The Eastland Court of Appeals has granted a petition for writ of mandamus ordering a trial court to vacate an order levying sanctions against the Texas Property and Casualty Insurance Guaranty Association (TPCIGA), a non-party to a lawsuit between an insured and its bankrupt insurer, ACCC Insurance Company.
In re Texas Property and Casualty Insurance Guaranty Association (No. 11-25-00191-CV; August 21, 2025) arose from a car wreck case in Midland County. Christina Granado sued Tina Marie Jamison and James Evert Holt (RPI Defendants) for the negligent operation of a vehicle (Jamison), and negligent entrustment of that vehicle (Holt). This accident led to a prolonged claim process, wherein Holt’s auto insurance carrier was liquidated, and the Relator, TPCIGA, became obligated to deal with the claim under the Guaranty Act. RPI Defendants filed a notice of automatic stay in December 2020, and on February 3, 2023, the parties executed a Rule 11 Agreement. In January 2025 RPI Defendants moved to enforce this agreement, arguing that RPI Plaintiffs had failed to execute the requisite affidavits regarding other insurance, a condition precedent to settlement and required by the Guaranty Act. The trial court ordered RPI Plaintiffs to complete the affidavits and RPI Defendants to distrubute the settlement funds in accordance with the Rule 11 agreement.
In May, however, Plaintiffs filed a motion to enforce the settlement agreement, maintaining that they had submitted the affidavits in accordance with the trial court order but hadn’t received payment. Plaintiffs further alleged that a hospital lien had been filed against them, which still existed at the time of the trial. When queried by the trial court, RPI Defendants’ trial counsel attributed the problem to a new adjuster assigned by TPCIGA. The trial court issued a written order requiring the adjuster to appear in person, which didn’t happen despite two court orders. Plaintiffs offered the solution of monetary sanctions against Relator in the amount of $6,000, to which the Court agreed. Relator responded, sensibly, that it wasn’t a party to the suit nor subject to the trial court’s orders under the Guaranty Act. It stated further that checks had already been issued to two plaintiffs and funds deposited in the court registry for the third, the day prior to the sanctions order. That didn’t stop the trial court from issuing the order. Relator sought mandamus relief.
An opinion by Justice Williams, the court of appeals conditionally issued the writ. The court identified no authority permitting a trial court to sanction a non-attorney, non-party, although it could hold a non-party in contempt for refusing to comply with discovery, appear for a deposition, or permit inspection of land. But without personal or subject-matter jurisdiction, “the trial court cannot issue a valid and binding order over the party it purports to bind” (citations omitted). Additionally, while “[u]nder the Guaranty Act, when an insurer becomes impaired, the TPCIGA is charged with investigating, compromising, settling, and paying covered claims owed by an impaired insurer,” the statute specifically bars a cause of action against the Association or its agents or employees “for any good faith act or omission in performing the person’s powers and duties” under the statute. The statute further protects TPCIGA from liability for other claims or damages, extracontractual damages, punitive damages, attorney fees, and pre- and postjudgement interest and penalties. Finally, any suit against TPCIGA must be brought in Travis County and defended by the attorney general. The court, however, found it unnecessary to decide whether the trial court’s sanction order was enforceable under the statute, since TPCIGA was a non-party, the trial court had no grounds for contempt order (and even if it had, TPCIGA was not afforded any due process safeguards and the fine “exceeded any potentially permissible fine amount associated with a finding of contempt”). Having determined that the trial court abused its discretion, the court held that mandamus was proper and Relator, as a non-party, had no appellate remedy in any event.
This is one of the strangest cases we have ever seen. Judging by the transcript of the hearing at which the sanction order was issued, which the court of appeals reproduced at length, the trial court didn’t know (1) who the defense attorney’s clients were (i.e., the insureds), (2) what TPCIGA was and how it functioned (of course, since TPCIGA wasn’t a party, there was no one there to inform the judge otherwise); or 3) that it couldn’t sanction a non-party over whom it had no jurisdiction. What is particularly striking was the trial court’s comment in response to Plaintiffs’ counsel proposition for sanctions (for which he already had a prepared order with blanks for the amount): “Well, I’m going to let the Court of Appeals tell me I’m wrong and redo it. No skin off my back.” We’ll just leave it there.
TCJL Research Intern Satchel Williams researched and prepared the first draft of this article.
