On March 17, State Farm Mutual Automobile Insurance Company was granted its request for mandamus relief in a case filed by a woman seeing uninsured/underinsured motorist benefits.
The Court of Appeals for the First District of Texas conditionally granted the appeal.
Amanda Marie Sanchez Garza sued after being involved in a car accident that another driver, Ofelia Castillo-Lara, caused. She filed a claim for UIM benefits via State Farm, and now there’s a dispute over whether State Farm told Garza it would settle her claim. She later sued for declaratory judgment that she’s owed UIM coverage. She also sued for breach of the duty of good faith and fair dealing, for violations of the Texas Insurance Code, and violating the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). State Farm later accused the lower court of abusing its discretion when it wouldn’t reduce the extra-contractual claims, and filed a petition for mandamus relief, and the appeals court granted it.
“This court, like other Texas courts of appeal, has required extra-contractual claims to be severed and abated until the entitlement to UIM benefits has been determined,” wrote Justice Russell Lloyd. “Our opinion is bolstered by Garza’s failure to identify specific misrepresentations in her pleadings, which only quote statutory language and provide generalities as to the purported misrepresentations.”
The judges also pointed out that Garza filed a declaratory judgment, not a breach of contract accusation in hopes of getting her UIM benefits. The judges ruled that State Farm shouldn’t have to answer for any of the other claims before the declaratory judgment is settled.
It was also determined that State Farm wouldn’t have an adequate remedy via appeal if discovery isn’t abated for Garza’s additional claims.
The judges ordered the lower court to vacate its ruling that denied abatement for the extra-contractual claims.
Justices Richard Hightower and Evelyn Keyes concurred on the ruling.