Court Opinion

ID: 2954922
Source: CourtListenerOpinion
Date Created: 2015-09-17 00:28:40.535217+00
Date Added: 2024-06-11T15:25:21.356875
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-12-00465-CV

In re American National County Mutual Insurance Company

ORIGINAL PROCEEDING FROM HAYS COUNTY

O P I N I O N

		Relator American National County Mutual Insurance Company seeks a writ of
mandamus compelling the trial court to (1) vacate its order denying American National's motion
for severance and abatement and (2) enter an order severing and abating real party in interest
Connie Cole's extra-contractual claims until her breach of contract claim has been resolved.  We
conditionally grant the writ.

BACKGROUND
		The lawsuit underlying this original proceeding arises from an automobile accident
that occurred on November 24, 2009, between Cole and another driver, Estelline Bullock.  Cole sued
Bullock and eventually settled her claims for the limits of Bullock's insurance policy, $100,000.
Cole then made a claim under the uninsured/underinsured provision ("UIM") of her own policy with
American National.  After rejecting American National's offer to settle her UIM claim for $5,000,
Cole sued American National for breach of contract, alleging that American National failed to pay
her covered UIM claim.  Cole also brought extra-contractual claims for common-law bad faith and
insurance code violations. (1)
  American National filed a traditional motion for summary judgment and
in the alternative, a motion for severance and abatement.  Specifically, American National requested
that the trial court sever Cole's extra-contractual claims, place those claims into a separate cause,
and abate that cause pending final resolution of Cole's claim for breach of contract.  The trial court
denied the motions and this mandamus proceeding followed.

STANDARD OF REVIEW
		Mandamus will issue only to correct a clear abuse of discretion when there is no
adequate remedy by appeal.  In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135 (Tex. 2004).  A
trial court abuses its discretion when it reaches a decision so arbitrary and unreasonable that it
amounts to clear and prejudicial error of law.  Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.
1992); see also Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex. 1985).  With
respect to resolution of factual issues or matters committed to the trial court's discretion, we may not
substitute our judgment for that of the trial court.  Walker, 827 S.W.2d at 840.  The relator must
establish that the trial court reasonably could have reached only one decision.  Id.  On the other hand,
the trial court has no discretion in determining what the law is or applying the law to the facts.  Id.
Thus, the trial court abuses its discretion when it fails to analyze the law correctly.  Id.

