Motion to Abate in DAVID NGUYEN vs. PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY| Trellis.Law

On December 23, 2019 a Motion,Ex Parte was filed involving a dispute between Nguyen, David, and Progressive County Mutual Insurance Company, for MOTOR VEHICLE ACCIDENT in the District Court of Dallas County.

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FILED
2/10/2020 3:25 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Debra Clark DEPUTY

CAUSE NO. DC-19-20391

DAVID NGUYEN § IN THE DISTRICT COURT
Plaintiff, §
§
VS. §
134T” JUDICIAL DISTRICT
§
PROGRESSIVE COUNTY MUTUAL §
INSURANCE COMPANY §
Defendant. § DALLAS COUNTY, TEXAS

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED
ANSWER AND SPECIAL EXCEPTIONS. AND IN THE ALTERNATIVE, MOTION TO
SEVER AND ABATE EXTRA-CONTRACTUAL CLAIMS

TO THE HONORABLE JUDGE OF THIS COURT:

COMES NOW, PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY

(“Progressive” and/or “Defendant”), Defendant in the above styled and numbered cause and,

SUBJECT TO ITS MOTION TO TRANSFER VENUE, ﬁles this its First Amended Answer

and Special Exceptions and in support thereof would respectfully represent and show unto the

Court the following:

MOTION TO TRANSFER VENUE
Defendant obj ects to venue in Dallas County, the county in Which this action was instituted,

0n the ground that Dallas County is not a proper county for the prosecution of this lawsuit. Venue

is mandatory in Ellis County pursuant t0 Texas law. As set forth in the Texas Insurance Code:

Section 1952.110. VENUE. Notwithstanding Section 15.032, Civil Practice and
Remedies Code, an action against an insurer in relation t0 the coverage provided
under this subchapter, including an action to enforce that coverage, may be brought
only in the county in which: (1) the policyholder or beneﬁciary instituting the action
resided at the time of the accident involving the uninsured or underinsured motor
vehicle; or (2) the accident occurred.

Section 15.032. INSURANCE. Suit against ﬁre, marine, 0r inland insurance
companies may also be commenced in any county in Which the insured property
was situated. A suit on a policy may be brought against any life insurance company,

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 1
or accident insurance company, or life and accident, or health and accident, or life,
health, and accident insurance company in the county in which the company’s
principal ofﬁce in this state is located 0r in the county in Which the loss has occurred
0r in Which the policy holder 0r beneﬁciary instituting the suit resided at the time
the cause 0f action accrued.

Section 15.016. OTHER MANDATORY VENUE. An action governed by any
other statute prescribing mandatory venue shall be brought in the county required
by that statute. Acts 1985, 69th Leg, ch. 959, Sec. 1, 1985.

Defendant asserts that the following facts establish mandatory venue in Ellis

County and support this Motion t0 Transfer Venue:

1. The incident which is the basis of this lawsuit allegedly occurred in Ellis County.
(Plaintiffs Original Petition, Paragraph 8, Page 3).

2. Many 0f the fact Witness pertaining t0 the events set forth in Plaintiffs petition

reside or work in or near Ellis County.

3. Much of the physical evidence Will be gathered and assembled in Ellis County.

4. Dallas County has no connection to, and no interest in, the adjudication 0fthis case.

Based on the facts and statutes referenced above, the present case is required by

law to be maintained in Ellis County. Any permissive venue statute relied on by Plaintiff

to bring suit in Dallas County is superseded by the above mandatory venue statutes and

supporting facts.

Pleading further, and Without waiving the foregoing, this Court may transfer an

action from a court 0f proper venue to another court 0f proper venue in this State When the

Court determines that the provisions of Section 15.002(b) 0f the Texas Civil Practice and

Remedies Code have been met. Said Section states that, for the convenience 0f the parties

and Witnesses and in the interest 0f justice, a court may so transfer an action where the

court ﬁnds:

(1) Maintenance of the action in the county of suit would work an injustice to the

movant considering movant’s economic and persona hardship; (b) the balance

SUBJECT TO MOTION T0 TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 2
of interests of all the parties predominates in favor of the action being brought
in the other county; and (c) the transfer of the action would not work an injustice
t0 any other party.

gs)
set forth above, the venue facts support venue in Ellis County, not Dallas

County. Maintenance 0f this action in Dallas County Will work an injustice to Defendant.

Having this lawsuit, for all practical purposes, conducted in more than one county forces

Defendant t0 incur additional attorneys’ fees to manage and try the case in one county and

conduct its investigation and discovery in another.

