discovery answers and an admission that Liberty corrected before trial.

Appellee’s Brief at 20-21. Sims, however, very clearly disregarded that admission

and tried the question of policy limits to the jury, introducing, over objection,

evidence on policy limits (3 R.R. 55-58; 5 (Part 2) R.R. PX-13); reading, over

objection, the superseded endorsement to the jury (3 R.R. 57-58); introducing, over

objection, evidence of Liberty’s discovery responses on policy limits (3 R.R. 59-

62); and requesting, over objection, Jury Question No. 1. 4 R.R. 143-145; 6 C.R.

1005.

Texas law holds that by submitting the issue of policy limits to the jury,

Sims waived reliance on the admission to establish limits as a matter of law. “The

primary purpose of requests for admissions is to simplify trials by eliminating

matters about which there is no real controversy.” Peralta v. Durham, 133 S.W.3d

339, 341 (Tex. App.–Dallas 2004, no pet.). Requests for admissions exist “to

Appellant’s Reply Brief Page 3 eliminate in advance of the trial fact issues which would not be in dispute, and . . .

the rule does not contemplate or authorize admissions to questions involving points

of law.” Gore v. Cunningham, 297 S.W.2d 287, 291 (Tex. Civ. App.–Beaumont

1956, writ ref’d n.r.e.). A judicial admission takes the matter out of the domain of

proof; it is not evidence, but serves as a substitute for evidence. Hercules

Exploration, Inc. v. Halliburton Co., 658 S.W.2d 716, 719 (Tex. App.–Corpus

Christi 1983, writ ref’d n.r.e.).

Thus, a party relying on an admission of fact “must protect the record by

objecting to the introduction of controverting evidence and to the submission of

any issue bearing on the facts admitted.” Houston First Am. Sav. v. Musick, 650

S.W.2d 764, 769 (Tex. 1983) (emphasis added). See also Restelle v. Williford, 364

S.W.2d 444 (Tex. Civ. App.–Beaumont 1963, writ ref’d n.r.e.). Texas courts

consistently hold that a party waives reliance on an admission by introducing

evidence on the subject matter of the admission as if it were a disputed issue. Dahl

v. Dahl, 2009 WL 866199, at *2 (Tex. App.–Dallas 2009, no pet.); Indus. Disposal

Supply Co., Inc. v. Perryman Bros. Trash Serv., Inc., 664 S.W.2d 756, 764 (Tex.

App.–San Antonio 1983, writ ref’d n.r.e); Starks v. City of Houston, 448 S.W.2d

698, 700 (Tex. Civ. App.–Houston [1st Dist.] 1969, writ ref’d n.r.e.) (“[E]ven if

counsel’s statement had amounted to a judicial admission, it was waived when

evidence to the contrary was heard. Appellants not only did not object to such

Appellant’s Reply Brief Page 4 evidence, they also introduced some on the disputed issue, and this certainly

amounted to waiver.”); Dallas Transit Co. v. Young, 370 S.W.2d 6, 11 (Tex. Civ.

App.–Dallas 1963, writ ref’d n.r.e.) (treating the issue to which an admission was

made as a disputed issue by introducing evidence thereon waived reliance on the

admission).

The primary purpose of admissions is to avoid trial of fact questions. Far

from objecting to the submission of any issue or evidence on policy limits, Sims’

counsel tried the issue, repeatedly and directly informing the jury that policy limits

were $1 million.1 Sims therefore waived reliance on the admission, even if it was

not withdrawn by written motion.2 By permitting Sims to try the issue as a fact

1 The only conceivable explanation for why Sims, believing the admission was binding on Liberty as a matter of law, would proceed to try the question to the jury is that it was a conscious tactic to inflate the jury’s damages verdict. Liberty objected to admission of the policy limits for that reason. 3 R.R. 8-9; 3 R.R. 10-11; 3 R.R. 56-57. 2 There is no question that Liberty amended its interrogatory answers three months before trial, disclosed that UM/UIM policy limits actually were $250,000, and produced the operative policy endorsement showing limits of $250,000. 6 C.R. 901-926. The admission on which Sims relies so heavily, Request for Admission No. 6, was withdrawn by amendment the day before trial rather than by a motion to withdraw. 4 R.R. 135-136 (amended admission response was read into the record as part of Liberty’s offer of proof). Under Rule 198.3 of the Texas Rules of Civil Procedure, the trial court had the power to allow Liberty to “withdraw or amend” its admission that policy limits were $1 million. Tex. R. Civ. P. 198.3. Having submitted the question of limits to the jury, it must be presumed that the trial court allowed the amendment, which superseded the prior admission, rendering it null and void. Sims cannot possibly claim he was prejudiced by amendment of the mistaken admission when he was well aware, months before trial, that Liberty contended the policy limits were $250,000 and when Liberty subsequently contested his assertion of $1 million limits at every turn. See Employers Ins. of Wausau v. Halton, 792 S.W.2d 462, 467 (Tex. App.–Dallas 1990, writ denied) (“Plaintiff cannot now claim prejudice by its ‘reliance’ on the deemed admissions when he knew that defendant disputed almost every issue in the lawsuit”).

Appellant’s Reply Brief Page 5 question, the trial court also disregarded the admission and treated it as withdrawn.

Accordingly, Sims failed to establish policy limits were $1 million as a matter of

law.

B. The trial court erred by submitting the issue of policy limits to the jury.

Although Sims incorrectly argues the admission was binding on Liberty, he

is correct about one thing: policy limits were established conclusively, but by

Liberty and in the amount of $250,000. As Liberty has shown, policy limits was a

question of law for the court under the unambiguous terms of the Policy and,

particularly, the Amended Policy Limits Schedule. Appellant’s Brief at 13-21.

Sims did not plead ambiguity and the policy limits are set out unambiguously in

the Amended Policy Limits Schedule, thus precluding Sims from introducing

evidence to contradict the policy’s $250,000 limit. Id. at 13-18. The trial court

was similarly precluded from submitting policy limits to the jury and from entering

judgment on the jury finding that policy limits were $1 million. Id. at 19-21.

Further, in light of Texas law addressing UM/UIM claims, the question of

policy limits became ripe only after trial at the time the court entered judgment.

See Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 815 (Tex. 2006)

(holding that a UM/UIM insurer has no contractual duty to pay benefits until after

the liability of the other motorist and the amount of damages suffered by the

insured are determined). Sims admits the only reason the trial court needed to

Appellant’s Reply Brief Page 6 determine policy limits was “in order to craft a judgment.” Appellee’s Brief at 17.

This is correct, as Liberty has shown. Appellant’s Brief at 21-24. See also Mid-

Century Ins. Co. of Texas v. McLain, 2010 WL 851407, at *1, 3 (Tex. App.–

Eastland, no pet.) (noting with approval that “[a]fter the verdict, [the carrier] put on

evidence that its policy limit was $20,000” producing the UM/UIM policy at the

time of judgment).

Because policy limits were established as a matter of law and were not ripe

or material until entry of judgment, Liberty’s corrected discovery error did not alter

the trial court’s obligation to construe the policy as a matter of law at the time of

judgment. Admissions, whether deemed or otherwise, are ineffective and not

permitted to resolve disputes on questions of law. E.g., Gore v. Cunningham, 297

S.W.2d 287, 291 (Tex. Civ. App.–Beaumont 1956, writ ref’d n.r.e.) (requests for

admissions exist “to eliminate in advance of the trial fact issues which would not

be in dispute, and . . . the rule does not contemplate or authorize admissions to

questions involving points of law”). This provides a second reason Liberty’s

purported admission was ineffective to overrule the unambiguous policy limits of

$250,000.

Sims admits the policy limits were relevant only to the crafting of the

judgment but nevertheless argues the production of the fully certified policy after

verdict was “too late.” Appellee’s Brief at 25-26. The argument is illogical and

Appellant’s Reply Brief Page 7 erroneous. As Liberty has shown, the cases and the very nature of the UM/UIM

claim dictate that the only stage at which policy limits becomes relevant is at the

time of judgment. Appellant’s Brief at 21-24; McLain, 2010 WL 851407 at *3.

Thus, Liberty’s production of the policy at that time cannot possibly have been too

late; the issue of limits is properly addressed at entry of judgment. In light of

Sims’ concession that determining policy limits was necessary to craft a judgment,

his citation of Rule 270 of the Texas Rules of Civil Procedure is inapposite.3

Deftly avoiding Liberty’s argument that any plain reading of the Policy

reflects unambiguous limits of $250,000, Sims contends that the issue before the

jury was not what the policy language meant, but what language the policy actually

contained. He argues that “the factual dispute that the jury decided was not what

the language of the contract meant, but rather whether the Policy was modified to

reduce the UIM policy limit from $1 million to $250,000” and that “Liberty

Mutual insisted that PX-13 was not the actual Policy because the Policy had been

modified by DX-12.” Appellee’s Brief at 30, 31. Jury Question No. 1, however,

asked the jury to decide what the contract language meant by asking, “What was

the policy limit of the underinsured motorist coverage in the Liberty Mutual Policy

at the time of the Collision?” 6 C.R. 1005. The question clearly asked the jury to

3 Appellee’s Brief at 26. The policy of insurance is not “additional evidence” within the meaning of Rule 270 that can be received into evidence in the liability phase of a UM/UIM case.

Appellant’s Reply Brief Page 8 construe and interpret the language of the policy and determine the policy limits.

There is no other way the jury could decide the question asked.

In any case, it is patently false to suggest the jury decided “whether the

Policy was modified to reduce the UIM policy limit from $1 million to $250,000”

when the jury never saw the Amended Policy Limits Schedule, DX-12, or any

other form that could have “modified” the entirely misleading and incomplete

policy provisions Sims submitted to the jury. The jury could not have decided that

question because the question and the evidence pertaining to it were never

presented to them. The trial court erred in submitting Jury Question No. 1 because

it asked the jury to do the trial court’s job of interpreting contract language and did

so unnecessarily when the contract provision in question, policy limits, was not

ripe or relevant to any question of fact in this UM/UIM case.

For the same reason, the trial court’s admission of only those portions of the

policy that Sims offered, the jury’s finding that limits were $1 million, and the trial

court’s entry of judgment on that finding are contrary to Texas law because they

ignored the unambiguous terms of a binding contract.

C. The complete, certified Policy, containing the endorsement establishing policy limits of $250,000, was fully and properly before the trial court and is before this Court for consideration.

Liberty properly submitted the certified Policy to the trial court at the time of

judgment showing the policy limits are $250,000 as a matter of law. 7 C.R. 1048

Appellant’s Reply Brief Page 9 through 8 C.R. 1388. Sims has made no attempt to dispute that the Amended

Policy Limits Schedule establishes the policy limits are $250,000. He now raises

certain “suspicions” about the applicable endorsements but those objections were

not raised with or ruled on by the trial court and, in any case, they do no more than

demonstrate Sims’ lack of familiarity with the issuance of complex commercial

insurance policies. See Appellee’s Brief at 3-5.4 In addition to being ill-founded,

these “suspicions” are irrelevant to construction of an unambiguous policy that had

to be construed as a matter of law at the time of judgment.

Sims’ also objected to Liberty’s post-verdict submission of the certified

Policy on hearsay grounds. Appellee’s Brief at 26-27; 8 C.R. 1393. As Sims

impliedly admits, however, he did not get a direct ruling on this objection. The

trial court neither ruled on the hearsay objection nor struck the Policy from the

record. Hearsay is an objection to the form of evidence and the trial court must

rule on the objection or it is waived. S & I Mgmt., Inc. v. Choi, 331 S.W.3d 849,

855 (Tex. App.–Dallas 2011, no pet.). Sims’ failure to get a ruling on his hearsay

objection waived that objection. Id. Sims asserts – without authority – that the

trial court’s final judgment in his favor was an “implied” ruling on the hearsay

4 For example, such policies are not stored in a paper file in some giant warehouse, as Sims’ question about endorsements being “stored together” implies. Upon request, a paper copy is assembled from computer files showing the declarations and applicable forms and endorsements. Thus, Sims’ “suspicions” about how Liberty would not know what the limits were, about “missing” signatures, and discrepancies in dates, and “storage” of endorsements and policy forms “close to one another in Liberty Mutual’s files” derive entirely from a pre-electronic data mindset and not from any misleading conduct on Liberty’s part.

Appellant’s Reply Brief Page 10 objection but that proposition has been rejected by Texas law. Gaspar v. Lawnpro,

Inc., 372 S.W.3d 754, 756-57 (Tex. App.–Dallas 2012, no pet.) (employers waived

hearsay objection to employees’ summary judgment affidavits even though

employers obtained favorable ruling on their no-evidence summary judgment

motion, where employers never sought a ruling on their hearsay objections, and

trial court never issued a ruling on those objections). The certified policy attached

to Liberty’s JNOV Motion is therefore properly before this Court for construction

as a matter of law.

Sims’ argument that the jury was presented with and resolved a factual

dispute about what the policy included is also fallacious. He argues the dispute

addressed whether the policy was “modified” to reduce policy limits from $1

million to $250,000 and asserts the evidence at trial “established” that Plaintiff’s

Exhibit 13 (“PX-13”) was the contract. Appellee’s Brief at 30. The only way that

incomplete and misleading exhibit became the operative contract was through the

trial court’s erroneous reliance on the initial discovery error and subsequent refusal

to permit the jury to consider the relevant amendatory endorsements establishing

unambiguous policy limits of $250,000. The trial court simply disregarded long-

standing rules of contract construction, ignored the proper and established method

of trying UM/UIM cases, and violated the rule of optional completeness.

Appellant’s Brief at 25-33.

Appellant’s Reply Brief Page 11 Taken cumulatively, the trial court’s erroneous rulings more or less created a

question of fact on an issue that should have been determined as a matter of law.

The trial court accepted Sims purported reliance on a mistaken discovery response

and on his self-serving selection of portions of the policy for the jury to review.

This does not create a fact issue where ambiguity is not plead, where the discovery

response is withdrawn and corrected, and where the issue (policy limits) is not

even relevant to any proper jury question.

Further, any dispute over the policy contents was not ripe or relevant until

judgment, as Sims admits. Post-trial, the court was charged with resolving any

disputes about the policy’s meaning, interpretation and construction. There is no

basis in Texas law for permitting the jury to decide what is an inherently

prejudicial issue such as the amount of insurance coverage – a legal issue at that –

while deciding facts relating to liability and damages.

Sims is incorrect that Liberty argues the Policy had been “modified” by

Defendant’s Exhibit 12 (“DX-12”). At the time Liberty answered Request for

Admission No. 6, erroneously admitting the applicable limits were $1 million, the

true and correct policy, set out as an exhibit to Liberty’s JNOV Motion

(7 C.R. 1048 through 8 C.R. 1388), contained the endorsement providing for

$250,000 in UM/UIM limits. Liberty’s trial counsel simply made a mistake in the

course of initial discovery about limits being $1 million. There is no question of

Appellant’s Reply Brief Page 12 modification of the policy relevant to this case and Liberty’s corrected discovery

responses made that clear months before trial. Sims simply latched onto the

original, erroneous admission because it served his interests, not because there has

ever been any doubt about the effect of the policy’s amendatory endorsements or

applicable limits. Sims’ authority on contract modification, offer and acceptance,

consideration, and “meeting of the minds” is simply irrelevant. See Appellee’s

Brief at 22-23. In any event, Sims never raised those issues before the trial court

and cannot rely on them in this appeal. See Tex. R. App. P. 33.1(a)(1); City of

Amarillo v. Barnes, 1998 WL 609765 at *1 (Tex. App.–Amarillo 1998, no pet.)

(“even the right to have a question of law reviewed by an appellate court may be

waived if it is not first presented to the trial court for consideration”).

All of Sims’ argument about admissibility of evidence at trial and Liberty’s

discovery mistake is immaterial because the policy could not properly be offered to

the jury for interpretation. The trial court was charged with interpreting that policy

and ascertaining its meaning. The fact that Sims refuses to admit that the

applicable policy was defined by the exhibit attached to the JNOV Motion is

irrelevant. That policy was unambiguous and definitive and was provided to the

trial court at the time it became relevant, i.e., at judgment.

Appellant’s Reply Brief Page 13 Issue Two

The amount of policy limits was not relevant to any triable fact issue and determination of limits was material only to calculate the amount of the judgment after the verdict. Therefore, the trial court erred by, among other things, submitting the issue of policy limits to the jury, admitting evidence about policy limits, and in entering judgment on the jury’s answer to Question 1.

As Liberty has shown, the amount of coverage is irrelevant to any properly

submitted jury issue in a UM/UIM case. See Appellant’s Brief at 21-24. As Sims

concedes, the amount of coverage is relevant only to the amount of the judgment

and becomes material only at the time the court calculates the judgment. In re

Reynolds, 369 S.W.3d 638, 654 (Tex. App.–Tyler 2012, no pet.) (noting UM/UIM

claimant has the burden of establishing coverage, but emphasizing that

introduction of the policy in violation of Rule 411 and “injection of insurance” into

the liability phase of trial was inherently prejudicial); McLain, 2010 WL 851407 at

*3 (noting with approval that “[a]fter the verdict, [the carrier] put on evidence that

its policy limit was $20,000” producing the UM/UIM policy at the time of

judgment); State Farm Mut. Auto. Ins. Co. v. Grayson, 983 S.W.2d 769, 770 (Tex.

App.–San Antonio 1998, no pet.). If the existence of some amount of UM/UIM

coverage is undisputed, the only triable issues of fact are liability of the

underinsured driver and the amount of damages. E.g., In re Progressive County

Mut. Ins. Co., 2014 WL 2618298 at *4 (Tex. App.–Houston [1st Dist.] 2014, no.

pet.) (because UM/UIM coverage was not in dispute, claimant’s suit only involved

Appellant’s Reply Brief Page 14 “the issues in a typical car wreck: the comparative negligence of [claimant] and the

other driver and [claimant’s] damages”). The observation in Reynolds that a

plaintiff must show UM/UIM “coverage” goes only to the existence of coverage

under the relevant policy; it does not include the amount of coverage. Appellee’s

Brief at 33.

The amount of available coverage is an irrelevant – and inflammatory –

issue for jury consideration because a UM/UIM insurer has no contractual duty to

pay benefits until the liability of the underinsured driver and the amount of

damages suffered by the insured are determined. Brainard v. Trinity Universal Ins.

Co., 216 S.W.3d 809, 815 (Tex. 2006) (holding insurer’s contractual duty to pay

UM/UIM insurance does not exist “until the insurer breaches the contract by

withholding benefits after the insured has obtained a judgment establishing the

liability and underinsured status of the other motorist”); In re Reynolds, 369

S.W.3d at 652. Thus, until liability and damages issues are determined, the amount

of UM/UIM coverage is simply not an issue because the underinsured driver might

not be negligent or the damages might not exceed the underinsured driver’s

coverage. Henson v. Southern Farm Bureau Cas. Ins. Co., 17 S.W.3d 652, 654

(Tex. 2000).

The trial court, at Sims’ urging, repeatedly departed from the proper

procedure for trying a UM/UIM case. Published decisions discussing these

Appellant’s Reply Brief Page 15 procedures uniformly require that the jury first determine liability and damages.

See, e.g., State Farm Mut. Auto Ins. Co. v. Norris, 216 S.W.3d 819, 821 (Tex.

2006) (discussing trial court’s application of policy limits, settlement credits and

PIP offsets to the jury verdict on the issues of liability and damages); Henson, 17

S.W.3d at 653 (discussing calculation of judgment after jury decided only liability

and damages); McLain, 2010 WL 851407 at *2-3 (after jury decided liability and

damages, trial court held a “hearing on entry of judgment” in which the UM/UIM

carrier proved amount of policy limits, personal injury payments it had made, and

amounts the injured driver received from the underinsured driver).

Because the availability of UM/UIM coverage under the Policy was

undisputed, the only triable fact issues in this case were liability of the

underinsured driver (Knous) and the amount of Sims’ damages. The amount of

UM/UIM coverage available to Sims could not have been relevant until the jury

found Knous responsible for the accident and that Sims’ damages exceeded his

settlement with Knous ($100,000), which was stipulated. If the jury had found

Sims rather than Knous responsible or if Sims’ damages had not exceeded his

settlement with Knous, the Policy’s UM/UIM coverage would never have become

available. Once those issues were decided in Sims’ favor by the jury, and only

then, the Insurance Code and Policy required that the trial court apply the Policy as

written to determine available UM/UIM limits, and enter judgment for Sims’

Appellant’s Reply Brief Page 16 damages, after applying offsets, up to the applicable UM/UIM policy limits. Thus,

the amount of UM/UIM policy coverage was irrelevant to any issue the jury had to

decide, as Liberty repeatedly informed the trial court. Even if that amount was

disputed, it never became a jury issue because construction of the policy was for

the court alone.

As Liberty’s brief shows (in the Statement of Facts and at 19-20), the trial

court erred repeatedly by refusing to construe the policy as a matter of law after

trial. Sims cites a case holding that the intentions of the parties to a contract to

modify that contract is a question of fact. See Appellee’s Brief at 34 (citing

Hathaway v. General Mills, Inc., 711 S.W.2d 227, 228 (Tex. 1986)). Obviously,

that principle is irrelevant here, where the parties to the Policy, Chesapeake and

Liberty, do not dispute that policy limits were $250,000 for UM/UIM coverage in

Texas. Moreover, the policy limit was determinable, as a matter of law, at the

time of judgment and was not a proper issue for jury determination, as discussed

above and in Liberty’s opening brief.

Issue Three

Even if it was proper to submit the policy limits issue to the jury, the trial court erred by failing to submit the relevant amendatory endorsements and by refusing Liberty’s offers of proof that it corrected all discovery errors prior to trial.

Moreover, even if it was proper to submit the policy limits issue to the jury,

the trial court erred by failing to submit the relevant amendatory endorsements and

Appellant’s Reply Brief Page 17 by refusing Liberty’s offers of proof that it corrected all discovery errors prior to

trial, as Liberty showed in its opening brief. Appellant’s Brief at 26-30.

Issue Four

Allowing the jury to consider and determine UM/UIM limits improperly injected insurance in the trial violating Texas Rule of Evidence 411.

A. The unfairly prejudicial nature of the evidence of UM/UIM limits vastly outweighed its probative value.

Allowing the jury to consider and determine UM/UIM limits improperly

injected insurance in the trial violating Texas Rule of Evidence 411, as Liberty also

showed in its brief. Appellant’s Brief at 30-33. Evidence that a defendant was or

was not insured against liability is not admissible on the issue of negligence. Tex.

R. Evid. 411. “[This] rule is founded on the belief that the probative value of such

evidence is vastly outweighed by the danger of unfair prejudice.” 1 Steven Goode,

Olin Guy Wellborn III, and M. Michael Sharlot, Texas Practice Series: Guide to

the Texas Rules of Evidence § 411.1 (3d ed. 2002). See also Thornhill v. Ronnie’s

I-45 Truck Stop, Inc., 944 S.W.2d 780, 794 (Tex. App.–Beaumont 1997, writ

dism’d by agr.) (recognizing that one purpose of Rule 411 is to avoid informing the

jury that someone other than defendant may be liable to pay damages). For

example, “in the simultaneous trial of two claims, when evidence of liability

insurance will be admissible as to only one of the claims, detailed evidence of

insurance is prejudicial.” In re Reynolds, 369 S.W.3d at 653-54.

Appellant’s Reply Brief Page 18 In addition to Knous’ negligence and Sims’ damages, the only thing Sims

had to prove in this trial was that Knous was underinsured. State Farm Mut. Auto

Ins. Co. v. Grayson, 983 S.W.2d 769, 770 (Tex. App.–San Antonio 1998, no pet.).

Knous was underinsured if the available proceeds of her liability coverage were

insufficient to compensate Sims for his actual damages. Stracener v. United Servs.

Auto. Ass’n, 777 S.W.2d 378, 380 (Tex. 1989) (“[A] negligent party is

underinsured whenever the available proceeds of his liability insurance are

insufficient to compensate for the injured party’s actual damages.”). Once Sims’

damages were determined by the jury, the court had all it needed to determine if

those damages exceeded the $100,000 settlement with Knous.

The amount of available UM/UIM limits had no bearing on any issue the

jury properly considered. The amount of limits had nothing to do with whether

Knous, as opposed to Sims, caused the accident nor did the amount of limits have

anything to do with the amount of Sims’ damages. Moreover, the amount of limits

had nothing to do with whether Knous was underinsured. To the contrary, because

the existence of UM/UIM coverage was admitted by Liberty, the amount of

UM/UIM limits was highly prejudicial to Liberty. Any jury knowing there was $1

million in coverage for a seriously injured plaintiff would be encouraged to

increase its damages findings. Rule 411 was intended to prevent just such a result.

Allowing any evidence of available UM/UIM policy limits violated Liberty’s right

Appellant’s Reply Brief Page 19 to have Knous’ liability and Sims’ damages decided without the prejudicial and

inflammatory fact of liability insurance influencing the jury. In re Reynolds, 369

S.W.3d at 653-54.

Most important, the improper prejudicial influence of the evidence of policy

limits vastly outweighed its actual probative value, which was zero. As shown

above, the amount of UM/UIM insurance was irrelevant to any fact issue properly

before the jury. Further, unless and until Knous was found liable and

underinsured, the UM/UIM coverage could not possibly come into play, and it was

unnecessary to inform the jury of policy limits at trial. The prejudicial nature of

the evidence thus vastly outweighed its probative value and violated Rule 411.

B. The trial court erred repeatedly by permitting Sims to introduce evidence of the amount of UM/UIM policy coverage over Liberty’s objections.

Because the amount of UM/UIM coverage was immaterial to any issue

properly before the jury, and because such evidence was highly inflammatory and

improperly prejudicial, the trial court therefore abused its discretion in connection

with the improper evidentiary ruling addressed above. See Appellant’s Brief at 19-

20. Each of those rulings violated Rule 411 and constituted an abuse of the trial

court’s discretion. Each of these errors was harmful and reversible in that each

error resulted in the erroneous jury finding on Question 1 that applicable policy

Appellant’s Reply Brief Page 20 limits were $1 million and in the erroneous judgment based on that finding. Tex.

R. App. P. 44.1; Thota v. Young, 366 S.W.3d 678, 687 (Tex. 2012).

CONCLUSION

The trial court largely abdicated its responsibility under settled Texas law to

interpret the Policy and determine available limits without assistance from the jury.

This resulted in erroneous evidentiary rulings, including the admission of irrelevant

but highly inflammatory evidence, the submission of erroneous jury issues, and the

entry of an erroneous judgment. The judgment should therefore be reversed and

rendered based on available UM/UIM limits of $250,000. In the alternative, the

judgment should be vacated and the case remanded for a new trial on the question

of policy limits alone.

Respectfully submitted,

HANNA & PLAUT, L.L.P. 211 E. Seventh Street, Suite 600 Austin, Texas 78701 Telephone: (512) 472-7700 Facsimile: (512) 472-0205 dplaut@hannaplaut.com

By: /s/ David L. Plaut David L. Plaut State Bar No. 16066030 dplaut@hannaplaut.com Jeffrey C. Glass State Bar No. 08004000 jglass@hannaplaut.com

ATTORNEYS FOR APPELLANT

Appellant’s Reply Brief Page 21 CERTIFICATE OF SERVICE

I hereby certify that on 16th day of January 2015, a true and correct copy of this document was e-filed with the Twelfth Court of Appeals and served electronically pursuant to TRCP 21(a). Any other counsel of record will be served pursuant to TRCP 21(a) this same date.

Don Wheeler Darrin M. Walker LAW OFFICE OF DON WHEELER LAW OFFICE OF DARRIN WALKER 101 Tenaha Street 6134 Riverchase Glen Dr. P.O. Box 1687 Kingwood TX 77345 Center, Texas 75935 Telephone: (281) 358-2295 Telephone: (936) 598-2925 Facsimile: (281) 358-5602 Facsimile: (936) 598-7024

/s/ David L. Plaut David L. Plaut

CERTIFICATE OF COMPLIANCE

I certify that this document was produced on a computer using Microsoft Word 2010 and contains 5,828 words, as determined by the computer software’s word-count function, excluding the sections of the document listed in Texas Rule of Appellate Procedure 9.4(i)(1).

/s/ David L. Plaut David L. Plaut Attorney for Liberty Mutual Insurance Company

Dated: January 16, 2015

Appellant’s Reply Brief Page 22 BRAINARD v. TRINITY UNIVERSAL INS. CO. Tex. 809 Cite as 216 S.W.3d 809 (Tex. 2006)

Whitehead v. State Farm Mut. Auto. Lilith BRAINARD, et al., Petitioners, Ins. Co., 952 S.W.2d 79, Novosad v. v. Mid–Century Ins. Co., 881 S.W.2d 546. Affirmed in part, reversed in part, and TRINITY UNIVERSAL INSURANCE remanded. COMPANY, Respondent. No. 04–0537. 1. Insurance O2787 Supreme Court of Texas. A motorist is underinsured if his or Argued April 14, 2005. her liability insurance is insufficient to pay for the injured party’s actual damages. Decided Dec. 22, 2006. V.A.T.S. Insurance Code, art. 5.06–1(5). Rehearing Denied April 13, 2007. 2. Insurance O2806 Background: Automobile accident vic- tim’s surviving spouse and children Liability coverage limit and insured’s brought wrongful death action and sought recovery of personal injury protection underinsured motorist (UIM) benefits. Li- (PIP) benefits were an offset to actual ability insurer then settled without admit- damages and reduced underinsured motor- ting liability. The 31st District Court, Gray ist (UIM) carrier’s liability. County, Steven R. Emmert, J., awarded 3. Insurance O2803 attorney fees to plaintiffs, but denied pre- Underinsured motorist (UIM) insur- judgment interest. Appeal and cross-ap- ance covers prejudgment interest that un- peal were taken. The Amarillo Court of derinsured motorist would owe to the in- Appeals, Don H. Reavis, J., 153 S.W.3d sured; statute requires UIM coverage for 508, affirmed in part and reversed and sums that insured is legally entitled to rendered in part. Review was granted. recover as damages from owners or opera- Holdings: The Supreme Court, Jefferson, tors of underinsured motor vehicles be- C.J., held that: cause of bodily injury or property damage, (1) UIM insurance covers prejudgment in- prejudgment interest represents additional terest that underinsured motorist compensatory damages for the insured’s would owe to the insured; bodily injury and property damage al- (2) credit for payment of personal injury though it accrues because of lost use of protection (PIP) benefits reduced prin- money, and contractual basis of suit for cipal on which prejudgment interest UIM benefits does not render prejudg- subsequently began to accrue against ment interest statute inapplicable. UIM carrier, but credit for liability V.A.T.S. Insurance Code, art. 5.06–1(5); insurer’s payment after interest began V.T.C.A., Finance Code § 304.102. to accrue applied first to interest and 4. Interest O39(2.6) then to principal; and Prejudgment interest is awarded to (3) carrier’s failure to pay within thirty fully compensate the injured party, not to days of claim did not entitle spouse and punish the defendant. children to attorney fees, abrogating Norris v. State Farm, 217 S.W.3d 1, 5. Interest O39(2.6) State Farm Mut. Auto. Ins. Co. v. ‘‘Prejudgment interest’’ is compensa- Nickerson, 130 S.W.3d 487, Allstate tion allowed by law as additional damages Ins. Co. v. Lincoln, 976 S.W.2d 873, for lost use of the money due as damages 810 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

during the lapse of time between the ac- 11. Insurance O3585 crual of the claim and the date of judg- ‘‘Presentment’’ for purposes of statute ment. entitling insured to attorney fees if under- See publication Words and Phrases insured motorist (UIM) carrier failed to for other judicial constructions and pay just amount owed before end of thirti- definitions. eth day after claim was presented oc- 6. Interest O59(1) curred when judgment established tortfea- sor’s liability and underinsured status; no The declining principal formula of just amount was owed by carrier until the crediting payments when received is the judgment; abrogating Norris v. State proper way to apply credits in the calcula- Farm, 217 S.W.3d 1, State Farm Mut. tion of prejudgment interest. Auto. Ins. Co. v. Nickerson, 130 S.W.3d 7. Interest O60 487, Allstate Ins. Co. v. Lincoln, 976 S.W.2d 873, Whitehead v. State Farm At each new interval between pay- Mut. Auto. Ins. Co., 952 S.W.2d 79, Novo- ments entitling defendant to credit, pre- sad v. Mid–Century Ins. Co., 881 S.W.2d judgment interest continues to accrue only 546. V.A.T.S. Insurance Code, art. 5.06– on the remaining principal because, under 1(5); V.T.C.A., Civil Practice & Remedies the general prejudgment interest provi- Code § 38.002. sions, interest is computed as simple inter- See publication Words and Phrases est and does not compound. V.T.C.A., Fi- for other judicial constructions and nance Code § 304.104. definitions.

8. Interest O59(1) 12. Insurance O2790 Payment O42 The underinsured motorist (UIM) car- Automobile insurer’s credit for pay- rier is under no contractual duty to pay ment of personal injury protection (PIP) benefits until the insured obtains a judg- benefits reduced principal on which pre- ment establishing the liability and underin- judgment interest subsequently began to sured status of the other motorist. accrue against insurer as UIM carrier, but V.A.T.S. Insurance Code, art. 5.06–1(5). credit for liability insurer’s payment after 13. Insurance O3343, 3585 interest began to accrue applied first to Neither requesting underinsured mo- interest and then to principal. torist (UIM) benefits nor filing suit against the insurer triggers a contractual duty to 9. Interest O39(2.35) pay, and where there is no contractual Prejudgment interest owed by under- duty to pay, there is no just amount owed insured motorist (UIM) carrier did not for purposes of statute requiring the insur- accrue after date that insured’s surviving er to pay just amount owed within thirty spouse and children rejected carrier’s set- days of presentment to avoid fees award. tlement offer more favorable than judg- V.T.C.A., Civil Practice & Remedies Code ment. V.T.C.A., Finance Code § 38.002. § 304.105(a). 14. Insurance O2790, 2793(1) 10. Costs O194.16 Neither a settlement nor an admission Attorney fees are recoverable from an of liability from the tortfeasor establishes opposing party only as authorized by stat- underinsured motorist (UIM) coverage, ute or by contract between the parties. because a jury could find that the other BRAINARD v. TRINITY UNIVERSAL INS. CO. Tex. 811 Cite as 216 S.W.3d 809 (Tex. 2006)

motorist was not at fault or award dam- judgment interest consistent with this ages that do not exceed the tortfeasor’s opinion. liability insurance. V.A.T.S. Insurance Code, art. 5.06–1(5). I 15. Insurance O2790 Background The underinsured motorist (UIM) car- On July 1, 1999, Edward H. Brainard II rier’s contractual obligation to pay benefits was killed when his vehicle was involved in does not arise until liability and damages a head-on collision with a rig owned by are determined. V.A.T.S. Insurance Code, Premier Well Service, Inc. His widow, Lil- art. 5.06–1(5). ith Brainard, and their five children (col- lectively, Brainard) brought a wrongful death action against Premier and sought UIM benefits from Trinity Universal In- Bryan W. Scott, Katy, for Petitioner. surance Company under a policy issued to Gregory R. Ave, Walters, Balido & the family business, Brainard Cattle Com- Crain, L.L.P., Dallas, for Respondent. pany. Trinity paid Brainard $5,000 under the policy’s PIP provision but requested Chief Justice JEFFERSON delivered further information supporting the UIM the opinion of the Court. claim. Brainard alleges she submitted the This case presents the following is- information and performed all conditions sues: (1) whether uninsured/underin- precedent to receiving the benefits, but sured motorist (UIM) insurance covers Trinity never paid. Eventually, Brainard prejudgment interest that the underin- joined Trinity as a defendant, alleging sured motorist would owe the insured in breach of contract, breach of the common tort liability; (2) if so, how to apply set- law duty of good faith, violations of the tlement and personal injury protection Deceptive Trade Practices–Consumer Pro- (PIP) credits to the interest calculation; tection Act, and violations of Insurance and (3) the circumstances under which Code articles 21.21 and 21.55. an insured may recover attorney’s fees On December 7, 2000, Brainard and Pre- from the UIM insurer under Chapter 38 mier settled Brainard’s claims for of the Civil Practice and Remedies Code. $1,000,000, Premier’s policy limit, and Pre- We hold that: (1) UIM insurance covers mier was subsequently dismissed from the this prejudgment interest; (2) under the suit. When Brainard demanded that Trin- ‘‘declining principal’’ formula, each credit ity also tender the $1,000,000 UIM policy is applied according to the date on limit, Trinity countered with an offer of which it was received; and (3) the in- $50,000. The trial court severed Brai- sured may recover attorney’s fees under nard’s extra-contractual claims, which re- Chapter 38 only if the insurer does not main pending, and the parties proceeded tender UIM benefits within thirty days to trial on the UIM contract. A jury after the trial court signs a judgment found that Premier’s negligence caused the establishing the liability and underin- accident and awarded Brainard $1,010,000 sured status of the other motorist. We for pecuniary loss, funeral expenses, loss reverse the court of appeals’ judgment of companionship and society, and mental in part, affirm in part, and remand this anguish. The jury also awarded $100,000 case to the trial court to calculate pre- for attorney’s fees. 812 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

The trial court applied a $1,005,000 cred- set to actual damages. Mid–Century Ins. it for Brainard’s settlement and PIP bene- Co. of Tex. v. Kidd, 997 S.W.2d 265, 271 fits, and signed a judgment against Trinity (Tex.1999); Stracener, 777 S.W.2d at 380. for the remaining $5,000 in damages plus Thus, Trinity does not dispute that the $100,000 in attorney’s fees. On appeal, $5,000 difference is covered under Brai- Trinity challenged the attorney’s fees nard’s UIM policy. The issue is whether, award, and Brainard, by cross appeal, al- in addition to this amount, UIM insurance leged the trial court erred in refusing to covers prejudgment interest that Premier award prejudgment interest on the would owe on the $1,010,000 in actual dam- $1,010,000 in actual damages. The court ages. We conclude that it does. of appeals reversed that portion of the [4, 5] Prejudgment interest is awarded trial court’s judgment awarding attorney’s to fully compensate the injured party, not fees and affirmed the denial of prejudg- to punish the defendant. Cavnar v. Quali- ment interest. 153 S.W.3d 508, 513. Be- ty Control Parking, Inc., 696 S.W.2d 549, cause both points have engendered dis- 552 (Tex.1985), superseded in part by stat- agreement among the courts of appeals, ute, Act of June 3, 1987, 70th Leg., 1st C. we granted Brainard’s petition for review. S., ch. 3, § 1, 1987 Tex. Gen. Laws 51, 51– 48 Tex. Sup.Ct. J. 439 (Mar. 11, 2005). 52, as recognized in Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 II S.W.2d 507 (Tex.1998) and C & H Nation- Recovery of Prejudgment Interest wide, Inc. v. Thompson, 903 S.W.2d 315, [1–3] The Insurance Code requires in- 327 (Tex.1994). It is ‘‘ ‘compensation al- surers to offer Texas motorists UIM cov- lowed by law as additional damages for erage and mandates that such coverage: lost use of the money due as damages provide for payment to the insured of all during the lapse of time between the ac- sums which he shall be legally entitled crual of the claim and the date of judg- to recover as damages from owners or ment.’ ’’ Johnson & Higgins, 962 S.W.2d operators of underinsured motor vehi- at 528 (quoting Cavnar, 696 S.W.2d at cles because of bodily injury or property 552). By statute, ‘‘[a] judgment in a damage in an amount up to the limit wrongful death, personal injury, or proper- specified in the policy, reduced by the ty damage case earns prejudgment inter- amount recovered or recoverable from est.’’ TEX. FIN.CODE § 304.102. Thus, if the insurer of the underinsured motor Brainard obtained a judgment against Pre- vehicle. mier for past damages resulting from the TEX. INS.CODE art. 5.06–1(5). A motorist is collision, Premier would be liable for pre- underinsured if his or her liability insur- judgment interest. Whether Brainard ance is insufficient to pay for the injured may recover this interest from Trinity is party’s actual damages. Stracener v. governed by their UIM insurance contract. United Servs. Auto. Ass’n, 777 S.W.2d 378, In language closely tracking article 380 (Tex.1989). Because the jury valued 5.06–1(5), Brainard’s policy states that Brainard’s damages at $1,010,000, and Trinity will pay ‘‘damages which [Brai- Premier’s liability policy limit was nard] is legally entitled to recover from’’ $1,000,000, Premier was underinsured. Premier. We have consistently viewed The trial court correctly applied the sum prejudgment interest as falling within the of Premier’s $1,000,000 liability limit and common law meaning of damages, and Brainard’s $5,000 PIP recovery as an off- Trinity does not argue that the Legislature BRAINARD v. TRINITY UNIVERSAL INS. CO. Tex. 813 Cite as 216 S.W.3d 809 (Tex. 2006)

or the parties intended the term to convey Trinity’s argument fails for several rea- a narrower meaning. TEX. INS.CODE art. sons. First, although several courts of 5.06–1(5); see, e.g., Horizon/CMS Health- appeals have held that UIM insurance care Corp. v. Auld, 34 S.W.3d 887, 898 does not cover punitive damages assessed (Tex.2000) (citing Cavnar, 696 S.W.2d at against the underinsured motorist, none 552–54). Two courts of appeals have held reached this result by adopting Trinity’s that prejudgment interest constitutes dam- narrow interpretation of damages ‘‘because ages that the insured is ‘‘legally entitled to of bodily injury.’’ In fact, their reasoning recover’’ from the underinsured motorist. effectively supports UIM coverage for pre- Norris v. State Farm Mut. Auto. Ins. Co., judgment interest. In Shaffer, the court 217 S.W.3d 1, 7 (Tex.App.-Waco 2004, pet. concluded that the phrase ‘‘because of bod- granted); Menix v. Allstate Indem. Co., 83 ily injury’’ was ambiguous because it could S.W.3d 877, 880 (Tex.App.-Eastland 2002, mean that the damages must (a) literally pet. denied); Allstate Indem. Co. v. Col- derive from a bodily injury or (b) arise as lier, 983 S.W.2d 342, 343 (Tex.App.-Waco a result of bodily injury. Shaffer, 888 1998, pet. dism’d by agr.). S.W.2d at 148–49. If this language were ambiguous and had been drafted by the Trinity’s primary argument to the con- insurance company, precedent would re- trary, upon which the court of appeals quire that it be interpreted to favor the relied, emphasizes that the UIM policy, insured. Nat’l Union Fire Ins. Co. v. like article 5.06–1(5), requires Trinity to Hudson Energy Co., 811 S.W.2d 552, 555 pay only those damages which the insured (Tex.1991). Most UIM provisions, howev- is legally entitled to recover ‘‘because of er, recite nearly the exact text of article bodily injury or property damage.’’ 153 5.06–1(5). For that reason, the Shaffer S.W.3d at 512; see also TEX. INS.CODE art. court inquired into the statute’s legislative 5.06–1(5). Trinity contends that this quali- intent, which it found addressed in one of fication negates coverage for prejudgment this Court’s opinions. In Stracener, we interest because the essence of prejudg- concluded that the Legislature sought to ment interest is compensation for lost use protect ‘‘conscientious motorists from ‘fi- of money, not damages from bodily injury. nancial loss caused by negligent financially Further, Trinity suggests that Brainard’s irresponsible motorists.’ ’’ Stracener, 777 interpretation of the UIM endorsement S.W.2d at 382 (quoting Act of Oct. 1, 1967, would require the insurer to cover all dam- 60th Leg., R. S., ch. 202, § 3, 1967 Tex. ages assessed against the underinsured Gen. Laws 448, 449). Accordingly, the motorist, yet the courts of appeals have court of appeals observed that a primary held that UIM insurance does not cover purpose of UIM insurance is compensato- punitive damages. See, e.g., Milligan v. ry; it protects against financial loss. State Farm Mut. Auto. Ins. Co., 940 Shaffer, 888 S.W.2d at 149. Other courts S.W.2d 228, 232 (Tex.App.-Houston [14th of appeals have added that neither deter- Dist.] 1997, writ denied); State Farm Mut. ring wrongful conduct nor punishing the Auto. Ins. Co. v. Shaffer, 888 S.W.2d 146, defendant is accomplished when the UIM 148 (Tex.App.-Houston [1st Dist.] 1994, insurer pays punitive damages assessed writ denied); Vanderlinden v. United against the underinsured motorist. Milli- Servs. Auto. Ass’n Prop. & Cas. Ins. Co., gan, 940 S.W.2d at 231; Vanderlinden, 885 885 S.W.2d 239, 242 (Tex.App.-Texarkana S.W.2d at 240–42. Thus, they have held 1994, writ denied). that neither the language of article 5.06– 814 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

