Opinion
No. 20-0075
05-07-2021
IN RE USAA GENERAL INDEMNITY COMPANY, Relator
Crystal Sadler, Paul Lindsey Sadler, Henderson, for Real Party in Interest. Melissa A. Lorber, Austin, Eric Todd Freemyer, Dallas, Sara B. Churchin, for Relator.
Crystal Sadler, Paul Lindsey Sadler, Henderson, for Real Party in Interest.
Melissa A. Lorber, Austin, Eric Todd Freemyer, Dallas, Sara B. Churchin, for Relator.
Justice Guzman delivered the opinion of the Court, in which Chief Justice Hecht, Justice Boyd, Justice Devine, Justice Blacklock, Justice Busby, and Justice Huddle joined.
Under a standard Texas automobile insurance policy, an insured seeking underinsured motorist (UIM) benefits may pursue a variety of options: (1) sue the insurer directly to establish the motorist's fault and the insured's damages without suing the motorist; (2) sue the underinsured motorist with the insurer's written consent, making the negligence judgment binding against the insurer for purposes of the insurer's liability under the UIM policy; or (3) sue the underinsured motorist without the insurer's written consent and then relitigate the issues of liability and damages in a suit for benefits under the UIM policy. The consent requirement protects the insurer from being bound to a default judgment or an inadequate defense by the underinsured motorist, leaving it to the insurer to determine whether to rely on the motorist's defense. In this original proceeding, the insurer declined to participate in the jury trial to establish the motorist's liability and demanded a separate trial on its liability under the UIM policy. After the insured's negligence suit against an at-fault motorist settled and the claim had been dismissed without rendition of judgment on the jury's verdict, the insurer consented to be bound to a judgment on the negligence verdict. Arguing the jury verdict and settlement payment collectively negate its liability to the insured for UIM benefits, the insurer seeks a writ of mandamus compelling the trial court to render judgment in its favor on the jury's verdict.
We deny the writ. The trial court did not abuse its discretion in declining to render judgment on the verdict for at least two reasons: (1) collateral estoppel does not bind the insured to a verdict that was not reduced to judgment; and (2) the insurer's post-dismissal consent to be bound by the negligence suit's outcome does not make the negligence verdict enforceable against the insured in the contract suit. The motorist's settlement and dismissal of the negligence suit without a judgment rendered the verdict unenforceable between the insured and the motorist, as if the verdict had never been reached. And while the insurer may want to bind itself to the verdict, consenting to the suit does not put the insurer in a better position with respect to the verdict than its litigation surrogate. The insurer can no more bind its insured to the verdict than could the motorist against whom it was rendered. Accordingly, the damages to which the insured is legally entitled remain to be determined in the UIM suit.
I. Background
After sustaining injuries in a rear-end collision, Adam Reising sued Sue Ann Baldor for negligence damages substantially in excess of Baldor's $30,000 insurance-policy limits. Because Baldor's liability-policy limits would not fully cover his asserted losses, he added a claim against his automobile insurer, USAA General Indemnity Company (USAA), for UIM benefits.
Reising's UIM policy pays benefits up to policy limits if an at-fault motorist's liability insurance is insufficient to cover his actual damages. The policy provides, however, that "[a]ny judgment of damages arising out of a suit brought without [USAA's] written consent is not binding on [USAA]." USAA did not consent to Reising's suit against Baldor and, instead, demanded a jury trial on Reising's UIM claim. Because USAA did not agree to have its policy liability determined in the Baldor trial, Reising was required to litigate Baldor's negligence and his damages in a separate trial with USAA.
To avoid injecting potentially prejudicial insurance issues into Baldor's negligence trial, Baldor moved for a bifurcated trial and abatement of Reising's UIM claim. USAA assented to Baldor's motion, which the trial court granted in an order stating:
See In re Reynolds , 369 S.W.3d 638, 654 (Tex. App.—Tyler 2012, orig. proceeding) (holding severance is proper to avoid injecting potentially prejudicial issues into the negligence suit).
[A]ll [Reising's] causes of action against [USAA] are hereby abated and bifurcated. The abatement will be lifted upon
agreement of the parties at the conclusion of the underlying trial or upon Order of the Court. Further, the trial date for the bifurcated claims will be agreed upon between the parties.
While the agreed motion and trial court's order refer to bifurcation, the trial court's order did not separate the case into two trial phases before the same jury. Rather, the trial court ordered separate trials, and by virtue of the abatement, USAA was not a participant in the trial proceedings, and could not act in those proceedings, until the abatement was lifted. See infra p. 887 and note 29.
With Reising's UIM claim abated, the court commenced a jury trial on Reising's negligence claim against Baldor. The jury found Baldor 100% at fault and awarded Reising $160,000 in damages, which was much less than the actual damages Reising claims to have suffered. After the jury was dismissed, and before the verdict was reduced to a judgment, Reising and Baldor agreed to settle the claim for approximately the amount of the jury verdict in forbearance of further trial and appellate proceedings between them.
In accordance with the UIM policy's terms, Reising's counsel advised USAA in writing that Reising and Baldor had agreed to a settlement and requested USAA's permission to settle. USAA did not respond to Reising's initial letter or a follow-up request, but with the trial court's approval, Reising and Baldor consummated the settlement, which Baldor's insurer fully funded despite her policy's much lower coverage limits. After the court had issued an order dismissing the suit against Baldor with prejudice, USAA sent Reising's counsel a letter consenting to the suit against Baldor.
The record does not disclose the insurer's reason for paying significantly over and above Baldor's policy limits.
The next day, the trial court reinstated Reising's UIM suit against USAA and set a trial date. USAA responded with a motion for judgment based on the jury verdict from the Baldor trial. USAA asserted that a separate trial on the UIM claim was no longer necessary because Baldor's insurer settled the negligence claim against her by paying Reising $161,114.79, the full amount of damages the jury had awarded plus court costs. USAA argued that the jury's findings, coupled with the settlement payment, conclusively established that Baldor was not underinsured or, in the alternative, that Reising had no uncompensated losses.
While USAA acknowledges it could still bear liability for some amount of prejudgment interest, it asserts that sum could be calculated without the necessity of a new trial. See Brainard v. Trinity Universal Ins. Co. , 216 S.W.3d 809, 811, 815-17 (Tex. 2006).
