In Re Liberty County Mutual Insurance Company v. the State of Texas

Opinion filed November 14, 2025

In The

Eleventh Court of Appeals
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No. 11-25-00257-CV
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IN RE LIBERTY COUNTY MUTUAL INSURANCE COMPANY

Original Mandamus Proceeding

OPINION
Relator, Liberty County Mutual Insurance Company, filed this original
petition for writ of mandamus asserting that Respondent, the Honorable Thomas M.
Wheeler, presiding judge of the 350th District Court of Taylor County, abused his
discretion when he declined “to abate Real Party in Interest’s [Sharron Ann Sibley’s]
declaratory action for [underinsured motorist] benefits,” the UIM suit, “until liability
and damages against the tortfeasors have been determined” in a separate cause of
action, the personal injury suit. 1 Liberty requests that we order Judge Wheeler to

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The personal injury suit, which is pending in the 42nd District Court of Taylor County, is in trial
court cause no. 52213-A and is styled Sharron Ann Sibley v. Eric Anthony Bonilla and Extreme Exteriors
Garden Center, LLC.
grant its motion to abate the UIM suit until the personal injury suit is resolved.
Because we conclude that the trial court clearly abused its discretion in denying
Liberty’s motion to abate and that Liberty has no adequate remedy by appeal, we
conditionally grant mandamus relief.
I. Factual and Procedural Background
Sibley filed the UIM suit against Liberty on December 1, 2023, alleging that
she suffered injuries in a vehicle collision that were caused by the negligence of an
underinsured driver, Eric Bonilla. Sibley pled that “she would be legally entitled to
recover damages from the Underinsured Driver,” that she “is an insured” by virtue
of her insurance policies with Liberty, and that she “is entitled to [recover] under the
‘Uninsured/Underinsured’ and ‘Excess Uninsured/Underinsured’ provisions” of her
policies with Liberty. Sibley sought a declaration that “her damages resulting from
the motor vehicle collision, that those damages fall within the coverage afforded
her.” She also sought a declaration “specifying the amount of damages, attorney’s
fees, interest, and court costs” that Liberty must pay.
Liberty then filed a third-party petition asserting negligence against Bonilla
and negligent entrustment against Bonilla’s employer, Extreme Exteriors Garden
Center, LLC (Extreme Exteriors), and seeking contribution from both. The trial
court granted Bonilla’s and Extreme Exteriors’ motions to continue and bifurcate,
but it denied Sibley’s motion to sever. Sibley then filed a second and a third
amended petition joining Bonilla and Extreme Exteriors as defendants.
Next, Liberty filed a motion to sever the UIM claim from the personal injury
claims and to abate it until the “negligence action has been resolved.” At the hearing
on the motion, Liberty represented that it consented to be bound by a judgment in
the “liability and damages standard lawsuit.” Sibley then orally nonsuited her claims
against Bonilla and Extreme Exteriors. Sibley later filed a notice of nonsuit, which

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the trial court granted, and her case against Liberty was set for trial for September 22,
2025.
However, on July 1, 2025, Sibley filed the personal injury suit against Bonilla
and Extreme Exteriors in a separate cause. Liberty filed a petition in intervention in
that suit “to protect its subrogation rights under Sibley’s insurance policy.” On
August 4, 2025, Liberty filed its second motion to abate in the UIM suit, asking that
the trial court abate the suit until the resolution of the personal injury suit. On
August 19, 2025, the trial court denied Liberty’s motion. On September 9, 2025,
Liberty filed this petition for writ of mandamus as well as a motion for emergency
relief seeking to stay the September 22 trial date in the UIM suit. We granted the
motion and ordered that the trial setting be temporarily stayed pending further order
of this court or final disposition of this mandamus proceeding. Sibley subsequently
filed a response to the petition for writ of mandamus.
II. Mandamus
Mandamus is an “extraordinary” remedy that is “available only in limited
circumstances.” Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.
proceeding). A writ of mandamus will issue only if the trial court clearly abused its
discretion, and the relator has no adequate remedy by appeal. In re Prudential Ins.
Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). A trial court
abuses its discretion if it reaches a decision so arbitrary and unreasonable as to
amount to a clear and prejudicial error of law. In re Cerberus Cap. Mgmt., L.P., 164
S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam). In addition, because
a trial court has no discretion in determining what the law is or in applying it to the
facts, a trial court clearly abuses its discretion if it fails to correctly analyze or apply
the law. See Prudential, 148 S.W.3d at 135; see also In re J.B. Hunt Transp., Inc.,
492 S.W.3d 287, 294 (Tex. 2016) (orig. proceeding).

