### NO. 14-15-00746-CV

__________________________________________________________________ IN THE COURT OF APPEALS FOR THE FOURTEENTH JUDICIAL DISTRICT OF TEXAS HOUSTON, TEXAS

__________________________________________________________________ IN RE GEICO INSURANCE COMPANY, RELATOR

__________________________________________________________________ ORIGINAL PROCEEDING FR OM CAUSE NO. 2013-50259-A IN THE 152 nd

### JUDICIAL DISTRICT CO URT OF HARRIS COUNTY, HOUSTON, TEXAS THE HONORABLE ROBERT SCHAFFER PRESIDING

__________________________________________________________________ RELATOR’S LETTER BRIEF Scott Benjamin Novak SBN: 24051124 Phil C. Summers SBN: 19506600 LORANCE & THOMPSON, P.C. 2900 North Loop West, Suite 500 Houston, Texas 77092 Telephone: 713/868-5560 Fax: 713/864-4671 sbn@lorancethompson.com ATTORNEYS FOR RELATOR RELATOR REQUESTS EM ERGENCY RELIEF IN THE FORM OF A STAY OF DISCOVERY AND PEND ING DISPOSITIVE PROCEEDINGS RELATOR REQUESTS ORAL ARGUMENT ACCEPTED 14-15-00746-CV FOURTEENTH COURT OF APPEALS

HOUSTON, TEXAS 9/25/2015 3:28:36 PM CHRISTOPHER PRINE

CLERK

### ii 

### IDENTITY OF PARTIES AND COUNSEL Pursuant to TEX 

### . R. A PP 

### . P. 52.3 (a), the following is a list of all parties and the names and addresse s of all counsel: 1. Counsel for Relator : Relator Scott Benjamin Novak GEICO Insurance Company SBN: 24051124 Phil C. Summers SBN: 19506600 Lorance & Thompson, P.C. 2900 North Loop West, Suite 500 Houston, Texas 77092 Telephone: 713/868-5560 Fax: 713/864-4671 sbn@lorancethompson.com 2. Respondent : The Honorable Robert Schaffer 152 nd

### Judicial District Court of Harris County, Texas 201 Caroline Houston, Texas 77002 Telephone: 713/368-6040 Fax: 713/368-6801 Via court reporter’s email: nalani_callico@justex.net 3. Counsel for Real Parties in Interest : Real Parties in Interest: Peter J. Clarke Linda Holman SBN: 00797779 C LARK 

### & A SSOCIATES 

### , PLLC 6001 Savoy Drive, Suite 305 Houston, TX 77036 Telephone: 713/339-3988 pjclarkelaw@yahoo.com

### iii 

### TABLE OF CONTENTS IDENTITY OF PARTIES AND C OUNSEL ................................................... ii INDEX OF AUTHORITIES ............................................................................. iv LETTER BRIEF ............................................................................................... 1 BRIEF RESTATEMENT OF RELEVANT PROCEDURAL HISTORY AND STATEMENT OF POSITION WITH RESPE CT TO ISSUES ............. 1 ARGUMENT AND AUTHORITIE S ............................................................... 5 A. Was the judgment signed on September 10, 2014 a final judgment under Lehmann v. Har-Con Corporation , 39 S.W. 3d 191 (Tex. 2001) ? .......................................................................... 5 B. If the judgment signed on September 10, 2014 was a final judgment under Lehmann v. Har-Con Corporation , did it adjudicate Holman’s breach of contract claim against GEICO? ............................................................................................. 8 CONCLUSION ................................................................................................. 10 CERTIFICATE OF COMPLIAN CE ................................................................ 11 CERTIFICATE OF SERVIC E ......................................................................... 12 APPENDIX ....................................................................................................... 13

### iv 

### INDEX OF AUTHORITIES Cases Chessher v. Southwestern Bell Te l. Co., 658 S.W.2d 563, 564(Tex. 1983) (per curiam). ........................................................................................... 6 Continental Airlines, Inc. v. Kiefer, 920 S.W.2d 274, 276-277 (Tex. 1996) ................................................... 6 In RE: United Fire Lloyds, 327 S.W. 3rd. 250, 256 (Tex. App–S an Antonio 2010, original Proceeding .............................................................................................. 9 Jack B. Anglin Co., v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992) .......................................................... 5 Lehmann v. Har-Con Corporation, 39 S.W.3 rd

### 191, 195, 203 (Tex. 2001 ) .................................................... 4, 5 Liberty Nat. Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996). ......................................................... 9 Linn v. Arambould, 55 Tex. 611, 617-18 (188 1) .................................................................... 5 Mafrige v. Ross, 866 S.W.2d 590 (Tex. 1993) .................................................................. 7 Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341 (Tex. 1995) .......................................................... 9 Stelter v. Langoria, 687 S. W. 2d 498, 499 (T ex. App.—Houston [14 th

### Dist.] 1985, no writ) 4, 9 S. Main Bank v. Wittig, 909 S.W.2d 243, 244 (Tex . App.—Houston [14 th

### Dist.] 1995, orig. proceeding) ............................................................................................. 4, 9

### v 

### U.S. Fire Insurance Co mpany vs. Mallard, 847 S.W. 2nd 668 (Tex. —App. Housto n [1st District] 1993, original proceeding ............................................................................................... 9 Young v. Hodde, 682 S.W.2d 236 (Tex. 1984) (per curiam) ............................................. 6 Rules Tex. R. Civ. P. 329b (d) ..................................................................................... 4, 9 Tex. R. Civ. P. 329b (e) ..................................................................................... 4, 9