Reising opposed the motion. He argued that USAA was not entitled to judgment on the Baldor jury verdict because the insurer had not consented to be bound to any aspect of the Baldor trial, including the jury verdict, until the negligence claim had been dismissed without rendition of judgment. Rather, in lieu of consenting to Baldor's representation of its interests, USAA had agreed to abatement of the UIM claim and insisted on a separate trial to establish its liability for UIM benefits. Reising further disputed that his settlement with Baldor was limited to damages and court costs, noting the settlement agreement also precluded him from moving for a new trial, appealing the verdict, or pursuing any other post-trial procedural matters.
After a hearing on the matter, the trial court summarily denied USAA's motion. The court of appeals also summarily denied USAA's petition for a writ of mandamus to compel the trial court to render judgment on the Baldor verdict.
II. Discussion
Mandamus relief is appropriate when the relator demonstrates a clear abuse of discretion and has no adequate remedy by appeal. USAA argues mandamus is appropriate here because (1) the trial court refused to perform the purely ministerial act of rendering judgment on the jury's verdict and (2) the court's clear error cannot be adequately rectified on appeal from an unnecessary and costly separate trial.
In re H.E.B. Grocery Co., L.P. , 492 S.W.3d 300, 302 (Tex. 2016) (orig. proceeding) ; In re Ford Motor Co. , 988 S.W.2d 714, 718 (Tex. 1998) (orig. proceeding); Walker v. Packer , 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding).
As in the proceedings below, USAA contends it timely consented to be bound by the Baldor trial's outcome and a take-nothing judgment on the UIM claim is required because the Baldor jury verdict and settlement establish that Reising has been compensated for all the damages the Baldor jury awarded. Further, and without regard to timeliness of consent to be bound, USAA asserts that Reising is collaterally estopped from relitigating Baldor's negligence and his damages. We hold USAA is not entitled to judgment on either of these bases.
A. Collateral Estoppel
"The doctrine of collateral estoppel or issue preclusion is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues." Collateral estoppel bars relitigation of an issue if a party seeking the benefit of a judgment proves "(1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action." When properly pleaded and proved in a UIM case, collateral estoppel prevents an insured from relitigating a motorist's negligence and the insured's resulting damages if a judgment in the insured's case against the motorist has finally determined those issues.
Sysco Food Servs., Inc. v. Trapnell , 890 S.W.2d 796, 801 (Tex. 1994) (emphasis added).
Id. (emphasis added); see also Van Dyke v. Boswell, O'Toole, Davis & Pickering , 697 S.W.2d 381, 384 (Tex. 1985) (noting that collateral estoppel "precludes the relitigation of identical issues of facts or law that were actually litigated and essential to the judgment in a prior suit" (emphasis added)).
See Rexrode v. Bazar , 937 S.W.2d 614, 620 (Tex. App.—Amarillo 1997, no writ) ; Forbis v. Trinity Universal Ins. Co. of Kan., Inc. , 833 S.W.2d 316, 319 (Tex. App.—Fort Worth 1992, writ dism'd).
As USAA observes, the court of appeals in Forbis v. Trinity Universal Insurance Co. of Kansas, Inc. applied the collateral estoppel doctrine to preclude relitigation of the amount of damages an at-fault motorist caused after the insured's survivor and the motorist had settled. But Forbis is materially distinguishable because the trial court entered the settlement as an agreed judgment, which had become final. That being the case, the final judgment established the amount of the survivor's damages and precluded her from relitigating that issue in a subsequent suit against the UIM insurer. Unlike Forbis , the essential requirement of a final judgment is lacking here. To the extent the dismissal with prejudice functioned as a sort of judgment, as the dissent suggests, it has not become final. Because there is no final judgment, collateral estoppel is inapplicable here.
Id. (holding survivor of UIM policyholder was collaterally estopped from relitigating damages because she entered into an agreed judgment with the negligent driver establishing her damages).
Id.
See Starnes v. Holloway , 779 S.W.2d 86, 93 (Tex. App.—Dallas 1989, writ denied) ("Application of collateral estoppel ... requires that there be a final judgment." (citations omitted)); Frost Nat'l Bank v. Burge , 29 S.W.3d 580, 595 (Tex. App.—Houston [14th Dist.] 2000, no pet.) ("[B]oth collateral estoppel and res judicata require a final judgment." (citing Mower v. Boyer , 811 S.W.2d 560, 562 (Tex. 1991) )).
See post at 891. The dissent argues the dismissal was a judgment, but concedes, as it must, that collateral estoppel does not apply because there is no final judgment. Id. at 892.
Because we conclude collateral estoppel is inapplicable here, we need not consider Reising's argument that USAA waived this affirmative defense by failing to plead and prove it. See Loya Ins. Co. v. Avalos , 610 S.W.3d 878, 882 n.3 (Tex. 2020) ("Collateral estoppel is an affirmative defense that must be pleaded unless tried by consent. Because the Hurtados raised collateral estoppel for the first time at a summary judgment hearing and said nothing in writing on the matter until their appellate briefing, they forfeited the defense." (internal citations omitted)).
B. USAA's Consent to be Bound
USAA's post-dismissal consent to be bound by the Baldor trial's outcome likewise does not entitle it to judgment on the Baldor verdict. An underinsured motorist is one whose liability insurance is insufficient to cover the injured party's actual damages. A UIM insurer has a contractual duty to pay its insured the difference between the damages the insured is "legally entitled to recover" from an at-fault motorist and the amount recovered or recoverable from the motorist's insurer.
Stracener v. United Servs. Auto. Ass'n , 777 S.W.2d 378, 380 (Tex. 1989).
See Brainard v. Trinity Universal Ins. Co. , 216 S.W.3d 809, 815 (Tex. 2006) (discussing Henson v. S. Farm Bureau Cas. Ins. Co. , 17 S.W.3d 652, 653 (Tex. 2000) ); see also Tex. Ins. Code § 1952.106 ("[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 motor 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.").
"Legally entitled to recover," a term of art in the UIM context, "means the UIM insurer is under no contractual duty to pay benefits until the insured obtains a judgment establishing the liability and underinsured status of the other motorist." A jury announces its decision with its verdict, but the resulting judgment, not the verdict, confers enforceable legal rights. Integral to the distinction is the trial court's ability to determine whether the verdict is proper and supported by evidence before rendering judgment. In making those determinations, a trial court can render judgment notwithstanding the verdict, disregard an unsupported jury finding, or grant a new trial. Thus, to ensure the determination's finality and provide adequate procedural protections for both the insured and the insurer, the judgment—not the verdict—establishes the amount an insured is "legally entitled to recover" for purposes of calculating UIM benefits.
Brainard , 216 S.W.3d at 818.