In addition, transfer 0f venue to Ellis County will not work an injustice t0 any other

party since much 0fthe investigation, discovery and depositions in the case are going to be

conducted in Ellis County. The balance of the parties’ interests dictates that the case be

developed and tried in a single county, which should be Ellis County.

Defendant requests that this action be transferred t0 District Court in Ellis County,

Texas, where proper venue lies in this cause.

FIRST AMENDED ANSWER SUBJECT T0 MOTION TO TRANSFER VENUE
1. Pursuant to Texas Rule 0f Civil Procedure 92, Defendant generally denies any and

all allegations and claims asserted by Plaintiff (including, but not limited to, any allegations,

claims, 0r causes of action asserted in Plaintiffs Original Petition and any amendments or

supplements thereto) and demands strict proof thereof by a preponderance of the evidence.

2. Defendant Speciﬁcally claims any credit 0r offset available from payments made

by 0r 0n behalf 0f the alleged underinsured motorist, including any offset for payments made to

Plaintiff pursuant to Plaintiff s personal injury protection beneﬁts (“PIP”), if any.

3. Additionally, to the extent that the medical expenses exceed the amount actually

paid on Plaintiff’s behalf, Defendant asserts the statutory defense set forth in § 41.0105 0f the

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 3
Texas Civil Practices and Remedies Code. Thus, recovery of medical 0r health care expenses

incurred by Plaintiff are limited to the amount actually paid 0r incurred by or 0n behalf of Plaintiff.

4. Pleading further and in the strict alternative, Defendant asserts that Plaintiff has

failed t0 comply With Texas Civil Practice and Remedies Code § 18.091, Which requires any party

who seeks damages for either loss 0f earnings or based 0n loss of earning capacity, to provide

evidence in the form 0f a net loss after reduction for income tax payments or unpaid tax liability

pursuant t0 federal income tax law.

5. Defendant intends t0 comply with the terms and conditions 0f the policy sued on;

however, Defendant speciﬁcally does not agree to waive any rights it has under the policy 0f

insurance sued 0n herein and insist 0n their rights as contained in the policy, including deﬁnitions,

conditions and exclusions contained therein.

6. Defendant speciﬁcally denies that all conditions precedent necessary for recovery

by Plaintiff under any policy 0f insurance issued by Progressive County Mutual Insurance

Company have been met. Under Texas law, Defendant’s contractual obligation to pay uninsured

(“UM”) 0r underinsured motorist (“UIM”) beneﬁts does not arise until Plaintiff obtains a legal

judgment establishing the liability 0r fault ofthe purported underinsured driver, the actual damages

sustained by Plaintiff and that such damages exceed the tortfeasor’s limits 0f liability. Brainard

vs. Trinity University Ins. Ca, 216 S.W. 3d 809, 818 (Tex. 2006); Henson vs. State Farm Bureau

Cas. Ins. C0., 17 S.W. 3d 652-54 (Tex. 2000). Neither requesting UIM beneﬁts nor ﬁling suit

against the insurer triggers a contractual duty to pay. Id.

7. Plaintiff has not established the necessary conditions precedent t0 establish a valid

claim for UIM beneﬁts. Thus, Plaintiff has not satisﬁed the conditions precedent necessary to

assert a claim for UIM beneﬁts and to recover under any policy of insurance issued by Defendant.

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 4
8. Further, Defendant denies that Plaintiff can pursue a declaratory judgment claim

and is not entitled t0 attorneys’ fees as there has not been a breach 0f the policy by Defendant and

the declaratory judgment chapter does not support the award of same in the context of a UIM

lawsuit.

9. Defendant reserves the right t0 assert any other policy provision, term, deﬁnition,

condition precedent, or exclusion as the litigation progresses and as any new 0r additional facts

are discovered or ascertained by Defendant.

10. Further answering, if the same be necessary, Progressive contends that the

allegations made the basis of the claims and alleged damages, if any, of Plaintiff were caused by

acts and/or omissions 0f persons 0r third parties over whom Progressive had n0 control, and for

whom Progressive is not in law responsible. Such acts and/or omissions were the sole proximate

cause or a proximate cause 0r a producing cause 0f the occurrence in question and the alleged

damages, if any.

11. Progressive hereby asserts its right to contribution and indemnity from any co-

defendant 0r third-party defendant Which may be joined in this action pursuant t0 Chapters 32 and

33, Tex. CiV. Prac. & Rem. Code Ann. By doing so, Progressive does not admit liability and

continues to deny the allegations as asserted by Plaintiff against Progressive and any other

defendant or third—party defendant.

12. Pleading further, Progressive would show Plaintiff‘s claim is barred or otherwise

limited to the extent that Plaintiff failed t0 mitigate her alleged damages and/or Plaintiffs

condition pre-existed the automobile accident in question.

13. Any coverage for the claim to Which Plaintiff s pleading refers may be barred, in

whole or in part, by the provisions, terms, exclusions, conditions and limitations applicable to the

SUBJECT T0 MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 5
policy at issue.

14. Further answering, and in the alternative, Progressive pleads the limitation of

recovery of exemplary damages as set forth in Section 41 .006, gL ﬂ, and Section 41,007, g; §§g_.

of the Texas Civil Practice and Remedies Code.

15. Progressive reserves the right t0 raise additional afﬁrmative defenses and to

supplement those asserted herein upon discovery 0f further information regarding Plaintiff’s

claims and upon ﬁlrther investigation as to the provisions, terms and conditions of the Progressive

policy.

16. Progressive would show that an unknown responsible third-party (hereinafter,

“John Doe”), the unidentiﬁed driver that “failed to secure his load” and allowed a piece 0f steel t0

fall of his vehicle onto the highway as described in Plaintiff s Original Petition, was negligent and

negligent per se and committed a crime When he ﬂed the scene 0f an accident involving personal

injury. Tex. Trans. Code § 550.021. N0 identifying characteristics 0f John Doe are known to

Defendant at the time 0f this Answer. The criminal acts of the unknown responsible third party

(hereinafter, “John Doe”) were a proximate cause or the sole proximate cause 0f Plaintiff’s alleged

damages.

17. Progressive would further plead to the extent the Plaintiff has received any monies

or settlement from any alleged joint tortfeasor or in accordance With the terms of any insurance

policy, worker’s compensation policy or any other source arising or related t0 the incident made

the basis 0f this suit, Progressive would show that pursuant to Texas common law and the one

satisfaction rule, Progressive is entitled to an offset 01‘ a credit with regard to said amounts. For

any settlements that have been made 0r will be made by any alleged joint tortfeasor and/or

responsible third-party, Progressive is entitled to a full credit, offset, pro—rate reduction or

SUBJECT T0 MOTION T0 TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 6
percentage reduction, based 0n the percentage 0f fault attributable t0 each settling defendant

herein, and Progressive makes known t0 the other parties and the Court that it will avail itself of

its rights in this regard under Chapters 32 and 33 of the TEX. CIV. PRAC. & REM. CODE, including

Section 33.012(b) or any other applicable law 0r statute. Speciﬁcally, Progressive would show that

it is entitled to a dollar-for-dollar credit or a percentage—based reduction based 0n Plaintiffs’ prior

settlements, if any.

18. Progressive would show the Court and jury that the injuries and damages, if any,

were proximately caused by the contributory negligence and/or negligent conduct 0f Plaintiff at

the time 0f the incident made the basis 0f this suit. Plaintiff failed t0 use that degree 0f care and

caution which would have been used by persons 0f ordinary prudence under the same 0r similar

circumstances. Progressive is entitled to a comparative fault instruction under Chapter 33 of the

Texas Civil Practice and Remedies Code. Plaintiff’s comparative fault/negligence was the sole

cause and/or the proximate cause 0f Plaintiff s damages, if any.

REQUEST FOR DISCLOSURE

Pursuant to Rule 194 of the Texas Rules of Civil Procedure, Plaintiff is requested t0

disclose, within thirty (3 O) days 0f service of this request, the information 0r material described in

Rule 194.2. Plaintiff is also hereby requested to amend 0r supplement his Responses to these

Requests for Disclosure in accordance with Texas Rules of Civil Procedure 193.5.

NOTICE PURSUANT T0 TEXAS RULE OF CIVIL PROCEDURE 193.7

Pursuant to TeX.R.CiV.Proc.§193.7 Defendant serves notice 0n Plaintiff that Defendant

intend to use Plaintiff s discovery responses in the trial 0f this cause of action.

SUBJECT T0 MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 7
DEMAND FOR JURY
Defendant would show that they request this case be transferred t0 the Coum’s active jury

docket. A jury fee is being paid at the time 0f the ﬁling of this Answer.
SPECIAL EXCEPTIONS SUBJECT TO MOTION TO TRANSFER VENUE

A. Introduction

If the plaintiff’ s suit is not permitted by law, a defendant may ﬁle special exceptions and a

motion to dismiss. Wayne Duddlesz’en, Inc. v. Highland Ins. C0,, 110 S.W.3d 85, 96-97 (Tex.

App.—H0uston [lst Dist] 2003, pet. denied). A defendant may challenge the sufﬁciency of a

plaintiff’s pleadings by speciﬁcally pointing out the defect 0r reason the claim is invalid. See

Mowbray v. Avery, 76 S.W.3d 663, 677 (Tex. App.—C01pus Christi 2002, pet. denied). If a

pleading fails t0 state a cause of action, a trial court does not err by dismissing the defective claim.

Hold v. Reproductive Services, Ina, 946 S.W.2d 602, 605 (Tex. App.——C0rpus Christi 1997, writ

denied).

Plaintiff seeks t0 recover UM/UIM beneﬁts from Progressive. Speciﬁcally, Plaintiffs

petition asserts claims for breach of contract, Violations of the Texas Insurance Code, breach of

the duty of good faith and fair dealing, and Violations of the DTPA against Progressive despite the

lack 0f a judgment establishing the liability of the alleged uninsured/underinsured driver and

Plaintiff s resulting damages.

B. Plaintiff’s claims for attorney’s fees

Progressive specially except t0 Plaintiffs claims for attorney’s fees because the Texas

Supreme Court has held that attorney’s fees are not recoverable in conjunction with an

underinsured/uninsured motorist claim. Brainard v. Trinity Universal Ins. C0., 216 S.W.3d. 809

(Tex. 2006).

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 8
In Brainard, the plaintiff contended that the appellate court erred in reversing the trial

court’s ruling which held that she was entitled t0 recover attorneys’ fees because her insurer failed

to timely pay underinsured motorists beneﬁts after she presented her claim. 216 S.W.3d at 817;

see TEX. CIV. PRAC. & REM. CODE § 38.002. T0 be entitled to attorneys’ fees, the claimant must:

1) be represented by an attorney; 2) present the claim to the opposing party 0r t0 a duly authorized

agent 0f the opposing party; and 3) payment for the just amount owed must not have been tendered

30th 38.002. While the Court
before the expiration of the day after the claim is presented. Id. at §

recognized that a UIM insurer is obligated t0 pay damages Which the insured is "legally entitled to

recover" from the underinsured motorist, under Chapter 38, the contractual duty t0 pay does not

arise until a judgment is obtained establishing the liability and underinsured/uninsured status 0f

the other motorist. Id. (citing Henson v. S. Farm Bureau Cas. Ins. Ca, 17 S.W.3d 652, 653-54

(Tex. 2000)). Therefore, the Court determined that a claim for beneﬁts is not presented until after

the judgment is signed, and, consequently, upheld the appellate court’s determination that the

plaintiff was not entitled t0 recover attorney’s fees.

In the present case, the insurance contract at issue between Plaintiff and Progressive does

not require Progressive to pay uninsured and underinsured motorist beneﬁts before the tortfeasor

is found negligent and until the uninsured/underinsured status is determined. Until the Court issues

a judgment to this effect, Plaintiff simply has n0 contract claim against Progressive. Accordingly,

Plaintiff also has n0 Viable claim to attorneys’ fees at this time. Progressive requests that the Court

sustain its special exceptions and order Plaintiff t0 re-plead and cure the pleading defects.

C. Plaintiff’s contractual and extra-contractual claims

Progressive further specially excepts to Plaintiff’s claims for contractual relief and extra-

contractual relief 0n the basis that they are pre-mature until he obtains a judgment, if any,

SUBJECT T0 MOTION T0 TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 9
establishing the liability of the underinsured motorist and the amount of Plaintiff’s resulting

damages in accordance with Brainard v. Trinity Universal Ins. C0,, 216 S.W.3d 809 (Tex. 2006);

see also Weber v. Progressive Cly. Mut. Ins. Ca, 2018 Tex. App. LEXIS 784, at *2—3 (App. —

Dallas Jan. 26, 2018).

WHEREFORE, PREMISES CONSIDERED, Progressive prays that Plaintiffs take nothing

by way 0f this litigation and that all costs of court be taxed against Plaintiffs, and for such other

and further relief to which it is justly entitled. Progressive further respectfully requests that this

Court sustain its Special Exceptions and order Plaintiffs t0 amend their petition t0 cure the above-

referenced pleading defect and if Plaintiffs fail t0 cure such defects, strike Plaintiffs’ claims in

their entirety.

IN THE ALTERNATIVE, MOTION T0 SEVER AND ABATE SUBJECT T0 MOTION
TO TRANSFER VENUE
I.

The present case arises from a motor vehicle accident and subsequent claim made on a

policy 0f insurance issued by Progressive. Plaintiffs assert claims for uninsured/underinsured

motorist beneﬁts (“UM/UIM”) under the policy issued by Progressive County Mutual Insurance

Company (“the Policy”) involving a motor vehicle collision on September 27, 2018. Plaintiff

contends that they were covered persons under the Policy and that Progressive failed t0 investigate,

evaluate, accept, or rej ect Plaintiffs’ underinsured motorist claim t0 date.

As a result 0f Plaintiffs’ allegations, Plaintiffs ﬁled this lawsuit alleging damages and

injuries for as a result 0f Progressive’s alleged failure to pay the policy beneﬁts for injuries

allegedly sustained by Plaintiffs in accordance With the policy provisions. See Plaintiffs’ Original

Petition 0n ﬁle With this Court. Plaintiffs have also asserted extra—contractual allegations against

Progressive, including Violations 0f the Texas Insurance Code, DTPA and breach of the duty of

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 10
good faith and fair dealing (collectively “extra—contractual claims”). Id.

II.

Rules 41 and 174(b) 0f the Texas Rules of Civil Procedure vest the trial court With broad

discretion t0 sever and order separate trials of causes 0f action. United States Fire Ins. C0. v.

Millard, 847 S.W.2d 668, 671 (Tex. App. B Houston [lst Dist] 1993, n0 pet). The trial court’s

discretion is not unlimited, however. Id. The court must exercise a sound and legal discretion

within the limits created by the circumstances of the particular case. Id. The Texas Supreme Court

stated:

When all the and circumstances of the case unquestionably require a separate
facts
trial to prevent manifest injustice, and there is no fact 0r circumstance supporting

or tending to support a contrary conclusion, and the legal rights of the parties will
not be prejudiced thereby, there is n0 room for the exercise of discretion. The rule
then peremptory in operation and imposes upon the court a duty to order a
is

separate trial. While the refusal t0 order a separate trial under such circumstances
is usually termed a clear abuse 0f discretion, it is nevertheless a Violation of a plain

legal duty. Id. (citing Womack v. Berry, 291 S.W.2d 677, 683 (Tex. 1956)).

For a severance to be proper, the following elements are necessary: (1) the controversy

must involve more than one cause 0f action; (2) the severed cause of action must be one that would

be the proper subject of a lawsuit if independently asserted; and (3) the severed causes must not

be so intertwined as to involve the same identical facts and issues. Id. at 672. A severance is

appropriate if a controversy involves two 0r more separate and distinct causes of action, each of

Which might constitute a complete lawsuit within itself. Id. A breach 0f an insurance contract

claim is separate and distinct from bad faith, Insurance Code or DTPA causes of action. Id.

Uninsured/underinsured motorist claims and bad faith claims have been recognized as separate

and distinct causes of action which might each constitute a complete lawsuit within itself. Id.

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 11
III.

Further, the extra—contractual claims depend upon the outcome 0f the contractual cause of

action.1 Id. It has been held that if, in the underlying case, the defendant prevails on liability, then

defendant’s conduct necessarily cannot have been in bad faith. Id. This is especially true when

an adjudication 0f liability is necessary in determining the insurer’s duty t0 pay UIM beneﬁts, and

its actions thereafter determine a ﬁnding of bad faith. It would be a waste 0fthe Court’s, the jury’s,

the parties’ , and the attorneys’ time t0 hear evidence on the extra-contractual Claims When a ﬁnding

in the contract lawsuit could be peremptorily dispositive. Id.

1V.

Progressive requests that this Court sever all extra—contractual claims from the underlying

contract claim in this case. Numerous Texas courts have concluded it is necessary t0 sever and

abate bad faith claims from the threshold contract claim because 0f the cruel and unacceptable

dilemma the defendant would necessarily face if it is forced to try both the fundamental issue 0f

liability in conjunction with claims addressing its evaluation 0f liability. In Re Trinity Universal

Insurance Company, N0. 64 S.W.3d 463 (Tex. App. - Amarillo 2001, orig. proceeding); State

Farm Mut. Automobile Ins. C0. v. Wilbom, 835 S.W.2d 260, 262 (Tex. App. - Houston [14th Dist.]

1992, orig. proceeding); Balderama v. Western Casualty Life Ins. C0., 794 S.W.2d 84, 89 (Tex.

App. — San Antonio 1990), rev’d 0n other grounds, 825 S.W.2d 432 (Tex. 1991); Northwestern

Nat’l Llyds Ins. C0. v. Caldwell, 862 S.W.2d 44, 46—47 ‘Tex. App. B Houston [14th Dist] 1993,

orig. proceeding); F.A. Richard & Assoc. v. Millard, 856 S.W.2d 765, 767 ‘Tex. App. ~ Houston

l
The Mllard also precludes the requirement that an offer of settlement
court’s decision in
be made by the insurance company before a severance can be ordered on the bad faith claims.
Specifically, the Mllard court enumerates two distinct reasons for severing the underlying liability
claim from the bad faith claim, including the reason that bad faith, Insurance Code, and DTPA
claims depend upon the outcome of the contractual cause 0f action.

SUBJECT T0 MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 12
[lst Dist] 1993, orig. proceeding); United States Fire Ins. C0. v. Millard, 847 S.W.2d at 668;

Mid—Century Ins. C0. v. Lerner, 901 S.W.2d 749, 752-53 ‘Tex. App.~—Houston [14th Dist] 1995,

orig. proceeding).

Progressive further requests Plaintiffs’ extra-contractual claims be abated until Plaintiffs’

entitlement to UM/UIM beneﬁts, or lack thereof, has been fully established. See United States

Fire Insurance C0. v. Millard, 847 S.W.2d at 676; Texas Farmers Insurance Company v. Stem,

927 S.W.2d 77 ‘Tex. App. — Waco 1996); Mid—Century Insurance Company 0f Texas v. Lerner,

901 S.W.2d 749 “Tex. App.—~Houst0n [14th Dist] 1995). Abatement 0f bad faith claims must

necessarily accompany severance 0f those claims from the contract claim. United States Fire Ins.

C0. V. Millard, 847 S.W.2d at 673. Without abatement, the parties will be put t0 the effort and

expense of conducting discovery and preparing for trial 0f claims that may be disposed of in a

previous trial. Id.

VI.

In further support of Progressive’s motion, the San Antonio Court of Appeals in In Re

United Fire Lloyds held extra-contractual claims should be severed and abated from the contract

action. The Court found severance and abatement 0f the extra-contractual claims, and not

bifurcation, is the proper procedure in a UIM claim. The Court found When an action is brought

against the insurer for both breach of contract and extra—contractual claims, the extra—contractual

claims should be severed and abated until such time as the Plaintiff has obtained a judgement as

t0 liability against the tortfeasor and established Plaintiff‘s underinsured status. As the Court

states, the insurer “should not be required t0 put forth the effort and expense 0f conducting

discovery, preparing for a trial, and conducting voir dire 0n bad faith claims that could be

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 13
rendered moot by the portion 0f the trial relating t0 UDVI benefits. T0 require such would

not d0 justice, avoid prejudice, and further convenience.” In re United Fire Lloyd, 327 S.W.

3d 250, 256 (Tex. App.-San Antonio 2010, no pet).

Plaintiffs contend that Progressive failed to investigate, evaluate 0r accept 0r reject

Plaintiffs’ claims. However, an insurer generally cannot be liable for failing to settle 0r investigate

a claim that it has n0 contractual duty t0 pay. See Progressive Cnty. Mut. Ins. C0. v. Boyd, 177

S.W.3d 919, 922 ‘Tex. 2005); Akin, 927 S.W.2d at 629 "'But, in most circumstances, an insured

may not prevail 0n a bad faith claim Without ﬁrst showing that the insurer breached the contract");

In re OldA'm. Cnly. Mm. Fire Ins. C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866, at *4; 1n
re State Farm Mut. Auto. Ins. C0., 395 S.W.3d at 237-38; In re Am. Nat’l Cnly. Mut. Ins. C0., 384

S.W.3d at 437—38; In re United Fire Lloyds, 327 S.W.3d at 256; In re Miller, 202 S.W.3d 922, 925

‘Tex. App.——Tyler 2006, orig. proceeding); Millard, 847 S.W.2d at 673.

In the context of underinsured motorist coverage, an insurer is under n0 contractual duty

t0 pay underinsured motorist beneﬁts until the insured proves that the insured has underinsured

motorist coverage, that the underinsured motorist negligently caused the accident that resulted in

the covered damages, the amount 0f the insured's damages, and that the underinsured motorist's

insurance coverage is deﬁcient. See Brainard v. Trinity Universal Ins. C0., 216 S.W.3d 809, 818

‘Tex. 2006); In re OldAm. Cnty. Mut. Fire Ins. C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866,

at *4; In re United Fire Lloyds, 327 S.W.3d at 255. Thus, an insured generally must ﬁrst establish

that the insurer is liable on the contract before the insured can recover 0n extra—contractual causes

of action against an insurer for failing to promptly pay, failing to settle, or failing t0 investigate an

underinsured motorist insurance claim. See Akin, 927 S.W.2d at 629; In re Progressive Cnly. Mut.

Ins. Co., 2014 Tex. App. LEXIS 6386, 2014 WL 2618298, at *4; In re OZdAm. Cnly. Mut. Fire

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 14
Ins. C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866, at *4; In re State Farm Mut. Auto. Ins.

C0,, 395 S.W.3d at 238 ‘quoting Smith, 2007 U.S. Dist. LEXIS 13286, 2007 WL 677992, at *5);
see also In re Am. Nat’l Cnty. Mut. Ins. C0., 384 S.W.3d at 437-38 ‘holding that "any duty by an

insurer t0 its insured, common—law 0r statutory, necessarily arises from the contractual relationship

between the parties," and that insurer has no duty t0 settle claim that it is not contractually obligated

t0 pay, insurer cannot be liable 0n bad faith claims arising from failure t0 investigate claim that it

has no duty t0 pay, and insurer cannot be liable for insurance code Violations related to delays in

making offer on claims it has no duty to pay). As a result, ”Texas case law establishes that

severance and abatement of extra-contractuai claims is required in many instances in Which an

insured asserts a claim t0 uninsured or underinsured motorist benefits." In re Old Am. Cmy. Mut.

Fire Ins. C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866, at *4; see also Iﬁ re Progressive

Cnty. Mut. Ins. C0., 2014 Tex. App. LEXIS 6386, 2014 WL 2618298, at *4-5; In re Am. Nat'l

Cnty. Mut. Ins. C0., 384 S.W.3d at 438-39; In re United Fire Lloyds, 327 S.W.3d at 255-56.

In this case, Plaintiffs allege Progressive failed t0 settle their UIM claims, failed to make a

good faith settlement offer to them, and failed to properly investigate, evaluate, and pay their

claims. T0 prevail on these claims, the Plaintiffs must ﬁrst establish that Progressive is liable under

‘
the insurance contract by proving: 1) Plaintiffs were covered by the insurance policy Progressive

issued to them; ‘2) the underinsured driver negligently caused the automobile collision that

resulted in Plaintiffs’ injuries; ‘3) the amount of his damages; and ‘4) the driver was either

uninsured 0r underinsured. See In re Old Am. Cnly. Mut. Fire Ins. C0., 2013 Tex. App. LEXIS

819, 2013 WL 398866, at *4; In re State Farm Mut. Auto. Ins. C0., 395 S.W.3d at 237—38. There

is n0 evidence in the record showing Plaintiffs have established that Progressive is liable under the

insurance contract. As a result, the Plaintiffs’ settlement claims would be negated by a

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 15
determination in the contractual claim that Progressive is not liable. See Boyd, 177 S.W.3d at 922;

In re Progressive Cnly. Mut. Ins. C0., 2014 Tex. App. LEXIS 6386, 2014 WL 2618298, at *4

‘stating that "extra—contractual liability could only accrue if [insurer] is found liable on the

contract"); In re OldAm. Cnty. Mut. Fire Ins. C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866,
at *4 "'[T]0 prevail on their extra-contractual claims against Old American, plaintiffs must ﬁrst

demonstrate that Old American was contractually obligated to pay their uninsured motorist

claim."); In re State Farm Mut. Auto. Ins. C0., 395 S.W.3d at 239; In re Am. Nat’l Cnty. Mul'. Ins.

C0,, 384 S.W.3d at 438; In re United Fire Lloyds, 327 S.W.3d at 256; Millard, 847 S.W.2d at 675.

Because the Plaintiffs’ settlement claims would be negated by a determination that he

lacked coverage under the insurance contract, requiring Progressive to prepare for and litigate the

settlement claims, which may have not yet accrued and may be rendered moot by the breach of

contract claim, would not do justice, avoid prej udice, or further convenience. See In re Progressive

Cmy. Mut. Ins. C0., 2014 Tex. App. LEXIS 6386, 2014 WL 2618298, at *4-5; In re OldAm. Cnty.

Mm. Fire Ins. C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866, at *4; In re State Farm Mut.
Auto. Ins. C0., 395 S.W.3d at 237—39; In re Am. Nat’l Cnty. Mut. Ins. C0., 384 S.W.3d at 437—39;

In re United Fire Lloyds, 327 S.W.3d at 256; Millard, 847 S.W.2d at 673. Further, allowing

Plaintiffs t0 conduct broad discovery into Progressive’s claims handling history regarding

unrelated accidents and then allowing the introduction of such information at the trial 0f the

Plaintiffs’ contractual claims would be manifestly unjust. See In re Progressive Cnty. Mut. Ins.

C0., 2014 Tex. App. LEXIS 6386, 2014 WL 2618298, at *4; In re Old Am. Cnty. Mut. Fire Ins.

C0., 2013 Tex. App. LEXIS 819, 2013 WL 398866, at *4. Finally, severance of the Plaintiffs’

settlement claims from the breach of contract claim would not prejudice the parties' rights.

Accordingly, severance 0f the settlement claims is required. See Boyd, 177 S.W.3d at 922;

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE l6
Womack, 291 S.W.2d at 683; In re Progressive Cmy. Mut. Ins. C0., 2014 Tex. App. LEXIS 6386,

2014 WL 2618298, at *4—5; In re OZdAm. Cnty. Mut. Fire Ins. C0., 2013 TeX. App. LEXIS 819,

2013 WL 398866, at *4; In re State Farm Mut. Auto. Ins. C0., 395 S.W.3d at 237-39; 1n re Am,

Nat’l Cnty. Mut. Ins. C0., 384 S.W.3d at 437-39; In re United Fire Lloyds, 327 S.W.3d at 256;

Millard, 847 S.W.2d at 673. In re Allstate County Mut. Ins. C0., 447 S.W.3d 497, 501—503, 2014

Tex. App. LEXIS 11463, *7—11 ‘Tex. App. Houston lst Dist. 2014).

VII.

The above authority is clear, controlling, and dispositive. The Court is left With but one

appropriate choice: t0 grant severance of the extra—contractual claims from the underlying contract

claim, and to abate the extra—contractual claims until Plaintiffs obtain a judgment for liability

against the tortfeasor and established their status as individuals entitled t0 UM/UIM beneﬁts.

WHEREFORE, PREMISES CONSIDERED, Progressive prays that the Court grant its

motion and sever Plaintiffs’ extra—contractual claims from the underlying contract claim, and that

such extra—contractual claims be abated until such time that the underlying contract claim is

resolved by judgment.

WHEREFORE, PREMISES CONSIDERED, Defendant pray that upon ﬁnal trial and

hearing hereof, that no recovery be had from Defendant, but that Defendant go hence Without delay

and recover its costs, and for such other and further relief t0 which Defendant may be justly entitled

and will ever pray.

SUBJECT TO MOTION TO TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 17
Respectfully submitted,

WALTERS, BALIDO & CRAIN, L.L.P.

BY: /s/ Randall G. Walters
RANDALL G. WALTERS — 20819480
randy.walters@wbclawﬁrm.com
Service 0f Documents:
WaltersEDocsNotiﬁcati0ns@wbclawﬁrm.com
Meadow Park Tower, Suite 1500
10440 North Central Expressway
Dallas, Texas 75231
214/347—8381 — FAX
214/347-8380 — DIRECT
214/749-4805 — MAIN
ATTORNEY FOR DEFENDANT

CERTIFICATE OF SERVICE

This is to certify that on this the 10th day of January, 2020, a true and correct copy of the
above document has been forwarded to all known counsel of record.

/s/ Randall G. Walters
RANDALL G. WALTERS

CERTIFICATE OF CONFERENCE

This is t0 certify that counsel for Progressive has attempted t0 conference with Plaintiff” s
counsel on the above-referenced motions, but Plaintiffs’ counsel has not responded t0
Progressive’s attempts to conference. The motions are therefore presented t0 the court for
determination.

/S/Randall G. Walters
RANDALL G. WALTERS

SUBJECT TO MOTION T0 TRANSFER VENUE, DEFENDANT’S FIRST AMENDED ANSWER AND
SPECIAL EXCEPTIONS PAGE 18

Case Info

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TILLERY, DALE Track Judge’s New Case

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February 10, 2020

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December 23, 2019

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Motion,Ex Parte: DAVID NGUYEN vs. PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY

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