ACCEPTED 12-15-00277-CV TWELFTH COURT OF APPEALS TYLER, TEXAS 12/2/2015 5:11:54 PM Pam Estes CLERK CASE NO. 12- 15-00277 -CV IN THE FILED IN TWELFTH COURT OF APPEALS 12th COURT OF APPEALS TYLER, TEXAS at Tyler 12/2/2015 5:11:54 PM PAM ESTES Clerk fn re t'l"l Texas County Mutua| fnsurance Company

Petition for Writ of Mandamus from Cause No. 2014-1365-A 188th District Court, Gregg County, Texas Honorable David Brabham Presiding

REAL PARTY IN INTEREST THOMAS JACKSON'S RESPONSE TO RELATOR'S PETITION FOR WRIT OF MANDAMUS

GLENN PtrRRY Texas Bar No. 15801500 E-mail: [email protected] JUSTIN A. SMITH Texas Bar No. 24068415 E-mail: [email protected] Sloan, Bagley, Hatcher & Perry Law Firm East Whaley Street P.O. Drawer 2909 Longview, Texas 75606 Telephone: 903- 7 57 -7 OO0 Telecopier: 903-757 -7 57 4 ATTORNEYS FOR REAL PARTY IN INTEREST THOMAS JACKSON December 2,2015 ORAL ARGUMENT REQUESTED IDENTITY OF PARTIES AND COUNSEL 1. AAA Texas County Mutual Insurance Company, Relator Appellate Counsel for Relator Gregory R. Ave Texas Bar No. 01448900 E -mail: Gre s. [email protected] Jay R. Harris Texas Bar No. 00793907 Walters, Balido & Crain, LLP Meadow Park Tower, Suite 1500 I044O North Central Expressway Dallas, Texas 75231 Telephone: 214-347-8310 Facsimile : 2t4'347'831 1 2. AAA Texas County Mutual Insurance Company, Relator Trial Counsel for ßelatof Carlos Balido Texas Bar No.O1631230 E -mail : [email protected] Walters, Balido & Crain, LLP Meadow Park Tower, Suite 1500 10440 North Central Expressway Dallas, Texas 7523L Telephone: 214-7 49-4805 Facsimile : 214-7 60- 1670 3. ßespondent The Honorable Judge David Brabham Judge of the 188th Judicial District Court of Gregg County, Texas Gregg County Courthouse E. Methvin St., Suite 408 Longview, Texas 75601 Telephone: 903-237'2588 Facsimile: 903-236-8603

I 4. Thomas Jackson, Real Party in Interest Trial Counsel for Mr. Jackson: Glenn A. Perry Texas Bar No. 15801500 E -mail: [email protected] Justin A.

Texas Bar No. 24068415 E -mail: [email protected] Sloan, Bagley, Hatcher & Perry Law Firm East Whaley Street P.O. Drawer 2909 Longview, Texas 75606 Telephon e: 903' 7 57 - 7000 Facsimile : 903'7 57'7 57 4

l1 TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL I TABLE OF CONTENTS tu INDEX OF AUTHORITIES V TERMINOLOGY vu STATEMENT OF THE CASE 1

I.The UIM Lawsuit's Inception and the Genesis of the Subject Motion to Compel 4 II. The Motion to Sever and Abate ...... T2 STATEMENT REGARDING ORAL ARGUMENT 15 ISSUES PRESENTED 16 II. STANDARD OF REVIEW T7 III. ARGUMENT & AUTHORITY 18 I. Relator's Petition for Writ of Mandamus is Premature and will likely be Rendered Moot.. ...........18 il. The Standard for Severance and Abatement in First Party fnsurance Cases Involving Extra-contractual Claims 20 III. Relator Did Not Plead, Allege, Argue, or Provide Evidence of Any Facts that Would Require Severance and Abatement, thus the Trial Court Could Not have Abused its Discretion .....24 IV. Bifurcation Protects Relator from Inadmissible Evidence Being Presented for Determining Third Party Fault and Underinsured Status 34

lll V. The Trial Court Did Not Abuse its Discretion in Denying Abatement 38 VI. Relator Has Failed to Establish that it has No Clear and Adequate Remedy by Appeal in Failing to Establish that the Trial Court Abused its Discretion or in That it Will Lose Substantial Rights By Being Required to Conduct Discovery on Jackson's Claims 46 VII. Relator's Requestto Vacate the November 6, 2OI5 Order on Jackson's Motion to Compel is Improper............ ..........48 V. CONCLUSION & PRAYER .............49 CERTIFICATE OF SERVICE 53 CERTIFICATE OF COMPLIANCE 54 TABLE OF CONTENTS TO REAL PARTY IN INTEREST'S APPENDIX ...............55

IV INDEX OF AUTHORITIES CASES PAGE(S) Liberty Nat. Fire fns. Co. v. Akin,927 S.W.2d 627 (Tex. 1966) 17, 18, 20-24, 35 Womack v. 8eruy,291 S.W.2d 677 (Tex. 1956) L7 Allstate fns. Co. v. Ifuntur,865 S.W.2d 189 (Tex.App.-Corpus Christi 1993) 17, 18, 25, 44 Progressive County MuL fns. Co. v. Parks,865 S.W.2d776 (Tex.App-El Paso 1993) T7 fn re Allstate fns. Co., 2005 WL 1114640 (Tex.App.-Texarkana M"y 12, 2OO5) 18, 34 Johnson v. Fourth Court of Appeals,700 S.W.2d 916 (Tex. 19S5) 18, 34 Walker v. Packer,827 S.W.2d 833 (Tex. 7992) 18 fn re Reynolds,369 S.W.3d 638 (Tex.App.-Tyler 2OI2) 25 fn re Trinity Univ. fns. Co.,2003 WL 22839280 (Tex.App.-Tyler Nov. 26,2003, orig. proceeding)........ ..... 25 fn re Allstate Texas Lloyds,202 S.W.3D 895 (Tex.App.-Corpus Christi-Edinburg 2006) 25 fn re Arcababa, 2013 WL 5890109 (Tex.App.-Waco October 31, 2013) 25

