Moya v. Allstate Fire and Casualty Insurance Company
ORDER GRANTING 33 Defendant's Motion to Abate Plaintiff's Extra-Contractual Claims. IT IS FURTHER ORDERED that Plaintiffs extracontractual claims are hereby ABATED until further Order of this Court. Signed by Judge Elizabeth S. Chestney. (bc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
MARIA D. MOYA,
ALLSTATE FIRE AND CASUALTY
Before the Court in the above-styled cause of action is Defendant’s Motion to Abate
Plaintiff’s Extra-Contractual Claims [#33]. This case was referred to the undersigned for all
pretrial proceedings on February 4, 2021, and the undersigned has authority to issue this nondispositive Order pursuant to 28 U.S.C. § 636(b)(1)(A). After considering Defendant’s motion,
Plaintiff’s response [#36], Defendant’s reply [#37], the record in this case, and the governing
law, the Court will grant the motion for the reasons that follow.
This is a first-party insurance dispute over underinsured motorist benefits (“UIM”).
Plaintiff Maria D. Moya had a collision with Melody Rose Shaddox on September 4, 2019, in
San Antonio, Texas. Ms. Shaddox rear-ended Moya’s vehicle, and Moya contends Shaddox was
solely responsible for the accident. As a result of the collision, Moya claims she suffered serious
bodily injuries. Ms. Shaddox possessed only $50,000 in auto liability insurance benefits at the
time of the crash, which she tendered to Moya. Because Moya’s damages from her injuries
allegedly exceed $50,000, she filed a claim with her insurer, Defendant Allstate Fire and
Casualty Insurance Company (“Allstate”). Allstate refused to pay the claim.
Moya filed this suit in state court on March 6, 2020, alleging Ms. Shaddox’s negligence
with respect to the accident and seeking a declaratory judgment against Allstate that Allstate
owes Moya benefits under the UIM motorist policy it issued. (Orig. Pet. [#1-3].) This case
already has a significant procedural history, involving two separate removals to federal court, the
first of which was unsuccessful, and an initial round of dispositive motions.
Most recently, after Allstate’s second removal, the Court denied Moya’s motion to
remand, concluding that the face of Moya’s First Amended Petition established that the amount
in controversy had been satisfied and that the Court has diversity jurisdiction over this case. The
Court also denied Allstate’s 12(c) motion for judgment on the pleadings, finding that Allstate
was not entitled to dismissal of any of the claims in Moya’s Second Amended Complaint, which
is now the live pleading in this action.
The Second Amended Complaint contains a claim for declaratory judgment, as well as
extracontractual claims arising under Chapters 541 and 542 of the Texas Insurance Code.
(Second Am. Compl. [#15].) Moya’s declaratory judgment claim asks the Court to determine
whether the UIM contract is valid and enforceable and to determine the amounts owed by
Allstate to Moya under the UIM policy she purchased. (Id. at ¶ 10.) Moya’s extracontractual
claims allege Allstate engaged in unfair settlement practices, failed to engage in a good faith
settlement of Moya’s claim, and made certain material misrepresentations in violation of the
Deceptive Trade Practices Act (“DTPA”). (Id. at ¶¶ 11–13.) Moya seeks actual and treble
damages under the Texas Insurance Code, alleging Allstate’s knowing violation of the Code.
(Id. at ¶¶ 15–16.)
Allstate now moves to abate Moya’s extracontractual claims, arguing that abatement is
required under prevailing case law, as these claims are contingent upon Moya first establishing
her legal entitlement to UIM benefits. The Court agrees and will abate the extracontractual
claims but without formally bifurcating or severing these claims from Plaintiff’s declaratory
judgment cause of action.
Under Texas law, which the parties agree governs here, “an insured cannot recover policy
benefits for an insurer’s statutory violation if the insured does not have a right to those benefits
under the policy.” USAA Texas Lloyds Co. v. Menchaca, 545 S.W.3d 479, 490 (Tex. 2018). The
Texas Supreme Court has stated that an “insurer is under no contractual duty to pay benefits until
the insured obtains a judgment establishing the liability and underinsured status of the
[tortfeasor] motorist.” Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809, 818 (Tex. 2006).
