Court Opinion

ID: 4704474
Source: CourtListenerOpinion
Date Created: 2021-07-19 07:15:58.49668+00
Date Added: 2024-06-11T08:05:23.012601
License: Public Domain

In the
                Court of Appeals
        Second Appellate District of Texas
                 at Fort Worth
             ___________________________
                  No. 02-20-00174-CV
             ___________________________

ALLSTATE COUNTY MUTUAL INSURANCE COMPANY, Appellant

                             V.

               CHRISTINE HILL, Appellee

          On Appeal from the 352nd District Court
                  Tarrant County, Texas
              Trial Court No. 352-291883-17

           Before Birdwell, Bassel, and Womack, JJ.
          Memorandum Opinion by Justice Womack
                          MEMORANDUM OPINION

                                 I. INTRODUCTION

      Appellee Christine Hill brought suit against Appellant Allstate County Mutual

Insurance Company to recover underinsured motorist (UIM) benefits under her

automobile policy. The trial court granted Hill declaratory relief and attorney’s fees.

On appeal, Allstate argues that the trial court erred in allowing Hill to use the

Uniform Declaratory Judgments Act (UDJA) in connection with her claim for UIM

benefits and by awarding her attorney’s fees. See Tex. Civ. Prac. & Rem. Code Ann.

§§ 37.001–.011. In light of the Texas Supreme Court’s recent decision in Allstate Ins.

Co. v. Irwin, No. 19-0885, 2021 WL 2021446, at *1, *6 (Tex. May 21, 2021), we will

affirm.

                                  II. BACKGROUND

      Hill was a passenger in a car driven by Joshua Warthen which was “t-boned” at

an intersection by a car driven by Rafael W. Mendes on April 13, 2016. Hill later

brought suit against Mendes for injuries she sustained in the collision and against

Warthen’s insurer, Farmers County Mutual Insurance Company, and her insurance

company, Allstate, for UIM coverage.

      Prior to trial, Hill settled with Mendes and Farmers and non-suited her claims

against them. Hill then proceeded to trial against Allstate for declaratory relief under

the UDJA for past and future medical care expenses, past and future physical pain and

mental anguish, past and future disfigurement, and past and future physical

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impairment.1    Specifically, Hill requested that the following be established by

declaratory judgment:

      a. she has an uninsured/underinsured policy with Allstate;

      b. she is entitled to uninsured/underinsured motorist coverage under
      that policy;

      c. Mendes was an underinsured driver;

      d. Mendes was negligent and his negligence[] caused the collision and
      Hill’s damages;

      e. Hill’s damages are covered under the Allstate policy;

      f. Hill has satisfied or is satisfying all policy conditions necessary for her
      to recover under the policy;

      g. the total amount of the damages Hill incurred as a result of the crash;

      h. the amount of prejudgment interest that Mendes would owe;

      i. the amount of underinsured motorist insurance benefits Allstate is
      obligated to tender under their policy to [Hill]; and

      j. costs and reasonable and necessary attorney fees as are equitable and
      just under C[ivil] P[ractice and] R[emedies] C[ode] ch. 37.

      Before trial began, the parties stipulated that Mendes was liable for causing the

collision, that Hill was a “Covered Person” under an Allstate policy, and that the

vehicle driven by Mendes was an “Underinsured motor vehicle” as defined by the

      1
       To establish an insurer’s liability to an insured under a UIM policy, an insured
must first obtain determinations of the third-party driver’s liability and the amount of
damages. In re State Farm Mut. Auto. Ins. Co., Nos. 19-0791, 19-0792, 2021 WL
1045651, at *5 (Tex. Mar. 19, 2021) (orig. proceeding).

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policy. The parties also stipulated, “No defense or basis for denial of benefits exists

other than that . . . Hill is required to prove at trial that she is entitled to benefits

under the Allstate Policy in excess of the amount previously paid by the policy

covering . . . Mendes.” Finally, there was an agreement to “bifurcate” the attorney’s

fees issue from the other issues in the case and have it heard by the trial court after

the jury verdict was received on the amount of damages, if any, Hill sustained in the

motor vehicle collision.

      Ultimately, the jury determined that Hill was entitled to $126,760.35 in past

damages and $211,000 in future damages as a result of the motor vehicle collision.

After the verdict, Hill sought to recover her attorney’s fees in a motion for entry of

judgment that included her attorney’s “Declaration as to Attorney’s Fees.” The trial

court entered judgment that Hill was entitled to recover from Allstate:

   • The sum of $30,000, which is the amount Hill is legally entitled to
     recover from Mendes, reduced to the policy limits in the insurance
     policy;

   • An award of $42,668.75 in reasonable and necessary attorney’s fees and
     costs incurred by Hill, pursuant to the UDJA. If Allstate appeals the
     judgment and Hill prevails on appeal, Hill recovers additional attorney’s
     fees: (a) in the event Allstate appeals to an intermediate appellate court,
     an additional $27,500, with an additional $5,000 for oral argument; (b) in
     the event Allstate files a petition for review with the Texas Supreme
     Court, an additional $5,000 with an additional $15,000 for merits briefing
     and an additional $5,000 for oral argument;

   • All of Hill’s costs of court; and

   • Post-judgment interest.

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Allstate filed a motion for new trial, or in the alternative, a motion to modify the

judgment, which was overruled by operation of law. This appeal followed.

                                  III. DISCUSSION

      Allstate’s issue in this case revolves around whether a declaratory judgment

action was the proper cause of action for a policyholder to secure UIM benefits. As

noted in Allstate’s brief, “This case contains identical issues as were involved” in

Allstate Ins. Co. v. Irwin, 606 S.W.3d 774 (Tex. App.—San Antonio 2019), aff’d, 2021

WL 2021446, which it argues was wrongly decided.

      The Texas Supreme Court has now resolved this issue by affirming the holding

in Irwin and concluding that the UDJA can be used to determine an insurance carrier’s

liability for benefits under a UIM policy. 2021 WL 2021446, at *1. The court

reasoned:

      The Act’s application here to determine the prerequisites for, and
      existence of, the insured’s UIM claim not only served a useful purpose
      but also terminated the controversy between the parties. The UDJA was
      thus properly invoked to determine the parties’ status and
      responsibilities under the UM/UIM policy prior to its breach. Tex. Civ.
      Prac. & Rem. Code § 37.003.

Id. at *4. With regard to the award of attorney’s fees, the supreme court noted that, as

part of the declaratory judgment remedy,

      the Legislature has provided for the award of “reasonable and necessary
      attorney’s fees as are equitable and just.” Tex. Civ. Prac. & Rem. Code
      § 37.009. Thus, when the Act applies, attorney’s fees may be available.
      Unlike Chapter 38, Chapter 37’s UDJA does not require an award of
      attorney’s fees to anyone; rather, it “entrusts attorney fee awards to the

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      trial court’s sound discretion.” Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex.
      1998).

Id. at *6. Because the supreme court “d[id] not agree that the award [in Irwin was]

erroneous or otherwise violate[d] the American Rule,” it affirmed the trial court’s

judgment. Id.

      Here, in Allstate’s only issue, it asks, “Did the trial court err in allowing Hill to

unnecessarily invoke the UDJA in connection with her claim for U[I]M benefits and

by also awarding her attorney’s fees under the statute?” Relying on Irwin, we answer

the question in the negative. See id. Accordingly, we overrule Allstate’s issue.

                                   IV. CONCLUSION

      Having overruled Allstate’s issue, we affirm the trial court’s judgment.

                                                       /s/ Dana Womack

                                                       Dana Womack
                                                       Justice

Delivered: July 15, 2021

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