in Re Germania Select Insurance Company ( 2020 )

Opinion filed September 25, 2020
In The
Eleventh Court of Appeals
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No. 11-20-00176-CV
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IN RE GERMANIA SELECT INSURANCE COMPANY
Original Mandamus Proceeding
MEMORANDUM OPINION
This original proceeding arises from Real Party in Interest Rosalita
Calsoncin’s contractual and extracontractual claims related to the underinsured
motorist (UIM) provisions in an insurance policy issued by Relator Germania Select
Insurance Company. Germania requests that we instruct the Honorable Brooks
Hagler, presiding judge of the 259th District Court, to vacate portions of an order
entered on July 14, 2020, in Cause No. 2019-014.1 In that order, Judge Hagler lifted
the abatement of litigation of Calsoncin’s extracontractual claims. We conditionally
grant the petition for writ of mandamus.
1
Germania requested that we direct Judge Hagler to vacate an oral ruling made during a July 9,
2020 hearing. We agree that Judge Hagler’s oral ruling could be subject to mandamus because it is clear,
specific, enforceable, and adequately shown by the record. See TEX. R. APP. P. 52.3(k)(1)(A); In re State
ex rel. Munk, 448 S.W.3d 687, 690 (Tex. App.—Eastland 2014, orig. proceeding). However, because Judge
Hagler also signed a written order, see https://research.txcourts.gov/CourtRecordsSearch/#/case/
453e43e574e25defa2113b8bb4faa25e, we construe Germania’s request to encompass that order.
Background
On November 3, 2017, Calsoncin was a passenger in a car that was in a
collision with a vehicle driven by Ginger Bartee. Calsoncin was an insured under a
policy issued by Germania that provided UIM coverage. After Calsoncin settled her
claims against Bartee, she sued Germania to recover UIM benefits under the policy.
Calsoncin alleged that she was injured in the accident, that Bartee caused the
accident, and that Bartee was underinsured. Calsoncin requested a declaratory
judgment that she was entitled to recover under the UIM policy the damages that
resulted from the accident (the UIM claim). Calsoncin also asserted that Germania
had been unjustly enriched and had violated the Texas Deceptive Trade Practices
Act, the Texas Insurance Code, and the duty of good faith and fair dealing (the
extracontractual claims).
Germania filed a motion to sever the extracontractual claims from the UIM
claim and to abate the extracontractual claims. On July 2, 2019, Judge Hagler signed
an agreed order that severed the extracontractual claims into Cause No. 2019-044
and abated the extracontractual claims pending the resolution of the UIM claim.
On March 27, 2020, Calsoncin filed in Cause No. 2019-014 a motion to
reconsider the severance and abatement and a motion to compel the deposition of
Germania’s claims adjuster. Calsoncin requested that all claims be tried together.
Alternatively, Calsoncin requested that Judge Hagler lift the abatement on the
extracontractual claims and allow her to simultaneously conduct discovery into both
the UIM and the extracontractual claims.
Judge Hagler heard Calsoncin’s motion on July 9, 2020. Judge Hagler granted
Calsoncin’s motion to lift the abatement of the extracontractual claims and stated:
I want the record to reflect the reason I’m ruling the way I am is driven
by the current crisis of the pandemic.
2
For the record, I am operating under -- I don’t even know -- 18,
19, 27, 50, I don’t know, order from the Supreme Court of currently
they ordered no jury trials until after September 1. For the benefit of
the record, this is a multi-county general jurisdiction court, that also
quite uniquely by legislative directive, when this court was created also
has misdemeanor jurisdiction, meaning I am one of the only district
judges in the State of Texas that presides over misdemeanors, felonies,
and every civil thing possible including family law, Child Protective
Services, tax cases in two counties.
In addition, with the Supreme Court’s ruling that no jury trials
until September 1 and having a general jurisdiction court, I am stating
that I have great concern about my jury docket, meaning
constitutionally people incarcerated are going to have priority. I am
thinking in my mind of at least five, six, maybe eight people awaiting
trial that are currently incarcerated, meaning that the Court’s jury time
[if] and when we are safe physically and healthy-wise safe to try a case,
the chances are extremely high that although those cases are important,
it is not going to trump priority of a criminal matter, especially if they’re
incarcerated.
My gut feeling, my instinct based on my practice in 17 and a half
years on the bench, is that it’s going to be -- it’s going to be quite some
time before this case sees a jury. I’m not granting a continuance sua
sponte, but I’m wanting the record to reflect that the finding and the
reason why I’m going to lift the abatement but maintain the claims on
a severance status, the reason I’m doing that is at least discovery [can]
continue while you’re -- we’re waiting for the pandemic to release its
hold on us. And if and when we get to brighter days of jury trials, if
need be, if we need to stack these cases up and get them tried, if they’re
ready for trial, then we’ll be able to do that.
Judge Hagler also ruled that Calsoncin could take the deposition of Germania’s
claims adjuster without “any restrictions other than what you will all have provided
to you under the rules of procedure and forms of objection.”