1(5) nor public policy supports coverage of between the parties. In sum, while it is punitive damages. true that prejudgment interest accrues We have already noted that prejudg- over time because of lost use of money, it ment interest serves to compensate the is equally accurate to say that it consti- injured party, not to punish the defendant. tutes additional compensatory damages for Johnson & Higgins, 962 S.W.2d at 528; the insured’s bodily injury and property Cavnar, 696 S.W.2d at 552. This distinc- damage. tion is apparent in the rule that ‘‘[p]re- Trinity’s alternative argument against judgment interest may not be assessed or coverage for prejudgment interest is based recovered on an award of exemplary dam- on the contractual aspect of a UIM claim. ages.’’ TEX. CIV. PRAC. & REM.CODE Franco v. Allstate Ins. Co., 505 S.W.2d § 41.007. Article 5.06–1(5)’s compensatory 789, 791–92 (Tex.1974) (noting that, ‘‘al- purpose is well served when the insured though ultimate recovery in this type of obtains, in addition to actual damages, any action depends upon proof of damages due prejudgment interest that the underin- to the tort of an uninsured third party, the sured motorist would owe the insured. cause of action against the insurer arises Trinity’s attempt to give the phrase ‘‘be- by reason of the written contract’’). If the cause of bodily injury’’ an artificially literal claim is purely contractual, as Trinity con- meaning—so as to establish a nexus re- tends, then Finance Code section 304.102, quirement that eliminates coverage for which authorizes prejudgment interest in prejudgment interest—has no basis in the wrongful death, personal injury, and prop- statute’s history or our precedent, under erty damage cases, would have no applica- which article 5.06–1 is liberally construed tion in this case. TEX. FIN.CODE § 304.102. to protect persons who are legally entitled The court of appeals adopted this ap- to recover damages from underinsured proach, citing our decision in Henson v. motorists. Stracener, 777 S.W.2d at 382. Southern Farm Bureau Casualty Insur- Moreover, Trinity’s rigid reading proves ance Company, 17 S.W.3d 652, 653 (Tex. too much, for it would entail splitting hairs 2000), as additional support for the view even among purely compensatory dam- that ‘‘the relationship between the Brai- ages, such as those for mental anguish and nards and Trinity is that of contracting loss of society. Article 5.06–1(5) states parties.’’ 153 S.W.3d at 513. that the insurer will pay the insured ‘‘all The reference to Henson deserves fur- sums which he shall be legally entitled to ther discussion because our reasoning in recover as damages from owners or opera- that case clarifies the issues presented tors of underinsured motor vehicles be- here. Henson was a passenger in a truck cause of bodily injury or property dam- driven by Millican, which collided with a age.’’ TEX. INS.CODE. art. 5.06–1(5). The vehicle driven by Contreras. Henson, 17 qualification ‘‘because of bodily injury or S.W.3d at 652. Henson sued Millican and property damage’’ merely underscores that Contreras for negligence and, before es- UIM insurance is compensatory. In addi- tablishing liability, settled with Contreras tion, it clarifies what should be obvious— for $20,000—her liability insurance limit. that only injuries and damages caused by Id. at 652–53. A jury attributed one hun- the motor vehicle accident are covered— dred percent of the negligence to Contrer- because if the qualification is omitted, the as and assessed Henson’s damages at policy would not exclude damages arising $133,842. Id. at 653. Within thirty days from unrelated incidents and transactions of the judgment, Henson and Millican’s BRAINARD v. TRINITY UNIVERSAL INS. CO. Tex. 815 Cite as 216 S.W.3d 809 (Tex. 2006)

UIM insurers tendered $45,000—their $1,010,000. TEX. FIN.CODE § 304.102. The combined UIM policy limits. Id. Henson, fact that Brainard’s suit against Trinity is however, refused the payment and de- based on contract in no way renders the manded prejudgment interest on top of the statute inapplicable. On the contrary, the policy limits, alleging the interest began to UIM policy effectively incorporates the accrue against the insurers from the earli- statute by requiring Trinity to pay dam- er of 180 days after he gave notice of his ages which Brainard is ‘‘legally entitled to claim or the day he filed suit against them. recover’’ from Premier. Section 304.102, Id. at 653–54. like the law of negligence, is necessary to The issue in Henson was whether pre- determine the liability of the underinsured judgment interest accrued on the insured’s motorist. The UIM policy, however, con- contractual claim for UIM benefits. The trols Trinity’s obligations. Because Brai- prejudgment interest which Henson could nard obtained a judgment establishing the recover from Contreras in tort liability was negligence and underinsured status of Pre- not at issue, as the damages assessed by mier, the contract requires Trinity to pay the jury already exceeded the UIM policy benefits. Henson, 17 S.W.3d at 654. limit. We examined the insurer’s obli- Accordingly, we hold that UIM insur- gation to pay damages which the insured is ance covers prejudgment interest that the ‘‘legally entitled to recover’’ from the un- underinsured motorist would owe the in- derinsured motorist and concluded that sured. The court of appeals erred in af- there is no contractual duty to pay benefits firming the trial court’s judgment denying until the liability of the other motorist and Brainard this recovery. the amount of damages suffered by the insured are determined. Id. at 653–64. III Thus, we held that a UIM claim does not earn prejudgment interest until the insur- Calculation of Prejudgment Interest er breaches the contract by withholding The parties do not challenge the calcula- benefits after the insured has obtained a tion of actual damages; they agree that judgment establishing the liability and un- the trial court properly deducted Brai- derinsured status of the other motorist. nard’s $1,000,000 settlement and $5,000 Id. at 654. The jury could have found that PIP recovery from the jury’s $1,010,000 Contreras was not negligent or that Hen- verdict, resulting in Trinity’s liability for son’s damages did not exceed Contreras’s $5,000. Mid–Century Ins. Co., 997 S.W.2d liability insurance limit, precluding any re- at 271; Stracener, 777 S.W.2d at 380. In- covery of UIM benefits. Id. Because the stead, the issue concerns how to apply insurers tendered the benefits promptly these credits when calculating prejudg- after the jury made its findings, no con- ment interest. Based on the jury’s ver- tractual duty was breached, and Henson dict, Premier would have been liable for was not entitled to receive the benefits $1,010,000 in actual damages, plus pre- earlier than he did. Id. The question we judgment interest on this amount. Having answer today—whether UIM insurance concluded that UIM insurance covers this covers the prejudgment interest an under- interest, we turn now to its calculation. insured motorist would owe the insured— Brainard’s suit against Premier was for was not before us in Henson. wrongful death. In a wrongful death case, Under section 304.102, Premier would prejudgment interest accrues beginning on be liable for prejudgment interest on the 180th day after the defendant receives 816 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

written notice of the claim or the day suit prejudgment interest is compensation is filed, whichever occurs first, and ending ‘‘ ‘for lost use of the money due as dam- on the day preceding the date judgment is ages during the lapse of time between the rendered. TEX. FIN.CODE § 304.104. In accrual of the claim and the date of judg- this case, the prejudgment interest period ment.’ ’’ Id. at 907 (quoting Cavnar, 696 commenced on January 19, 2000, when S.W.2d at 552). Therefore, compensation Brainard filed suit against Premier. Be- other than for lost use of money is not cause the trial court signed its judgment interest but a windfall for the claimant and on January 15, 2003, the period ended on a penalty to the defendant. Id. We con- January 14. Id. Prejudgment interest is cluded that, to satisfy the purpose of pre- computed as simple interest with a rate judgment interest, settlements must be equal to the postjudgment interest rate credited periodically, according to the date applicable at the time judgment is ren- they are received. Id. at 907–08. This dered. Id. §§ 304.103, 304.104. The trial approach, known as the ‘‘declining princi- court’s judgment set the rate at ten per- pal’’ formula, is the proper way to apply cent. credits in the calculation of prejudgment Brainard contends that prejudgment in- interest. Id. at 909 (overruling in part C terest is calculated on the entire $1,010,000 & H Nationwide, Inc. v. Thompson, 903 before applying credits. Accordingly, she S.W.2d 315, 327 (Tex.1994)). seeks $263,430 in prejudgment interest— ten percent interest on $1,010,000 from [7] In Battaglia, we concluded that January 19, 2000, until August 29, 2002, ‘‘[a] settlement payment should be credited the date the parties moved to enter judg- first to accrued prejudgment interest as of ment.1 In Brainard’s view, the interest is the date the settlement payment was added to the jury’s verdict before deduct- made, then to ‘principal,’ thereby reducing ing settlement and PIP credits, so that the or perhaps eliminating prejudgment inter- credits do not affect the prejudgment in- est from that point in time forward.’’ Id. terest calculation. Trinity objects, arguing at 908. Thus, as we explain below, each that Brainard should not continue to earn credit applies first to the accrued interest interest on $1,010,000 in damages despite and then to the principal, with each credit having already received $1,005,000 in com- establishing a new interval. At each new pensation. We agree. interval, interest continues to accrue only [6] We recently touched on this issue on the remaining principal because under in Battaglia v. Alexander, 177 S.W.3d 893, the general prejudgment interest provi- 908–09 (Tex.2005), in which we held that sions, ‘‘interest is computed as simple in- the trial court erred in calculating prejudg- terest and does not compound.’’ TEX. FIN. ment interest on total damages before de- CODE § 304.104. ducting payments that the plaintiff re- ceived from settling defendants. Although [8, 9] Under the ‘‘declining principal’’ Battaglia involved health care liability formula, the trial court is to consider the claims subject to section 16.02 of former date on which the insured received each Revised Civil Statutes article 4590i, we payment. Trinity paid Brainard $5,000 in established a framework that resolves the PIP benefits shortly after the July 1, 1999 issue presented here. We reiterated that collision. Because there is no dispute that

1. As explained above, however, the relevant rather than when the parties moved for entry date is that of the trial court’s judgment, of judgment. BRAINARD v. TRINITY UNIVERSAL INS. CO. Tex. 817 Cite as 216 S.W.3d 809 (Tex. 2006)

this payment was made sometime in July, We remand this case to the trial court to well before the prejudgment interest peri- modify the judgment in accordance with od commenced, we may assume it was July this opinion. 31. Brainard settled with Premier for $1,000,000—its liability insurance limit—on IV December 7, 2000. On March 9, 2001, Trinity offered to settle with Brainard for Attorney’s Fees $50,000. See TEX. FIN. CODE § 304.106. The final issue is whether Brainard may Two weeks later, in a letter to Brainard’s recover attorney’s fees on her contract counsel, Trinity confirmed that the offer claim. The court of appeals reversed that would remain open. Because Brainard’s portion of the trial court’s judgment $5,000 recovery did not exceed Trinity’s awarding Brainard $100,000 in attorney’s settlement offer, prejudgment interest did fees. 153 S.W.3d at 510–11. not accrue on the judgment after March 9, 2001. Id. § 304.105(a) (‘‘If judgment for a [10] Attorney’s fees are recoverable claimant is equal to or less than the from an opposing party only as authorized amount of a settlement offer of the defen- by statute or by contract between the par- dant, prejudgment interest does not accrue ties. Travelers Indem. Co. v. Mayfield, on the amount of the judgment during the 923 S.W.2d 590, 593 (Tex.1996). Chapter period that the offer may be accepted.’’). 38 of the Civil Practice & Remedies Code Following are the relevant dates: permits an insured to recover attorney’s A. 07/31/1999 Brainard receives $5,000 PIP payment B. 01/19/2000 Prejudgment interest period begins fees incurred in a successful breach of when Brainard files suit contract suit against the insurer unless the C. 12/07/2000 Brainard receives $1,000,000 settlement insurer is liable for the fees under a differ- D. 03/09/2001 Trinity offers Brainard $50,000 ent statutory scheme. TEX. CIV. PRAC. & Brainard is entitled to recover prejudg- REM.CODE §§ 38.001(8), 38.006; Grapevine ment interest on the damages caused by Excavation, Inc. v. Maryland Lloyds, 35 Premier’s negligence. The beginning prin- S.W.3d 1, 5 (Tex.2000). Because no other cipal is $1,010,000—the amount of dam- statutory scheme applies, Brainard seeks ages determined by the jury. The $5,000 to recover the fees under Chapter 38. PIP credit reduced the principal before prejudgment interest began to accrue. [11] Under section 38.002, Brainard Thus, during the period from B to C, must show that: (1) she was represented interest accrued on $1,005,000. At point by counsel; (2) she presented the claim to C, the $1,000,000 credit is applied first to Trinity; and (3) Trinity failed to pay the accrued prejudgment interest and then to just amount owed within thirty days of principal. During the period from C to D, presentment. TEX. CIV. PRAC. & REM.CODE interest accrued on the principal remaining § 38.002. Brainard contends that her suit after application of the $1,000,000 credit. is like any other breach of contract suit, At point D, Brainard could have accepted and therefore, presentment occurred on Trinity’s settlement offer, and interest February 15, 2000, the day she made a ceased to accrue on that date. Trinity is claim for UIM benefits. Three courts of liable for the remaining sum, up to Brai- appeals support her position. See Norris nard’s UIM policy limit, of the uncredited v. State Farm, 217 S.W.3d at 3; State principal plus the uncredited interest that Farm Mut. Auto. Ins. Co. v. Nickerson, accrued from point C to point D. TEX. 130 S.W.3d 487, 490 (Tex.App.-Texarkana INS.CODE art. 5.06–1(5). 2004, pet. granted); Allstate Ins. Co. v. 818 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

Lincoln, 976 S.W.2d 873, 876 (Tex.App.- this language means the UIM insurer is Waco 1998, no pet.); Whitehead v. State under no contractual duty to pay benefits Farm Mut. Auto. Ins. Co., 952 S.W.2d 79, until the insured obtains a judgment estab- 88–89 (Tex.App.-Texarkana 1997), rev’d on lishing the liability and underinsured sta- other grounds, 988 S.W.2d 744 (Tex.1998); tus of the other motorist. Henson, 17 Novosad v. Mid–Century Ins. Co., 881 S.W.3d at 653–54. Neither requesting S.W.2d 546, 552 (Tex.App.-San Antonio UIM benefits nor filing suit against the 1994, no writ). Trinity, on the other hand, insurer triggers a contractual duty to pay. argues that a UIM policy is different be- Id. Where there is no contractual duty to cause the insurer’s duty to pay does not pay, there is no just amount owed. Thus, arise until the underinsured motorist’s lia- under Chapter 38, a claim for UIM bene- bility, and the insured’s damages, are le- fits is not presented until the trial court gally determined. Five courts of appeals, signs a judgment establishing the negli- including the court of appeals in this case, gence and underinsured status of the other agree. See DeLaGarza v. State Farm motorist. Mut. Auto. Ins. Co., 175 S.W.3d 29, 34 (Tex.App.-Dallas 2005, pet. denied); Me- [14, 15] Of course, the insured is not nix v. Allstate Indem. Co., 83 S.W.3d 877, required to obtain a judgment against the 882 (Tex.App.-Eastland 2002, pet. denied); tortfeasor. State Farm Mut. Auto. Ins. Sprague v. State Farm Mut. Auto. Ins. Co. v. Matlock, 462 S.W.2d 277, 278 (Tex. Co., 880 S.W.2d 415, 416 (Tex.App.-Hous- 1970). The insured may settle with the ton [14th Dist.] 1993, writ denied); Sikes v. tortfeasor, as Brainard did in this case, Zuloaga, 830 S.W.2d 752, 753 (Tex.App.- and then litigate UIM coverage with the Austin 1992, no writ). insurer. But neither a settlement nor an [12, 13] This issue turns on the lan- admission of liability from the tortfeasor guage in Chapter 38 requiring that ‘‘pay- establishes UIM coverage, because a jury ment for the just amount owed must not could find that the other motorist was not have been tendered before the expiration at fault or award damages that do not of the 30th day after the claim is present- exceed the tortfeasor’s liability insurance. ed.’’ TEX. CIV. PRAC. & REM. CODE See Henson, 17 S.W.3d at 654. Brainard’s § 38.002(3). The purpose of presentment contention that a UIM policy is to be is to allow the opposing party a reasonable treated like other contracts, for which opportunity to pay a claim without incur- damages are liquidated in a judicial pro- ring an obligation for attorney’s fees. ceeding and attorney’s fees incurred are Jones v. Kelley, 614 S.W.2d 95, 100 (Tex. recoverable, misinterprets the nature of 1981). Thus, an essential element to recov- UIM insurance. The UIM contract is ery of attorney’s fees under Chapter 38 in unique because, according to its terms, a suit based on contract is ‘‘the existence benefits are conditioned upon the insured’s of a duty or obligation which the opposing legal entitlement to receive damages from party has failed to meet.’’ Ellis v. Wal- a third party. Unlike many first-party drop, 656 S.W.2d 902, 905 (Tex.1983). The insurance contracts, in which the policy UIM insurer is obligated to pay damages alone dictates coverage, UIM insurance which the insured is ‘‘legally entitled to utilizes tort law to determine coverage. recover’’ from the underinsured motorist. Consequently, the insurer’s contractual ob- TEX. INS. CODE art. 5.06–1(5). As dis- ligation to pay benefits does not arise until cussed above, we have determined that liability and damages are determined. Id. City of Amarillo v. Barnes, Not Reported in S.W.2d (1998)

apply. We agree. However, even the right to have a question of law reviewed by an appellate court may be waived if it 1998 WL 609765 is not first presented to the trial court for consideration. See Only the Westlaw citation is currently available. Tex.R.App. P. 33.1(a)(1); Downer v. Aquamarine Operators, NOTICE: NOT DESIGNATED FOR PUBLICATION. Inc., 701 S.W.2d 238, 243 (Tex.1985), cert. denied, 476 U.S. UNDER TX R RAP RULE 47.7, UNPUBLISHED 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986) (holding that OPINIONS HAVE NO PRECEDENTIAL appellant waived its argument that the trial court erred in VALUE BUT MAY BE CITED WITH THE awarding prejudgment interest in a Jones Act case tried to a NOTATION “(not designated for publication).” jury because it did not present its argument to the trial court); Hardeman v. Judge, 931 S.W.2d 716, 720 (Tex.App.-Fort Court of Appeals of Texas, Amarillo. Worth 1996, writ denied) (holding that it could not review appellant's assertion that the trial court erred by not following CITY OF AMARILLO, Appellant, the mandatory requirements of the relevant provisions of v. the Probate Code because appellant failed to raise such Billy J. BARNES, Appellee. error in the trial court); Reyna v. State Nat'l. Bank of Iowa Park, 911 S.W.2d 851, 858 (Tex.App.-Fort Worth 1995, writ No. 07-97-0217-CV. | Sept. 14, 1998. denied) (holding that it could not reform the portion of the FROM THE 181ST DISTRICT COURT OF RANDALL judgment concerning wrongful foreclosure damages based COUNTY; NO. 38,296-B; HONORABLE SAMUEL C. upon a formula never presented to the trial court); Centroplex KISER, JUDGE Ford, Inc. v. Kirby, 736 S.W.2d 261, 264-65 (Tex.App.- Austin 1987, no writ) (holding that by failing to raise its Before BOYD, C.J., and DODSON and QUINN, JJ. objections at trial, appellant waived its complaint that the trial court erred by awarding pre-judgment interest because the award was not supported by pleadings and because the rate BOYD. was contrary to statute); Great N. Am. Stationers, Inc. v. Ball, 770 S.W.2d 631, 632-33 (Tex.App.-Dallas 1989, writ dism'd) ON MOTION FOR REHEARING (holding that appellant waived its choice of law argument by waiting until the case was on appeal to raise the issue for *1 The City filed a motion for rehearing seeking to have this the first time). Although the City reasserts that it brought to court withdraw its June 4, 1998 judgment and opinion. With the trial court's attention that the award of attorney fees was the comment we make below, we overrule its motion. subject to a statutory limitation, after reviewing the record, we do not find that it did so. The City argues in its motion that the question of whether attorney's fees should be limited by statute is a question of law Accordingly, the City's motion for rehearing is overruled. to be decided by the trial court, not by the jury, and therefore, Rule 278 of the Texas Rules of Civil Procedure does not

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 Dahl v. Dahl, Not Reported in S.W.3d (2009)

for divorce. The case was tried to the bench in March 2007. The trial judge signed the final decree of divorce a few months 2009 WL 866199 later, and appellant timely filed her notice of appeal. Only the Westlaw citation is currently available.

SEE TX R RAP RULE 47.2 FOR DESIGNATION AND SIGNING OF OPINIONS. II. PROPERTY DIVISION MEMORANDUM OPINION In her first point of error, appellant complains of the trial Court of Appeals of Texas, court's division of the house in which the parties lived during Dallas. their marriage (the “Coleridge property”). Under the heading “Division of Marital Estate,” the trial court awarded appellee Lori Ann Melton DAHL, Appellant 60% of the net proceeds from the sale of the Coleridge v. property and appellant 40% of those net proceeds. Appellant Kelly Louis DAHL, Appellee. argues that the trial court erred in dividing the house as part of the marital estate because the Coleridge property was her No. 05-07-01338-CV. | April 2, 2009. separate property rather than community property. On Appeal from the 330th Judicial District Court, Dallas County, Texas, Trial Court Cause No. 04-21372-Y, Marilea A. Applicable law Lewis, J. In a decree of divorce, a trial court must “order a division Attorneys and Law Firms of the estate of the parties in a manner that the court deems just and right.” TEX. FAM.CODE ANN. § 7.001 W. Michael Read, Law Offices of W.M. Read, Dallas, TX, (Vernon 2006). The court may divide only the parties' for Appellant. community property. Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex.1985). Community property is property, other than Jerry Michael Pittman, Arlington, TX, Thomas B. Cowart, separate property, acquired by either spouse during marriage. Turley Law Firm, Dallas, TX, for Appellee. TEX. FAM.CODE ANN. § 3.002. Property possessed by Before Justices MOSELEY, FITZGERALD, and either spouse during or on dissolution of marriage is presumed MAZZANT. to be community property rather than separate property. Id. § 3.003(a). Separate property includes, among other things, property owned or claimed by a spouse before marriage. Id . § 3.001(1). The characterization of property as community or MEMORANDUM OPINION separate is determined by the inception of title, i.e., when a Opinion by Justice FITZGERALD. party first has a right of claim to the property by virtue of which title is finally vested. Id. § 3.404(a); Chavez v. Chavez, *1 This is an appeal from a divorce decree. In three points 269 S.W.3d 763, 767 (Tex.App.-Dallas 2008, no pet.). A of error, appellant Lori Ann Melton Dahl argues that the trial party who claims that property is separate property must court erred when it (1) divided the parties' property, (2) denied prove the necessary facts by clear and convincing evidence in appellant's request to change her name back to her maiden order to overcome the presumption of community property. name, and (3) denied her motion for continuance. We sustain TEX. FAM.CODE ANN. § 3.003(b). her first two points of error, overrule her third point of error, reverse the divorce decree in part, and remand the case for We review property-characterization rulings for abuse of further proceedings. discretion. See Chavez, 269 S.W.3d at 766. In family law cases, the traditional sufficiency standard of review overlaps with the abuse of discretion standard, so legal and factual sufficiency are not independent grounds of error but are I. BACKGROUND relevant factors in our assessment of whether the trial court The parties were married in 1998. Appellant filed for divorce abused its discretion. Id. in 2004, and appellee filed an answer and a counterpetition

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 Dahl v. Dahl, Not Reported in S.W.3d (2009)

v. Eggemeyer, 554 S.W.2d 137, 140-42 (Tex.1977) (affirming B. Application of the law to the facts reversal of mischaracterization of separate property as *2 Appellee was the only witness to testify at trial. He community property without conducting harm analysis); testified that he and appellant were married on September In re Marriage of Case, 28 S.W.3d 154, 161 (Tex.App.- 22, 1998. He also testified that the Coleridge property was Texarkana 2000, no pet.) (“When a court mischaracterizes purchased in July 1997. He admitted that appellant made separate property as community property, the error requires the entire down payment for the Coleridge property at that reversal because a spouse is divested of separate property.”); time by borrowing $16,000 against her 401(k). He further Hodges v. Hodges, No. 05-92-00239-CV, 1993 WL 25347, acknowledged that he did not “pay a dime” for the house at *7 (Tex.App.-Dallas Feb.4, 1993, no writ) (not designated at the time of the purchase. No title documents regarding for publication) (“Such divestiture of title [to separate the purchase of the Coleridge property were introduced at property] is beyond the discretion of the court and cannot trial. In short, the only evidence presented at trial relevant be harmless error.”); Barbara A. Kazen, Division of Property to the inception of title was appellee's own testimony that at the Time of Divorce, 49 BAYLOR L.REV. 417, 429 the Coleridge property was purchased before the parties were (1997) (describing mischaracterization of separate property married and that appellant supplied the down payment. This as community property as “an error that will result in undisputed evidence established that the Coleridge property reversal”). Moreover, the Coleridge property appears to be was separate property. See Chavez, 269 S.W.3d at 767. the most substantial asset addressed in the proceedings, and “[w]hen the court mistakenly characterizes property Appellee argues that the trial court's characterization is that constitutes the main asset of the parties, the error is supported by a judicial admission in appellant's petition for of such a magnitude that it materially affects the just and divorce. In her petition, appellant alleged, “Petitioner and right division of the community estate.” Evans v. Evans, 14 Respondent possess and own community property which S.W.3d 343, 347 (Tex.App.-Houston [14th Dist.] 2000, no requires a division of the marital estate, including, but not pet.); see also In re Marriage of Morris, 123 S.W.3d 864, limited to, their residence on Coleridge Street, vehicle(s), 868 (Tex.App.-Texarkana 2003, no pet.) (stating that “any savings, retirement savings, and personal property.” Appellee mischaracterization of a major asset of the parties' estate” is argues that this statement is a judicial admission as to the reversible error). proper characterization of the Coleridge property. We have held, however, that a party waives a judicial admission by *3 We conclude that the trial court abused its discretion introducing evidence on the disputed issue. Dallas Transit in characterizing the Coleridge property as community Co. v. Young, 370 S.W.2d 6, 11 (Tex.Civ.App.-Dallas property and that this error constitutes reversible error. 1963, writ ref'd n.r.e.); accord Indus. Disposal Supply Co. This necessitates remand for a new division of the entire v. Perryman Bros. Trash Serv., Inc., 664 S.W.2d 756, community estate. Jacobs, 687 S.W.2d at 732; Bufkin v. 764 (Tex.App.-San Antonio 1983, writ ref'd n.r.e.); see Bufkin, 259 S.W.3d 343, 350-51 (Tex.App.-Dallas 2008, pet. also Houston First Am. Sav. v. Musick, 650 S.W.2d 764, denied). 769 (Tex.1983) (to rely on judicial admissions, a party “must protect his record by objecting to the introduction of evidence contrary to that admission of fact and by objecting to the submission of any issue bearing on the III. OTHER ISSUES fact admitted”). Appellee's own testimony at trial established In her second point of error, appellant complains that the trial that the Coleridge property was separate property, so he court erred by denying her unopposed request to change her waived appellant's judicial admission, if any. We conclude name back to her maiden name. At trial, appellee stated that he that the trial court abused its discretion by characterizing the was unopposed to appellant's regaining her prior name. The Coleridge property as community property instead of separate trial judge said on the record that she would restore appellant's property. maiden name, but the decree of divorce is silent on the subject and denies all relief not expressly granted therein. The denial Appellee argues in the alternative that appellant fails to of appellant's request to change her name appears to have been demonstrate that the trial court's erroneous characterization a clerical error. We sustain appellant's second point of error, of the Coleridge property was harmful error. But the reverse the judgment to the extent it denies appellant's request erroneous characterization of a spouse's separate property as community property is never harmless error. See Eggemeyer

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Dahl v. Dahl, Not Reported in S.W.3d (2009)

that party complaining of denial of continuance must show for a name change, and remand for further proceedings not “the materiality of the testimony to be offered by the absent inconsistent with this opinion. witness”). In her third point of error, appellant complains that the trial court erred by denying her counsel's oral motion for continuance on the day of the trial. As a result of the denial, IV. DISPOSITION appellant was not present at the trial. Appellant does not demonstrate that she was prejudiced by the denial of her We reverse the portion of the final decree of divorce that motion, so we overrule this point of error. See Ngo v. Ngo, divides the marital estate and the denial of appellant's request 133 S.W.3d 688, 693 (Tex.App.-Corpus Christi 2003, no pet.) to change her name. We remand for a new division of the (“The appellant must show that the denial [of a continuance] community estate and other appropriate proceedings. We resulted in her prejudice and that she had a reasonable affirm the final decree of divorce in all other respects. excuse for her absence.”); Humphrey v. Ahlschlager, 778 S.W.2d 480, 483 (Tex.App.-Dallas 1989, no writ) (stating

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© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 STATE FARM MUT. AUTO. INS. CO. v. NORRIS Tex. 819 Cite as 216 S.W.3d 819 (Tex. 2006)

Because the contract did not require take-nothing judgment. Insured appealed. Trinity to pay UIM benefits before Premi- The Waco Court of Appeals, Vance, J., 217 er’s negligence and underinsured status S.W.3d 1, 2004 WL 811722, reversed and were determined, Brainard did not present remanded. Review was granted. a contract claim before the trial court ren- Holdings: The Supreme Court, Jefferson, dered its judgment, and the court of ap- C.J., held that: peals correctly concluded that Brainard is (1) prejudgment interest could not be cal- not entitled to recover attorney’s fees un- culated without payment dates for lia- der Chapter 38. bility coverage proceeds and personal injury protection (PIP) benefits; V (2) as a matter of first impression, insured Conclusion released claim for prejudgment inter- est on difference between liability cov- We reverse the portion of the court of erage limits and tort settlement; appeals’ judgment that denied Brainard prejudgment interest, affirm the portion (3) UIM carrier’s credits reduced princi- that denied attorney’s fees, and remand pal, if payment was made before pre- this case to the trial court to calculate judgment interest began to accrue, and prejudgment interest consistent with this reduced interest, if payment was made opinion. TEX.R.APP. P. 60.2(a), (d). after interest began to accrue; and (4) insured was not entitled to attorney Justice O’NEILL and Justice fees after take-nothing judgment in fa- JOHNSON did not participate in the vor of carrier, disapproving Allstate decision. Insurance Company v. Lincoln, 976 S.W.2d 873. Reversed and remanded. , 1. Interest O56 The declining principal formula is used to calculate prejudgment interest on STATE FARM MUTUAL AUTOMO- underinsured motorist (UIM) benefits; BILE INSURANCE COMPA- thus, the trial court considers the date on NY, Petitioner, which the insured received each payment and cannot calculate prejudgment interest v. until those dates are established. Jimmie R. NORRIS, Respondent. 2. Insurance O2793(1), 2803 No. 04–0514. Interest O26 Supreme Court of Texas. When automobile accident victim set- tled tort claim for less than liability cover- Argued April 14, 2005. age limits and released tortfeasor, he also Decided Dec. 22, 2006. released any prejudgment interest in the Background: Insured brought action to difference between the policy limits and recover underinsured motorist (UIM) ben- the settlement amount; thus, the victim efits. The 87th District Court, Limestone could recover from his underinsured mo- County, Sam B. Bournias, J., entered a torist (UIM) carrier prejudgment interest In re Progressive County Mut. Ins. Co., 439 S.W.3d 422 (2014)

439 S.W.3d 422 Background Court of Appeals of Texas, Houston (1st Dist.). Following an automobile collision with an uninsured motorist's vehicle, Guia sued her insurer, Progressive. 1 In re PROGRESSIVE COUNTY MUTUAL While investigation into the claim was ongoing, Guia sued INSURANCE COMPANY, Relator. Progressive for breach of the uninsured motorist provisions in her policy, violations of Chapter 542 of the Texas Insurance No. 01–14–00199–CV. | June 12, 2014. Code, violations of the Deceptive Trade Practices–Consumer Synopsis Protection Act, and breach of the duty of good faith and fair Background: Insured brought action against uninsured dealing. Guia served Progressive with a number of discovery motorist (UM) carrier to recover for breach of contract, breach requests, some of which would not be relevant to the breach- of the duty of good faith and fair dealing, and statutory of-contract claim. Progressive filed a motion to sever the violations. The 215th District Court, Harris County, Elaine H. breach of contract claim for uninsured motorist coverage from Palmer, J., denied carrier's motion to sever and abate extra- the extra-contractual claims. The trial court judge signed an contractual claims. Carrier petitioned for writ of mandamus. order abating the motion to sever, allowing discovery to move forward on all claims, and deferring the other issues covered by the motion until the pretrial hearing. Progressive filed a writ seeking to compel severance and abatement. [Holding:] The Court of Appeals, Harvey Brown, J., held that severance of extra-contractual claims from breach of contract claim was required. Standard of Review

Writ conditionally granted. [1] [2] [3] [4] We may issue a writ of mandamus to correct a trial court's clear abuse of discretion or violation of duty imposed by law when no adequate remedy by Attorneys and Law Firms appeal exists. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (orig. proceeding). A clear abuse of discretion *424 Mark R. Lapidus, Megan L. Knudsen, Lapidus occurs when the trial court's decision is so arbitrary and Knudsen, PC, Houston, TX, for Relator. unreasonable that it amounts to clear error. See id. (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, Timothy R. Hightower, Alexandra Muthcler, Houston, TX, 917 (Tex.1985)). Because a trial court has no discretion for Real Party in Interest. in determining what the law is, the trial court abuses its Panel consists of Justices KEYES, BLAND and BROWN. discretion if it clearly fails to analyze or apply the law correctly. See id. at 840. “In determining whether appeal is an adequate remedy, [we] consider whether the benefits outweigh the detriments of mandamus review.” In re BP OPINION Prods. N. Am., Inc., 244 S.W.3d 840, 845 (Tex.2008) (orig. HARVEY BROWN, Justice. proceeding).

Relator, Progressive County Mutual Insurance Company [5] [6] The trial court has “broad” discretion in the seeks a writ of mandamus compelling the trial court to severance of causes of action. Morgan v. Compugraphic (1) vacate its order denying Progressive's motion to sever Corp., 675 S.W.2d 729, 734 (Tex.1984); Black v. Smith, 956 extra-contractual claims asserted against it and (2) enter an S.W.2d 72, 75 (Tex.App.-Houston [14th Dist.] 1997, orig. order abating those extra-contractual claims until the breach- proceeding). However, that discretion is not unlimited. See of-contract claim brought by Alma Guia, the real party in U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668, 671 (Tex.App.- interest, has been resolved. We conditionally grant the writ. Houston [1st Dist.] 1993, orig. proceeding). The trial court has a duty to order severance when *425 “all of the facts and circumstances of the case unquestionably require a separate

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 In re Progressive County Mut. Ins. Co., 439 S.W.3d 422 (2014)

trial to prevent manifest injustice, and there is no fact or claim would become unlikely. One circumstance supporting or tending to support a contrary example would be when the insurer conclusion, and the legal rights of the parties will not be has made a settlement offer on the prejudiced thereby.” Womack v. Berry, 156 Tex. 44, 291 disputed contract claim. As we have S.W.2d 677, 682–83 (Tex.1956) (orig. proceeding). noted, some courts have concluded that the insurer would be unfairly prejudiced by having to defend the contract claim at the same time and Severance of Contractual and before the same jury that would Extra–Contractual Claims consider evidence that the insurer had [7] Texas Rule of Civil Procedure 41 governs severance of offered to settle the entire dispute. claims. See TEX.R. CIV. P. 41. The rule provides, in part, While we concur with these decisions, that “[a]ctions which have been improperly joined may be we hasten to add that evidence of this severed ... on such terms as are just. Any claim against a sort simply does not exist in this case. party may be severed and proceeded with separately.” Id. The In the absence of a settlement offer predominant reasons for a severance are to do justice, avoid on the entire contract claim, or other prejudice, and promote convenience. F.F.P. Op. Partners, compelling circumstances, severance L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex.2007). Claims are is not required. properly severable if: (1) the controversy involves more than Id. (internal citations omitted); see also In re Miller, 202 one cause of action; (2) the severed claim is one that would be S.W.3d 922, 925–26 (Tex.App.-Tyler 2006, orig. proceeding the proper subject of a lawsuit if independently asserted; and [mand. denied] ); In re Trinity Universal Ins. Co., 64 S.W.3d (3) the severed claim is not so interwoven with the remaining 463, 468 (Tex.App.-Amarillo 2001, orig. proceeding [mand. action that it involves the same facts and issues. Guar. Fed. denied] ). Thus, in Liberty National, the Court opined a Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 settlement offer by an insurer may create a situation where (Tex.1990). Only the third element is in dispute here. severance of an insured's contract claim is required. 927 S.W.2d at 630 (Tex.1996). In Liberty National Fire Insurance Co. v. Akin, the Texas Supreme Court considered whether severance was required There is no evidence in the record that Progressive made a in a case involving breach of contract and extra-contractual settlement offer to *426 Guia. However, Liberty National claims against an insurer under a homeowner's policy. 927 does not limit severance to cases where such an offer has been S.W.2d 627 (Tex.1996). In refusing to grant mandamus relief, made, instead holding that “other compelling circumstances” the Court rejected “an inflexible rule that would deny the may also require severance. Id. In the case before us, trial court all discretion and ... require severance in every Progressive argues that “other compelling circumstances” case [involving bad-faith insurance claims], regardless of the should include the effort and cost associated with conducting likelihood of prejudice.” Id. at 630. Ultimately, the Court discovery on extra-contractual claims that have not yet concluded that the contractual and extra-contractual claims accrued because the insured's breach-of-contract claim has in that case were interwoven, with most evidence admissible not yet been decided. on both claims, and that any prejudicial effect could be ameliorated by appropriate limiting instructions. See id. The Several courts of appeals have considered the issues of Court went on to severance and abatement in the context of uninsured motorist Several Texas appellate courts have or underinsured motorist insurance coverage; these courts found severance may nevertheless have concluded that, when uninsured motorist claims are be necessary in some bad faith involved, severance of the extra-contractual claims was cases. A trial court will undoubtedly required. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 S.W.3d confront instances in which evidence 429 (Tex.App.-Austin 2012, orig. proceeding) (concluding admissible only on the bad faith claim trial court abused discretion by denying insurer's motion for would prejudice the insurer to such an severance and abatement of extra-contractual claims where extent that a fair trial on the contract settlement offer was made on underinsured motorist claim); In re Reynolds, 369 S.W.3d 638, 650–55 (Tex.App.-Tyler

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 In re Progressive County Mut. Ins. Co., 439 S.W.3d 422 (2014)

2012, orig. proceeding) (holding severance of underinsured Progressive was contractually obligated to pay her uninsured motorist claim was required to prevent prejudice); In re motorist claim. To do this, Guia must first prove that she had United Fire Lloyds, 327 S.W.3d 250, 257 (Tex.App.-San uninsured motorist coverage, that the other driver negligently Antonio 2010, orig. proceeding) (finding abuse of discretion caused the accident and was uninsured, and the amount of her in granting motion for bifurcation of trial rather than damages. See In re Reynolds, 369 S.W.3d at 652. It appears severance and abatement of extra-contractual claims); see that the first issue is not in dispute. Therefore, Guia's breach- also In re Old Am. Cnty. Mut. Fire Ins. Co., No. 13– of-contract claim will essentially involve the issues in a 12–00700–CV, 2013 WL 398866 (Tex.App.-Corpus Christi typical car wreck: the comparative negligence of Guia and the January 30, 2013, orig. proceeding) (mem. op.) (holding other driver and Guia's damages. The bad faith claim here is that severance and abatement of extra-contractual claims more complicated. In her most recent petition, she alleges that is required in many instances when insured asserts claim Progressive breached their duty of good faith and fair dealing, to uninsured or underinsured motorist benefits); In re violated the insurance code by failing to timely pay the Farmers Tex. Cnty. Mut. Ins. Co., No. 07–11–00396–CV, claim, and further alleges Progressive's conduct was knowing 2011 WL 4916303, (Tex.App.-Amarillo Oct. 17, 2011, and intentional in violation of the Deceptive Trade Practices orig. proceeding) (mem. op.) (denying mandamus because Act. In discovery, Guia seeks production of all documents complaint was not preserved, but agreeing that abatement of related to lawsuits and claims against Progressive regarding extra-contractual claims is required in most instances when the denial of uninsured/underinsured motorist claims for over an insured asserts claim to uninsured motorist benefits). ten years. Examples of these requests include:

The San Antonio Court of Appeals explained its Request 3. Produce all documents of any type as to claims determination that mandamus relief was proper to compel asserted against Progressive during period from January severance and abatement of an underinsured motorist claim 1, 2001, up to and including present day as a result of from related bad faith claims as follows: nonpayment of uninsured/underinsured motorist claims in Texas regardless of whether a lawsuit was filed and/or [The insurer] is under no contractual liability was denied. duty to pay [underinsured motorist] benefits until [the insured] establishes Request 4. Produce all documents of any type as to the liability and underinsured status all lawsuits filed against Progressive during period from of the other motorist. Therefore, [the January 1, 2001, up to and including present day, as a result insurer] should not be required to of nonpayment of uninsured/underinsured motorist claims put forth the effort and expense of in Texas regardless of whether liability was denied. conducting discovery, preparing for ... a trial, and conducting voir dire on bad faith claims that could be Request 16. A copy of each and every policy, manual, rendered moot by the portion of protocol, instruction booklet or similar writing concerning the trial relating to [underinsured procedures for the investigation and handling of uninsured/ motorist] benefits. To require such underinsured motorist claim which was in effect at the time would not do justice, avoid prejudice, Plaintiff made her claims in this case, and for the seven and further convenience. Under years preceding Progressive's denial of Plaintiff's claim. these circumstances, we conclude the trial court abused its discretion These requested documents are irrelevant to the breach-of- in bifurcating the case instead of contract claim, and the introduction of Progressive's claims severing and abating the [underinsured handling history in unrelated accidents at the trial of Guia's motorist] claim from the bad faith breach-of-contract claim would be manifestly unjust. See claims. Womack v. Berry, 291 S.W.2d at 682–83 (Tex.1956) (orig. proceeding). In re United Fire Lloyds, 327 S.W.3d at 256. 2 The trial court's abatement of any decision on severance until *427 [8] In this case, to prevail on her extra-contractual the eve of trial requires the parties to engage in discovery claims against Progressive, Guia must demonstrate that on the extra-contractual claims and prepare for a trial on

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 In re Progressive County Mut. Ins. Co., 439 S.W.3d 422 (2014)

have an adequate remedy by appeal. See In re Am. Nat'l Cnty. these claims, even though extra-contractual liability could Mut. Ins. Co., 384 S.W.3d 429, 439; In re Reynolds, 369 only accrue if Progressive is found liable on the contract. See S.W.3d at 658; In re United Fire Lloyds, 327 S.W.3d at 256. In re United Fire Lloyds, 327 S.W.3d at 256. Accordingly, the trial court's decision to postpone severance, unless writ is granted, will require Progressive to expend resources answering discovery that is far broader than the car accident Conclusion claim that must be resolved. Based on our review of the record, we conclude that Guia's Consistent with In re Reynolds and In re United Fire Lloyds, extra-contractual claims against Progressive are severable, we conclude that severance of insured's extra-contractual the facts and circumstances of the case require a severance to claims is required in this instance to avoid prejudice. prevent manifest injustice, and the legal rights of the parties will not be prejudiced thereby. See Womack, 291 S.W.2d at 683. The trial court, therefore, abused its discretion in refusing to sever and abate the uninsured motorist claims Adequate Remedy by Appeal from the bad faith claims pending the determination of Progressive's liability for the uninsured motorist damages [9] A writ of mandamus will issue only if there is no under the policy. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 adequate remedy available by direct appeal. See *428 S.W.3d 429; In re Reynolds, 369 S.W.3d at 650–55; In re Walker, 827 S.W.2d at 839. The Corpus Christi Court of United Fire Lloyds, 327 S.W.3d at 257; see also In re Old Am. Appeals in In re United Fire Lloyds concluded the insurer Cnty. Mut. Fire Ins. Co., 2013 WL 398866; In re Farmers did not have an adequate remedy by appeal because, if a Tex. Cnty. Mut. Ins. Co., 2011 WL 4916303. writ of mandamus were not granted, the insurer stood to lose substantial rights by being required to prepare for claims that We conditionally grant Progressive's writ of mandamus and might be rendered moot and never even accrue. In re Fire order the trial court to vacate the February 11, 2014 Order, Lloyds, 327 S.W.3d at 256 (citing U.S. Fire Ins. Co., 847 grant Progressive County Mutual Insurance Company's S.W.2d at 675; In re Trinity Universal Ins. Co., 64 S.W.3d Motion to Sever, and abate the extra-contractual claims. We at 468). are confident that the trial court will promptly comply, and our writ will issue only if it does not. The Corpus Christi Court of Appeals agreed. See In re Old Am. Cnty. Mut. Fire Ins. Co., 2013 WL 398866. Likewise, other appellate courts have also found these claims do not

Footnotes 1 The underlying case is Alma Guia v. Jessica Nicole Estes, Relinda Estes, Progressive Insurance Company and Progressive County Mutual Insurance Company; No. 2012–57535, in the 215th District Court of Harris County, Texas, the Honorable Elaine H. Palmer presiding. 2 The court relied on the Texas Supreme Court's reasoning in Brainard v. Trinity Universal Insurance Co., 216 S.W.3d 809 (Tex.2006), but acknowledged that Brainard concerned timing of presentment of contract claim to determine whether party was entitled to attorney's fees under Chapter 38 of Texas Civil Practice and Remedies Code, rather than severance and abatement in the context of uninsured motorist claim. See In re United Fire Lloyds, 327 S.W.3d 250, 257 (Tex.App.-San Antonio 2010, orig. proceeding) (discussing Brainard, 216 S.W.3d at 818).

