For the twelfth time in the last year, the Texas Supreme Court has granted an emergency stay while it considers an insurer’s petition for writ of mandamus in an underinsured motorist case.
This is the second mandamus petition in this case. The first (No. 24-0172; stayed March 8, 2024), arose from a Dallas county court at law judge’s denial of State Farm’s motion to abate the insured’s extracontractual claims until after trial on the declaratory judgment action and grant of plaintiff’s motion to compel State Farm to produce a corporate representative for depositions. Now, in In re State Farm Mutual Automobile Insurance Company, Betty Ganales, and Carlos Balido (No. 24-1052; stayed December 19, 2024), State Farm and its trial attorney, Carlos Balido, are seeking to reverse the trial court’s sanctions order against Balido, in which the trial court ordered him to make an immediate payment of more than $6,000 to Plaintiff’s counsel, Carlos Cortez. The order added an additional $20,000 to the amount if the Dallas Court of Appeals denied mandamus of the sanctions order, which, after initially granting a stay, it did. Just on the face of things, this looks particularly outrageous.
As you know, TCJL filed an amicus brief in one of these cases, in which we argued that once the Irwin case allowed the underinsured driver’s liability to be determined in a declaratory judgment action (for which plaintiff’s attorney’s fees are recoverable), then any extracontractual claims must be abated and severed for subsequent trial. What is going on here is that plaintiffs are seeking discovery of the insurer’s claims handling practices (often including deposition requests for corporate representatives and adjusters) before the insurer’s liability on the policy has even been established. They hope to use this discovery in the dec action to distract the jury from the real issue: whether the underinsured driver caused the plaintiff’s injuries. If they can shift the focus from the other driver to the big, bad insurance company, they enhance their chances for both a favorable verdict and recovery of their attorney’s fees. In short, this is the workaround plaintiff’s attorneys devised in response to the Brainard decision.
SCOTX has requested a response to State Farm’s petition by January 21.