See Tex. R. Civ. P. 290 ("A verdict is a written declaration by a jury of its decision...."); Verdict , Black's Law Dictionary (11th ed. 2019) (defining verdict as "[a] jury's finding or decision on the factual issues of a case").
See Tex. R. Civ. P. 301 ("The judgment of the court ... shall be so framed as to give the party all the relief to which he may be entitled either in law or equity."); Tex. R. Civ. P. 308 ("The court shall cause its judgments and decrees to be carried into execution...."); Judgment , Black's Law Dictionary (11th ed. 2019) (defining judgment as "[a] court's final determination of the rights and obligations of the parties in a case"); see generally Smith v. McCool , 83 U.S. (16 Wall.) 560, 561, 21 L.Ed. 324 (1872) ("To give efficacy to a verdict, general or special, it must be followed by a judgment, and when offered to establish any fact, such fact must have constituted, in whole or in part, the foundation of the judgment which was rendered."); Pullin v. Parrish , 306 S.W.2d 241, 242 (Tex. Civ. App.—San Antonio 1957, writ ref'd) ("[A] verdict is not a judgment. Judgments, not verdicts, record the final decisions of courts.").
Tex. R. Civ. P. 301 ("[U]pon motion and reasonable notice the court may render judgment non obstante veredicto if a directed verdict would have been proper, and provided further that the court may, upon like motion and notice, disregard any jury finding on a question that has no support in the evidence.").
Id.
Tex. R. Civ. P. 320 ("[O]n motion or on the court's own motion[,] ... [n]ew trials may be granted when the damages are manifestly too small or too large.").
See, e.g., Allstate Ins. Co. v. Irwin , 606 S.W.3d 774, 777 (Tex. App.—San Antonio 2019, pet. granted) ("Absent a judgment establishing the other motorist's liability and damages, a UM/UIM carrier has no contractual duty to pay benefits."); Liberty Mut. Ins. Co. v. Sims , No. 12-14-00123-CV, 2015 WL 7770166, at *2 (Tex. App.—Tyler Dec. 3, 2015, pet. denied) (mem. op.) ("The UIM insurer is under no contractual duty to pay benefits until the insured obtains a judgment...."); Mid-Century Ins. Co. of Tex. v. McLain , No. 11-08-00097-CV, 2010 WL 851407, at *2 (Tex. App.—Eastland Mar. 11, 2010, no pet.) (mem. op.) ("The UIM insurer is under no contractual duty to pay benefits until the insured obtains a judgment...."); Stoyer v. State Farm Mut. Auto. Ins. Co. , No. 3:08-CV-1376-K, 2009 WL 464971, at *2 (N.D. Tex. Feb. 24, 2009) ("Texas state law requires a judgment...."); cf. Blevins v. State Farm Mut. Auto. Ins. Co. , No. 02-17-00276-CV, 2018 WL 5993445, at *15 (Tex. App.—Fort Worth Nov. 15, 2018, no pet.) (mem. op.) ("[I]t is for the trial court, not the jury, to decide what sorts of damages a litigant is legally entitled to recover.").
An insured obtains the requisite judgment from either a suit between the insured and the motorist to which the insurer consented or a suit in which the insured litigates the motorist's negligence directly against the insurer. The wrinkle here is that, following a jury trial on the insured's claim against the motorist, the negligence claim settled and the court dismissed the suit against the motorist without rendering judgment on the jury verdict, leaving no judgment establishing the amount Reising is legally entitled to recover from Baldor to which USAA could consent. After the suit had been dismissed, USAA viewed the jury's adverse verdict favorably because of the parties’ pre-judgment settlement. USAA therefore purported to consent to the negligence verdict and moved for judgment on it with respect to Reising's contract claim. USAA frames "[t]he key question [as] whether [it] is barred from consenting to be bound after the jury in the negligence trial reached a verdict." But we need not decide whether USAA could choose to bind itself after the jury returned a verdict because USAA's consent, even if timely, does not entitle it to judgment on the verdict. USAA may desire to bind itself but that does not make the verdict binding on Reising.
See In re Koehn , 86 S.W.3d 363, 368 (Tex. App.—Texarkana 2002, orig. proceeding) (articulating the different options an insured has to obtain UIM benefits).
The consent requirement in the UIM policy protects the insurer from a default judgment or an inadequate defense by the underinsured motorist. A consenting insurer forfeits that protection altogether, as USAA purported to do here, and binds itself to the negligence suit's outcome, not merely the portions beneficial to it. If the suit's outcome is a judgment establishing the amount of damages the motorist caused the insured, the insurer is bound by that judgment's effect: the damages the insured is legally entitled to recover have been determined. If the outcome is a dismissal prior to any judgment establishing that amount, the insurer is likewise bound by the dismissal's effect: the damages the insured is legally entitled to recover have not been determined.
In re Reynolds , 369 S.W.3d 638, 655 (Tex. App.—Tyler 2012, orig. proceeding) ("[T]he purpose of requiring the UIM insurer's consent to suit against the UIM is to protect the insurer from liability arising from a default judgment against the UIM or an insubstantial defense by the UIM."); In re Koehn , 86 S.W.3d 363, 368 (Tex. App.—Texarkana 2002, orig. proceeding) ("One of the purposes of requiring the insurance company's written consent to sue is to allow the insurance company to protect itself from a default judgment taken against the uninsured/underinsured motorist or an insubstantial defense by the uninsured/underinsured motorist.").
A party's pre-judgment agreed dismissal has the same effect on a verdict against that party as a new trial order—it makes the verdict unenforceable. USAA, as a stranger to the verdict, cannot revive the verdict reached without its participation by consenting to the Baldor trial post-dismissal. Rather, its consent caused it to be bound by the outcome—a dismissal—to the same extent as Baldor, its putative litigation surrogate. Because the dismissal made the verdict unenforceable, the damages Reising is legally entitled to recover from Baldor remain to be determined in the separate UIM trial USAA demanded and the trial court ordered. In short, consent is not piecemeal—if you're in for a penny, you're in for a pound. Whether USAA's post-dismissal consent to the Baldor suit was timely is disputed but ultimately immaterial because USAA cannot bind Reising to an unenforceable jury verdict.
See In re Columbia Med. Ctr. of Las Colinas, Subsidiary, L.P. , 290 S.W.3d 204, 212 (Tex. 2009) (orig. proceeding) (noting that when the trial court grants a new trial, "the prevailing party loses the jury verdict"); Crofts v. Ct. of Civil Appeals for Eighth Supreme Judicial Dist. , 362 S.W.2d 101, 104 (Tex. 1962) (orig. proceeding) ("It is elementary that a dismissal is in no way an adjudication of the rights of parties; it merely places the parties in the position that they were in before the court's jurisdiction was invoked just as if the suit had never been brought."). Although a dismissal with prejudice, unlike one without, prevents relitigation of the same claim against the same party, it does not follow that a verdict remains enforceable after such a dismissal.
