in Re Allstate County Mutual Insurance Company

Petition for Writ of Mandamus Conditionally Granted; Majority and Concurring
and Dissenting Opinions filed October 20, 2011.
In The
Fourteenth Court of Appeals
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NO. 14-11-00746-CV
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IN RE ALLSTATE COUNTY MUTUAL INSURANCE COMPANY, Relator
ORIGINAL PROCEEDING
WRIT OF MANDAMUS
344th District Court
Chambers County, Texas
Trial Court Cause No. 25233
CONCURRING AND DISSENTING OPINION
I concur in the majority’s determination that the petition should be conditionally
granted and the trial court directed to vacate its order denying Allstate’s motion to sever
(Issue Number One). I dissent, however, from the majority’s conclusion that mandamus
should also conditionally issue directing the trial court to vacate its order denying
Allstate’s motion to abate (Issue Number Two).
Through its Petition for Writ of Mandamus, Relator Allstate urges that ―[t]he trial
court abused its discretion in refusing to abate the extracontractual claims until the
underlying contractual claims are resolved.‖ Allstate crystallizes its argument:
―Abatement of the bad faith claims necessarily accompanies severance of those claims
from the contract claim 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 and preparing for a trial of claims that may be disposed of in the
previous trial.‖
The majority agrees with Allstate’s argument and it finds support among some
courts of appeals. See, e.g., In re Progressive Cnty. Mut. Ins. Co., No. 09-07-011-CV,
2007 WL 416553 (Tex. App.—Beaumont Feb. 8, 2007, orig. proceeding). However, the
Texas Supreme Court has already determined that the mere possibility that trial of the
extracontractual claims will become unnecessary does not, as a matter of law, deprive the
trial court of discretion to refuse abatement of those claims. Specifically, in Liberty
National Fire Insurance Co. v. Akin, 927 S.W.2d 627, 631 (Tex. 1996), the Court held that,
―[r]egardless of which party prevails on the contract claim, we disagree that an abatement
of the bad faith claim until all appeals of the contract claim are exhausted is required.‖
The Court has never retreated from this holding.
Other courts of appeals reject the notion that abatement is, as a bright line rule,
mandatory in all cases of extracontractual severance. See, e.g., In re Allstate Ins. Co., 232
S.W.3d 340, 344 (Tex. App.—Tyler 2007, orig. proceeding) (rejecting other courts of
appeals’ conclusion that ―abatement is mandatory when a trial court orders severance of
extracontractual claims‖); Tex. Farmers Ins. Co. v. Cooper, 916 S.W.2d 698, 701–02
(Tex. App.—El Paso 1996, orig. proceeding) (―Even where settlement evidence requires
separation of contract and bad faith claims, we see no need to create an ironclad rule
mandating abatement at any given time.‖). Instead, these courts look to the relator’s
specific showing of, for example, prejudice or burden to determine whether the trial court
abused its discretion in denying abatement in a specific case. See, e.g., U.S. Fire Ins. Co.
v. Millard, 847 S.W.2d 668, 673 (Tex. App.—Houston [1st Dist.] 1993, orig. proceeding)
(holding that ―the facts and circumstances of this case extinguished Judge Millard’s
discretion‖); Cooper, 916 S.W.2d at 702 (holding that insurance carrier bears burden at
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trial court of proving prejudice without abatement); In re Loya Ins. Co., No.
01-10-01054-CV, 2011 WL 3505434, at *3 (Tex. App.—Houston [1st Dist.] Aug. 11,
2011, orig. proceeding) (holding that where relator failed to show prejudice or burden
relating to parallel discovery of contractual and extracontractual claims, trial court did not
abuse its discretion in denying abatement).
In my view, these cases demonstrate a faithfulness to the flexible approach of Akin
and represent a more sound policy to vest the trial court with limited discretion to balance
the interest of the parties and judicial economy. Moreover, a rule that deprives the trial
court of any discretion to deny abatement, no matter the facts and circumstances,
encourages settlement gamesmanship.
In this case, the record reflects that Allstate made no specific showing of prejudice
or burden or case-specific need. The record of hearing further reflects that the trial court
evaluated the facts and circumstances of the case and considered the impact on the court’s
docket and the parties’ ability to reasonably bring the merits of the dispute to closure and
determined abatement was not appropriate.
I would hold that the trial court did not abuse its discretion in denying the motion to
abate because abatement is neither mandatory nor required as a matter of law and because,
in the absence of any showing of specific prejudice, the trial court retained discretion to
manage its docket and deny abatement.
/s/ Sharon McCally
Justice
Panel consists of Justices Brown, Boyce, and McCally. (Brown, J., majority).
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