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Detection of alleged bad faith irrelevant until UIM allegation is resolved



Rosalita Calsoncins made contractual and extra contractual claims related to underinsured motoring regulations (UIM) in an insurance policy issued by the Germania Select Insurance Company. Germania requested that the Court of Appeal instruct the Honorable Brooks Hagler, Chairman of the 259th District Court, to leave parts of a decision entered into on 14 July 2020, in substance no. 2019-014. In that order, Judge Hagler annulled the reduction of disputes in Calsoncin's extra-contractual claims. Court of Appeal I Re Germania Select Insurance Company, no. 11-20-00176-CV, State of Texas in the Eleventh Court of Appeal (September 25, 2020) decided the draft mandate.

BACKGROUND

Calsoncin was a passenger in a car that collided with a vehicle driven by Ginger Bartee. Calsoncin was insured under a policy issued by Germania that provided UIM coverage. After Calsoncin settled her claim against Bartee, she sued Germania for reclaiming UIM benefits under the policy.

Calsoncin claimed that she was injured in the accident, that Bartee caused the accident and that Bartee was underinsured. Calsoncin requested an explanatory ruling that, according to the UIM policy, she had the right to recover the damages caused by the accident (the UIM claim). Calsoncin also claimed that Germania had been unfairly enriched and had violated the Texas Deceptive Trade Practices Act, the Texas Insurance Code and the duty of good faith and fair trade (the extracontractual claims).

Germania submitted a request to cancel the extra contract. receivables from the UIM claim and to reduce the non-contractual receivables. Judge Hagler first signed an agreed order that suspended the extra-contractual receivables and reduced the extra-contractual receivables pending the settlement of the UIM requirement. Judge Hagler later heard Calsoncin's proposal on July 9, 2020. Judge Hagler approved Calsoncin's proposal to repeal the reduction of the extracurricular claims, saying: “I want the post to reflect the reason I control how I am driven by the current pandemic crisis. "Judge Hagler also ruled that Calsoncin could take the deposit of Germany's damages rules without" any other restrictions than what you have all given you under the rules of procedure and objections. "

Following Calsoncin's submission of Germania's request for adjustment of Germania's claim.

ANALYSIS

Mandamus is an extraordinary remedy and is justified only when the court clearly abused its discretion and there is no adequate remedy on appeal. A court abuses its discretion when its decision is arbitrary and unreasonable or is made without regard to guidelines of legal principles or supporting evidence. The area of ​​discovery is usually within the court of law. However, discovery inquiries must reasonably be tailored to include only issues that are relevant to the case. A court abuses its discretion by ordering a discovery that exceeds what is permitted by the rules of procedure.

A motorist is underinsured if his or her liability insurance is insufficient to pay the actual damages of the injured party. UIM coverage provides payment to the insured for all amounts that the insured has a "legal right to recover" as damages from UIM. The recovery is reduced by the amount recovered or recovered from UIM's vehicles and can not exceed the insurance's insurance limits. status of the other motorist. In order to receive benefits under a UIM insurance, the insured must show:

  • that the insured has UIM coverage,
  • that UIM negligently caused the accident that led to the covered damages,
  • the amount of the insured's damages, and
  • that UIM's insurance coverage is deficient.

Since UIM coverage depends on the liability under applicable tort law for the alleged UIM, the extent of the discovery in a UIM case differs from other insurance disputes where the terms of the policy alone dictate the outcome. Specifically, the insurer should not be required to make efforts and costs to carry out the discovery, prepare for a trial and make tough allegations of bad faith that can be made part of the UIM benefits part of the trial. [19659004] In this case, Calsoncin's UIM claim has been removed from her extra contractual claim, no liability for the UIM claim has been established, and the extra contractual claims can be plundered by the underlying liability provision in the UIM case.

Therefore, at this time, any discovery of extracontracting claims is not relevant to the UIM claim. The Court of Appeal acknowledged the challenges that the pandemic has posed to the courts and disputes. But even with these challenges, Judge Hagler did not have room for discretion to allow Calsoncin to make discoveries that were only relevant to claims that are not mature and that may never exist.

When a court decides on discovery that is not relevant, the opposing party has no adequate remedy through appeal. As a result, the Court of Appeal concluded that Judge Hagler abused his discretion when revoking the reduction and allowed litigation in Calsoncin's extracontractor claims and that Germania did not have an adequate remedy through appeal and the Court of Appeal directed the Honorable Brooks Hagler to leave that part of the July 14, 2020 order in which he dismissed the dispute against Calsoncin's extra contractual claims.

Mandate is a cure that is almost never granted. It was granted in this case because the parties had not resolved the question of whether Calsoncin was entitled to UIM benefits. Since she could lose that case, which the insurer challenged, it was clearly too early to detect bad faith refusal to pay and if there was no right to UIM benefits, the bad faith part of the suit would be a lot. The discovery required and allowed by Judge Hagler would punish Germania for helping him deal with the time needed to deal with criminal cases and was inappropriate in the civil action. Catalog

© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance management, insurance deeds and insurance fraud almost equal for insurers. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

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