In arriving at the opposite conclusion, the dissent not only relies on collateral estoppel principles, which it concedes are inapplicable, but also fails to appreciate the distinctive nature of UIM litigation. Absent a judgment establishing the motorist's liability and the amount of the insured's damages, insureds are permitted to try those issues directly against the insurer, regardless of whether they can or want to sue the motorist. Even assuming the dismissal functioned as a judgment, as the dissent does, that judgment established only that Reising cannot bring another negligence claim against Baldor based on the accident. If the dissent were correct that the dismissal established Reising is "legally entitled to recover" nothing from Baldor for purposes of determining USAA's UIM liability, insureds could never settle and dismiss their claims against underinsured motorists without eviscerating the contractual right to recover from their own insurer any unrecovered actual damages within policy limits. Cf. Knutson v. Morton Foods, Inc. , 603 S.W.2d 805, 808 (Tex. 1980) (holding settlement with, and release of claim against, tortfeasor did not bar plaintiff from pursuing respondeat superior claim against tortfeasor's employer for same automobile accident).
Mandamus relief is not appropriate absent a clear abuse of discretion, yet the dissent would grant extraordinary relief here despite an inability to identify any authority compelling rendition of judgment on a verdict from a separate trial that was dismissed while the claim against the relator was under abatement and to which the relator was not a participant. The best the dissent can offer is to string together a series of inapt analogies to Mary Carter agreements, bifurcated phases of a single trial as opposed to separate trials, and cases in which judgment was rendered for parties who participated in the trial.
In re H.E.B. Grocery Co., L.P. , 492 S.W.3d 300, 302 (Tex. 2016) (orig. proceeding) ; In re Ford Motor Co. , 988 S.W.2d 714, 718 (Tex. 1998) (orig. proceeding) ; Walker v. Packer , 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding).
The dissent's main thrust is that this case is procedurally indistinguishable from a bifurcated trial on actual damages and, if necessary, exemplary damages. But the truism that the findings in the first phase of a bifurcated trial can preclude the second is a red herring. A bifurcated trial is one trial in which one jury decides multiple questions in different phases. Although the trial court used the term "bifurcated," the trial court did not order one trial in which the first phase would determine the liability and damages issues as to all parties. Whether termed as bifurcated trials or as separate trials , the trial court ordered two trials, each of which would involve a separate jury deciding the negligence issues, as necessitated by USAA's demand for its own jury trial. While citing a case involving a single bifurcated trial and specifically noting that "[t]he hallmark of bifurcation is that the second phase of the trial is dependent on the resolution of the first[,]" the dissent consciously ignores this critical procedural fact to anchor a faulty analysis.
See In re Reynolds , 369 S.W.3d at 654. The dissent disagrees, citing a dictionary definition of "bifurcate[.]" See post at 892. Of course, dictionary definitions do not trump Texas precedent on an issue of Texas law. But regardless, what matters here is not the word the trial court used but what actually happened. And on that score, there is an important difference between one trial and multiple trials. The general definition of "bifurcate" the dissent cites contemplates any type of bifurcation: "To separate into two parts, esp[ecially] for convenience ... Multiple aspects of litigation, such as discovery, motions, defenses, trial, and jury deliberations, may be bifurcated to save time, reduce jury confusion, or achieve other benefits, with or without the same jury hearing both bifurcated parts." Bifurcate , Black's Law Dictionary (11th ed. 2019). The more specific definition of "bifurcated trial"—the type to which the dissent purports to analogize—is "[a] trial that is divided into two stages, such as for guilt and punishment or for liability and damages." Bifurcated trial , Black's Law Dictionary (11th ed. 2019). To the extent the former does not, this latter definition clearly contemplates one trial.
The order stated: "The abatement will be lifted upon agreement of the parties at the conclusion of the underlying trial or upon Order of the Court. Further, the trial date for the bifurcated claims will be agreed upon between the parties."
See Transp. Ins. Co. v. Moriel , 879 S.W.2d 10, 30 (Tex. 1994) ("If the jury answers the punitive damage liability question in the plaintiff's favor, the same jury is then presented evidence relevant only to the amount of punitive damages, and determines the proper amount of punitive damages, considering the totality of the evidence presented at both phases of the trial. " (emphases added)).
Post at 893 (emphasis added).
The dissent even cites a case further highlighting the distinction. See Van Dyke v. Boswell, O'Toole, Davis & Pickering , 697 S.W.2d 381, 385 (Tex. 1985) (holding that the findings in the first of two separate trials did not preclude the second trial).
The dissent also veers off into other matters that are equally inapposite, invoking the "collusion" boogeyman and implying the trial court had no authority to allow a dismissal in the first trial once the jury rendered its verdict. The settlement here—one USAA enthusiastically embraces—is not akin to a Mary Carter agreement. Public policy disfavors such agreements because they result in unfair trials by providing economic incentives for a defendant to assist in maximizing the plaintiff's recovery against other defendants, skewing both presentation of the merits and the outcome. Lacking any evidence of collusion, the dissent is forced to concede that "Baldor has no financial interest in Reising's recovery against USAA." Rather, the dissent complains that by settling, Baldor now has "no incentive to resist" in the suit against USAA. But that circumstance does not distinguish this case from any other UIM case in which the insured tries the negligence case against the motorist without the insurer's consent and then subsequently litigates the negligence case against the insurer. Nor is it distinguishable from any other case in which the insured chose not to sue the motorist within the two-year statute of limitations. And it is no different than any other case in which a witness has no skin in the game. The dissent's hyperbole belies the reality that UIM suits often involve motorists who have no incentive to assist the UIM insurer. Indifference is not equivalent to collusion.
State Farm Fire & Cas. Co. v. Gandy , 925 S.W.2d 696, 709 (Tex. 1996) ("A Mary Carter agreement is any settlement arrangement between the plaintiff and some of the defendants in a case by which the settling defendants agree to pay the plaintiff a certain amount of money and to participate in the trial against the nonsettling defendants, and the plaintiff agrees to release the settling defendants from liability and, if the judgment against a nonsettling defendant is large enough, to repay the settlement amount.").
Post at 894.
Id. (emphasis omitted).
