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No. 05-11-01360-CV<br />

<strong>In</strong> <strong>the</strong> <strong>Court</strong> <strong>of</strong> <strong>Appeals</strong><br />

<strong>For</strong> <strong>the</strong> <strong>Fifth</strong> <strong>Court</strong> <strong>of</strong> <strong>Appeals</strong> <strong>District</strong><br />

<strong>Dallas</strong>, Texas<br />

COLONIAL COUNTY MUTUAL INSURANCE COMPANY,<br />

v.<br />

DALIA AMAYA,<br />

Appellant<br />

Appellee<br />

on interlocutory appeal from <strong>the</strong> 162nd Judicial <strong>District</strong> <strong>Court</strong> <strong>of</strong><br />

<strong>Dallas</strong> County, Texas (Cause No. DC–09–15049–I)<br />

Honorable Lorraine A. Raggio, Presiding<br />

APPELLEE’S AMENDED OPENING BRIEF<br />

Adam R. Hardison<br />

HARDISON LAW FIRM<br />

5050 Quorum Drive, Suite 700<br />

<strong>Dallas</strong>, Texas 75254<br />

972-687-9050 phone<br />

972-687-9053 fax<br />

Counsel for Appellee<br />

ORAL ARGUMENT REQUESTED<br />

ACCEPTED<br />

225EFJ016854805<br />

FIFTH COURT OF APPEALS<br />

DALLAS, TEXAS<br />

12 April 30 P3:13<br />

Lisa Matz<br />

CLERK


No. 05-11-01360-CV<br />

<strong>In</strong> <strong>the</strong> <strong>Court</strong> <strong>of</strong> <strong>Appeals</strong><br />

<strong>For</strong> <strong>the</strong> <strong>Fifth</strong> <strong>Court</strong> <strong>of</strong> <strong>Appeals</strong> <strong>District</strong><br />

<strong>Dallas</strong>, Texas<br />

COLONIAL COUNTY MUTUAL INSURANCE COMPANY,<br />

v.<br />

DALIA AMAYA,<br />

i<br />

Appellant<br />

Appellee<br />

on interlocutory appeal from <strong>the</strong> 162nd Judicial <strong>District</strong> <strong>Court</strong> <strong>of</strong><br />

<strong>Dallas</strong> County, Texas (Cause No. DC–09–15049–I)<br />

Honorable Lorraine A. Raggio, Presiding<br />

APPELLEE’S AMENDED OPENING BRIEF<br />

Respectfully submitted,<br />

/s/ Adam R. Hardison<br />

_________________________<br />

Adam R. Hardison<br />

HARDISON LAW FIRM<br />

5050 Quorum Drive, Suite 700<br />

<strong>Dallas</strong>, Texas 75254<br />

972-687-9050 phone<br />

972-687-9053 fax<br />

Counsel for Appellee


IDENTITY OF PARTIES AND COUNSEL<br />

Appellee adopts <strong>the</strong> disclosures and <strong>the</strong> naming references <strong>of</strong> <strong>the</strong> Appellant.<br />

ii


TABLE OF CONTENTS<br />

Identity <strong>of</strong> Parties and Counsel ........................................................................................ ii<br />

Table <strong>of</strong> Contents ............................................................................................................. iii<br />

<strong>In</strong>dex <strong>of</strong> Authorities ........................................................................................................... v<br />

Statement <strong>of</strong> Jurisdiction ................................................................................................. vi<br />

Statement <strong>of</strong> Case ........................................................................................................... vii<br />

Citations to <strong>the</strong> Record ................................................................................................... vii<br />

Issue presented ............................................................................................................... viii<br />

Statement <strong>of</strong> Facts ............................................................................................................. 1<br />

Summary <strong>of</strong> Argument ..................................................................................................... 1<br />

Argument ............................................................................................................................ 3<br />

A. Colonial failed to invoke this <strong>Court</strong>’s appellate jurisdiction ................. 3<br />

B. Colonial’s obligation to comply with <strong>the</strong> Texas <strong>In</strong>surance Code<br />

and fulfill its duty <strong>of</strong> good faith and fair dealing when determining<br />

whe<strong>the</strong>r an applicable insuring agreement is in place does not<br />

disappear when such determination later reveals that <strong>the</strong>re is<br />

no such insuring agreement.. ...................................................................... 6<br />

Prayer ................................................................................................................................. 9<br />

Certificate <strong>of</strong> Service ....................................................................................................... 10<br />

iii


CASES<br />

INDEX OF AUTHORITIES<br />

Bally Total Fitness Corp. v. Jackson,<br />

53 S.W.3d 352 (Tex. 2001) ...................................................................................... 5<br />

Baylor College <strong>of</strong> Med. v. Camberg,<br />

247 S.W.3d 342 (Tex. App.—Houston [14th Dist.] 2008). ................................... 8<br />

Diamond Products <strong>In</strong>ternational, <strong>In</strong>c. v. Handsel,<br />

2004 WL 1607689 (Tex. App. [14th Dist.] July 20,2004) ....................................... 4<br />

E. Tex. Salt Water Disposal Co. v. Werline,<br />

307 S.W.3d 267 (Tex. 2010) .................................................................................... 5<br />

Geisler v. Mid-Century <strong>In</strong>s. Co.,<br />

712 S.W.2d 184 (Tex. App.—Houston [14th Dist.] 1986). .................................... 6<br />

Guarantee <strong>In</strong>s. Co. <strong>of</strong> Texas v. Boggs,<br />

527 S.W.2d 265 (Tex. Civ. App.—Amarillo 1975) ................................................. 6<br />

<strong>In</strong> re D.B.,<br />

80 S.W.3d 698 (Tex. App.–<strong>Dallas</strong> 2002) ................................................................. 4<br />

