Proof Required of Liability and Underinsured Nature of Defendant Before Suit Against Insurer

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In the case In Re United Financial Casualty Company, Relator, No. 14-22-00502-CV the Court of Appeals of Texas, (November 3, 2022) ordered the issuance of a writ of mandate.

 BACKGROUND

United Financial filed a petition for writ of mandamus asking the Court of Appeals to compel the presiding judge of the 234th District Court of Harris County, to vacate the trial court’s June 6, 2022 order denying United Financial’s motion to abate the real party in interest Elizabeth Echeverria’s (“Echeverria”) extra-contractual claims in an uninsured/underinsured motorist coverage suit.

Echeverria was involved in a motor vehicle accident as a passenger in a vehicle operated by Uber driver Samir Tachbaroute (“Tachbaroute”). Carlos Lanausse-Ramos (“Lanausse-Ramos”) allegedly rear-ended Tachbaroute’s vehicle. Echeverria alleges that she sustained physical injuries as a result of this accident.

MANDAMUS STANDARD OF REVIEW

Ordinarily, to be entitled to a writ of mandamus, the relator (the insurer) must show that the trial court clearly abused its discretion, and that the relator lacks an adequate remedy by appeal. 

ABATEMENT OF EXTRA-CONTRACTUAL CLAIMS

Abatement of Echeverria’s extra-contractual claims is required until the declaratory judgment action and breach-of-contract claim have been decided. 

ABUSE OF DISCRETION

United Financial has no contractual obligation to pay Echeverria UIM benefits until Echeverria establishes the liability and underinsured status of Lanausse-Ramos.

The introduction of information on Echeverria’s extra-contractual claims during the trial on Echeverria’s breach-of-contract claim would be manifestly unjust. 

NO ADEQUATE APPELLATE REMEDY

United Financial will lose the important right to have Echeverria’s extra-contractual claims tried with her breach-of-contract claim. 

The Court of Appeal concluded that the trial court abused its discretion by denying United Financial’s motion to abate Echeverria’s extra-contractual claims. United Financial’s motion to abate Echeverria’s extra-contractual claims and grant United Financial’s motion to abate the extra-contractual claims.

ZALMA OPINION

When a person brings a tort action against a person who allegedly rear-ended the car in which she was riding and claims underinsured motorist benefits before proving the defendant was underinsured it was manifestly unjust to claim bad faith when she failed to prove the other driver was underinsured. 

(c) 2022 Barry Zalma & ClaimSchool, Inc.

Barry Zalma, Esq., CFE is available at http://www.zalma.com and [email protected].

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