Indeed, as noted, the purpose of the policy's consent requirement is to permit the insurer to decide whether to align with the motorist by consenting to the motorist's suit. See supra note 25.
Most importantly, this is not a case in which a party that participated in a jury trial was denied judgment on the verdict reached in that trial. Arguing that only nonsuits pursuant to Texas Rule of Civil Procedure 162 —dismissals that are necessarily pre-verdict—can nullify pre-dismissal proceedings and thus the agreed dismissal here did not render the verdict unenforceable, the dissent cites O'Brien v. Stanzel for the proposition that "late-in-the-game nonsuits do not prevent judgments vis-à-vis other parties to the suit[.]" As O'Brien expressly acknowledges, in some situations, "a trial court may exercise discretion [to grant a dismissal] even though the trial has progressed beyond the rule's point of no return." Such is the case here where, unlike O'Brien , all the parties who participated in the jury trial agreed to the dismissal. By failing to mention that USAA could not participate in the trial or oppose the dismissal while the claims against it were abated, the dissent improperly analogizes to a case in which the party seeking judgment participated in the jury trial and opposed the dismissal. Neither Rule 162 nor O'Brien prohibited the trial court from granting the agreed dismissal in this case, nor does either support the dissent's view that a verdict remains enforceable after all the parties to it have agreed to dismiss the case.
Post at 895–96.
603 S.W.2d 826 (Tex. 1980).
Post at 895.
See id. at 826-27.
III. Conclusion
USAA's consent does not entitle it to judgment on the verdict because collateral estoppel does not apply, and USAA cannot bind Reising to a verdict that is not binding between the parties to it. We deny USAA's petition for writ of mandamus because the trial court did not clearly abuse its discretion in proceeding with the trial USAA demanded to determine its liability under the UIM policy.
Justice Bland filed a dissenting opinion, in which Justice Lehrmann joined.
Justice Bland, joined by Justice Lehrmann, dissenting.
The salient question presented in this case is whether the motorist who injured the plaintiff was underinsured. The answer is simple: she was not.
The trial court's post-verdict dismissal of the at-fault motorist does not set aside the jury's verdict establishing her liability and the amount of the damages she caused for purposes of determining whether she was underinsured. Nor does it remove from consideration her agreement to pay the plaintiff an amount that exceeds the jury's verdict. Fundamentally, the plaintiff's own insurer has no underinsured-motorist liability in this case because the liable motorist and her insurance carrier fully compensated the plaintiff for his injuries, as determined by the jury that heard his case against her. The plaintiff's receipt of payment for the damages found by the jury from the at-fault motorist and his agreement to dismiss with prejudice his claim against that motorist precludes his claim against his own carrier for underinsured-motorist coverage.
In rejecting this basic tenet, the Court ignores that USAA is one of three parties to this single action. Likewise, its focus on the plaintiff's dismissal and the timing of the plaintiff's insurer's consent to be bound by the verdict neglects both the verdict's force and effect and the binding nature of the plaintiff's dismissal. As a party to the lawsuit, the plaintiff's insurer may seek judgment on the jury's verdict. Absent any question of the verdict's infirmity, the trial court's decision to disregard it in favor of another trial warrants mandamus relief. Because the Court declines to grant relief, I respectfully dissent.
I
Sue Ann Baldor rear-ended Adam Reising in a car accident. Reising sued Baldor. Because Baldor's insurance coverage initially was limited to $30,000, and Reising alleged more than $30,000 in damages, Reising also sued his own insurer, USAA General Indemnity Company, seeking coverage under his underinsured-motorist policy for any covered amount that Baldor did not pay.
Reising's underinsured-motorist coverage applies when the coverage of the motorist-defendant "is not enough to pay the full amount the covered person is entitled to recover as damages." The policy further provides that the coverage is for damages reduced by payments made on behalf of the underinsured motorist: "[a]ny amount otherwise payable for damages under UM/UIM Coverage shall be reduced by all sums paid or payable" by or on behalf of the person legally responsible for those damages. Finally, "[a]ny judgment of damages arising out of a suit brought without [USAA's] written consent is not binding on [USAA]."
Baldor moved to bifurcate the trial and abate the case against USAA, and the trial court granted her motion. Reising and Baldor proceeded to trial. The jury found Baldor 100% responsible for the accident and awarded Reising $160,000 in damages.
Neither Reising nor Baldor challenged the verdict by, for example, moving for a new trial or to set the verdict aside. Instead, Reising and Baldor agreed to settle their suit for $161,114.79. They then moved in the trial court to dismiss Reising's claim against Baldor with prejudice. At a hearing on the motion and settlement, USAA moved for judgment on the verdict, which, it argued, is dispositive of its liability given Baldor's payment. The trial court refused to act on USAA's motion. The trial court then granted Reising's motion to dismiss his claim against Baldor with prejudice.
After the trial court dismissed Baldor from the suit with prejudice, USAA wrote to Reising that it would be bound by the verdict. USAA again moved for judgment on the verdict. Without explanation, the court refused and scheduled a second trial, in which Reising contends that he may retry his claim against Baldor and submit her liability and his damages to another jury, solely for the purpose of determining USAA's liability for underinsured-motorist coverage.
II
For over a century, we have consistently held that a judge has a ministerial duty to enter judgment on a verdict. Under Texas Rule of Civil Procedure 300, the trial court "shall render judgment" on a special verdict, unless the verdict is "set aside or a new trial is granted, or judgment is rendered notwithstanding verdict or jury finding."
Hume v. Schintz , 90 Tex. 72, 36 S.W. 429, 430 (1896) (orig. proceeding) ("The jury are the judges—the triors—of questions of fact. Their award, until set aside, is conclusive, and it has been held by this court that it is the imperative duty of the court, in the first instance, to give judgment in accordance with the verdict."); see also Traywick v. Goodrich , 364 S.W.2d 190, 191 (Tex. 1963) (orig. proceeding) ("Where there is no irreconcilable conflict in the jury's findings it is the ministerial duty of the Judge to enter a judgment on the verdict and the matter involves no judicial or discretionary powers." (citing Gulf, C. & S. F. Ry. Co. v. Canty , 115 Tex. 537, 285 S.W. 296, 299 (1926) (orig. proceeding) (collecting cases))).
"A special verdict is one wherein the jury finds the facts only on issues made up and submitted to them under the direction of the court." Tex. R. Civ. P. 290.
A trial court has "considerable discretion" to set aside a verdict and grant a new trial, for example, in cases of a conflicting verdict or juror misconduct. However, a trial court must state its reasons—failing to do so is an abuse of discretion that warrants mandamus relief.