DISCUSSION

Severance
		A severance divides a lawsuit into separate and independent causes, which then
proceed to individual judgments.  See Tex. R. Civ. P. 41 ("Any claim against a party may be severed
and proceeded with separately.").  Severance is appropriate if:  (1) the controversy involves more
than one cause of action, (2) the severed claim is one that could be asserted independently in
a separate lawsuit, and (3) the severed actions are not so interwoven with the other claims that
they involve the same facts and issues.  Liberty Nat'l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629
(Tex. 1996).  The controlling reasons for a severance are to do justice, avoid prejudice, and further
convenience.  Guaranty Fed. v. Horseshoe Operating, 793 S.W.2d 652, 658 (Tex. 1990).
		In the context of insurance coverage cases, it is well established that extra-contractual
claims, such as bad faith claims, and contract claims related to insurance coverage are by their
nature, independent claims that are subject to severance.  See Akin, 927 S.W.3d at 629 ("Insurance
coverage claims and bad faith claims are by their nature independent."); In re Allstate Ins. Co.,
232 S.W.3d 340, 343 (Tex. App.--Tyler 2007, orig. proceeding) (noting that extra-contractual
claims can be severed from breach of contract claims in insurance cases); U.S. Fire Ins. Co. v.
Millard, 847 S.W.2d 668, 672-73 (Tex. App.--Houston 1993, orig. proceeding) ("A breach of an
insurance contract claim is separate and distinct from bad faith, [i]nsurance [c]ode or [deceptive
trade practices act] causes of action.").  Thus, the issue in this case is not whether the trial court
could have ordered severance of Cole's extra-contractual claims, but whether the trial court was
required to do so.  American National argues that because it made an offer to settle Cole's UIM
claim, trying Cole's breach of contract claim together with her extra-contractual claims would unduly
prejudice American National.  Consequently, American National argues, the trial court abused its
discretion in failing to sever Cole's extra-contractual claims.
		A trial court has broad discretion in determining whether to sever a lawsuit into
separate suits.  Akin, 927 S.W.2d at 629.  However, that discretion is not unlimited.  In re General
Agents Ins. Co. of Am., Inc., 254 S.W.3d 670, 673 (Tex. App.--Houston [14th Dist.] 2008, orig.
proceeding).  A trial court's refusal to order a severance constitutes an abuse of discretion "when all
of the facts and circumstances of the case unquestionably require a separate trial to prevent manifest
injustice, and there is no fact or circumstance supporting or tending to support a contrary conclusion
and the legal rights of the parties will not be prejudiced thereby."  See Womack v. Berry, 291 S.W.2d
677, 682-83 (Tex. 1956) (orig. proceeding); In re Hochheim Prairie Farm Mut. Ins. Ass'n, 296
S.W.3d 907, 912 (Tex. App.--Corpus Christi 2009, orig. proceeding); In re General Agents Ins. Co.
of Am., 254 S.W.3d at 673-74.
		In Liberty National Fire Insurance Company v. Akin, the Texas Supreme Court was
confronted with the same issue presented in this case--whether the trial court abused its discretion
when it denied the insurer's motion to sever and abate the insured's bad faith claim pending a
determination on the insured's breach of contract claim. 927 S.W.2d at 628.  While the supreme
court held that severance was not required in that case, it recognized that severance of extra-contractual claims from contractual claims may be necessary in certain cases.  Id. at 630.  The
supreme court explained:
	A severance may nevertheless be necessary in some bad faith cases.  A trial court will
undoubtably confront instances in which evidence admissible only on the bad faith
claim would prejudice the insurer to such an extent that a fair trial on the contract
claim would become unlikely.  One example would be when the insurer has made a
settlement offer on the disputed contract claim.  As we have noted, some courts have
concluded that the insurer would be unfairly prejudiced by having to defend the
contract claim at the same time and before the same jury that would consider
evidence that the insurer had offered to settle the entire claim.  While we concur with
these decisions, we hasten to add that evidence of this sort simply does not exist in
this case.  In the absence of a settlement offer on the entire contract claim, or other
compelling circumstances, severance is not required.