### 1 

### TO THE HONORABLE COURT OF APPEALS: As requested by this Court in its Order of September 17, 2015, Relator, Government Employees Insurance Company (hereinafter “GEICO”), submits this, its Letter Brief attendant to Relator’s Petition for Writ of Mandamus complaining of the November 17, 2014 Order granting Linda Holman’s Motion to Lift the abatement of her extra-contractual claims against GEICO (and the attendant July 10, 2015 Order denial of GEICO’s Moti on to Reconsider same) by the Honorable Robert Schaffer, Presi ding Judge of the 152 nd

### Judicial District Court of Harris County, Texas. I. Brief Restatement of Releva nt Procedural History and Statement of Position with Respect to Issues Relator, GEICO, was a Defendant in a lawsuit pending in the 152 nd

### Judicial District Court of Harris County, Texas, Cause No. 2013-50259, styled Linda Holman vs. GEICO Insurance Company . GEICO insured Ms. Holman’s vehicle and provided underinsured coverage. Linda Ho lman initially filed a claim against GEICO related to a January 12, 2012 automobile accident with Crystal MacGrirr (Cause No. 2013-50259) and attendant to Holman’s underinsured motorist policy. 1 

### She alleged that GIECO was liable on contract and extra-contractual theories based

1 

### A copy of that Petition is attached to Relator’s Petition for Writ of Mandamus at TAB 3.

### 2 

### on GEICO’s alleged failure to settle her claims attendant to the collision with Ms. MacGrirr. Hollman subsequently added Ms . MacGrirr as a negligence defendant. On September 13, 2013 , GEICO filed its Moti on to Sever and Abate Hollman’s extra-contractual claims from her other claims, which included her negligence suit against Crystal MacGrirr and her breach of contract suit against GEICO. 2

### On June 5, 2014, Judge Robert Schaffer signed an Order severing the extracontractual claims brought by Hollmanagainst GEICO and abating discovery; Hollman’s extra-contractual claims agains t GEICO were then incorporated into Cause No. 2013-50259-A. Holman ’s negligence and breach of contract claims persisted under the original matter numb er - Cause No. 2013-50259. The Trial Court’s Order of Severance and Abatement states as follows: The Court, after due and proper no tice to all parties, considered Defendant Government Employ ees Insurance Company d/b/a GEICO's Motion to Sever and Abate, and the Court, after reviewing the pleadings and the evidence and hearing the arguments of counsel, finds the Motion is well-founded and that the motion should be GRANTED . It is, therefore,

2

### GEICO’s Motion to Sever and Ab ate is attached to Relator’s Petition for Writ of Mandamus at TAB 7. A copy is attached hereto as Exhibit A for the Court’s convenience.

### 3 

### ORDERED, ADJUDGED, AND DECREED that Defendant's Motion to Sever and Abate is hereby GRANTED, and that Plaintiffs' extra-contractual allegations, which include: (1) violations of the Texas Insurance Code (2) violations of the Texas DTPA, (3) breach of the duty of good faithand fair dealing, and (4) claims for attorney fees. as well as the prayer for relief fo r these claims, are hereby severed from the original Cause No. 2013-50259; styled Linda Holman v. GEICO and this Court hereby orders the clerk of the Court to assign the severed action the separateCause No. of 2013-50259-A (hereinafter the "An case). Defendant will pay for the cost of filing, and to copy the following documents and include them in the new file: 1. Plaintiffs Original Petition; 2. Defendant's Original Answer; and 3. Defendant's Motion to Sever and Abate and Order All other relief not expressl y granted is hereby denied. 3

3 

### The Trial Court’s Order of Severance and Abatement is attached to Relator’s Petition for Writ of Mandamus at TAB 5. A copy is attached heretoas Exhibit B for the Court’s convenience.

### 4 

### On September 10, 2014 th e Trial Court entered a default judgment against Crystal MacGrirr in Cause No. 2013-50259. 4

### It states that said “ judgment finally disposes of all parties and all claims and is appealable .” Hollman did not file any pleadings extending the Trial Court’s plenary power, which therefore expired on October 10, 2014. 5 

### After GEICO filed its Petition for Wr it of Mandamus, this Court requested briefing on the following two issues: (a) whether the Judgment of September 10, 2014 was a Final Judgment under Lehmann v. Har-Con Corporation , 39 S.W.3d 191 (Tex. 2001) and, if so, (b) whether that judg ment adjudicated Holman’s breach of contract claim against GEICO. Upon review of the record and the law, Relator answers in the affirm ative as to both of these inquiries and sets forth the reason for same infra.

4

### A copy of the Default Judgment is attached toRelator’s Petition for Writ of Mandamus at TAB 9. A copy is attached hereto as Exhib it C for the Court’s convenience.
5 

### SeeTEX 

### . R. C IV 

### . P. 329b(d), (e); Stelter v. Langoria , 687 S.W.2d 498, 499 (Tex. App.— Houston [14th Dist.] 1985, no writ); cf. S. Main Bank v. Wittig , 909 S.W.2d 243, 244 (Tex. App.—Houston [14th Dist.] 1995, orig. proceeding).