In re Columbia Med. Ctr. of Las Colinas , 290 S.W.3d 204, 211 (Tex. 2009) (orig. proceeding) (citing Tex. R. Civ. P. 320, 326, 327 ).
See id. at 213 (holding that trial court's order for a new trial without justification was "arbitrary and an abuse of discretion").
The trial court in this case did not state a reason to justify its disregard of the jury's verdict, and on this record, no justification exists. When Reising dismissed Baldor from this suit, it did not dissolve the verdict. Rather, Reising exchanged his right to enforce the verdict against Baldor for the settlement amount that she and her insurer paid.
Reising's dismissal with prejudice of his claim against Baldor does not dispense with USAA's right to seek judgment on the jury's verdict. "Any party may prepare and submit a proposed judgment to the court for signature." Abated or not, bifurcated or not, USAA is a party to the case. If USAA's proposed judgment conformed to the verdict, and the trial court had no reason to set the verdict aside, then the trial court had no option but to enter judgment.
A
USAA's proposed judgment conformed to the verdict. Underinsured-motorist coverage compensates the insured for damages that he does not recover from the negligent driver or her insurance company. Under Reising's policy, Reising may recover from USAA only the amount that he is "legally entitled" to recover from Baldor, less any payments Baldor made to satisfy her obligation. The jury awarded Reising $160,000. Baldor's insurer thereafter paid Reising $161,114.79. USAA's obligation to Reising, reduced by Baldor's payment, is zero.
Reising is not "legally entitled" to recover any more from Baldor. Reising's argument against simple arithmetic is that his agreement to dismiss Baldor effectively voids the verdict and leaves undetermined the amount he is "legally entitled" to recover from her. By agreeing to dismiss his claim against Baldor with prejudice, however, Reising is no longer "legally entitled" to pursue Baldor for any amount. He has released his claim against her after receiving an amount that exceeded the damages the jury awarded to him.
The Court posits that to permit judgment on the jury's verdict and the resulting partial dismissal would "eviscerate" the contractual right to recover underinsured-motorist benefits because "insureds could never settle." Ante at 886 n.27. This ignores that the contractual right to recover benefits is not unfettered. An insured cannot settle with a third party absent the insurance company's consent if that settlement prejudices the insurer—for example, causing it to lose a valuable subrogation right—under the policy's standard settlement-without-consent exclusion. See Hernandez v. Gulf Grp. Lloyds , 875 S.W.2d 691, 692 (Tex. 1994) (holding that "an insurer may escape [UM/UIM] liability on the basis of a settlement-without-consent exclusion only when the insurer is actually prejudiced by the insured's settlement with the tortfeasor"); Guar. Cty. Mut. Ins. Co. v. Kline , 845 S.W.2d 810, 811 (Tex. 1992) (per curiam) ("Texas courts have uniformly upheld the validity of [settlement-without-consent] exclusion[s] in the standard Texas Personal Auto Policy.").
To the extent that a judgment must fix the amount to which an insured is "legally entitled," the trial court must render that judgment in this case based on the jury's findings and the applicable law. The jury's verdict coupled with Reising's dismissal of his claim against Baldor with prejudice in exchange for an amount greater than the jury's verdict satisfies the requirement without need for further factfinding. In an attempt to avoid this rule, Reising and Baldor "asked the court not to enter a judgment." Their request, however, does not transmute the trial court's dismissal with prejudice of Reising's claim against Baldor into anything other than a binding judgment between them.
See Brainard v. Trinity Universal Ins. Co. , 216 S.W.3d 809, 818 (Tex. 2006) ("Consequently, the insurer's contractual obligation to pay benefits does not arise until liability and damages are determined.").
See Epps v. Fowler , 351 S.W.3d 862, 868–69 (Tex. 2011) (recognizing that a "a dismissal or nonsuit with prejudice is ‘tantamount to a judgment on the merits.’ " (quoting Dean v. Riser , 240 F.3d 505, 509 (5th Cir. 2001) )).
By the same token, their agreement does not bind USAA. It left the question of underinsured coverage to be determined, not the damages for which Baldor was responsible. "The order entered at the conclusion of a separate trial is often interlocutory, because no final and appealable judgment can properly be rendered until all of the controlling issues have been tried and decided." In this case, the jury has decided the controlling fact issue. The verdict establishing Baldor's liability and damages cannot conflict with a later verdict deciding those same issues.
Hall v. City of Austin , 450 S.W.2d 836, 838 (Tex. 1970) (per curiam).
The verdict against Baldor and her insurer's payment of an amount exceeding the verdict to resolve Reising's claim against her admits but one conclusion: USAA has no liability to Reising for underinsured-motorist coverage. No further fact-finding is required, and the trial court should have entered judgment for USAA.
B
The law places a premium upon finality and conserving judicial resources. "[E]xtraordinary relief can be warranted when a trial court subjects taxpayers, defendants, and all of the state's district courts to meaningless proceedings and trials." For that reason, we have concluded that a trial court abuses its discretion in granting a motion for new trial when the record does not support the trial court's reasons for granting it or when the trial court states no reason. In this case, no party sought to set aside the verdict; one party—USAA—sought judgment on it. The trial court's refusal to enter judgment, combined with an ensuing wasteful second jury trial to decide the same issues a jury in this case has decided, warrants mandamus relief.
In re Team Rocket, L.P. , 256 S.W.3d 257, 262 (Tex. 2008) (orig. proceeding).
In re Columbia Med. Ctr. of Las Colinas , 290 S.W.3d 204, 211–13 (Tex. 2009) (orig. proceeding).
III
The Court declines to grant relief for two reasons: (1) collateral estoppel does not attach in the absence of final judgment; and (2) USAA's consent to the verdict does not bind Reising. We agree that collateral-estoppel principles are out of place in a bifurcated trial, which does not create separate actions. It is precisely because this case is a single action that USAA is entitled to judgment on the verdict. The second reason fails because the verdict, subsequent settlement, and dismissal with prejudice bind Reising. USAA's contractual shield of consent cannot be used as a sword against it to countermand that verdict and settlement.
A
USAA's brief characterizes the preclusive effect of the verdict against Baldor as "collateral estoppel." As the Court correctly observes, however, collateral estoppel requires a valid and final judgment. Collateral estoppel is the correct doctrine for measuring claim preclusion in successive lawsuits, but it is inapplicable to the effect of a partial verdict in the same action. The trial court entered an order bifurcating and abating—not dismissing or severing —Reising's claim for underinsured-motorist benefits against USAA from his negligence claim against Baldor. To bifurcate means "[t]o separate into two parts." Abatement is "[t]he suspension or defeat of a pending action for a reason unrelated to the merits of the claim."