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© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 754 Tex. 372 SOUTH WESTERN REPORTER, 3d SERIES

court had jurisdiction over appellants’ CONCLUSION claims in the tort suit, the trial court nev- We resolve appellants’ two issues ertheless abused its discretion by consoli- against them and affirm the trial court’s dating the two cases at the conclusion of judgment. trial because it deprived appellants of the opportunity to present evidence or argu- ment in support of their claims. [3, 4] As a threshold issue, we must decide whether appellants have preserved their complaint for appellate review. See , In re M.S., 115 S.W.3d 534, 547 (Tex.2003) (noting ‘‘error preservation in the trial court [ ] is a threshold to appellate re- view’’). ‘‘To preserve a complaint for ap- pellate review, a party generally must Rafael GASPAR, Arturo Gaspar, Javier present it to the trial court by timely Rodriguez, Guillermo Gaspar, Antonio request, motion, or objection, stating the Gaspar, and Carmen Gaspar, Appel- specific grounds, and obtain a ruling.’’ lants Shaw v. Cnty. of Dallas, 251 S.W.3d 165, 174 (Tex.App.-Dallas 2008, pet. denied) v. (citing TEX.R.APP. P. 33.1(a)). In addition, LAWNPRO, INC. and Kirk ‘‘a party’s argument on appeal must com- E. Henton, Appellees. port with its argument in the trial court.’’ Knapp v. Wilson N. Jones Mem’l Hosp., No. 05–11–00861–CV. 281 S.W.3d 163, 170 (Tex.App.-Dallas 2009, no pet.). Court of Appeals of Texas, At the conclusion of trial, when the trial Dallas. court announced its decision to grant the July 25, 2012. motion to consolidate the tort lawsuit, Tate stated, ‘‘But I’m the—I’m the plaintiff in Background: Employees brought breach that cause.’’ She also stated, ‘‘I’d like my of contract action against employers seek- objection noted for the record, Your Hon- ing unpaid wages. The County Court at or.’’ Appellants did not argue, either be- Law, No. 1, Collin County, Corinne Mason, fore or after the trial court granted the J., granted employers’ no-evidence motion motion to consolidate, that the consolida- for summary judgment. Employees ap- tion deprived them of the opportunity to pealed. present evidence or argument in support Holdings: The Court of Appeals, Bridges, of their claims. As a result, we conclude J., held that: that appellants’ second issue was not pre- (1) employers waived hearsay objection to served for appellate review. See, e.g., id. employees’ affidavits, and at 171 (‘‘We conclude [appellant] failed to preserve the issue for appellate review (2) genuine issue of material fact existed because his issue on appeal does not com- as to whether employees had a formal- port with his objections made at trial.’’). ized working relationship with employ- We resolve appellants’ second issue ers. against them. Reversed and remanded. GASPAR v. LAWNPRO, INC. Tex. 755 Cite as 372 S.W.3d 754 (Tex.App.—Dallas 2012)

1. Evidence O314(1) 7. Contracts O168 Evidence that contains hearsay is de- Terms of a contract are implied when fective as to form; that is, it is competent, they are necessarily involved in the con- but inadmissible. tractual relationship such that the parties must have intended to include them, but 2. Trial O31 failed due to inadvertence or because they A defect in form must be raised in the were too obvious to need expression. trial court, the opposing party must be 8. Judgment O185.3(13) given an opportunity to amend, and the trial court must rule upon the objection or Genuine issue of material fact raised the objection is waived. by employees’ summary judgment affida- vits as to whether employees had a work- 3. Judgment O189 ing relationship with employers formalized Although the rules of civil procedure by checks, pay statements, and a work do not prescribe a period of time in which contract precluded summary judgment in a trial court is required to rule on sum- employees’ breach of contract action to mary judgment objections, the better prac- recover unpaid wages. Vernon’s Ann.Tex- tice is for the court to rule on any objec- as Rules Civ.Proc., Rule 166a(i). tions at or before the time it signs an order granting or denying summary judg- ment.

4. Appeal and Error O242(4) Winston Ndubueze Udeh, Law Office of Winston Udeh & Assoc., Dallas, TX, for Employers waived hearsay objection Appellant. to employees’ summary judgment affida- vits in employees’ action to recover alleg- Jeremy F. Rosenthal, Rosenthal & Wa- edly unpaid wages, even though employers das, PLLC, for Appellee. obtained favorable ruling on their no-evi- dence summary judgment motion, where Before Justices BRIDGES, employers never sought a ruling on their FITZGERALD, and LANG. hearsay objections, and trial court never issued a ruling on those objections. OPINION

5. Contracts O315 Opinion By Justice BRIDGES. A breach of contract occurs when a Rafael Gaspar, Arturo Gaspar, Javier party fails to perform an act it has explicit- Rodriguez, Guillermo Gaspar, Antonio ly or impliedly promised to perform. Gaspar, and Carmen Gaspar appeal the trial court’s no-evidence summary judg- 6. Contracts O326 ment in favor of Lawnpro, Inc., and Kirk The elements of a breach of contract E. Henton. In two issues, appellants ar- claim are (1) the existence of a valid con- gue the affidavits they presented in re- tract between plaintiff and defendant; (2) sponse to appellees’ no-evidence motion for the plaintiff’s performance or tender of summary judgment were sufficient to de- performance; (3) the defendant’s breach of feat the motion, and the trial court erred the contract; and (4) the plaintiff’s damage in granting appellees’ no-evidence motion as a result of the breach. for summary judgment. We reverse the 756 Tex. 372 SOUTH WESTERN REPORTER, 3d SERIES

trial court’s judgment and remand for fur- dence motion for summary judgment virtu- ther proceedings. ally identical to the first motion. Again, In June 2010, appellants filed suit alleg- appellees did not mention the factual as- ing they all worked for appellees during sertions made by appellants and did not June 2009 doing lawn maintenance and raise any specific challenge to the evidence construction work. The petition alleged supporting appellants’ claims. In a sepa- appellees issued checks for compensation rate pleading entitled ‘‘Defendants’ Reply for the work performed, but the bank re- and Objections to Plaintiffs’ Summary fused the checks for insufficient funds. Judgment Evidence,’’ appellees argued the Appellants complained, and appellees affidavits filed by appellants were hearsay. promised to make the checks good. How- However, it does not appear appellees ob- ever, for a period of two months appellees tained a ruling on their objections. The continued to pay appellants with worthless trial court granted appellees motion, and checks. Appellants asserted claims for this appeal followed. breach of contract, fraud, conversion, puni- Appellants raise two issues, which they tive damages, and attorney’s fees. Appel- argue together, asserting their affidavits lees filed an answer and a no-evidence were sufficient to defeat appellees’ motion motion for summary judgment asserting for no-evidence summary judgment, and ‘‘There is no evidence of one or more of the trial court therefore erred in granting the following elements of’’ each of appel- appellees’ motion. Appellees did not file a lants’ claims. The motion did not refer to brief in response. A no-evidence summary the facts alleged in appellants’ petition or judgment motion under rule 166a(i) is es- specify in what way the evidence entirely sentially a motion for a pretrial directed failed to support appellants’ claims. In- verdict; it requires the nonmoving party stead, the motion merely broke appellants’ to present evidence raising a genuine issue causes of action for breach of contract, of material fact supporting each element fraud, conversion, punitive damages, and contested in the motion. TEX.R. CIV. P. attorney’s fees into elements and asserted 166a(i); Timpte Indus., Inc. v. Gish, 286 no evidence existed ‘‘as to one of more of S.W.3d 306, 310 (Tex.2009). When review- the aforementioned elements.’’ ing a no-evidence summary judgment, we review the evidence presented by the mo- Appellants filed a response to appellees’ tion and response in the light most favor- motion and attached an appendix contain- able to the party against whom the sum- ing affidavits from each appellant stating mary judgment was rendered, crediting each appellant was employed by appellees evidence favorable to that party if reason- for certain specified months, all of the able jurors could, and disregarding con- checks appellees gave them were denied trary evidence unless reasonable jurors for insufficient funds for a total of a speci- could not. Timpte Indus., 286 S.W.3d at fied dollar amount, and appellee ‘‘took the 310. checks and promised to give me cash but never did.’’ The appendix also contained [1–4] We note appellees raised a hear- statements from Lawnpro stamped ‘‘SUB– say objection to appellant’s affidavits in CONTRACT/SEASONAL LABOR’’ and the trial court. Evidence that contains indicating hours worked, pay rate, current hearsay is defective as to form; that is, it payments, pay periods, pay dates, and is competent, but inadmissible. S & I year-to-date amounts paid to some appel- Mgmt., Inc. v. Choi, 331 S.W.3d 849, 855 lants. Appellees filed an amended no-evi- (Tex.App.-Dallas 2011, no pet.). A defect GASPAR v. LAWNPRO, INC. Tex. 757 Cite as 372 S.W.3d 754 (Tex.App.—Dallas 2012)

in form must be raised in the trial court, must have intended to include them, but the opposing party must be given an op- failed due to inadvertence or because they portunity to amend, and the trial court were too obvious to need expression. must rule upon the objection or the objec- Mann Frankfort Stein & Lipp Advisors, tion is waived. Id. Although the rules of Inc. v. Fielding, 289 S.W.3d 844, 850 (Tex. civil procedure do not prescribe a period of 2009). Appellant’s affidavits, together time in which a trial court is required to with copies of checks and pay statements rule on summary judgment objections, the from Lawnpro, raised a fact issue as to ‘‘better practice’’ is for the court to rule on the elements of their claims against appel- any objections at or before the time it lees. See Timpte Indus., 286 S.W.3d at signs an order granting or denying sum- 310. The affidavits and supporting docu- mary judgment. Stewart v. Sanmina ments indicate the parties had a working Tex., L.P., 156 S.W.3d 198, 207 (Tex.App.- relationship formalized by checks and pay Dallas 2005, no pet.). statements, and appellees breached that [5–8] Here, the trial court did not rule agreement, damaging appellants. The ev- on appellees’ objections to appellants’ affi- idence indicates appellees made represen- davits, and those objections are therefore tations that they would pay appellants but waived. Choi, 331 S.W.3d at 855. Appel- instead issued additional worthless checks lants raised a breach of contract claim and failed to pay cash. We conclude ap- against appellees. A breach of contract pellants’ evidence was sufficient to defeat occurs when a party fails to perform an appellees’ no-evidence motion for sum- act it has explicitly or impliedly promised mary judgment, and the trial court there- to perform. Esty v. Beal Bank S.S.B., fore erred in granting appellees’ motion. 298 S.W.3d 280, 299 (Tex.App.-Dallas We sustain appellants’ issues. 2009, no pet.). The elements of a breach We reverse the trial court’s judgment of contract claim are (1) the existence of a and remand for further proceedings. valid contract between plaintiff and defen- dant; (2) the plaintiff’s performance or tender of performance; (3) the defendant’s breach of the contract; and (4) the plain- tiff’s damage as a result of the breach. , Id. Terms of a contract are implied when they are necessarily involved in the con- tractual relationship such that the parties 652 Tex. 17 SOUTH WESTERN REPORTER, 3d SERIES

3. Insurance O2793(1), 2816 Jerry L. HENSON, Petitioner, Insured’s settlement with tort-feasor without an admission of liability did not v. alone establish a right to underinsured SOUTHERN FARM BUREAU CASU- motorist (UIM) benefits; the jury could ALTY INSURANCE COMPANY and have found that the tort-feasor was not at Texas Farm Bureau Mutual Insur- fault or that the damages resulting from ance Company, Respondents. her actions did not exceed her policy lim- its. No. 99–0453.

Supreme Court of Texas. Kenneth D. Cowling, Lubbock, for peti- Argued Feb. 9, 2000. tioner. James L. Wharton, G. Douglas Welch, Decided April 13, 2000. Lubbock, for respondents.

Justice ENOCH delivered the opinion Insured sought to recover underin- for a unanimous Court. sured motorist (UIM) benefits following judgment against the tort-feasor. The [1] The question is whether an insurer, 121st Judicial District Court, Terry Coun- obligated to pay uninsured/underinsured ty, Kelly G. Moore, J., denied request for benefits, owes on top of those benefits prejudgment interest. Insured appealed. prejudgment interest to be computed ei- The Court of Appeals, Charles L. Reyn- ther from 180 days after a demand for olds, Senior Justice (Retired), 989 S.W.2d those benefits has been made, or from the 837, affirmed. Review was granted. The day a suit is filed for those benefits. Be- Supreme Court, Enoch, J., held that the cause uninsured/underinsured insurers do insured was not entitled to prejudgment not breach their contractual obligation to interest. pay until tort liability is established, we conclude that prejudgment interest begins Affirmed. running from the date liability of the unin- sured/underinsured motorist is established. Consequently, Texas Farm Bureau Mutual 1. Interest O39(2.35) Insurance Company and Southern Farm Prejudgment interest on claim for un- Bureau Casualty Insurance Company do derinsured motorist (UIM) benefits did not not owe Jerry Henson prejudgment inter- begin to run 180 days after a demand for est on top of the uninsured/underinsured those benefits or upon the filing of a suit; benefits. rather, it would begin when tort liability On March 3, 1991, Henson was a passen- was established by judgment and, there- ger in a truck driven by Robert Millican. fore, never accrued where the insurers Henson was injured when the truck collid- paid within 30 days after the tort judg- ed with a truck driven by Consuelo Contr- ment. Vernon’s Ann.Texas Civ.St. art. eras. In March 1991, Henson submitted 5069–1.05 §§ 2, 6 (Repealed); V.T.C.A., his claim to his insurance carrier, Texas Finance Code §§ 304.003, 304.006, 304.102. Farm Bureau Mutual Insurance Company, and Millican’s insurance carrier, Southern 2. Interest O39(2.35) Farm Bureau Casualty Insurance Compa- Insurers owe prejudgment interest on ny, for uninsured/underinsured motorists top of the policy benefits only if they with- benefits. In February 1993, Henson and hold those benefits in breach of the insur- his wife sued both Millican and Contreras ance contracts. for negligence. They also sued Texas HENSON v. SOUTHERN FARM BUREAU CAS. INS. Tex. 653 Cite as 17 S.W.3d 652 (Tex. 2000) Farm Bureau and Southern Farm Bureau Henson believes that our previous hold- for the uninsured/underinsured motorists ings on prejudgment interest and sections benefits. 2 and 6 of article 5069–1.05 of the Texas Revised Civil Statutes 1 entitle him to pre- Without establishing liability, but with judgment interest of ten percent on the the insurers’ permission, the Hensons set- uninsured/underinsured motorist benefits tled with Contreras for $20,000, the limits computed from 180 days after he made of her liability policy. Before proceeding demand for the benefits. to trial against Millican, the claim against the insurers was severed, and the insurers But Henson conflates two prejudgment agreed to be bound by the judgment ren- interest concepts. There is no doubt that dered in the negligence action against Mil- if Henson were recovering directly from lican. The agreement also provided that Contreras, the judgment would include the insurers had thirty days before the prejudgment interest. And the insurers judgment would be binding against them. do not dispute that had the trial court The jury attributed 100% of the negligence awarded prejudgment interest against the that caused the collision to Contreras, and tort defendants, the insurers would be ob- fixed Henson’s damages at $133,842.13. ligated to pay the entire judgment includ- The court then entered a take-nothing ing that portion awarded for prejudgment judgment as to Millican. interest, to the extent of policy limits.2 But here, Henson is seeking to recover Within thirty days of the judgment, the prejudgment interest based not on the insurers tendered $45,000, the combined tortfeaser’s obligations, but upon the in- uninsured/underinsured motorist policy surance companies’ obligations. Unlike limits, to Henson. But he refused the the relationship between Henson and tender, demanding prejudgment interest Contreras, which is that of injured party on top of the benefits. In the severed and tortfeasor, the relationship between action, the insurers then filed an amended Henson and the insurers is that of con- answer, denying that Henson met all con- tracting parties. Consequently, their re- ditions precedent required by the contract spective duties are established by the con- prior to the judgment in the tort action, tract. and specifically denying that Henson was Under the policies, the insurance compa- entitled to prejudgment interest. With nies are obligated to pay the uninsured/un- their amended answer, the insurers paid derinsured motorist’s shortfall to the ex- the policy benefits into the court’s registry. tent of the policy limits. The Texas Farm Henson moved for judgment and sum- policy limits were $25,000 per person and mary judgment, and the insurers moved $50,000 per accident; the Southern Farm for summary judgment. The trial court policy limits were $20,000 per person and denied both of Henson’s motions and $40,000 per accident. Both policies stated: granted the insurers’ motion, ordering We will pay damages which a covered that Henson recover from Texas Farm its person is legally entitled to recover from uninsured/underinsured policy limits of the owner or operator of an [unin- $25,000, and from Southern Farm the sured/underinsured] motor vehicle be- uninsured/underinsured policy limits of cause of bodily injury sustained by a $20,000, plus interest accrued while in the covered person, or property damage, court’s registry, ‘‘in full satisfaction of this caused by an accident. The owner’s or judgment.’’ operator’s liability for these damages 1. TEX.REV.CIV. STAT. art. 5069–1.05 §§ 2 and 6 2. TEX.REV.CIV. STAT. art. 5069–1.05 §§ 2 and 6; have been subsequently recodified at TEX. FIN. see Johnson & Higgins of Tex., Inc. v. Kenneco CODE §§ 304.003, .006, and 304.102. Energy, Inc., 962 S.W.2d 507, 529–30 (Tex. 1998). 654 Tex. 17 SOUTH WESTERN REPORTER, 3d SERIES

must arise out of the ownership, mainte- that Henson was entitled to recover from nance, or use of the uninsured motor the uninsured/underinsured insurers. vehicle. In fact, though, the jury found the entire [2] We have emphasized that prejudg- losses to be inflicted by Contreras, and ment interest is awarded not to punish the fixed the amount of those losses at $133,- defendant, but to fully compensate the in- 842.13. The policies provided that the in- jured party.3 The insurers owe prejudg- surers will pay damages that a covered ment interest on top of the policy benefits person is legally entitled to recover from only if they withheld those benefits, in an uninsured/underinsured motorist. breach of the insurance contracts. In that When the jury found Contreras at fault for case, the injured insured would have lost the accident and found Henson damaged the use of funds that he would otherwise by her negligence, Henson became legally have had, and prejudgment interest would entitled to recover from her. And because compensate for the time the proceeds were the damages exceeded Contreras’ liability withheld. policy limits, Henson became entitled to Here, Henson has failed to demonstrate the uninsured/underinsured motorist poli- that the insurers were obligated to pay the cy benefits, up to the policy limits. By the benefit at any time earlier than they did. terms of the policies, no obligation to pay In his brief, Henson appears to concede the claim existed until the jury established that the insurer’s obligation to pay did not Contreras’ liability. And the insurers paid arise until the first judgment was ren- the claim promptly after the jury made its dered, stating that the trial court’s entry findings. Because no contractual duty was of judgment ‘‘had the effect of entitling breached, Henson had no right to receive Mr. Henson to recover the respective sums the benefits earlier than he in fact received of $20,000 and $25,000 from Southern them. Therefore no compensation is due Farm Bureau and Texas Farm Bureau, by for lost use of the funds. Thus Henson is reason of the TTT stipulation.’’ 4 He fails not entitled to prejudgment interest on top to specify any point earlier than rendition of the benefits he is otherwise entitled to of the judgment that a breach of contract receive from the insurers. could have occurred. We infer from his The judgment of the court of appeals is insistence that the prejudgment interest affirmed. accrued either 180 days after he gave no- tice of the claim, or the day he filed suit against the companies, that he believes the obligation to pay arose either at the time , he filed his claim, or at the time he filed suit against the insurers. But neither of these events, the claim itself or filing suit, In re DAISY MANUFACTURING triggers an obligation to pay. COMPANY, INC., Relator. [3] In this case, Henson settled with No. 99–0500. Contreras for $20,000, the limits of her liability insurance policy, and released her Supreme Court of Texas. from any further claims. Because the jury April 13, 2000. could have found that Contreras was not at fault, or that the damages resulting from her actions did not exceed her policy lim- In design-defect products liability suit its, the settlement alone did not establish against air rifle manufacturer, plaintiff 3. Johnson & Higgins, 962 S.W.2d at 528. 4. Petitioner’s brief on the merits at 4. In re Progressive County Mut. Ins. Co., 439 S.W.3d 422 (2014)

439 S.W.3d 422 Background Court of Appeals of Texas, Houston (1st Dist.). Following an automobile collision with an uninsured motorist's vehicle, Guia sued her insurer, Progressive. 1 In re PROGRESSIVE COUNTY MUTUAL While investigation into the claim was ongoing, Guia sued INSURANCE COMPANY, Relator. Progressive for breach of the uninsured motorist provisions in her policy, violations of Chapter 542 of the Texas Insurance No. 01–14–00199–CV. | June 12, 2014. Code, violations of the Deceptive Trade Practices–Consumer Synopsis Protection Act, and breach of the duty of good faith and fair Background: Insured brought action against uninsured dealing. Guia served Progressive with a number of discovery motorist (UM) carrier to recover for breach of contract, breach requests, some of which would not be relevant to the breach- of the duty of good faith and fair dealing, and statutory of-contract claim. Progressive filed a motion to sever the violations. The 215th District Court, Harris County, Elaine H. breach of contract claim for uninsured motorist coverage from Palmer, J., denied carrier's motion to sever and abate extra- the extra-contractual claims. The trial court judge signed an contractual claims. Carrier petitioned for writ of mandamus. order abating the motion to sever, allowing discovery to move forward on all claims, and deferring the other issues covered by the motion until the pretrial hearing. Progressive filed a writ seeking to compel severance and abatement. [Holding:] The Court of Appeals, Harvey Brown, J., held that severance of extra-contractual claims from breach of contract claim was required. Standard of Review

Writ conditionally granted. [1] [2] [3] [4] We may issue a writ of mandamus to correct a trial court's clear abuse of discretion or violation of duty imposed by law when no adequate remedy by Attorneys and Law Firms appeal exists. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (orig. proceeding). A clear abuse of discretion *424 Mark R. Lapidus, Megan L. Knudsen, Lapidus occurs when the trial court's decision is so arbitrary and Knudsen, PC, Houston, TX, for Relator. unreasonable that it amounts to clear error. See id. (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, Timothy R. Hightower, Alexandra Muthcler, Houston, TX, 917 (Tex.1985)). Because a trial court has no discretion for Real Party in Interest. in determining what the law is, the trial court abuses its Panel consists of Justices KEYES, BLAND and BROWN. discretion if it clearly fails to analyze or apply the law correctly. See id. at 840. “In determining whether appeal is an adequate remedy, [we] consider whether the benefits outweigh the detriments of mandamus review.” In re BP OPINION Prods. N. Am., Inc., 244 S.W.3d 840, 845 (Tex.2008) (orig. HARVEY BROWN, Justice. proceeding).

Relator, Progressive County Mutual Insurance Company [5] [6] The trial court has “broad” discretion in the seeks a writ of mandamus compelling the trial court to severance of causes of action. Morgan v. Compugraphic (1) vacate its order denying Progressive's motion to sever Corp., 675 S.W.2d 729, 734 (Tex.1984); Black v. Smith, 956 extra-contractual claims asserted against it and (2) enter an S.W.2d 72, 75 (Tex.App.-Houston [14th Dist.] 1997, orig. order abating those extra-contractual claims until the breach- proceeding). However, that discretion is not unlimited. See of-contract claim brought by Alma Guia, the real party in U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668, 671 (Tex.App.- interest, has been resolved. We conditionally grant the writ. Houston [1st Dist.] 1993, orig. proceeding). The trial court has a duty to order severance when *425 “all of the facts and circumstances of the case unquestionably require a separate

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trial to prevent manifest injustice, and there is no fact or claim would become unlikely. One circumstance supporting or tending to support a contrary example would be when the insurer conclusion, and the legal rights of the parties will not be has made a settlement offer on the prejudiced thereby.” Womack v. Berry, 156 Tex. 44, 291 disputed contract claim. As we have S.W.2d 677, 682–83 (Tex.1956) (orig. proceeding). noted, some courts have concluded that the insurer would be unfairly prejudiced by having to defend the contract claim at the same time and Severance of Contractual and before the same jury that would Extra–Contractual Claims consider evidence that the insurer had [7] Texas Rule of Civil Procedure 41 governs severance of offered to settle the entire dispute. claims. See TEX.R. CIV. P. 41. The rule provides, in part, While we concur with these decisions, that “[a]ctions which have been improperly joined may be we hasten to add that evidence of this severed ... on such terms as are just. Any claim against a sort simply does not exist in this case. party may be severed and proceeded with separately.” Id. The In the absence of a settlement offer predominant reasons for a severance are to do justice, avoid on the entire contract claim, or other prejudice, and promote convenience. F.F.P. Op. Partners, compelling circumstances, severance L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex.2007). Claims are is not required. properly severable if: (1) the controversy involves more than Id. (internal citations omitted); see also In re Miller, 202 one cause of action; (2) the severed claim is one that would be S.W.3d 922, 925–26 (Tex.App.-Tyler 2006, orig. proceeding the proper subject of a lawsuit if independently asserted; and [mand. denied] ); In re Trinity Universal Ins. Co., 64 S.W.3d (3) the severed claim is not so interwoven with the remaining 463, 468 (Tex.App.-Amarillo 2001, orig. proceeding [mand. action that it involves the same facts and issues. Guar. Fed. denied] ). Thus, in Liberty National, the Court opined a Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 settlement offer by an insurer may create a situation where (Tex.1990). Only the third element is in dispute here. severance of an insured's contract claim is required. 927 S.W.2d at 630 (Tex.1996). In Liberty National Fire Insurance Co. v. Akin, the Texas Supreme Court considered whether severance was required There is no evidence in the record that Progressive made a in a case involving breach of contract and extra-contractual settlement offer to *426 Guia. However, Liberty National claims against an insurer under a homeowner's policy. 927 does not limit severance to cases where such an offer has been S.W.2d 627 (Tex.1996). In refusing to grant mandamus relief, made, instead holding that “other compelling circumstances” the Court rejected “an inflexible rule that would deny the may also require severance. Id. In the case before us, trial court all discretion and ... require severance in every Progressive argues that “other compelling circumstances” case [involving bad-faith insurance claims], regardless of the should include the effort and cost associated with conducting likelihood of prejudice.” Id. at 630. Ultimately, the Court discovery on extra-contractual claims that have not yet concluded that the contractual and extra-contractual claims accrued because the insured's breach-of-contract claim has in that case were interwoven, with most evidence admissible not yet been decided. on both claims, and that any prejudicial effect could be ameliorated by appropriate limiting instructions. See id. The Several courts of appeals have considered the issues of Court went on to severance and abatement in the context of uninsured motorist Several Texas appellate courts have or underinsured motorist insurance coverage; these courts found severance may nevertheless have concluded that, when uninsured motorist claims are be necessary in some bad faith involved, severance of the extra-contractual claims was cases. A trial court will undoubtedly required. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 S.W.3d confront instances in which evidence 429 (Tex.App.-Austin 2012, orig. proceeding) (concluding admissible only on the bad faith claim trial court abused discretion by denying insurer's motion for would prejudice the insurer to such an severance and abatement of extra-contractual claims where extent that a fair trial on the contract settlement offer was made on underinsured motorist claim); In re Reynolds, 369 S.W.3d 638, 650–55 (Tex.App.-Tyler

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2012, orig. proceeding) (holding severance of underinsured Progressive was contractually obligated to pay her uninsured motorist claim was required to prevent prejudice); In re motorist claim. To do this, Guia must first prove that she had United Fire Lloyds, 327 S.W.3d 250, 257 (Tex.App.-San uninsured motorist coverage, that the other driver negligently Antonio 2010, orig. proceeding) (finding abuse of discretion caused the accident and was uninsured, and the amount of her in granting motion for bifurcation of trial rather than damages. See In re Reynolds, 369 S.W.3d at 652. It appears severance and abatement of extra-contractual claims); see that the first issue is not in dispute. Therefore, Guia's breach- also In re Old Am. Cnty. Mut. Fire Ins. Co., No. 13– of-contract claim will essentially involve the issues in a 12–00700–CV, 2013 WL 398866 (Tex.App.-Corpus Christi typical car wreck: the comparative negligence of Guia and the January 30, 2013, orig. proceeding) (mem. op.) (holding other driver and Guia's damages. The bad faith claim here is that severance and abatement of extra-contractual claims more complicated. In her most recent petition, she alleges that is required in many instances when insured asserts claim Progressive breached their duty of good faith and fair dealing, to uninsured or underinsured motorist benefits); In re violated the insurance code by failing to timely pay the Farmers Tex. Cnty. Mut. Ins. Co., No. 07–11–00396–CV, claim, and further alleges Progressive's conduct was knowing 2011 WL 4916303, (Tex.App.-Amarillo Oct. 17, 2011, and intentional in violation of the Deceptive Trade Practices orig. proceeding) (mem. op.) (denying mandamus because Act. In discovery, Guia seeks production of all documents complaint was not preserved, but agreeing that abatement of related to lawsuits and claims against Progressive regarding extra-contractual claims is required in most instances when the denial of uninsured/underinsured motorist claims for over an insured asserts claim to uninsured motorist benefits). ten years. Examples of these requests include:

The San Antonio Court of Appeals explained its Request 3. Produce all documents of any type as to claims determination that mandamus relief was proper to compel asserted against Progressive during period from January severance and abatement of an underinsured motorist claim 1, 2001, up to and including present day as a result of from related bad faith claims as follows: nonpayment of uninsured/underinsured motorist claims in Texas regardless of whether a lawsuit was filed and/or [The insurer] is under no contractual liability was denied. duty to pay [underinsured motorist] benefits until [the insured] establishes Request 4. Produce all documents of any type as to the liability and underinsured status all lawsuits filed against Progressive during period from of the other motorist. Therefore, [the January 1, 2001, up to and including present day, as a result insurer] should not be required to of nonpayment of uninsured/underinsured motorist claims put forth the effort and expense of in Texas regardless of whether liability was denied. conducting discovery, preparing for ... a trial, and conducting voir dire on bad faith claims that could be Request 16. A copy of each and every policy, manual, rendered moot by the portion of protocol, instruction booklet or similar writing concerning the trial relating to [underinsured procedures for the investigation and handling of uninsured/ motorist] benefits. To require such underinsured motorist claim which was in effect at the time would not do justice, avoid prejudice, Plaintiff made her claims in this case, and for the seven and further convenience. Under years preceding Progressive's denial of Plaintiff's claim. these circumstances, we conclude the trial court abused its discretion These requested documents are irrelevant to the breach-of- in bifurcating the case instead of contract claim, and the introduction of Progressive's claims severing and abating the [underinsured handling history in unrelated accidents at the trial of Guia's motorist] claim from the bad faith breach-of-contract claim would be manifestly unjust. See claims. Womack v. Berry, 291 S.W.2d at 682–83 (Tex.1956) (orig. proceeding). In re United Fire Lloyds, 327 S.W.3d at 256. 2 The trial court's abatement of any decision on severance until *427 [8] In this case, to prevail on her extra-contractual the eve of trial requires the parties to engage in discovery claims against Progressive, Guia must demonstrate that on the extra-contractual claims and prepare for a trial on

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 In re Progressive County Mut. Ins. Co., 439 S.W.3d 422 (2014)

have an adequate remedy by appeal. See In re Am. Nat'l Cnty. these claims, even though extra-contractual liability could Mut. Ins. Co., 384 S.W.3d 429, 439; In re Reynolds, 369 only accrue if Progressive is found liable on the contract. See S.W.3d at 658; In re United Fire Lloyds, 327 S.W.3d at 256. In re United Fire Lloyds, 327 S.W.3d at 256. Accordingly, the trial court's decision to postpone severance, unless writ is granted, will require Progressive to expend resources answering discovery that is far broader than the car accident Conclusion claim that must be resolved. Based on our review of the record, we conclude that Guia's Consistent with In re Reynolds and In re United Fire Lloyds, extra-contractual claims against Progressive are severable, we conclude that severance of insured's extra-contractual the facts and circumstances of the case require a severance to claims is required in this instance to avoid prejudice. prevent manifest injustice, and the legal rights of the parties will not be prejudiced thereby. See Womack, 291 S.W.2d at 683. The trial court, therefore, abused its discretion in refusing to sever and abate the uninsured motorist claims Adequate Remedy by Appeal from the bad faith claims pending the determination of Progressive's liability for the uninsured motorist damages [9] A writ of mandamus will issue only if there is no under the policy. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 adequate remedy available by direct appeal. See *428 S.W.3d 429; In re Reynolds, 369 S.W.3d at 650–55; In re Walker, 827 S.W.2d at 839. The Corpus Christi Court of United Fire Lloyds, 327 S.W.3d at 257; see also In re Old Am. Appeals in In re United Fire Lloyds concluded the insurer Cnty. Mut. Fire Ins. Co., 2013 WL 398866; In re Farmers did not have an adequate remedy by appeal because, if a Tex. Cnty. Mut. Ins. Co., 2011 WL 4916303. writ of mandamus were not granted, the insurer stood to lose substantial rights by being required to prepare for claims that We conditionally grant Progressive's writ of mandamus and might be rendered moot and never even accrue. In re Fire order the trial court to vacate the February 11, 2014 Order, Lloyds, 327 S.W.3d at 256 (citing U.S. Fire Ins. Co., 847 grant Progressive County Mutual Insurance Company's S.W.2d at 675; In re Trinity Universal Ins. Co., 64 S.W.3d Motion to Sever, and abate the extra-contractual claims. We at 468). are confident that the trial court will promptly comply, and our writ will issue only if it does not. The Corpus Christi Court of Appeals agreed. See In re Old Am. Cnty. Mut. Fire Ins. Co., 2013 WL 398866. Likewise, other appellate courts have also found these claims do not

Footnotes 1 The underlying case is Alma Guia v. Jessica Nicole Estes, Relinda Estes, Progressive Insurance Company and Progressive County Mutual Insurance Company; No. 2012–57535, in the 215th District Court of Harris County, Texas, the Honorable Elaine H. Palmer presiding. 2 The court relied on the Texas Supreme Court's reasoning in Brainard v. Trinity Universal Insurance Co., 216 S.W.3d 809 (Tex.2006), but acknowledged that Brainard concerned timing of presentment of contract claim to determine whether party was entitled to attorney's fees under Chapter 38 of Texas Civil Practice and Remedies Code, rather than severance and abatement in the context of uninsured motorist claim. See In re United Fire Lloyds, 327 S.W.3d 250, 257 (Tex.App.-San Antonio 2010, orig. proceeding) (discussing Brainard, 216 S.W.3d at 818).

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 638 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

in control of a corporation uses that ticularly an insolvent one, has standing to control, or uses the corporate assets, to pierce its own corporate veil under an alter further his or her own personal inter- ego theory to reach the assets of its par- ests, the fiction of the separate corpo- ent. See S.I. Acquisition, 817 F.2d at rate identity may properly be disregard- 1152. We further conclude that such claim ed. passes into the bankruptcy estate on the Id. at 641 (citations omitted). filing of the bankruptcy petition. See 11 U.S.C. § 541(a)(1). At that point, the The focus of Delaware and Pennsylva- trustee or debtor-in-possession has exclu- nia law is on the conduct of the corpora- sive standing to assert the alter ego claim. tion rather than on the relationship be- See Tow, 312 S.W.3d at 757; Highland tween the corporation and its creditors. Capital Mgmt., 212 S.W.3d at 530. As The law of those states emphasizes equita- applied to this case, the debtor-in-posses- ble concerns, directed at holding the con- sion, Washington Group, was the only par- trol entity accountable and addressing un- ty with standing to assert an alter ego just enrichment to that company. We are claim against Raytheon. Boccard did not convinced that the policies that persuaded have standing to assert the alter ego claim. the Fifth Circuit that alter ego claims Thus, we hold that the trial court was against a debtor’s parent corporation may without subject-matter jurisdiction to ren- be brought by the bankruptcy estate rep- der judgment based on the equitable claim resentative, rather than individual credi- of alter ego. tors, support the same conclusion in this We sustain Raytheon’s first issue.10 case. See S.I. Acquisition, 817 F.2d at 1152–53; see also Baillie Lumber, 612 Conclusion S.E.2d at 300. Because we hold that Boccard did not [27] Moreover, we recognize that the have standing to pursue its alter ego claim alter ego doctrine is an equitable remedy. against Raytheon, we vacate the trial See Peacock v. Thomas, 516 U.S. 349, 354, court’s judgment and dismiss the case. 116 S.Ct. 862, 866, 133 L.Ed.2d 817 (1996).