### 5 

### II. Arguments and Authorities A. Was the judgment signed on September 10, 2014 a final judgment under Lehmann v. Har-Con Corporation , 39 S.W.3d 191 (Tex. 2001)? A judgment is final for purposes of appealif it disposes of all pending parties and claims in the record, except as necessary to carry out the decree. See Jack B. Anglin Co., v. Tipps , 842 S.W.2d 266, 272 (Tex. 1992); Linn v. Arambould, 55 Tex. 611, 617-18 (1881) (surveying several tests for determining when a judgment is final). See generally 49 C.J.S. Judgments § 11 (1947); 46 AM. JUR. 2D Judgments § 200-206 (1994). Beca use the law does not require that a final judgment be in any particular form, whether a judicial decree is a final judgment must be determined from its language and the record in the case. Lehmann v. Har-Con Corp ., 39 S.W.3d 191, 195 (Tex. 2001). Determination of finality based on these factors is crucial in assessing the need for post-judgment actions. Id. (“Since timely perfecting appeal (as well as filing certain post- judgment motions and requests)hangs on a party's making this determination correctly , certainty is crucial.”). As iterated by the Supreme Court in Lehman v. Har-Con Corporation , “a judgment that finally disposesof all remaining parties and claims based on the record in the case is final rega rdless of the language.” Id. at 200. As underscored by the Court and, to avoid confusion, “every fi nal judgment should plainly, explicitly, and

### 6 

### specifically dispose of each and every party to the cause, and of each and every issue therein presented by the pleadings.” Id. at 197. The language of the judgment – and the record – will control over any uncertainty. Id. at 200. (“the language of an order or judgment can make it final, even though it should have been interlocutory, if that language expressly disposes of all claims and all parties. It is not en ough, of course, that the order or judgment merely use the word "final". The intent to finally di spose of the case must be unequivocally expressed in the words of the order itself. But if that intent is clear from the order, then the order is final and appealable, even though the record does not provide an adequate basis for rendition of judgment .); Continental Airlines, Inc. v. Kiefer , 920 S.W.2d 274, 276-277 (Tex. 1996). As advised by the Court in Lehmann v. Har-Con , “A party who is uncertain whether a judgment is final must err on the side of appealing or risk losing the right to appeal.” For example, “if a defendant moves for summary judgment on only one of four claims asserted by the plaintiff, but the trial court renders judgment that the plaintiff take nothing on all claims asserted, the judgment is final – erroneous, but final.” Id. at 200 (citing Young v. Hodde , 682 S.W.2d 236 (Tex. 1984) (per curiam); Chessher v. Southwestern Bell Tel. Co ., 658 S.W.2d 563, 564 (Tex. 1983) (per curiam)).

### 7 

### Unlike in Mafrige v. Ross , 866 S.W.2d 590 (Tex. 1 993) and, subsequently, Lehmann v. Har-Con , this Court need not tackle an ambiguous Default Judgment or attempt to unravel “mother Hubbard” language. Rather, the subject Default Judgment is crystal clear in its finality. While the judgment made the basis of Lehman did not indicate its finality, the Default Judgment entered in Cause No. of 2013-50259 does. Finality "must be resolved by a determin ation of the intention of the court as gathered from the language of the decree and the record as a whole, aided on occasion by the conduct of the parties." See Lehmann v. Har-Con at 203 (citing 5 RAY W. MCDONALD, TEXAS CIVIL PRACTICE § 27:4[a], at 7 (John S. Covell, ed., 1992 ed.)). In Cause No . 2013-50259, the subject Default Judgment explicitly states that “[t]his judgment finally disposes of all pa rties and all claims and is appealable.” 6 

### Neither the record nor the Judg ment reflect any intent to retain any matter for further adjudication. Under the rule articulated by Lehmann v. Har-Con , the Default Judgment of September 10, 2014 was final asto all parties and claims then pending under Cause No. 2013- 50259. This holds true even though Holman’s Motion for Default Judgment did not request adjudication of anything other than the

6 

### See the September 10, 2014 Default Judgment, attached to Relator’s Petition for Writ of Mandamus at Tab 9, attached hereto as Exhibit C for the Court’s convenience

### 8 

### negligence claims against MacGrirr be cause the ensuing Default Judgment was nevertheless explicit inits conclusiveness. See Lehmann v. Har-Con at 207. B. If the judgment signed on September 10, 2014was a final judgment under Lehmann v. Har-Con Corporation , did it adjudicate Holman’s breach of contract claim against GEICO On September 13, 2013, GEICO move d to sever and abate the extracontractual claims brought by Hollmaninto their own, unique matter. 7

### By Order of June 5, 2014, the Trial Court explicitly severed the extra-contractual claims from Cause No. 2013-50259, ordering the clerk of the Court to assign the severed action the separate Cause No. of 2013-50259-A. 8 

### GEICO did not request th at Holman’s breach of contract claim follow the extra-contractual claims into the severed action and the Court did not so order. Axiomatically, Cause Number Cause No . 2013-50259 continued to include not only the negligence cl aims against Crystal MacGrirr, but also the breach of contract claim against GEICO predicating the extra-contractual claims severed into Cause No. 2013-50259-A . Id. When the Trial Court issued its Default Judgment on September 10, 2014 granting Plaintiff’s Motion against MacGrirr, th e Judgment of the Court stated “[t]his judgment finally disposes of all part ies and all claims and is appealable.” See Exhibit B. This finally disposed of all claims and all parties then

7 

### A copy of GEICO’s Motion to Sever and Abate, attached to Relator’s Petition for Writ of Mandamus at Tab 7, is attached hereto as Exhibit A for the Court’s convenience.
8

### A copy of the Trial Court’s Order for Severance and Abatement, attached to Relator’s Petition for Writ of Mandamus at Tab 5, is attached heretoas Exhibit B for the Court’s convenience.