V Texas Farmers fns. Co. v. Cooper,916 S.W.zd 698 (Tex.App.-El Paso 1996) 25 45-46 fn re State Farm Mut. Auto fns. Co., 395 S.W.3d 229 (Tex.App.-El Paso 2012, orig. proceeding) 26, 27, fn re Reynolds, S.W.3d, 354 (Tex.App.-Houston h4rt'Dist.l 2003) .... 28 fn re Allstate fns. Co.,232 S.W.3d 340 (Tex.App.-Tyler 2OO7) 29,3r-34, 38-39, 42, 47 fn re Farmers Tex. MuL fns. Co., 2OII WL 4916303 (Tex.App.-Amarillo Octob er 17 , 2011) 29, 30 Liberty Nat. Fire fns. Co. v. Akin,927 S.W.2D 627 (Tex. 1996) 35 Accardo v. America First Lloyds fns. Co.,2012WL 1576022 (S.D.Tex. 2013) 40, 4r I{amburger v. State Arm Mut. Auto fns. Co.,361 F.3D 875 4I Aleman v. Zenith fns. Co.,343 S.W.3D 817 (Tex.App.-El Paso 2OII, no pet.) 4T Jordan v. Fourth Court of Appeals, 701S.W.zd 644 (Tex. 19S5) 43 fn re Park Cities Bank,409 S.W.3d 859 (Tex.App.-Tyler 2013) 43 Texas Rules of Civil Procedure Tex. R. Civ. P. 193.3 43

vl TERMINOLOGY "AAA" or "Relator" Relator/Defendant, AAA Texas County Mutual Insurance Company "Jackson" or "ReaI Party Real Party in Interest/Plaintiff, in Interest" Thomas Jackson "Judge Brabham" or the Honorable Davis Brabham, 188th "trial court" Judicial District Court, Gregg County, Texas

vil STATEMENIIT OF THE CASE It is interesting how an offending party ffiây, through grand revisionism, portray themselves as the offended. That is exactly what AAA Texas County Mutual Insurance Company has done in this case. The truth is that virtually none of arguments made in Relator's petition were made in the trial court below and not one piece of evidence was filed with, cited to, or even mentioned in Relator's motion to sever and abate or in Relator's attendant arguments to the trial court. In fact, despite the attestations in Mr. Balidos' affidavit, some of the evidence in the mandamus record, namely the extrinsic correspondence upon which Relator relies to characteríze their offer as one for the entire contract, labeled MR 4 and MR 5, was neverfited with or mentioned in the trial court at all and makes its first appearance in this case on appeal. ,See Affidavit of Carlos Balido, pg. 2, see MR 4-MR 5.

Prior to the underlying wreck which caused Thomas Jackson severe injury, Relator entered into a contract of insurance with him, they took his premiums, they promised to provide him with coverage in the event he was injured by an uninsured or I underinsured motorist and assumed the attendant duties of dealing with him in good faith and fair dealing. It is undisputed that the policy exists and provides coverage for the underlying wreck. ^9ee MR 187.

On June 12, 2013, Thomas Jackson was involved in an automobile wreck. See MR 7-8. The facts of the wreck were not disputed by Relator in the motion or in their argument on severance and abatement. See generally MR 139-2L5. On June 12, 201fl Jackson, leaving the church where he works, was headed west on Pliler Precise Road and came to a stop at the red light where Pliler Precise Road intersects Judson Road. MR 7; MR 143.

When Jackson's light turned green, he entered the intersection.

MR 7, MR 143. At that same time, Patricia Tompkins was driving north on Judson Road, disregarded the red light commanding her to stop, entered the intersection unlawfully, and struck Jackson.

MR 7, MR I43. Jackson was transported from the scene of the wreck by ambulance to Good Shepherd Medical Center. MR 7, MR 143. To date, Jackson has gathered evidence that he has paid or

incurred approximately $47,000.00 in past medical expenses alone. MR 143.

The information relating to the wreck and Jackson's injuries was, of course, presented to Ms. Tompkin's insurer. Ms. Tompkin's insured tendered their policy limits of $30,000.00. MR 8-9. Nor is there any great mystery as to why Ms. Tompkin's insurer did so, in light of the fact that Jackson's past medical expenses alone are approximately $17,000.00 in excess of Ms. Tompkin's policy limits.

Jackson presented his claim to Relator, providing it with the clear facts of this case and his damages. Presumably, Relator conducted an investigation and made their own determination of coverage and entitlement to benefits. Based on that investigation and determination, Relator offered $20,000.00 in excess of Ms. Tompkin's policy limits and the PIP benefits that had already been disbursed. MR 1.

Relator characterizes that offer as unequivocally being an offer to settle the entirety of Mr. Jackson's contract claim, including disputed portions of the claim, despite the fact that no such language appears in the offer. While Jackson disagrees with J Relator's characterization, the truth is that for purposes of Relator's petition these characterizations do not matter one iota.

Relator had the burden of establishing that it was entitled to severance and abatement below and they did not do so. Despite the fact that Jackson has contended since the filing of this suit that the $20,000.00 offer represented an amount that was undisputedly owed to him, Relator never pled, alleged, argued, or contested in anyfiling prior to this mandamus that the offer was for disputed damages and the entirety of the contract.

MR 227-228; MR 62-65; MR 93-726; MR 81-86; MR 66-80; MR 139-182; MR 183-216. Nor did Relator offer any evidence in support of its motion to sever and abate, let alone evidence that Relator claimed to support its position that they had made a settlement offer on the entirety of the contract. MR 66-80; MR 183-216. The trial court was and is entitled to hold Relator to its burden and doing so is not an abuse of discretion.

I. The UIM Lawsuit's Inception and the Genesis of the Subject Motion to Compel

This suit was filed on July 16, 2014. MR 217-223. That suit alleges breach of contract claims, a declaratory judgment claim, and extra'contractual claims. Id. On October 17, 2014, Jackson's counsel served Relator with their First Request for Admissions, First Request for Production and First Set of Interrogatories. MR 88i See also Pet., Tab C. Thirty days later, Relator requested and Pastor Jackson granted the first of four extensions for Relator to respond to written discovery, extending Relator's deadline to November 17, 2074. MR 24I. Again, on November 25, 2014, Relator requested and was given a second extension. MR 242- 243. On December 10, 2014, Relator again requested and was given a third extension. MR 244. On December 17, 2014, Relator requested, and received, a fourth extension to respond to discovery. MR 245 When Relator finally responded to discovery, their responses were abysmal, where almost every request was objected to and virtually no responsive information was provided. MR 87-MR 90; MR 15-65i See also Pet., Tab C. On January 16, 2015, Jackson filed a motion to compel, which he did not set for hearing. MR 236-245. In a conference following the production of their discovery responses, Relator's asked to table the pending issues and engage in an early mediation, given the clear facts of thrs case and purportedly to avoid unnecessary litigation expense. MR 145, I47, 754, 156-157. Jackson agreed and suggested mediators. ,See

rd. None of the mediators were acceptable and Relator requested additional proposals, which Jackson provided. Id. Two months after Relator's request for an early mediation in April, Relator finally agreed to a mediator, with whom Jackson worked to obtain more than a dozen available dates in June and July of 2OI5, which were circulated to Relator. MR 156-157. Relator claimed they rwere not available for any of these dates and requested additional dates. MR 157. In June, Jackson again circulated more than dozen available dates for August and September of 2OI5. See id. Relator chose the very last available date, six months after Relator's request for an "early mediation." See id. It became clear to Jackson in late June that Relator's tactics in this case were likely dilatory in nature. On July 15, 2015, Jackson sent his motion to compel with a letter to Relator seeking to confer on Relator's discovery responses and requesting a privilege log. MR 252-260. Following that letter, Jackson's counsel called Relator's counsel three times in an attempt to meet and confer on discovery, with no response. MR I57-I58, MR 91.

Jackson's motion to compel was served on Relator on August 7,

2OL5 and was file marked on August 10, 2015. MR 87, MR 92.