, To the extent that each were damaged by its respective parent’s domination and con- trol over it to the point that it was ren- dered insolvent and unable to meet its legal obligations, the subsidiary should In re James Michael REYNOLDS have standing to assert an equitable claim and Pelhams Industrial against its dominant parent. See In re Warehouse, Inc. iPCS, Inc., 297 B.R. 283, 298 (Bankr. No. 12–10–00176–CV. N.D.Ga.2003) (interpreting Delaware law and holding that estate representative had Court of Appeals of Texas, standing to assert alter ego claim of debtor Tyler. corporation). May 16, 2012. [28] We conclude that, under Delaware Background: Injured motorist brought and Pennsylvania law, a corporation, par- personal injury action against truck driver

10. Because this issue is dispositive, we do not See TEX.R.APP. P. 47.1. address Raytheon’s remaining three issues. IN RE REYNOLDS Tex. 639 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

and truck diver’s employer, and asserted a 4. Mandamus O28 claim against his automobile insurer for With respect to resolution of factual underinsured motorist (UIM) benefits. The issues or matters committed to the trial 273rd Judicial District Court, Shelby court’s discretion, a relator seeking man- County, Charles R. Mitchell, J., denied damus relief must establish that the trial truck driver’s and employer’s motion to court could reasonably have reached only sever and transfer venue, and truck driver one decision. and employer filed petition for writ of mandamus. 5. Mandamus O172 Holdings: The Court of Appeals, Brian An appellate cannot in a mandamus Hoyle, J., held that: proceeding disturb a trial court’s decision (1) motorist’s claims against truck driver unless it is shown to be arbitrary and and driver’s employer and motorist’s unreasonable, even if the appellate court claim against UIM insurer were not would have decided the issue differently. interwoven and thus were properly 6. Mandamus O28 severable; Because a trial court has no discretion (2) severance was necessary to avoid prej- in determining what the law is or applying udice to truck driver and driver’s em- the law to the facts, a clear failure by the ployer; and trial court to analyze or apply the law (3) truck driver and driver’s employer did correctly will constitute an abuse of discre- not have an adequate appellate reme- tion and may result in appellate reversal dy, as required in order to obtain man- by extraordinary writ or mandamus. damus relief. 7. Mandamus O4(1) Petition conditionally granted. When determining whether manda- mus relief is appropriate, the adequacy of 1. Mandamus O1 an appellate remedy must be determined by balancing the benefits of mandamus Mandamus is an extraordinary reme- review against the detriments. dy. 8. Mandamus O4(1) 2. Mandamus O4(1), 28 When the benefits of mandamus re- To obtain mandamus relief, a relator view outweigh the detriments, appellate must show that: (1) the trial court clearly courts must consider whether the appel- abused its discretion, and (2) the benefits late remedy is adequate. of mandamus outweigh the detriments to the extent that an appellate remedy is 9. Mandamus O3(2.1) inadequate. Mandamus will not issue when the law provides another, plain, adequate, and 3. Mandamus O28 complete remedy. A trial court clearly abuses its discre- tion, as required for mandamus relief, if it 10. Appeal and Error O78(1) reaches a decision so arbitrary and unrea- An order denying severance is not a sonable as to amount to a clear and preju- final judgment and therefore is not appeal- dicial error of law. able. 640 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

11. Mandamus O32 19. Action O13 Mandamus is the appropriate avenue Standing is a component of subject by which a party may seek review of a matter jurisdiction. trial court’s order denying severance. 20. Action O6, 13 12. Mandamus O44 Standing focuses on who may bring the cause of action, and ripeness focuses Venue determinations generally are on when the cause of action may be not reviewable by mandamus. V.T.C.A., brought. Civil Practice & Remedies Code § 15.064(b). 21. Appeal and Error O842(1) Because ripeness is a component of 13. Mandamus O4(4), 44 subject matter jurisdiction, an appellate Where a relator does not seek en- court reviews a ripeness determination un- forcement of a mandatory venue statute, der the same standard by which it reviews mandamus generally is not available ab- subject matter jurisdiction generally. sent an abuse of discretion by the trial Vernon’s Ann.Texas Rules Civ.Proc., Rule court and an inadequate appellate remedy. 87. V.T.C.A., Civil Practice & Remedies Code 22. Courts O32.3 § 15.064(b). A pleader must allege facts that affir- 14. Mandamus O44 matively demonstrate the court’s jurisdic- Mandamus review of permissive venue tion to hear the cause. determinations is appropriate in extraordi- 23. Insurance O3571 nary circumstances. V.T.C.A., Civil Prac- Venue O8.5(1) tice & Remedies Code § 15.064(b). Trial court did not abuse its discretion 15. Venue O76 by concluding that injured motorist prop- erly pled a cause of action against motor- Like any other interlocutory order, an ist’s underinsured motorist (UIM) benefits order denying a motion to transfer venue insurer and that such claim could fix ven- may be reconsidered at any time within ue, in motorist’s action against insurer the period of the trial court’s plenary pow- which also asserted a personal injury claim er. Vernon’s Ann.Texas Rules Civ.Proc., against truck driver and driver’s employer; Rule 87(5). assuming that proper pleading required 16. Venue O17 allegations supporting ripeness, motorist alleged that truck driver and driver’s em- The existence of a cause of action is ployer were UIMs at the time of the sub- immune from challenge at a venue hearing. ject collision, that all conditions precedent Vernon’s Ann.Texas Rules Civ.Proc., Rule to a recovery under the policy had been 87. complied with, that he made a demand for 17. Action O6 payment, and that insurer refused to pay. Vernon’s Ann.Texas Rules Civ.Proc., Rule Ripeness is a component of subject 87. matter jurisdiction. 24. Action O60 18. Action O6 Severance of claims rests within the Ripeness is a question of law. sound discretion of the trial court. Ver- IN RE REYNOLDS Tex. 641 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

non’s Ann.Texas Rules Civ.Proc., Rules 41, 30. Action O60 174. When a trial court grants a severance, the separated causes of action typically 25. Action O60 proceed to individual judgments that are Although a trial court has broad dis- themselves separately final and appealable. cretion in determining whether to grant Vernon’s Ann.Texas Rules Civ.Proc., Rule severance, that discretion is not unlimited; 41. a trial court is required to exercise a sound and legal discretion within limits created 31. Action O60 by the circumstances of the particular A claim is properly severable only if: case. Vernon’s Ann.Texas Rules Civ. (1) the controversy involves more than one Proc., Rules 41, 174. cause of action; (2) the severed claim is one that would be the proper subject of a 26. Action O60 lawsuit if independently asserted; and (3) That a claim may be severed does not the severed claim is not so interwoven with always mean that it must. Vernon’s the remaining action that they involve the Ann.Texas Rules Civ.Proc., Rules 41, 174. same facts and issues. Vernon’s Ann.Tex- as Rules Civ.Proc., Rule 41. 27. Action O60 There is no room for the exercise of 32. Action O60 discretion on a motion to sever claims The controlling reasons for a sever- when all of the facts and circumstances of ance are to do justice, avoid prejudice, and the case unquestionably require a separate further convenience. Vernon’s Ann.Texas trial to prevent manifest injustice, there is Rules Civ.Proc., Rule 41. no fact or circumstance supporting or 33. Action O60 tending to support a contrary conclusion, Whether a trial court should grant a and the legal rights of the parties will not motion to sever is ultimately a question of be prejudiced thereby; under these cir- law. Vernon’s Ann.Texas Rules Civ.Proc., cumstances, the refusal to order a sever- Rule 41. ance constitutes a violation of a plain legal duty, even though it is often termed a 34. Action O60 clear abuse of discretion. Vernon’s When considering whether to grant a Ann.Texas Rules Civ.Proc., Rule 41. motion for severance, a trial court must generally accept the plaintiff’s pleadings as 28. Action O60 true and then determine whether sever- On a motion for severance, the desire ance is appropriate; consequently, the only to avoid some identified prejudice to the remaining dispute concerns the legal con- movant by denying severance must be sequences stemming from accepted-as- weighed against the prejudice that could pleaded facts. Vernon’s Ann.Texas Rules result from ordering severance. Vernon’s Civ.Proc., Rule 41. Ann.Texas Rules Civ.Proc., Rule 41. 35. Action O60 29. Action O60 The intimately connected test, applica- A severance divides a lawsuit into two ble when the issue is venue, is not applica- or more separate and independent causes. ble when severance is the issue; instead, a Vernon’s Ann.Texas Rules Civ.Proc., Rule court must determine whether the claims 41. are ‘‘interwoven,’’ meaning that they in- 642 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

volve the same facts and issues. Vernon’s 41. Action O60 Ann.Texas Rules Civ.Proc., Rule 41. Injured motorist’s negligence and re- See publication Words and Phrases spondeat superior claims against truck for other judicial constructions and driver and truck driver’s employer, and his definitions. claim against his underinsured motorist 36. Negligence O202 (UIM) insurer, were not ‘‘interwoven,’’ and To prevail on a negligence claim, a thus were properly severable; though the plaintiff must establish that the defendant claims against truck driver and employer had a legal duty, he breached that duty, and claim against insurer shared the issues and plaintiff suffered damages that were of whether driver was negligent, whether proximately caused by the breach. the negligence damaged motorist and the amount of motorist’s damages, motorist’s 37. Labor and Employment O3025, 3045 UIM claim had the additional issues of To prevail on a respondeat superior whether motorist had UIM coverage and claim, a plaintiff must show that the defen- whether truck driver and employer had dant was the tortfeasor’s employer and insurance coverage in at least the amount also that the tortfeasor’s act was commit- of the damages recovered. V.T.C.A., In- ted within the scope of his general authori- surance Code § 1952.106; Vernon’s ty, in furtherance of the defendant’s busi- Ann.Texas Rules Civ.Proc., Rule 41. ness, and for the accomplishment of the 42. Action O60 object for which the tortfeasor was hired. Ordinarily, a party seeking severance 38. Insurance O2790 has the burden to show how it will be A underinsured motorist (UIM) bene- prejudiced if severance is not granted and fits insurer has no contractual duty to pay to present evidence to the trial court, in benefits until the liability of the other mo- camera if necessary, to support its posi- torist and the amount of damages suffered tion. Vernon’s Ann.Texas Rules Civ.Proc., by the insured are determined. V.T.C.A., Rule 41. Insurance Code § 1952.106. 43. Action O60 39. Insurance O2787 The injection of insurance into a trial does not necessarily create prejudice, for A motorist is underinsured for pur- purposes of severance. Vernon’s Ann.Tex- poses of underinsured motorist (UIM) ben- as Rules Civ.Proc., Rule 41. efits if the available proceeds of his liabili- ty insurance are insufficient to compensate 44. Trial O127 for the injured party’s actual damages. The rule that evidence that a defen- V.T.C.A., Insurance Code § 1952.106. dant was or was not insured is not admissi- ble on the issue of negligence is founded 40. Insurance O2787, 2790 on the belief that the probative value of To recover underinsured motorist such evidence is vastly outweighed by the (UIM) benefits, an injured motorist must danger of unfair prejudice. Rules of establish that he had UIM coverage, the Evid., Rule 411. other motorist’s negligence proximately caused his damages and the amount of his 45. Action O60 damages, and the other motorist was un- Failure of truck driver and truck driv- derinsured. V.T.C.A., Insurance Code er’s employer to present evidence of preju- § 1952.106. dice, when they moved to sever injured IN RE REYNOLDS Tex. 643 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

motorist’s negligence and respondeat supe- had not agreed to be bound by the results rior claims against them from injured mo- of a separate trial against truck driver and torist’s underinsured motorist (UIM) claim employer, joinder of motorist’s claims against motorist’s UIM insurer, was not against truck driver and employer with fatal to truck driver’s and employer’s sev- motorist’s claim against his UIM insurer erance motion, as injured motorist would did not negate the consent clause. Ver- be required to present evidence regarding non’s Ann.Texas Rules Civ.Proc., Rules 41, truck driver’s and employer’s insurance to 174(b); V.T.C.A., Insurance Code establish his UIM claim, truck driver and § 1952.106. employer had a substantial right to have 48. Insurance O2792, 3556 their liability decided without any mention Unless an underinsured motorist of insurance, and allowing evidence of in- (UIM) insurer has consented in writing to surance presented an irreconcilable con- a suit against the tortfeasor, the usual flict that was apparent without the intro- result of a consent provision in a UIM duction of evidence. Vernon’s Ann.Texas policy is that the insurer is not bound by a Rules Civ.Proc., Rule 41; Rules of Evid., judgment entered in an action prosecuted Rule 411. by its insured against a UIM; to avoid this 46. Action O60 result an insured seeking UIM benefits may sue his UIM insurer directly without Trial O3(1) suing the UIM, obtain written consent The rules authorize two distinct trial from his UIM insurer and then sue the procedures, severance and bifurcation, for UIM alone, making the judgment binding avoiding prejudice; a severance divides the against the insurance company, or sue the lawsuit into two or more separate and UIM without the written consent of the independent causes, resulting in a final, UIM insurer and relitigate liability and appealable judgment in each cause, while a damages. V.T.C.A., Insurance Code bifurcated trial results in one trial with § 1952.106. separate parts before one jury. Vernon’s Ann.Texas Rules Civ.Proc., Rules 41, 49. Venue O8.5(1, 8) 174(b). Following severance of injured motor- ist’s negligence and respondeat superior 47. Action O60 claims against truck driver and truck driv- Severance of injured motorist’s negli- er’s employer from motorist’s underin- gence and respondeat superior claims sured motorist (UIM) benefits claim against truck driver and truck driver’s em- against his UIM insurer, correct venue for ployer, and injured motorist’s underin- motorist’s negligence and respondeat supe- sured motorist (UIM) benefits claim rior claims was the county in which truck against his UIM insurer, was necessary to driver resided and where employer had its avoid prejudice to truck driver and em- principal place of business, rather than ployer, as a bifurcation order had not been county in which motorist resided; venue of requested or signed and it appeared that claims against truck driver and employer the claims would be tried simultaneously, in injured motorist’s county was derivative truck driver and employer had a substan- only, and injured motorist did not allege tial right to have their liability decided that any basis existed for maintaining ven- without any mention of insurance, and, ue is his county following severance. though injured motorist had a consent V.T.C.A., Civil Practice & Remedies Code clause in his UIM policy and UIM insurer §§ 15.002(2, 3), 15.005. 644 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

50. Mandamus O4(1) the defendant provides prima facie proof In evaluating benefits and detriments that its requested venue is proper. to determine the adequacy of an appellate V.T.C.A., Civil Practice & Remedies Code remedy when determining whether a party § 15.002(2, 3). is entitled to mandamus relief, appellate courts consider whether mandamus will: (1) preserve important substantive and procedural rights from impairment or loss; Rebecca E. Bell, Thomas W. Fee, for (2) allow the appellate court to give needed Relator. and helpful direction to the law that would Don Wheeler, Darrin Walker, for Real otherwise prove elusive in appeals from Party in Interest Richard Sharp. final judgments; and (3) spare litigants and the public the time and money utterly Dick Davis, Real Party in Interest wasted enduring eventual reversal of im- Southern Farm Bureau Casualty. properly conducted proceedings. Panel consisted of WORTHEN, C.J., 51. Mandamus O4(4), 32 GRIFFITH, J., and HOYLE, J. Truck driver and truck driver’s em- ployer did not have an adequate appellate OPINION remedy, as required in order to obtain BRIAN HOYLE, Justice. mandamus relief when trial court denied James Michael Reynolds, Pelhams In- truck driver’s and employer’s motion for dustrial Warehouse, Inc., and Texas Farm severance, in action injured motorist Bureau Casualty Insurance Company brought asserting negligence and respon- (Farm Bureau) are defendants in a person- deat superior claims against truck driver al injury action filed by the real party in and employer, and claim for underinsured interest, Richard Sharp. Reynolds and motorist (UIM) benefits against motorist’s Pelhams, Relators, request a writ of man- UIM insurer; truck driver and employer damus directing the trial court to (1) sever had a substantial right to have their liabili- Sharp’s claim against Texas Farm Bureau ty decided without any mention of insur- Casualty Insurance Company (Farm Bu- ance that would be lost if mandamus was reau) and, following severance, to (2) grant not granted, severance and venue were Relators’ motion to transfer venue, and (3) intertwined and if mandamus was not transfer Sharp’s claims against Relators to granted driver’s and employer’s right to a Tarrant County. The respondent is the correct venue would be lost, and the denial Honorable Charles R. Mitchell, Judge of of severance when negligence and UIM the 273rd Judicial District Court, Shelby claims were joined in the same action was County, Texas. We conditionally grant a recurring one. Vernon’s Ann.Texas the petition. Rules Civ.Proc., Rule 41.

52. Venue O2, 46, 68, 74 PROCEDURAL BACKGROUND Under the statutory venue scheme, a Richard Sharp filed a personal injury plaintiff has the first choice to fix venue in action in Shelby County to recover dam- a proper county, but a trial court must ages he sustained in an accident involving transfer venue to the county specified in his vehicle and an eighteen wheeler driven the defendant’s motion to transfer if the by James Michael Reynolds. Sharp alleg- plaintiff fails to establish proper venue and es that Reynolds caused the accident. IN RE REYNOLDS Tex. 645 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

Pelhams Industrial Warehouse, Inc. is was ‘‘neither ripe nor a part of the under- Reynolds’s employer. Sharp seeks dam- lying liability matter.’’ They alleged fur- ages from both Reynolds and Pelhams, ther that Sharp had not pleaded the ‘‘inex- and alleges they were underinsured motor- tricably intertwined’’ elements or factual ists at the time of the accident. support necessary to support Farm Bu- Sharp also alleges that, at the time of reau’s joinder. Accordingly, they asserted the accident, he had an insurance policy that ‘‘it is difficult to understand why issued by Farm Bureau’s predecessor that same is included in this lawsuit at all other provided for underinsured motorist (UIM) than for impermissible purposes such as benefits. He asserts that all conditions shadow parties to establish venue or to precedent to recovery under the policy otherwise attempt to place the issue of have been satisfied and seeks the policy insurance coverage (and the amount of limits for UIM benefits. such coverage) before the fact finder.’’ Relators each filed a general denial sub- Relators also filed a joint motion for re- ject to a motion to transfer venue in which consideration of their motions to transfer each asserted that Sharp had not pleaded venue. The motion for reconsideration in- any facts showing that venue is proper in cluded a supplemental motion to sever. It Shelby County. To the contrary, they also incorporated by reference Relators’ urged, Sharp alleged that Reynolds is a original motions to transfer venue, all sup- resident of Tarrant County, Pelhams is a porting briefing, and their motion to sever, company doing business and having its ‘‘as it relates to [Sharp’s] potential claim principal office in Tarrant County, and the that may not exist as to [Farm Bureau].’’ accident occurred in Johnson County. Sharp responded that venue is proper in They asserted that these allegations Shelby County, citing the mandatory ven- showed venue was not proper in Shelby ue statute for suits pertaining to unin- County, but was proper in Tarrant County. sured/underinsured motorist coverage.3 Accordingly, Relators requested that the He also reurged his previous arguments in case be transferred to Tarrant County opposition to the venue motions and dis- pursuant to the general venue statute.1 puted Relators’ ripeness and severance ar- Sharp filed a response opposing the mo- guments. tions, and Relators filed a reply to his response. After a hearing, the trial court In a telephonic hearing, the trial court denied the motions to transfer venue with- denied Relators’ motion for severance, but out specifying a reason.2 did not sign a written order. Thereafter, Relators then filed a joint motion to Sharp filed a motion requesting the trial sever, subject to their motions to transfer court to (1) vacate its prior order denying venue, alleging that Farm Bureau had Relators’ motions to transfer venue; (2) been improperly joined in the suit and grant Sharp leave to file supplemental evi- that Sharp’s claim against Farm Bureau dence; (3) reconsider Relators’ motions to

1. See TEX. CIV. PRAC. & REM.CODE ANN. 2. The record includes an order setting a hear- § 15.002(a)(2), (3) (West 2002) (general venue ing on Relators’ motions to transfer venue. statute, when applicable, prescribes four pos- We assume that this hearing was held. sible venue choices, including county of de- fendant’s residence when cause of action ac- 3. See TEX. INS.CODE ANN. § 1952.110 (West crued if defendant is natural person, and 2009). county of defendant’s principal office in this state if defendant is not natural person). 646 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

transfer venue and motion to sever; and appellate reversal by extraordinary writ. (4) deny the motions. In a second tele- Id. phonic hearing, the trial court granted [7] In providing guidance for deter- Sharp’s motion in its entirety without spec- mining whether an appellate remedy is ifying a reason. Relators then filed this adequate, the Texas Supreme Court has original proceeding challenging the trial noted that the operative word, ‘‘adequate,’’ court’s order denying reconsideration of has no comprehensive definition. In re their motions for severance and transfer of Prudential Ins. of Am., 148 S.W.3d 124, venue. They also filed a motion for emer- 136 (Tex.2004) (orig. proceeding). In- gency relief. We granted the motion, and stead, it is simply a proxy for the careful stayed the proceedings in the trial court balance of jurisprudential considerations until further order of this court. that determine when appellate courts will use original mandamus proceedings to re- AVAILABILITY OF MANDAMUS view the actions of lower courts. Id. [1, 2] Mandamus is an extraordinary These considerations include both public remedy. In re Sw. Bell Tel. Co., L.P., 235 and private interests, and the determina- S.W.3d 619, 623 (Tex.2007) (orig. proceed- tion is practical and prudential rather than ing). To obtain mandamus relief, the rela- abstract or formulaic. Id. Thus, the ade- tor must show that (1) the trial court quacy of an appellate remedy must be de- clearly abused its discretion, and (2) the termined by balancing the benefits of man- benefits of mandamus outweigh the detri- damus review against the detriments. In ments to the extent that an appellate rem- re Team Rocket, L.P., 256 S.W.3d 257, 262 edy is inadequate. In re Poly–America, (Tex.2008) (orig. proceeding). 262 S.W.3d 337, 347 (Tex.2008) (orig. pro- [8, 9] When the benefits of mandamus ceeding). review outweigh the detriments, appellate courts must consider whether the appel- [3–6] A trial court clearly abuses its late remedy is adequate. Id. ‘‘Mandamus discretion if it reaches a decision so arbi- will not issue when the law provides anoth- trary and unreasonable as to amount to a er, plain, adequate, and complete remedy.’’ clear and prejudicial error of law. Walker In re Tex. Dep’t of Family and Protective v. Packer, 827 S.W.2d 833, 839 (Tex.1992) Servs., 210 S.W.3d 609, 613 (Tex.2006). (orig. proceeding). With respect to resolu- tion of factual issues or matters committed Severance and Venue to the trial court’s discretion, the relator [10, 11] An order denying severance is must establish that the trial court could not a final judgment and therefore is not reasonably have reached only one decision. appealable. See Beckham Group, P.C. v. Id. at 839–40. We cannot disturb the trial Snyder, 315 S.W.3d 244, 245 (Tex.App.- court’s decision unless it is shown to be Dallas 2010, no pet.). Consequently, man- arbitrary and unreasonable, even if we damus is the appropriate avenue by which would have decided the issue differently. a party may seek review of a trial court’s Id. at 840. However, a trial court has no order denying severance. In re Liu, 290 discretion in determining what the law is S.W.3d 515, 518 (Tex.App.-Texarkana or applying the law to the facts. Id. Thus, 2009, orig. proceeding). a clear failure by the trial court to analyze or apply the law correctly will constitute [12–14] A party may appeal a venue an abuse of discretion and may result in ruling following the trial on the merits. IN RE REYNOLDS Tex. 647 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

See TEX. CIV. PRAC. & REM.CODE ANN. we first consider whether the trial court § 15.064(b) (Vernon 2002). If venue was had the authority to reconsider its venue improper, ‘‘it shall in no event be harmless ruling. error and shall be reversible error.’’ Id. Except under circumstances not present Consequently, venue determinations gen- in this case, ‘‘[i]f venue has been sustained erally are not reviewable by mandamus. as against a motion to transfer TTT, then In re Masonite Corp., 997 S.W.2d 194, 197 no further motions to transfer shall be (Tex.1999) (orig. proceeding). Where, as consideredTTTT’’ See TEX.R. CIV. P. 87(5). here, the relator does not seek enforce- In reliance on this rule, some courts have ment of a mandatory venue statute, man- held that a trial court cannot reconsider damus generally is not available absent an the denial of a motion to transfer venue, abuse of discretion by the trial court and even if, as here, only one such motion has an inadequate appellate remedy. See id. been filed. See, e.g., In re Med. Carbon But mandamus review of permissive venue Res. Inst., L.L.C., No. 14–07–00935–CV, determinations is appropriate in ‘‘extraor- 2008 WL 220366, at *1–2 (Tex.App.-Hous- dinary circumstances.’’ Team Rocket, ton [14th Dist.] Jan. 29, 2008, orig. pro- L.P., 256 S.W.3d at 262. ceeding) (mem. op.); Van Es, 230 S.W.3d at 775; Dorchester Master Ltd. P’ship v. AUTHORITY TO RECONSIDER VENUE RULING Anthony, 734 S.W.2d 151, 152 (Tex.App.- Sharp and Relators disagree on wheth- Houston [1st Dist.] 1987, orig. proceeding). er the trial court correctly denied recon- Some courts have also held that an order sideration of Relators’ motions to transfer reconsidering the prior denial of a motion venue. But neither Sharp nor Relators to transfer venue is void. See, e.g., Med. question the trial court’s authority to re- Carbon Res. Inst., 2008 WL 220366, at *1– consider its venue ruling. Nevertheless, 2; Dorchester, 734 S.W.2d at 152. there are cases holding that a trial court [15] The San Antonio court of appeals has no such authority. And if the trial has held, however, that Rule 87(5) does not court has no authority to reconsider its preclude reconsideration of the ‘‘first and venue ruling, mandamus is not available to only motion to transfer scheduled for hear- compel it to do so. See, e.g., Van Es v. ingTTTT’’ Orion Enters., Inc. v. Pope, 927 Frazier, 230 S.W.3d 770, 775 (Tex.App.- S.W.2d 654, 659 (Tex.App.-San Antonio Waco 2007, pet. denied) (denying manda- 1996, orig. proceeding [motion to file man- mus directing reconsideration of prior damus overruled] ) (citing HCA Health venue ruling where reconsideration would Servs. of Tex., Inc. v. Salinas, 838 S.W.2d have been improper). 246, 248 (Tex.1992)). The court reasoned In this case, Relators requested a sever- that an order denying a motion to transfer ance in connection with their motion for venue is interlocutory, both as to the trial reconsideration of the trial court’s venue court and the parties. Id. Therefore, like ruling. In other words, they requested any other interlocutory order, an order severance and transfer of venue; they did denying a motion to transfer venue may be not request a separate trial on Sharp’s reconsidered at any time within the period claim against Farm Bureau if the trial of the trial court’s plenary power. Id. We court declined to reconsider its venue rul- agree with the reasoning in Orion and ing. Therefore, if the trial court had no conclude that the trial court in this case authority to reconsider its venue ruling, we had authority to reconsider its prior denial need not address severance. Accordingly, of Relators’ motions to transfer venue. 648 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

See id. We now proceed to the merits of 2004). Moreover, ‘‘no party shall ever be Relators’ petition. required for venue purposes to support by prima facie proof the existence of a cause RIPENESS of action or part thereof, and at the hear- Relators first argue that the trial court ing the pleadings of the parties shall be abused its discretion when it concluded taken as conclusive on the issues of exis- that Texas Insurance Code Section tence of a cause of action.’’ TEX.R. CIV. P. 1952.110, a mandatory venue statute, fixes 87(3)(a). Consequently, the existence of a venue in Shelby County. Section 1952.110 cause of action is immune from challenge provides that, in an action against an in- at a venue hearing. Killeen v. Lighthouse surer ‘‘in relation to [uninsured/underin- Elec. Contractors, L.P., 248 S.W.3d 343, sured motorist] coverage TTT, including an 349 (Tex.App.-San Antonio 2007, pet. de- action to enforce that coverage,’’ venue is nied); see also Underwood, supra at 606– mandatory in (1) the county in which the 07 (‘‘[A] plaintiff who can adequately plead policyholder or beneficiary instituting the a claim against a resident defendant is not action resided at the time of the accident, required to show that he has any evidence or (2) the county in which the accident whatsoever to support the claim—at least occurred. TEX. INS.CODE ANN. § 1952.110 not in connection with the venue determi- (West 2009). nation at the trial court level.’’). But ab- Sharp contends that Section 1952.110 sent proper pleading, the Rule 87 pre- applies here. Therefore, his argument sumption does not arise. See TEX.R. CIV. continues, venue is mandatory in Shelby P. 87(2)(b). County because he resided there at the time of the accident. Relators disagree, Proper Pleading Under Rule 87 asserting that Sharp’s claim against Farm Bureau is not ripe for adjudication and [17–20] Ripeness is a component of therefore cannot fix venue. subject matter jurisdiction. Waco Indep. Venue Challenges Sch. Dist. v. Gibson, 22 S.W.3d 849, 851 [16] The rules of procedure prescribe (Tex.2000). Therefore, ripeness is a ques- the scope of the trial court’s consideration tion of law. Mayhew v. Town of Sunny- in venue challenges. See TEX.R. CIV. P. 87. vale, 964 S.W.2d 922, 928 (Tex.1998). We One significant limitation is that the trial have been unable to locate any Texas case court may not inquire into the merits of a addressing whether the proper pleading cause of action. See TEX.R. CIV. P. 87(2)(b) required by Rule 87 must include allega- (providing that ‘‘[i]t shall not be necessary tions establishing ripeness. One court has for a claimant to prove the merits of a held that proper pleading must include cause of action, but the existence of a facts that demonstrate standing.4 See In cause of action, when pleaded properly, re Valetutto, 976 S.W.2d 893, 895 (Tex. shall be taken as established as alleged by App.-Austin 1998, orig. proceeding). An- the pleadings’’); see generally William Un- other court, quoting Rule 87(2)(b), ques- derwood, Reconsidering Derivative–Venue tioned whether its review of the trial in Cases Involving Multiple Parties and court’s venue determination should encom- Claims,’’ 56 BAYLOR L.REV. 579 (Spring pass a standing challenge. See Sw. Bell

4. Standing is also a component of subject cause of action, and ripeness focuses on when matter jurisdiction. Gibson, 22 S.W.3d at the cause of action may be brought. Id. 851. Standing focuses on who may bring the IN RE REYNOLDS Tex. 649 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

Tel. Co. v. Superior Payphones, Ltd., No. S.W.2d 439, 442 (Tex.1998); Tex. Ass’n of 13–05–00661–CV, 2006 WL 417423, at *5–6 Bus., 852 S.W.2d at 446. (Tex.App.-Corpus Christi Feb. 23, 2006, [23] Sharp alleges in his petition that pet. dism’d) (mem. op.). Ultimately, that court concluded that it need not define the at the time of the collision, he had UIM extent of its review because the result was coverage under a policy of insurance is- the same, regardless of whether its review sued to him by Farm Bureau’s predeces- included the standing challenge. Id., at sor. He alleges further that the collision *6. Because the result here is also the was caused by Reynolds’s negligence while same, regardless of the scope of our re- acting in the course and scope of his em- view, we take a similar approach. There- ployment with Pelhams. Sharp also avers fore, we assume, without deciding, that that Reynolds and Pelhams were UIMs at proper pleading under Rule 87 requires the time of the collision, and therefore allegations supporting ripeness. Farm Bureau is liable to him for the policy limits under the UIM provision in the poli- [21, 22] In the instant case, the trial cy. Sharp pleads generally that all condi- court implicitly determined that Sharp tions precedent to recovery under the poli- properly pleaded a cause of action as re- cy have been complied with, that demand quired by Rule 87. Based upon our as- has been made for payment, and Farm sumption that proper pleading under Rule Bureau has refused to pay. These allega- 87 requires allegations supporting ripe- tions, when taken as true, provide suffi- ness, we will consider whether the trial cient facts to establish the requisite injury court correctly concluded that Sharp’s pe- for ripeness. See Alvarado, 281 S.W.3d at tition included those allegations. Because 42.5 Accordingly, the trial court did not ripeness is a component of subject matter abuse its discretion in concluding that jurisdiction, we review a ripeness determi- Sharp had properly pleaded a cause of nation under the same standard by which action against Farm Bureau under Rule 87 we review subject matter jurisdiction gen- and that this claim could fix venue. erally. Alvarado v. Okla. Sur. Co., 281 S.W.3d 38, 42 (Tex.App.-El Paso 2005, no SEVERANCE—ABUSE OF DISCRETION pet.). Under that standard, the pleader must allege facts that affirmatively demon- Relators next argue that the trial court strate the court’s jurisdiction to hear the abused its discretion in denying reconsid- cause. Id. We then take those facts as eration of their motions for severance of true, and focus on whether the pleader has Sharp’s claim against Farm Bureau and alleged that an injury has occurred or is for transfer of venue. They argue that about to occur. Patterson v. Planned Par- joinder of Sharp’s claims against them enthood of Hous. & Se. Tex., Inc., 971 with his claim against Farm Bureau is

5. In Alvarado, the plaintiff sued his employ- insurer] has failed and refused to pay benefits er’s UIM insurer and a UIM who ran a red due under the policy provisions in question.’’ light and hit his vehicle. Alvarado, 281 Id. The UIM insurer filed a motion to dismiss S.W.3d at 39. He alleged that his employer arguing that the plaintiff’s suit was premature carried an insurance policy with the named and no cause of action had accrued against UIM insurer and that the policy included cov- the insurer. Id. In its analysis, the El Paso erage for damages caused by a UIM. Id. at 40. court observed that the plaintiff (Alvarado) He alleged further that the other driver in- might not ultimately prevail on the merits, but volved in the collision was a UIM, and that held that he had pleaded sufficient facts to ‘‘[d]espite Plaintiff’s compliance with the confer subject matter jurisdiction on the trial terms and provisions of the policy, [the UIM court. Id. at 42. 650 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

improper and therefore severance is re- ance constitutes a violation of a plain legal quired. Sharp disagrees. duty, even though it is often termed a The Trial Court’s Discretion clear abuse of discretion. Gen. Agents [24–26] Severance of claims under the Ins., 254 S.W.3d at 674. In applying this Texas Rules of Civil Procedure rests with- standard, the desire to avoid some identi- in the sound discretion of the trial court. fied prejudice to the relator by denying Liberty Nat’l Fire Ins. Co. v. Akin, 927 severance must be weighed against the S.W.2d 627, 629 (Tex.1996) (orig. proceed- prejudice that could result from ordering ing); see TEX.R. CIV. P. 41. Although the severance. See Womack, 291 S.W.2d at trial court has broad discretion in deter- 683. mining whether to grant severance, that discretion is not unlimited. In re Gen. Requirements for Severance Agents Ins. Co. of Am., 254 S.W.3d 670, [29, 30] A severance divides a lawsuit 673 (Tex.App.-Houston [14th Dist.] 2008, into two or more separate and independent orig. proceeding [mand. denied] ). In- causes. Hall v. City of Austin, 450 S.W.2d stead, the trial court is required to exer- 836, 837–38 (Tex.1970). When a trial court cise ‘‘a sound and legal discretion within grants a severance, the separated causes limits created by the circumstances of the of action typically proceed to individual particular case.’’ See Womack v. Berry, judgments that are themselves separately 156 Tex. 44, 291 S.W.2d 677, 683 (1956) final and appealable. Id. at 838. Although (orig. proceeding) (addressing denial of severance runs counter to the general poli- separate trials under Texas Rule of Civil cy condemning a multiplicity of suits, it is Procedure 174). ‘‘That a claim may be indicated in some situations. 3 Roy W. severed does not always mean that it McDonald & Elaine A. Grafton Carlson, must.’’ In re Wilkerson, No. 14–08– Texas Civil Practice § 17.26 (2d ed. 2000). 00376–CV, 2008 WL 2777418, at *1 (Tex. App.-Houston [14th Dist.] June 6, 2008, [31, 32] A claim is properly severable orig. proceeding [mand. denied] ) (mem. only if (1) the controversy involves more op.). than one cause of action; (2) the severed claim is one that would be the proper [27, 28] But there is no room for the subject of a lawsuit if independently as- exercise of discretion ‘‘[w]hen all of the serted; and (3) the severed claim is not so facts and circumstances of the case un- interwoven with the remaining action that questionably require a separate trial to they involve the same facts and issues. prevent manifest injustice, there is no fact Guar. Fed. Sav. Bank v. Horseshoe Oper- or circumstance supporting or tending to ating Co., 793 S.W.2d 652, 658 (Tex.1990) support a contrary conclusion, and the le- (op. on reh’g). The controlling reasons for gal rights of the parties will not be preju- a severance are to do justice, avoid preju- diced therebyTTTT’’ See Womack, 291 dice, and further convenience. Id. S.W.2d at 683; see also, e.g., In re Hoch- heim Prairie Farm Mut. Ins. Ass’n, 296 [33, 34] Whether a trial court should S.W.3d 907, 912 (Tex.App.-Corpus Christi grant a motion to sever is ultimately a 2009, orig. proceeding) (applying Womack question of law. In re Liu, 290 S.W.3d at standard to severance under Texas Rule of 520 (citing Guar. Fed. Sav. Bank, 793 Civil Procedure 41); Gen. Agents Ins., 254 S.W.2d at 658–59). When considering S.W.3d at 674 (same). Under these cir- whether to grant the motion, the trial cumstances, the refusal to order a sever- court must generally accept the plaintiff’s IN RE REYNOLDS Tex. 651 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

pleadings as true and then determine one of them resided. See id. at 479. whether severance is appropriate. Id. However, the claims against the resident Consequently, the only remaining dispute defendant and the nonresident defendant concerns the legal consequences stemming were required to be ‘‘properly joinable.’’ from ‘‘accepted-as-pleaded facts.’’ Id. See, e.g., Glens Falls Indem. Co. v. Ster- ling, 213 S.W.2d 858, 861 (Tex.Civ.App.- This Court’s Prior Opinion Dallas 1948, no writ [mand. overruled] ). The disagreement in this case concerns One means of satisfying this requirement the third requirement for severance: was to allege a cause of action against the whether the severed actions are ‘‘so inter- resident defendant and a cause of action woven TTT that they involve the same facts against the nonresident defendant that and issues.’’ Sharp contends the trial were so ‘‘intimately connected’’ that they court correctly concluded that the claims could be joined under the rule intended to are sufficiently interwoven to preclude sev- avoid a multiplicity of suits. See Stock- erance. As authority, he cites State Farm yards Nat’l Bank v. Maples, 127 Tex. 633, Mutual Automobile Insurance Co. v. 95 S.W.2d 1300, 1302 (1936). However, White, 461 S.W.2d 476, 479 (Tex.Civ.App.- the ‘‘intimately connected’’ test is not ap- Tyler 1970, no writ). plicable when severance is the issue. See, In White, an injured driver sued to re- e.g., Guar. Fed. Sav. Bank, 793 S.W.2d at cover damages he and his minor daughter 658. Instead, we must determine whether sustained as a result of the alleged negli- the claims are ‘‘interwoven,’’ meaning that gence of an uninsured motorist. Id. at they ‘‘involve the same facts and issues.’’ 478. He also sued his insurer in the same See id. Severance was not the issue in action, requesting payment of uninsured White, and therefore this court did not motorist benefits. Id. The suit was filed in examine whether the claims in that case the county where the accident occurred, involved the same facts and issues. See and the insurer filed a plea of privilege White, 461 S.W.2d at 479. Consequently, alleging it was entitled to be sued in the our holding in White is not dispositive county of its residence. Id. As pertinent here. here, this court held that venue was proper against the insurer because (1) the liability Sharp’s Pleadings of the tortfeasor and the uninsured motor- According to the allegations in Sharp’s ist arose out of the same transaction and third amended petition, which we take as (2) the two causes of action were ‘‘so inti- true, Reynolds ran a red light and turned mately connected that [they] should be in front of Sharp’s vehicle. Sharp’s vehicle joined to avoid a multiplicity of suits.’’ Id. struck Reynolds’s vehicle, an eighteen at 479 (applying former Article 1995, sub- wheeler, and Sharp suffered personal inju- division 4, predecessor to TEX. CIV. PRAC. & ries as a result. Reynolds was acting in REM.CODE ANN. § 15.005 (West 2002)). the course and scope of his employment at Sharp claims this holding mandates a con- the time of the accident. Sharp sued clusion that the claims in the instant case Reynolds for damages asserting the theo- are sufficiently interwoven to preclude sev- ries of negligence and negligence per se. erance. We disagree. Sharp also sued Pelhams, Reynolds’s em- [35] Under former Article 1995, sub- ployer, under the doctrine of respondeat section 4, all defendants could be sued superior. Sharp alleges that Reynolds and together in any county in which at least Pelhams were underinsured at the time of 652 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

the accident and seeks UIM benefits from amount of his damages, and Reynolds and Farm Bureau. Pelhams were underinsured. See Mid– Century Ins. Co. of Tex. v. McLain, No. [36, 37] To prevail on his negligence 11–08–00097–CV, 2010 WL 851407, at *11 claim against Reynolds, Sharp must estab- (Tex.App.-Eastland Mar. 11, 2010, no pet.) lish that Reynolds had a legal duty, he (mem. op.); State Farm Mut. Auto. Ins. breached that duty, and Sharp suffered Co. v. Grayson, 983 S.W.2d 769, 770 (Tex. damages that were proximately caused by App.-San Antonio 1998, no pet.). the breach. See Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 782 (Tex.2001).6 [41] Sharp’s negligence and UIM To prevail on his claim against Pelhams, claims have in common the facts and issues Sharp must show that Pelhams was Reyn- relating to whether Reynolds was negli- olds’s employer and also that Reynolds’s gent; if so, whether his negligence proxi- act was committed within the scope of his mately caused Sharp’s damages and the general authority, in furtherance of Pel- amount of his damages; and whether Pel- hams’s business, and for the accomplish- hams is also liable. The remaining ele- ment of the object for which Reynolds was ments of Sharp’s UIM claim—whether hired. Robertson Tank Lines, Inc. v. Van Sharp had UIM coverage and whether Cleave, 468 S.W.2d 354, 357 (Tex.1971). Reynolds and Pelhams had insurance cov- erage in at least the amount of the dam- [38–40] UIM coverage provides pay- ages recovered—are unrelated to the facts ment to the insured of all amounts that the and issues pertaining to his negligence insured is legally entitled to recover as claims. Thus, the two causes of action damages from owners or operators of un- have some overlapping facts and issues, derinsured motor vehicles because of bodi- but do not involve ‘‘the same facts and ly injury or property damage. TEX. INS. issues.’’ Therefore, they are not ‘‘inter- CODE ANN. § 1952.106 (West 2009). This woven.’’ Accordingly, we conclude that the amount is reduced by the amount recov- claims are properly severable. But as we ered or recoverable from the insurer of acknowledged earlier, a claim need not be the underinsured motor vehicle. Id. A severed simply because it can be. Wilker- UIM insurer has no contractual duty to son, 2008 WL 2777418, at *1. To complete pay benefits until the liability of the other our analysis, we must consider whether motorist and the amount of damages suf- severance is necessary to do justice, avoid fered by the insured are determined. prejudice, or further convenience. See Brainard, 216 S.W.3d at 815. A motorist Guar. Fed. Sav. Bank, 793 S.W.2d at 658. is underinsured if the available proceeds of his liability insurance are insufficient to Injection of Insurance compensate for the injured party’s actual [42] Relators argued in the trial court, damages. Stracener v. United Servs. and continue to assert here, that if Sharp’s Auto. Ass’n, 777 S.W.2d 378, 380 (Tex. claim against Farm Bureau is not severed, 1989). Therefore, to recover UIM bene- they will be prejudiced because insurance fits, Sharp must establish that he had will be injected into the case. Ordinarily, UIM coverage, Reynolds’s negligence a party seeking severance has the burden proximately caused his damages and the to show how it will be prejudiced if sever-