See Sysco Food Servs. v. Trapnell , 890 S.W.2d 796, 801 (Tex. 1994) ("A party seeking to assert the bar of collateral estoppel must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action.").
Severance , Black's Law Dictionary (11th ed. 2019) ("Civil procedure. The separation, by the court, of multiple parties’ claims either to permit separate actions on each claim or to allow certain interlocutory orders to become final.").
Bifurcate , Black's Law Dictionary.
Abatement , Black's Law Dictionary; see Tex. Highway Dep't v. Jarrell , 418 S.W.2d 486, 488 (Tex. 1967) ("[A] plea in abatement, if sustained, would require an abatement of the claim or cause of action until some obstacle to its further prosecution was removed.").
The Court is adamant that the trial court did not order a bifurcated trial, despite the trial court's order, which expressly states that Reising's cause of action against USAA is "hereby abated and bifurcated." The Court improperly constrains bifurcated trials to those that involve a single jury. Even so, in this case, no more than a single jury was necessary. The hallmark of bifurcation is that the second phase of the trial is dependent on resolution of the first. USAA's liability is dependent on Baldor's liability. USAA remained a party entitled to seek judgment on the verdict. Only severed actions result in independently appealable judgments—judgments that dispose of all claims and all parties.
See ante at 888. At the hearing on USAA's amended motion for judgment on the verdict, the trial court also puzzled over the effect of an agreed order signed by only two parties because "this was a bifurcated cause and not a severed cause of action."
See ante at 887 n.29. Bifurcate , Black's Law Dictionary (explaining that a trial court may bifurcate a case "with or without the same jury hearing both bifurcated parts").
See Tex. R. Civ. P. 305.
Van Dyke v. Boswell, O'Toole, Davis & Pickering , 697 S.W.2d 381, 383 (Tex. 1985) ("In contrast to a severance, separate trials are interlocutory, and are not final and appealable until all the separated claims and issues in the suit have been litigated."). Van Dyke involved the unusual instance in which the trial judge ordered a counterclaim severed from a claim, conducted the trial in the severed cause, and then rescinded the severance order. See id. at 382–83. We said that "the effect of the trial court's rulings was to grant separate trials," but that the resolution of the counterclaim could not be inferred from the verdict on the claim because the court had not submitted it to the jury. Id. at 383–85. In contrast, the jury in this case heard and determined Baldor's liability and the damages she caused Reising in the accident.
The jury's verdict resolved the parties’ factual dispute about the amount of damages Baldor owed Reising for the collision that she caused. Reising identifies no other fact issue to be resolved in a new trial other than Baldor's liability and damages. To do so again, when Baldor's interests are no longer adversarial to Reising's, risks a skewed outcome like the kind we refused to countenance in State Farm Fire & Casualty Co. v. Gandy. The tortfeasor in Gandy assigned his claims against his insurer to the plaintiff in exchange for her agreement not to collect her judgment against him. We likened the disincentives that occur when the tortfeasor is no longer aligned with the party responsible for paying the damages for her conduct to the deleterious effects of Mary Carter agreements. As we said then:
925 S.W.2d 696, 705 (Tex. 1996).
Id. at 698.
Id. at 709–10.
As a matter of public policy, this Court favors settlements, but we do not favor partial settlements that promote rather than discourage further litigation. And we do not favor settlement arrangements that skew the trial process, mislead the jury, promote unethical collusion among nominal adversaries, and create the likelihood that a less culpable defendant will be hit with the full judgment. The bottom line is that our public policy favoring fair trials outweighs our public policy favoring partial settlements.
Id. at 710 (quoting Elbaor v. Smith , 845 S.W.2d 240, 250 (Tex. 1992) ).
As in Gandy , the concern is not, as the Court states, that Baldor has an economic incentive to assist Reising in the second trial. It is instead that Baldor has no incentive to resist Reising's efforts to establish her liability and damages because she is no longer legally responsible for them. Put differently, though Baldor has no financial interest in Reising's recovery against USAA, she also is not anything more than a "nominal" adversary in what will (again) be a determination of her liability for the car accident and the damages she caused. As we forewarned in Gandy : "It is one thing to say that a defendant's liability must be determined as if he had not settled with the plaintiff; it is quite another thing to do it." In reality, "[o]nce the parties have changed positions, their views are altered, and it is very difficult to determine what might have been."
Id. at 719.
Id.
Our Rules of Civil Procedure provide that a trial court may bifurcate a case for convenience or to avoid prejudice. Here, the trial court did so to avoid injecting potentially prejudicial insurance issues into the negligence suit against Baldor. Whether done for convenience or to avoid prejudice, a separate trial on issues leaves the lawsuit intact, separating the case into two or more parts that are tried separately.
Ante at 881.
Hall v. City of Austin , 450 S.W.2d 836, 837–38 (Tex. 1970) (per curiam).
The Court's analysis presumes either that Reising's dismissal bars the trial court from entering judgment on the verdict or that the earlier phase is a legal fiction that evaporated when some of the parties agreed to settle. There is no "earlier" action. There is only a separate verdict in a bifurcated case, which, in turn, incorporates into one final judgment. In a case in which exemplary damages are bifurcated from actual damages, for example, the actual damages verdict informs whether to proceed to the trial on the remaining issue of exemplary damages. Because actual damages are necessary to award exemplary damages, the second phase may not be necessary. The same is true in this case. The first verdict resulted in a finding that established Reising's actual damages. That finding, combined with Reising's receipt of more than the jury's award from Baldor and his subsequent agreement to dismiss his claim against her, precludes underinsured-motorist liability for USAA.
See Transp. Ins. Co. v. Moriel , 879 S.W.2d 10, 30 (Tex. 1994) ("If the jury answers the punitive damage liability question in the plaintiff's favor, the same jury is then presented evidence relevant only to the amount of punitive damages, and determines the proper amount of punitive damages, considering the totality of the evidence presented at both phases of the trial."), superseded by statute on other grounds as recognized in U-Haul Int'l, Inc. v. Waldrip , 380 S.W.3d 118, 140 (Tex. 2012) ; see also Tex. Civ. Prac. & Rem. Code § 41.004(a) (requiring a finding of actual damages to support an award of exemplary damages).
In sum, USAA's agreement to split the trial into phases does not compel it to participate in a second trial that the first has rendered unnecessary.
B
While re-litigation happens in underinsured-motorist cases, it comes about when the insurer declines to be bound by the findings made against the motorist. In contrast to those cases, the Court in this case holds that the verdict is unenforceable against the very party who sought that verdict to support his claims against two defendants, choosing to settle with only one. None of our precedent leads to such a result; Gandy instructs differently.
Gandy , 925 S.W.2d at 709.
The Court further holds that "[a] party's pre-judgment agreed dismissal has the same effect on a verdict against that party as a new trial order—it makes the verdict unenforceable." That may be true for the parties who have agreed to dismiss the claims between them. It is not true for the remaining parties to the case.
Ante at 886. The two cases the Court cites have nothing to do with dismissals with prejudice or their binding effect. In In re Columbia Medical Center of Los Colinas , we observed that the end result of a trial court's decision to set a verdict aside and order a new trial is "that the prevailing party loses the jury verdict." See 290 S.W.3d 204, 211–12 (Tex. 2009) (orig. proceeding). We did not hold, however, that an agreed dismissal binds other parties to its effect. A dismissal with prejudice is not like a new trial—the former is a binding judgment enforceable between the parties who made it. A new trial, in contrast, vacates any judgment that has been rendered on the issues to be decided again. The Court's reliance on Crofts v. Court of Civil Appeals for the Eighth Supreme Judicial District is equally out of place, as that case involved neither an agreed dismissal, new-trial order, nor a post-verdict dismissal. 362 S.W.2d 101 (Tex. 1962) (orig. proceeding). Instead, Crofts held that the court of appeals lacked jurisdiction to issue a writ of mandamus once the trial court had dismissed the case in favor of a related divorce proceeding pending in Maryland. See id. at 103–05.
Under Rule 162, a plaintiff has the absolute right to take a nonsuit or dismissal without prejudice "[a]t any time before the plaintiff has introduced all of his evidence other than rebuttal evidence." However, this case proceeded well past Rule 162 ’s point of no return. As we recognized in O'Brien v. Stanzel , late-in-the-game nonsuits do not prevent judgments vis-à-vis other parties to the suit:
One should not be permitted to take a nonsuit so that he can have another day and another try after he has announced ready, picked a jury, and heard and seen all of the witnesses unfold all of the contentions of a three-sided controversy that has proceeded to the point that all parties have closed after a trial that lasted a week. Under such circumstances, one may not prevent a final judgment on the merits by moving for a nonsuit.
603 S.W.2d 826, 828 (Tex. 1980) ; accord In re Baker , 420 S.W.3d 397, 405 (Tex. App.—Texarkana 2014, no pet.) (orig. proceeding) ("[O]btaining a nonsuit without prejudice after a jury has returned its verdict entices a plaintiff to re-file his lawsuit in hopes of securing a jury sympathetic to his position. This practice should be viewed with extreme skepticism, as it tends to undermine the legitimate role of the jury in our system of jurisprudence."). O'Brien concerned a dismissal under then-Rule 164, which has since been repealed.
Although O'Brien notes that "circumstances may arise which, in a court's discretion, constitute[ ] grounds for a nonsuit late in a trial," it does not suggest that a post-verdict nonsuit of one party renders the verdict a nullity for a party not included in that nonsuit.
O'Brien , 603 S.W.2d at 828.
Because the Court holds that the dismissal rendered the verdict a nullity for Reising's claims against USAA, it then analyzes whether USAA's consent resurrects it. In doing so, it improperly uses a clause intended to protect USAA from the vagaries of a sham trial as a bludgeon against USAA's invocation of a verdict that was not a sham.
Reising's policy provides: "Any judgment of damages arising out of a suit brought without our written consent is not binding on us." Consent, in this context, is a one-way street. See Binding , Black's Law Dictionary (11th ed. 2019) ("(Of an agreement) having legal force to impose an obligation."). USAA cannot be bound by a judgment arising out of a suit brought without its consent. It nevertheless may accede to the verdict if it chooses. The policy does not say, for example, "Any judgment arising out of a suit brought without our consent is inoperative" or "unenforceable."
See State Farm Fire & Cas. Co. v. Gandy , 925 S.W.2d 696, 712–13 (Tex. 1996).
The Court writes that "the insurer can no more bind its insured to the verdict than could the motorist against whom it was rendered." It is not USAA who binds Reising; it was Reising who bound himself. He fully participated in the trial and in the settlement agreement, which bars him from re-adjudicating Baldor's liability for the damages the jury awarded. If Reising did not want to be bound by the verdict, he could have moved for a new trial or for judgment notwithstanding the verdict. Instead, he agreed to dismiss his claim with prejudice after he received payment of an amount exceeding the verdict "by or on behalf of" the party he claims is underinsured. If Baldor's insurer had paid less than the jury's verdict to settle, USAA would have two choices: either move for a judgment on the verdict and pay Reising the difference between the verdict and the amount he recovered from Baldor, or roll the dice and try the case again. Under the former scenario, USAA is required to pay Reising because Reising would not have recovered "all amounts that [he] is legally entitled to recover as damages from [Baldor]." Under the latter, USAA has declined to be bound by a judgment from a suit brought without its written consent. The choice is USAA's, not Reising's, because Reising has asserted claims against both defendants based on the same operative facts.
Ante at 881.
See Tex. Ins. Code § 1952.106.
See supra note 37.
The Court suggests that USAA seeks to improperly rely on Reising's settlement by consenting to the judgment with the benefit of hindsight. That is the very purpose of the consent provision: it allows the insurer to determine with the benefit of hindsight whether the potentially underinsured motorist adequately defended the suit before agreeing to be bound by a finding of liability and damages against that motorist. The consent provision protects USAA from default judgments and the lackadaisical efforts of a judgment-proof defendant. USAA used the consent provision here precisely as designed.
See ante at 885, 887.
* * *
Because the jury's verdict established that Baldor is liable to Reising for $160,000 in damages, Baldor paid more than that to settle her liability, and Reising dismissed his claim against Baldor with prejudice, USAA is entitled to judgment on the verdict as a party to the suit. Once Reising released his claim against Baldor, he was no longer "legally entitled" to seek damages against her arising out of the accident. His agreement precludes a second trial to again adjudicate Baldor's liability and damages. Mandamus relief is appropriate when a trial court improperly refuses to proceed to judgment on a jury's verdict. Because the Court does not grant that relief in this case, I respectfully dissent.
See In re Columbia Med. Ctr. of Las Colinas , 290 S.W.3d 204, 212–13 (Tex. 2009) (orig. proceeding).