Jackson did not, however, set the motion for hearing, in the hope that filing the motion would prompt Relator to confer on the disputes. It did not. Finally, on September 10, 2015, after almost two months of attempting to confer with Relator on discovery, Jackson set his motion to compel for hearing and served Relator with notice of the hearing, set for October I, 2015, by both e-filing and facsimile. MR 26I-264. Even then, however, Relator still attempted to delay this case by filing a motion to continue Jackson's hearing on discovery by informing the trial court that the notice of hearing was not e-filed, even though it is clearly file marked, and that it did not receive service of the notice via facsimile, even though the fax confirmation sheet established that Relator had been served on September 10, 2015. MR 161-162 Accordingly, the trial court denied Relator's motion for continuance and addressed the merits of Relator's objections Just as it did in the trial court below, Relator attempts to misrepresent the record here, stating that: At prior hearr I, 2015 the parties presented to the trial court their arguments as to why discovery as to the extra-contractual claims should be stayed (bv ArlvÐ and why it should not (by Jackson) . Yet, the court did not rule [on the motion to compell until after tlze severance and abate hearing where the trial court then entered an order retroactively dating back to October 1, 2OI5 directing AArt to respond to the extra- contractual discovery requests within 45 days - which became ten days from the date of the hearing.

SeePet. pg. 10 (emphasis added).

That assertion is blatantly false, as the transcripts to the October 1 and November 6, 2015 hearings, which Relator chose not to make part of the record, make perfectly clear. At the October I, 2015 hearing: The Court: All right. Thank yoü, Counsel.

What relief are you asking for, Mr. Smith?...

Mr. Smith: The easiest way of doing it is for the requests and the interrogatories that deal with the substantive underlying claim, I would ask that those objections be overruled and they lRelator] ¡e ordered, compelled to respond to those within 14 days....

The Court: I'm going to make that ruling.

Okay. Ail right.

Mr. Smith: With respect to the bad faith claims, perhaps the fairest way of dealing with that is to overrule the objections and require a response within 30 days, or maybe even 45 days. That will give them time to file their motion to sever and abate. In the event that it's granted, that discovery would be pending in the severed claim, and they won't have to respond to it until the abatement is removed. In the event that it's bifurcated, then we already have an order that compels the production of that information, and we can kind of keep this thing rolling.

The Court: III make that ruling....

MR 178-179 (emphasis added); see also MR I4I (th" chronological index identifying where in the transcript the "court's ruling" appears).

In addition, Judge Brabham ordered, at the October 1, 2075 hearing, that Relator would produce a privilege log for each category of discovery within the time frames cited, 14 days for the

discovery relating to the underlying wreck and within 45 days for the discovery relating to the extra-contractual claims. MR 180.

That Relator's alternate reality IS purposefully crafted cannot be doubted. Relator rwas present at the October 1, 2015 hearing, when Judge Brabham first issued his ruling on the motion to compel. Jackson submitted his proposed order that is identical in substance to the agreed order, which the trial court signed on October 26, 2015, eleven (f f) aays prior to the hearing on the motion to sever and abate. MR 270-27I. Relator itself informed the trial court at the hearing on its motion to sever and abate that the trial court }:rad signed an order on the motion to compel prior to that hearing. MR 189. Last, and most telling, is Relator's own acknowledgment of the court's October 1, 2015 ruling when Relator presented its agreed order on the motion to compel.

The Court: So this is the order consistent with my prior rulinfl....

[Counsel for Relator]: Yes. Your IIonor.

MR 214 (emphasis added).

While Jackson is not surprised that Relator would characterize the trial court signing the agreed order at their request as Judge Brabham's first and only ruling on the motion to compel, despite Relator's prior acknowledgments and, thus, knowledge that such a characteñzation is false, the prejudice they claim from that invented fact simply does not exist.

Relator goes on to inform this Court that "the trial court reviewed the following discovery requests which clearly go beyond the scope of the evidence" required to establish Ms. Tompkin's fault and underinsured status. See Pet. at pg. 11. This also Relator knows is false. The trial court directed t}:re parties to review the discovery and determine if there was an agreement regarding which discovery requests related to Ms. Tompkins' fault and insurance status and which related to extra-contractual claims. MR 179-180; MR 212. Jackson and Relator did confer following the October l, 2Ol5 hearing and the discovery requests reflected in the Agreed Orderl reflect Jackson's and Relator's l This is also true of Plaintiffls Proposed Order, filed on October 6,20t5, since by that time the parties had conferred and reached an agreement regarding the discovery requests. The only disagreement at that time, and that prompted the filing agreement as to which discovery requests relate to which claims.

MR 2T2.

Almost half of the requests Relator now contends the trial court reviewed and "clearly go beyond the scope of the evidence to establish" Ms. Tompkins' fault and underinsured status, listed on page 12 through 2O of the Petition, are those Relator itself agreed relate to underlying claim to establish Ms. Tompkin's fault, underinsured status, and coverage. SeePet., Tab B; MR 168-169, MR 212.23 II. The Motion to Sever and Abate It is telling that the entirety of Relator's petition, which it titles "The Motion to Sever and Abate," does not actually discuss the motion to sever and abate or the hearing on the motion, save of the Proposed Order, was whether the trial courÇ in ruling on the motion on October t,20L5, overruled Relator's objections. See MRZI2; MR270-272.

2 Specifically out of Relator's list of now complained of discovery requests, the parties agreed that Requests for Production Numbers 7, LI, L3, and 18 and Interrogatory Numbers 5,7,9, LL, L5, and 20 relate to Ms. Tompkin's fault, fackson's damages (and, thus, Ms. Tompkins' underinsured status), and coverage. See Pet., Tab B; MR 270-272. Relator responded to Requests for Admission Number 14 and 18 without objection and, thus, they were not subject to the motion to compel. See id. fackson has no desire to re-litigate the motion to compel or argue that which was agreed to by the parties. However, by way of example, Request for Production Number 11, which asks for the discovery of insurance policies which provide coverage, which is expressly discoverable in every suit under Texas Rule of Civil Procedure L92.3(Ð. Likewise, Request No. L8, and Interrogatories Nos. 7 and 9 ask for information that would substantiate any claim of pre-existing injury.

1,2 for making the misrepresentation discussed above that the trial court "did not rule" on the motion to compel until after denying severance and abatement. See Pet. pg. I0-2I. The entirety of the section is devoted to the motion to compel which was filed in August and ruled on October 1, 2OI5.

Relator's motion to sever and abate filed with the trial court below comprises seven pages and one exhibit. MR66-MR80. The one exhibit attached to it is not any "evidence" that Relator urges this Court to consideri rather, it is a copy of one of the cases cited in Relator's motion. MR 73-80.

Nowhere in Relator's motion to sever and abate does Relator argue that the trial court was required to sever and"/or abate the case because they had made an offer to settle the entire contract claim in offering $20,000.00, which Jackson contends was undisputedly owed in UM/UIM coverage at the time it was made.