Moon v. Guarantee <strong>In</strong>s. Co.,<br />

764 P.2d 1331 (Okla. 1988) ..................................................................................... 8<br />

Ortiz v. State Farm Mut. Auto. <strong>In</strong>s. Co.,<br />

955 S.W.2d 353 (Tex. App.—San Antonio 1997). ............................................ 6, 7<br />

Republic <strong>In</strong>s. Co. v. Stoker,<br />

903 S.W.2d 338 (Tex. 1995). ................................................................................. 7<br />

Sentry <strong>In</strong>s. v. R.J. Weber Co.,<br />

2 F.3d 554 (5th Cir. 1993) ........................................................................................ 7<br />

Tex. A&M Univ. Sys. v. Koseoglu,<br />

233 S.W.3d 835 (Tex. 2007) .................................................................................... 5<br />

iv


Trahan v. Prudential Prop. & Cas. <strong>In</strong>s. Co.,<br />

739 So. 2d 811 (La. App. [1 Cir.] 1999) .................................................................. 8<br />

U.S. Sec. <strong>In</strong>s. Co. v. Doss,<br />

764 So. 2d 885 (Fla. Dist. Ct. App. [4th Dist.] 2000); ............................................. 8<br />

Zurcher v. Nat'l Sur. Corp.,<br />

2002 Ohio 901 (Ohio Ct. App. 2002, app. denied.) ................................................. 8<br />

OTHER<br />

TEX. CIV. PRAC. & REM. CODE § 51.014(f) ................................................................. 3<br />

v


STATEMENT OF JURISDICTION<br />

This is an interlocutory appeal brought under sections 51.014(d-f) <strong>of</strong> <strong>the</strong> Texas<br />

Civil Practice and Remedies Code. [Appendix, p.1-3 at 2.] Both Amaya and Colonial<br />

agreed to <strong>the</strong> interlocutory appeal, as required under <strong>the</strong> version <strong>of</strong> <strong>the</strong> Code in effect<br />

prior to September 1, 2011. Regrettably, Amaya cannot represent to this <strong>Court</strong> that<br />

Colonial has properly invoked appellate jurisdiction. Amaya’s disclosure in this regard is<br />

set forth on page 3 <strong>of</strong> her brief.<br />

vi


STATEMENT OF CASE<br />

This is an interlocutory appeal <strong>of</strong> <strong>the</strong> trial court’s denial <strong>of</strong> Colonial’s motion for<br />

summary judgment. The issue in <strong>the</strong> summary judgment was whe<strong>the</strong>r Colonial’s conduct<br />

in handling a PIP claim could never constitute a violation <strong>of</strong> <strong>the</strong> Texas <strong>In</strong>surance Code or<br />

could never expose Colonial to extra contractual damages upon a showing that <strong>the</strong>re was<br />

not a PIP insuring agreement in place. Amaya’s amended pleadings abandoned her quest<br />

for benefits under <strong>the</strong> insurance contract, and she did not respond to Colonial’s summary<br />

judgment grounds on those issues.<br />

CITATIONS TO THE RECORD<br />

The record in this case consists <strong>of</strong> a one-volume, sequentially numbered Clerk’s<br />

Record and a one volume, sequentially numbered Supplemental Clerk’s Record.<br />

Citations to this record are in <strong>the</strong> format [CR:pp and SCR:pp, as appropriate.].<br />

This appeal does not have a Reporter’s Record.<br />

vii


ISSUE PRESENTED<br />

A. Whe<strong>the</strong>r, as a matter <strong>of</strong> law, an insurer is never obligated to comply with <strong>the</strong><br />

Texas <strong>In</strong>surance Code and an insurer never owes a claimant <strong>the</strong> duty <strong>of</strong> good faith<br />

and fair dealing in determining whe<strong>the</strong>r an applicable insuring agreement is in<br />

place when such determination later reveals that <strong>the</strong>re is no such insuring<br />

agreement.<br />

viii


STATEMENT OF FACTS<br />

Amaya <strong>of</strong>fers <strong>the</strong> following Statement <strong>of</strong> Facts under TRAP 38.1(f):<br />

On May 17, 2009, Amaya had a car accident while she was <strong>the</strong> permissive user <strong>of</strong> a<br />

motor vehicle owned by Colonial's named insured, Antonio Orellana. [CR:89]. Mr.<br />

Orellana is not a party. At <strong>the</strong> time <strong>of</strong> <strong>the</strong> accident, Mr. Orellana’s insurance information<br />

revealed a policy number <strong>of</strong> 7842A 759168. [CR:98]. On August 13, 2009, Amaya’s<br />

attorney contacted Colonial requiting ei<strong>the</strong>r an application for PIP benefits or a signed<br />

written rejection <strong>of</strong> PIP coverage. [CR:112]. The next day, August 14, 2009, Colonial<br />

replied to Amaya’s letter stating, “Personal <strong>In</strong>jury Protection ... is optional and requires<br />

an endorsement to <strong>the</strong> initial policy. Research <strong>of</strong> your policy revealed that you did not<br />

carry Personal <strong>In</strong>jury Protection (PIP) ... coverage. Therefore, <strong>the</strong>re is no first party<br />

coverage for any medical bills under this automobile policy and your injury claim must<br />

be denied.” [CR:113]. Colonial’s reply did not contain a written PIP rejection. Amaya<br />

wrote again to Colonial on September 3, 2009, asking that Colonial deliver ei<strong>the</strong>r a PIP<br />

application or a written rejection <strong>of</strong> PIP. [CR:114]. Colonial responded that same day by<br />

providing a signed waiver for a policy different from <strong>the</strong> policy in question. [CR:115-17<br />

at 117]. The document provided was for Policy Number 7894A 1 0443, but Colonial did<br />

not provide a signed waiver for <strong>the</strong> policy in question and did not <strong>of</strong>fer an explanation for<br />

this variance. [CR:117]. Amaya acknowledged receipt <strong>of</strong> Colonial’s earlier response,<br />

notified Colonial that <strong>the</strong> rejection was for a different policy number, and asked for a<br />

correct rejection or confirmation that <strong>the</strong> two policies are <strong>the</strong> same. [CR:118]. Amaya<br />

