Opinion ID: 2460346
Heading Depth: 1
Heading Rank: 1

Heading: There Was Abuse of Discretion

Text: The trial court abused its discretion in refusing Allstate's motion to withdraw its consent to be bound by the Hunt-Rose judgment after Hunt substantially changed the posture of the lawsuit. This is the sequence of events. Hunt instituted its suit, naming Rose only, on April 8, 1966. On October 5, 1967, Allstate agreed with Hunt that it would be bound by the judgment as to liability and damages in the suit by Hunt against Rose. Allstate, under the undisputed facts, was willing to make that agreement after it obtained from Rose an agreement that Allstate would take the lead in the Hunt-Rose suit. To obtain Rose's agreement Allstate surrendered its subrogation rights. In an effort to consolidate these trials Allstate also waived its coverage defenses and stipulated its contractual liability. [1] For reasons already discussed, this should have permitted Rose and Allstate to defend jointly the issues which Hunt otherwise had to prove against each of them in two suits. It was at this point that Hunt, not Allstate, changed the entire situation. Hunt decided to join Allstate as a first-named defendant in an amended petition which it filed on October 10, 1967. This converted the action into a direct action against the insurer with the uninsured motorist joined. I find nothing wrong with this procedure; Allstate now was an open adversary, not only in fact but by Hunt's own pleadings. Hunt, no doubt, thought that it would aid his case for a jury to think that Allstate was the insurer for Rose. This new situation was not of Allstate's making. If Allstate had known at the time it gave its consent to be bound that it would later be joined as a defendant, there would have been no need for its consent, and it could have defended itself on both the liability and damage issues. If Allstate had known that Hunt would name it as a defendant, there would have been no need for it to surrender its subrogation rights against Rose. If Allstate had known that it would not be permitted to participate in the trial, it would surely not have consented to be bound by the results of the trial. Allstate thus reasons, and I agree, that Hunt's designedly changing the posture of the case and making a new party entitled it to a withdrawal of the consent to be bound. The correct alignment of parties in uninsured motorist cases is a new problem in Texas. Allstate followed the teaching of other jurisdictions and surrendered every right which might otherwise create conflicts of interest. It then had good reason to think that it could defend Rose on their common defenses without disclosing the fact of insurance, because that arrangement was consistent with the settled Texas practice. Accord, Widiss, Uninsured Motorist Coverage, Sec. 7.21 (1969). The majority opinion accepts this principle, saying in its opinion,    there is something to be said on behalf of the uninsured motorist who might not want to have an insurance company as a co-defendant. This court has said, This court takes judicial knowledge of the fact that a jury is more apt to render a judgment against a defendant, and for a larger amount, if it knows that the defendant is protected by insurance. Barrington v. Duncan, 140 Tex. 510, 169 S.W.2d 462 (1943); Kuntz v. Spence, 67 S.W.2d 254 (Tex.Com.App. 1934, holdings approved); 2 McCormick and Ray, Texas Law of Evidence, Sec. 1539 (2d ed.1956). This was the reason for the arrangement between Allstate and Rose that Allstate's identity would not be disclosed to the jury. It was this settled practice which Allstate and Rose were respecting and by which all aspects of this three-party problem would have been determined, but for Hunt's making new parties in its desire to name its own insurer as co-defendant in such a way as to convey the idea to the jury that Allstate was the uninsured motorist's insurer. When it became apparent that Hunt had disclosed the fact of insurance, and in an effort to respect this accepted Texas practice, Allstate had to take some steps. It moved that its identity be withheld from the jury. Alternatively it moved for a separate trial. The trial court granted the motion for separate trial. This motion for separate trial and the trial court's favorable order is now held to be sound reason for refusing to permit Allstate to withdraw its consent to be bound. The reasoning is that Allstate received the very thing it asked for, a separate trial. Allstate did not receive a separate trial. It received no trial at all. On December 16, Rose and Allstate appeared for trial, and after a hearing before the court, Allstate was excluded from the trial and ordered to conceal its file from Rose. Rose's attorney asked for a delay and said that it had announced ready on December 13, [p]redicated, your Honor, on the fact that Mr. Lorance (Allstate's attorney) would be the lead counsel in the case. The trial court postponed the trial one day, until December 17, and on December 18 a jury verdict was returned against Rose in the sum of $19,106.20. We come to the separate trial. On January 9, 1969, Allstate's trial came on for hearing. The court took charge of developing the record. It instructed counsel for Hunt to introduce in evidence the Allstate policy which Hunt's counsel did not have and had to send for. The court then told Hunt's counsel to introduce Allstate's motion to sever, Allstate's motion to withhold its identity, and Allstate's consent to be bound. Following the introduction of those documents and a record of the proceedings which consumed the first three pages of the statement of facts, the court ruled, The Court finds that there is no issue of fact to be determined in the suit   . Allstate had already admitted coverage. [2] It received a separate trial only on the issue it had already admitted; it was denied a trial on the issues which it disputed. Allstate received a phantom trial, yet the court of civil appeals holds that Allstate got what it asked for.