MR 66-72. Nowhere in Relator's motion does Relator claim they had, in fact, made any offer to settle the entire contract claim or that the $20,000.00 offer was not for an undisputed sum. See id.

The $20,000.00 offer which Jackson contends Relator should have paid upon their determination that it was owed, and which Relator has attached as MRl, was not filed as evidence with their motion and is not referenced or cited. MR 66-80. Jackson's response to that letter demanding that the amount be paid by Relator, MR2-MR3, was also not filed as evidence with their motion, nor is it referenced or cited. MR 66-80.

Despite Mr. Balidos' assertion in his sworn affidavit to this Court that the attached documents which comprise the mandamus record are "[t]rue and correct copies of the material documents filed with the trial court," the letter that Relator contends it sent to Jackson and which it contends evidences that the $20,000.00 offer was for a disputed sum on the entire contract, labeled as MR 4-5, was never filed in the trial court at any point time. See Affidavit of Carlos Balido, pg. 2 (emphasis added); ,See

Affidavit of Justin Smith, pg. 4-5.

t4 STATEMEI{T REGARDING ORAL ARGUMENT Jackson asks this Court to grant oral argument in this matter because full discussion of the case would materially aid in this Court's decision-making process.

ISSUES PRESENTED

1. Is a UM/UIM carrier entitled to severance and abatement of an insured's extra-contractual claims when it does not meet its burden of establishing that the carrier made an offer to settle the entirety of a disputed contract claim or other compelling circumstances.

t6 II. STANDARD OF REVIEW "Severance of claims under the Texas Rules of Civil Procedure rest within the sound discretion of the trial court." Liberty Nat. Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996). A trial court only abuses its discretion in failing to order a severance "when all of the facts and circumstances of the case unquestionably require a separate trial to prevent manifest injustice, and there is no fact or circumstance supporting or tending to support a contrary conclusion and the legal rights of the parties will not be prejudiced thereby...." Womack v. Berry, S.W.2d677,683 (Tex. 1956). Prejudice is not presumed simply because contract claims and extra-contractual claims are joined in the same action and accordingly, severance is not always mandatory. See Allstate Ins. Co. v. Ifuntur,865 S.W.2d 189, 193- (Tex.App.-Corpus Christi 1993); see also Progressive County MuL fns. Co. v. Parks, 865 S.W.2d 776, 778 (Tex.App.-trI Paso 1993). "To satisfy the clear abuse of discretion standard, the relator must show 'that the trial court could reasonably have t7 reached only one decision."' See id. Thus, "fflor mandamus relief to be appropriate, the trial court must have... issueld] a decision without basis or guiding principle in law." fn re Allstate Ins. Co., 2005 WL 1714640, at 'kl (Tex.App.-Texarkana May 12, 2005) (emphasis added) citing to Johnson v. Fourth Court of Appeals, S.W .2d 916, 917 (Tex. 1935).

Further, a writ of mandamus will not issue "absent a clear abuse of discretion that leaves the aggrieved party no adequate remedy at law." Liberty Nat. Fire fns. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996). "Mandamus is intended to be an extraordinary remedy, available only in limited circumstances." See WaLker v. Packer,827 S.W.2d 833, 840 (Tex. 1992). "The writ will issue only in situations involving manifest and urgent necessity and not for grievances that may be addressed by other remedies." See id. III. ARGUMENT & AUTHORITY I Relator's Petition for Writ of Mandamus is Premature and will likely be Rendered Moot

Before turning to the merits of why Relator's Petition should be denied, it is important to note that, procedurally, this petition is premature and will likely be rendered moot. The titular contentions of Relator's petition are that "AAA has no contractual duty to pay UIM benefits" and that "[alllowing discovery on Jackson's extracontractual claims before a determination on Jackson's UIM claim is an abuse of discretion." SeePet. pg 22 and (emphasis added). These are also the sole contentions that Relator made below with respect to severance and abatement.

MR187-190.

Jackson has pending now before the trial court his Motion for Partial Summary Judgment and No Evidence Summary Judgment which, if granted, will determine Ms. Tompkin's liability for causing the underlying wreck, the amount of Jackson's actual liquidated damages, and thus Ms. Tompkin's underinsured status. ^9ee Affidavit of Justin Smith, pg. 4 In the event Jackson's Motion for Summary Judgment is granted, there wiII be a determination of coverage triggering Relator's obligation to pay under Brainard and mooting Relator's contention that the trial court abused its discretion in permitting discovery prior to the determination of Ms. Tompkins' liability and underinsured status. This Court should, therefore, lift the stay on the underlying proceeding and deny the petition to allow the motion for summary judgment to be decided. Alternatively, this Court should lift the stay and withhold rendering its decision until after the motion for summary judgment is decided. Further, because that course of action would expedite this proceeding and that below, in the event that this Court lifts the stay to permit the trial court to rule on Jackson's motion for summary judgment, Jackson would agree to a stay of Relator's obligation to produce discovery regarding Jackson's extra-contractual claims until after the trial court's ruling on his motion for summary judgment.

II. The Standard for Severance and Abatement in First Party Insurance Cases Involving Extra-contractual Claims The Supreme Court's decision in Liberty National Ftre fnsurance Company v. Akin is the seminal and controlling case regarding the severance and abatement of insurance coverage or breach of contract claims from extra-contractual claims. Liberty Nat. Fire fns. Co. v. Akin,927 S.W .2d 627,629 (Tex. 1996). There an insured brought breach of contract and bad faith claims against her homeowner's insurer after a denial of coverage. See id, at 628. The insurer moved to sever the breach of contract claims from the bad faith claims, arguing that certain evidence admissible for bad faith would be inadmissible on the contract claim. See id. The insurer also sought to abate the bad faith claims until the contract claim was finally resolved. See id. The trial court denied the severance and abatement, which the appellate court affirmed, and the case proceeded to the Supreme Cowrt. See id. The Supreme Court stated in Akin that "insurance coverage claims and bad faith claims are by their nature independent." See id. at 629. While Relator's assertion that bad faith claims can never exist absent a preliminary determination that of coverage4 is not accurate, that is generally the case. See id. at 629. Thus, the insurer in Akin argued exactly what Relator argued here, namely a SeePet.pg.23 2I that "the trial court should have required lits insured] to obtain a favorable finding on her contract claim before proceeding with the bad faith claim," and that abatement should be ordered "to avoid the effort and expense of litigating a claim that may be nullified by a judgment for the insurer on the contract verdíct." See id. T}le insurer also argued that it was entitled to severance because it had offered and tendered the undisputed portion of the insured's damages. See id. at 63O After re-iterating that severance and abatement are matters vested in the discretion of the trial court, the Supreme Court held the trial court did not abuse its discretion in denying the insurer's motions for severance and abatement. See id. The Supreme Court noted, however, that: A severance may nevertheless be necessary in some bad faith cases.... One example would be when the insurer has made a settlement offer on the disputed contract claim. As we have noted some courts have concluded that the insurer would be unfairly prejudiced by having to defend the contract claim at the same time and before the same jury that would consider evidence that the insurer had offered to settle the entire dispute. While we concur with these decisions, we hasten to add that evidence of this sort simply does not exist in this case.