On July 14, 2020, Judge Hagler reduced his rulings to writing. After
Calsoncin filed a notice to take the deposition of Germania’s claims adjuster,
Germania sought mandamus relief in this court. We granted Germania’s request for
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temporary relief and stayed discovery related to the extracontractual claims pending
further order of this court or final disposition of this mandamus proceeding.
Analysis
Mandamus is an extraordinary remedy and is warranted only when the trial
court clearly abused its discretion and there is no adequate remedy by appeal. In re
Murrin Bros. 1885, LTD., 603 S.W.3d 53, 56 (Tex. 2019) (orig. proceeding); In re
H.E.B. Grocery Co., 492 S.W.3d 300, 302 (Tex. 2016) (orig. proceeding). A trial
court abuses its discretion when its ruling is arbitrary and unreasonable or is made
without regard for guiding legal principles or supporting evidence. In re Nationwide
Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding). “Similarly, a
trial court abuses its discretion when it fails to analyze or apply the law correctly.”
Id.; see also In re Geomet Recycling LLC, 578 S.W.3d 82, 91 (Tex. 2019) (orig.
proceeding).
Ordinarily, the scope of discovery is within the discretion of the trial court. In
re CSX Corp., 124 S.W.3d 149, 152 (Tex. 2003) (orig. proceeding) (per curiam).
However, discovery requests “must be reasonably tailored to include only matters
relevant to the case.” In re Am. Optical Corp., 988 S.W.2d 711, 713 (Tex. 1998)
(orig. proceeding) (per curiam); see also TEX. R. CIV. P. 192.3(a) (“In general, a
party may obtain discovery regarding any matter that is not privileged and is relevant
to the subject matter of the pending action.”). A trial court “abuses its discretion by
ordering discovery that exceeds that permitted by the rules of procedure.” In re CSX,
124 S.W.3d at 152; see also In re Dana Corp., 138 S.W.3d 298, 301 (Tex. 2004)
(orig. proceeding) (per curiam). “If an appellate court cannot remedy a trial court’s
discovery error, then an adequate appellate remedy does not exist.” In re Dana
Corp., 138 S.W.3d at 301; see also In re CSX, 124 S.W.3d at 153 (holding that a
party does not have an adequate remedy by appeal when the trial court orders
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discovery of “patently irrelevant” information (quoting Walker v. Packer, 827
S.W.2d 833, 843 (Tex. 1992)).
“A motorist is underinsured if his or her liability insurance is insufficient to
pay for the injured party’s actual damages.” Brainard v. Trinity Universal Ins. Co.,
216 S.W.3d 809, 812 (Tex. 2006). UIM coverage provides payment to the insured
for all amounts that the insured is “legally entitled to recover” as damages from the
UIM. TEX. INS. CODE ANN. § 1952.101(a) (West 2009). The recovery is reduced
by the amount recovered or recoverable from the insurer of the UIM’s vehicle and
cannot exceed the insured’s policy limits. Id. at § 1952.106.
“[T]he UIM insurer is under no contractual duty to pay benefits until the
insured obtains a judgment establishing the liability and underinsured status of the
other motorist.” Brainard, 216 S.W.3d at 818; see also State Farm Mut. Auto. Ins.
Co. v. Nickerson, 216 S.W.3d 823, 824 (Tex. 2006) (holding that the insurer “had
no contractual duty to pay benefits until the trial court rendered judgment” for the
insured). Specifically, to recover benefits under a UIM policy, the insured must
show (1) that the insured has UIM coverage, (2) that the UIM negligently caused the
accident that resulted in the covered damages, (3) the amount of the insured’s
damages, and (4) that the UIM’s insurance coverage is deficient. In re Progressive
Cty. Mut. Ins. Co., No. 04-20-00178-CV, 2020 WL 3815927, at *2 (Tex. App.—San
Antonio July 8, 2020, orig. proceeding); see also Brainard, 216 S.W.3d at 818. “[A]
claim for UIM benefits is not presented until the trial court signs a judgment” in
which these issues are resolved. Brainard, 216 S.W.3d at 818; see also In re
Progressive, 2020 WL 3815927, at *2. Any extracontractual claims can be rendered
moot if the insured does not obtain a judgment against the UIM. In re Liberty Cty.
Mut. Ins. Co., 537 S.W.3d 214, 220–21 (Tex. App.—Houston [1st Dist.] 2017, orig.
proceeding); see also Brainard, 216 S.W.3d at 818 (noting that a jury could
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determine “that the other motorist was not at fault or award damages that do not
exceed the tortfeasor’s liability insurance”).