6. Negligence per se is merely one method of Uzoka, 290 S.W.3d 437, 445 (Tex.App.-Hous- proving a breach of duty, a requisite element ton [14th Dist.] 2009, pet. denied). of any negligence cause of action. Thomas v. IN RE REYNOLDS Tex. 653 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

ance is not granted and to present evi- Christi 1998, orig. proceeding) (conditional- dence to the trial court, in camera if neces- ly granting mandamus requiring severance sary, to support its position. See In re of personal injury claim joined with bad Trinity Universal Ins. Co., No. 12–03– faith claim against defendant’s liability in- 00314–CV, 2003 WL 22839280, at *2 (Tex. surer); Black v. Smith, 956 S.W.2d 72, 75 App.-Tyler Nov. 26, 2003, orig. proceeding) (Tex.App.-Houston [14th Dist.] 1997, orig. (mem. op.); Allstate Ins. Co. v. Hunter, proceeding) (conditionally granting manda- 865 S.W.2d 189, 194 (Tex.App.-Corpus mus requiring severance of personal injury Christi 1993, no writ). Sharp points out claim joined with claim against defendant’s that Relators presented only argument, insurer for wrongful disclosure of medical and no evidence, to show prejudice. information); F.A. Richard & Assocs. v. [43, 44] The injection of insurance into Millard, 856 S.W.2d 765, 767 (Tex.App.- a trial does not necessarily create preju- Houston [1st Dist.] 1993, orig. proceeding) dice. See, e.g., Babcock v. Nw. Mem’l (conditionally granting mandamus requir- Hosp., 767 S.W.2d 705, 708 (Tex.1989) (tri- ing severance of negligence claim against al court abused discretion by refusing to UIM from bad faith claim against insur- allow proposed voir dire questions about ance adjuster). ‘‘liability insurance crisis’’ and ‘‘lawsuit cri- [45] Here, evidence of insurance is not sis’’); Lewis v. United Parcel Svc., Inc., admissible in the trial of Sharp’s negli- 175 S.W.3d 811, 816 (Tex.App.-Houston gence claims against Relators. See TEX.R. [1st Dist.] 2004, pet. denied) (reference to EVID. 411. But evidence of Relators’ insur- insurance not automatically reversible er- ance and Sharp’s UIM coverage is re- ror). But evidence that a defendant was quired to establish Sharp’s UIM claims. or was not insured against liability is not See Mid–Century, 2010 WL 851407, at *11; admissible on the issue of negligence. State Farm Mut., 983 S.W.2d at 770. To TEX.R. EVID. 411. ‘‘[This] rule is founded allow evidence of insurance would violate on the belief that the probative value of Relators’ substantial right to have their such evidence is vastly outweighed by the liability decided without any mention of danger of unfair prejudice.’’ 1 Steven insurance, and to exclude evidence of in- Goode, Olin Guy Wellborn III, and M. surance would prejudice Sharp’s presenta- Michael Sharlot, Texas Practice Series: tion of his UIM claim. See Foremost, 966 Guide to the Texas Rules of Evidence S.W.2d at 772; Black, 956 S.W.2d at 75; § 411.1 (3d ed.2002); see also Thornhill v. Millard, 856 S.W.2d at 767. This presents Ronnie’s I–45 Truck Stop, Inc., 944 an irreconcilable conflict that is apparent S.W.2d 780, 794 (Tex.App.-Beaumont 1997, without the introduction of evidence. See writ dism’d by agr.) (recognizing that one In re Allstate Tex. Lloyd’s, No. 14–05– purpose of Rule 411 is to avoid informing 00762–CV, 2005 WL 2277134, at *4 (Tex. jury that someone other than defendant App.-Houston [14th Dist.] Sept. 2, 2005, may be liable to pay damages). orig. proceeding) (mem. op.) (per curiam) Additionally, Texas courts have recog- (pointing out, in response to argument that nized that in the simultaneous trial of two relator had not shown it would be preju- claims, when evidence of liability insurance diced by denial of severance, that irrecon- will be admissible as to only one of the cilable conflict was apparent in cases in- claims, detailed evidence of insurance is volving contractual and extracontractual prejudicial. See, e.g., In re Foremost Ins. claims). Therefore, we conclude that, in Co., 966 S.W.2d 770, 772 (Tex.App.-Corpus this situation, Relators’ argument pertain- 654 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

ing to injection of insurance was sufficient their motion for reconsideration. Nothing to inform the trial court that prejudice in the record indicates that a bifurcation would result from the simultaneous trial of order has been requested or signed. See Sharp’s claims. Thus, Relators were not In re Koehn, 86 S.W.3d 363, 367 (Tex. required to present evidence of prejudice. App.-Texarkana 2002, orig. proceeding) Consequently, Relators’ failure to present (holding that granting of separate trial evidence of prejudice is not fatal to their minimized danger of prejudice from evi- severance motion. dence of liability insurance). Thus, it ap- pears from the record that the claims will Avoidance of Prejudice be tried simultaneously, and we decline to Sharp acknowledges, at least implicitly, speculate about what issues will be con- that Relators will suffer prejudice if insur- tested at trial. Therefore, we cannot de- ance is injected into the trial of this case. termine from the record before us that He argues, however, that the procedure prejudice can be avoided at trial without the trial court will follow at trial precludes severance. the possibility of prejudice.7 He argues further that there are no issues requiring Prejudice to Sharp the injection of insurance into the case Sharp next points out that Farm Bureau before the jury. has not consented to be bound by the [46] The rules authorize two distinct results of a separate trial of his claims trial procedures-severance and bifurcation- against Relators. He urges that because for avoiding prejudice. See TEX.R. CIV. P. of the consent provision of the policy, he 41, 174(b). A severance divides the law- will have to try his case twice if his claim suit into two or more separate and inde- against Farm Bureau is severed, and pendent causes, resulting in a final, appeal- Farm Bureau will have ‘‘two bites at the able judgment in each cause. Hall, 450 apple’’ if Sharp’s case results in the first S.W.2d at 837–38. A bifurcated trial re- judgment.8 As a result, Sharp contends, sults in one trial with separate parts be- he will be prejudiced by severance, and fore one jury. In re United Fire Lloyds, therefore the trial court correctly exer- 327 S.W.3d 250, 254 (Tex.App.-San Antonio cised its discretion by denying reconsider- 2010, orig. proceeding). An order for bi- ation of the motion to sever. furcation, or separate trials, leaves the [48] Unless the UIM insurer has con- lawsuit intact but enables the court to hear sented in writing to the suit, the usual and determine one or more issues without result of a consent provision is that the trying all issues at the same time. Id. insurer is not bound by a judgment en- [47] Here, the trial court denied Rela- tered in an action prosecuted by its in- tors’ motion for severance and also denied sured against a UIM. See, e.g., State Farm

7. Specifically, Sharp points to his counsel’s Counsel did not elaborate further, and did not argument in the trial court that represent to the trial court that the issue of [w]e have actually tried in this Court—in prejudice had been addressed on appeal. both this court and Judge Griffin’s court, cases similar to this to a jury without inject- 8. The record does not include a copy of the ing insurance. Without in any way preju- insurance policy State Farm issued to Sharp. dicing the third party with the fact that Therefore, we are unable to quote the provi- there was a third party with U–I–M in the sion. case. So, we have done that successfully. IN RE REYNOLDS Tex. 655 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

Mut. Auto. Ins. Co. v. Azima, 896 S.W.2d cumstances. See Allstate Ins. Co. v. Hunt, 177, 178 (Tex.1995) (per curiam); Koehn, 450 S.W.2d 668, 671 (Tex.Civ.App.-Hous- 86 S.W.3d at 368. To avoid this result, an ton [14th Dist.] 1970), aff’d, 469 S.W.2d 151 insured seeking the benefits of his UIM (1971) (providing extensive discussion of coverage may sue his UIM insurer directly the ‘‘[s]erious ethical problems that [can] without suing the UIM; obtain written arise when an insurance company seeks to consent from his UIM insurer and then participate in the defense of an uninsured sue the UIM alone, making the judgment motorist’’). binding against the insurance company; or We cannot conclude that joinder of the sue the UIM without the written consent UIM and the UIM insurer in the same of the UIM insurer and relitigate liability action negates the consent clause. There- and damages. See, e.g., Azima, 896 fore, even absent severance, Sharp will be S.W.2d at 178; Koehn, 86 S.W.3d at 368. required to relitigate his claim against Sharp acknowledges that in Koehn, the Farm Bureau if he obtains a judgment court concluded that the same rules apply against Relators and Farm Bureau does when the UIM and the UIM insurer are not consent to be bound by the judgment. joined in the same suit. See Koehn, 86 See Koehn, 86 S.W.3d at 368. According- S.W.3d at 368. He argues, however, that ly, Sharp has not shown that he will be Koehn was wrongly decided. Specifically, prejudiced by severance. he urges that ‘‘[t]here is no logical reason Conclusion that a carrier that is sued directly, and Sharp’s UIM claim against Farm Bu- therefore participates at trial, will not be reau is severable, and severance is neces- bound by the judgment simply because the sary to avoid prejudice to Relators. Addi- uninsured motorist is also a party at trial. tionally, a simultaneous trial would violate Nor is there any authority (other than Relators’ substantial right to have their Koehn ) that suggests such a result.’’ We liability decided without mention of insur- are not persuaded. ance. See Foremost, 966 S.W.2d at 772; The rule Sharp advocates would permit Black, 956 S.W.2d at 75; Millard, 856 an insured in a UIM case to unilaterally S.W.2d at 767. This would result in mani- negate the consent clause in his policy fest injustice to Relators. See Foremost, merely by joining the UIM insurer and the 966 S.W.2d at 772; Black, 956 S.W.2d at UIM in the same action. But the purpose 75; Millard, 856 S.W.2d at 767. And if of requiring the UIM insurer’s consent to Sharp obtains a judgment against Rela- suit against the UIM is to protect the tors, he will have to relitigate his UIM insurer from liability arising from a default claim, even if it is not severed, unless judgment against the UIM or an insub- Farm Bureau consents to be bound by the stantial defense by the UIM. Azima, 896 judgment. Therefore, he will not be prej- S.W.2d at 178; Koehn, 86 S.W.3d at 368. udiced by severance. Sharp does not address the purpose of the We also conclude that ‘‘all of the facts provision and therefore does not explain and circumstances of the case unquestion- how the UIM’s joinder will afford the same ably require a [severance] to prevent man- protection. Although Sharp does not sug- ifest injustice, there is no fact or circum- gest that the UIM insurer undertake the stance supporting or tending to support a defense of the UIM, we note that a UIM contrary conclusion, and the legal rights of insurer’s defense of a UIM can create a the parties will not be prejudiced there- conflict of interest under a variety of cir- byTTTT’’ See Womack, 291 S.W.2d at 683; 656 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

Hochheim, 296 S.W.3d at 912; Gen. We have held that the trial court abused Agents Ins., 254 S.W.3d at 674. Accord- its discretion in denying reconsideration of ingly, we hold that the trial court abused Relators’ motion for severance. Severance its discretion in denying reconsideration of would have divided the underlying action Relators’ motion for severance. into two separate lawsuits. See Hall, 450 S.W.2d at 837–38. Therefore, because VENUE–ABUSE OF DISCRETION Section 15.005 is a derivative venue stat- ute, it would not determine venue of Relators further contend that if we con- Sharp’s claims against Relators after sev- clude the trial court abused its discretion erance. Cf. Oryx Energy Co. v. Union in denying their motion to reconsider sev- Nat’l Bank of Tex., 895 S.W.2d 409, 416 erance, we must also conclude that the (Tex.App.-San Antonio 1995, writ denied) court abused its discretion in denying their (in addressing claim that trial court erred motion to reconsider venue. They argue in denying motions to sever and transfer that if Sharp’s claim against Farm Bureau venue, appellate court first reviewed denial is severed, there exists no basis for main- of severance; after concluding denial was taining venue of the remaining claims in not abuse of discretion, then reviewed ven- Shelby County. ue in light of ruling on severance). Venue After Severance Relators contend that because severance Sharp sued Farm Bureau in Shelby is required, the general venue statute ap- County, the county of his residence at the plies and venue is proper in Tarrant Coun- time of the accident. See TEX. INS.CODE ty. In pertinent part, the general venue ANN. § 1952.110(1). Relying on Texas Civ- statute provides that, subject to certain il Practice and Remedies Code Section exceptions, a lawsuit may be brought in 15.005, he joined his negligence claims the county of the defendant’s residence at against Relators in the same action. Farm the time the cause of action accrued if the Bureau did not object to venue in Shelby defendant is a natural person, and the County. Therefore, venue of Sharp’s county of the defendant’s principal office in claim against Farm Bureau is fixed in this state if the defendant is not a natural Shelby County. See TEX.R. CIV. P. 86(1). person. See TEX. CIV. PRAC. & REM.CODE ANN. § 15.002(2), (3). Sharp has alleged, Section 15.005 provides that where there and Relators agree, that Reynolds is a are multiple defendants, and the plaintiff resident of Tarrant County, Pelhams is a first establishes proper venue against at company doing business and having its least one defendant, venue is then proper principal office in Tarrant County, and the as to all defendants in all claims arising accident occurred in Johnson County. out of the same transaction, occurrence, or Thus, under either subsection, Tarrant series of transactions or occurrences. See County is the correct venue. TEX. CIV. PRAC. REM.CODE ANN. § 15.005. Thus, as to Relators, venue is derivative [49] Sharp has not alleged that any only. See Underwood, supra at 582 (‘‘De- basis exists for maintaining venue in Shel- rivative-venue simply means venue over a by County after severance. Consequently, particular claim or party that is derived we agree with Relators that because the from venue over some other claim or party trial court should have granted their mo- in the same lawsuit-venue that would not tion to reconsider its severance ruling, it exist independent of the other claim or also should have granted their motion to party.’’). reconsider its venue ruling and transferred IN RE REYNOLDS Tex. 657 Cite as 369 S.W.3d 638 (Tex.App.—Tyler 2012)

Sharp’s claims against them to Tarrant for them to meet this burden on appeal, we County. See Jones v. Ray, 886 S.W.2d recognize that Relators cannot be assured 817, 823 (Tex.App.-Houston [1st Dist.] of doing so. But even if Relators were to 1994, orig. proceeding) (where severance obtain a reversal, their substantial right order was abuse of discretion, order trans- will have been lost, in part, because only ferring venue in reliance on severance or- by a second trial will the right be available der must also fail). Its failure to do so to them. constituted an abuse of discretion. See id. [52] Moreover, severance and venue are intertwined in this case. Therefore, if ADEQUACY OF APPELLATE REMEDY Relators are unable to obtain a reversal of [50] In evaluating benefits and detri- the incorrect denial of severance, they will ments to determine the adequacy of an be unable to obtain reversal of the incor- appellate remedy, we consider whether rect venue ruling as well. See Oryx, 895 mandamus will (1) preserve important sub- S.W.2d at 416 (denial of severance was not stantive and procedural rights from im- abuse of discretion, and therefore denial of pairment or loss; (2) allow us to give motion to transfer venue was not error). needed and helpful direction to the law Our venue statutes create a balance. See that would otherwise prove elusive in ap- Team Rocket, 256 S.W.3d at 262. Under peals from final judgments; and (3) spare the statutory venue scheme, a plaintiff has litigants and the public the time and mon- the first choice to fix venue in a proper ey utterly wasted enduring eventual rever- county. Masonite, 997 S.W.2d at 197. sal of improperly conducted proceedings. But the trial court must transfer venue to Team Rocket, 256 S.W.3d at 262; Pruden- the county specified in the defendant’s mo- tial, 148 S.W.3d at 136. tion to transfer if the plaintiff fails to establish proper venue and the defendant Preservation of Rights provides prima facie proof that its request- [51] Relators have a substantial right ed venue is proper. Id. That balance will to have their liability decided without any be disrupted, and Relators’ procedural mention of insurance. See, e.g., Foremost, right to a correct venue will be lost, if 966 S.W.2d at 772. We have held that Relators are unable to obtain a reversal of severance is necessary to preserve that the trial court’s incorrect venue ruling. right. If Relators obtain judgment on a See Team Rocket, 256 S.W.3d at 262 (pro- favorable jury verdict, they cannot appeal. cedural rights impaired when plaintiff non- If Sharp obtains a judgment against Rela- suited and refiled elsewhere to circumvent tors on an unfavorable jury verdict, Rela- ruling on defendant’s motion to transfer tors could not obtain reversal for the incor- venue because balance of venue statutes rect denial of severance unless the court of disrupted). appeals concludes that the trial court’s er- ror ‘‘probably caused the rendition of an Direction for the Trial Court improper judgmentTTTT’’ TEX.R.APP. P. Severance is ultimately a question of 44.1(a)(1). Relators contend that, in that law. Liu, 290 S.W.3d at 520. Sharp ar- instance, ‘‘there will be no way to untangle gues that this court’s holding in White how or whether prejudice and confusion required the trial court to deny severance infected the jury’s deliberations.’’ See in this case. And his comments to the Hochheim, 296 S.W.3d at 911. Although trial court suggest that the fact situation we cannot say that ‘‘there will be no way’’ presented here—the denial of severance 658 Tex. 369 SOUTH WESTERN REPORTER, 3d SERIES

when negligence and UIM claims are opment of the law, and add unproductively joined in the same action—is a recurring to the expense and delay of civil litigation. one. Therefore, our interpretation of Prudential, 148 S.W.3d at 136. But in this White and the case law pertaining to sev- case, the trial court’s denial of Relators’ erance can provide helpful guidance to the motions for reconsideration has failed to trial court and prevent the recurrence of preserve two important rights—the right the situation presented here. of Relators to have their liability deter- Waste of Resources mined without mention of insurance and Finally, we note that if the trial court’s their right to defend against Sharp’s order denying reconsideration of Relators’ claims in a proper venue. motion for severance were reversed on If mandamus is unavailable, Relators appeal, a second trial would be required. cannot exercise those rights except by a This second trial would be a waste of successful appeal and retrial. But they judicial and public resources in the instant have no assurance that they can prevail if case as well as any other cases in which an appeal is necessary. And even if they this situation arises. We recognize that were to successfully appeal, Relators’ the resulting waste would be minimal in rights will have been impaired because two comparison to circumstances that have trials will have been necessary to preserve been addressed in other mandamus pro- them. Moreover, mandamus will allow us ceedings. See, e.g., id. (trial court’s ruling to provide direction to the trial court in permitted plaintiff ‘‘to abuse the legal sys- this case, and prevent the recurrence of tem by refiling his case in county after this procedural conundrum in the future. county, which would inevitably result in And despite the relatively small waste of considerable expense to taxpayers and de- resources in comparison to those ad- fendants, requiring defendants to proceed dressed in other cases, the denial of Rela- to trial in the wrong county’’); Masonite, tors’ rights is significant and, in our view, 997 S.W.2d at 199 (order transferring ven- likely cannot be remedied satisfactorily ex- ue ‘‘wrongfully burdened fourteen other cept by mandamus. courts in fourteen other counties, hundreds of potential jurors in those counties, and Based upon these considerations, we thousands of taxpayer dollars in those conclude that the benefits of mandamus counties’’). Thus, this factor, unlike the outweigh the detriments. Accordingly, we two we have previously considered, weighs hold that Relators have no adequate reme- against mandamus. dy by appeal.9 Summary and Holding DISPOSITION We acknowledge that mandamus review of incidental, interlocutory rulings by the For the reasons set forth above, we have trial courts can unduly interfere with trial concluded that Relators have satisfied both court proceedings, distract appellate prerequisites to mandamus. Accordingly, courts’ attention to issues that are unim- we conditionally grant Relators’ petition portant both to the ultimate disposition of for writ of mandamus and direct the trial the case at hand and to the uniform devel- court to (1) vacate its order denying Rela-

9. Relators also assert that Section 15.005 is occurrence, or series of transactions and oc- not applicable in this case because Sharp’s currences. That issue is not dispositive, how- claims against them and against Farm Bureau ever, and therefore we do not address it. See did not arise out of the same transaction, TEX.R.APP. P. 47.1. MORTON v. HUNG NGUYEN Tex. 659 Cite as 369 S.W.3d 659 (Tex.App.—Houston [14th Dist.] 2012)

tors’ motion for reconsideration of their Holdings: The Court of Appeals, Sharon motions for severance and transfer of ven- McCally, J., held that: ue and (2) issue an order granting the (1) vendor’s ignorance of statutory re- motion for reconsideration, severing quirements for contents of annual Sharp’s claim against Farm Bureau, and statement regarding status of contract transferring his claims against Relators to for deed did not preclude finding of Tarrant County. We trust that the trial good faith attempt to provide purchas- court will promptly comply with this opin- ers with annual statements; ion and order. The writ will issue only if (2) Flores standard to determine whether the trial court fails to do so within ten vendor made good faith effort to pro- days of the date of the opinion and order. vide purchasers with annual statement The trial court shall furnish this court, on contract did not provide vendor within the time for compliance with this with defense to purchasers’ statutory court’s opinion and order, a certified copy right to rescind contract; of its order evidencing compliance. This court’s stay is lifted. (3) as matter of first impression, statute governing purchasers’ right to cancel and rescind contract for deed did not

, require purchasers to provide vendor with notice of rescission or tender val- ue of three-year possession of property back to vendor; (4) common law defenses of quasi-estoppel Kevin T. MORTON, Appellant, and laches were not available remedies on purchasers’ claims under Property v. Code; HUNG NGUYEN and Carol (5) provision of Property Code authorizing S. Nguyen, Appellees. purchasers to recover value of any im- No. 14–11–00126–CV. provements made to property upon cancellation or rescission of contract Court of Appeals of Texas, for deed did not require purchasers to Houston (14th Dist.). prove that costs for repairs and im- May 17, 2012. provements were reasonable;

Background: Vendor on contract for deed (6) trial court’s findings of fact did not sued purchasers for breach of contract af- permit award of statutory damages of ter purchasers informed vendor of their $300 under Finance Code; and intent to cancel/rescind contract. Purchas- (7) purchasers failed to support claim un- ers counter-claim for damages under Prop- der DTPA for vendor’s false, mislead- erty Code, Finance Code, and Deceptive ing or deceptive acts or practices. Trade Practices–Consumer Protection Act Affirmed as modified in part; reversed and (DTPA), attorney fees and costs, and in- remanded in part. terest. The 55th District Court, Harris County, Dion Ramos, J., entered judgment in purchasers’ favor on most, but not all of 1. Vendor and Purchaser O54 their claims. Vendor appealed and pur- A contract for deed, unlike a mort- chasers cross-appealed. gage, allows the seller to retain title to the Mid-Century Ins. Co. Of Texas v. McLain, Not Reported in S.W.3d (2010)

any, of Mid-Century to pay under the uninsured/underinsured motorist (UIM) provision of McLain's insurance policy. 2010 WL 851407 Only the Westlaw citation is currently available. A jury found that Morey's negligence was the cause of SEE TX R RAP RULE 47.2 FOR the accident and awarded McLain $116,726: $5,000 for DESIGNATION AND SIGNING OF OPINIONS. physical pain and mental anguish sustained in the past; $0 for pain and mental anguish in the future; $80,000 for loss Court of Appeals of Texas, of earning capacity sustained in the past; $10,000 for loss of Eastland. earning capacity in the future; $500 for physical impairment sustained in the past; $0 for physical impairment that would MID-CENTURY INSURANCE be sustained in the future; $11,226 for medical care in the CO. OF TEXAS, Appellant past; and $10,000 for future medical care. The trial court v. also awarded prejudgment interest. Morey had settled with Synthia McLAIN, Appellee. McLain and did not participate in the trial.

No. 11-08-00097-CV. | March 11, 2010. After the verdict, Mid-Century put on evidence that its policy limit was $20,000, that it had made personal injury payments On Appeal from the 42nd District Court, Taylor County, (PIP) of $2,500, that it had made a settlement offer of $1,500, Texas, Trial Court Cause No. 45,958-A. and that McLain had received a settlement of $21,500 from Attorneys and Law Firms Morey. At a hearing on entry of judgment, Mid-Century again urged that these amounts be taken into consideration, citing Steven A. Springer, Lance E. Caughfield, for Mid-Century Brainard v. Trinity Universal Insurance Co., 216 S.W.3d Insurance Co. of Texas. 809 (Tex.2006); Henson, 17 S.W.3d 652; and State Farm Mutual Automobile Insurance Co. v. Norris, 216 S.W.3d 819 Burt L. Burnett, for Synthia McLain. (Tex.2006). Mid-Century argued that its liability under the Panel consists of: WRIGHT, C.J. McCALL, J., and UIM provision should not exceed $20,000, pointing out that STRANGE, J. the extra-contractual claims had been severed and were to be tried later. Despite the fact that it was her burden of proof, McLain contended that Mid-Century had not introduced McLain's policy during the jury trial and that it had failed MEMORANDUM OPINION to establish the amount of the settlement from Morey. And TERRY McCALL, Justice. despite well-settled law, McLain convinced the trial court to enter judgment against Mid-Century for the entire $116,726 *1 Synthia McLain, the insured, sued Mid-Century plus prejudgment interest. The trial court also denied Mid- Insurance Co. of Texas and its agent, Larry Chapman, after Century's motion for a judgment n.o.v. and for a new trial. her car wreck with Becky Morey. McLain had uninsured/ underinsured coverage under a policy written by Mid-Century Mid-Century presents four issues on appeal: that the trial and sold to her by Chapman. McLain's lawsuit was for court erred in entering judgment for the entire $116,726 contractual claims under the policy and for extra-contractual in this first phase of a UIM case; that the evidence was and bad faith claims. The trial court granted Mid-Century's legally and factually insufficient to support the award of lost motion to sever and ordered that McLain's extra-contractual earning capacity; that the evidence was legally and factually and bad faith claims against Mid-Century and Chapman be insufficient to support the award of future medical expenses; severed from the underlying car accident claims. The extra- and that it was incurable jury argument for counsel for contractual and bad faith claims were assigned Docket No. McLain to argue in closing that Mid-Century and its lawyer 45,958-B. McLain's claim in this case, made pursuant to were trying to “deceive” the jury because they believed the her insurance policy, was contractual in nature. Henson v. jury was “ignorant” and that the jury should serve as the S. Farm Bureau Cas. Ins. Co., 17 S.W.3d 652 (Tex.2000); conscience of the community. This argument was made after Franco v. Allstate Ins. Co., 505 S.W.2d 789 (Tex.1974). counsel for McLain had repeatedly injected the idea of bad Thus, this case was to establish the contractual obligation, if faith on the part of Mid-Century during the entire trial from

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 Mid-Century Ins. Co. Of Texas v. McLain, Not Reported in S.W.3d (2010)

the time of voir dire to closing. The first, second, and fourth Henson, 17 S.W.3d at 654. 2 A motorist is underinsured if issues are sustained, and the case is remanded for a new trial. his or her liability insurance is insufficient to pay for the injured party's actual damages. Stracener v. United Servs. Auto. Ass'n, 777 S.W.2d 378, 380 (Tex.1989). Recovery from UIM Coverage UIM coverage may be had only for damages sustained in an amount in excess of the total amount of the tortfeasor's *2 The Texas Insurance Code requires insurers to offer liability coverage. Section 1952.106; Olivas v. State Farm Texas motorists UIM coverage and mandates that such Mut. Auto. Ins. Co., 850 S.W.2d 564, 565 (Tex.App.-El Paso coverage: 1993, writ denied). It was McLain's burden to establish these elements to prove that Morey was at fault and underinsured [P]rovide for payment to the insured of and that McLain's damages exceeded the amount recovered all amounts that the insured is legally or recoverable from Morey. entitled to recover as damages from owners or operators of underinsured McLain argues that Mid-Century was required to plead, as motor vehicles because of bodily affirmative defenses, policy limits and any offset such as injury or property damage, not to Morey's coverage limits and Mid-Century's PIP payments. exceed the limit specified in the For her position, McLain cites Southwestern Fire & Casualty insurance policy, and reduced by the Co. v. Larue, 367 S.W.2d 162 (Tex.1963). However, Larue amount recovered or recoverable from involved an action on a promissory note against the maker of the insurer of the underinsured motor the note. McLain's citation of Brown v. American Transfer & vehicle. Storage Co., 601 S.W.2d 931 (Tex.1980), and TEX.R. CIV. P. 94 on affirmative defenses is also not in point. McLain TEX. INS.CODE ANN. § 1952.106 (Vernon 2009). 1 has confused a contractual condition precedent with an affirmative defense. The court of appeals in Henson held that McLain's counsel erroneously argued to the trial court, and the specific language in insurance contracts-“legally entitled now to this court, that it was Mid-Century's burden to to recover”-creates a condition precedent to a contractual introduce McLain's policy and the amount of any settlement obligation by insurance companies to perform under a UIM from Morey into evidence. The long established Texas law provision. Henson v. Tex. Farm Bureau Mut. Ins. Co., 989 is that a plaintiff seeking recovery against an insurance S.W.2d 837, 839 (Tex.App.Amarillo 1999), aff'd, 17 S.W.3d company for injuries resulting from the negligence of an at 654. It was McLain's burden to satisfy the condition uninsured motorist must plead and prove that, at the time of precedent by establishing that she was “legally entitled to the accident, the plaintiff was protected by uninsured motorist recover” damages from Morey and that Morey was an coverage. Members Mut. Ins. Co. v. Olguin, 462 S.W.2d 348, underinsured driver. 350 (Tex.Civ.App.-El Paso 1970, no writ); Members Mut. Ins. Co. v. Clancy, 455 S.W.2d 447 (Tex.Civ.App.-San Antonio *3 After the jury verdict, Mid-Century correctly established 1970, no writ); Pan Am. Fire & Cas. Co. v. Loyd, 411 S.W.2d that it had paid PIP benefits and made a settlement offer 557, 560 (Tex.Civ.App.-Amarillo 1967, no writ). In the retrial to McLain. As pointed out in Brainard, those amounts are of this case, McLain should introduce a copy of her policy to be taken into consideration in determining the amount and establish her UIM coverage if she continues to contend of prejudgment interest (that would have been owed by that the policy introduced by Mid-Century was not her policy the underinsured motorist) under the “declining principal” at the time. formula. Brainard, 216 S.W.3d at 816. In Brainard, the supreme court held that UIM insurance covers prejudgment Before an insured is entitled to recover under a UIM policy interest that the underinsured motorist would have owed to provision, the insured must establish the tortfeasor's liability the insured and that prejudgment interest constitutes part of and the damages resulting from the tortfeasors negligence. the damages caused by the underinsured motorist. On the The UIM insurer is under no contractual duty to pay benefits other hand, the supreme court in Henson held that, because until the insured obtains a judgment establishing the liability UIM insurers do not breach their contractual obligation to pay and underinsured status of the other motorist. Brainard v. until tort liability is established, prejudgment interest against Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex.2006); the UIM insurer does not begin running until the liability of

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the uninsured/underinsured motorist is established. See also capacity. Id. at 35-36. When a plaintiff is employed at the Menix v. Allstate Indem. Co., 83 S.W.3d 877 (Tex.App.- time of his or her injury, the extent of his or her loss can best Eastland 2002, pet. denied). be shown by comparing his or her actual earnings before and after the injury. See Strauss v. Cont'l Airlines, Inc., 67 S.W.3d McLain attempts to distinguish Brainard, Henson, and 428, 436 (Tex.App.-Houston [14th Dist.] 2002, no pet.). Nationwide Mutual Fire Insurance Co. v. Voight, 971 So.2d 239 (Fla.Dist.Ct.App.2008), the cases cited by Mid-Century, *4 McLain had the burden to introduce evidence from by arguing that in this case Mid-Century undertook the which a jury could reasonably measure in monetary terms her defense of Morey and thereby undertook a duty to plead and earning capacity prior to the injury. Strauss, 67 S.W.3d at 435. prove the amount of money paid by Morey or her insurer Although the amount of damages resulting from impairment and a duty to plead and prove McLain's UIM coverage. We of a plaintiff's earning capacity is largely within the discretion disagree. Mid-Century simply put McLain to her burden of of the jury, the jury should not be left to mere conjecture when proof that she had to establish a contractual obligation of Mid- facts appear to be available upon which the jury could base an Century to pay an amount under the UIM provision. intelligent answer. Id. The damages need to be proved with that degree of certainty of which the case is susceptible. Id. The trial court erred in entering judgment against Mid- at 436. Century for $116,726. Despite McLains failure to introduce the policy, Mid-Century did introduce a copy of the policy Mid-Century correctly states that McLain was required to with its provision for $20,000 in UIM benefits. At the prove (1) her earning capacity before the accident in April outset of trial, counsel for McLain told the court that the 2003 and (2) her earning capacity after the accident and underinsured motorist had paid McLain $20,100, that Mid- before trial in November 2007, as well as her earning capacity Century had paid her $2,500 in PIP benefits, and that the UIM in the future. Mid-Century concedes that there was some limit in her policy was $20,000. The judgment against Mid- evidence through McLain's testimony as to the first element, Century should not have exceeded $20,000. Mid-Century's but contends that evidence of the second element was lacking. first issue is sustained. We turn next to McLain's burden of proof on her damages from Morey's negligence. McLain had McLain testified that, before the accident, she worked forty the burden to establish that her damages exceeded $22,600 hours a week at $10 an hour as an office aide for Hibbs & ($20,100 settlement from Morey and $2,500 PIP benefits Todd, a civil engineering company. Her duties included filing from Mid-Century). and making copies of manuals that went with blueprints to the job site. In addition, she said that she worked “approximately eighteen hours a week at the Buffalo Gap Store.” There, she made $6 an hour. McLain stated that her back pain became Loss of Earning Capacity unbearable because both jobs kept her on her feet most of In its second issue, Mid-Century argues that the evidence was the time. According to McLain, “very shortly after the wreck legally and factually insufficient to support the jury award of [she] ended up leaving the Buffalo Gap store .” She believed $80,000 for past lost earning capacity and $10,000 for future that she left Hibbs & Todd during the first part of 2004, lost earning capacity. but she “would have to check to make sure.” Her testimony was evidence of her earning capacity before the accident, Loss of earning capacity is the plaintiffs diminished capacity but it was not the degree of certainty of which this case to earn a living. See Plainview Motels, Inc. v. Reynolds, was susceptible. McLain could have easily provided her form 127 S.W.3d 21, 35 (Tex.App.-Tyler 2003, pet. denied); Koko W-2s from her employers, statements from her employers, Motel, Inc. v. Mayo, 91 S.W.3d 41, 51 (Tex.App.-Amarillo and her tax returns. 2002, pet. denied). Loss of earnings is the loss of actual income due to an inability to perform a certain job that the If one assumes that McLain worked forty hours a week every person held before the injury. Reynolds, 127 S.W.3d at 35. week for Hibbs & Todd and eighteen hours a week every Loss of earning capacity is the proper measure of damages, week for the Buffalo Gap store, she would have earned $508 not loss of earnings, because even an unemployed person per week or $26,416 per year. McLain acknowledged that she can recover for lost earning capacity. Id. However, evidence did not work forty hours a week every week for Hibbs & of loss of earnings is admissible to establish loss of earning

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Todd because sometimes she was sick, had to take care of her after she is a college graduate, she will have an opportunity children, or took time for a vacation. for greater earnings.

Within a few weeks of leaving Hibbs & Todd, McLain There was a lack of medical evidence as to McLain's loss of took a job as a substitute teacher at the Jim Ned school. earning capacity. McLain testified that Dr. Daniel L. Munton As a substitute teacher, she earned $50 per day. There did not take her off work because she requested that he is no evidence on how often she worked as a substitute not do so. She further testified that, after the procedure by teacher; but, apparently, she had the capacity to earn $250 per Dr. Munton, she felt like “her old self” for a period. In his week if substitute teacher jobs were available. Subsequently, deposition, Dr. Munton stated, “No, I didnt recommend light although the record does not reflect when, she became a duty. I just recommended avoiding aggravating activity.” Dr. teacher's aide at $7 an hour, working from “8:30 in the Munton specializes in physical medicine and rehabilitation; morning to 3:30 in the afternoon.” She was a teacher's aide he treats people who want to avoid surgery. from April 2004 until May 2007, working forty hours a week. McLain said that she also tutored students for $7 an hour for From the record, it appears that McLain suffered a loss of about five hours a week for three months during the summers earning capacity for some period. She should be commended of 2005 and 2006. She also worked at Albertson's for either for her decision to obtain a college degree; however, loss of $6.50 or $6.75 an hour for “between 14 and 21” hours a week. earnings due to her decision to pursue a college degree was At the time of trial, McLain was a full-time student at Abilene not a loss of earning capacity. There is insufficient evidence in Christian University with one year left to obtain a degree in the record to support the awards of $90,000 for loss of earning special education. From her testimony, it appears that she capacity. Mid-Century's second issue is sustained. continued to work as a bus driver and at Albertson's to help her husband support their family.

Future Medical Expenses *5 We are unable to determine from the record how the jury arrived at $80,000 for past loss of earning capacity or Dr. Munton testified that McLain underwent a procedure, $10,000 for future loss of earning capacity. Apparently, she known as a medial branch block, where he tried to determine wanted to stay with Hibbs & Todd, a job that she described as where her pain was coming from. That procedure uses needles a good one with benefits. However, she could not because of up to eight inches long to inject a numbing medicine called her back pain. But even if we assume that she earned $508 per Marcaine. After a few days, when her pain returned to the week before the accident, it is not clear how much she earned pre-injection level, Dr. Munton then determined that McLain or had the capacity to earn after the wreck. Also, the $508 needed to undergo a procedure termed “radiofrequency per week was based on her working fifty-eight hours a week. lesioning,” which he described as being similar to cauterizing After McLain left Hibbs & Todd, a number of her jobs appear the nerves that appeared to be causing the pain. That to have been at $7 per hour or $280 for a forty-hour week. She procedure also utilized lengthy needles and was described by testified that she left Hibbs & Todd sometime during the first McLain as being quite painful. McLain had that procedure part of 2004. The difference between $508 and $280 per week performed on October 2, 2003. is $228 less earnings per week. Assuming she left Hibbs & Todd in January 2004, there were approximately 204 weeks *6 McLain returned to Dr. Munton on November 24, 2003, between that date and the date of trial in November 2007. and on December 22, 2003, and said that she felt pain in a Multiplying $228 times 204 weeks yields $46,512, a number different location. Dr. Munton gave her the option of therapy, far short of the $80,000 jury verdict. There is, of course, chiropractic treatment, or medication, which she chose. At the insufficient evidence to even support a verdict in the $40,000 time of his deposition in 2006, Dr. Munton had not seen her range because there was no evidence as to how many hours since 2003 because he had moved to another city. Before the she actually worked before the wreck and how many hours trial, he had returned to Abilene. During his deposition, he she worked after the wreck, much less any other evidence of testified that some patients will have their pain return but that loss of earning capacity. sixty to seventy percent of patients after a year are pain free or continue to have reduced symptoms. The record does not reflect how the jury arrived at $10,000 in future loss of earning capacity. McLain acknowledged that,

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To sustain an award of future medical expenses, the plaintiff must present evidence to establish that, in all reasonable probability, future medical care will be required and the Improper Jury Argument reasonable cost of that care. See Rosenboom Mach. & Tool, Inc. v. Machala, 995 S.W.2d 817, 828 (Tex.App.-Houston *7 In its fourth issue, Mid-Century argues that counsel [1st Dist.] 1999, pet. denied). The reasonable value of future for McLain engaged in improper jury argument. To obtain medical expenses may be established by evidence of the reversal of a judgment on the basis of improper jury argument, reasonable value of past medical expenses of a similar Mid-Century must prove (1) an error (2) that was not invited nature. See City of Rosenberg v. Renken, 616 S.W.2d 292, or provoked; (3) was preserved at trial by a proper objection, 293 (Tex.Civ.App.Houston [14th Dist.] 1981, no writ). The motion to instruct, or motion for mistrial; and (4) was preferred method of establishing future medical expenses is not curable by an instruction, a prompt withdrawal of the through expert testimony, but such testimony is not required. statement, or a reprimand by the trial court. Standard Fire Ins. Nat'l Freight, Inc. v. Snyder, 191 S.W.3d 416, 426-27 Co. v. Reese, 584 S.W.2d 835, 839 (Tex.1979). Our review of (Tex.App.-Eastland 2006, no pet.). an improper jury argument claim must cover the entire case, beginning with voir dire and ending with closing argument. Dr. Munton did not address whether in all probability McLain Id. at 840. The complainant must show that the probability will need future medical care, the type of care that would be that the improper argument caused harm is greater than the required, and the reasonable cost of that care in the future. probability that the verdict was grounded on the evidence. Id. As to future treatment, Dr. Munton stated that McLain might at 840. develop conditions that require surgery but that “[i]t would be unlikely in her case.” He repeated again that he could not At the pretrial conference, counsel for Mid-Century requested recommend any kind of surgical procedure, and his opinion that the trial court explain (or allow him to explain) at the was there was no need for spine surgery. McLain testified that outset to the jury the nature of the case and the posture of the she anticipated having to have the cauterization process again case. He stated that a brief statement would give the jury the in the future because the nerves grow back and have to be context of the case and explain why Morey, the underinsured cauterized. driver, was not present and McLain's insurance company was the defendant. The trial court denied this request. However, According to the medical records, Dr. Munton did see McLain the court did allow Mid-Century to state during voir dire that again in January 2007. Dr. Munton wanted to determine the this case was not about how the claim was handled but was source of her pain by again performing a medial branch block about the liability of Morey and the damages that resulted and having an MRI done, but McLain thought these were from the accident McLain had with Morey. unnecessary. They agreed that she would again have another radio frequency medial branch neurotomy that utilized the One of the first statements by McLain's attorney to the jury 3 inch radio frequency spinal needle. Subsequent to the on voir dire was, “We find ourselves in an odd situation procedure, Dr. Munton noted in February that McLain in that Mrs. McLain's own insurance company is fighting appeared to be “doing remarkably well.” But on June 7, against her.” The court sustained Mid-Century's objection, 2007, McLain again visited Dr. Munton and told him that her but moments later, McLain's counsel continued, “[E]ven pain level had increased to level five. Dr. Munton described though it's against her own insurance company, she has to her condition as chronic, implying that she might have to prove and can only recover money.” Then, the following undergo the procedure again in the future. This confirmed occurred: McLain's testimony that she thought her nerves would grow back and that she would need further treatments in the [T]his lawsuit has been here for three-and-a-half years. The future. In 2007, McLain's medical expenses for the treatment wreck has been-it happened four-and-a-half years ago, and were approximately $1,200. After reviewing the records of within the last week they say for the first time it's her fault. the costs for the injections, office visits with Dr. Munton, Who thinks that's right? If you do, raise your hand and let's another possible medial branch block, and physical therapy, talk about that. Do you think that an insurance company we cannot say that the jury's finding of $10,000 for future owes better to their insured than that? medical expenses was not supported by sufficient evidence. Mid-Century's third issue is overruled. ....

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opinion of who caused the wreck?” Mid-Century's objection VENIREPERSON: Yes. was sustained.

MR. BURNETT: If they think that her injuries were caused In questioning McLain, her counsel continued in the same by something else don't you think within four-and-a-half vein: years they ought to bring a doctor, any doctor- When was the first time that you heard this company, your Counsel for Mid-Century again objected, and the trial court insurance company, say that this wreck was your fault? sustained the objection. Counsel for McLain continued during voir dire to allude to the insurance company as being in bad .... faith even though this case was solely about the negligence of Morey and damages caused by her negligence. McLain's bad You have been telling this company that you were hurt, that faith claims had been severed into a separate case and were it wasn't your fault, for four-and-a-half years, right? not involved in this case. Although it was McLain's burden to establish her lost earning Questions by the venire panel indicate the effect counsel for capacity, her counsel did not produce any of her earning McLain had on the panel. One venireman asked counsel for records. Instead, he attempted to persuade the jury that it was Mid-Century, “But what about when the lady-y'all decided Mid-Century's burden to negate her testimony as to where and not to pay her, didn't you?” Counsel for Mid-Century when she worked: answered, “No,” but counsel for McLain immediately said, “I object to that. That's not true.” When the venireperson Q. Is today the first time you have now heard they [Mid- continued with, “My question is, someone somewhere had Century] are quarreling with you over your lost earning already had to resolve the evidence to not pay her; the capacity? insurance company,” the court intervened and said, “Well, A. Correct. that's what the lawsuit is about.” The court's statement was not helpful. The venireperson may have interpreted the court's Q. If we had known about that we could have brought statement to mean that the lawsuit was over whether the somebody in here with those records, right? insurance company had in bad faith failed to pay an amount that it owed, not that it was a lawsuit to determine whether the The court sustained Mid-Century's objection, but counsel's insurance company had any obligation at all under the UIM next questions were: provision. Q. Your earning records are available and have been available to them for four-and-a-half years, haven't they? *8 In opening statement, counsel for McLain continued the same tactic that he pursued during voir dire: A. Yes. [T]here aren't any other doctors to Q. They could have gone down to Hibbs & Todd, they indicate otherwise, and yet here we are could have called anybody they wanted to and they would on her uninsured underinsured claim have give them that information, right? with this company and they haven't paid a penny. The court again sustained Mid-Century's objection, but counsel continued: Counsel for Mid-Century again objected, stating that Mid- Century had no obligation to pay at this point and that Q. Has anyone asked you, with this counsel's statements were prejudicial and had no relevance to Defendant, to produce any records up this case. The court sustained the objection, telling counsel, until this moment? “Do not do that again.” The court instructed the jury to disregard counsel's statement, but overruled Mid-Century's The court again sustained Mid-Century's objection that motion for a mistrial. counsel was misleading the jury with respect to the burden of proof and with respect to the law that the jury would be McLain's counsel asked the investigating officer, “Did any guided by in making its decisions. of these artful questions by this lawyer here change your

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It is apparent from the record that counsel for McLain created not only have to prove shes a liar, they have to prove the the impression that Mid-Century owed duties that it did not police officer was a liar. They have to prove Doctor Munton owe and that the insurance company had acted in bad faith. was a liar. Although the court sustained Mid-Century's many objections, the court's actions had little effect. In closing argument, .... counsel for McLain argued: I want you to be able to say you righted a wrong, and that as You know now that this insurance company, that these the standard bearer and setter of this community, this will people, paid for this coverage. not be tolerated. I look forward to your verdict.

