AMARILLO COURT OF APPEALS DENIES PETITION FOR MANDAMUS IN UIM CASE REGARDING ABATEMENT

In another decision related to severance and abatement of extra-contractual claims last week, the court of appeals in Amarillo denied a petition for mandamus seeking an order compelling the trial court to abate extra-contractual claims asserted by Terry Henrie in In re Farmers Tex. County Mut. Ins. Co., 2011 WL 4916303 (Tex.App. – Amarillo Oct. 17, 2011) (not designated for publication).  Henrie was involved in an auto accident in September 2008 when William Walker Rainey collided with Henrie’s parked vehicle. Henrie sued Rainey and, later, amended his pleading to assert claims against Farmers, his personal auto carrier. Henrie’s claims against Farmers alleged breach of contract for failure to pay uninsured/underinsured motorist (UIM) benefits, and extra-contractual claims for breach of the duty of good faith and fair dealing and for violations of the Texas Insurance Code.

In July 2011, Farmers filed a plea in abatement requesting the trial court abate all extra-contractual claims until after resolution of the UIM claim.  After holding a hearing on Farmers’s plea in abatement on August 30, 2011, the trial court denied the plea on the record.  The parties mediated on September 29, 2011, and in a letter dated September 30, Farmers informed the trial court judge that it “made a settlement offer to conclude the entire contract claim” of Henrie. Trial was set to begin on October 14.

In its Petition for Mandamus, Farmers argued Texas law establishes that, when an auto insurance carrier makes a settlement offer for a UIM claim, a trial court is without discretion and must abate extra- contractual claims until the contractual UIM claim is resolved.  Because the trial court has not abated Henrie’s extra-contractual claims, Farmers argued it was entitled to mandamus relief.

The court of appeals agreed with Farmers that Texas case law establishes that abatement of extra- contractual claims is required in most instances in which an insured asserts a claim to UIM benefits.  The court stated, however, in a mandamus context, for a party to preserve its complaint that the trial court failed to abate extra-contractual claims, that party must have brought the issue to the trial court’s attention by seeking the issuance of an abatement order from the trial court.  The record did not establish that the trial court had been asked to reconsider its denial of Farmers’s plea in abatement in light of its settlement offer to Henrie.  Yet Farmers’s mandamus petition alleged that the trial court judge clearly abused her discretion by failing to abate Henrie’s extra-contractual claims after Farmers made a settlement offer on Henrie’s entire contract claim. As such, Farmers failed to preserve its complaint by failing to seek an abatement order from the trial court on the grounds upon which it sought mandamus relief.  The court of appeals stated, consequently, it could not conclude the trial court clearly abused its discretion or that Farmers did not have an adequate remedy available at law. Thus, it denied Farmers’s petition.