Hamburger v. State Farm Mut. Auto. Ins. Co.

Decision Date02 March 2004
Docket NumberNo. 02-21126.,02-21126.
Citation361 F.3d 875
PartiesPerry HAMBURGER, Plaintiff-Appellant-Cross-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee-Cross-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Timothy W. Cerniglia (argued), Sharp, Henry, Cerniglia, Colvin, Weaver & Hymel, New Orleans, LA, Thomas Miles Farrell, Nickens, Keeton, Lawless, Farrell & Flack, Houston, TX, for Hamburger.

Mary Elizabeth McCahill Taylor (argued), Taylor & Taylor, Houston, TX, for State Farm Mut. Auto. Ins. Co.

Appeals from the United States District Court for the Southern District of Texas.

Before KING, Chief Judge, DENNIS, Circuit Judge, and LYNN,* District Judge.

LYNN, District Judge:

Perry Hamburger appeals the trial court's grant of partial summary judgment on his extra-contractual claims, the striking of his expert witness's testimony on causation, the entry of judgment as a matter of law that Hamburger was not entitled to recover for pain and suffering or medical expenses related to his herniated disc, and the offset of the jury verdict with the $35,000 in benefits previously paid to Hamburger. We affirm in part, and reverse and remand in part.

I. BACKGROUND

On July 26, 1999, Hamburger was involved in an automobile accident caused by another driver. Thereafter, Hamburger suffered a herniated disc in his neck that required surgery. Hamburger contends that this injury was caused by the accident. The other driver's insurer, Old American Insurance Company ("Old American"), paid Hamburger $25,000, the limits of the other driver's policy. Thereafter, Hamburger filed a claim with his insurer, State Farm Mutual Automobile Insurance Company ("State Farm"), for his damages which exceeded $25,000. State Farm paid Hamburger $10,000 under the personal injury protection ("PIP") provision1 of his policy, but denied payment under the uninsured/underinsured motorist ("UIM") provision.2

On July 24, 2001, Hamburger filed suit in state court against State Farm for breach of the UIM clause (the "contractual claim"), and for violations of the Deceptive Trade Practices Act and Article 21.21 of the Texas Insurance Code, relating to State Farm's alleged bad faith in denying his claim under the UIM provision (the "extra-contractual claims"). State Farm removed the case to federal court on September 7, 2001, based on diversity jurisdiction.3

The trial court's Docket Control Order set a discovery deadline of May 31, 2002. On March 15, 2002, State Farm moved for summary judgment on Hamburger's extra-contractual claims. Hamburger asked State Farm to provide dates for Hamburger to depose Matt Schomburg and Catherine Wesley, the State Farm representatives who handled State Farm's PIP and UIM claims. State Farm replied in an April 30, 2002 letter: "This is to inform you that State Farm will not agree to produce these representatives for deposition because there is no issue in this suit to which their testimony is relevant." On May 20, 2002, Hamburger moved to compel the depositions of the two State Farm representatives. On May 28, 2002, the trial court granted State Farm's motion for partial summary judgment, and Hamburger filed a motion to reconsider the partial grant of summary judgment. On June 12, 2002, the court conducted a hearing on Hamburger's motion to compel and his motion to reconsider, and denied both motions. Hamburger appeals the granting of partial summary judgment for State Farm on Hamburger's extra-contractual claims.

Hamburger designated his expert witnesses on April 30, 2002, almost three months after the trial court's deadline, without submitting expert reports. On May 23, 2002, State Farm filed a motion to exclude Hamburger's expert witnesses for failure to timely designate the experts and produce expert reports. On June 12, 2002, the trial court granted State Farm's motion to exclude Hamburger's expert witnesses, and on August 23, 2002, the trial court denied Hamburger's motion to reconsider. Hamburger appeals the court decision to bar Dr. Lynn Fitzgerald's expert testimony that the accident caused Hamburger's herniated disc.