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III. UIM Actions
Liberty argues that Texas case law requires that “the underlying [UIM] suit
must be abated until the [s]eparate [p]ersonal [i]njury [s]uit is resolved.” Liberty
states that it has provided written consent to be bound by the judgment in Sibley’s
personal injury suit; therefore, any negligence judgment in that case will be binding
on Liberty in the UIM suit. Liberty maintains that proceeding to trial in the UIM
suit first “would risk inconsistent judgments, an advisory opinion, and impermissibly
expose [Liberty] to conflicting obligations.”
Sibley responds that Liberty is only entitled to an abatement of the UIM suit
in instances “where an insured attempts to combine extracontractual claims against
her carrier with the underlying liability claims” because the liability trial determines
“whether the carrier owes its insured UIM benefits in the first place.” Sibley asserts
that an abatement is not required here because she has sued Liberty only “to
determine its liability under the insurance contract,” as Texas law permits.
A. Applicable Law
The Texas Insurance Code states:
[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.
TEX. INS. CODE ANN. § 1952.106 (West 2022) (emphasis added). “[UIM] coverage
protects insureds when damages from a vehicle collision exceed an at-fault
motorist’s liability policy limits.” In re State Farm Mut. Auto. Ins. Co., 712 S.W.3d
53, 56 (Tex. 2025) (orig. proceeding).
Under Texas law, an insurer “is under no contractual duty to pay [UIM]
benefits until the insured obtains a judgment establishing the liability and
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underinsured status of the other motorist.” Brainard v. Trinity Universal Ins. Co.,
216 S.W.3d 809, 818 (Tex. 2006) (citing Henson v. S. Farm Bureau Cas. Ins. Co.,
17 S.W.3d 652, 653–54 (Tex. 2000)). In other words, a judgment establishing the
alleged tortfeasor’s liability is a condition precedent that must be satisfied before an
injured party can recover breach of contract damages under a UIM provision. See
id. The Texas Supreme Court “has constructed a distinctive procedure for UIM
litigation. A ‘car crash’ trial typically determines the third-party motorist’s liability
and the insured’s damages, and the insured must obtain a favorable judgment as a
condition precedent to [invoking] UIM coverage.” State Farm, 712 S.W.3d at 56.
The liability judgment need not be against the alleged tortfeasor, however, as
“[t]he insured may settle with the tortfeasor . . . and then litigate UIM coverage with
the insurer.” Brainard, 216 S.W.3d at 818. In other words, “[i]f not otherwise
determined . . . a judgment establishing . . . prerequisites to coverage may be
obtained in a direct action against the insurance carrier.” Allstate Ins. Co. v. Irwin,
627 S.W.3d 263, 265 (Tex. 2021) (emphasis added). And these prerequisites may
be triggered by a declaratory judgment against the insurer establishing that the other
motorist was at fault and underinsured. Id. at 267 (“[A] declaratory judgment action
is the appropriate remedy for determining the underlying tort issues that control the
validity of an insured’s UIM claim against his insurer.”). In approving the use of a
declaratory judgment action to establish UIM coverage, the Fourth Court of Appeals
reasoned:
Without the options of an agreed judgment, a settlement, or an
admission of liability from the [UIM], an insured faces the unduly
burdensome and inefficient task of rejecting the tortfeasor’s policy
limits offer and instead participating in a full-blown adversarial trial to
obtain a judgment so he can then turn around and make a claim against
his own insurer to recover benefits for which he paid. That is simply
unreasonable where, as here, the tortfeasor has already paid policy
limits to settle her claim and there is no real dispute that the insured’s
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damages exceed his recovery from the tortfeasor. Given the [Uniform
Declaratory Judgments Act’s (UDJA)] purpose of settling uncertainty
with respect to a party’s rights, we hold that an insured may use the
UDJA to establish the prerequisites to recovery in a [UIM] claim.
Allstate Ins. Co. v. Irwin, 606 S.W.3d 774, 777–78 (Tex. App.—San Antonio 2019),
aff’d, 627 S.W.3d 263 (Tex. 2021) (second emphasis added) (internal citations
omitted). Summarizing the above principles, the Texas Supreme Court has
identified three pathways for establishing UIM coverage:
(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.
In re USAA Gen. Indem. Co., 629 S.W.3d 878, 880–81 (Tex. 2021) (orig.
proceeding).
B. Analysis
As set out above, Sibley has sued the underinsured motorist, and Liberty has
consented to be bound by the judgment that Sibley secures in her personal injury
suit. Sibley has yet to settle or otherwise resolve her claim against the tortfeasors.
See State Farm, 712 S.W.3d at 56. We agree with Liberty’s observation that this
case presents the unique scenario where there is yet no indication that the tortfeasors
are in fact underinsured. Rather, representations in the record indicates that the
applicable insurance coverage for the tortfeasors may total $3,000,000, and there has
been no showing that Sibley’s damages will likely exceed that amount. 2