### 9 

### extant under the originalmatter, Cause No . 2013-50259, including Holman’s breach of contract claim against GEICO, which is discrete from the extra-contractual claims. 9 

### Because Holman never filed any motionsor pleadings extending this Court’s plenary power in Cause No. 2013-50259, it expired on October 10, 2014. 10

### All postjudgment and appellate deadlines have, in turn, expired as to Holman’s breach of contract claim against GEICO, further cementing the finality of the Default Judgment as to same. After consideration of Lehmann v. Har-Con, the Trial Court’s Default Judgment of September 10, 2014 and the record as a whole, it is clear that the Default Judgment did, in fact, adjudicate Holman’s breach of contract claim against GEICO to finality.

9

### “A breach of an insurance contract claim is separate and distinct from bad faith, insurance code, or DTP causes of action.” U.S. Fire Insurance Company vs. Mallard 847 S.W. 2nd 668 (Tex.– App. Houston [1st District] 1993, original proceeding). In RE: United Fire Lloyds327 S.W. 3rd. 250, 256 (Tex. App–San Antonio 2010, original proc eeding) the court heldthat, “contractual claims based on an insurance policy and bad faith claims are by their nature independent” Akin 927 S.W. 2nd at 629, but in most circumstances, an insured may not prevail on a bad faith claim without first showing that the insurer breached the contract.” In most circumstances, an insured may not prevail on a bad faith cl aim without first showi ng that the insurer breached the contract. Liberty Nat. Fire Ins. Co. v. Akin , 927 S.W.2d 627, 629 (Tex. 1996). There are two exceptions to this rule: (1) the insurer's failure to timely inve stigate the insured's claim; or (2) the insurer's commission of "some act, so extreme, that woul d cause injury independent of the policy claim." Republic Ins. Co. v. Stoker , 903 S.W.2d 338, 341 (Tex. 1995). Ne ither exception applies.
10 

### SeeTEX 

### . R. C IV 

### . P. 329b(d), (e); Stelter v. Langoria , 687 S.W.2d 498, 499 (Tex. App.— Houston [14th Dist.] 1985, no writ); cf. S. Main Bank v. Wittig , 909 S.W.2d 243, 244 (Tex. App.—Houston [14th Dist.] 1995, orig. proceeding).

### 10 

### III. Conclusion In response to this Court’s inquiry as to the finality of the Trial Court’s September 10, 2014 Default Judgment, Relator would state that the judicial decree leaves little room for construal - it is plai nly final, disposing of all parties and claims under Cause No. 2013- 50259 by its very terms. Based on the procedural history of Cause No. 2013-50259, with anemphasis on the Trial Court’s Order of Severance and Abatement, this final judgment necessarily includes Holman’s breach of contract claim against GEICO, which remain ed tethered to thatcause number. Respectfully submitted, LORANCE & THOMPSON, P.C. /s/ Scott B. Novak Scott B. Novak SBN: 24051124 Phil C. Summers SBN: 19506600 2900 North Loop West, Ste. 500 Houston, TX 77092 713/868-5560 713/864-4671 (fax) sbn@lorancethompson.com ATTORNEYS FOR RELATOR GEICO INSURANCE COMPANY

### 11 

### CERTIFICATE OF COMPLIANCE Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that this brief contains 2,675 words (excluding the caption, table of contents, table of authorities, signature, proof of service, certification, and certificate of compliance). This is a computer-generated document created in Microsoft Word, using 14-point typeface for all text, except for footnotes which are in 12-point typeface. In making this certificate of complian ce, I am relying on the word count provided by the software used to prepare the document.
/s/ Scott B. Novak Scott B. Novak

### 12 

### CERTIFICATE OF SERVICE This is to certify that a true copy of th e foregoing has been sent by e-filing on this 25th day of September, 2015, to the following: Respondent : The Honorable Robert Schaffer 152 nd

### Judicial District Court of Harris County, Texas 201 Caroline Houston, Texas 77002 Telephone: 713/368-6040 Fax: 713/368-6801 Via court reporter’s email: nalani_callico@justex.net Counsel for Real Parties in Interest : Real Parties in Interest: Peter J. Clarke Linda Holman SBN: 00797779 C LARK 

### & A SSOCIATES 

### , PLLC 6001 Savoy Drive, Suite 305 Houston, TX 77036 Telephone: 713/339-3988 pjclarkelaw@yahoo.com
/s/ Scott B. Novak Scott B. Novak

### 13 

### NO. 14-15-00746-CV

__________________________________________________________________ IN THE COURT OF APPEALS FOR THE FOURTEENTH JUDICIAL DISTRICT OF TEXAS HOUSTON, TEXAS

__________________________________________________________________ IN RE GEICO INSURANCE COMPANY, RELATOR

__________________________________________________________________ ORIGINAL PROCEEDING FR OM CAUSE NO. 2013-50259-A IN THE 152 nd

### JUDICIAL DISTRICT CO URT OF HARRIS COUNTY, HOUSTON, TEXAS THE HONORABLE ROBERT SCHAFFER PRESIDING

__________________________________________________________________ APPENDIX
LIST OF DOCUMENTS Defendant’s Motion to Sever and Abate dated 09/13 /13 .................................. EX A Order for Severance and Abatement dated 06/05 /14 ........................................ EX B Default Judgment date d 09/10/14 ..................................................................... EX C

# EXHIBIT AFiled 13 September 13 P4:34 Chris Daniel
- District Clerk Harris County ED101J017113747 By: adiliani a. solis CAUSE NO. 2013-50259 LINDA HOLMAN 

# v. GEICO INSURANCE COMPANY 

### § IN THE DISTRICT COURT OF 

### § § HARRlSCOUNTY, TEXAS 

### § § 152ND JUDICIAL DISTRICT DEFENDANT'S MOTION TO SEVER AND ABATE TO THE HONORABLE JUDGE OF SAID COURT: COME NOW Govenunent Employees Insurance Company, Defendant in the above malter, and files this Motion to Sever and Abate, pwsuant to Rule 41 of the Texas Rules of Civil Procedure. In support of this motion, Defendant respectfully shows unto the Court the following: 