Neither a settlement between the insured and tortfeasor, nor an admission of liability from the
tortfeasor, on its own establishes coverage under UIM insurance because “a jury could find that
the other motorist was not at fault or award damages that do not exceed the tortfeasor’s liability
This Court has already held, in denying Allstate’s motion for judgment on the pleadings
(see [#32] at 7–8), that an insured may choose to litigate UIM coverage with the insurer by
pursuing a declaration that benefits are owed without first obtaining a judgment against the
tortfeasor. See Brainard, 216 S.W.3d at 818 (“[T]he insured is not required to obtain a judgment
against the tortfeasor[;] . . . the insured may settle with the tortfeasor . . . and then litigate UIM
coverage with the insurer.”). This is precisely what Moya is doing here through her declaratory
judgment against Allstate.
This Court has also already denied Allstate’s request to dismiss Moya’s extracontractual
claims pursuant to Rule 12(c). (See [#32] at 9.) For extracontractual claims to proceed without
first judicially establishing the liability of the motorist tortfeasor, there must be some
extracontractual injury that is unrelated to and independent of the denial of the underlying policy
claim. Manchaca, 545 S.W.3d at 499. The Court held that Moya pleaded independent injuries
separate and apart from the denial of her insurance claim and that there was no basis for
dismissal on the pleadings under the independent-injury rule at the pleading stage of this
litigation. (See [#32] at 9.)
The Court does, however, find that Moya’s extracontractual claims should be abated, so
that the parties may first resolve Moya’s declaratory judgment action. It is within a federal
court’s discretion to decide whether to sever and abate a claim. See FDIC v. Blanton, 918 F.2d
524, 533 (5th Cir. 1990). And Texas courts have also found that abatement is proper if it will
promote justice, avoid prejudice, and promote judicial economy. In re State Farm Mut. Auto Ins.
Co., 395 S.W.3d 229, 237 (Tex. App.—El Paso 2012, orig. proceeding).
Several Texas appellate courts have held that it is an abuse of discretion to refuse to abate
discovery on extracontractual claims because the parties should not be made to incur the “effort
and expense of conducting discovery and preparing for trial for claims that may be disposed of in
a previous trial.” U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668, 673 (Tex. App.—Houston [1st
Dist.] 1993, no pet., orig. proceeding); see also In re Progressive Cty. Mut. Ins. Co., No. 04-2000178-CV, 2020 WL 3815927, at *6 (Tex. App.—San Antonio July 8, 2020, orig. proceeding)
(“[A]batement of Sanchez’s extra-contractual claims is necessary to avoid unnecessary litigation
expenses, conserve judicial resources, and to do justice, avoid prejudice, and further
convenience.”) (internal quotation and citation omitted); Tex. Farmers Ins. Co. v. Stem, 927
S.W.2d 76, 79 (Tex. App.—Waco 1996, no pet., orig. proceeding) (holding that severance and
abatement of extra-contractual claims was mandatory).
And although federal law governs
matters of procedure in federal court, in UIM cases federal district courts have also often abated
extra-contractual claims pending resolution of the underlying UIM claim. See Ochoa v. Allstate
Fire & Cas. Ins. Co., No. SA-20-CV-319-XR, 2020 WL 2129252, at *3 (W.D. Tex. May 5,
2020); Stoyer v. State Farm Mut. Auto. Ins. Co., No. 3:08-CV-1376-K, 2009 WL 464971, at *3
(N.D. Tex. Feb. 24, 2009).
Consistent with these opinions, the Court finds that the extracontractual claims in this
case should be abated. The Court declines, however, to officially sever these claims at this time.
Texas appellate courts have found in some circumstances that the denial of a request to sever
extracontractual claims would cause the insurer undue prejudice, such as whether the insurer has
made an offer of settlement, as evidence of that offer might help the insurer on the bad faith
claims but hurt the insurer on the breach of contract claim.
See Liberty Nat’l Fire Ins. Co. v.
Akin, 927 S.W.2d 627, 630 (Tex. 1996). Allstate has not requested severance in its motion. If
particular circumstances arise at a subsequent juncture in this case that warrant severance of
Moya’s claims, Allstate may move for such relief.
IT IS THEREFORE ORDERED that Defendant’s Motion to Abate Plaintiff’s ExtraContractual Claims [#33] is GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s extracontractual claims are hereby
ABATED until further Order of this Court.
SIGNED this 3rd day of June, 2021.
ELIZABETH S. ("BETSY") CHESTNEY
UNITED STATES MAGISTRATE JUDGE
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