In the absence of a settlement offer on the entire contract elaim, or other compelling circumstances, severance is not required.

Id. at 630 (emphasis addeÐ.

Thus, the Supreme Court maintained that "[t]raditionally, severance has been reserved to the trial court's discretion, where we leave it today." See id. at 631. Akin is the law in Texas regarding severance and abatement of first party insurance contractuaUcoverage claims from extra-contractual claims and the trial court here was referred to and relied upon Akin in reaching its decision in this case. MR193-I94.

Under Akin, there is no special rule for bad faith insurance claims and there is but one sltuation in first party insurance cases, whether that is homeowner's insurance or UM/UIM insurance, that clearly requires severance. That is, if the trial court is presented with euidence that established there rs a settlement offer on the entire and disputed portion of a contract claim, severance would be required to avoid undue prejudice. See id. at 630. If the trial court is not presented with evidence that established there is a settlement offer on the entire contract claim, then, under Akin "severance is not required" and the trial court does not abuse its discretion in refusing to order a severance. See id. Akin was decided in 1996 and this is not new law.

The entirety of Relator's petition, unlike its motion to sever and abate and arguments below, revolves around contractuaVcoverage claims being severed from extra-contractual claims when the insurer has put on evidence that a settlement offer for the entire contract claim has been made. SeePet. p9.22- 39. Relator, however, misconstrues the evidence, contentions, and arguments Relator presented to the trial court and, thus, completely misses the point. Relator did not contend or make any showing to the trial court that the rule they invoke here was applicable.

III. Relator Did Not Plead, Allege, Argue, or Provide Evidence of Ary Facts that Would Require Severance and Abatement, thus the Trial Court Could Not have Abused its Discretion

Relator, as the party moving for severance and abatement, had the burden of establishing in the trial court that severance and abatement of the extra'contractual claims was required. fn re Reynolds, 369 S.W.3d 638, 652-653 (Tex.App.-Tyler 2072) (stating that "party seeking severance has the burden to show how it will be prejudiced if severance is not granted and to present evidence to the trial court, in camera if necessary, to support its position .) citing tu fn re Trinity [-Iniv. fns. Co.,2003 WL 22839280, at *2 (Tex.App.-Tyler Nov. 26, 2003, orig. proceeding) (mem. op.) and Allstate v. fns. Co. v. I{unter, 865 S.W.zd 189, I94 (Tex.App.-Corpus Christi 1993, no writ)i see also fn re ALilstate Texas Lloyds, 202 S.W.3d 895, 900 (Tex.App.-Corpus Christi- Edinburg 2006) ("Rather, the burden is on the party seeking severance to show how it will be prejudiced if the claims are tried together and to present the evidence to the trial court, in camera if necessary, that forms the basis of its claims. In other words, relators must still caruy the burden of proof to show that severance is required.")i see also fn re Arcababa, 2OI3 WL 5890109, at *8 (Tex.App.-Waco October 31, 2013); see also Texas Farmers fns. Co. v. Cooper, 916 S.W.2d 698, 7OI (Tex.App.-EI Paso 1996) ("It is and remains the movant's burden to show specifrcally how it will be prejudiced if abatement is not ordered, and to show concrete euidence of how defending against plaintiffs contract claim clashes with defending against plaintiffs bad faith claims.") (emphasis added).

Relator cites this Court to the EI Paso court of appeals opinion in fn re State Farm Mutua| Auto fnsurance Company as authority which, in Relator's own words, was decided "under virtually identical circumstances," as guiding the outcome of this matter. SeePet., pg. 32-33. Jackson agrees whole-heartedly that the El Paso court of appeals rightly decided fn re State Farm and that its opinion should guide this Court's determination of this matter, just as it did the trial court's determination. MR194-195.

Jackson also agrees that the decision in fn re State Farm is virtually identical to this case, with one very important distinctioni the insurer there actually argued and put on evidence that "conclusively proved" that that they had made an offer on the entire contract claim in presenting its motion to sever and abate.

See In re State Farm Mut. Autu fns. Co., 395 S.W.3d 229, 232 (Tex.App.-El Paso 2012, orig. proceeding).

As here, the plaintiff in State Farm contended that payment offered was not "an offer to settle the entire contract claim." See id. at 236. Relying, as it was required to do, on Akin the El Paso court held that "severance is required when an insurer offers to settle the entire contract claim...." See id. at 234. Unlike Relator, however, "State Farm asserted in its motion and reply, and prouided proof to the trial court in the form of letters and affidavits from its claims representative, that it was offering to settle in full each of' the insured's contract claims. See id. (emphasis added). Thus, "State Farm met its evidentiary burden by providing the trial court with letters and affidavits from its claims representative that conclusively proved that State Farm offered to settle" the entirety of the insured's contract claims "and the resulting damages therefrom." See id. at 236 (emphasis addeÐ. Therefore, because the trial court was presented with conclusive evidence that State Farm had made settlement offers

on the entirety of the insured's contractual claims, it abused its discretion in denying severance, contrary to Akin. See id. Similarly, in fn ïe Reynolds there was a dispute over whether the insurer had made an offer to settle the entirety of the contract claims under Akin, thus mandating the severance of the insured's contractuaVcoverage and extra-contractual claims. See fn re Reynoldq 104 S.W.3d 354, 358-360 (Tex.App.-Houston h4rt Dist.l 2003). There, the court of appeals held that because the insurer did t:rot " conclusively provel they offered to settle the entire claim as required by Akin," as opposed to an offer on the undisputed portion of the claim, the insurer failed to establish that they \ryere entitled to severance and abatement. See id. at 359-360 (emphasis added).

Here, unlike fn re State -Farm and fn re Reynolds, Relator did not contend in its motion or any reply that it made an offer to settle the entire and disputed portions of Jackson's contract claim, nor did it offer any evidence that it had done so. MR66-MR80.

Similarly, Relator did not claim at the hearing on its motion that they had made an offer on the entirety and disputed portions of Jackson's contract claim and again offere d no evidence that it done so. See generally, MR183-2165 While Jackson disagrees with Relator's characterization of their $20,000.00 offer6, the characterizations, arguments and so-called evidence Relator were not presented to the trial court, could not have been considered by the trial court, and, thus, cannot form the basis for an abuse of discretion. See fn re ALlstate fns. Co., 232 S.W.3d 340, 342-343 (Tex.App.-Tyler 2007) .

s The only reference Relator made to the $20,000.00 offer at the hearing on their motion to sever and abate is located at MR I99 of the transcript. In truth, Jackson is not certain what the argument is attempting to convey because it is nigh on unintelligible, but it seems to be that, because Relator has no contractual obligation to pay prior to their being a judicial determination of third party fault and uninsured status, Relator's failure to tender the $20,000.00 Ís not a breach of contract.