Id. (citations omitted).
		Following Akin, a majority of intermediate courts of appeals have concluded that it
is an abuse of discretion for a trial court to refuse to grant a severance of contractual claims from
extra-contractual claims when an offer of settlement has been made by the insurer.  See In re Allstate
Cnty. Mut. Ins. Co., 352 S.W.3d 277, 278 (Tex. App.--Houston [14th Dist.] 2011, orig. proceeding)
(citing State Farm Mut. Auto Ins. Co. v. Wilborn, 835 S.W.2d 260, 262 (Tex. App.--Houston
[14th Dist.] 1992, orig. proceeding)); In re Miller, 202 S.W.3d 922, 926 (Tex. App.--Tyler 2006,
orig. proceeding); In re Trinity Universal Ins. Co., 64 S.W.3d 463, 468 (Tex. App.--Amarillo 2001,
orig. proceeding); Texas Farmers Ins. Co. v. Stem, 927 S.W.2d 76, 80 (Tex. App.--Waco 1996, orig.
proceeding); see also In re State Farm Mut. Auto Ins. Co., No. 08-12-176-CV, 2012 Tex. App.
LEXIS 6537, at *5-6 (Tex. App.--El Paso Aug. 8, 2012, orig. proceeding); In re Allstate Prop. &
Relator Cas. Ins. Co., No. 02-07-141-CV, 2007 Tex. App. LEXIS 4328, at *2-3 (Tex. App.--Fort
Worth May 30, 2007, orig. proceeding) (mem. op.); In re Progressive Cnty. Mut. Ins. Co., No.
09-07-00011-CV, 2007 Tex. App. LEXIS 889, at *1-2 (Tex. App.--Beaumont Feb. 8, 2007, orig.
proceeding) (mem. op.); In re Maryland Cas. Co., No. 04-06-413-CV, 2006 Tex. App. LEXIS 11209,
at *4-5 (Tex. App.--San Antonio Aug. 2, 2006, orig. proceeding) (mem. op.); but see Allstate Ins.
Co. v. Evins, 894 S.W.2d 847, 850 (Tex. App.--Corpus Christi 1995, orig. proceeding) (denial of
motion to sever contractual and extra-contractual claims was proper because it was assumed that jury
would follow limiting instruction to limit their consideration of settlement offers in determining bad
faith claims).  In reaching this conclusion, many of these courts of appeals have explained that, when
the insurer has made an offer of settlement on a disputed contract claim, a court's refusal to sever
contractual claims from extra-contractual claims creates an irreconcilable conflict between the
parties' competing interests at trial.  See, e.g., In re Allstate Ins. Co., 232 S.W.3d at 343; Millard,
847 S.W.2d at 673; Wilborn, 835 S.W.2d at 261; see also In re State Farm Mut. Auto Ins. Co., 2012
Tex. App. LEXIS 6537, at *6-7 ("Absent severance, an insurer is presented with a 'Catch-22' in that
its decision to admit or exclude evidence of a settlement offer jeopardizes the successful defense of
the other claim.").  More specifically, a conflict arises from the parties' competing interests in
excluding and admitting evidence of the insurer's offer of settlement, and only a severance can
adequately protect their rights.  See, e.g., Wilborn, 835 S.W.2d at 261-62.
		Under rule 408 of the Texas Rules of Evidence, settlement offers are not admissible
to prove liability for, or invalidity of, the claim or its amount, but may be admissible for another
purpose.  Tex. R. Evid. 408.  This exclusion of settlement offers promotes the settlement of claims
and recognizes that "such evidence does not represent a party's actual position, but is an amount he
is willing to give or take to avoid the expense and annoyance of litigation."  Wilborn, 835 S.W.2d
at 261.  When an insurer has made an offer to settle a disputed contract claim, a conflict arises
between the parties' right to introduce the settlement offer in trying the bad faith claim and the
insurer's right to exclude the evidence in the defense of the contract claims.  See In re Allstate Ins. Co.,
232 S.W.3d at 343 (citing Millard, 847 S.W.2d at 673).  On one hand, the exclusion of the settlement
offer in trial would unfairly deny the insured the use of the evidence to prove essential elements of
the bad faith claim.  Millard, 847 S.W.2d at 673.  At the same time, admission of the settlement offer
would deny the insurer the right to exclude evidence unfairly implicating that it has admitted liability
on the contract claims.  Id.  Accordingly, in this situation, the trial court can only reach one decision
which adequately protects the parties' rights and that is to order severance of the two types of claims.
See, e.g., Wilborn, 835 S.W.2d at 262.
		Based on the record before us, there can be no dispute that American National offered
to settle Cole's entire UIM claim, and Cole does not claim otherwise.  Because we agree that severance
is necessary to avoid the unfair dilemma that American National would face in simultaneously
defending Cole's contractual and extra-contractual claims, we conclude that the trial court abused
its discretion in denying American National's motion for severance.  See In re Republic Lloyds, 104
S.W.3d 354, 358 (Tex. App.--Houston [14th Dist.] 2003, orig. proceeding) ("Thus, pursuant to
Akin, a severance is required when the insurer has made a settlement offer on the entire breach of
contract claim.").
Abatement
		In most circumstances, a trial court's decision to grant or deny a motion to abate is
within the court's discretion.  In re Allstate Cnty. Mut., 209 S.W.3d 742, 746 (Tex. App.--Tyler
2006, orig. proceeding).  In this case, American National contends that the trial court abused its
discretion in failing to abate Cole's extra-contractual claims because, according to American
National, both severance and abatement are required whenever "a plaintiff has filed a breach of
contract claim as well as extra-contractual claims, and a settlement offer has been made."  American
National argues that absent an abatement it will "be put through the effort and expense of answering
discovery, producing documents and witnesses, engaging experts and preparing for trial on issues
that are not ripe for litigation and may be rendered moot by the trial."  In response, Cole argues that
the trial court did not abuse its discretion in failing to abate her extra-contractual claims.  Specifically,
Cole argues that there is no bright-line rule requiring the abatement of extra-contractual claims in
insurance cases, even when the insurer has made an offer of settlement, and there is no necessity for
the trial court to abate her extra-contractual claims in this case.
		In support of her argument, Cole relies on the Texas Supreme Court's decision in
Akin.  In Akin, the supreme court rejected the assertion that a separate trial on extra-contractual
claims required, as a matter of law, that the court also abate those extra-contractual claims pending
a final judgment on the contract claims. 927 S.W.2d at 630-31.  The supreme court explained:

	[W]e disagree  with Liberty National's argument that our decision in Stoker mandates
that the trial court should abate a severed bad faith claim until it renders a final
judgment and perhaps all appeals have been exhausted on the contract claim.  While
Stoker held that a judgment for the insurer on the coverage claim prohibits recovery
premised only on bad faith denial of a claim, it does not necessarily bar all claims for
bad faith.