1


made additional attempts to obtain ei<strong>the</strong>r PIP benefits or a written rejection on September<br />

15, 2009 [CR:122], September 23, 2009 [CR:123], September 28, 2009 [CR:124].<br />

Colonial responded on September 30, 2009 with a declarations page but still did not<br />

provide a written rejection. [CR:126-28]. Amaya made her sixth request for a written<br />

rejection <strong>of</strong> PIP on October 5, 2009. [CR:129]. She made her seventh request for a<br />

written rejection on October 12, 2009 [CR:130-131].<br />

Colonial never produced a written rejection in response to Amaya’s seven<br />

requests, and Amaya filed suit on or about October 30, 2009 seeking PIP benefits and<br />

extra-contractual damages.<br />

After Amaya had incurred attorney’s fees and expenses in filing and serving<br />

Colonial with her lawsuit, Colonial finally produced a written rejection <strong>of</strong> PIP for <strong>the</strong><br />

policy in question on November 11, 2009.<br />

SUMMARY OF ARGUMENT<br />

Contrary to each precedent relied upon as authority by Colonial, <strong>the</strong> underlying<br />

facts in this case do not concern an insurer’s determination <strong>of</strong> whe<strong>the</strong>r, under a specified<br />

insuring agreement, a claim was a “Covered Claim” or <strong>the</strong> claimant was a “Covered<br />

Person.” Each <strong>of</strong> those determinations requires analysis and investigation <strong>of</strong> facts<br />

external to <strong>the</strong> insurer itself. Here, by contrast, <strong>the</strong> question is whe<strong>the</strong>r a PIP insuring<br />

agreement is in place. Texas law is clear that, absent a written rejection <strong>of</strong> such coverage,<br />

each Texas auto policy provides PIP coverage. The existence or absence <strong>of</strong> a written<br />

2


ejection was a fact uniquely within <strong>the</strong> purview <strong>of</strong> Colonial, yet Colonial required<br />

Amaya to file a lawsuit to obtain that written rejection.<br />

ARGUMENT<br />

A. Colonial failed to invoke this <strong>Court</strong>’s appellate jurisdiction.<br />

This appeal is brought under 51.014(d-f) <strong>of</strong> <strong>the</strong> Texas Civil Practice and Remedies<br />

Code. Prior to September 1, 2011, this section required an agreement <strong>of</strong> <strong>the</strong> parties along<br />

with o<strong>the</strong>r prerequisites. H.B. 274 (<strong>the</strong> “loser pays” bill) eliminated <strong>the</strong> requirement for<br />

an agreement and allowed for such appeals upon a party’s motion or on <strong>the</strong> trial court’s<br />

own initiative. See H.B. 274, §3.01, 82nd Leg.<br />

Section 51.014 was subjected to many changes over <strong>the</strong> years. From its enactment<br />

in 1985 until a modification in 2005, section 51.014(f) read as follows:<br />

If application is made to <strong>the</strong> court <strong>of</strong> appeals that has appellate jurisdiction<br />

over <strong>the</strong> action not later than <strong>the</strong> 10 th day after <strong>the</strong> date an interlocutory<br />

order under Subsection (d) is entered, <strong>the</strong> appellate court may permit an<br />

appeal to be taken from that order.<br />

TEX. CIV. PRAC. & REM. CODE § 51.014(f)(As it existed prior to enactment <strong>of</strong> H.B. 1294,<br />

79 th Leg., effective June 1, 2005). Thus, prior to June 1, 2005, <strong>the</strong> parties had 10 days to<br />

make application to <strong>the</strong> <strong>Court</strong> <strong>of</strong> <strong>Appeals</strong> for review under this section.<br />

H.B. 1294, however, completely eliminated section (f) in 2005. Presumably, <strong>the</strong><br />

requirement for an application was no longer in effect and <strong>the</strong> time to perfect appeal<br />

defaulted to <strong>the</strong> standard 20 days for accelerated appeals under TRAP 26.1(b).<br />

3


Section (f) was reinstated with <strong>the</strong> Loser Pays bill, marking <strong>the</strong> return <strong>of</strong> <strong>the</strong><br />

concept <strong>of</strong> an application for interlocutory appeal and specifying a 15-day window for<br />

filing. See TEX. CIV. PRAC. & REM. CODE § 51.014(f)(2011).<br />

<strong>For</strong> <strong>the</strong> following reasons, Amaya cannot represent to this <strong>Court</strong> that its<br />

jurisdiction has been invoked by Colonial.<br />

1. The version <strong>of</strong> 51.014 in effect at <strong>the</strong> time <strong>the</strong> trial court made its order<br />

under that section, and at <strong>the</strong> time <strong>the</strong> notice <strong>of</strong> appeal was filed, specified a 15-day time<br />

period for such filings. The trial court’s order was dated September 12, 2011 and <strong>the</strong><br />