Because UIM coverage hinges on the liability under applicable tort law of the
alleged UIM, the scope of discovery in a UIM case differs from other insurance
disputes in which the terms of the policy alone dictate the outcome. In re
Progressive, 2020 WL 3815927, at *5; In re State Farm Mut. Auto. Ins. Co., 553
S.W.3d 557, 564 (Tex. App.—San Antonio 2018, orig. proceeding). Specifically,
the insurer “should not be required to put forth the effort and expense of conducting
discovery, preparing for a trial, and conducting voir dire on bad faith claims that
could be rendered moot by the portion of the trial relating to UIM benefits.” In re
United Fire Lloyds, 327 S.W.3d 250, 256 (Tex. App.—San Antonio 2010, orig.
proceeding); see also In re Farmers Tex. Cty. Mut. Ins. Co., 509 S.W.3d 463, 467
(Tex. App.—Austin 2015, orig. proceeding); In re Allstate Cty. Mut. Ins. Co., 447
S.W.3d 497, 501 (Tex. App.—Houston [1st Dist.] 2014, orig. proceeding).
In this case, Calsoncin’s UIM claim has been severed from her
extracontractual claims, there has been no determination of liability on the UIM
claim, and the extracontractual claims could be rendered moot by the underlying
liability determination in the UIM case. Therefore, at this time, any discovery into
the extracontractual claims is not relevant to the UIM claim. See In re Progressive,
2020 WL 3815927, at *6; In re Allstate Cty. Mut. Ins. Co., 447 S.W.3d at 502; In re
United Fire Lloyds, 327 S.W.3d at 256.
Judge Hagler lifted the abatement of litigation of the extracontractual claims
and ordered that Calsoncin could conduct discovery into those claims because (1) the
COVID-19 pandemic had caused a delay in jury trials; (2) after jury trials resume,
criminal trials will take precedence over the trial of Calsoncin’s UIM claim; and (3)
discovery into the extracontractual claims will allow both cases to be ready for trial
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when Calsoncin’s UIM claim is reached.2 We recognize the challenges that the
pandemic has presented to the courts and to litigants. However, even with those
challenges, Judge Hagler did not have the discretion to allow Calsoncin to conduct
discovery that was relevant only to claims that are not ripe and may never exist. See
In re Berrenberg, No. 08-20-00104-CV, 2020 WL 4218795, at *4–5 (Tex. App.—
El Paso July 23, 2020, orig. proceeding) (holding that, although the trial court had
discretion to quash a scheduled deposition based on concerns about the effect of the
pandemic, the trial court did not have discretion to order that the party’s deposition
be taken in a different county without sufficient evidence of undue hardship or
unnecessary expense); see also In re Nat’l Lloyds Ins. Co., 507 S.W.3d 219, 223
(Tex. 2016) (orig. proceeding) (per curiam) (holding that a trial court abuses its
discretion when it compels discovery of matters that are not relevant to the case).
When a trial court orders discovery that is not relevant, the resisting party has no
adequate remedy by appeal. In re Compton, No. 11-20-00154-CV, 2020 WL
4519562, at *4 (Tex. App.—Eastland Aug. 6, 2020, orig. proceeding) (mem. op.)
(citing In re Islamorada Fish Co. Tex., L.L.C., 319 S.W.3d 908, 913 (Tex. App.—
Dallas 2010, orig. proceeding)); see also In re State Farm Mut. Auto. Ins. Co.,
No. 01-19-00821-CV, 2020 WL 1264184, at *7 (Tex. App.—Houston [1st Dist.]
Mar. 17, 2020, orig. proceeding) (mem. op.) (holding that the insurer lacked
adequate remedy by appeal because, if it was forced to engage in discovery on the
extracontractual claims, it would “lose its substantial right to avoid the time and
expense of discovery for claims that are not ripe and may ultimately be rendered
moot”).
2
In her response to the petition for writ of mandamus, Calsoncin argues that mandamus relief is not
warranted because “[p]ublic policy is also served by achieving a proper balance between the unequal
bargaining power enjoyed by carriers and consumer protection” and because “[s]imultaneous discovery on
all claims in this case is warranted given the interwoven nature of the facts and issues in first-party cases.”
Judge Hagler, however, based his ruling solely on the delay in jury trials caused by the COVID-19 pandemic
and the difficulty in obtaining a quick trial of Calsoncin’s UIM claim.
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We hold that Judge Hagler abused his discretion when he lifted the abatement
and allowed litigation to proceed on Calsoncin’s extracontractual claims and that
Germania does not have an adequate remedy by appeal. Therefore, we conditionally
grant Germania’s petition for writ of mandamus. See In re Progressive, 2020 WL
3815927, at *1 (“Mandamus relief is appropriate when a trial court abuses its
discretion in denying a motion to sever and abate extra-contractual claims in an
underinsured motorist case.”); In re Farmers, 509 S.W.3d at 468. We direct the
Honorable Brooks Hagler to vacate that portion of the July 14, 2020 order in which
he lifted the abatement of litigation on Calsoncin’s extracontractual claims. A writ
of mandamus will issue only if Judge Hagler fails to act by October 6, 2020.
JIM R. WRIGHT
SENIOR CHIEF JUSTICE
September 25, 2020
Panel consists of: Bailey, C.J.,
Stretcher, J., and Wright, S.C.J.3
Willson, J., not participating.
3
Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.
8