Keeping Adjusters Out of the Hot Seat – UM/UIM Edition

February 3rd, 2019 By Sheila Tan

UM/UIM cases are a unique hybrid of tort and contract. Although the insured’s own insurance carrier is often named as a defendant, it has no contractual duty to pay benefits until after the liability of the insured and the other motorist, as well as the damages suffered by the insured, have been determined. Brainard v. Trinity Universal Ins. Co.216 S.W.3d 809, 815 (Tex. 2006). Trial courts often struggle with the dilemma of how to avoid the prejudicial injection of insurance issues into a trial where an insurance carrier is the defendant.

In Blevins v. State Farm Mutual, 2018 WL 5993445, (Tex. App.—Fort Worth Nov. 15, 2018, no pet. h.), the Fort Worth Court of Appeals provided some guidance. After being involved in a car accident, Blevins sued both drivers who had struck his vehicle, as well as State Farm, his UIM carrier. The trial court quashed Blevins’s subpoena for a representative from State Farm to appear and testify. In holding that the trial court had not abused its discretion, the court of appeals noted that the parties had stipulated to the existence of UIM coverage and that it would have been improper for the jury to learn what the limits of that policy were. Id at *15 (citing Liberty Mut. Ins. Co. v. Sims, 2015 WL 7770166, at *6 (Tex. App.—Tyler Dec. 3, 2015, pet. denied). The court of appeals rejected Blevins’s argument that he should have been allowed to question a State Farm representative in his “breach of contract” case. noting that State Farm would have breached a contract only if it refused to pay UIM benefits after their amounts were established.  Id.

Blevins also argued that the State Farm representative could have testified that the non-economic damages he sought were of the type covered by UM/UIM insurance. but the court of appeals noted that the determination of what damages the insured is “legally entitled to recover” is a matter for the trial court, not the jury, and that it would have been improper for the jury “to have heard much about Blevins’s UIM coverage.” Id. Accordingly, there was no reasons for a corporate representative of State Farm to testify at trial.

The Blevins holding echoes recent holdings regarding depositions of UM/UIM carriers’ corporate representatives. See, e.g., In re Liberty County Mut. Ins. Co., 537 S.W.3d 214, 220 (Tex. App.—Houston [1st Dist.] 2017, orig. proceeding)(holding that the UM/UIM claimant did not have a “justiciable cause of action” against the carrier until she obtained a judgment establishing the liability of the tortfeasor and the amount of her damages, and so the deposition was quashed as premature

We have found that some trial court judges are reluctant to disallow testimony of insurance carrier representatives. However, where the applicability of the UM/UIM policy is not in dispute, there is simply no relevant evidence to be gained from the carrier’s representative and there is a significant downside of allowing potentially prejudicial testimony regarding insurance coverage. Still, we do not expect plaintiff’s attorneys to stop arguing this point any time soon, which makes Blevins a very useful case in the defense attorney’s arsenal.