### I. 

## Elli! This lawsuit arises from an automobile accident involving the Plaintiff, Linda Holman, and a vehicle driven by Crystal MacGrirr. The Plaintiff claims Crystal MacGrirr was negligent, and that she was an "uninsured motorisf' as that term is defined by law. The Plaintiff seeks uninsured motorist ("UIM") benefits from Government Employees Insurance Company, the company which inswed Plaintiffs' vehicle at the time of the accident. Plaintiff alleges that she sustained injuries as a result of the accident. She seeks damages for medical expenses in the past and in the futwe. Plaintiff seeks uninsured motorist benefits from Defendant Government Employees Insurance Company. Plaintiff alleges in her Original Petition that Defendant engaged in violations of the Texas Insurance Code, violations of the Texas DTPA, breach of the duty of good faith and fair dealing. For the reasons set forth below, Defendant is entitled to an Order severing and abating discovery
538580.1 PLD 0004750 9142 peson all of the "extra-contractual" claims until there is a legal determination as to the amount of UM benefits, if any, which are owed to the Plaintiff. II. Legal Standard for Severance Rule 41 of the Texas Rules of Civil Procedure provides that "[a]ny claim against a party may be severed and proceeded with separately." In McGuire v. Commercial Union Insurance Co. of NY., 431 S.W.2d 347, 351 (Tex. 1 968), the Court held that the rule refers to a claim "which is a severable part of a controversy which involves more than one cause of action." Id. The objective of a severance is to do justice, avoid prejudice, and further convenience. Guarantee Fed v. Horseshoe Operating, 793 S.W.2d 652, 658 (Tex.l990); In re Trinity Universal Ins. Co., 64 S.W.3d 463, 465 (Tex. App.-Amarillo 2001, orig. proceeding). A claim is properly severable if (1) the controversy involves more than one cause of action, (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted, and (3) the severed claim is not so interwoven with the remaining action that they involve the same facts and issues. In re Trinity Universal Ins. Co.,64 S.W.3d at 465. III. Discussion 

### A. Severance is Required Because Plaintiff Has Not Established Entitlement to UM Benefits The policy in effect at the time of the accident provides in part: PART C-UNINSUREDIUNDERINSUERD MOTORISTS COVERAGE We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage, caused by an accident.

538580.1 PLD 0004750 9142 pcsIt is well-settled Texas law that a Plaintiff is not "legally entitled to recover," and no duty to pay VM/UIM benefits exist, until there is a judicial determination that the tortfeasor was negligent and that Plaintiffs' damages exceed the insurer's applicable credit. 

### Allstate Ins. Co. v. 

### Bonner, 51 S.W.3d 289 (Tex. 2001) (holding that because the jury determined that the Plaintiff's damages were below the applicable credits, the VM carrier owed no duty to pay VM benefits and because no duty to pay UM benefits ever arose, there could be no violation of Article 21.55); 

### Henson v. 

### Southern Farm Bureau Cas. Ins. Co., 17 S.W.3d 652 (Tex. 2000) (there is no obligation to pay 

### VIM benefits until a jury establishes the tortfeasor's liability and determines that damages exceed the underlying liability limits). OEICO's duty to pay benefits under the contract is not triggered merely by the insured filing a suit to recover policy benefits. 

### Henson, 17 S.W.3d at 654. The Supreme Court recently affmned 

### Henson in 

### Brainard vs. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006). In denying a claim for attorney's fees, the Supreme Court again held there was "no contractual duty to pay benefits until the liability of the other motorist 

### and the amount of damages suffered by the insured 

### are determined." 

### Brainard, 216 S.W.3d at 815, citing 

### Henson, 17 S.W.3d at 653-654. The Court ruled in 

### Brainard: Neither requesting VIM benefits nor filing suit against the insurer triggers a contractual duty to pay. Where there is no contractual duty to pay, there is no just amount owed. Thus, under Chapter 38, a claim for VIM benefits is not presented until the trial court signs a judgment establishing the negligence and underinsured status of the other motorist. 

### Id at 818. The 

### Brainard opinion explains that unlike other insurance contracts, UM insurance utilizes tort law to determine coverage. "The VIM contract is unique because, according to its terms, benefits are conditioned upon the insured's legal entitlement to receive damages from a S38SBO.l PLD 0004750 9142 pesthird party." Id. "Consequently, the insurer's contractual obligation to pay benefits does not arise until liability and damages are determined." Id, citing Henson, 17 S.W.3d at 654. Because there is no obligation to pay benefits before liability and damages are determined, breach of contract and extra-contractual claims cannot accrue until a jury determines that the Plaintiffs are "legally entitled to recover" UMIUIM benefits. See Wellisch v. United Servs. Auto Ass 'n, 75 S.W.3d 53, 59 (Tex. App.-San Antonio 2002, pet. denied). The Wellisch court, addressing an Article 21.55 claim, stated that it is "clear that an insurer is not obligated to pay UIM benefits until the insured becomes legally entitled to those benefits." Id at 57. This is because 21.5 5 is premised on the presumption that carriers have the right to dispute claims and "nothing in Article 21.55 precludes an insurer from awaiting a judicial determination of an insured's 'legal entitlement.'" Id. at 57. In short, there can be no "breach" of the UMIUIM contract and no penalties of any kind can be assessed against the insurer until there is a judicial determination that the third party was negligent and that the Plaintiffs' damages exceed the insurer's applicable credits. The court in In re Trinity Universal Ins. Co. also held that an insurer is entitled to
severance on all of the extra-contractual claims against it. 63 S.W.3d 463. The Trinity court explained that no extra-contractual claims could accrue (including bad faith claims, Article 21.21, or Article 21.55 claims) until the jury determined that the Plaintiffs were "legally entitled to recover" from the owner or operator of an uninsured/underinsured motor vehicle. 64 S.W.3d 467. The court concluded that the trial court abused its discretion in severing only some of the extra-contractual claims. Id Other Texas courts have held that when UM/UIM claims are combined with extracontractual claims (including allegations of bad faith and/or violations of the Texas Insurance 538580.1 PLO 0004150 9142 pesCode Article 21.21 and/or Article 21.55), a severance is required to avoid undue prejudice to the insurer in its defense of the coverage dispute. 

