Litigation: Personal Injury; Insurance;

Litigation: Commercial

In Re: Allstate County Mutual Insurance Company

Tyler- 11/15/06 – 12-06-00164-CV

Chief Justice Worthen

Bifurcation of Contractual & Extracontractual Claims Against Insurer, Rather than Severance, was an Abuse of Discretion.

Mandamus proceeding. Vehicles driven by P & X collided; P contended that X was underinsured & filed an underinsured motorist (UIM) claim with D-Allstate. D offered P $20,000 to settle the UIM claim, but P filed suit for breach of contract under the UIM provision of her policy & for violations of the DTPA, Insurance Code, & general insurance principles. D answered & filed a motion to sever & abate, which the trial court denied. But it bifurcated the contractual & extracontractual claims to be heard by the same jury in separate trials. D filed this mandamus proceeding. Held: The trial court abused its discretion by failing to sever, rather than bifurcate, the claims. In a case such as this, where the insurer has made a settlement offer on the disputed contract claim, evidence admissible only on the extracontractual claim would prejudice the insurer to such an extent that a fair trial on the contract claim would become unlikely. However, after balancing the interests of the parties & its duty to expeditiously dispose of the cases on its docket, the trial court did not clearly abuse its discretion when it refused to abate P’s extracontractual claims pending determination of her contractual claim.

State Bar of Texas Digest

December 6, 2006