Because Hamburger had no expert testimony that the accident caused Hamburger's herniated disc, the trial court granted State Farm's motion for judgment as a matter of law that the accident did not cause Hamburger's injuries. Therefore, the trial court did not allow the jury to consider compensation for Hamburger's medical expenses or pain and suffering related to the herniated disc. The jury was allowed to consider compensation only for Hamburger's past and future pain and suffering related to injuries other than the herniated disc. As an alternative ground for granting judgment as a matter of law that Hamburger was not entitled to recover medical expenses, the trial court found that Hamburger had presented no evidence that his medical expenses were reasonable. Hamburger appeals the trial court's grant of judgment as a matter of law.

The jury awarded Hamburger $50,000 for pain and suffering not related to his herniated disc, and on September 6, 2002, the trial court entered a final judgment against State Farm for $50,000. On September 13, 2002, State Farm moved to alter or amend the final judgment to offset the $10,000 in PIP benefits paid by State Farm, and the $25,000 in benefits paid by Old American. On September 30, 2002, the trial court granted State Farm's motion and entered an amended final judgment against State Farm in the amount of $15,000. Hamburger appeals the trial court's application of the offsets to the jury verdict.

II. ANALYSIS
A. Summary Judgment on the Extra-Contractual Claims

On May 28, 2002, the trial court granted State Farm's Motion for Partial Summary Judgment on Hamburger's claims that State Farm "failed to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect to which the insurer's liability had become reasonably clear" in violation of the Deceptive Trade Practices Act and Article 21.21 of the Texas Insurance Code (the "extra-contractual claims"). Hamburger contends that summary judgment on the extra-contractual claims was improper because (1) material facts were in dispute which precluded summary judgment, and (2) Hamburger was not afforded a full opportunity to conduct discovery.

The Court reviews the trial court's grant of partial summary judgment de novo, applying the same summary judgment standard applied by the district court. Williams v. Bramer, 180 F.3d 699, 702 (5th Cir.1999). Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In addition, the trial court's interpretations of state law are reviewed by this Court de novo. Salve Regina Coll. v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991).

In order to impose liability on State Farm for violations of the duty of good faith and fair dealing, the DTPA, and Article 21.21, Hamburger was required to show that State Farm knew or should have known that it was reasonably clear that Hamburger's UIM claim was covered, but failed to attempt in good faith to effectuate a prompt, fair, and equitable settlement. Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 55 (Tex.1997)(enunciating the standard for breach of the common law duty of good faith and fair dealing); Emmert v. Progressive County Mut. Ins. Co., 882 S.W.2d 32, 36 (Tex.App. — Tyler 1994, no writ) ("The various other extracontractual claims require the same predicate for recovery as bad faith causes of action.").

Hamburger's UIM coverage requires State Farm to "pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person." Texas courts construe the phrase "legally entitled to recover" in UIM provisions to mean that "the insured must establish the uninsured motorist's fault and the extent of the resulting damages before becoming entitled to recover [UIM benefits]." Wellisch v. United Servs. Auto. Ass'n, 75 S.W.3d 53, 57 (Tex.App. — San Antonio 2002, pet. denied) (citing Henson v. S. Farm Bureau Cas. Ins. Co., 17 S.W.3d 652, 653 (Tex.2000); Franco v. Allstate Ins. Co., 505 S.W.2d 789, 792 (Tex.1974); Mid-Century Ins. Co. of Tex. v. Barclay, 880 S.W.2d 807, 811 (Tex.App. — Austin 1994, writ denied); Sikes v. Zuloaga, 830 S.W.2d 752, 753 (Tex.App. — Austin 1992, no writ)). Generally, establishment of an insured's legal entitlement requires "a settlement with the tortfeasor or a judicial determination following trial on the issue of the tortfeasor's liability." Id. Therefore, Hamburger was not "legally entitled to recover" from State Farm until the jury established the extent of Hamburger's damages caused by the tortfeasor, the other driver.