notice <strong>of</strong> appeal was filed 18 days later on September 30, 2011. [CR:276-77; 280]. The<br />

lack <strong>of</strong> timeliness casts doubt on appellate jurisdiction. Amaya is aware <strong>of</strong> later-drafted<br />

commentary to <strong>the</strong> Rule enacted pursuant to this legislation which specifies <strong>the</strong> operative<br />

date is <strong>the</strong> date <strong>the</strong> action was filed “in <strong>the</strong> trial court,” but nothing in <strong>the</strong> legislation<br />

itself—which solely concerns appellate jurisdiction—supports this expansive<br />

interpretation.<br />

2. Colonial never made application for interlocutory appeal. While <strong>the</strong><br />

version <strong>of</strong> section 51.014(f) that existed prior to 2005 referenced an “application,” some<br />

courts <strong>of</strong> appeal gave an expansive definition to this term and allowed a notice <strong>of</strong> appeal<br />

to serve as an application. See Diamond Products <strong>In</strong>ternational, <strong>In</strong>c. v. Handsel, No. 14-<br />

03-00990-CV, 2004 WL 1607689 (Tex. App. [14th Dist.] July 20,2004, no pet.);<br />

Compare <strong>In</strong> re D.B., 80 S.W.3d 698 (Tex. App.–<strong>Dallas</strong> 2002, no pet.)(Dismissing appeal<br />

for want <strong>of</strong> jurisdiction upon holding that a notice <strong>of</strong> appeal could not substitute for an<br />

application and finding that, regardless, <strong>the</strong> notice was filed two days late.) Justice Frost,<br />

4


concurring in Diamond Products, identified <strong>the</strong> need for procedural clarification in this<br />

area. The Texas Legislature responded in 2011, and <strong>the</strong> current (and controlling) version<br />

<strong>of</strong> 51.014(f) clearly requires a separate application for interlocutory appeal within 15<br />

days. Upon grant <strong>of</strong> that application, <strong>the</strong> TRAP 20-day time period for accelerated<br />

appeals commences. Because Colonial never made application, appellate jurisdiction is in<br />

doubt.<br />

3. Finally, and distinct from <strong>the</strong> procedural shortcomings listed above, section<br />

51.014(d) requires that <strong>the</strong> “order to be appealed involves a controlling question <strong>of</strong> law as<br />

to which <strong>the</strong>re is a substantial ground for difference <strong>of</strong> opinion.” While this is an issue <strong>of</strong><br />

first impression in Texas courts, Amaya has doubts whe<strong>the</strong>r <strong>the</strong> jurisdiction contemplated<br />

over pure questions <strong>of</strong> law extends to <strong>the</strong> mixed question <strong>of</strong> law and fact raised in<br />

Colonial’s first, second, third, fourth, and sixth Issues Presented. [Appellant’s Brief at p.<br />

2]. Jurisdiction over interlocutory appeals must be narrowly construed. See E. Tex. Salt<br />

Water Disposal Co. v. Werline, 307 S.W.3d 267, 277 (Tex. 2010), citing Tex. A&M Univ.<br />

Sys. v. Koseoglu, 233 S.W.3d 835, 841 (Tex. 2007)(Observing that courts strictly<br />

construe <strong>the</strong> general interlocutory appeals statute as “a narrow exception to <strong>the</strong> general<br />

rule that only final judgments are appealable.” (quoting Bally Total Fitness Corp. v.<br />

Jackson, 53 S.W.3d 352, 355 (Tex. 2001)).<br />

5


B. Colonial’s obligation to comply with <strong>the</strong> Texas <strong>In</strong>surance Code and fulfill its<br />

duty <strong>of</strong> good faith and fair dealing when determining whe<strong>the</strong>r an applicable<br />

insuring agreement is in place does not disappear when such determination<br />

later reveals that <strong>the</strong>re is no such insuring agreement.<br />

“[A]bsent a written rejection, UM/UIM and PIP coverage exist as a matter <strong>of</strong><br />

law.” Ortiz v. State Farm Mut. Auto. <strong>In</strong>s. Co., 955 S.W.2d 353, 356-357 (Tex. App.—<br />

San Antonio 1997, pet denied.); see also Howard v. INA County Mutual <strong>In</strong>s. Co., 933<br />

S.W.2d 212, 218 (Tex. App.—<strong>Dallas</strong> 1996, n.w.h.); Guarantee <strong>In</strong>s. Co. <strong>of</strong> Texas v.<br />

Boggs, 527 S.W.2d 265, 268 (Tex. Civ. App.—Amarillo 1975, writ dism'd); Geisler v.<br />

Mid-Century <strong>In</strong>s. Co., 712 S.W.2d 184, 187 (Tex. App.—Houston [14th Dist.] 1986, writ<br />

ref'd n.r.e.). No o<strong>the</strong>r automobile coverages have this “opt-out” requirement.<br />

<strong>In</strong> <strong>the</strong> trial court, Amaya raised <strong>the</strong> issue that <strong>the</strong> written rejection Colonial finally<br />

produced bore indicia <strong>of</strong> forgery. <strong>For</strong> purposes <strong>of</strong> <strong>the</strong> narrow issue before this <strong>Court</strong>,<br />

however, Amaya will presume <strong>the</strong> rejection is valid to focus <strong>the</strong> question on whe<strong>the</strong>r a<br />

subsequent determination that PIP coverage was rejected will excuse misconduct in<br />

delivering that rejection.<br />

Regarding that conduct, Colonial agreed it owed Amaya <strong>the</strong> same duty it owes to a<br />

named insured [SCR:38], that its adjuster made multiple misrepresentations to Amaya<br />