6 Relator claims there is a "clear connotation" that the April 28,2014letter was to settle a disputed contract claim, but itself is forced to rely on a document that was not filed in the trial court below as extrinsic evidence that Relator disputed the value of Mr. fackson's claims. See Pet. pg. 1-3. Relator's reliance on that extrinsic evidence indicates that even Relator acknowledges that the April 28,2014letter is not clear. Of course, the trial court could not have relied on that extrinsic evidence, nor was it asked to rely on any evidence. The April 28,20L4letter also states that the $20,000.00 sum was arrived at from a "review of the facts" and there are other extrinsic facts which support fackson's position that Relator did not and could not have disputed that he was entitled to at least $20,000.00 in damages, such as the amount of his past medical damages, his future medical damages, the evidence of other unliquidated damages, the clarity of Ms. Tompkins'fault for causing the wreck.

There also is likely other evidence, which has not yet been produced in discover¡ which evidences Relator's investigation of the claim and their determination that fackson was covered and entitled to at least $20,000.00 at the time the offer was made.

This is the situation that was presented to the Amarillo court of appeals in In re Farmers Texas Mutua| fnsurance Company. See fn re Farmers Tex. Mut. fns. Co., 2OII WL 4916303 (Tex.App.-Amarillo October 17,2011). Farmers, as Relator did here, filed to abate all extra-contractual claims until after the resolution of the UIM claim. See id. at *1. Farmers, also as Relator did here, did not raise that it had made an offer to settle the entire contract claim. See id. at *I-2. The trial court denied Farmers motion. See id. at *1. After the trial court's ruling, Farmers informed the trial court that it had made "a settlement offer to conclude [the insured's] entire contract claim" and asked the trial court to enter an order memorializing its prior ruling for appeal. See id. at *I-2. The Amarillo court of appeals noted that "in a mandamus context, for a party to preserve its complaint that the trial court failed to abate extra-contractual claims, that party must have brought the issue to the trial court's attention...." See id. at *I.

Farmers's mandamus petition alleges that Judge Schildknecht clearly abused her discretion by failing to abate Henrie's extra- contractual claims after Farmers made a settlement offer on Henrie's entire contract claim. As such, Farmers has failed to preserve its complaint by failing to seek an abatement order from the trial court on the grounds upon which it now seeks mandamus relief Consequently, we cannot conclude that the trial court clearly abused its discretion or that Farmers does not have an adequate remedy available at law.

Having failed to establish its entitlement to mandamus relief, we deny Farmers's petition.

See id. at*2 (emphasis added).

Relator asserts that this Court tn fn re AIIstatu fns. Co. "held that severance and abatement was necessary where an insurer made an offer to settle." Pet. pg. 30. That is not the holding of this Court tn Allstate, although the actual opinion is instructive. In Allstate the insureds' vehicle was damaged by " falling tree and they submitted a claim to their insurer, Allstate.

See fn re AIIstatu fns. Co., 232 S.W.3d 340, 341 (Tex.App.-Tyler 2007). Allstate had the vehicle damage appraised and tendered a check for $867.34, which represented the undisputed damages less the deductible. See id. The insureds obtained their own appraisal, which reflected greater damage, and ultimately brought suit against Allstate . See rd. Allstate filed a motion to sever and abate extra-contractual claims until the breach of contract \ryas determined. See id. The trial court denied the motion. See id. Allstate then made a settlement offer on the entire contract and, thereafter, filed a motion for reconsideration with the trial court premised on that settlement offer. See id. The motion was again denied. See id. This Court recognized that "[i]n considering whether the trial court abused its discretion in denying Allstate's motion to sever and abate, our review is limited to the record as it existed before the trial court at the time of the decision." See id. at 343 (emphasis added). Citing to the Supreme Court's opinion ín Akin, this Court also recognized that a "trial court has broad discretion to sever a lawsuit into separate suits" and is only required to do so "when there is a settlement offer on the disputed contract claim." See id. (emphasis added).

While this Court determined that the trial court 'bould have granted the severance," because the claims did not rely on the same facts and were not inextricably intertwined, that alone is not sufficient. See id. T}:re question in whether the trial court abused its discretion was whether it was required to order severance because it was presented with evidence that Allstate had made an offer on the entire contract claim. See id.In fact, this Court noted that "if the settlement offer represented only the undisputed portion of the contract claim, the trial court's denial of the severance would not be an abuse of discretion." See id. (emphasis added). Which is, of course, exactly what Jackson has contended since day one and which Relator made no apparent attempt to contradict. MR 66-80; MR 183-MR 216.

There is, quite frankly, no evidence here that "conclusively proves" that Relator made an offer for the entirety of a disputed contract claim, as opposed to undisputed damages, and there was certainly no evidence at all that Relator had presented or asked the trial court to consider in conjunction with its motion to sever and abate. Thus, consistent with the Supreme Court's opinion in Akin, the El Paso court's opinion ín fn re State -Farm, the Houston court's opinion ín fn re Reynold's, the Amarillo court's opinion in In re Farmers and this Court's opinion in fn re Allstate, Relator JJ did not meet its burden of establishing that the severance and abatement was mandatory and, clearly, the trial court did not abuse its discretion by having "issueld] a decision without basis or guiding principle in law." In re Allstate fns. Co., 2005 WL 7114640, at *I (Tex.App.-Texarkana May 12, 2005) (emphasis added) citing to Johnson v. Fourth Court of Appeals,700 S.W.2d 916, 917 (Tex. 19S5).

ry. Bifurcation Protects Relator from Inadmissible Evidence Being Presented for Determining Third Party Fault and Underinsured Status Putting aside Relator's new arguments and so-called evidence regarding settlement under Akin, the only argument presented to the trial court by Relator regarding severance was that certain evidence that would be admissible with respect to Jackson's extra-contractual claims would be inadmissible for determining whether Ms. Tompkins' was liable and underinsured MR66-72. That was also a concern raised in fn re Allstate and, as this Court noted there, even if the trial court could order severance, its refusal to do so is not an abuse of discretion. See fn re Allstate, 232 S.W.3d at 343. Relator's concern does not mandate severance here just as it did not mandate it in fn re Allstate.

Akin suggested that a trial court "may address any undue prejudice by instructing the juty that the evidence proves nothing with regard to the coverage of the plaintiffs claim, but may be considered relevant only to the bad faith claim." See Liberty Nat.

Fire fnc. Co. v. Akin, 927 S.W.2d 627, 630 (Tex. 1996). Judge Brabham's order bifurcating the coverage claim from the remainder of the claims provides far more protection than the instruction suggested in Akin. In fact, the trial court's order here complies with even the "inflexible" application rejected by Akin.

See id. at 632 (dissent) (requiring "segregation" of claims in all first party cases, but maintaining a trial court's discretion to sever or bifurcate, and prohibit abatement).

Nonetheless, Relator asserts that it will be prejudiced because Jackson intends to introduce the $20,000.00 offer in the first trial, during which the jury will determine Ms. Tompkins' liability and underinsured status. See Pet. pg. 8-9 (... Jackson is going to make the settlement offer the focal point by arguing to the jury that it represents (f) an admission by AAA he is entitled to UIM benefits and Q) then to the same jury in the same bifurcated trial portion that &L\ acted in bad faith in not paying him the per person policy limit.")(emphasis added).