Id. at 631.  Based on this language, we agree that the abatement of extra-contractual claims is not
necessarily required, as a matter of law, in every insurance case where the insurer has offered to
settle the insured's contract claim.  But see In re Allstate Cnty. Mut. Ins. Co., 352 S.W.3d at 278 ("In
cases in which contractual and extra-contractual claims are being pursued simultaneously, this court
repeatedly has held that extra-contractual claims must be severed and abated when the insurer has
made a settlement offer on the contract claim.").
		However, consistent with Akin, a number of our sister courts have held that abatement
of extra-contractual claims is required when, under the circumstances, both parties would incur
unnecessary expenses if the breach of contract claim were decided in the insurer's favor.  See Millard,
847 S.W.2d at 673 (noting that abatement was necessary because insured's bad faith, insurance code,
and deceptive trade practices act claims depended on outcome of contractual cause of action); see
In re Progressive Cnty. Mut. Ins. Co., 2007 Tex. App. LEXIS 889, at *3 ("Abatement of the bad
faith claim necessarily accompanies severance because the scope of permissible discovery differs
in the two types of claims and without abatement the parties will be put to the effort and expense of
conducting discovery on claims that may be disposed of in a previous trial."); In re Allstate Prop.
& Relator Cas. Co., 2007 Tex. App. LEXIS 4328, at *3 (holding that abatement was required, noting
that "the court, as well as the parties, would be put to the expense and effort of preparing and trying
extracontractual claims that may be disposed of in the resolution of the breach of contract claim").
In these cases, the courts of appeals concluded that abatement was necessary because a determination
on the contract claim in favor of the insurer would have negated the insured's extra-contractual
claims.  See, e.g., Millard, 847 S.W.2d at 673.  Without abatement, the parties would be put to the
effort and expense of conducting discovery and preparing for trial of claims that may be disposed
of in a previous trial.  Id.; see Akin, 927 S.W.2d at 629 ("[I]n most circumstances, an insured may
not prevail on a bad faith claim without first showing that the insurer breached the contract.").
		In addition, in the context of UIM cases specifically, several courts of appeals have
recently concluded that abatement of extra-contractual claims is necessary as a consequence of
the unique hurdles faced by plaintiffs asserting UIM contract claims.  See In re United Fire Lloyds,
327 S.W.3d 250, 256 (Tex. App.--San Antonio 2010, orig. proceeding) (discussing Brainard v.
Trinity Universal Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006)); see also In re Old Am. Cnty. Mut.
Fire Ins. Co., No. 13-11-00412-CV, 2012 Tex. App. LEXIS 1293, at *12-13 (Tex. App.--Corpus
Christi Feb. 16, 2012, orig. proceeding) (mem. op.) (following In re United Fire Lloyds).  In a UIM
case, "[t]he UIM insurer is obligated to pay damages which the insured is 'legally entitled to recover'
from the underinsured motorist." (2) Brainard v. Trinity Universal Ins. Co., 216 S.W.3d at 818; see
In re United Fire Lloyds, 327 S.W.3d at 256.  In Brainard v. Trinity Universal Insurance Company,
the supreme court determined that this language means that "the UIM insurer is under no contractual
duty to pay UIM benefits until the insured obtains a judgment establishing the liability and
underinsured status of the other motorist. . . . Neither requesting UIM benefits nor filing suit against
the insurer triggers a contractual duty to pay." 216 S.W.3d at 818.  Thus, a UIM contract is unlike
many first-party insurance contracts because, according to its terms, benefits are conditioned upon
the insured's legal entitlement to receive damages from a third party.  Id.
		Though Brainard involved a determination as to when presentment of a contract
claim was made in order to determine when a party was entitled to attorney's fees, the San Antonio
court of appeals subsequently applied the rationale presented in Brainard to the issue of abatement.
See id.; In re United Fire Lloyds, 327 S.W.3d at 253, 256.  In In re United Fire Lloyds, the San
Antonio court of appeals concluded that, given the clear holding in Brainard, the insurer should not
be required to incur litigation expenses on claims that could be rendered moot by the portion of the
trial related to UIM benefits and may not have even yet accrued. 327 S.W.3d at 253, 256 (concluding
that insured's bad faith claims based on insurance code violations, including failure to properly
investigate and evaluate claim, could be rendered moot by portion of the trial related to UIM
benefits); see also In re Old Am. Cnty. Mut. Fire Ins. Co., 2012 Tex. App. LEXIS 1293, at *13;
but see In re State Farm Mut. Auto. Ins. Co., 2012 Tex. App. LEXIS 6537, at *20 (distinguishing
UIM case from In re United Fire Lloyds, explaining that there was no dispute that uninsured motorist
was negligent and underinsured).  Accordingly, the court held that abatement of the insured's extra-contractual claims was required in order to "do justice, avoid prejudice, and further convenience."
In re United Fire Lloyds, 327 S.W.3d at 265.  In light of the supreme court's holding in Brainard,
we agree that if a decision rendered in favor of American National on Cole's contract claim would
