Adjuster in the UM/UIM Hot Seat? Houston Court of Appeals Says No

October 29th, 2018 By Sheila Tan

One of the more contentious battles in a UM/UIM case is the taking of the deposition of insurer’s corporate representative. The good news is that more and more Texas courts are acknowledging that the corporate representative’s deposition in a UM/UIM matter has no bearing on the issues of the tortfeasor’s liability and damages and “is not reasonably calculated to lead to the discovery of admissible evidence.” We suspect that Plaintiffs’ lawyers desire to get insurance carrier representatives in the hot seat is less about gaining discoverable information and more about having the opportunity to ask the rep why they haven’t settled yet.

In the recent opinion In re Liberty County Mutual Insurance Company (No. 14-18-00315-CV) from the Houston Court of Appeals, the appellate court conditionally granted the petition for writ of mandamus for the trial court to vacate an order compelling Liberty to present a designated representative for deposition in a UM/UIM case.

The plaintiff had been insured under a Liberty automobile insurance policy when he was involved in a multi-vehicular accident. The tortfeasor driver left the scene and was unidentified. The plaintiff filed suit against Liberty to recover UIM benefits under the policy. Liberty filed a motion to sever and abate, asking the trial court to sever all direct and extra-contractual claims against Liberty into a separate action. The trial court partially granted the motion and severed the extra-contractual claims but did not abate proceedings.

The plaintiff then noticed the deposition of Liberty’s corporate representative to testify on a number of topics, including but not limited to the policy, how the crash occurred, injuries to the plaintiff, plaintiff’s damages, Liberty’s factual bases for its legal theories and defenses, and Liberty’s discovery responses and pleadings. Liberty moved to quash and for a protective order, arguing that the deposition was overbroad, harassing, and irrelevant. The trial court, after hearing arguments, struck the topics pertaining to the policy and conditions precedent but otherwise granted the plaintiff’s motion to compel the deposition.

In its analysis, the Fourteenth Court of Appeals first pointed out that UIM coverage was unique in that coverage depended on the liability of the alleged tortfeasor. “Accordingly, a claim for uninsured motorist benefits is not presented until the trial court signs a judgment resolving these issues [emphasis added].” Liberty had already stipulated among other things that the Policy was in effect on the date of the accident, that the plaintiff was an insured within the meaning of the UM coverage provision, and the accident was a covered occurrence. Thus, the Court noted that the only relevant issues in the case were those typical of car wreck cases – the driver’s liability and damages. Liberty’s responses to discovery were all irrelevant.

Further, Liberty was not involved in the car accident at issue so Liberty employees would have no direct of personal knowledge of the accident. Any knowledge would have already been obtained by Plaintiff through discovery or its own investigation. Finally, with respect to the plaintiff’s medical records, the corporate representative would not be qualified to testify as a medical expert anyway. Any factual information about the accident and plaintiff’s injuries was information already available to the plaintiff. Thus, even if the topics were relevant to the issues of liability or damages, the Court found that the information sought through the deposition was already known to the plaintiff or had been obtained through discovery or was obtainable through another source. As there is no adequate remedy on appeal once a deposition has been taken, the Court of Appeals granted the petition and directed the trial court to vacate its order and grant Liberty’s motion to quash.