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Liberty pleads that there is $3,000,000 in available coverage from the alleged tortfeasers. Sibley
pleads for “over $1,000,000.00” in damages in both her third amended petition in the UIM suit and her
original petition in cause number 52213-A.
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Despite no indication that the tortfeasors are, in all probability, underinsured,
Sibley maintains that she is permitted by Texas case law to “sue the insurer directly
to establish the motorist’s fault and the insured’s damages without suing the
motorist.” But this scenario is patently not available to Sibley here because she has
sued the motorist and his employer, and those liability claims remain pending. In
UIM suits against the insurer solely, there must be some resolution of the personal
injury claim, thus demonstrating the need for the UIM suit. See e.g., State Farm,
712 S.W.3d at 57 (tortfeasor settled prior to initiation of the UIM suit); USAA, 629
S.W.3d at 881–82 (UIM claim was abated until settlement was reached with
tortfeasor); In re State Farm Mut. Auto. Ins. Co., 629 S.W.3d 866, 871 (Tex. 2021)
(orig. proceeding) (tortfeasor settled prior to UIM suit); Irwin, 627 S.W.3d at 266
(same); Brainard, 216 S.W.3d at 811 (tortfeasor settled prior to trial against the UIM
carrier). As noted above, it is unreasonable to require that an insured pursue a “full-
blown adversarial trial . . . where . . . the tortfeasor has already paid policy limits to
settle her claim and there is no real dispute that the insured’s damages exceed his
recovery from the tortfeasor.” Irwin, 606 S.W.3d at 777–78. However, that scenario
is not presented here.
We conclude that under well-established case law governing UIM coverage,
Sibley must resolve her personal injury suit before she may pursue the UIM suit
against Liberty. Accordingly, we hold that the trial court clearly abused its discretion
in denying Liberty’s motion to abate the UIM case until the personal injury suit is
resolved. See In re A.L.M.-F., 593 S.W.3d 271, 282 (Tex. 2019).
“A trial court’s failure to grant a motion to abate usually is an incidental ruling
not subject to mandamus.” State Farm, 712 S.W.3d at 66. “[H]owever, no appellate
remedy adequately protects [an] insurer’s ‘substantial right’ not to undergo costly
discovery and litigation expenses on [UIM coverage] issues that may be wholly

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unnecessary depending on the outcome of [a personal injury suit].” Id. (discussing
the failure to abate extracontractual claims pending resolution of UIM coverage
claim). On this record, we conclude that Liberty has established its right to
mandamus relief. See Prudential Ins., 148 S.W.3d at 135–36.
IV. This Court’s Ruling
We conditionally grant Liberty’s petition for writ of mandamus. We direct
the trial court to vacate its August 19, 2025 order denying Liberty’s motion to abate
and to enter an order granting the motion. A writ of mandamus will issue only if the
trial court fails to comply by November 28, 2025.

W. BRUCE WILLIAMS
JUSTICE

November 14, 2025
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.

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