### See In re Allstate Ins. Co, 2003 WL 21026877 (Tex. App.-Houston [1 ,t Dist.] 2003, orig. proceeding) (holding that it was an abuse of discretion not to sever the common law bad faith and the Article 21.21 claims from the VIM claim); 

### Mid-Century Ins. Co. v. 

### Lerner, 901 S.W.2d 749, 752-53 (Tex. App.-Houston [14th Dist.] 1995, orig. proceeding) (holding that severance and abatement of extra-contractual claims is required until all appeals are exhausted for the contractual claims); 

## u.s. Fire Ins Co v. Millard, 847 S.W.2d 668 (Tex. App.-Houston [1 st Dist.] 1993, orig. proceeding) (holding that it was an abuse of discretion not to sever the extra-contractual claims from the VIM claim); 

### State Farm Mut. Auto. Ins. Co. v. Wilborn, 835 S.W.2d 260, 261 (Tex. App,-Houston 

### [14 th Dist.] 1992, orig. proceeding) (holding that the bad faith and Insurance Code claims must be severed from the VIM claim to avoid prejudice). B. Discovery Must Be Abated on the Extra-Contractual Claims. Along with severance, abatement of discovery on the extra-contractual claims is necessary. Without abatement, Defendants would be unfairly prejudiced by having to conduct discovery and prepare for trial on claims which are not ripe until the jury has determined whether UM benefits are owed. Texas law supports requests for abatement of discovery on the extra-contractual claims. In 

### United States Fire Insurance v. 

### Millard, Plaintiff filed an action against his uninsured motorist carrier seeking both uninsured motorist benefits and alleging extra-contractual claims for violations of the DTPA and the Texas Insurance Code. 

### Millard, 847 S.W.2d 668 (Tex. App.- Houston [1" Dist.] 1993, rehearing denied). The insurer filed a motion to sever and abate the extra-contractual claims pending resolution of the underlying claim, which the trial court denied. 538580.1 PLO 0004750 9142 pes

### Id. The appellate court, in ordering the trial judge to sever and abate the extra-contractual claims from the underlying action, specifically noted: [A ]batement of the bad faith claims must necessarily accompany severance of those claims from the contract claim. Without abatement, the parties will be put to the effort and expense of conducting discovery and preparing for trial on claims that may be disposed of in a previous trial. 

### Millard, 847 S.W.2d at 673. The majority of cases in Texas hold that when severance occurs, so does abatement. 

### See e.g. Northwestern Nat. Lloyds Ins. Co. v. 

### Caldwell. 862 S.W.2d 44 (Tex. App.-Houston [14 th Dist.] 1993, orig. proceeding) (compelling the trial court to order abatement of all proceedings

on the bad faith cause of action until final disposition of the underinsured motorist claim); 

### Texas Farmers Insurance Company v. 

### Stem, 927 S.W.2d 76 (Tex. App.-Waco 1996, orig. proceeding) (holding that the insurer was prejudiced and therefore entitled to severance and abatement of extra-contractual claims); 

### Mid-Century Ins. Co. of Texas v. 

### Lerner, 901 S.W.2d 749 (Tex. App.-Houston [14 th Dist.] 1995, rehearing overruled) (holding that severance and abatement of extra-contractual claims is required until all appeals are complete for the contractual claims). As the above cases show, this Court must abate all discovery on the extra-contractual claims until after the resolution of the UM claim. 

### IV. Conclusion Severance of Plaintiffs' extra-contractual claims should be granted because the claims are premature until there has been a determination of whether UM benefits are owed by GEICO. In conjunction with the severance, discovery on the extra-contractual claims must be abated as required by the multiple Texas appellate court mlings on this issue.

538580.1 PLD 0004750 9142 pcsWHEREFORE, PREMISES CONSIDERED, Defendant prays its Motion for Severance and Abatement be granted; that the UM/car wreck case alone proceed to trial and the extra· contractual claims be severed; that all discovery not relevant to the UM case be abated until after resolution of the UM case; and for such other and further relief to which Defendant may show itself justly entitled. Respectfully submitted, 

### LO(jfj THOMPSON By: Phillip C. Summers TBN: 19506600 2900 North Loop West, Suite 500 Houston, TX 77092 

### 713/868-5560 713/864-4671 (fax) ATTORNEY FOR DEFENDANT, GOVERNMENT EMPLOYEES INSURANCE COMPANY
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing has been served on all**p~~** in accordance with Rules 21 and 21a of the Texas Rules of Civil Procedure, on this 

### d"y 

### 0"","""", 2<113. •

# ~R~---

538580.1 PLD 0004750 9142 pcs**·.~.".'** 

# .. "'.".'""

### """o~ 

## HAIl.t;····· • • ". ""'(/.o ..
.. 

# .. ... 

# ,. ....
. 

## ''''''

.. 