In Wellisch, in determining whether an insurer could be liable for violations of Article 21.55 by not paying a UIM claim before the insured's legal entitlement was established, the San Antonio Court of Appeals stated: "[A]n insurer has the right to withhold payment of UIM benefits until the insured's legal entitlement is established." Wellisch, 75 S.W.3d at 57. State Farm argues from Wellisch that coverage of Hamburger's UIM claim was not reasonably clear until the jury determined the extent of Hamburger's damages caused by the other driver. State Farm thus contends that the trial court properly granted summary judgment on Hamburger's extra-contractual claims, because no bad faith liability could attach for State Farm's failure to settle the claim prior to the jury's determination of Hamburger's damages caused by the accident.

There are no Texas cases which have squarely held that liability can never be reasonably...

To continue reading

Request your trial
253 cases
  • Barbara Techs. Corp. v. State Farm Lloyds
    • United States
    • Texas Supreme Court
    • June 28, 2019
    ...liability does not arise until uninsured motorist's liability to insured is determined); see also Hamburger v. State Farm Mut. Auto. Ins. Co. , 361 F.3d 875, 880 (5th Cir. 2004) (same). But a primary insurer's first-party liability to cover its insured's loss arises when the loss occurs, or......
  • Le v. Exeter Fin. Corp.
    • United States
    • U.S. District Court — Northern District of Texas
    • March 31, 2019
    ...if he believed that the deadlines could not reasonably have been met despite diligence on his part. Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875, 883 (5th Cir. 2004) (internal quotation marks omitted); S & W Enters., L.L.C. v. Southwest Bank of Alabama, 315 F.3d 533, 535 (5th C......
  • In re Enron Corp. Securities
    • United States
    • U.S. District Court — Southern District of Texas
    • June 1, 2009
    ...of these securities, causing harm to the plaintiff, when the truth comes out." # 105 at 14. See, e.g., Hamburger v. State Farm Mutual Auto. Ins., 361 F.3d 875, 884 (5th Cir.2004) ("Under Texas law, `[l]ay testimony is adequate to prove causation in those cases in which general experience an......
  • Kumar v. Frisco Indep. Sch. Dist.
    • United States
    • U.S. District Court — Eastern District of Texas
    • August 4, 2020
    ...and (4) the possibility of a continuance to cure such prejudice. Torres , 2014 WL 7339122, at *1 ; Hamburger v. State Farm Mut. Auto Ins. Co. , 361 F.3d 875, 883 (5th Cir. 2004).Here, the Court's Scheduling Order required the parties to provide a Joint Final Pretrial Order on February 28, 2......
  • Request a trial to view additional results
7 books & journal articles
  • Experts
    • United States
    • James Publishing Practical Law Books Handling Federal Discovery
    • May 1, 2022
    ...submitted untimely letter concerning expert rather than report complying with FRCP 26(2)(a)); Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875 (5th Cir. 2004) (plaintiff’s expert barred from testifying at trial where plaintiff designated expert 3 months late without explanation; al......
  • Experts
    • United States
    • James Publishing Practical Law Books Archive Handling Federal Discovery - 2014 Contents
    • August 5, 2014
    ...submitted untimely letter concerning expert rather than report complying with FRCP 26(2)(a)); Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875 (5th Cir. 2004) (plaintiff’s expert barred from testifying at trial where plaintiff designated expert 3 months late without explanation; al......
  • Experts
    • United States
    • James Publishing Practical Law Books Archive Handling Federal Discovery - 2018 Contents
    • August 8, 2018
    ...submitted untimely letter concerning expert rather than report complying with FRCP 26(2)(a)); Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875 (5th Cir. 2004) (plainti൵’s expert barred from testifying at trial where plainti൵ designated expert 3 months late without expla-nation; all......
  • Experts
    • United States
    • James Publishing Practical Law Books Archive Handling Federal Discovery - 2016 Contents
    • August 8, 2016
    ...untimely letter concerning expert rather than report complying with FRCP 26(2) (a)); Hamburger v. State Farm Mut. Auto. Ins. Co., 361 F.3d 875 (5th Cir. 2004) (plaintiff’s expert barred from testifying at trial where plaintiff designated expert 3 months late without explanation; allowing te......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT