HARVEY BROWN, Justice.
Relator, Progressive County Mutual Insurance Company seeks a writ of mandamus compelling the trial court to (1) vacate its order denying Progressive's motion to sever extra-contractual claims asserted against it and (2) enter an order abating those extra-contractual claims until the breach-of-contract claim brought by Alma Guia, the real party in interest, has been resolved. We conditionally grant the writ.
Following an automobile collision with an uninsured motorist's vehicle, Guia sued her insurer, Progressive.
We may issue a writ of mandamus to correct a trial court's clear abuse of discretion or violation of duty imposed by law when no adequate remedy by appeal exists. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (orig. proceeding). A clear abuse of discretion occurs when the trial court's decision is so arbitrary and unreasonable that it amounts to clear error. See id. (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985)). Because a trial court has no discretion in determining what the law is, the trial court abuses its discretion if it clearly fails to analyze or apply the law correctly. See id. at 840. "In determining whether appeal is an adequate remedy, [we] consider whether the benefits outweigh the detriments of mandamus review." In re BP Prods. N. Am., Inc., 244 S.W.3d 840, 845 (Tex.2008) (orig. proceeding).
The trial court has "broad" discretion in the severance of causes of action. Morgan v. Compugraphic Corp., 675 S.W.2d 729, 734 (Tex.1984); Black v. Smith, 956 S.W.2d 72, 75 (Tex.App.-Houston [14th Dist.] 1997, orig. proceeding). However, that discretion is not unlimited. See U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668, 671 (Tex.App.-Houston [1st Dist.] 1993, orig. proceeding). The trial court has a duty to order severance when
Texas Rule of Civil Procedure 41 governs severance of claims. See TEX.R. CIV. P. 41. The rule provides, in part, that "[a]ctions which have been improperly joined may be severed ... on such terms as are just. Any claim against a party may be severed and proceeded with separately." Id. The predominant reasons for a severance are to do justice, avoid prejudice, and promote convenience. F.F.P. Op. Partners, L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex.2007). Claims are properly severable if: (1) the controversy involves more than one cause of action; (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted; and (3) the severed claim is not so interwoven with the remaining action that it involves the same facts and issues. Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex.1990). Only the third element is in dispute here.
In Liberty National Fire Insurance Co. v. Akin, the Texas Supreme Court considered whether severance was required in a case involving breach of contract and extra-contractual claims against an insurer under a homeowner's policy. 927 S.W.2d 627 (Tex.1996). In refusing to grant mandamus relief, the Court rejected "an inflexible rule that would deny the trial court all discretion and ... require severance in every case [involving bad-faith insurance claims], regardless of the likelihood of prejudice." Id. at 630. Ultimately, the Court concluded that the contractual and extra-contractual claims in that case were interwoven, with most evidence admissible on both claims, and that any prejudicial effect could be ameliorated by appropriate limiting instructions. See id. The Court went on to
Id. (internal citations omitted); see also In re Miller, 202 S.W.3d 922, 925-26 (Tex. App.-Tyler 2006, orig. proceeding [mand. denied]); In re Trinity Universal Ins. Co., 64 S.W.3d 463, 468 (Tex.App.-Amarillo 2001, orig. proceeding [mand. denied]). Thus, in Liberty National, the Court opined a settlement offer by an insurer may create a situation where severance of an insured's contract claim is required. 927 S.W.2d at 630 (Tex.1996).
There is no evidence in the record that Progressive made a settlement offer to
Several courts of appeals have considered the issues of severance and abatement in the context of uninsured motorist or underinsured motorist insurance coverage; these courts have concluded that, when uninsured motorist claims are involved, severance of the extra-contractual claims was required. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 S.W.3d 429 (Tex. App.-Austin 2012, orig. proceeding) (concluding trial court abused discretion by denying insurer's motion for severance and abatement of extra-contractual claims where settlement offer was made on underinsured motorist claim); In re Reynolds, 369 S.W.3d 638, 650-55 (Tex.App.-Tyler 2012, orig. proceeding) (holding severance of underinsured motorist claim was required to prevent prejudice); In re United Fire Lloyds, 327 S.W.3d 250, 257 (Tex.App.-San Antonio 2010, orig. proceeding) (finding abuse of discretion in granting motion for bifurcation of trial rather than severance and abatement of extra-contractual claims); see also In re Old Am. Cnty. Mut. Fire Ins. Co., No. 13-12-00700-CV, 2013 WL 398866 (Tex.App.-Corpus Christi January 30, 2013, orig. proceeding) (mem. op.) (holding that severance and abatement of extra-contractual claims is required in many instances when insured asserts claim to uninsured or underinsured motorist benefits); In re Farmers Tex. Cnty. Mut. Ins. Co., No. 07-11-00396-CV, 2011 WL 4916303, (Tex. App.-Amarillo Oct. 17, 2011, orig. proceeding) (mem. op.) (denying mandamus because complaint was not preserved, but agreeing that abatement of extra-contractual claims is required in most instances when an insured asserts claim to uninsured motorist benefits).
The San Antonio Court of Appeals explained its determination that mandamus relief was proper to compel severance and abatement of an underinsured motorist claim from related bad faith claims as follows:
In re United Fire Lloyds, 327 S.W.3d at 256.
These requested documents are irrelevant to the breach-of-contract claim, and the introduction of Progressive's claims handling history in unrelated accidents at the trial of Guia's breach-of-contract claim would be manifestly unjust. See Womack v. Berry, 291 S.W.2d at 682-83 (Tex.1956) (orig. proceeding).
The trial court's abatement of any decision on severance until the eve of trial requires the parties to engage in discovery on the extra-contractual claims and prepare for a trial on these claims, even though extra-contractual liability could only accrue if Progressive is found liable on the contract. See In re United Fire Lloyds, 327 S.W.3d at 256. Accordingly, the trial court's decision to postpone severance, unless writ is granted, will require Progressive to expend resources answering discovery that is far broader than the car accident claim that must be resolved.
Consistent with In re Reynolds and In re United Fire Lloyds, we conclude that severance of insured's extra-contractual claims is required in this instance to avoid prejudice.
A writ of mandamus will issue only if there is no adequate remedy available by direct appeal. See Walker, 827 S.W.2d at
The Corpus Christi Court of Appeals agreed. See In re Old Am. Cnty. Mut. Fire Ins. Co., 2013 WL 398866. Likewise, other appellate courts have also found these claims do not have an adequate remedy by appeal. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 S.W.3d 429, 439; In re Reynolds, 369 S.W.3d at 658; In re United Fire Lloyds, 327 S.W.3d at 256.
Based on our review of the record, we conclude that Guia's extra-contractual claims against Progressive are severable, the facts and circumstances of the case require a severance to prevent manifest injustice, and the legal rights of the parties will not be prejudiced thereby. See Womack, 291 S.W.2d at 683. The trial court, therefore, abused its discretion in refusing to sever and abate the uninsured motorist claims from the bad faith claims pending the determination of Progressive's liability for the uninsured motorist damages under the policy. See In re Am. Nat'l Cnty. Mut. Ins. Co., 384 S.W.3d 429; In re Reynolds, 369 S.W.3d at 650-55; In re United Fire Lloyds, 327 S.W.3d at 257; see also In re Old Am. Cnty. Mut. Fire Ins. Co., 2013 WL 398866; In re Farmers Tex. Cnty. Mut. Ins. Co., 2011 WL 4916303.
We conditionally grant Progressive's writ of mandamus and order the trial court to vacate the February 11, 2014 Order, grant Progressive County Mutual Insurance Company's Motion to Sever, and abate the extra-contractual claims. We are confident that the trial court will promptly comply, and our writ will issue only if it does not.