[SCR:41, 44, 46, 47-48, 56], and that <strong>the</strong> first indication in its records that an attempt was<br />

made to investigate coverage was two weeks after <strong>the</strong> claim was made, and 13 days after<br />

it was denied [SCR:458]. Colonial fur<strong>the</strong>r agreed that it did not provide a rejection for<br />

<strong>the</strong> policy number listed in <strong>the</strong> policy report, did not explain why it did not, that this<br />

failure was a violation <strong>of</strong> its internal policies, and this failure was a breach <strong>of</strong> its duty to<br />

6


Amaya. [SCR:54, 55, 56, 68-69]. Colonial knew <strong>of</strong> no reason why <strong>the</strong> written rejection<br />

could not have been delivered to Amaya months earlier, in response to her repeated<br />

requests. [SCR:63, 64]. Colonial fur<strong>the</strong>r agree that its actions damaged Amaya.<br />

[SCR:60-61, 65, 66].<br />

Colonial cites Republic <strong>In</strong>s. Co. v. Stoker as <strong>the</strong> sole source for an exception to <strong>the</strong><br />

general rule that bad faith will not be found when <strong>the</strong> claim was not covered. 903 S.W.2d<br />

338, 341 (Tex. 1995). As a threshold observation, <strong>the</strong> language in Stoker and its progeny<br />

concerns a claim that is “promptly” denied. Colonial’s own admissions show that <strong>the</strong><br />

denial was not prompt and was not in accordance with Colonial’s polices.<br />

All authority cited by Colonial share a common <strong>the</strong>me that is absent in <strong>the</strong> case at<br />

bar. Specifically, in each case, an insurance policy and insuring agreement were in place,<br />

but disputes arose as to whe<strong>the</strong>r a particular claim was within <strong>the</strong> ambit <strong>of</strong> <strong>the</strong> coverage<br />

provided by that insuring agreement. Here, by contrast, Colonial did not make a fact-<br />

specific denial <strong>of</strong> a claim on its merits; ra<strong>the</strong>r, Colonial’s sole task was to determine<br />

whe<strong>the</strong>r PIP coverage was rejected.<br />

Generally, an insured bears <strong>the</strong> burden <strong>of</strong> showing that a claim against an insurer<br />

is within <strong>the</strong> policy’s coverage. See Sentry <strong>In</strong>s. v. R.J. Weber Co., 2 F.3d 554, 556 (5th<br />

Cir. 1993) (interpreting Texas law). But this is a PIP claim, and “absent a written<br />

rejection, UM/UIM and PIP coverage exist as a matter <strong>of</strong> law.” Ortiz v. State Farm Mut.<br />

Auto. <strong>In</strong>s. Co., 955 S.W.2d 353, 357 (Tex. App. San Antonio 1997). The existence <strong>of</strong> a<br />

written rejection is uniquely within <strong>the</strong> knowledge <strong>of</strong> Colonial, and Colonial has<br />

exclusive access to <strong>the</strong> sole document that would reject coverage. As such, this case is<br />

7


distinguishable from Colonial’s cited authority were claims analysis required <strong>the</strong> insured<br />

to come forth with facts demonstrating <strong>the</strong> existence <strong>of</strong> a covered claim.<br />

As <strong>the</strong> Appellant, Colonial bears <strong>the</strong> burden to provide this <strong>Court</strong> with authority<br />

supporting its position. See Baylor College <strong>of</strong> Med. v. Camberg, 247 S.W.3d 342, 349<br />

(Tex. App.—Houston [14th Dist.] 2008, pet. denied). It has not done so.<br />

While <strong>the</strong> issue <strong>of</strong> coverage rejections (whe<strong>the</strong>r UM or PIP), and potential bad<br />

faith findings and statutory violations for a failure to timely deliver pro<strong>of</strong> <strong>of</strong> rejection, is<br />

an issue <strong>of</strong> first impression in Texas, states with similar statutory schemes have spoken<br />

clearly on <strong>the</strong> issue:<br />

� “The burden <strong>of</strong> pro<strong>of</strong> is upon <strong>the</strong> insurer to come forward with a written rejection<br />

in order to relieve <strong>the</strong> insurer from its duty to provide <strong>the</strong> statutory uninsured<br />

motorist coverage.” Moon v. Guarantee <strong>In</strong>s. Co., 764 P.2d 1331, 1335 (Okla.<br />

1988);<br />

� A review <strong>of</strong> <strong>the</strong> record supports <strong>the</strong> trial court's conclusion, in directing a verdict<br />

in favor <strong>of</strong> <strong>the</strong> insureds, that <strong>the</strong> insurer failed to meet its burden to prove, absent a<br />

written rejection, that <strong>the</strong>re was an informed knowing rejection <strong>of</strong> uninsured<br />

motorist coverage.” U.S. Sec. <strong>In</strong>s. Co. v. Doss, 764 So. 2d 885 (Fla. Dist. Ct. App.<br />

[4th Dist.] 2000);<br />

� “The insurer bears <strong>the</strong> burden <strong>of</strong> proving any insured named in <strong>the</strong> policy rejected<br />

in writing UM coverage equal to bodily injury limits or selected lower limits.”<br />

Trahan v. Prudential Prop. & Cas. <strong>In</strong>s. Co., 739 So. 2d 811, 814 (La. App. [1<br />

Cir.] 1999, writ denied);<br />

� “Under Ohio Law, insurance companies bear “<strong>the</strong> burden <strong>of</strong> showing that any<br />

rejection <strong>of</strong> UM/UIM coverage was knowingly made by <strong>the</strong> customer.” Zurcher<br />

v. Nat'l Sur. Corp., 2002 Ohio 901 (Ohio Ct. App. 2002, app. denied.)<br />

Notably, no state with an “opt out” statute for PIP or UM/UIM has placed <strong>the</strong> burden on<br />