To be clear, Jackson has always intended and contemplated that Ms. Tompkins' fault and Jackson actual damages, and thus his entitlement to UIM benefits is to be tried solely and exclusively in the first trial. MR194-195. Jackson does not now nor has he ever expressed an intention to introduce the $20,000.00 sum as evidence in that first trial for any reason. As Jackson stated at the hearing below, only "after that issue lof third party fault and underinsured statusl is tried," would there be a "bifurcated trial on the bad faith claims and the [second] breach of contract claim that asserts that lfu\rYsl failure to tender the amount that [it] determined to be owed was a breach of contract and bad faith." MR195.7 Removing the potential concern of

7 Contrary to Relator's contention, Jackson's bad faith claims are not premised on the sufficiency or adequacy of the $20,000.00 sum, such that Jackson will be contending that "AAA acted in bad faith in not paying him the per person limit." Pet. pg. 9. presenting evidence supporting both of these latter claims, which arise from the same facts and involve the exact same issues, during the first stage of the trial is exactly why Jackson proposed and Judge Brabham ordered the bifurcation of this trial. See id. Relator did not make any showing below, and does not make any showing here, how the second breach of contract claim, asserting that Relator's failure to tender the $20,000.00 offer upon Jackson's request, and his remaining extra-contractual claims, asserting that Relator's failure to tender the $20,000.00 which Jackson contends and believes Relator determined to be owed following its investigation of the claim, that "the extra-contractual claims are not so interwoven with the contract action that they involve the same facts and issues," such that severance of those two claims would be proper. See MR 69.

Thus, in ordering bifurcation, evidence that is inadmissible with respect to Jackson's claims to determine coverage remains inadmissible and there is no prejudice to Relator in how this matter will be tried.

V. The Trial Court Did Not Abuse its Discretion in Denying Abatement A party cannot be entitled to an abatement if it is not entitled to a severance that would make abatement possible. As demonstrated above, Relator completely failed to establish its entitlement to a severance and, thus, is also not entitled to an abatement. However, even if Relator had established its entitlement to severance, this Court has specifically rejected a mandatory rule requiring abatement even where severance would be required because the trial court was presented with evidence that the insurer offered to settle the entire contract claim, which was not the case here. See fn re Allstate fns. Co., 232 S.W.3d 340, 344 (Tex.App-Tyler 2007) ("We recognize that a number of our sister courts hold that abatement is mandatory when a trial court orders severance of extracontractual claims from contractual claims," however, "we have avoided creating a bright line rule requiring abatement under these circumstances.") This Court reached this result because "a trial court should schedule its cases in such a manner as to expeditiously resolve them," and that to promote carrying out this task, the "trial court is given broad discretion in managing its docket" which "we will not interfere with the exercise of... absent a showing of clear abuse." See id. Despite this Court's clear language in Allstate to the contràyy, Relator cites to that opinion for the proposition that this Court "held that severance and abatement is necessary where an insurer made an offer to settle," a claim which is, as discussed above, not accurate with respect to either severance or abatement.

SeePet. at pg. 30.

While this Court did ultimately find that abatement was required 1n Allstate, ít rejected the notion that avoiding potentially unnecessary discovery was sufficient by itself to establish the necessity for abatement and relied on two additional factors, the first being the insurer's showing that it would have to disclose privileged and protected information and, second, the fact that the insured's did not dispute that, if severance was ordered, abatement should be granted. See fn re Allstate fns. Co., 232 S.W.3d 340, 344-345 (Tex.App.-Tyler 2007). This latter factor,

of course, is conspicuously missing from Relator's block quote of the opinion in fn re Allstate. See id. at pg. 30 (emphasis added).

Unlike fn re Allstate, none of the factors that led this Court to hold that abatement was required are present here. As an initial matter, Relator offered no evidence in the trial court that the $20,000.00 offer was for the entirety of a disputed contract claim, thereby establishing the necessity of a severance. See infra $IandII Second, an adverse determination on coverage will not negate the remainder of Jackson's claims and, thus, will not render discovery of Jackson's extra-contractual claims and second breach of contract claim unnecessary. As noted above, it is not universally true that extra-contractual claims require on determination of coverage. The only case Relator cites for the proposition is the Southern District of Texas' 20Og opinion in Weir v. Twin City Fire fns. Co. See Pet., pg. 26. Wief however, rwas

rejected by the none other than the Southern District of Texas in 2013 because it is not the law in Texas or even in the Fifth Circuit when applying Texas law in UM/UIM bad faith cases. See Accardo v. America First Llotrds fns. Co., 2OI2 WL 1576022, at *4-5 (S.D.Tex. 2013) reþing on Ifamburger v. State Farm Mut. Auto. fns. Co.,361 F.3d 875,880 (5th Cir. 200¿). The duty of good faith and fair dealing, which is imposed on all first party insurers in Texas, does not focus on whether the claim is valid, but whether the insurer acted reasonablyrn the handling of the claim. Aleman v. Zenith fns. Co.,343 S.W.3d 817, 822 (Tex.App.-El Paso 2OII, no pet.) citing to Republic fns. Co. v. Stoker, 903 S.W.zd 338, 340 (Tex. 1995). Thus, there are occasions where the insurer's investigation reveals such evidence of the motorist's fault and their own insured's damages where "the judicial determination that triggers the insurer's obligation to pay is no more than a mere formality." See id. at *5. "fn such cases, an insurer may act in bad faith by delaying payment and insisting that the insured Iitigate liability and damages before paying benefits on a claim." See Accardo v. America First Lloyds fns. Co., 2O72 WL 1576022, at *4-5 (S.D.Tex. 2013) reþing on Hamburger v. State Farm Mut. Auto. fns. Co.,361 F.3d 875,880 (5th Cir. 2004).

4t Jackson believes that this is just such a case, as evidenced by his motion for summary judgment. Further, Jackson's claim that AAA's failure to tender the $20,000.00 offer amounts to a breach of contract is independent of any judicial determination of coverage. While Relator apparently would like to contest the validity of that claim, arguing their interpretation of the offer and whether there was a rejection and counter-offer based on purported evidence that is not even in the record below, the truth is that this is not an appeal from a motion for summary judgment where the merits of Jackson's claims are at issue. Jackson's breach of contract claim is a live claim that is not contingent on a judicial determination of coverage and discovery of that claim is not contingent on a judicial determination of coverage.

The first additional factor cited ín fn re AIIstaúe was the insurer's showing that it would be required to disclose privileged information if the extra-contractual claims were not abated. See fn re Alhstate fns. Co.,232 S.W.3d 340, 344-345 (Tex.App.-Tyler 2007). Relator has not, however, been ordered to produce any privile ged information for any claim.

In fact, Jackson has been attempting to discover what information Relator even contends is privileged since sending his request for a privilege log on July 15, 2015. Jackson presumes Relator's response to this will be that the agreed order did not compel them to produce a privilege log on the extra-contractual discovery until after the proceeding below was stayed by this Court.

