As you may recall, we reported last spring on SCOTX’s decision in Allstate Insurance Co. v. Irwin, 627 S.W.3d 263 (Tex. 2021). In this case, the Court held that the Uniform Declaratory Judgments Act can be used to determine an insurer’s liability for uninsured/underinsured motorist benefits and that attorney’s fees “as are equitable and just” are available under the Act. The Fort Worth Court of Appeals has now decided a case applying the Irwin decision to affirm a trial court judgment against an insurer for UM/UIM benefits and attorney’s fees under the UDJA.
The facts of Allstate Fire and Casualty Insurance Company v. Lesley Howell-Herring (No. 02-20-00175-CV) are unremarkable. Plaintiff was injured in a collision with an uninsured driver. She sued the driver for negligence and her insurer, Allstate, for UM/UIM benefits and attorney’s fees under the UDJA. She took a default judgment from the uninsured driver and proceeded to trial against Allstate on the damages and attorney’s fees issues. Allstate objected to her attorney’s fees claims on the basis that she had not designated an expert as required by the TRCP (she did, however, plead the claim, so Allstate’s claim that it was surprised when she asked for a bifurcated trial to determine the attorney’s fees issue separately did not fly with the court of appeals). The jury found $49,000 in damages. Three months later, plaintiff submitted a proposal for final judgment with attorney’s fees left blank. Allstate objected on the basis that SCOTX’s decision in Brainard precluded the use of the UDJA to determine liability for UM/UIM benefits and attorney’s fees. Allstate also claimed that plaintiff’s attorney’s fees claim was unjust and inequitable and her attorney’s fees evidence should have been excluded under the rules. The trial court awarded the plaintiff her $30,000 in policy limits, $16,700 in attorney’s fees, taxable court costs, and postjudgment interest. Allstate appealed.
The court of appeals affirmed. Noting that SCOTX had decided Irwin case in the interim after Allstate filed its appellate brief and the case was submitted to the court, the court ruled that Irwin permitted the plaintiff to use the UDJA to determine the insurer’s liability and recover just and equitable attorney’s fees (citing an earlier decision, Allstate Cty. Mut. Ins. Co. v. Hill, No. 02-20-00174-CV, 2021 WL 2978746 (Tex. App.—Fort Worth July 15, 2021, no pet.), in which the same thing happened). The only remaining issues were the propriety of the attorney’s fee award. As alluded to above, the court of appeals was unimpressed that Allstate suffered from unfair surprise or unfair prejudice stemming from the plaintiff’s failure to designate an attorney’s fee expert prior to trial. Though the rules require that, a trial court may decide to admit the evidence anyway upon a finding of good cause or that the failure to disclose did not result in unfair surprise or prejudice. That was the case here, as the plaintiff had pleaded for attorney’s fees in its original petition. Similarly, the court of appeals held that the trial court did not abuse its discretion in awarding equitable and just attorney’s fees under the UDJA. Since the court has discretion to award fees “on the matter of fairness given all the circumstances,” the court of appeals saw no reason to object.
It appears that the Irwin blueprint is taking hold. We expect that pretty much all UM/UIM claims will now be made under the UDJA with attorney’s fees tacked on for good measure. Is Brainard a dead letter? We could certainly be mistaken (it often happens), but from our perspective, it sure looks like it.