<strong>the</strong> insured to prove <strong>the</strong> negative; that is, no state requires an insured to prove <strong>the</strong> absence<br />

<strong>of</strong> a written rejection.<br />

8


Amaya agrees that, in those coverage analyses where <strong>the</strong> insured bears <strong>the</strong> burden<br />

to prove coverage, bad faith claims will only follow once <strong>the</strong> insured has successfully<br />

met that burden. Here, Amaya met her burden and Colonial’s corporate representative<br />

admits Colonial did not timely provide pro<strong>of</strong> <strong>of</strong> written rejection. Colonial cites no<br />

authority that, contrary to cases where a duty had not yet attached, it can breach its duty<br />

and remain immunized for bad faith claims. And <strong>of</strong> course, Colonial’s arguments touch<br />

only bad faith claims and not claims for breaches <strong>of</strong> duties under <strong>the</strong> <strong>In</strong>surance Code.<br />

CONCLUSION; PRAYER<br />

Based on <strong>the</strong> forgoing, Colonial has not established that, as a matter law, an<br />

insurer will never owe a duty to its insureds, or will never be required to comply with <strong>the</strong><br />

Texas <strong>In</strong>surance Code, in cases where it eventually delivers a written rejection <strong>of</strong><br />

o<strong>the</strong>rwise mandatory coverage. By extension, <strong>of</strong> course, Colonial also has not<br />

established that it is immunized from traditional remedies availed to its insureds for such<br />

breaches and violations.<br />

Amaya prays that this <strong>Court</strong> affirm <strong>the</strong> trial court’s denial <strong>of</strong> summary judgment.<br />

9


CERTIFICATE OF SERVICE<br />

This is to certify that a true and correct copy <strong>of</strong> <strong>the</strong> above and foregoing document has<br />

been served on all counsel <strong>of</strong> record on this <strong>the</strong> 30th day <strong>of</strong> April 2012, in accordance with <strong>the</strong><br />

rules.<br />

MR. RANDALL G. WALTERS<br />

WALTERS BALIDO & CRAIN<br />

900 JACKSON STREET, SUITE 600<br />

DALLAS, TX 75202<br />

/s/ Adam R. Hardison<br />

__________________________________<br />

Adam R. Hardison<br />

10


APPENDIX<br />

11


LexisNexis (R) Texas Annotated Statutes<br />

Copyright © 2012 by Mat<strong>the</strong>w Bender & Company, <strong>In</strong>c.<br />

a member <strong>of</strong> <strong>the</strong> LexisNexis Group<br />

All rights reserved.<br />

*** This document is current through <strong>the</strong> 2011 First Called Session ***<br />

*** Federal case annotations: Jan. 3, 2012 postings on Lexis ***<br />

*** State case annotations: Dec. 16, 2011 postings on Lexis ***<br />

CIVIL PRACTICE AND REMEDIES CODE<br />

TITLE 2. TRIAL, JUDGMENT, AND APPEAL<br />

SUBTITLE D. APPEALS<br />

CHAPTER 51. APPEALS<br />

SUBCHAPTER B. APPEALS FROM COUNTY OR DISTRICT COURT<br />

§ 51.014. Appeal from <strong>In</strong>terlocutory Order<br />

GO TO TEXAS CODE ARCHIVE DIRECTORY<br />

Tex. Civ. Prac. & Rem. Code § 51.014 (2012)<br />

(a) A person may appeal from an interlocutory order <strong>of</strong> a district court, county court at law, or county court that:<br />

Page 1<br />

(1) appoints a receiver or trustee;<br />

(2) overrules a motion to vacate an order that appoints a receiver or trustee;<br />

(3) certifies or refuses to certify a class in a suit brought under Rule 42 <strong>of</strong> <strong>the</strong> Texas Rules <strong>of</strong> Civil Procedure;<br />

(4) grants or refuses a temporary injunction or grants or overrules a motion to dissolve a temporary injunction as<br />

provided by Chapter 65;<br />

(5) denies a motion for summary judgment that is based on an assertion <strong>of</strong> immunity by an individual who is an<br />

<strong>of</strong>ficer or employee <strong>of</strong> <strong>the</strong> state or a political subdivision <strong>of</strong> <strong>the</strong> state;<br />

(6) denies a motion for summary judgment that is based in whole or in part upon a claim against or defense by a<br />

member <strong>of</strong> <strong>the</strong> electronic or print media, acting in such capacity, or a person whose communication appears in or is<br />

published by <strong>the</strong> electronic or print media, arising under <strong>the</strong> free speech or free press clause <strong>of</strong> <strong>the</strong> First Amendment to<br />

<strong>the</strong> United States Constitution, or Article I, Section 8, <strong>of</strong> <strong>the</strong> Texas Constitution, or Chapter 73;<br />

(7) grants or denies <strong>the</strong> special appearance <strong>of</strong> a defendant under Rule 120a, Texas Rules <strong>of</strong> Civil Procedure, except<br />

in a suit brought under <strong>the</strong> Family Code;<br />

(8) grants or denies a plea to <strong>the</strong> jurisdiction by a governmental unit as that term is defined in Section 101.001;<br />

