ORDER DENYING SEVERANCE/ABATEMENT OF BAD FAITH CLAIMS IN A UIM SUIT OVERTURNED ON MANDAMUS

The Corpus Christi court of appeals recently confirmed there are some cases in which an insurer seeking severance and abatement of extra-contractual claims against it can successfully enforce that right.  In Re Germania Insurance Company, No. 13-18-00102-CV, 2018 WL 1904911 (Tex. App.—Corpus Christi Apr. 23, 2018, no pet. h.) was a UIM case in which the policyholder sued for UIM benefits and also alleged an array of extra-contractual claims..

Germania moved to sever and abate the extra-contractual claims until after Plaintiff had proved her contractual right to UIM benefits.  After that motion was denied by the trial court, Germania sought mandamus relief on both judicial efficiency grounds and arguments that the history of settlement demands and offers between the parties would irrevocably prejudice Germania if it were introduced in the trial of the UIM claim.

Existing Texas law allows the trial court some discretion in granting or denying severance of extra-contractual claims, but acknowledges that in some cases, the extra-contractual claims must be severed. The court recognized that exchanges of settlement proposals on a UIM claim are the type of evidence that requires severance and abatement.  Therefore, the appellate court instructed the trial court to reverse its ruling.