### " 

# .

.... ti···· 

# C!o···· :.::sl to
.... ". :0: 

## .c::.. 

# ;" :**·~z:** .. .. '"**~~\** 

### .. 5.""(: ••**~'.** 

### /·l
• 'J '. • ...... ... 'Y"" • ." A."7 .• 

## '. ,/ '"
.. ' ..c'
.

......**"'.~ ~l-**  .



### ..**··.Qtt~·** 

### ·· 

## ..... " 

# . I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this September I 2Q 15
Certified Document Number: 57302594 Total Pages: 7

Chris Daniel, DISTRICT CLERK HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a qnestion regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.comFiled 13 September 13 P4:34 Chris Daniel· District Clerk Harris County ED101J017713747 By: adiliani solis

GEICO INSURANCE COMPANY LINDA HOLMAN 

### V. CAUSE NO. 2013-50259 

### § IN THE DISTRICT COURT OF 

### § § HARRIS COUNTY, T E XA S 

### § 

### § 152ND JUDICIAL DISTRICT

Defendant will pay for the cost of filing, and to copy the following documents and ORDER FOR SEVERANCE AND ABATEMENT The Court, after due and proper notice to all parties, considered Defendant Government Employees Insurance Company d/b/a GEICO's Motion to Sever and Abate, and the Court, after reviewing the pleadings and the evidence and hearing the arguments of counsel, finds the Motion is well-founded and that the motion should be GRANTED. 

### It is, therefore, ORDERED, ADJUDGED, AND DECREED that Defendant's Motion to Sever and Abate is hereby GRANTED, and that Plaintiffs' extra-contractual allegations, which include: (1) violations of the Texas Insurance Code, (2) violations of the Texas DTPA, (3) breach ofthe duty of good faith and fair dealing, and (4) claims for attorney fees.

as well as the prayer for relief for these claims, are hereby severed from the original Cause No
.. 2013-50259; styled 

### Linda Holman v. C;EICa and this Court hereby orders the clerk of the Court to assign the severed action the separate Cause No. of2013-50259·A (hereinafter the "A" case). 

# l

• :9 

### r::: In 

# j
" 

# I 538580.1 PLO 0004750 9142 pes 

### o 

## 8

### include them in the new file: I. 

### Pla,intiffs Original Petition; 2. Defendant's Original Answer; and 3. 

### Defendant's Motion to Sever and Abate and Order All other relief not expressly granted is hereby denied. SIGNED THIS

_ DAY OF -', 2013.

JUDGE PRESIDING

APPROVED AS TO FORM AND CONTENT: 

### LORANCE & 

### TIIOMPSON


### By:

# ~Ld Phillip C. ummers 

### TEN: 19506600 2900 North Loop West, Suite 500 Houston, 'IX 

### 77092 713/868-5560 713/864-4671 (fax) 

### ATTORNEY FOR DEFENDANT

N 

### "0 N 

# l

, on 

### f:! on 

# j J 538580.1 PLD 0004750 9J42PCS


# a

## ....... " 

### .



# .**+·~** 

# .. 

# ··O'f, HAR/i'.····· ....

•**o-.~** ••••• - •• 0., l"'iiS"

... • , 

## 1 9:- 

## ti'" 

# 'b

. :**~l ~~,**  .. 0..
. ",""",0' 

# . (.) 

### .. .**~'** 

# .... • .. . .• 60i :: :-1: .--., "---"

'; "to

.. . """'I; •

.. ''''-'''!':

.. Of

.. 

### \.

### ~""'.... . ...

### ·~ •.l



### •••• '<"6): 

# #
.

..... ,. 0' 

# * <:i •• oft

••· ..**~.i** •••• ,.· ..... ••• ·•· .. • I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this September I. 2015
Certified Document Number: 57302595 Total Pages: 2

Chris Daniel, DISTRICT CLERK HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regardiug the validity of this document and or seal please e-mail support@hcdistrictclerk.com

# EXHIBIT BFiled 13 September 13 P4:34 Chris Daniel
- District Clerk Harris County ED101J017713747 By: adilian; solis CAUSE NO. 2013-50259 LINDA HOLMAN V. GEICO INSURANCE COMPANY § IN THE DISTRICT COURT OF § § HARRIS COUNTY, T E X A S § 

### § 152ND JUDICIAL DISTRICT

N 

### """' o ORDER FOR SEVERANCE AND ABATEMENT The Court, after due and proper notice to all parties, considered Defendant Goverrunent Employees Insurance Company d/b/a GEICO's Motion to Sever and Abate, and the Court, after reviewing the pleadings and the evidence and hearing the argwnents of counsel, finds the Motion is well-founded and that the motion should be GRANTED. It is, therefore, ORDERED, ADJUDGED, AND DECREED that Defendant's Motion to Sever and Abate is hereby GRANTED, and that Plaintiffs' extra-contractual allegations, which include: (I) violations of the Texas Insurance Code, (2) violations of the Texas DTPA, (3) breach of the duty of good faith and fair dealing, and (4) claims for attorney fees.

as well as the prayer for relief for these claims, are hereby severed from the original Cause No. 2013-50259; styled 

### Linda Holman v. 

### GEICO and this Court hereby orders the clerk of the Court to assign the severed action the separate Cause No. of2013-50259-A (hereinafter the "An case). Defendant will pay for the cost of filing, and to copy the following documents and