(9) denies all or part <strong>of</strong> <strong>the</strong> relief sought by a motion under Section 74.351(b), except that an appeal may not be<br />

taken from an order granting an extension under Section 74.351;<br />

(10) grants relief sought by a motion under Section 74.351(l); or<br />

(11) denies a motion to dismiss filed under Section 90.007.<br />

Appendix - Page 1


Tex. Civ. Prac. & Rem. Code § 51.014<br />

Page 2<br />

(b) An interlocutory appeal under Subsection (a), o<strong>the</strong>r than an appeal under Subsection (a)(4), stays <strong>the</strong> commencement<br />

<strong>of</strong> a trial in <strong>the</strong> trial court pending resolution <strong>of</strong> <strong>the</strong> appeal. An interlocutory appeal under Subsection (a)(3),<br />

(5), or (8) also stays all o<strong>the</strong>r proceedings in <strong>the</strong> trial court pending resolution <strong>of</strong> that appeal.<br />

(c) A denial <strong>of</strong> a motion for summary judgment, special appearance, or plea to <strong>the</strong> jurisdiction described by Subsection<br />

(a)(5), (7), or (8) is not subject to <strong>the</strong> automatic stay under Subsection (b) unless <strong>the</strong> motion, special appearance,<br />

or plea to <strong>the</strong> jurisdiction is filed and requested for submission or hearing before <strong>the</strong> trial court not later than <strong>the</strong> later <strong>of</strong>:<br />

(1) a date set by <strong>the</strong> trial court in a scheduling order entered under <strong>the</strong> Texas Rules <strong>of</strong> Civil Procedure; or<br />

(2) <strong>the</strong> 180th day after <strong>the</strong> date <strong>the</strong> defendant files:<br />

(A) <strong>the</strong> original answer;<br />

(B) <strong>the</strong> first o<strong>the</strong>r responsive pleading to <strong>the</strong> plaintiff's petition; or<br />

(C) if <strong>the</strong> plaintiff files an amended pleading that alleges a new cause <strong>of</strong> action against <strong>the</strong> defendant and <strong>the</strong><br />

defendant is able to raise a defense to <strong>the</strong> new cause <strong>of</strong> action under Subsection (a)(5), (7), or (8), <strong>the</strong> responsive pleading<br />

that raises that defense.<br />

(d) On a party's motion or on its own initiative, a trial court in a civil action may, by written order, permit an appeal<br />

from an order that is not o<strong>the</strong>rwise appealable if:<br />

(1) <strong>the</strong> order to be appealed involves a controlling question <strong>of</strong> law as to which <strong>the</strong>re is a substantial ground for<br />

difference <strong>of</strong> opinion; and<br />

(2) an immediate appeal from <strong>the</strong> order may materially advance <strong>the</strong> ultimate termination <strong>of</strong> <strong>the</strong> litigation.<br />

(d-1) Subsection (d) does not apply to an action brought under <strong>the</strong> Family Code.<br />

(e) An appeal under Subsection (d) does not stay proceedings in <strong>the</strong> trial court unless:<br />

(1) <strong>the</strong> parties agree to a stay; or<br />

(2) <strong>the</strong> trial or appellate court orders a stay <strong>of</strong> <strong>the</strong> proceedings pending appeal.<br />

(f) An appellate court may accept an appeal permitted by Subsection (d) if <strong>the</strong> appealing party, not later than <strong>the</strong><br />

15th day after <strong>the</strong> date <strong>the</strong> trial court signs <strong>the</strong> order to be appealed, files in <strong>the</strong> court <strong>of</strong> appeals having appellate jurisdiction<br />

over <strong>the</strong> action an application for interlocutory appeal explaining why an appeal is warranted under Subsection<br />

(d). If <strong>the</strong> court <strong>of</strong> appeals accepts <strong>the</strong> appeal, <strong>the</strong> appeal is governed by <strong>the</strong> procedures in <strong>the</strong> Texas Rules <strong>of</strong> Appellate<br />

Procedure for pursuing an accelerated appeal. The date <strong>the</strong> court <strong>of</strong> appeals enters <strong>the</strong> order accepting <strong>the</strong> appeal starts<br />

<strong>the</strong> time applicable to filing <strong>the</strong> notice <strong>of</strong> appeal.<br />

HISTORY: Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985; am. Acts 1987,<br />

70th Leg., ch. 167 (S.B. 892), § 3.10, effective September 1, 1987; am. Acts 1989, 71st Leg., ch. 915 (S.B. 908), § 1,<br />

effective June 14, 1989; am. Acts 1993, 73rd Leg., ch. 855 (S.B. 76), § 1, effective September 1, 1993; am. Acts 1997,<br />

75th Leg., ch. 1296 (S.B. 453), § 1, effective June 20, 1997; am. Acts 2001, 77th Leg., ch. 1389 (H.B. 978), § 1, effective<br />

September 1, 2001; am. Acts 2003, 78th Leg., ch. 204 (H.B. 4), § 1.03, effective September 1, 2003; am. Acts<br />

2005, 79th Leg., ch. 97 (S.B. 15), § 5, effective September 1, 2005; am. Acts 2005, 79th Leg., ch. 1051 (H.B. 1294), §§<br />

1, 2, effective June 18, 2005; am. Acts 2011, 82nd Leg., ch. 203 (H.B. 274), § 3.01, effective September 1, 2011.<br />

NOTES:<br />

2001 Note:<br />

This Act applies only to a suit that is commenced on or after <strong>the</strong> effective date <strong>of</strong> this Act. A suit that is commenced<br />

before <strong>the</strong> effective date <strong>of</strong> this Act is governed by <strong>the</strong> law applicable to <strong>the</strong> suit immediately before <strong>the</strong> effective date<br />

<strong>of</strong> this Act, and that law is continued in effect for that purpose. Acts 2001, 77th Leg., ch. 1389, § 3.<br />