render her extra-contractual claims moot, the trial court abused its discretion in refusing to abate her
extra-contractual claims.
		In this case, Cole contends an abatement is not necessary in order to prevent the parties
from incurring unnecessary litigation expenses.  Cole argues that, unlike most cases involving
abatement of extra-contractual claims, at least some of her extra-contractual claims against American
National are not premised on a finding that American National wrongfully denied her claim.  Instead,
according to Cole, these claims are related to American National's conduct in handling her claim
and consequently, would not be rendered moot if she did not prevail on her contract claim.  Upon
reviewing Cole's pleadings in this case, we disagree.
		Cole's pleadings reveal that she has asserted, in essence, that American National
breached its common-law duty of good faith and fair dealing and committed insurance code
violations by failing to offer a prompt and fair settlement of her UIM claim.  However, any duty
by an insurer to its insured, common-law or statutory, necessarily arises from the contractual
relationship between the parties.  See also In re Miller, 202 S.W.3d at 926 (rejecting argument that
insurance code must be construed to allow insured to pursue bad faith claims before adjudicating
UIM claim and explaining "[N]o matter how liberally we might construe an insurance code provision,
a contract underlies any cause of action involving insurance.  This is an inescapable fact.").  An
insurer obviously has no obligation to settle a claim that it is not contractually obligated to pay.  See
Brainard, 216 S.W.3d at 818 ("When there is no contractual duty to pay, there is no just amount
owed.").  Thus, an insurer generally cannot be liable on bad faith claims arising from its denial or
failure to investigate claims that it has no duty to pay.  See Progressive Cnty. Mut. Ins. Co. v. Boyd,
177 S.W.3d 919, 922 (Tex. 2005) (concluding that bad faith claims for improper denial and failure
to investigate were negated by determination in breach of contract claim that there was no coverage);
see also Weir v. Twin City Fire Ins. Co., 622 F. Supp. 483, 486 (S.D. Tex. 2009) (concluding that
if there is no contractual duty to pay UIM claim then insurer cannot be in bad faith for not paying
or for not performing proper investigation).  Similarly, it follows that a UIM insurer generally cannot
be liable for insurance code violations related to delays in payment, such as delays in making a
timely offer, on claims that it has no duty to pay.  See Boyd, 177 S.W.3d at 922 (holding that there
can be no liability under article 21.55, now chapter 542 of the insurance code, if  insurance claim is
not covered by policy); see also Weir, 622 F. Supp. at 486 (concluding that if there is no contractual
duty to pay UIM claim then insured's bad faith claim for denial or postponing payment fails).
Therefore, in this case, all of Cole's extra-contractual claims are premised on a contractual obligation
to pay her UIM claim, and Cole does not allege that she has suffered any damages unrelated and
independent of her contract claim.  See Boyd, 177 S.W.3d at 922 (noting that supreme court has left
open possibility that insurer's denial of claim it was not obligated to pay might nevertheless be
in bad faith if its conduct was extreme and produced damages unrelated to and independent of
policy claim).  Accordingly, all of Cole's extra-contractual claims would be rendered moot upon a
determination that American National was not contractually obligated to pay her UIM claim.
		To prevail on her extra-contractual claims against American National, Cole must
necessarily demonstrate that American National was contractually obligated to pay her UIM claim.
To do this, Cole must first prove that the other driver negligently caused the accident and that her
recoverable damages exceed the driver's liability insurance. (3)  Under these circumstances, American
National should not be required to put forth the effort and expense of conducting discovery,
preparing for trial, and conducting voir dire on claims that would be rendered moot by a determination
against Cole on her UIM contract claim.  See In re United Fire Lloyds, 327 S.W.3d at 253, 256.  We
conclude that the trial court abused its discretion in failing to abate Cole's contract claim from her
extra-contractual claims until her contract claim is resolved.
CONCLUSION
		We conclude that the trial court abused its discretion in denying American National's
motion for severance and abatement of Cole's extra-contractual claims.  If mandamus relief is not
granted, American National would lose substantial rights related to the exclusion of the settlement
offer as evidence at trial and by being required to prepare and try claims that may be rendered moot.
See Millard, 847 S.W.2d at 675.  Thus, American National does not have an adequate remedy by
appeal.  See id.  Accordingly, we conditionally grant the writ of mandamus.  The trial court is ordered
to vacate that portion of its June 4, 2012 order denying American National's alternative motion for
severance and abatement.  Further, the trial court is ordered to grant American National's alternative
motion for severance and abatement, severing and abating Cole's extra-contractual claims pending
resolution of the breach of contract claim.  The writ will issue only if the trial court fails to comply
within fourteen days.