538580.1 PLO 0004750 9(42 PeS

RECORDER'S MEMORANDUM ThiS Lnslrument IS of poor quality at the lime Ollmagmg

### include them in the new file: I. 

### Plaintiffs Original Petition; 2. Defendant's Original Answer; and 3. 

### Defendant's Motion to Sever and Abate and Order All other relief not expressly granted is hereby denied. SIGNEDTffiS DAY 

### OF ..=..JU:=.;.N_O_5

## _20_\4---,,2013.

APPROVED AS 

### TO FORM AND CONTENT: LORANCE & 

### THOMPSON

By:

# ~J, 1<YY

### Phillip C. ummers 

### TBN: 19506600 2900 North Loop West, Suite 500 Houston, TX 77092 713/868-5560 713/864-4671 (fax) ATTORNEY FOR 

### UEFENDANT

S38S80 I PLD 0004750 9142 pes

# ....**···~~··H·A~~····** 

# ...

•• "**.~** •••.• + ••• ·OJ • Li...' 0'" .....A " .. l 

# ::sti' ··· ... 0·· :0/ \c:.\ 

## : ',:
-**.~z: .~**  :0:. 

# :-1:**~'::t.\ ':~:** **~::** 

### • ""0.- ", .'
........

.. ..". 'O" A-T .. '. ,/ '. .' A:' •

... 

### ,**"'"~ ~'**  

### •...

_ 

# .. ;. 

# ..

...... 0 

# * co: ." ..... 

## ..... ., ; 

## .. I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this September 1. 2015

Certified Document Number: 61096287 Total Pages: 2

Chris Daniel, DISTRlCT CLERK HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated doc1!ments are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com

# EXHIBIT C

### •
9/9/2014 5:27:54 PM Chris Daniel- District Clerk Harris County Envelope No. 2436151 By: SALENE SMITH

LINDA HOLMAN Plaintiff, 

# v. CRYSTAL MACGIRR ANl) GOVERNMENT EMPLOYEES lNSURNACE COMPANY Defendants. NO. 2013-50259 § IN THE DISTRICT COURT § § § 152ND .JUI>IC1AL ])JSTRICT 

### § § 

### § § § OF HARRIS COUNTY, TEXAS DEFAULT Jl.)J)GMENT

N 

### '0 

# - At the hearing on this cause, Plainti IT, Linda Holman, appeared and Dcfcndant, Crystal Macgirr, although duly cited to appear by filing an answer herein, failed to file an answer within the time ullowed by law and wholly defaulted. The Court has considered the pleadings and official records on file in this cause and the evidence and is of the opinion that judgment should be rendered for Plaintiff. It is accordingly 

### ADJUDGED that Linda Holman, Plaintitf, recover from Crystal Macgh'l', Defendant, judgment forI. On the claim of Negligence, the court finds in favor of Plaintiff, Linda Holman, against Defendant, Crystal Mcgirr, in the amount of$58, 1 03.49: Plaintiffs award includes a finding of:
a. $7,455.49 for reasonable medical care and expenses in the past; =6. $1,§QG,B9 

### I'm ,eas&ftabl e medical**ea~G'!I!la** ellfl6A!ltls:tl 

### the**R~**

c. $30,000.00 for physical pain and suffering in the past; d. $10,000.00 for physical pain and suiTering in the future;
e. $7,500.00 for mcntulunguish in the past; f. $1,000.00 for mental anguish in the future; and

RECORDER'S MEMORANDUM ThIS instrumenl \5 of**po~r** quality at the time of ImagIng

# • •

g. $648,00 

### for lost wages in the past. 2. Plaintiff, Linda Holman, is entitled to**pre-jUdgl~~:terest** 

### on the damages awarded herein, measured from December 13,2014, 

### at the rate 

### of**~per** 

### annum. 3. 

### Plaintiff, Linda Holman, is entitled to post-judgment interest on the total amount 

# 2'?0 of the judgment and any pre-judgment interest. awarded hereinabove, at the rate of**~,** 

### per
annum fi'om 

### the date this judgment is signed until paid.

, 4. 

### Cost are hereby taxed against Defendant. 

### IT IS ORDERED that Plaintiff, Linda Holman, is entitled to enrorce this judgment through abstract, execution and any other process necessary. This judgment finally disposes of all 

### parties and all claims and is appealable. 

### SIGNED on 

## SEP, 10

## ~9A~4.

# ~~ JUDGE PRESIDING

APPROVED AS TO FORM:
lsI 

### Peter 1. 

### Clarke Peter J. 

### Clarke Texas Bar No. 00797779 

### Errol A. 

### Jones Texas Bar No. 24070019 6001 

### Savoy Drive Suite 305 

### Houston, TX 77036 

### Tel. (713) 339-3988 

### Fax. (713) 339-4669 

### Attorneys for Plaintiff Linda Holman

2

# · " 

# .

..**~~··** 

# ..**·o~** 

## HAR/?:"·"· .••**".~** 

### '". 

## " =, ," -'I.""

..
... i'J.., ••• .." '",",,:'" • 

# .. S-'u"
0·' : 0
.. " \ 

### c:::.**.~,** :',:**.~...,..** " 

## ,... .. . :



### .. 

### ....., .. .. '"



### ':':.. \
. '" 5 

## -<: :: •• ".::i. '. ,.'**~.'**
.. \J"': ". ..A.., • :J' 

# "#'

. ...**~.ft·** . .' 

# '. ,,;to . .

....... ,j 

# *

.
........ , " 

# .. I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this September 1 2015

Certified Document Number: 62294446 Total Pages: 2

Chris Daniel, DISTRICT CLERK HARRIS COUNTY, TEXAS



### In accordance with Texas Government Code 406.013 

### electronically transmitted authenticated documents are valid, If 

### there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com