2003 Note:<br />

The changes in law made by Section 1.03 <strong>of</strong> Ch. 204 to Sections 51.014(b) and (c), Civil Practice and Remedies<br />

Code, apply to any case in which an appeal allowed by Section 51.014(a), Civil Practice and Remedies Code, as<br />

amended by ch. 204, is taken and <strong>the</strong> notice <strong>of</strong> appeal is filed on or after September 1, 2003. Acts 2003, 78th Leg., ch.<br />

204, § 1.05(b).<br />

Appendix - Page 2


Tex. Civ. Prac. & Rem. Code § 51.014<br />

Page 3<br />

* See Texas Litigation Guide, Ch. 153, Accelerated <strong>Appeals</strong>.<br />

* See also Texas Rules <strong>of</strong> Appellate Procedure 21--51.<br />

Editor's Notes. --<br />

A former (f) was repealed by Acts 2005, 79th Leg., ch. 1051 (H.B. 1294), § effective June 18, 2005.<br />

Applicability. --<br />

Acts 2005, 79th Leg., ch. 97 (S.B. 15), § 10 provides: "There is a direct appeal to <strong>the</strong> supreme court from an order,<br />

however characterized, <strong>of</strong> a trial court granting or denying a temporary or o<strong>the</strong>rwise interlocutory injunction or a permanent<br />

injunction on <strong>the</strong> grounds <strong>of</strong> <strong>the</strong> constitutionality or unconstitutionality, or o<strong>the</strong>r validity or invalidity, under <strong>the</strong><br />

state or federal constitution <strong>of</strong> all or any part <strong>of</strong> this Act. The direct appeal is an accelerated appeal."<br />

Acts 2011, 82nd Leg., ch. 203 (H.B. 274), § 6.01 provides: "The changes in law made by this Act apply only to a civil<br />

action commenced on or after <strong>the</strong> effective date <strong>of</strong> <strong>the</strong> change in law as provided by this article [September 1, 2011]. A<br />

civil action commenced before <strong>the</strong> effective date <strong>of</strong> <strong>the</strong> change in law as provided by this article is governed by <strong>the</strong> law<br />

in effect immediately before <strong>the</strong> effective date <strong>of</strong> <strong>the</strong> change in law, and that law is continued in effect for that purpose."<br />

2005 amendment,<br />

by ch. 97, added (a)(11).<br />

2005 amendment,<br />

by ch. 1051, added "county court at law, or county court" after "A district court" in (d); substituted "trial court" for<br />

"district court" or variants in (e); and repealed (f), which read: "If application is made to <strong>the</strong> court <strong>of</strong> appeals that has<br />

appellate jurisdiction over <strong>the</strong> action not later than <strong>the</strong> 10th day after <strong>the</strong> date an interlocutory order under Subsection<br />

(d) is entered, <strong>the</strong> appellate court may permit an appeal to be taken from that order."<br />

2011 amendment,<br />

in <strong>the</strong> introductory language <strong>of</strong> (d), substituted "On a party's motion or on its own initiative, a trial court in a civil action<br />

may, by" for "A district court, county court at law, or county court may issue a," substituted "permit an appeal from<br />

an order that is" for "for interlocutory appeal in a civil action," and deleted "under this section" after "appealable"; in<br />

(d)(1), deleted "<strong>the</strong> parties agree that" from <strong>the</strong> beginning and added "to be appealed"; deleted former (d)(3), which<br />

read: "<strong>the</strong> parties agree to <strong>the</strong> order"; added (d-1); added <strong>the</strong> (e)(1) and (e)(2) designations; added "to a stay; or" in<br />

(e)(1); in (e)(2), deleted "and" from <strong>the</strong> beginning, added "or appellate," deleted "<strong>the</strong> court <strong>of</strong> appeals, or a judge <strong>of</strong> <strong>the</strong><br />

court <strong>of</strong> appeals" before "orders," and added "pending appeal"; added (f); and made related changes.<br />

LexisNexis (R) Notes:<br />

CASE NOTES<br />

1. Where a former school district employee did not initiate grievance proceedings as required by Tex. Gov't Code Ann. §<br />

554.006 because she immediately withdrew <strong>the</strong> grievance filed after her first termination by <strong>the</strong> district without ever<br />

attempting to reinstitute it prior to filing suit and did not institute a grievance <strong>of</strong> any kind after her involuntary separation<br />

from employment occurring three months later, those omissions were jurisdictional defects that precluded <strong>the</strong> employee<br />

from bringing her whistleblower claim. Midland <strong>In</strong>dep. Sch. Dist. v. Watley, 216 S.W.3d 374, 2006 Tex. App.<br />

LEXIS 4499 (Tex. App. Eastland 2006).<br />

2. Should a state district court refuse a requested order restraining implementation <strong>of</strong> an agency order, that denial is itself<br />

appealable pursuant to former Tex. Rev. Civ. Stat. Ann. art. 2251 (see Tex. Civ. Prac. & Rem. Code Ann. § 51.014);<br />

<strong>the</strong>refore, a car manufacturer was not deprived <strong>of</strong> due process rights where a mechanism existed for review <strong>of</strong> Texas<br />

Motor Vehicle Commission decisions that complied with <strong>the</strong> Administrative Procedure and Texas Register Act. Chrysler<br />

Corp. v. Texas Motor Vehicle Com., 755 F.2d 1192, 1985 U.S. App. LEXIS 28490, 1985-1 Trade Cas. (CCH)<br />

P66498, 51 A.L.R.4th 845 (5th Cir. Tex. 1985).<br />

Appendix - Page 3

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