						__________________________________________
						Diane M. Henson, Justice
Before Justices Puryear, Pemberton and Henson
Filed:   September 25, 2012
1.   Cole's common-law bad faith claims are premised on allegations that American National
failed to "effectuate a prompt, fair, and equitable settlement of her [UIM] claim."  Cole's insurance
code violations are premised on allegations that American National failed to "attempt to effectuate
a prompt, fair, and equitable settlement of Plaintiff's claims" and engaged in "unfair claim settlement
practices."  Specifically, Cole alleges that American National violated chapter 451 of the insurance
code by:  (1) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of
a claim with respect to which the insurer's liability has become reasonably clear; (2) refusing, failing,
or unreasonably delaying an offer of settlement under applicable first-party coverage on the basis that
other coverage may be available or that third parties are responsible for the damages suffered, except
as may be specifically provided in the policy; and/or (3) delaying or refusing settlement of a claim
solely because there is other insurance of a different type available to satisfy all or part of the loss
forming the basis of the claim.  Cole alleges that American National violated chapter 542 by:  (1) not
attempting in good faith to effectuate prompt, fair, and equitable settlements of claims submitted in
which liability has become reasonably clear; (2) compelling policyholders to initiate suits to recover
amounts due under its policies by offering substantially less than the amounts ultimately recovered
in suits brought by them; and/or (3) failing to promptly pay on a claim within fifteen business days
after a policyholder submits all proof of loss documentation, within five business days after a
policyholder satisfies all requests for additional documentation, or, failing to pay on a claim
altogether within sixty (60) days of receiving all documentation required to process and pay a claim.
2.   The Texas Insurance Code provides that UIM coverage:

	must provide for payment to the insured of all amounts that the insured is legally
entitled to recover as damages from owners or operators of underinsured vehicles
because of bodily injury or property damage, not to exceed the limit specified in the
insurance policy, and reduced by the amount recovered or recoverable from the
insurer of the underinsured motor vehicle.

Tex. Ins. Code Ann. § 1952.106 (West 2009) (emphasis added).
3.   Though it is undisputed that Cole accepted the full amount of liability insurance from the
other driver, this settlement does not establish UIM coverage.  See Brainard v. Trinity Universal
Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006) (explaining in UIM case where other driver's insurance
tendered policy limit that "neither a settlement nor an admission of liability from the tortfeasor
establishes UIM coverage"); but see In re State Farm Mut. Auto. Ins. Co., No. 08-12-176-CV, 2012
Tex. App. LEXIS 6537, at *20 (Tex. App.--El Paso Aug. 8, 2012, orig. proceeding) (concluding that
because there was no dispute that the insured had reached policy limits settlement with underinsured
motorist, insured had proven negligence and underinsured status of other motorist).  This is because
a jury could always still find that the other motorist was not at fault or award damages that do not
exceed the tortfeasor's liability insurance.  Brainard, 216 S.W.3d at 818.