.... Counsel for McLain was well aware that McLain's extra- contractual claims had been severed from this case. He No witness, no evidence, all they have is a lawyer that came points out that the court sustained Mid-Century's objections down here armed with a strong desire to deceive you.... throughout the trial. It is obvious from the record, however, Does he think-does this company think that out here in that the court's rulings had no effect on counsel. Abilene we're all so, I guess, ignorant that we can't read a doctor's order ... ? In Living Centers of Texas Inc. v. Penalver, 256 S.W.3d 678, 680-81 (Tex.2008), the supreme court stated that the *9 [Y]ou don't have to get past tab one in the case in complaining party “must show that the argument by its the medical records of the very first exhibit to see how nature, degree, and extent constituted such error that an untruthful and disingenuous these people's own insurance instruction from the court or retraction of the argument could company is. not remove its effects.” Error as to improper jury argument .... must ordinarily be preserved by a timely objection that is overruled. Tex. Employers' Ins. Ass'n v. Haywood, 153 Now, how is it that they can stand up here and say those Tex. 242, 266 S.W.2d 856, 858 (Tex.1954). Here, however, things and expect you to be misled? ... [T]hey have to unlike the situation in Penalver, Mid-Century did object, and deceive you into believing. its objections were sustained; counsel for McLain simply ignored them. .... Unsupported, extreme, and personal attacks on opposing We know it's been 1,672 days since this happened. We parties can compromise the basic premise that a trial court know it's been 1,672 days where this company could have provides impartial, equal justice. See Standard Fire Ins. Co. stepped up to the plate and honored its responsibility, and v. Reese, 584 S.W.2d 835, 840 (Tex.1979). As the supreme they have failed entirely to do that. court noted in Penalver, the serious effects of arguments not based on evidence or invited by opposing counsel are Counsel for Mid-Century objected, and the objections were recognized in our Texas Rules of Civil Procedure. Rule sustained, as they had been throughout the case. Counsel for 269 provides that, during final arguments, “[m]ere personal McLain continued to imply that the insurance was acting in criticism by counsel upon each other shall be avoided, and bad faith in his rebuttal argument: when indulged in shall be promptly corrected as a contempt of court.” TEX.R. CIV. P. 269(e). Do you really think when this insurance company is talking to people- *10 In this case, counsel's final arguments were made after .... he had consistently emphasized to the jury during the entire trial that McLain's own insurance company had acted in bad To this insurance company that means their insured did not faith. That effect was not cured by the court's instruction complain of back pain. during counsel's argument.

.... Counsel for McLain first argues that Mid-Century invited and And when you boil this case down they've got to prove she's provoked the argument in question because “Mid-Century a liar, and they can't do it and it's driving them crazy. They waited over 3 years until days before trial to contest liability

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or assert that McLain's damages resulted from a preexisting without the consent of the insurance condition and then challenged the truthfulness of McLain on company, but the judgment in that both liability and damages.” Mid-Century had filed a general suit will not be “conclusive,” (i.e. denial at the outset. It did file an amended petition just prior liability and damages will have to to trial. At a hearing on the amended petition, Mid-Century be relitigated) in the suit against the represented to the trial court that its amended petition was insurance company. Allstate Ins. Co. v. only based on testimony already reflected in the record. The Hunt, supra. trial court ruled that it was timely filed. Implicit in its ruling was a premise that McLain should not have been surprised by *11 This is still the law. Soliz v. Cofer, No. 03-01-00246- the amended petition. After reviewing the record, we find that CV, 2002 WL 821909 (Tex.App.-Austin May 2, 2002, pet. there was no abuse of discretion in the trial court's ruling. denied); Gov't Employees Ins. Co. v. Lichte, 792 S.W.2d 546, 548 (Tex.App.-El Paso 1990, writ denied). Counsel for McLain also argues that Mid-Century disregarded the fiduciary duties it owed to its insured by Here, the other motorist, Morey, was not involved because stepping into the shoes of the underinsured motorist, Morey. she had already settled with McLain. This suit was directly For this argument, counsel relies on Allstate Insurance Co. against Mid-Century. Mid-Century was not defending v. Hunt, 450 S.W.2d 668, 671 (Tex.Civ.App.-Houston [14th Morey; it was putting McLain to her proof on the issues of Dist.] 1970), aff'd, 469 S.W.2d 151 (Tex.1971). In Hunt, liability and damages. This case was only a suit on a contract the supreme court held that the trial court did not abuse and similar to automobile, fire, life, theft, accident, wind, and its discretion in ruling that Allstate could not participate in workers' compensation insurance cases brought by an insured defending the underinsured motorist. The court emphasized against its own insurer over contractual coverage. Counsel's that Allstate had agreed to be bound by the insured's suit arguments to the jury were improper and incurable by the time against the other motorist and had been granted a severance they were made. Mid-Century's fourth issue is sustained. of the suit against it. The supreme court reasoned that Allstate had a primary duty to its insured and that the insurance company would have conflicting duties if the “uninsured Conclusion motorist should later decide to bring a cross-action against the insured motorist, the company would find itself under a duty To establish her entitlement to underinsured motorist to defend both antagonists.” 469 S.W.2d at 153. benefits, McLain was required to establish the following: (1) that she had UIM coverage; (2) that Morey's negligence In this case, the facts are quite different from those in Hunt. caused her damages and the amount of her damages; and (3) There is no basis in the record for an argument that Mid- that Morey was, in fact, underinsured. State Farm Mut. Auto. Century owed a fiduciary duty to McLain in this case. Shortly Ins. Co. v. Grayson, 983 S.W.2d 769, 770 (Tex.App.-San after Hunt was decided, the court in Criterion Insurance Co. Antonio 1998, no pet'n). v. Brown, 469 S.W.2d 484, 485 (Tex.Civ.App.-Austin 1971, writ ref'd n.r.e.), pointed out the choices someone in Mclain's McLain did not introduce her insurance policy and failed to position has: carry her burden of proof to establish that she had uninsured/ underinsured coverage from Mid-Century. It is basic law that [The insured] may sue the insurance when one sues on a contract, that person must first establish company directly without suing that he or she had a contract. McLain also had the burden the uninsured motorist. State Farm to provide evidence of her settlement with Morey and the Mutual Automobile Ins. Co. v. limits of Morey's insurance to establish that Morey was an Matlock, 462 S.W.2d 277 (Tex.1970). underinsured motorist. She failed to provide that evidence. When the insured obtains the written However, Mid-Century did not contest the coverage and consent of the insurance company, provided evidence to the trial court that her policy provided he may sue the uninsured motorist for $20,000 in coverage. alone, and that judgment binds the insurance company. Allstate Ins. Co. McLain failed to provide sufficient proof to justify the jury's v. Hunt, supra. The insured may award of $80,000 in loss of past earnings capacity and proceed against the uninsured motorist

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Mid-Century Ins. Co. Of Texas v. McLain, Not Reported in S.W.3d (2010)

$10,000 in loss of future earnings capacity. Final argument by counsel for McLain apparently influenced the jury to give an award far in excess of the evidence. This Courts Ruling

It is well settled that, in this case, Mid-Century's liability for The judgment of the trial court is reversed, and the cause is breach of contract is limited to the amount stated in McLain's remanded for a new trial. contract. From the record provided by Mid-Century, it appears that amount was $20,000. On retrial, the judgment should not exceed $20,000.

Footnotes 1 Article 5.06-1(5) of the Insurance Code, which was a former version of Section 1952.106, was in effect when McLain filed this suit. See former TEX. INS.CODE art. 5.06-1(5) (1981). However, because the legislature made no substantive changes to Article 5.06-1(5) in enacting Section 1952.106, we refer to the current statute in the body of the opinion. 2 If the insured proceeds against the uninsured motorist without the consent of the insurance company, the judgment in that case will not be conclusive; the liability of the uninsured motorist and damages will have to be relitigated in the suit against the insurance company providing the uninsured/underinsured coverage. Criterion Ins. Co. v. Brown, 469 S.W.2d 484, 485 (Tex.Civ.App.-Austin, writ ref'd n.r.e.).

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 PERALTA v. DURHAM Tex. 339 Cite as 133 S.W.3d 339 (Tex.App.—Dallas 2004)

to be modified so as to be made final); Immediately before trial tortfeasor stipu- McNally v. Guevara, 52 S.W.3d 195, 196 lated to liability. The 191st Judicial Dis- (Tex.2001) (remanding appeal from inter- trict Court, Dallas County, Catharina locutory summary-judgment order to court Haynes, J., entered judgment for damages of appeals so court could determine wheth- on jury’s verdict for motorist, and later er to abate the appeal to permit the trial awarded motorist expenses for tortfeasor’s court to render a final judgment or to denial of certain requests for admissions dismiss the appeal for want of jurisdic- related to liability. Tortfeasor appealed. tion); Lehmann, 39 S.W.3d at 206 (stating Holdings: The Court of Appeals, Morris, that appellate court can abate the appeal J., held that: to permit the trial court to clarify the intention of its order). (1) motorist was entitled to award of ex- penses for tortfeasor’s denial of mat- III. ABATEMENT ters later proven, and We grant Coastal’s request that this ap- (2) tortfeasor’s stipulation of liability was peal be abated for a reasonable period to judicial admission that satisfied ‘‘proof’’ allow the trial court to clarify whether it requirement of sanction rule. intended its August 23, 2002 judgment to Affirmed. be an interlocutory judgment and to allow the trial court a reasonable time to strike or sever Coastal’s counterclaim, if the trial 1. Appeal and Error O984(1) court wishes to do so. The clerk of the The court’s decision to award ex- trial court is ordered to prepare and file penses, under rule allowing expenses for a with this court a supplemental clerk’s rec- party’s denial of requests for admissions ord containing any additional orders signed by the trial court in response to this that are later proven, is reviewed under an abatement order. If the trial court does abuse of discretion standard. Vernon’s not take action in this regard within thirty Ann.Texas Rules Civ.Proc., Rules 198.1, days of the date of this order, then this 215.4(b). court shall dismiss this appeal for lack of 2. Pretrial Procedure O485 jurisdiction. Motorist was entitled to award of ex-

, penses after tortfeasor stipulated to liabili- ty on eve of trial, under rule authorizing sanctions for denial of matters thereafter proved, for tortfeasor’s failure to admit Lauren PERALTA, Appellant, fault in causing car accident in response to requests for admissions, even though tort- v. feasor claimed right to rely on her general Charles DURHAM, Appellee. denial and force motorist to prove his case; No. 05–03–00934–CV. whether tortfeasor failed to maintain prop- er lookout, maintain safe distance, and ap- Court of Appeals of Texas, ply her brakes properly at time of accident Dallas. were matters within her knowledge, and April 28, 2004. tortfeasor made no objection to requests at Background: Motorist sued alleged tort- time they were made. Vernon’s Ann.Tex- feasor for injuries incurred in car accident. as Rules Civ.Proc., Rules 198.1, 215.4(b). 340 Tex. 133 SOUTH WESTERN REPORTER, 3d SERIES

3. Pretrial Procedure O472 OPINION The primary purpose of requests for Opinion by Justice MORRIS. admission is to simplify trials by eliminat- This is an appeal of an award of ex- ing matters about which there is no real penses granted pursuant to rule 215.4(b) of controversy. Vernon’s Ann.Texas Rules the Texas Rules of Civil Procedure. Lau- Civ.Proc., Rule 198.1. ren Peralta contends the trial court abused 4. Evidence O265(9) its discretion in granting the award against her based on her denial of certain requests Pretrial Procedure O485 for admission because the requests were Tortfeasor’s stipulation to liability for improper and Charles Durham never car accident on eve of trial was judicial proved the truth of the matters she de- admission that satisfied ‘‘proof’’ require- nied. For the reasons set forth below, we ment of rule authorizing sanctions for par- affirm the trial court’s judgment. ty’s failure to admit matters in discovery that are proved thereafter; tortfeasor re- I. sponded to motorist’s requests for admis- This case arose out of a traffic accident sions by denying she failed to maintain between Lauren Peralta and Charles Dur- proper lookout, failed to keep a safe dis- ham. Durham filed suit against Peralta tance, and failed to apply her brakes prop- claiming she negligently struck his car erly at time of accident. Vernon’s with her car causing him injuries. In re- Ann.Texas Rules Civ.Proc., Rules 198.1, sponse to the suit, Peralta filed a general 215.4(b). denial. Durham sent requests for admis- 5. Evidence O265(7) sion under rule 198 of the Texas Rules of Civil Procedure asking Peralta to admit, Although a judicial admission relieves among other things, that she failed to keep the opposing party of his obligation to a proper lookout, failed to maintain a safe present evidence on the issue, the fact distance, and failed to make a proper ap- admitted is proved for the purposes of plication of her brakes. Durham also trial. asked Peralta to admit that she caused the 6. Evidence O265(7) accident. Peralta did not object to these requests and denied each of the matters. A judicial admission must be taken as true by the court and the jury and the Immediately before trial, Peralta stipu- declarant cannot introduce evidence to lated to liability and the case was tried on contradict it. the issue of damages alone. The charge of the court instructed the jury that Peralta was ‘‘negligent on the occasion in question and her negligence was a proximate cause of the occurrence in question.’’ The jury Steven P. Amis, Amis & Bell, Arlington, awarded Durham $3,365 in damages. for Appellant. On the same day judgment was granted, Ray Brooks, Attorney At Law, Garland, Durham filed a motion to recover expenses for Appellee. of proof under rule 215.4(b). At the hear- ing on the motion, Durham argued Peralta Before Justices MORRIS, admitted in her deposition that she was FITZGERALD, and FRANCIS. turned around in her seat and was not PERALTA v. DURHAM Tex. 341 Cite as 133 S.W.3d 339 (Tex.App.—Dallas 2004)

looking where she was going when her car for admission relating to Peralta’s negli- struck Durham’s. Furthermore, Peralta gence improperly asked Peralta to admit ultimately conceded liability just before she had no defense against Durham’s trial. According to Durham, Peralta had claims. Peralta contends that punishing no good faith basis for denying the re- her for failing to admit fault in response to quests for admission relating to liability the requests for admission denies her the and he was entitled to recover from her right to rely on her general denial and the reasonable expenses he incurred in make Durham prove his case. We dis- preparing to prove liability at trial. Peral- agree. ta responded she had a right to make [3] First, we note that Peralta did not Durham prove his case and because he object to the requests at issue or obtain a was never forced to prove liability at trial, ruling on the propriety of the requests he is not entitled to expenses under rule under rule 193. Accordingly, the alleged 215.4(b). The trial court granted Dur- objectionable nature of the questions could ham’s motion and awarded him $1,000 in not have been grounds for denying relief expenses. This appeal ensued. under rule 215.4(b). See TEX.R. CIV. P. 215.4(b). In addition, Peralta mischarac- II. terizes the relationship between a general [1] Under rule 215.4(b) of the Texas denial and responses to requests for ad- Rules of Civil Procedure, ‘‘[i]f a party fails mission. Although a defendant has a right to admit the genuineness of any document to force a plaintiff to prove his case, a or the truth of any matter as requested defendant also has an obligation to answer under rule 198 and if the party requesting requests for admission in good faith to the the admissions thereafter proves the genu- extent of the information within her pos- ineness of the document or the truth of the session or easily attainable. See TEX.R. CIV. matter he may apply to the court for an P. 198.2(b). The primary purpose of re- order requiring the other party to pay him quests for admission is to simplify trials by the reasonable expenses incurred in mak- eliminating matters about which there is ing that proof, including reasonable attor- no real controversy. See Stelly v. Papa- neys fees.’’ TEX.R. CIV. P. 215.4(b). The nia, 927 S.W.2d 620, 622 (Tex.1996). In court must grant the order unless it finds this case, it was within Peralta’s knowl- that (1) the request for admission was held edge when she responded to the requests objectionable pursuant to rule 193, (2) the for admission whether she failed to main- admission sought was of no substantial tain a proper lookout, maintain a safe dis- importance, (3) the party failing to make tance, and apply her brakes properly at the admission had a reasonable ground to the time of the accident. By failing to believe he might prevail on the matter, or admit to these matters until immediately (4) there was other good reason for the before trial, she forced Durham to unnec- failure to admit. Id. The court’s decision essarily incur expenses in preparing to to decision to award expenses is reviewed prove her negligence at trial. We cannot under an abuse of discretion standard. conclude the trial court abused its discre- See Bodnow Corp. v. City of Hondo, 721 tion in awarding Durham his expenses on S.W.2d 839, 840 (Tex.1986). this basis. [2] Peralta first argues the trial court Peralta next argues that Durham is not abused its discretion in awarding Durham entitled to his expenses under rule 215.4(b) his expenses of proof because the requests because he never proved her wrongful con- 342 Tex. 133 SOUTH WESTERN REPORTER, 3d SERIES

duct or negligence at trial. It is Peralta’s on the eve of trial, after discovery has position that her judicial admission of lia- been done and expenses incurred by the bility relieved Durham of his obligation to opposing party, the purpose of rule prove the matter so the conditions giving 215.4(b) would be thwarted. rise to an award of expenses under rule Peralta does not dispute she had no 215.4(b) never occurred. We conclude good reason to deny her wrongful conduct Peralta’s reading of rule 215.4(b) is too or reasonable ground to believe she would limited and would defeat the purpose of prevail on the issue of her liability.1 We the rule. conclude the trial court did not abuse its [4–6] Peralta focuses on the language discretion in awarding Durham his ex- of the rule stating that expenses may be penses of proof under rule 215.4(b). We awarded if the requesting party proves the affirm the trial court’s judgment. truth of a matter previously denied in re- sponse to a request for admission. See TEX.R. CIV. P. 215.4(b). Although a judicial admission relieves the opposing party of , his obligation to present evidence on the issue, the fact admitted is proved for the purposes of trial. See Gevinson v. Man- hattan Const. Co., 449 S.W.2d 458, 466 (Tex.1969). A judicial admission must be GRANT THORNTON LLP, Appellant, taken as true by the court and the jury v. and the declarant cannot introduce evi- SUNTRUST BANK, Atlanta, as Trustee dence to contradict it. See Sherman v. for Suntrust Retirement Sunbelt Eq- Merit Office Portfolio, Ltd., 106 S.W.3d uity Fund, and STI Classic Funds, for 135, 140 (Tex.App.-Dallas 2003, pet. de- STI Classic Small Cap Growth Stock nied). Because Peralta’s conduct was Fund, Appellees. proved for purposes of the trial against her, we conclude rule 215.4(b) is applicable No. 05–03–00302–CV. to her conduct. Court of Appeals of Texas, As stated above, requests for admission Dallas. are intended to simplify litigation and re- duce costs by eliminating the need to dis- April 29, 2004. cover and present evidence about matters Background: Bank, as trustee for retire- over which there is no legitimate dispute. ment fund, and mutual fund brought action Id. Rule 215.4(b) furthers this goal by against public accounting firm for material permitting the trial court to sanction par- misstatements and omissions of material ties who, in response to proper requests, facts in registration statement for initial fail to admit material facts without good public offering. The 191st Judicial District reason or reasonable ground to believe Court, Dallas County, Catharina Haynes, they might prevail on the matter. See J., certified action as a class action, and TEX.R. CIV. P. 215.4(b). If a party could accounting firm appealed. The Court of avoid the sanction by admitting the matter Appeals reversed and remanded for fur-

1. Indeed, Peralta cannot dispute these issues cannot review the trial court’s findings. See as she failed to file a complete record with Christiansen v. Prezelski, 782 S.W.2d 842, 843 this court and, absent a complete record, we (Tex.1990). S & I MANAGEMENT, INC. v. SUNGJU CHOI Tex. 849 Cite as 331 S.W.3d 849 (Tex.App.—Dallas 2011)

2. Judgment O185(5) S & I MANAGEMENT, A matter is conclusively established INC., Appellant, on motion for summary judgment if ordi- v. nary minds cannot differ as to the conclu- sion to be drawn from the evidence. SUNGJU CHOI a/k/a Sung Ju Choi a/k/a Sam Choi and The Michael 3. Judgment O185(2) Group, L.L.C., Appellees. After the movants have established a right to summary judgment, the burden No. 05–09–00948–CV. shifts to the nonmovants to present evi- Court of Appeals of Texas, dence creating a fact issue. Dallas. 4. Appeal and Error O854(1) Jan. 25, 2011. When a successful summary judgment Rehearing Overruled March 2, 2011. movant presents both traditional and no- evidence grounds, the Court of Appeals Background: Purchaser of gas station must affirm it if it can be sustained under sued real estate agent and real estate bro- either standard. kerage for whom agent worked for fraud, violations of the Deceptive Trade Prac- 5. Labor and Employment O3027, 3045 tices–Consumer Protection Act (DTPA), Principal and Agent O159(1) negligent misrepresentation, breach of fi- Under the doctrine of respondeat su- duciary duty, and conspiracy. The 162nd perior, an employer is vicariously liable for District Court, Dallas County, Lorraine the negligence of an agent or employee Raggio, J., granted defendants summary acting within the scope of his agency or judgment. Purchaser appealed. employment even though the principal or Holdings: The Court of Appeals, Myers, employer has not personally committed a J., held that: wrong; the justification for imposing this (1) independent contractor agreement was liability is that the principal or employer properly admitted in traditional motion has the right to control the means and for summary judgment, and methods of the agent or employee’s work. (2) purchaser’s affidavit was some evi- 6. Labor and Employment O3125 dence that agent’s alleged conduct was An employer is not vicariously liable a substantial factor in bringing about for the torts of an independent contractor purchaser’s injury. it hires because an independent contractor Affirmed in part, reversed in part, and has sole control over the means and meth- remanded. ods of the work. 7. Labor and Employment O29 1. Judgment O185(6) A contract between the parties that Defendants who move for summary establishes an independent contractor rela- judgment must show the plaintiffs have no tionship is determinative of the parties’ cause of action and may meet this burden relationship in the absence of extrinsic evi- by either (1) disproving at least one essen- dence indicating that the contract was a tial element of each theory of recovery or ‘‘sham or cloak’’ designed to conceal the (2) conclusively proving all elements of an true legal relationship of the parties or affirmative defense. that despite the contract terms, the true 850 Tex. 331 SOUTH WESTERN REPORTER, 3d SERIES

agreement vested the right of control in 11. Judgment O185.1(8) the principal. Trial court’s ruling on real estate agent’s objections to purchaser’s summary 8. Judgment O185(4), 185.3(7) judgment affidavit was ineffective in negli- Independent contractor agreement at- gence action, where trial court did not tached to affidavit of real estate broker- enter a written ruling on the objections. age’s vice president did not have to satisfy statute of frauds to be considered on bro- 12. Judgment O185.1(8), 189 kerage’s motion for summary judgment in For a ruling on an objection to sum- action against brokerage based on vicari- mary judgment evidence to be effective, ous liability for alleged negligence of real the ruling must be reduced to writing, estate agent; brokerage was not seeking to signed by the trial court, and entered of enforce agreement against agent or any- record. one else, but attached the agreement to show terms of the agreement indicating 13. Appeal and Error O242(4) that it did not have sole control over man- Objections to summary judgment affi- ner and means used by agent to sell real davit, based on assertions that affidavit estate, as required for finding it vicarious contained hearsay and self-serving state- liable under doctrine of respondeat superi- ments of an interested witness that were or. not clear, positive, direct, credible, or free from contradiction, were objections to de- 9. Brokers O7 fects of form which could not be raised on Labor and Employment O3143 appeal, where objector failed to obtain Statement in independent contractor written rulings on his objections from the agreement, that contractor understood trial court. that the real estate brokerage was legally 14. Appeal and Error O242(4) accountable for the activities of the con- tractor, did not give brokerage sole control Judgment O185.1(8) over the manner and means used by con- Defects in the form of summary judg- tractor to sell real estate, as required to ment affidavit must be objected to, the find brokerage vicariously liable for con- opposing party must have the opportunity tractor’s alleged negligence under doctrine to amend, and the trial court must rule on of respondeat superior. the objection; otherwise, the objection is waived and the objected-to material is in 10. Judgment O185(5) evidence. More than a ‘‘scintilla of evidence’’ required to defeat summary judgment mo- 15. Judgment O185.1(8), 189 tion exists when the evidence rises to a Objections that summary judgment level that would enable reasonable, fair- documentary evidence contains hearsay, or minded persons to differ in their conclu- that statements of an interested witness sions; less than a scintilla of evidence ex- are not clear, positive, direct, credible, and ists when the evidence is so weak as to do free from contradiction, are defects of no more than create a mere surmise or form. suspicion of a fact. 16. Appeal and Error O223 See publication Words and Phrases for other judicial constructions and Objections that statements in a sum- definitions. mary judgment affidavit are conclusory as- S & I MANAGEMENT, INC. v. SUNGJU CHOI Tex. 851 Cite as 331 S.W.3d 849 (Tex.App.—Dallas 2011)

sert defects of substance, which may be company was moving into the vacant gas raised for the first time on appeal. station, and that as a result of purchasing the business and with the company having 17. Judgment O185.1(4) come, the business lost revenue and with it Conclusory statement in summary value. judgment affidavit is one that does not provide the underlying facts to support the conclusion, and the statement may be ei- ther legal or factual in nature. William Chu, Jamie J. Lee, The Law 18. Antitrust and Trade Regulation Offices of William Chu, Dallas, TX, for O138 Appellant. Fraud O25 Elaine T. Lenahan, Larry Johnson, Dal- For negligent misrepresentation, las, TX, Michael W. Eady, Thompson, Coe, fraud, and breach of fiduciary duty, the Cousins, & Irons, LLP, Austin, TX, for plaintiff must prove proximate causation, Appellees. but for violations of the Deceptive Trade Practices–Consumer Protection Act Before Justices MARTIN RICHTER, (DTPA), the plaintiff must prove produc- LANG, and MYERS. ing causation; the components of proxi- mate cause are cause in fact and foresee- OPINION ability, but the test for both cause in fact and producing cause is whether the defen- Opinion By Justice MYERS. dant’s conduct was a substantial factor in S & I Management, Inc. appeals the bringing about the injury that would not summary judgment rendered in favor of otherwise have occurred. V.T.C.A., Bus. Sungju Choi a/k/a Sung Ju Choi a/k/a Sam & C. § 17.50(a). Choi and The Michael Group, L.L.C. Ap- 19. Judgment O185.3(7) pellant brings four issues asserting the Purchaser’s affidavit was some evi- trial court erred in granting appellees’ mo- dence that real estate agent’s alleged mis- tions for summary judgment. We affirm representations concerning business pur- the trial court’s judgment as to The Mi- chase site were a substantial factor in chael Group, we reverse the judgment as bringing about purchaser’s loss of business to Choi, and we remand the cause for revenue that otherwise would not have further proceedings. occurred, precluding no-evidence summary judgment in action for negligent misrepre- BACKGROUND sentation; purchaser stated that his agent In 2005, Steven Lee was looking to pur- represented to him that the vacant gas chase a new business for his company, station would remain vacant, that all appellant. He met with Choi, a real estate agents knew a gas company was moving agent or broker,1 who advertised that he into that space, that he relied on agent’s worked for The Michael Group real estate representations, that he would not have brokerage. Choi directed appellant to a bought ‘‘the business’’ if he had known the gas station and store owned by New Chu-

1. Lee stated in his affidavit that Choi was a mary judgment indicating Choi was an ‘‘broker,’’ but The Michael Group attached a ‘‘agent.’’ document to its traditional motion for sum- 852 Tex. 331 SOUTH WESTERN REPORTER, 3d SERIES

dhri Enterprises, Inc., and appellant Michael Group is vicariously liable under agreed to buy the businesses. Before ap- the doctrine of respondeat superior for pellant purchased the property, Choi and Choi’s tortious conduct. Appellant sought Lee were surveying the businesses’ neigh- actual and exemplary damages as well as borhood when Lee asked Choi about a attorney’s fees. Choi and The Michael nearby property with a defunct gas sta- Group filed no-evidence motions for sum- tion. Choi told Lee that no one would mary judgment, and The Michael Group move into that space because the gas sta- also filed a traditional motion for summary tion there was decrepit and old. Choi said judgment. The trial court granted appel- he would ask Chudhri Iqbal, the owner of lees’ motions for summary judgment. New Chudhri Enterprises, about the prop- erty with the defunct gas station. Later, TRADITIONAL SUMMARY Choi told Lee that no one would move into JUDGMENT that property because the gas tanks were In the first issue, appellant contends the old and leaking. After appellant pur- trial court erred in granting The Michael chased the businesses from New Chudhri Group’s traditional motion for summary Enterprises, Quiktrip opened a gas station judgment, which asserted The Michael on the lot with the old gas station.2 Lee Group was not liable as a matter of law stated in his affidavit that after he bought under the doctrine of respondeat superior the businesses, other brokers told him for Choi’s torts. ‘‘that all the brokers knew about the com- ing of Quiktrip about the time I purchased [1–4] The standard for reviewing a tra- the businesses.’’ He stated he ‘‘never ditional summary judgment is well estab- would have purchased the business had lished. Nixon v. Mr. Prop. Mgmt. Co., [he] known that Quiktrip was coming into 690 S.W.2d 546, 548 (Tex.1985); Private that space.’’ ‘‘As a result of purchasing Mini Storage Realty, L.P. v. Larry F. the business and with Quiktrip having Smith, Inc., 304 S.W.3d 854, 858 (Tex. come, the business has lost revenue and App.-Dallas 2010, no pet.). Defendants with it value.’’ Lee stated he ‘‘had to sell who move for summary judgment must one of [the businesses] to keep the other show the plaintiffs have no cause of action. afloat.’’ Citizens First Nat’l Bank of Tyler v. Cinco Appellant sued Choi and The Michael Explor. Co., 540 S.W.2d 292, 294 (Tex. Group for fraud, violations of the Texas 1976). Defendants may meet this burden Deceptive Trade Practices–Consumer Pro- by either (1) disproving at least one essen- tection Act (DTPA), negligent misrepre- tial element of each theory of recovery, sentation, breach of fiduciary duty, and Anderson v. Snider, 808 S.W.2d 54, 55 conspiracy with Iqbal and New Chudhri (Tex.1991), or (2) conclusively proving all Enterprises.3 Appellant’s causes of action elements of an affirmative defense. Swil- against The Michael Group assert that The ley v. Hughes, 488 S.W.2d 64, 67 (Tex.

2. Appellees assert in their motions for sum- 3. Appellant also sued Iqbal and New Chudhri mary judgment and in their brief on appeal Enterprises for a variety of causes of action that Quiktrip moved into the vacant gas sta- related to the sale of the businesses. After the tion two years after appellant purchased the trial court granted appellees’ motions for businesses. No evidence in the record sup- summary judgment, the court severed appel- ports this statement. lant’s causes of action against appellees, ren- dering a final judgment on appellant’s causes of action against appellees. S & I MANAGEMENT, INC. v. SUNGJU CHOI Tex. 853 Cite as 331 S.W.3d 849 (Tex.App.—Dallas 2011)

1972). A matter is conclusively estab- [8] The Michael Group attached a form lished if ordinary minds cannot differ as to contract to its motion for summary judg- the conclusion to be drawn from the evi- ment with an affidavit of its vice-president, dence. Triton Oil & Gas Corp. v. Marine Kern Coleman, who testified the document Contractors & Supply, Inc., 644 S.W.2d was ‘‘a true and correct copy of the Inde- 443, 446 (Tex.1982). After the movants pendent Contractor Agreement entered have established a right to summary judg- into between [The Michael Group] and ment, the burden shifts to the nonmovants Sungju Choi.’’ The Independent Contrac- to present evidence creating a fact issue. tor Agreement provided: Denson v. Dallas County Credit Union, The Michael Group, LLC, and 262 S.W.3d 846, 849 (Tex.App.-Dallas 2008, (‘‘Contractor’’) TTT hereby no pet.). When a successful summary judg- agree as follows: ment movant presents both traditional and Contractor agrees to work for Broker as no-evidence grounds, we must affirm it if it an INDEPENDENT CONTRACTOR, can be sustained under either standard. and not as [an] employee; however, Flood v. Katz, 294 S.W.3d 756, 762 (Tex. Contractor understands that Broker is App.-Dallas 2009, pet. denied) legally accountable for the activities of the Contractor. All costs and obli- [5–7] Under the doctrine of respondeat gations incurred by Contractor in con- superior, an employer is vicariously liable ducting his/her independent business for the negligence of an agent or employee shall be paid solely by Contractor, who acting within the scope of his agency or will hold Broker harmless from any and employment even though the principal or all such costs and obligations. Contrac- employer has not personally committed a tor will act independently as to the man- wrong. Baptist Mem’l Hosp. Sys. v. agement of his/her time and efforts, and Sampson, 969 S.W.2d 945, 947 (Tex.1998). will be responsible for all of his/her ex- The justification for imposing this liability penses, such as industry association, is that the principal or employer has the dues, licensing renewals, pagers, cellular right to control the means and methods of telephones, etc. as they are incurred. the agent or employee’s work. Id. An TTT employer is not vicariously liable for the Contractor understands and agrees that torts of an independent contractor it hires because Contractor is an Independent because an independent contractor has Contractor and not an employee of Bro- sole control over the means and methods ker, Broker will not withhold any Fed- of the work. Id. A contract between the eral or State Income Tax, Social Securi- parties that establishes an independent ty (FICA) or Unemployment (FUTA) contractor relationship is determinative of taxes from Contractor’s commission the parties’ relationship in the absence of paid. Contractor is personally responsi- extrinsic evidence indicating that the con- ble for paying any and all Federal and tract was a ‘‘sham or cloak’’ designed to State Income, Social Security and other conceal the true legal relationship of the taxes, and for maintaining all expense parties or that despite the contract terms, records as required by law, and repre- the true agreement vested the right of sents to Broker that all such amount control in the principal. Bell v. VPSI, will be withheld and paid. Contractor Inc., 205 S.W.3d 706, 713 (Tex.App.-Fort shall indemnify and hold Broker harm- Worth 2006, no pet.). less from any liability or costs thereof. 854 Tex. 331 SOUTH WESTERN REPORTER, 3d SERIES

Contractor further understands and ac- doctrine of respondeat superior for Choi’s knowledges that Broker provides no torts depends on whether it had sole con- Workman’s Compensation coverage. trol over the means and methods of Choi’s Contractor hereby specifically waives work. Nothing in the contract, and no such coverage and represents to Broker evidence presented by appellant, purports that he/she understands that if Contrac- to give it that authority. The statement tor desires such coverage, Contractor that ‘‘Contractor understands that Broker must personally obtain such coverage. is legally accountable for the activities of (Emphasis omitted.) Nothing in the con- Contractor’’ did not give The Michael tract gave The Michael Group the right to Group sole control over the manner and control the means and methods of Choi’s means used by Choi to sell real estate. work. The Independent Contractor Agree- Appellant argues that the Agreement ment, with Coleman’s affidavit, established was insufficient to establish Choi’s inde- Choi’s independent-contractor relationship pendent-contractor status as a matter of with The Michael Group. Appellant does law because it does not identify the con- not assert on appeal that it presented any tractor and it is not signed by the alleged evidence controverting this relationship. contractor. Under the statute of frauds, See Bell, 205 S.W.3d at 713–14. Accord- certain contracts are not enforceable un- ingly, we conclude the trial court did not less they are in writing and signed by the err in granting The Michael Group’s tradi- person against whom enforcement of the tional motion for summary judgment. We contract is sought. See TEX. BUS. & COM. overrule appellant’s first issue. Having CODE ANN. § 26.01(a)(2) (West 2009). determined the trial court did not err in However, The Michael Group was not granting The Michael Group’s traditional seeking to enforce the Agreement against motion for summary judgment, we do not Choi or anyone else; it attached the address appellant’s third issue asserting Agreement to show the terms of the the trial court erred in granting The Mi- agreement between it and Choi. Appellant chael Group’s no-evidence motion for sum- cites no authority showing the Agreement mary judgment. Likewise, we do not ad- was inadmissible or that it had to be dress appellant’s fourth issue addressing signed for its terms to be admissible in appellant’s conspiracy cause of action as it evidence in a dispute with a third party relates to The Michael Group. such as appellant. Coleman testified in his affidavit that the terms in the Agreement NO–EVIDENCE SUMMARY constituted the terms between it and Choi, JUDGMENT and appellant does not explain why Cole- [10] In the second issue, appellant as- man’s testimony, together with the Agree- serts the trial court erred in granting ment, did not establish the terms of the Choi’s no-evidence motion for summary contract between Choi and The Michael judgment. We review a no-evidence sum- Group. mary judgment under the same legal suffi- [9] Appellant also points to the state- ciency standard used to review a directed ment in the Agreement that ‘‘Contractor verdict. See TEX.R. CIV. P. 166a(i); Flood, understands that Broker is legally ac- 294 S.W.3d at 762. Thus, we must deter- countable for the activities of Contractor.’’ mine whether the nonmovant produced However, whether The Michael Group is more than a scintilla of probative evidence vicariously liable to third parties under the to raise a fact issue on the material ques- S & I MANAGEMENT, INC. v. SUNGJU CHOI Tex. 855 Cite as 331 S.W.3d 849 (Tex.App.—Dallas 2011)

tions presented. See id. When analyzing na Mktg., 760 S.W.2d 719, 723 (Tex.App.- a no-evidence summary judgment, we con- Dallas 1988, no writ); see also Stewart v. sider all the evidence in the light most Sanmina Tex. L.P., 156 S.W.3d 198, 206– favorable to the nonmovant, indulging ev- 07 (Tex.App.-Dallas 2005, no pet.). In this ery reasonable inference and resolving any case, the trial court did not enter a written doubts against the movant. Sudan v. Su- ruling on Choi’s objections to Lee’s affida- dan, 199 S.W.3d 291, 292 (Tex.2006) (quot- vit. We conclude the record does not ing City of Keller v. Wilson, 168 S.W.3d show the trial court ruled on Choi’s objec- 802, 823 (Tex.2005)). A no-evidence sum- tions. mary judgment is improperly granted if [13–15] On appeal, Choi argues that the respondent brings forth more than a much of Lee’s affidavit should not be con- scintilla of probative evidence to raise a sidered as evidence because it contains genuine issue of material fact. King hearsay; it is self-serving statements of an Ranch, Inc. v. Chapman, 118 S.W.3d 742, interested witness that are not clear, posi- 751 (Tex.2003). ‘‘More than a scintilla of tive, direct, credible, free from contra- evidence exists when the evidence rises to diction, and readily controvertible; and it a level that would enable reasonable, fair- is conclusory. Defects in the form of an minded persons to differ in their conclu- affidavit must be objected to, the opposing sions.’’ Id. (quoting Merrell Dow party must have the opportunity to amend, Pharms., Inc. v. Havner, 953 S.W.2d 706, and the trial court must rule on the objec- 711 (Tex.1997)). ‘‘Less than a scintilla of tion; otherwise, the objection is waived evidence exists when the evidence is ‘so and the objected-to material is in evidence. weak as to do no more than create a mere See Hogan v. J. Higgins Trucking, Inc., surmise or suspicion’ of a fact.’’ Id. (quot- 197 S.W.3d 879, 883 (Tex.App.-Dallas 2006, ing Kindred v. Con/Chem, Inc., 650 S.W.2d no pet.); Stewart, 156 S.W.3d at 207. Ob- 61, 63 (Tex.1983)). jections that a document contains hearsay are defects of form. Stewart, 156 S.W.3d Summary Judgment Evidence at 207. Likewise, objections that state- Appellant attached the affidavit of its ments of an interested witness are not president, Lee, to its response to appel- clear, positive, direct, credible, and free lees’ motions for summary judgment. from contradiction are defects of form. Choi made numerous objections to this Choctaw Props., L.L.C. v. Aledo I.S.D., 127 affidavit, and he submitted a draft order S.W.3d 235, 241 (Tex.App.-Waco 2003, no for the court’s rulings on the objections. pet.). By failing to obtain written rulings The trial court did not make a written on these objections, Choi cannot raise ruling on the objections. However, in a these defects on appeal. See DMC Valley subsequent hearing, Choi requested the Ranch, L.L.C. v. HPSC, Inc., 315 S.W.3d court to rule on his objections to Lee’s 898, 905 (Tex.App.-Dallas 2010, no pet.); affidavit. The court stated, ‘‘Because your Stewart, 156 S.W.3d at 207. motions were granted, you can assume [16, 17] Objections that statements in that the objections have been granted.’’ an affidavit are conclusory assert defects [11, 12] For a ruling on an objection to of substance, which may be raised for the summary judgment evidence to be effec- first time on appeal. Brown v. Brown, 145 tive, the ruling must be reduced to writing, S.W.3d 745, 751 (Tex.App.-Dallas 2004, signed by the trial court, and entered of pet. denied). ‘‘A conclusory statement is record. Utils. Pipeline Co. v. Am. Petrofi- one that does not provide the underlying 856 Tex. 331 SOUTH WESTERN REPORTER, 3d SERIES

facts to support the conclusion.’’ Id. at [19] Lee testified in his affidavit that 751 (quoting Choctaw Props., 127 S.W.3d his broker, Choi, represented to him that at 242). A conclusory statement may be the vacant gas station would remain va- either legal or factual in nature. Choctaw cant, that all brokers knew Quiktrip was Props., 127 S.W.3d at 242. moving into that space, that he relied on Choi’s representations, that appellant Causation would not have bought ‘‘the business’’ if he had known Quiktrip was moving into the [18] Choi’s no-evidence motion for vacant gas station, and that ‘‘as a result of summary judgment asserted appellant had purchasing the business and with Quiktrip no evidence to support the causation ele- having come, the business has lost revenue ment of its causes of action, that is, that and with it value.’’ This evidence shows Choi’s conduct was a proximate cause or Choi’s representations about the vacant producing cause of appellant’s damages.4 gas station were a substantial factor in For negligent misrepresentation, fraud, appellant’s purchasing the businesses and and breach of fiduciary duty, the plaintiff that he would not have purchased the busi- must prove proximate causation. Finger nesses if Choi had told him Quiktrip would v. Ray, 326 S.W.3d 285, 291 (Tex.App.- be moving into the vacant gas station. As Houston [1st Dist.] 2010, no pet.) (breach Lee’s affidavit demonstrates, if appellant of fiduciary duty); Employees Retirement had not purchased the gas station then it Sys. of Tex. v. Putnam, LLC, 294 S.W.3d would not have suffered the alleged loss of 309, 315 (Tex.App.-Austin 2009, no pet.) revenue and value from Quiktrip’s pres- (fraud; negligent misrepresentation). For ence. We conclude Lee’s testimony consti- violations of the DTPA, the plaintiff must tutes some evidence of the causation ele- prove producing causation. TEX. BUS. & ment of appellant’s causes of action. COM.CODE ANN. § 17.50(a) (West Supp. 2010); Prudential Ins. Co. of Am. v. Jef- We conclude the trial court erred in ferson Assocs., Ltd., 896 S.W.2d 156, 161 granting Choi’s no-evidence motion for (Tex.1995). The components of proximate summary judgment, and we sustain appel- cause are cause in fact and foreseeability. lant’s second issue. W. Invs., Inc. v. Urena, 162 S.W.3d 547, 551 (Tex.2005). The test for both cause in Conspiracy fact and producing cause is whether the In the fourth issue, appellant contends defendant’s conduct was a substantial fac- the trial court erred in granting the no- tor in bringing about the injury that would evidence motion for summary judgment not otherwise have occurred. Ford Motor asserting appellant had no evidence to sup- Co. v. Ledesma, 242 S.W.3d 32, 46 (Tex. port its conspiracy allegations. Appellant 2007) (producing cause); W. Invs., Inc., alleged that Choi and Iqbal agreed to com- 162 S.W.3d at 551 (cause in fact). Choi mit the acts constituting the torts appel- asserted appellant had no evidence that his lant alleged. Choi asserted in his motion conduct was a substantial factor in bring- for summary judgment that if appellant ing about appellant’s injury that otherwise had no evidence to support its tort claims, would not have occurred. then it had no evidence to support the

4. Choi did not move for summary judgment do not consider whether Lee’s affidavit con- on the ground that appellant had no evidence tained any evidence of any element other than of any of the other elements of the causes of causation. action other than causation. Accordingly, we MERRITT v. DAVIS Tex. 857 Cite as 331 S.W.3d 857 (Tex.App.—Dallas 2011)

conspiracy claim. Because we have con- OPINION cluded appellant presented some evidence on the only element of appellant’s causes Opinion By Chief Justice WRIGHT. of action that Choi challenged, we conclude Before the Court is appellant Larry the trial court erred in granting Choi’s Smith’s motion to dismiss the appeal. Ap- motion for summary judgment on appel- pellant filed an interlocutory appeal from lant’s conspiracy cause of action. We sus- the trial court’s order denying his motion tain appellant’s fourth issue as to Choi. to dismiss for failure of the appellees to attach a certificate of merit to their peti- CONCLUSION tion against a professional engineer. See We affirm the trial court’s summary TEX. CIV. PRAC. & REM.CODE ANN. judgment in favor of The Michael Group, § 150.002(a) & (f) (West Supp. 2010). In we reverse the trial court’s summary judg- his motion, appellant explains that the trial ment in favor of Choi, and we remand the court reconsidered its ruling and on Janu- cause to the trial court for further pro- ary 11, 2011, signed an order dismissing ceedings. the appellees’ claims against him. Accord- ingly, appellant asks that this appeal be dismissed.

