in Re Ion at East End, Asset Campus Housing, Inc., Austin Student Venture II, L.P., Tribridge Residential, LLC ( 2013 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
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NO. 09-13-00447-CV
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IN RE ION AT EAST END, ASSET CAMPUS HOUSING, INC., AUSTIN
STUDENT VENTURE II, L.P., TRIBRIDGE RESIDENTIAL, LLC
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Original Proceeding
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MEMORANDUM OPINION
A petition for writ of mandamus filed by Ion at East End, Asset Campus
Housing, Inc., Austin Student Venture II, L.P., and TriBridge Residential, LLC
contends the trial court abused its discretion by denying a motion to sever a
negligence and premises liability suit from a claim for uninsured motorist benefits
and transfer the case to the county where the accident occurred. After reviewing
the petition, the mandamus record, and the response of the real parties in interest,
Wesley Palmer and Donna Palmer, we conditionally grant mandamus relief.
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Sara Kaitlin Palmer was struck and killed by a vehicle driven by an
unknown motorist as she was walking in the parking lot of the Austin, Texas
apartment complex where she resided. The Palmers filed suit in Orange County
against all defendants on venue facts that their contract claim against State Farm
Mutual Automobile Insurance Company (“State Farm”) arose in Orange County
because the policyholders resided in Orange County and made demand for
payment there. See Tex. Civ. Prac. & Rem. Code Ann. §§ 15.002(a)(1), 15.032
(West 2002). The Palmers alleged their daughter Sara was a covered person on the
Palmers’ automobile policy with State Farm. They alleged Relators owned,
controlled, or managed the premises, which were unreasonably dangerous and on
which they allowed a dangerous activity, all of which proximately caused Sara’s
death. The Palmers alleged Relators breached a duty to Sara, an invitee, to inspect
the premises and to warn or cure dangerous conditions, including an inoperable
security gate, no security guards or cameras, no speed bumps or other traffic
control devices, and inadequate lighting. Relators asked the trial court to sever the
claims against them from the Palmers’ uninsured motorist benefits claim against
State Farm and to transfer venue of the claims against them to Travis County. The
trial court denied the motion.
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An order denying a motion to sever is not immediately appealable but may
be challenged by an original mandamus proceeding. See In re Hoover, Bax &
Slovacek, L.L.P., 6 S.W.3d 646, 650 & n.12 (Tex. App.—El Paso 1999, orig.
proceeding). Mandamus will issue only to correct a clear abuse of discretion for
which the relators have no adequate remedy at law. In re Prudential Ins. Co. of
Am., 148 S.W.3d 124, 135-36 (Tex. 2004). “A trial court has no ‘discretion’ in
determining what the law is or applying the law to the facts.” Walker v. Packer,
827 S.W.2d 833, 840 (Tex. 1992). The trial court abuses its discretion when it
fails “to analyze or apply the law correctly[.]” Id.
A trial court may exercise discretion in deciding whether to sever claims.
Liberty Nat’l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996) (orig.
proceeding); see Tex. R. Civ. P. 41. To establish the trial court abused its
discretion in failing to sever the claims, Relators must show: “(1) the controversy
involves more than one cause of action; (2) the severed claim is one that could be
asserted independently in a separate lawsuit; and (3) the severed actions are not so
interwoven with the other claims that they involve the same facts and issues.” See
Akin, 927 S.W.2d at 629. “The controlling reasons for a severance are to do justice,
avoid prejudice and further convenience.” Guar. Fed. Sav. Bank v. Horseshoe
Operating Co., 793 S.W.2d 652, 658 (Tex. 1990).
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The Palmers concede that the controversy involves more than one cause of
action and that the two claims could be asserted independently in separate suits.
The parties dispute whether the claims are so interwoven that they involve the
same facts and issues. Because they must prove the unknown motorist was
negligent to recover the $30,000 uninsured motorist benefit from State Farm, the
Palmers argue the contract and tort claims can be tried together, with State Farm
standing in the shoes of the unknown motorist. According to the Palmers, a single
jury can apportion fault between the premises owners and the unknown motorist,
avoiding the possibility of conflicting verdicts on the contract and tort claims.
Citing In re Liu, the Palmers argue the trial court may deny severance where a
plaintiff sues multiple parties for a single indivisible injury under varying causes of
action. See 290 S.W.3d 515, 523-24 (Tex. App.—Texarkana 2009, orig.
proceeding). Liu concerned claims brought against joint tortfeasors. Id. at 523.
The Palmers are not suing the unknown motorist; they are suing their insurance
company. “[T]he insurer’s contractual obligation to pay benefits does not arise
until liability and damages are determined.” Brainard v. Trinity Universal Ins.
Co., 216 S.W.3d 809, 818 (Tex. 2006).
The Palmers suggest uninsured motorist coverage is not in dispute, but
during the hearing State Farm’s counsel acknowledged that the insurer’s
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contractual liability depends on the outcome of the tort liability without admitting
that coverage is undisputed. Although the two causes of action have some
overlapping facts and issues, the negligence claims against the premises owners
and the contractual claims against the insurer do not involve the same facts and
issues. In re Reynolds, 369 S.W.3d 638, 652 (Tex. App.—Tyler 2012, orig.
proceeding). Because any introduction of insurance into the trial of the negligence
claims would unfairly prejudice the defense, severance is required and mandamus
is the appropriate remedy to protect the alleged tortfeasors’ right to have their
liability decided without mention of insurance related to the plaintiffs’ contractual
claim against their insurer. See In re Koehn, 86 S.W.3d 363, 367 (Tex. App.—
Texarkana 2002, orig. proceeding); see also Reynolds, 369 S.W.3d at 653-54.
Evidence of insurance would be admissible in the trial of the contractual claim, and
inadmissible in the trial of the tort claim; because we cannot speculate about what
issues will be contested at trial, we cannot determine from the mandamus record
that prejudice can be avoided without severance. See Reynolds, 369 S.W.3d at
653. We hold the trial court abused its discretion when it denied Relators’ motion
to sever.
The Palmers argue that venue is proper in Orange County because the suit
on the accident policy can be brought in the county of their residence. See Tex.
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Civ. Prac. & Rem. Code Ann. §§ 15.002(a)(1), 15.032. Because section 15.005 is
a derivative venue statute, it would not determine venue after severance. Reynolds,
369 S.W.3d at 656; see also Tex. Civ. Prac. & Rem. Code Ann. § 15.005 (West
2002). The Palmers suggest venue might be proper in Orange County through
probate proceedings, but Chapter 15 of the Civil Practice and Remedies Code
controls venue to the extent of any conflict with the Texas Probate Code. See Tex.
Civ. Prac. & Rem. Code Ann. § 15.007 (West 2002); see generally In re Reliant
Energy, Inc., 159 S.W.3d 624, 626 (Tex. 2005). The Palmers alleged no venue
facts that would place venue of the severed negligence claims in Orange County.
Issues one and two are sustained. We are confident that the trial court will
vacate its order of August 15, 2013, sever the Palmers’ negligence claims against
Relators from the Palmers’ contract dispute with their insurer, and transfer the case
in light of the severance. The writ shall issue only if the trial court fails to act
promptly in accordance with this opinion within a reasonable time.
PETITION CONDITIONALLY GRANTED.
PER CURIAM
Submitted on October 16, 2013
Opinion Delivered October 31, 2013
Before McKeithen, C.J., Kreger and Horton, JJ.
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