, We grant appellant’s motion and dismiss the appeal. See TEX.R.APP. P. 42.1(a)(1).

Larry SMITH, Appellant, , v. Stephen JONES and Beth Jones, Appellees. 2

No. 05–11–00006–CV. Lowell MERRITT, Appellant,

Court of Appeals of Texas, v. Dallas. Robert DAVIS, Appellee. Jan. 25, 2011. No. 05–09–01231–CV. On Appeal from the 417th Judicial Dis- Court of Appeals of Texas, trict Court, Collin County, Texas, Trial Dallas. Court Cause No. 417–00618–2009, Cynthia McCrann, Judge. Jan. 27, 2011.

Anthony A. Petrocchi, Weil & Petrocchi, Rehearing Overruled Feb. 23, 2011. P.C., Dallas, TX, for Appellant. Background: Plaintiff brought action William Todd Albin, Albin Harrison against opposing party’s attorney in under- Roach, Plano, TX, for Appellee. lying lawsuit alleging that attorney filed fraudulent lien arising from sanctions im- Before Chief Justice WRIGHT and posed in underlying suit. The 380th Judi- Justices O’NEILL and LANG–MIERS. cial District Court, Collin County, Suzanne STATE FARM MUT. AUTO. INS. CO. v. GRAYSON Tex. 769 Cite as 983 S.W.2d 769 (Tex.App.—San Antonio 1998) 3. Insurance O2782, 2787 STATE FARM MUTUAL AUTOMOBILE To establish entitlement to underinsured INSURANCE COMPANY, Appellant, motorist benefits, insured was required to v. establish other driver’s negligence, amount of her damages, and that other driver was, in Patricia GRAYSON, Appellee. fact, underinsured. No. 04–98–00137–CV.

Court of Appeals of Texas, Alex M. Miller, Robert A. Allen, Allen, San Antonio. Stein, Powers, Durbin & Hunnicutt, P.C., San Antonio, for Appellant. Oct. 28, 1998. Paul D. Taylor, Bart L. Brzozowski, Law Rehearing Overruled Dec. 8, 1998. Offices of Bart L. Brzozowski, San Antonio, for Appellee. Insured filed action against insurer for RICKHOFF, STONE, and GREEN, failure to pay underinsured motorist benefits. Justices. The 288th Judicial District Court, Bexar County, Carlos C. Cadena, Visiting Judge OPINION Presiding, entered take-nothing judgment against insured but taxed court costs against RICKHOFF, Justice. insurer. Insurer appealed. The Court of Ap- State Farm Mutual Automobile Insurance peals, Rickhoff, J., held that insured’s recov- Company appeals from a take-nothing judg- ery of settlement from other driver’s insurer ment rendered against Patricia Grayson. In for amount greater than her damages pre- its sole issue, State Farm argues that the cluded her success on merits of her claim trial court erred by assessing costs against it against her insurer for underinsured motor- because it prevailed on Grayson’s cause of ist benefits and thus her entitlement to re- action for underinsured motorist benefits. covery of court costs as successful party. We agree with State Farm’s contention. We Affirmed as modified. therefore modify the judgment to assess costs against Grayson.

1. Costs O32(2) FACTUAL AND PROCEDURAL BACKGROUND ‘‘Successful party’’ entitled by rule to Grayson sued State Farm, claiming she recover costs of court is one who obtains a sustained injuries in a car accident caused by judgment vindicating a civil claim of right. the negligence of an underinsured motorist, Vernon’s Ann.Texas Rules Civ.Proc., Rule Jerome Richard Perales. She alleged that 131. on the date of the accident, she had underin- See publication Words and Phrases sured motorist coverage under a policy with for other judicial constructions and def- initions. State Farm, but that State Farm had refused to compensate her pursuant to the policy. 2. Insurance O3585 Grayson and State Farm stipulated that Insured was not successful on merits of State Farm was entitled to a credit of $20,- her claim against insurer for breach of con- 000, the amount that Grayson had already tractual duty to provide underinsured motor- obtained in settlement from Perales’s insur- ist benefits, and thus was not entitled to er. Three special issues were submitted to recovery of her court costs, even though she the jury: 1) whether the negligence of Gray- established other driver’s negligence was sole son or Perales caused the accident; 2) what cause of accident, where insured did not dis- percentage of negligence was attributable to pute that she had already received settle- Grayson and Perales; and 3) what sum of ment from other driver’s insurer for amount money would compensate Grayson for her greater than her damages. Vernon’s injuries. The jury determined that the acci- Ann.Texas Rules Civ.Proc., Rule 131. dent was 100% attributable to Perales’s neg- 770 Tex. 983 SOUTH WESTERN REPORTER, 2d SERIES

ligence and that Grayson’s damages were was required to establish Perales’s negli- $6,550. Because the parties had stipulated gence and the amount of her damages. See to the $20,000 credit, the court rendered a Essman v. General Accident Ins. Co., 961 take-nothing judgment against Grayson. S.W.2d 572, 573 (Tex.App.—San Antonio However, the court taxed costs against State 1997, no pet.). Second, she was required to Farm. establish that Perales was, in fact, underin- sured. Cf. State Farm Mut. Auto. Ins. Co. v. DISCUSSION Matlock, 462 S.W.2d 277, 278–79 (Tex.1970) [1] Rule 131 of the Texas Rules of Civil (plaintiff in uninsured motorist case has bur- Procedure provides that a ‘‘successful party’’ den of proving tortfeasor was uninsured). shall recover costs of court. A successful Grayson satisfied the first requirement by party under this rule is one who obtains a convincing the jury that Perales’s negligence judgment vindicating a civil claim of right. caused her damages in the amount of $6,550. See Scholl v. Home Owners Warranty Corp., Grayson does not dispute, however, that she 810 S.W.2d 464, 468 (Tex.App.—San Antonio received a $20,000 settlement from Perales’s 1991, no writ). State Farm asserts that insurer. Since her damages were less than Grayson’s claim for underinsurance benefits this amount, Perales was not underinsured. was not vindicated; instead, a take-nothing See Stracener v. United Servs. Auto. Ass’n, judgment was rendered on that claim. It 777 S.W.2d 378, 380 (Tex.1989) (‘‘[A] negli- therefore asserts that the trial court should gent party is underinsured whenever the have taxed costs against Grayson. See Den- available proceeds of his liability insurance are insufficient to compensate for the injured ney v. Texas Employers Ins. Ass’n, 780 party’s actual damages.’’). S.W.2d 412, 413 (Tex.App.—Texarkana 1989, no writ) (‘‘The party in whose favor a take- In Perez, the plaintiff sued a premises nothing judgment is entered is the prevailing owner for negligence. A take-nothing judg- party.’’). ment was rendered against the plaintiff be- cause a second defendant had settled with [2] Characterizing this case as a personal the plaintiff in an amount greater than the injury action, Grayson counters that she was total damages assessed against the premises successful on the merits because the jury owner. Nevertheless, the trial court as- found that Perales’s negligence was the sole sessed costs against the premises owner. cause of the accident. She relies on Perez v. See Perez, 694 S.W.2d at 143. The appellate Baker Packers, 694 S.W.2d 138, 143 (Tex. court upheld the assessment of costs. See App.—Houston [14th Dist.] 1985, writ ref’d id. It is apparent that the plaintiff in Perez n.r.e.), in which the court held that ‘‘the proved his cause of action against the defen- determination of a successful party under dant. Thus, he succeeded ‘‘on the merits,’’ rule 131 is to be based upon success upon the even though he was not entitled to recover merits, not upon damages.’’ We disagree damages from the defendant after the appli- with Grayson’s characterization of this case cation of the offset. See id. As explained and with her assertion that Perez is on point. above, however, Grayson was not successful Although Grayson’s petition alleged that on the merits because Perales was not under- her injuries were caused by Perales’s negli- insured. gence, and State Farm denied this allegation Since State Farm, rather than Grayson, and claimed that Grayson was contributorily was the successful party, the trial court erred negligent, Grayson’s asserted basis for recov- by taxing costs against State Farm. We ering from State Farm was its contractual therefore modify the judgment to provide duty to provide her underinsured motorist that costs are taxed against Grayson. As benefits. She alleged that State Farm re- modified, the judgment of the trial court is fused to pay these benefits ‘‘as it is contrac- affirmed. tually required to do.’’ [3] To establish her entitlement to the underinsured motorist benefits, Grayson was , required to establish two things. First, she STATE FARM MUT. AUTO. INS. CO. v. NORRIS Tex. 819 Cite as 216 S.W.3d 819 (Tex. 2006)

Because the contract did not require take-nothing judgment. Insured appealed. Trinity to pay UIM benefits before Premi- The Waco Court of Appeals, Vance, J., 217 er’s negligence and underinsured status S.W.3d 1, 2004 WL 811722, reversed and were determined, Brainard did not present remanded. Review was granted. a contract claim before the trial court ren- Holdings: The Supreme Court, Jefferson, dered its judgment, and the court of ap- C.J., held that: peals correctly concluded that Brainard is (1) prejudgment interest could not be cal- not entitled to recover attorney’s fees un- culated without payment dates for lia- der Chapter 38. bility coverage proceeds and personal injury protection (PIP) benefits; V (2) as a matter of first impression, insured Conclusion released claim for prejudgment inter- est on difference between liability cov- We reverse the portion of the court of erage limits and tort settlement; appeals’ judgment that denied Brainard prejudgment interest, affirm the portion (3) UIM carrier’s credits reduced princi- that denied attorney’s fees, and remand pal, if payment was made before pre- this case to the trial court to calculate judgment interest began to accrue, and prejudgment interest consistent with this reduced interest, if payment was made opinion. TEX.R.APP. P. 60.2(a), (d). after interest began to accrue; and (4) insured was not entitled to attorney Justice O’NEILL and Justice fees after take-nothing judgment in fa- JOHNSON did not participate in the vor of carrier, disapproving Allstate decision. Insurance Company v. Lincoln, 976 S.W.2d 873. Reversed and remanded. , 1. Interest O56 The declining principal formula is used to calculate prejudgment interest on STATE FARM MUTUAL AUTOMO- underinsured motorist (UIM) benefits; BILE INSURANCE COMPA- thus, the trial court considers the date on NY, Petitioner, which the insured received each payment and cannot calculate prejudgment interest v. until those dates are established. Jimmie R. NORRIS, Respondent. 2. Insurance O2793(1), 2803 No. 04–0514. Interest O26 Supreme Court of Texas. When automobile accident victim set- tled tort claim for less than liability cover- Argued April 14, 2005. age limits and released tortfeasor, he also Decided Dec. 22, 2006. released any prejudgment interest in the Background: Insured brought action to difference between the policy limits and recover underinsured motorist (UIM) ben- the settlement amount; thus, the victim efits. The 87th District Court, Limestone could recover from his underinsured mo- County, Sam B. Bournias, J., entered a torist (UIM) carrier prejudgment interest 820 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

only on the settlement amount plus the tablishing the liability and underinsured amount of judgment in excess of the liabili- status of the other motorist. V.T.C.A., ty coverage limits. Civil Practice & Remedies Code § 38.002(2, 3). 3. Interest O39(2.35) Prejudgment interest began to accrue on claim for underinsured motorist (UIM) benefits 180 days after UIM carrier re- ceived written notice of accident. Trenton Colby Hood, Naman Howell V.T.C.A., Finance Code § 304.104. Smith & Lee, and Michael L. Scanes, Scanes, Routh & James, Waco, for Peti- 4. Insurance O2806 tioner. Automobile accident victim’s settle- ment with tortfeasor’s liability insurer for Amy C. Thomas, The Law Offices of less than policy limits entitled underin- Amy Thomas, Mexia, for Respondent. sured motorist (UIM) carrier to credit equal to liability coverage limits. Chief Justice JEFFERSON delivered the opinion of the Court. 5. Insurance O2806 Underinsured motorist (UIM) carri- An underinsured motorist (UIM) policy er’s payment of personal injury protection allows an insured to recover the difference (PIP) benefits to insured entitled carrier between the negligent driver’s insurance to credit in than amount. policy limit and the full amount of dam- ages, including prejudgment interest, de- 6. Payment O42 termined at trial. The trial court held that Underinsured motorist (UIM) carri- the insured was not entitled to prejudg- er’s credits for payments before prejudg- ment interest under his UIM policy be- ment interest begins to accrue will reduce cause the insurer had already paid benefits the principal owed by carrier; thereafter, that exceeded the actual damages found by each credit will apply first to the accrued the jury. Additionally, the trial court re- prejudgment interest and second to the fused to award attorney’s fees to the in- remaining principal. sured. The court of appeals reversed on both issues. In accordance with our Brai- 7. Insurance O3585 nard opinion, we hold that the insured is Insured was not entitled to attorney entitled to prejudgment interest but not fees after take-nothing judgment in favor attorney’s fees. of underinsured motorist (UIM) carrier; no just amount was owed by carrier; disap- proving Allstate Insurance Company v. I Lincoln, 976 S.W.2d 873. V.T.C.A., Civil Background Practice & Remedies Code § 38.002(2, 3). Jimmie R. Norris was injured during a 8. Insurance O3585 car accident with Allen Johnston on De- An insured may recover attorney fees cember 8, 1997. Norris sued Johnston on for an underinsured motorist (UIM) carri- March 29, 1999, and subsequently settled er’s failure to pay just amount owed within with Johnston for $40,000 ($10,000 less thirty days only if the carrier does not than Johnston’s policy limit). The record tender the UIM benefits within thirty days does not reflect the date of the settlement. after the trial court signs a judgment es- On the same day that he dismissed his STATE FARM MUT. AUTO. INS. CO. v. NORRIS Tex. 821 Cite as 216 S.W.3d 819 (Tex. 2006)

claims against Johnston, Norris added ages award before calculating prejudgment State Farm as a defendant, seeking to interest, leaving no principal on which pre- recover benefits under his UIM policy. judgment interest can accrue. Although State Farm paid Norris $5,000 in [1] We apply the ‘‘declining principal’’ personal injury protection (PIP) benefits, formula to calculate prejudgment interest it never offered to settle Norris’s UIM in a UIM case. Brainard v. Trinity Uni- claim. versal Insurance Co., 216 S.W.3d 809, 816 A jury found that: (1) Johnston’s negli- (Tex.2006). Under this approach, the trial gence caused the accident; (2) Norris suf- court considers the date on which the in- fered only past damages in the amount of sured received each payment. Id. at *3. $51,200; and (3) Norris’s attorney’s fees As Chief Justice Gray correctly observed, were $11,500 for trial, $5,000 for appeal to however, the record in this case does not the court of appeals, and $7,500 for appeal reflect the dates of either the PIP or the to this Court. The trial court applied a settlement payments. 2004 WL 811722, at $55,000 credit (the sum of Johnston’s poli- *3 (Gray, C.J., dissenting). Because pre- cy limit and the PIP benefits already paid judgment interest cannot be calculated un- to Norris) and signed a take-nothing judg- til those dates are established,1 we remand ment in State Farm’s favor, finding that this case to the trial court for that pur- Norris was not entitled to attorney’s fees pose. TEX.R.APP. P. 60.2(f), 60.3. or prejudgment interest. Reversing the trial court’s judgment, the court of appeals [2] This case presents an additional is- held that Norris was entitled to both pre- sue that Brainard does not answer. Nor- judgment interest and attorney’s fees. ris settled with Johnston for $40,000, 217 S.W.3d 2, 2004 WL 811722, at *1. We which is $10,000 less than Johnston’s poli- hold, contrary to the court of appeals, that: cy limit of $50,000. Norris argues he is (1) Norris is entitled to prejudgment inter- entitled to prejudgment interest on the est calculated by the declining principal entire $50,000 amount because, based on formula; and (2) Norris is not entitled to the jury’s verdict, he would have been attorney’s fees under Chapter 38 of the ‘‘legally entitled to recover’’ more than Civil Practice and Remedies Code. that amount from the tortfeasor. We dis- agree. UIM policies are intended to com- II pensate injured parties ‘‘up to the limit specified in the policy, reduced by the Prejudgment Interest amount recovered or recoverable from the Norris argues that prejudgment interest insurer of the underinsured motor vehi- is covered under his UIM policy and cle.’’ TEX. INS.CODE art. 5.06–1(5) (empha- should be calculated on the full amount of sis added). When Norris settled and re- damages before deducting State Farm’s leased his claims against Johnston, he also PIP and settlement credits. State Farm released any interest in the difference be- disputes that it owes prejudgment interest tween Johnston’s policy limit and the set- at all. According to State Farm, the tlement amount. The purpose of prejudg- $55,000 in PIP and settlement credits ment interest is to compensate a claimant should be deducted from the $51,200 dam- for the lost use of money due as damages

1. In Battaglia v. Alexander, we recognized more and no less, the timing of settlement that ‘‘[i]n order for interest to actually com- payments must be taken into account.’’ 177 pensate for the lost time value of money, no S.W.3d 893, 907 (Tex.2005). 822 Tex. 216 SOUTH WESTERN REPORTER, 3d SERIES

during the lapse of time between the ac- prejudgment interest remaining after the crual of the claim and the date of the credits are applied. judgment. Battaglia, 177 S.W.3d at 907. Because Norris has not lost use of that IV $10,000, having released any entitlement to it, he can receive prejudgment interest Attorney’s Fees only on the amount of the settlement ($40,- 000) plus the amount that exceeds John- [7] Norris argues that he is entitled to ston’s policy limits ($1,200). attorney’s fees under Chapter 38 of the Civil Practice and Remedies Code. The III trial court denied Norris those fees, not- Calculating Prejudgment Interest withstanding the jury’s verdict. The court [3] Prejudgment interest begins to ac- of appeals reversed and awarded attor- crue on the earlier of: (1) 180 days after ney’s fees, citing its opinion in Allstate the date the defendant receives written Insurance Company v. Lincoln, 976 notice of a claim; or (2) the date suit is S.W.2d 873 (Tex.App.-Waco 1998, no pet.). filed. TEX. FIN.CODE § 304.104; Johnson We disapprove of Allstate Insurance Com- & Higgins of Tex., Inc. v. Kenneco Ener- pany v. Lincoln to the extent it is inconsis- gy, Inc., 962 S.W.2d 507, 529 (Tex.1998). tent with our decision in Brainard, and we Norris asserts that prejudgment interest hold that State Farm is entitled to a take- began to accrue 180 days after the acci- nothing judgment with respect to attor- dent. The record does not indicate, how- ney’s fees. ever, that State Farm had written notice of the accident on the day it occurred, [8] An insured may recover attorney’s December 8, 1997. January 21, 1998, is fees under Chapter 38 only if the insurer the earliest date in the record showing does not tender the UIM benefits within that State Farm had written notice of the thirty days after the trial court signs a accident.2 Therefore, prejudgment inter- judgment establishing the liability and un- est began to accrue 180 days after January derinsured status of the other motorist. 21, 1998. Brainard, 216 S.W.3d at 811. Chapter 38 [4–6] State Farm is entitled to: (1) a requires Norris to ‘‘present a claim’’ to $50,000 credit, representing Johnston’s State Farm, which must pay the ‘‘just policy limit, as of the date Johnston remit- amount owed’’ within thirty days of pres- ted the settlement amount; and (2) a entation. TEX. CIV. PRAC. & REM.CODE $5,000 credit, representing the PIP bene- § 38.002(2),(3). Under a UIM policy, how- fits State Farm paid, as of the date it was ever, there can be no ‘‘just amount owed’’ tendered. Credits applied before prejudg- until the trial court establishes liability and ment interest began to accrue will reduce damages. Brainard, 216 S.W.3d at 818; the principal. Thereafter, each credit will Henson v. S. Farm Bureau Cas. Ins. Co., apply first to the accrued prejudgment 17 S.W.3d 652, 654 (Tex.2000). Thus, Nor- interest and second to the remaining prin- ris could not seek attorney’s fees until, at cipal. Brainard, 216 S.W.3d at 816. the earliest, thirty days after the trial Thus, State Farm is liable, up to the UIM court rendered judgment—assuming that policy limits, for the principal plus accrued State Farm refused to pay the amount due

2. This is the date that an attending physician signed a report sent by State Farm. STATE FARM MUT. AUTO. INS. CO. v. NICKERSON Tex. 823 Cite as 216 S.W.3d 823 (Tex. 2006)

under the UIM contract.3 Therefore, the mar County, Scott McDowell, J., ordered trial court did not err in refusing to award insurer to pay insured’s attorney fees. In- Norris attorney’s fees, and the court of surer appealed. The Texarkana Court of appeals erred in reversing that judgment. Appeals, Ross, J., 130 S.W.3d 487, af- firmed. Review was granted. V Holding: The Supreme Court, Jefferson, C.J., held that carrier was not liable for Conclusion insured’s attorney fees. We hold that Norris is entitled to pre- Affirmed. judgment interest calculated under the de- clining principal formula. We reverse that part of the court of appeals’ judgment and Insurance O3585 remand this cause to the trial court for further proceedings consistent with this Underinsured motorist (UIM) carrier opinion. TEX.R.APP. P. 60.2(f), 60.3. With was not liable for insured’s attorney fees respect to the attorney’s fees issue, we where it paid policy limits within thirty reverse the court of appeals’ judgment and days of judgment against the carrier; no render judgment for State Farm. TEX. just amount was owed, and the insured R.APP. P. 60.2(c). had no claim to present, before the judg- ment. V.T.C.A., Civil Practice & Reme- Justice O’NEILL did not participate in dies Code § 38.002(3). the decision.

, Michelle E. Robberson, Steven Dillon Roberts, Mark Anthony Teague, R. Brent Cooper, Cooper & Scully, P.C., Dallas, for petitioner.

STATE FARM MUTUAL AUTOMO- Jesse L. Nickerson III, Nickerson Law BILE INSURANCE COMPA- Office, James R. Rodgers, The Moore Law NY, Petitioner, Firm, Paris, for respondent.

v. J. Wade Birdwell, Wallach, Andrews & Stouffer, P.C., Fort Worth, for Amicus Teresa NICKERSON, Respondent. Curiae Judith Moss, D.O. No. 04–0427. Chief Justice JEFFERSON delivered Supreme Court of Texas. the opinion of the Court. Argued April 14, 2005. The issue in this case is whether an Decided Dec. 22, 2006. insured can recover attorney’s fees under Background: Insured brought action to Chapter 38 of the Civil Practice and Reme- recover underinsured motorist (UIM) ben- dies Code from her underinsured motorist efits. The 62nd Judicial District Court, La- (UIM) insurer.

3. In this case, the trial court entered a take- Farm was not presented with a claim for a nothing judgment against Norris. Thus, State just amount owed on the day of judgment. 678 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

instruction under an abuse of discretion Venkateswarlu THOTA, M.D. and standard of review. North Texas Cardiology 2. Trial O182, 215 Center, Petitioners, The trial court has considerable dis- v. cretion to determine proper jury instruc- Margaret YOUNG, individually, and as tions; if an instruction might aid the jury Representative of the Estate of Wil- in answering the issues presented to them, liam R. Young, Respondent. or if there is any support in the evidence for an instruction, the instruction is prop- No. 09–0079. er. Supreme Court of Texas. 3. Trial O232(1), 238, 250 Argued Nov. 10, 2011. A jury instruction is proper if it: (1) assists the jury, (2) accurately states the Decided May 11, 2012. law, and (3) finds support in the pleadings Background: On behalf of herself and her and evidence. deceased husband’s estate, widow brought medical malpractice action against physi- 4. Appeal and Error O1064.1(1) cian and cardiology center after husband Jury charge error is generally consid- died following complications from internal ered harmful as required for reversal of a bleeding caused by cardiac catheterization. judgment if it relates to a contested, criti- Following jury trial, the 30th District cal issue. Rules App.Proc., Rules 44.1(a), Court, Wichita County, Robert P. Brother- 61.1. ton, J., entered judgment for defendants. 5. Appeal and Error O230, 231(9), 242(1) Widow appealed. The Court of Appeals, The procedural requirements for de- 271 S.W.3d 822, Terrie Livingston, J., re- termining whether a party has preserved versed and remanded. Physician sought error in the jury charge are explained by review which was granted. one basic test: whether the party made the Holdings: The Supreme Court, Green, J., trial court aware of the complaint, timely held that: and plainly, and obtained a ruling. Rules (1) presumed harm analysis did not apply App.Proc., Rule 33.1; Vernon’s Ann.Texas to a broad-form submission in a single- Rules Civ.Proc., Rule 274. theory-of-liability case; disapproving of Block v. Mora, 314 S.W.3d 440; 6. Appeal and Error O230, 231(9) Under Supreme Court’s preservation (2) any error associated with the inclusion rules, a timely objection plainly informing of a jury question regarding patient’s the court that a specific element should not negligence was harmless; and be included in a broad-form question be- (3) any error in the trial court’s submis- cause there is no evidence to support its sion of the new and independent cause submission preserves the error for appel- instruction was harmless. late review. Rules App.Proc., Rule 33.1; Reversed and remanded. Vernon’s Ann.Texas Rules Civ.Proc., Rule 274. 1. Appeal and Error O969 7. Appeal and Error O230, 231(9) Supreme Court reviews a trial court’s Specific and timely no-evidence objec- decision to submit or refuse a particular tion to jury charge question on patient’s THOTA v. YOUNG Tex. 679 Cite as 366 S.W.3d 678 (Tex. 2012)

contributory negligence and specific objec- 9. Appeal and Error O1031(6) tion to the disputed instruction on new and While appellate courts may presume independent cause was sufficient to place harm when meaningful appellate review is the trial court on notice that patient’s wid- precluded because the submitted charge ow believed the evidence did not support mixes valid and invalid theories of liability an inclusion of patient’s contributory negli- or commingles improper damage elements, gence or instruction on new and indepen- the courts do not presume harm because of dent cause, and, thus, issue was preserved improper inferential rebuttal instructions for appeal, although widow did not cite or on defensive theories. specifically reference Casteel, a case which 10. Appeal and Error O1064.1(8) held that, when a single broad-form liabili- ty question erroneously commingled valid Any error in negligence charge includ- and invalid liability theories and the appel- ing both an improper defensive theory of lant’s objection was timely and specific, the contributory negligence and an improper inferential rebuttal instruction may be error was harmful when it could not be harmless when jury questions are submit- determined whether the improperly sub- ted in a manner that allows the appellate mitted theories formed the sole basis for court to determine that the jury’s verdict the jury’s finding. Rules App.Proc., Rule was actually based on a valid liability theo- 33.1; Vernon’s Ann.Texas Rules Civ.Proc., ry. Vernon’s Ann.Texas Rules Civ.Proc., Rule 274. Rules 277, 278. 8. Appeal and Error O1031(6) 11. Trial O252(1), 350.1 Presumed harm analysis, for when Regardless of whether a granulated or jury question incorporated multiple theo- broad-form charge is submitted, the trial ries of liability, of which at least one was court’s duty is to submit only those ques- invalid, or when it commingled damage tions, instructions, and definitions raised elements that were unsupported by legally by the pleadings and the evidence. Ver- sufficient evidence, did not apply to a non’s Ann.Texas Rules Civ.Proc., Rule 278. broad-form submission in a single-theory- 12. Appeal and Error O969 of-liability case in action by patient’s wid- When a trial court abuses its discre- ow against physician and cardiology center tion by including erroneous charge ques- for medical malpractice, even if negligence tions or instructions in a single-theory-of- charge included both an improper defen- liability case, Supreme Court’s traditional sive theory of contributory negligence and harmless error analysis applies and the an improper inferential rebuttal instruc- entire record should be reviewed to deter- tion, where charge provided two separate mine whether the charge errors probably blanks for the jury to answer the single- caused the rendition of an improper judg- theory-of-liability question, the only theory ment. Rules App.Proc., Rule 61.1(a). of liability asserted against physician was negligence, and the jury’s findings on that 13. Appeal and Error O1062.1 theory were clear that physician was not When jury charge questions are sub- negligent; disapproving of Block v. Mora, mitted in a manner that allows the appel- 314 S.W.3d 440. Rules App.Proc., Rule late court to determine whether the ver- 33.1; Vernon’s Ann.Texas Rules Civ.Proc., dict was actually based on a valid theory of Rule 274. liability, the error may be harmless. 680 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

14. Appeal and Error O1062.1 Diana L. Faust, R. Brent Cooper, Coo- Any error associated with the inclu- per & Scully P.C., Dallas, J. Wade Bird- sion of a jury question regarding patient’s well, D. Michael Wallach, Jennifer M. An- negligence was harmless in action by pa- drews, Wallach & Andrews P.C., Fort tient’s widow against physician and cardi- Worth, Marc Maraman Tittlebaum, Rich- ology center for medical malpractice, ard Clark Harrist, Cooper & Scully P.C., where physician could only have been neg- Matthew Christopher Kawalek, Sodal Se- ligent in causing the tear in patient’s ar- curity Administration, Michelle E. Robber- tery, but the jury failed to find that he was son, Cooper & Scully, P.C., Dallas, for negligent, and clarifying instructions made Venkateswarlu Thota, M.D. it clear that jury could answer question Doug Perrin, Jerry Mark Perrin, The regarding whether physician or patient Perrin Law Firm, Dallas, for Margaret were negligent in any of the following com- Young. binations: (1) ‘‘Yes’’ to both physician and patient, (2) ‘‘No’’ to both, or (3) ‘‘Yes’’ to Justice GREEN delivered the opinion of one and ‘‘No’’ to the other, the choice the the Court. jury ultimately made. Rules App.Proc., We have held that reversible error is Rule 61.1(a). presumed when a broad-form question 15. Appeal and Error O1062.5 submitted to the jury incorporates multiple When the answer to a jury question theories of liability and one or more of cannot alter the effect of the verdict, the those theories is invalid, Crown Life Ins. reviewing court considers that question Co. v. Casteel, 22 S.W.3d 378, 388 (Tex. immaterial. Rules App.Proc., Rule 61.1(a). 2000), or when the broad-form question commingles damage elements that are un- 16. Health O823(1) supported by legally sufficient evidence, Fact that defendant-physician in med- Harris Cnty. v. Smith, 96 S.W.3d 230, ical malpractice action testified on his own 233–34 (Tex.2002). We have not, however, behalf did not negate the weight that the addressed whether that presumed harm jury could give to his testimony. analysis applies to a broad-form submis- sion in a single-theory-of-liability case 17. Appeal and Error O930(1) when the negligence charge includes both In circumstances where a reasonable an improper defensive theory of contribu- jury could resolve conflicting evidence ei- tory negligence and an improper inferen- ther way, Supreme Court presumes the tial rebuttal instruction. For the reasons jury did so in favor of the prevailing party. explained below, we hold that it does not, 18. Appeal and Error O1064.1(8) and that meaningful appellate review is Any error in the trial court’s submis- provided through a traditional harm analy- sion of the new and independent cause sis. Inasmuch as the court of appeals instruction was harmless in action by pa- ruled otherwise, we reverse its judgment tient’s widow against physician and cardi- and remand the case to that court for ology center for malpractice, where review further consideration consistent with this of the entire record provided no clear indi- opinion. cation that the new and independent cause instruction, if erroneous, probably caused I. Background the rendition of an improper verdict. William R. Young (Ronnie) died of leu- Rules App.Proc., Rule 61.1(a). kemia on March 10, 2005, at the age of THOTA v. YOUNG Tex. 681 Cite as 366 S.W.3d 678 (Tex. 2012)

fifty-seven. Prior to his death, Ronnie condition. Soon thereafter, Dr. Walker suffered from several physical ailments, performed an emergency surgery to repair including a rare blood disorder called poly- a tear in Ronnie’s right external iliac ar- cythemia vera, coronary artery disease, tery, allegedly caused by the catheteriza- hypertension, and angina. In late 2001, tion procedure. During the emergency Ronnie visited Venkateswarlu Thota, M.D., surgery, Dr. Walker discovered a large a cardiologist at the North Texas Cardiolo- hematoma from severe bleeding in Ron- gy Center (NTCC), complaining of chest nie’s peritoneal cavity. After repairing pains. After medications failed, Dr. Thota the tear in the iliac artery and draining recommended that Ronnie undergo a coro- the retroperitoneal hematoma, the emer- nary angiography—a test using dye and x- gency care providers placed Ronnie on a rays to observe how blood flows through ventilator. the heart—to evaluate Ronnie’s heart con- Ronnie remained on the ventilator for dition. Dr. Thota performed the cardiac several months and required additional catheterization procedure—insertion and procedures to treat injuries resulting from threading of a thin tube into the coronary the severe bleed. Ronnie suffered acute arteries, through which dye is released renal failure that required dialysis, had into the bloodstream—on the morning of multiple blood transfusions, underwent a March 4, 2002, at the United Regional splenectomy, and had his gallbladder re- Health Care System in Wichita Falls, Tex- moved because it had turned gangrenous as. Ronnie was released from the hospital as a result of ischemia—the lack of blood at approximately 2:30 p.m. that afternoon supply—caused from the bleed. Ronnie and given routine instructions to call if he ultimately lost his vision in one eye and experienced any problems. Ronnie’s wife, suffered numerous strokes and blood clots, Margaret, drove him home after the cath- all allegedly as a result of the catheteriza- eterization procedure. tion. Later, Ronnie was transferred from Later that evening, Ronnie experienced the Wichita Falls hospital to Baylor Uni- abdominal pain. Ultimately, Ronnie’s con- versity Medical Center in Dallas to receive dition worsened, and he fell from his re- treatment for various other ailments. Af- clining chair around 11:30 p.m. Margaret ter several months of additional treatment, called 911, and Ronnie returned by ambu- Ronnie was released from the hospital in lance to the hospital’s emergency room at August 2002. Nearly three years after the approximately 1:15 a.m. Dr. Thota’s part- catheterization procedure, Ronnie died of ner, Siriam Sudarshan, M.D., saw Ronnie leukemia, which had developed as a com- in the emergency room. An abdominal plication of his prolonged struggle with CT scan showed bleeding from the punc- polycythemia vera. ture site—where the needle and catheter were inserted during the catheterization A. The Medical–Malpractice Lawsuit procedure—at Ronnie’s right external iliac Following Ronnie’s death, Margaret artery, as well as a large hematoma. Be- brought this suit both individually and on cause of those results, Dr. Sudarshan con- behalf of Ronnie’s estate (collectively, sulted Olyn Walker, M.D., a vascular sur- Young) against Dr. Thota and NTCC (col- geon in Wichita Falls, concerning Ronnie’s lectively, Dr. Thota).1 Young alleged that

1. Young alleged that NTCC was liable for superior. Ronnie’s injuries on the basis of respondeat 682 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

Dr. Thota was negligent by: (1) failing to pain, which would have substantially allevi- obtain Ronnie’s complete medical history; ated Ronnie’s resulting health problems. (2) failing to heed Ronnie’s underlying Dr. Thota averred that the negligence, if medical conditions, which may have exac- any, resulted from the concurrent actions erbated his risk of potential complications; of both parties, which made this a contrib- (3) failing to properly locate Ronnie’s fem- utory negligence issue rather than a miti- oral artery during the catheterization pro- gation-of-damages issue. cedure and lacerating his right iliac artery At the charge conference, Young object- instead; (4) failing to discover the iliac ed to the inclusion of the definitions of artery tear before discharging Ronnie negligence, ordinary care, and proximate from the hospital; and (5) failing to diag- cause in reference to Ronnie, arguing that nose and treat the artery tear. Young contributory negligence was not supported sought damages for Ronnie’s pain and suf- by the evidence and that any delay on fering and mental anguish, medical ex- Ronnie’s part in seeking medical treatment penses, physical disfigurement, and lost was a mitigation-of-damages issue. The earnings. Additionally, Young sought trial court overruled Young’s objection and damages for Margaret’s loss of consortium included a question on Ronnie’s contributo- and loss of household services. ry negligence in the charge. Additionally, In his answer, Dr. Thota generally de- the trial court overruled Young’s objec- nied all of Young’s claims and, alternative- tions to the inclusion of instructions on ly, claimed that Ronnie’s injuries were the new and independent cause and unavoid- result of an unavoidable accident, a new able accident. Neither party advised the and independent cause, or pre-existing or trial court that the charge might contain a subsequent medical conditions. Dr. Tho- Casteel problem, which arises when a ta’s answer also contended that Ronnie’s broad-form charge mixes valid and invalid injuries were partially the result of Ron- theories of liability, making it impossible nie’s own negligence and included a coun- for the appellate courts to determine if the terclaim against Young for contribution jury answered the liability question based due to Young’s alleged failure to mitigate on an invalid theory, nor did either party his damages. request separate submissions for the negli- The case proceeded to a week-long jury gence of Dr. Thota and Young. See Cas- trial. At the charge conference, both par- teel, 22 S.W.3d at 388–89. Instead, ties raised several objections and argued Young’s objections rested on the argument over the proper questions and instructions that there was no evidence to support the that the trial court should submit to the inclusion of the disputed jury charge items jury. Young’s theory of liability rested on in the broad-form question. the claim that Dr. Thota breached the The charge included one broad-form standard of care by puncturing Ronnie’s submission as to the single theory of liabil- iliac artery instead of the femoral artery, ity—negligence—and additional questions resulting in the extensive bleeding and regarding apportionment and calculation of concomitant injuries that Ronnie suffered. damages. Question 1 addressed both par- In contrast, Dr. Thota’s theory of the case ties’ liability and stated: considered Ronnie’s injury to be the exten- sive bleed. Accordingly, Dr. Thota alleged Did the negligence, if any, of those that Ronnie was negligent in failing to named below, proximately cause the in- return to the hospital at the first sign of jury in question, if any? THOTA v. YOUNG Tex. 683 Cite as 366 S.W.3d 678 (Tex. 2012)

‘‘Negligence,’’ when used with respect same or similar circumstances or doing to the conduct of Venkat Thota, M.D., that which a person of ordinary pru- means failure to use ordinary care, that dence would not have done under the is, failing to do that which a cardiologist same or similar circumstances. of ordinary prudence would have done ‘‘Ordinary care,’’ when used with re- under the same or similar circumstances spect to the conduct of [Ronnie] Young or doing that which a cardiologist of means that degree of care that a person ordinary prudence would not have done of ordinary prudence would use under under the same or similar circum- the same or similar circumstances. stances. ‘‘Proximate cause,’’ when used with ‘‘Ordinary care,’’ when used with re- respect to the conduct of [Ronnie] spect to the conduct of Venkat Thota, Young means that cause which, in a M.D., means that degree of care that a natural and continuous sequence, pro- cardiologist of ordinary prudence would duces an event, and without which cause use under the same or similar circum- such event would not have occurred. In stances. order to be a proximate cause, the act or ‘‘Proximate Cause,’’ when used with omission complained of must be such respect to the conduct of Venkat Thota, that a person using ordinary care would M.D., means that cause which, in a natu- have foreseen that the event, or some ral and continuous sequence unbroken similar event, might reasonably result by any new and independent cause, pro- therefrom. There may be more than duces an event, and without which cause one proximate cause of an event. such event would not have occurred. In An injury may be an ‘‘unavoidable ac- order to be a proximate cause, the act or cident,’’ that is, an event not proximately omission complained of must be such caused by the negligence of any party to that a cardiologist using ordinary care it. would have foreseen that the event, or some similar event, might reasonably re- Answer ‘‘Yes’’ or ‘‘No’’. sult therefrom. There may be more Venkat Thota, M.D.: than one proximate cause of an event. [Ronnie] Young: ‘‘New and independent cause,’’ when If you have answered ‘‘Yes’’ to Ques- used with respect to the conduct of Ven- tion 1 for both of those named in Ques- kat Thota, M.D., means the act or omis- tion 1, then answer Question 2. Other- sion of a separate and independent wise do not answer Question 2. agency, not reasonably foreseeable by a If you have answered ‘‘Yes’’ to Ques- cardiologist exercising ordinary care, tion 1 only as to Mr. Young, then do not that destroys the causal connection, if answer Questions 2, 3, or 4. any, between the act or omission in- quired about and the injury in question If you have answered ‘‘Yes’’ to Ques- and thereby becomes the immediate tion 1 only as to Dr. Thota, then answer cause of such injury. Questions 3 and 4. ‘‘Negligence,’’ when used with respect Question 2 conditionally asked about Dr. to the conduct of [Ronnie] Young means Thota’s and Ronnie’s comparative negli- failure to use ordinary care, that is, fail- gence, and Questions 3 and 4 concerned ing to do that which a person of ordinary the amount of damages owed for Ronnie’s prudence would have done under the and Margaret’s injuries. 684 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

The jury answered Question 1 with a S.W.3d 822, 841 (Tex.App.-Fort Worth ‘‘No’’ as to Dr. Thota’s negligence and a 2008, pet. granted). The appellate court ‘‘Yes’’ as to Ronnie’s negligence. On July found that the ‘‘injury in question’’ was the 18, 2005, the trial court entered final judg- tear in Ronnie’s iliac artery and, contrary ment that Young take nothing. Young filed to Dr. Thota’s arguments, not the exten- a motion for new trial, arguing that the sive bleed. Id. at 834–35. The court of trial court had erred in overruling Young’s appeals compared the parties’ theories of objections to the jury charge and that the liability and concluded that Dr. Thota’s jury’s findings were against the great premise for Ronnie’s contributory negli- weight and preponderance of the evidence gence was ‘‘based upon Ronnie’s alleged or based on insufficient evidence. The negligence occurring after the tear, not trial court denied Young’s motion for new Ronnie’s negligence in causing the tear.’’ trial, and Young timely appealed. Id. at 833. The court recognized that con- tributory negligence must have a causal B. Appellate Court Proceedings connection with the original accident, while On appeal, Young raised the same issues a failure to mitigate damages ‘‘arises from presented in the motion for new trial. an injured party’s duty to act reasonably Specifically, Young challenged the trial in reducing his damages.’’ Id. (citing Hyg- court’s judgment for the following reasons: eia Dairy Co. v. Gonzalez, 994 S.W.2d 220, (1) the jury’s finding of no negligence as to 226 (Tex.App.-San Antonio 1999, no pet.)). Dr. Thota was against the great weight Because it found that Dr. Thota’s theory and preponderance of the evidence and pointed only to Young’s ‘‘subsequent negli- was manifestly unjust and/or the opposite gence that might have increased his dam- answer was conclusively proven as a mat- ages as opposed to Dr. Thota’s original ter of law; (2) the evidence was insuffi- negligence,’’ the court concluded ‘‘that cient to support the jury’s findings as to Ronnie’s negligence, if any, only increased Ronnie’s contributory negligence, and the the damages he suffered after the cathet- trial court erred by overruling Young’s erization or tear, as opposed to causing the objection to the inclusion of contributory ‘injury,’ ‘accident,’ or ‘occurrence’ itself.’’ negligence in the jury charge; and (3) the Id. trial court erred in overruling Young’s ob- The appellate court then considered jections and submitting jury instructions whether the disputed inferential rebuttal on unavoidable accident and new and inde- instructions on new and independent cause pendent cause. and unavoidable accident were proper. Id. The court of appeals held that the trial at 836–39. Finding that Dr. Thota pre- court’s inclusion of the question on Ron- sented some evidence that the tear in Ron- nie’s contributory negligence and the new nie’s artery could have been a natural re- and independent cause instruction in the sult of Ronnie’s then-existing illnesses or jury charge was an abuse of discretion and an unexpected catastrophe, the court of constituted harmful error; accordingly, it appeals held that the trial court did not reversed the trial court’s judgment and abuse its discretion in submitting the un- remanded the case for a new trial. 271 avoidable accident instruction.2 Id. at 837.

2. In this Court, the parties do not contest the issues concerning the inclusion of Ronnie’s court of appeals’ holding as to the unavoid- contributory negligence and the instruction able accident instruction. Therefore, our on new and independent cause. opinion focuses solely on the disputed charge THOTA v. YOUNG Tex. 685 Cite as 366 S.W.3d 678 (Tex. 2012)

The court concluded that Ronnie’s massive improper inferential rebuttal instructions, bleed and resulting injuries were foresee- id. at 757, but distinguished Young’s situa- able risks in the catheterization procedure tion because ‘‘the jury was not only given and held that the trial court abused its an erroneous defensive instruction on new discretion by submitting the new and inde- and independent cause that benefitted only pendent cause instruction in connection Dr. Thota but also an erroneous jury ques- with Dr. Thota’s negligence. Id. at 838. tion on liability—Ronnie’s contributory After holding that the trial court erred negligence—a theory not supported by the in submitting the question of Ronnie’s con- evidence.’’ 271 S.W.3d at 839. Conclud- tributory negligence and the new and inde- ing that Casteel’s presumed harm analysis pendent cause instruction as to Dr. Thota, applied, the court of appeals reasoned: the court of appeals considered which level We simply cannot determine, on this of harm analysis applied. Id. at 839. The evidence, whether the jury properly court, sua sponte, held that Young’s objec- found Dr. Thota not negligent, properly tions to these specific aspects of the charge found that his negligence was excused invoked Casteel’s presumed harm analysis based upon the unavoidable accident in- because the improperly submitted broad- struction, or improperly found that his form question commingled valid and inval- negligence was excused based upon the id theories of liability. Id. at 836 (citing new and independent cause instruction Casteel, 22 S.W.3d at 388–89).3 The court alone or combined with its improper acknowledged our opinion in Bed, Bath & finding of Ronnie’s negligence. Beyond, Inc. v. Urista, 211 S.W.3d 753 Id. Specifically, the court held that the (Tex.2006), which held that Casteel’s pre- charge commingled Dr. Thota’s improper sumed harm analysis does not apply to theory of liability (the extensive bleeding) broad-form questions based on a single with Young’s proper theory of liability (the theory of liability that are submitted with torn artery) and, consequently, prevented

3. As mentioned by Young’s counsel at oral that the trial court erred in submitting his argument, at least one other appellate court negligence to the jury. Id. On appeal, the has followed this approach and held that a court of appeals held that it was error to broad-form charge that includes separate submit the invalid theory of the plaintiff’s blanks for multiple parties’ fault, under a sin- contributory negligence to the jury. Id. at gle theory of liability, presents a Casteel issue. 450. Like the court of appeals in Thota, the See Block v. Mora, 314 S.W.3d 440, 450 (Tex. Block court held that because ‘‘the trial court App.-Amarillo 2009, pet. dism’d by agr.). In submitted two competing theories of liability Block, Question 1 of the jury charge asked: within one broad-form liability question that ‘‘Did the negligence, if any, of those named asked whether the negligence of the two par- below proximately cause the injuries, if any, ties involved in the accident caused the plain- to [the plaintiff]?’’ Id. at 444. Question 1 tiff’s injuries,’’ it could not ‘‘determine wheth- included two separate answer blanks next to the names of the plaintiff and the defendant. er the jury truly found that [the defendant] Id. The jury answered ‘‘Yes’’ to the plaintiff’s was not negligent in causing the accident or negligence and ‘‘No’’ to the defendant’s negli- [that the plaintiff] was solely negligent in gence. Id. On appeal, the plaintiff com- causing his injuries (both of which findings plained that the evidence supported judgment would be against the great weight and pre- in his favor because the defendant’s negli- ponderance of the evidence).’’ Id. The court gence was established as a matter of law. Id. cited to Casteel’s presumed harm analysis, but The plaintiff also alleged that there was no held, under the traditional harmless error evidence of his contributory negligence nor analysis that the charge error ‘‘likely caused any evidence that he had proximately caused the rendition of an improper judgment.’’ Id.; the accident or his injuries, and he claimed see TEX.R.APP. P. 44.1. 686 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

the appellate court ‘‘from being able to Young counters that the trial court’s determine whether the jury’s finding of no submission of Ronnie’s contributory negli- liability as to Dr. Thota was a finding of no gence and the inferential rebuttal instruc- negligence on his part, an erroneous find- tion on new and independent cause was an ing of contributory negligence on Ronnie’s abuse of discretion. According to Young, part, or an erroneous finding of new and the court of appeals correctly interpreted independent cause.’’ Id. at 841. The Elbaor because Ronnie could not have court concluded: ‘‘Because these instruc- been negligent in causing the tear to his tions likely caused rendition of an improp- iliac artery and any fault on Ronnie’s part er judgment or, at least, prevented should have been submitted only through [Young] from properly presenting her case an instruction on Ronnie’s failure to miti- on appeal, we conclude that such error was gate his damages. See Elbaor, 845 S.W.2d harmful.’’ Id. at 244–45. Young asserts that Casteel’s presumed harm analysis applies because C. Dr. Thota’s Petition for Review the submitted jury charge was based on Dr. Thota petitioned our Court for re- one valid and one invalid theory of liability, view, and we granted his petition on re- which obviously confused the jury to such hearing. 54 Tex.Sup.Ct.J. 682 (Mar. 18, a degree that an appellate court cannot 2011). Dr. Thota argues that the court of determine whether the jury based its deci- appeals erred in holding that the trial sion on the valid or invalid theory. Young court’s inclusion of Ronnie’s contributory claims that direct mention of Casteel to the negligence and the inferential rebuttal in- trial court was not required to preserve struction constituted an abuse of discre- the Casteel error, and Young’s timely and tion. Dr. Thota claims that even if there specific no-evidence objections to the were error in the jury charge, it was harm- charge errors were sufficient to inform the less, and Casteel’s presumed harm analysis trial court of the Casteel problem. Alter- does not apply. Furthermore, Dr. Thota natively, Young claims that the trial claims that the court of appeals improperly court’s judgment must be reversed even reversed the trial court’s judgment based under the traditional harmless error analy- on unassigned error because Young nei- sis. ther raised a Casteel issue before the court of appeals nor made a timely or specific II. Harm Analysis objection before the trial court to assert that the submission of Young’s contributo- Assuming, but not deciding, that it was ry negligence or the inferential rebuttal error for the trial court to submit the instruction would improperly commingle question on Ronnie’s contributory negli- valid and invalid theories of liability and, gence and the instruction on new and inde- therefore, prevent the appellate court from pendent cause, we consider whether these conducting a meaningful appellate review. charge issues constituted harmful error. Finally, Dr. Thota claims that the appel- See, e.g., TEX.R.APP. P. 61.1; Urista, 211 late court misapplied our holding in Elbaor S.W.3d at 756. We first address whether v. Smith, 845 S.W.2d 240 (Tex.1992), by the court of appeals correctly applied Cas- holding that the trial court abused its dis- teel’s presumed harm analysis to the con- cretion by submitting a question on Ron- tested jury charge. We hold that it did nie’s contributory negligence instead of an not. For reasons stated below, we further instruction on Ronnie’s duty to mitigate hold that even if the submission of the his damages. contested charge issues were an abuse of THOTA v. YOUNG Tex. 687 Cite as 366 S.W.3d 678 (Tex. 2012)

discretion, a review of the entire record pecially likely to cause an unfair trial when provides no clear indication that the con- the trial is contested and the evidence tested charge issues probably caused the sharply conflictingTTTT’’) rendition of an improper judgment and, therefore, we must conclude that the trial B. Casteel and Its Progeny court’s submission was harmless. See TEX. Casteel involved a dispute between an R.APP. P. 44.1(a), 61.1(a). insurance agent and the insurer. 22 A. General Law S.W.3d at 381. In Casteel, the trial court submitted a single broad-form question on [1–4] ‘‘We review a trial court’s deci- the issue of the insurer’s liability to the sion to submit or refuse a particular in- agent, which included thirteen independent struction under an abuse of discretion grounds for liability. Id. at 387. We de- standard of review.’’ In re V.L.K., 24 termined that five of the thirteen indepen- S.W.3d 338, 341 (Tex.2000). The trial court has considerable discretion to deter- dent grounds for liability did not apply and mine proper jury instructions, and ‘‘[i]f an held that the trial court erred by submit- instruction might aid the jury in answering ting the invalid grounds for liability in the the issues presented to them, or if there is charge. Id. We then considered whether any support in the evidence for an instruc- the charge error was harmful. Id. Be- tion, the instruction is proper.’’ La.-Pac. cause the single broad-form charge mixed Corp. v. Knighten, 976 S.W.2d 674, 676 valid and invalid theories of liability, we (Tex.1998). ‘‘An instruction is proper if it held that the charge error constituted (1) assists the jury, (2) accurately states harmful error, explaining: the law, and (3) finds support in the plead- It is fundamental to our system of jus- ings and evidence.’’ Columbia Rio tice that parties have the right to be Grande Healthcare, L.P. v. Hawley, 284 judged by a jury properly instructed in S.W.3d 851, 855–56 (Tex.2009). An appel- the law. Yet, when a jury bases a find- late court will not reverse a judgment for a ing of liability on a single broad-form charge error unless that error was harmful question that commingles invalid theo- because it ‘‘probably caused the rendition ries of liability with valid theories, the of an improper judgment’’ or ‘‘probably appellate court is often unable to deter- prevented the petitioner from properly mine the effect of this error. The best presenting the case to the appellate the court can do is determine that some courts.’’ TEX. R. APP. P. 61.1; see TEX. evidence could have supported the jury’s R.APP. P. 44.1(a).4 ‘‘Charge error is gener- conclusion on a legally valid theory. To ally considered harmful if it relates to a hold this error harmless would allow a contested, critical issue.’’ Hawley, 284 defendant to be held liable without a S.W.3d at 856; see also Quantum Chem. judicial determination that a factfinder Corp. v. Toennies, 47 S.W.3d 473, 480 actually found that the defendant should (Tex.2001) (‘‘An improper instruction is es- be held liable on proper, legal grounds.

4. Rule 61.1 is the Supreme Court version of concludes that the error complained of: (1) the harmful error rule. See TEX.R.APP. P. 61.1. probably caused the rendition of an im- Similarly, the appellate court provision, Rule proper judgment; or (2) probably prevent- 44.1(a), states: ed the appellant from properly presenting No judgment may be reversed on appeal on the case to the court of appeals. the ground that the trial court made an TEX.R.APP. P. 44.1(a). error of law unless the court of appeals 688 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

Id. at 388. Therefore, we held: ‘‘When a sis does not apply. Moreover, when a single broad-form liability question errone- defensive theory is submitted through ously commingles valid and invalid liability an inferential rebuttal instruction, Cas- theories and the appellant’s objection is teel’s solution of departing from broad- timely and specific, the error is harmful form submission and instead employing when it cannot be determined whether the granulated submission cannot apply. improperly submitted theories formed the Unlike alternate theories of liability and sole basis for the jury’s finding.’’ Id. at damage elements, inferential rebuttal is- 389. sues cannot be submitted in the jury Following Casteel, we have clarified the charge as separate questions and in- extent of its presumed harm analysis on stead must be presented through jury several occasions. See Urista, 211 S.W.3d instructions. Therefore, although harm 753; Romero v. KPH Consolidation, Inc., can be presumed when meaningful ap- 166 S.W.3d 212 (Tex.2005); Harris Cnty., pellate review is precluded because valid 96 S.W.3d 230. In Harris County, we and invalid liability theories or damage extended Casteel’s presumed harm analy- elements are commingled, we are not sis to a broad-form question that commin- persuaded that harm must likewise be gled valid and invalid elements of damages presumed when proper jury questions for which there was no evidence. 96 are submitted along with improper in- S.W.3d at 233–34. In Romero, we applied ferential rebuttal instructions. Casteel’s presumed harm analysis to a sin- gle broad-form proportionate responsibili- Id. (citations omitted). Cf. Hawley, 284 ty question that included a factually-un- S.W.3d at 865 (applying Rule 61.1(b) in a supported malicious credentialing claim. non-Casteel context where the trial court 166 S.W.3d at 227–28 (noting that ‘‘unless omitted the defendant’s proposed instruc- the appellate court is ‘reasonably certain tion in a single-theory-of-liability case, that the jury was not significantly influ- thereby allowing the jury to potentially enced by issues erroneously submitted to find the defendant liable on an invalid ba- it,’ the error is reversible’’ (citations omit- sis). Because we held that Casteel’s pre- ted)). Later, in Urista, we declined to sumed harm analysis did not apply to the extend Casteel’s presumed harm analysis inferential rebuttal question in Urista, we to the trial court’s submission of an erro- applied the traditional harmless error neous inferential rebuttal instruction. 211 analysis, which considers whether the in- S.W.3d at 756–57. In Urista, we ex- struction ‘‘probably caused the rendition of plained: an improper judgment.’’ 211 S.W.3d at We specifically limited our holdings in 757; see TEX.R.APP. P. 61.1(a); see also Casteel and Harris County to submis- Reinhart v. Young, 906 S.W.2d 471, 473 sion of a broad-form question incorpo- (Tex.1995) (‘‘Error in the jury charge is rating multiple theories of liability or reversible only if, in the light of the entire multiple damage elements. We have record, it was reasonably calculated to and never extended a presumed harm rule to probably did cause the rendition of an instructions on defensive theories such improper judgment.’’). After reviewing as unavoidable accident, and we decline the entire record, we concluded in Urista to do so nowTTTT When, as here, the that there was some evidence the plaintiff broad-form questions submitted a single failed to meet his burden of proof and liability theory (negligence) to the jury, therefore held that the unavoidable acci- Casteel’s multiple-liability-theory analy- dent instruction did not probably cause the THOTA v. YOUNG Tex. 689 Cite as 366 S.W.3d 678 (Tex. 2012)

jury to render an improper verdict. 211 C. Preservation of Error S.W.3d at 758–59. [5] We first address Dr. Thota’s argu- Notwithstanding Casteel’s presumed ment that the court of appeals improperly harm analysis in situations that errone- reversed the judgment of the trial court ously commingle valid and invalid theories based on unassigned and unpreserved er- of liability, we have repeatedly reaffirmed ror. Our procedural rules govern the our longstanding, fundamental commit- preservation requirements for raising a ment to broad-form submission. See, e.g., Harris Cnty., 96 S.W.3d at 235–36. We jury charge complaint on appeal and re- first expressed our preference for broad- quire the complaining party to make an form practice in 1973 and, after issuing objection before the trial court. TEX.R. multiple opinions in which we supported CIV. P. 274; TEX.R.APP. P. 33.1. Rule 274 broad-form submission, we modified Rule requires that an objecting party ‘‘must 277 of the Texas Rules of Civil Procedure point out distinctly the objectionable mat- in 1988 to more expressly mandate the ter and the grounds of the objection,’’ and use of broad-form submission. See id.; states that ‘‘[a]ny complaint as to a ques- see also Lemos v. Montez, 680 S.W.2d tion, definition, or instruction, on account 798, 801 (Tex.1984) (explaining our pro- of any defect, omission, or fault in plead- gression from separate, granulated charge ing, is waived unless specifically included issues to the broad-form charge). See in the objections.’’ TEX.R. CIV. P. 274. generally William G. ‘‘Bud’’ Arnot, III & Additionally, to preserve error for appel- David Fowler Johnson, Current Trends in late review, the rules generally require the Texas Charge Practice: Preservation of complaining party to (1) make a timely Error and Broad–Form Use, 38 ST. objection to the trial court that ‘‘state[s] MARY’S L.J. 371, 416–40 (2007) (providing the grounds for the ruling that the com- a more detailed history of Texas jury plaining party [seeks] from the trial court charge practice); William L. Davis, Tools with sufficient specificity to make the trial of Submission: The Weakening Broad– court aware of the complaint, unless the Form ‘‘Mandate’’ in Texas and the Roles specific grounds were apparent from the of Jury and Judge, 24 REV. LITIG. 57 context,’’ and (2) obtain a ruling. TEX. (2005) (same). Since 1988, Rule 277 has R.APP. P. 33.1. As we stated twenty years stated, in pertinent part: ‘‘In all jury ago, the procedural requirements for de- cases the court shall, whenever feasible, termining whether a party has preserved submit the cause upon broad-form ques- error in the jury charge are explained by tions.’’ TEX.R. CIV. P. 277. Casteel and one basic test: ‘‘whether the party made its progeny denote situations where the trial court aware of the complaint, broad-form submission may be unfeasible. timely and plainly, and obtained a ruling.’’ See, e.g., Casteel, 22 S.W.3d at 389. But State Dep’t of Highways v. Payne, 838 ‘‘whenever feasible,’’ broad-form submis- S.W.2d 235, 241 (Tex.1992). sion should be the norm. See TEX.R. CIV. P. 277; Harris Cnty., 96 S.W.3d at 235– Although Young made a timely and spe- 36; see also Tex. Dep’t of Human Servs. cific objection at the charge conference to v. E.B., 802 S.W.2d 647, 649 (Tex.1990) the inclusion of the question on Ronnie’s (interpreting ‘‘whenever feasible’’ to man- contributory negligence and the instruc- date broad-form submission ‘‘in any or ev- tion on new and independent cause, Dr. ery instance in which it is capable of be- Thota argues that because Young failed to ing accomplished’’). specifically state that these charge issues 690 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

raised a Casteel problem or notify either objections to items included in the broad- the trial or appellate court that the charge form charge. See A.V., 113 S.W.3d at 357; would prevent Young from obtaining B.L.D., 113 S.W.3d at 349. Moreover, the meaningful appellate review, Young waived charge complaint at issue in those paren- the right to invoke Casteel and the court of tal-rights-termination cases was that sepa- appeals improperly reversed the trial court rate statutory grounds for terminating the on unassigned error. In essence, Dr. Tho- parents’ parental rights should not have ta argues that because Young did not cite been submitted within a single broad-form Casteel or specifically object to the form of question. See A.V., 113 S.W.3d at 357; the charge question, Young waived any B.L.D., 113 S.W.3d at 349. The basis for benefit of the presumed harm analysis. the parents’ complaints was not that the charge should not include the termination Contrary to Dr. Thota’s narrow and grounds at all, but that it was error for the technical interpretation of our preservation trial court to submit them in a broad-form of error requirements, we have never held question. See A.V., 113 S.W.3d at 357; that a no-evidence objection in this context B.L.D., 113 S.W.3d at 349. In those cir- is insufficient to preserve a broad-form cumstances, it was necessary for the com- complaint on appeal. See, e.g., Romero, plaining party to make a specific objection 166 S.W.3d at 229; Harris Cnty., 96 to the form of the charge to put the trial S.W.3d at 236; Casteel, 22 S.W.3d at 387, court on notice of the alleged error and 389. Moreover, we have long favored a afford the court an opportunity to correct common sense application of our procedur- the error. See A.V., 113 S.W.3d at 363 al rules that serves the purpose of the (holding that the parent failed to preserve rules, rather than a technical application the issue for appellate review because he that rigidly promotes form over substance. did not make ‘‘a specific objection to the See Alaniz v. Jones & Neuse, Inc., 907 charge to put [the] trial court on notice to S.W.2d 450, 451–52 (Tex.1995) (per curiam) submit a granulated question to the jury’’); (citing Payne, 838 S.W.2d at 241) (‘‘While B.L.D., 113 S.W.3d at 349; TEX. R. APP. Payne does not revise the requirements of P. 33.1. Cf. Keetch v. Kroger Co., 845 the rules of procedure regarding the jury S.W.2d 262, 267 (Tex.1992) (stating that charge, it does mandate that those re- ‘‘[e]rror in the charge must be preserved quirements be applied in a common sense by distinctly designating the error and the manner to serve the purposes of the rules, grounds for the objection’’ and holding rather than in a technical manner which that error was not preserved when the defeats them.’’). complaint of the trial court’s failure to In addition, Dr. Thota’s reliance on our submit in broad form was first raised in opinions in In re A.V., 113 S.W.3d 355, 362 this Court). In this case, a separate objec- (Tex.2003), and In re B.L.D., 113 S.W.3d tion to the form of the charge question was 340, 349–50 (Tex.2003), to support his con- not necessary to inform the trial court of tention that Young failed to preserve any Young’s complaint—that the inclusion of complaint regarding the charge’s broad- Ronnie’s contributory negligence and the form submission is misplaced. Although instruction on new and independent cause in those cases we did hold that complaints should not be submitted to the jury. A of harmful charge error were not pre- granulated submission would have cured served, those cases are distinguishable the alleged charge defect in A.V. and from this case because in both A.V. and B.L.D., but here, even if the trial court B.L.D., the complaining party raised no submitted the issue of Ronnie’s contributo- THOTA v. YOUNG Tex. 691 Cite as 366 S.W.3d 678 (Tex. 2012)

ry negligence in a separate question, this dent cause, and our procedural rules re- would not have cured Young’s no-evidence quire nothing more. objection. By making timely and specific objections [6, 7] In every case in which we have that there was no evidence to support the considered Casteel’s presumed harm analy- disputed items submitted in the broad- sis, including Casteel itself, we have em- form charge and raising these issues for phasized the need for the complaining par- the court of appeals to consider, Young ty to make a timely and specific objection properly preserved these issues for appel- to preserve complaints of error in broad- late review; Young did not have to cite or form submission. See, e.g., Casteel, 22 reference Casteel specifically to preserve S.W.3d at 387–89; Romero, 166 S.W.3d at the right for the appellate court to apply 229. As we stated in Harris County, un- the presumed harm analysis, if applicable, der our preservation rules: ‘‘A timely ob- to the disputed charge issues. See, e.g., jection, plainly informing the court that a Harris Cnty., 96 S.W.3d at 236; Casteel, specific element TTT should not be included 22 S.W.3d at 387–88, 390. Cf. Pat Baker in a broad-form question because there is Co., Inc. v. Wilson, 971 S.W.2d 447, 450 no evidence to support its submission, (Tex.1998) (per curiam) (‘‘It is axiomatic therefore preserves the error for appellate that an appellate court cannot reverse a review.’’ 96 S.W.3d at 236 (emphasis add- trial court’s judgment absent properly as- ed). Again in A.V. and B.L.D., we quoted signed error.’’). With the charge issues that statement from Harris County and properly preserved and contested on ap- held that without some objection to the peal, an appellate court reviews the basis charge, claiming the submitted theory had of the complaints and reverses only if the no evidentiary support, or an objection to alleged charge errors were harmful. TEX. the form of the charge, any complaint of R.APP. P. 44.1(a), 61.1. Because Young charge error was not preserved for review properly preserved error as to the disput- by the court of appeals. See A.V., 113 ed charge issues, we must consider wheth- S.W.3d at 362–63; B.L.D., 113 S.W.3d at er the appellate court properly applied the 349–50. In contrast to A.V. and B.L.D., correct harm analysis. See Urista, 211 Young made a specific and timely no-evi- S.W.3d at 757. dence objection to the charge question on Ronnie’s contributory negligence and also D. Application of Harm Analysis Law specifically objected to the disputed in- [8] Young alleges, and the court of ap- struction on new and independent cause. peals agreed, that the trial court erred by In addition to Young’s timely and specific submitting a jury question on Dr. Thota’s objections at the charge conference, Young theory of the case—Ronnie’s contributory submitted a proposed charge to the trial negligence. Even if Young is correct, Cas- court, which omitted any inclusion of Ron- teel’s presumed harm analysis does not nie’s contributory negligence and the new apply because the separate answer blanks and independent cause instruction and pre- allow us to determine whether the jury sented the charge according to Young’s found Dr. Thota negligent. Unlike Cas- theory of the case. This was sufficient to teel, which involved thirteen independent place the trial court on notice that Young grounds for liability with one answer blank believed the evidence did not support an for the defendant’s liability, here, the inclusion of Ronnie’s contributory negli- charge provided two separate blanks for gence or instruction on new and indepen- the jury to answer the single-theory-of- 692 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

liability question. See Casteel, 22 S.W.3d 271 S.W.3d at 839. And in response to the at 387. The charge mirrors the Texas dissent, the majority added: Pattern Jury Charges’s longstanding use It is the combination of these two incor- of separate blanks when multiple parties’ rect theories that prevents us from be- negligence are in issue. See Comm. On ing able to determine whether the jury’s Pattern Jury Charges, State Bar of Tex., finding of no liability as to Dr. Thota Texas Pattern Jury Charges: General was a finding of no negligence on his Negligence & Intentional Personal Torts part, an erroneous finding of contributo- PJC 4.1 (2010). The only theory of liabili- ry negligence on Ronnie’s part, or an ty asserted against Dr. Thota was negli- erroneous finding of new and indepen- gence, and the jury’s findings on that theo- dent cause. ry are clear: Dr. Thota was not negligent. We hold that this charge question simply Importantly, we are not trying to ex- does not raise a Casteel issue, and the tend Casteel’s presumed harm analysis court of appeals erred in applying Casteel’s to defensive theories; we are applying it presumed harm analysis. to a single broad-form question that er- Additionally, we hold that the new and roneously includes two different theories independent cause instruction fails to pres- of liability. This error is only exacer- ent a Casteel situation. See Urista, 211 bated by the erroneous defensive in- S.W.3d at 756–57. In concluding that the struction of new and independent cause. new and independent cause instruction Id. at 841. constituted harmful error, the appellate court reasoned: [9] We disagree with the court of ap- Here, however, the jury was not only peals’ interpretation of our holding in Ur- given an erroneous defensive instruction ista and hold that, even assuming the new on new and independent cause that ben- and independent cause instruction in this efitted only Dr. Thota but also an erro- charge constituted error, it does not raise neous jury question on liability—Ron- a Casteel issue. Like Urista, this case nie’s contributory negligence—a theory involves a single liability theory—negli- not supported by the evidence. So, we gence—so Casteel’s multiple-liability-theo- should not be limited to Urista’s tradi- ry analysis does not apply. See 211 tional harm analysis when trying to de- S.W.3d at 756–57. Moreover, as we noted termine the impact of the improperly in Urista, ‘‘when a defensive theory is submitted instruction on new and inde- submitted through an inferential rebuttal pendent cause when combined with the instruction, Casteel’s solution of departing improperly submitted question of Ron- from broad-form submission and instead nie’s contributory negligence. We sim- employing granulated submission cannot ply cannot determine, on this evidence, apply.’’ Id. at 757. Inferential rebuttal whether the jury properly found Dr. issues are distinct from theories of liability Thota not negligent, properly found that and damage elements because they ‘‘can- his negligence was excused based upon not be submitted in the jury charge as the unavoidable accident instruction, or separate questions and instead must be improperly found that his negligence presented through jury instructions.’’ Id. was excused based upon the new and Like the inferential rebuttal instruction on independent cause instruction alone or unavoidable accident in Urista, the new combined with its improper finding of and independent cause instruction ‘‘was Ronnie’s negligence. given in reference to the causation element THOTA v. YOUNG Tex. 693 Cite as 366 S.W.3d 678 (Tex. 2012)

of the plaintiff’s negligence claim.’’ Id. at evidence.’’ Harris Cnty., 96 S.W.3d at 756–57. While appellate courts may pre- 236; see TEX.R. CIV. P. 278; Elbaor, 845 sume harm when meaningful appellate re- S.W.2d at 243. view is precluded because the submitted [12] While Casteel’s presumed harm charge mixes valid and invalid theories of analysis is necessary in instances where liability or commingles improper damage the appellate court cannot determine elements, the courts do not presume harm ‘‘whether the improperly submitted theo- because of improper inferential rebuttal ries formed the sole basis for the jury’s instructions on defensive theories. See id. finding’’ because the broad-form question at 757. Therefore, assuming without de- mixed valid and invalid theories of liability, ciding that the submission of the new and Casteel, 22 S.W.3d at 389, or when the independent cause instruction was an broad-form question commingled damage abuse of discretion, we hold that this elements that are unsupported by legally charge error does not present a Casteel sufficient evidence, Harris Cnty., 96 problem. S.W.3d at 235, an improper inferential re- [10, 11] Even if the inclusion of a jury buttal instruction and improper defensive question regarding a party’s contributory theory of contributory negligence present- negligence and an inferential rebuttal in- ed in a broad-form question with separate struction were erroneous in a single-theo- answer blanks in a single-theory-of-liability ry-of-liability case, the combination of case does not prevent the harmed party these errors would not automatically trig- from obtaining meaningful appellate re- ger a situation where the appellate court view. When a trial court abuses its discre- must presume the error was harmful. If tion by including erroneous charge ques- presumed harm analysis were required, tions or instructions in a single-theory-of- then our fundamental commitment to sub- liability case, our traditional harmless er- mitting broad-form questions, whenever ror analysis applies and the appellate feasible, would routinely be discarded for courts should review the entire record to separate, granulated submissions to the determine whether the charge errors prob- jury. See TEX.R. CIV. P. 277; Harris ably caused the rendition of an improper Cnty., 96 S.W.3d at 235–36. Moreover, judgment. See TEX.R.APP. P. 44.1, 61.1; even in multiple-theory-of-liability cases Urista, 211 S.W.3d at 757. like Casteel, the presumed harm analysis is Because we hold that Casteel’s pre- not automatic. See Casteel, 22 S.W.3d at sumed harm analysis does not apply, we 389–90; Romero, 166 S.W.3d at 227–28. next consider whether, applying traditional As we stated in Casteel, ‘‘when questions harmless error analysis, the alleged charge are submitted in a manner that allows the errors constitute reversible error. See appellate court to determine that the TEX.R.APP. P. 61.1(a); Urista, 211 S.W.3d jury’s verdict was actually based on a valid at 757. We address Young’s objections to liability theory, the error may be harm- the inclusion of Ronnie’s contributory neg- less.’’ 22 S.W.3d at 389 (citing City of ligence and the instruction of new and Brownsville v. Alvarado, 897 S.W.2d 750, independent cause in turn. 752 (Tex.1995)). And regardless of wheth- er ‘‘a granulated or broad-form charge is 1. Contributory Negligence submitted, the trial court’s duty is to sub- [13, 14] When charge questions are mit only those questions, instructions, and submitted in a manner that allows the definitions raised by the pleadings and the appellate court to determine whether the 694 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

verdict was actually based on a valid theo- Thota and Ronnie, it is evident that the ry of liability, the error may be harmless. jury was well aware that its findings as to Casteel, 22 S.W.3d at 389; see also Alvara- Dr. Thota’s and Ronnie’s negligence were do, 897 S.W.2d at 752 (‘‘Submission of an separate and that there could be more improper jury question can be harmless than one proximate cause of an event. error if the jury’s answers to other ques- tions render the improper question imma- [15] When the answer to a jury ques- terial.’’); Boatland of Hous., Inc. v. Bailey, tion cannot alter the effect of the verdict, 609 S.W.2d 743, 750 (Tex.1980) (holding the reviewing court considers that question that the potentially erroneous submission immaterial. See Alvarado, 897 S.W.2d at of defensive theories was harmless error 752. In Alvarado, we held that even if it because the jury found for the defendant were error for the trial court to submit a on independent grounds and the complain- question as to the deceased plaintiff’s neg- ing party failed to show how it probably ligence, that question was immaterial be- resulted in an improper verdict). Young’s cause of the jury’s finding of ‘‘No’’ as to argument that the inclusion of Ronnie’s the defendant’s liability for negligence. contributory negligence was harmful error Id. Like Alvarado, any error in submitting fails for several reasons. First, Dr. Thota the question of Ronnie’s contributory neg- could only have been negligent in causing ligence to the jury was harmless and ren- the tear in Ronnie’s artery, and the jury dered immaterial in light of the jury’s find- failed to find that he was. The jury’s ing of no negligence as to Dr. Thota. finding as to Dr. Thota’s non-negligence is Once the jury answered ‘‘No’’ to whether entirely separate from its finding as to any negligence of Dr. Thota proximately Ronnie’s negligence. Perhaps the jury caused Ronnie’s injury, Dr. Thota was ex- was confused about whether to find Ronnie onerated, and neither a ‘‘Yes’’ nor a ‘‘No’’ negligent and, despite the unavoidable ac- answer as to Ronnie’s contributory negli- cident instruction, believed that they had gence could alter the verdict. See id. to find someone negligent. Either way, any error associated with the inclusion of a 2. New and Independent Cause jury question regarding Ronnie’s negli- gence was harmless. Assuming without deciding that the new Moreover, when determining whether and independent cause instruction was im- harm occurred, we consider the entire proper, a review of the record does not charge. See, e.g., Tex. Emp’rs Ins. Assoc. indicate that it probably caused the rendi- v. McKay, 146 Tex. 569, 210 S.W.2d 147, tion of an improper judgment. See TEX. 149 (1948). Here, the clarifying instruc- R.APP. P. 61.1(a); Urista, 211 S.W.3d at tions at the end of Question 1 made it clear 757; Reinhart, 906 S.W.2d at 473. At that the jury could answer in any of the trial, Dr. Thota testified on his own behalf, following combinations: (1) ‘‘Yes’’ to both and Neill Doherty III, M.D. testified as Dr. Thota and Ronnie; (2) ‘‘No’’ to both; Young’s expert witness. The evidence or (3) ‘‘Yes’’ to one and ‘‘No’’ to the oth- from the medical records and Dr. Thota’s er—the choice the jury ultimately made. testimony indicated that good hemostasis The charge’s definition of proximate cause was most likely obtained, which would also clearly informed the jury that ‘‘[t]here mean that Ronnie was in a stable condition may be more than one proximate cause of by the time he was released from the an event.’’ In light of the entire charge hospital. Even Young’s own medical ex- and the separate answer blanks for Dr. pert, Dr. Doherty, admitted on cross-ex- THOTA v. YOUNG Tex. 695 Cite as 366 S.W.3d 678 (Tex. 2012)

amination that there was a 99% chance Dr. Walker’s report, the CT scan men- that Ronnie was not bleeding when he was tioned on Dr. Sudharshan’s report, and the released after the catheterization proce- bleed in Ronnie’s retroperitoneal cavity, dure and that, based on the totality of the which could occur when the puncture is too medical records, there was no objective high, rather than the more visible femoral evidence that Ronnie was bleeding or ex- bleed that would occur if the puncture is in periencing any complications at the time the femoral artery. In contrast, Dr. Thota he was discharged from the hospital. claimed at trial that he did not breach the Both Dr. Thota and Dr. Doherty testified standard of care during Ronnie’s catheteri- that if there had been an improper punc- zation procedure. He testified that he had ture in the iliac artery preventing hemos- no problems inserting the catheter and tasis, Ronnie would likely have developed that he believed he entered the artery at signs of bleeding before his discharge. the appropriate location. Dr. Thota stated Dr. Doherty also testified that the cardiac that Dr. Sudharshan’s finding that the catheterization was a reasonable proce- puncture site was at ‘‘about the inguinal dure, given Ronnie’s condition, and that ligament,’’ would indicate that the punc- the medical records did not indicate Dr. ture site was correct. He further testified Thota had incorrectly performed the pro- that Dr. Walker’s report was ambiguous as cedure. to what he repaired and how far above or Both parties’ experts based their opin- below the inguinal ligament the bleed orig- ions, in part, on their interpretations of the inated. Also, Dr. Thota testified that a doctors’ reports from the emergency sur- retroperitoneal bleed can occur with a fem- gery the night of Ronnie’s catheterization oral artery stick as well as an iliac artery procedure. The report by Dr. Thota’s stick and that, based on his review of the partner, Dr. Sudharshan, noted that Ron- medical records and his own knowledge of nie had a ‘‘puncture site just about the the procedure, he met the standard of inguinal ligament’’ and that a CT scan care. ‘‘apparently revealed bleeding from [the] [16, 17] Like many medical malpractice external iliac artery puncture site.’’ Based cases, this record contains conflicting ex- on Dr. Sudharshan’s assessment, Dr. pert opinions. The fact that Dr. Thota Walker performed the emergency surgery, testified on his own behalf does not negate and Dr. Walker’s report noted that he the weight that the jury could give to his repaired a ‘‘high tear’’ in Ronnie’s right testimony. See City of Keller v. Wilson, external iliac artery. Neither Dr. Sudhar- 168 S.W.3d 802, 827 (Tex.2005) (holding shan nor Dr. Walker testified at trial. that the proper test for legal-sufficiency At trial, Dr. Thota’s and Dr. Doherty’s review must ‘‘credit favorable evidence if testimony about Ronnie’s medical reports reasonable jurors could, and disregard conflicted. Dr. Doherty testified that the contrary evidence unless reasonable jurors standard of care for cardiac catheterization could not’’); see also Wilson v. Scott, 412 was to insert a needle and catheter into S.W.2d 299, 303 (Tex.1967) (noting that the the right femoral artery below the inguinal defendant physician’s own testimony can ligament. In Dr. Doherty’s opinion, Dr. establish the standard of care). ‘‘Jurors Thota punctured Ronnie’s artery at the are the sole judges of the credibility of the wrong location, above the inguinal liga- witnesses and the weight to give their ment and into the right external iliac ar- testimony.’’ City of Keller, 168 S.W.3d at tery. Dr. Doherty’s opinion was based on 819. Because of the conflicting testimony 696 Tex. 366 SOUTH WESTERN REPORTER, 3d SERIES

of Dr. Doherty and Dr. Thota, and because Even assuming the trial court abused its both testifying experts agreed that Ronnie discretion by including a question as to was likely not bleeding upon his discharge Ronnie’s contributory negligence and an from the hospital, the jury could have rea- instruction on new and independent cause, sonably believed Dr. Thota’s opinions and for the reasons explained above, we hold discounted Dr. Doherty’s opinions. In cir- that these alleged charge errors were cumstances where a reasonable jury could harmless and did not probably cause the resolve conflicting evidence either way, we rendition of an improper judgment. Be- presume the jury did so in favor of the cause Casteel’s presumed harm analysis prevailing party. See id. at 821. does not apply and any error in the disput- [18] Based on the conflicting evidence, ed charge issues was harmless, we need the jury could have reasonably concluded not address Dr. Thota’s remaining issues. that Dr. Thota did not breach the standard Accordingly, we reverse the court of ap- of care without reaching the issue of proxi- peals’ judgment and, without addressing mate cause. In that case, the jury would whether the trial court erred by submit- not have relied on the new and indepen- ting the question as to Ronnie’s contributo- dent cause instruction because it pertains ry negligence or the instruction on new only to the proximate cause element. See and independent cause, we remand the Hawley, 284 S.W.3d at 856 (‘‘New and case to the court of appeals to consider independent cause is a component of the Young’s remaining issues. proximate cause issue.’’). Thus, the record

, supports the jury’s finding of no negli- gence as to Dr. Thota. Accordingly, our review of the entire record provides no clear indication that the new and indepen- dent cause instruction, if erroneous, proba- bly caused the rendition of an improper verdict. We therefore conclude that any In re Billy Frederick ALLEN, Relator. error in the trial court’s submission of the new and independent cause instruction was No. 10–0886. harmless. See Urista, 211 S.W.3d at 759. Supreme Court of Texas. III. Conclusion Argued Jan. 12, 2012. In sum, we hold that Young’s timely and specific no-evidence objections were suffi- Decided May 18, 2012. cient to preserve the disputed charge is- Background: Applicant sought compensa- sues for appellate review. Because the tion under the Tim Cole Act (TCA), which trial court submitted a broad-form ques- allowed a wrongfully imprisoned person to tion on a single theory of liability that seek compensation from the state for the included separate answer blanks for Dr. period of wrongful imprisonment, after the Thota’s and Ronnie’s negligence, we hold Court of Criminal Appeals, 2009 WL that the court of appeals misapplied Cas- 282739, granted habeas relief from a judg- teel and its presumed harm analysis.5 ment of conviction against him for two

5. To the extent that it conflicts with this opin- 440 (Tex.App.-Amarillo 2009, pet. dism’d by ion, we expressly disapprove the appellate agr.). court’s opinion in Block v. Mora, 314 S.W.3d