That, however, does not excuse or explain their failure to produce a privilege log within fifteen (fS) of the July 15, 2015 request, as required by Texas Rule of Civil Procedure 193.3, or prior to the hearing on Jackson's motion to compel almost eighty (gO) days later where Relator's objections and assertions of privilege were set for hearing and Relator was obliged to prove the applicability of its asserted privileges. See Jordan v. Court of Appeals, 7OI S.W.zd 644, 648-49 (Tex. 1985) ("The burden of proof to establish the existence of a privilege rests on the one asserting it.")i see also fn re Park Cities Bank, 409 S.W.3d 859, 868-69 (Tex.App.-Tyler 2013). Nor does it explain why Relator did not offer any privilege log or any other evidence that supports its claim that some privileged material wiII be disclosed and thereby cause prejudice in an attempt to meet its burden in moving for severance and abatement. MR 66-MR80 A party is not permitted to simply refuse to comply with its obligation to produce a privilege log under Rule 193.3, or its obligation to establish the applicability of its privileges under the jurisprudence of the Texas Supreme Court and this judicial district, or its obligation to meet its burden of proof in establishing its entitlement to severance and abatement, and then claim in seeking a mandamus that a trial judge, whose rulings have been reasoned and fair, has abused his discretion by not finding some amorphous prejudice which the party has refused at every single step in the proceeding to identify or substantiate. See Allstate fns.

Co. v. Ifuntur, 865 S.W.2d 189, 794 (Tex.App.-Corpus Christi 1993) (noting that the insurer failed to carry its burden of proof in requesting abatement where it provided "nothing more than generalized allegations of prejudice" and "no evidence to the trial court, in open court or for in camera review, of specific settlement offers or the nature or contents of the allegedly privileged matters, so that the trial court could determine their prejudicial/beneficial potential.") Which brings us to the second of the two additional factors this Court cited in fn re AIIstaúe, specifically the insured's non- opposition to abatement, which is conveniently omitted from consideration when Relator quotes the Allstate opinion in its petition. It should be clear, based on the above and the transcript from below, that Jackson is staunchly opposed to abatement in this case. Since the filing of this suit, Relator has made every attempt to unnecessarily delay the litigation of this matter and this Court need only look at the facts and the actual record of what has been filed, what has been said, and what has been done in this case to understand exactly what game Relator is playing here. Abatement is just one more means of delay and if permitted poses a substantial risk of prejudice to Jackson.

As the El Paso court of appeals wrote in upholding a trial court's denial of a UM/UIM insurer's request for abatement: [I]f discovery in the extracontractual case is stayed until the uninsured motorist claim is final, years may pass. Witnesses may die or disappear, files may be lost, and memories will undoubtedly fade. Rather than minimizing pretrial efforts, abatement may require that discovery be conducted twice, as the carrier may successfully argue it initially prepared for trial only on [the insured'sl contractual claim, not his extracontractual causes. Moreover, it is possible that the entire lawsuit, contractual and extracontractual, is subject to disposition before trial.... [And n]umerous pretrial rulings may effect both contractual and extracontractual claims.

See Texas -Farmers Ins. Co. v. Cooper,916 S.W.2d 698,702 (Tex.App.-El Paso 1996).

VI. Relator Has Failed to Establish that it has No Clear and Adequate Remedy by Appeal tn Failing to Establish that the Trial Court Abused its Discretion or in That it Wiil Lose Substantial Rights By Being Required to Conduct Discovery on Jackson's Claims As noted above, an "abuse of discretion occurs only when the trial court's decision was without reference to guiding principles." See Texas Farmers fns. Co. v. Cooper,916 S.W.2d 698, 702-703 (Tex.App.-Et Paso 1996). It is clear from a review of the record in this case that the trial court here did not abuse its discretion and relied on the guiding principles cited in the briefing and arguments below, including the Texas Supreme Court's opinion in Akin and the El Paso Court of Appeals opinion in fn re State Farm. The simple matter of it that, despite its protestations, contentions and the purported evidence offered here, Relator placed none of it in front of the trial court below and, thus, simply failed to meet its burden under existing case law.

Relator goes on, however, to claim that it has no adequate remedy by appeal for one reason onlyi that it will be required to engage in discovery on Jackson's remaining claims. This is exactly the same argument Relator espouses with respect to abatement and which this Court has held is insufficient to establish an abuse of discretion regarding abatement. See fn re Allstate fns. Co., 232 S.W.3d 340, 343 (Tex.App.-Tyler 2OO7). Since that basis is insufficient to establish an abuse of discretion, it is also insufficient to establish an inadequate remedy on appe al. See id. Jackson incorporates herein by reference Section IV, supra, }rís arguments as to why Relator's claim that it will be required to engage in discovery that might be unnecessary does not establish an inadequate remedy by appeal and, thus, establish an entitlement to mandamus relief.

VII. Relator's Request to Vacate the November 6, 2015 Order on Jackson's Motion to Compel is Improper The Prayer of Relator's Petition asks this Court to "vacate the November 6, 2015 order compelling AAA to respond to the discovery requests associated with or which only pertain to Jackson's extra-contractual claims." See Pet., pg. 4I. Jackson presumes that the order referenced is the agreed order which Relator requested the trial court sign, after the trial court signed Jackson's proposed order, both of which memorialized the trial court's prior ruling on the motion to compel at the October I,2OI5 hearing.

Jackson cannot find any briefing in the Petition where Relator has made a showing that the trial court abused its discretion in its ruling on Jackson's motion to compel and that it is entitled to the vacation of the agreed order, or the proposed order, or the trial court's October I, 2015 ruling. Relator did not contest that it was required to respond to aII of the discovery propounded upon it. MR176-I77. The only question was one of timing.

MR176-177. The trial court's October I,2015 ruling and subsequent orders are expressly tailored to work in conjunction with any subsequent severance, abatement or bifurcation. MR 176-MR 177. Relator's attempt to vacate that order, which does not compel them to respond if severance and abatement were required, can only be an attempt to force Jackson to re-litigate discovery disputes that have already been briefed, argued and decided by the trial court, to cause yet another delay and the unnecessary expense of time and effort by Jackson's counsel and, thus, is improper.

V. CONCLUSION & PRAYER Jackson has, since the inception of this suit, sought to accommodate Relator. Jackson's efforts are maligned by Relator here, accusing him of engaging in "procedural machinations," of being "delusional," and misrepresenting his conduct and his statements below. See Mtn for Emergency Relief, pg. 4; see Pet., pg.9-11.

Far more important, however, is that the trial court provided Relator with ample opportunities to offer its evidence and meet its burdens. On October 1, 2015, the trial court did not overrule Relator's claims of privilege for its failure to comply with Rule 193.3 or offer any evidence to substantiate its claims of privilege, as it was well within its rights to do. Nor did the trial court order that Relator respond to extra-contractual discovery prior to being afforded forty-five (¿S) days to submit its motion for severance and abatement, along with any and all evidence Relator deemed material and appropriate to meet its burden. Relator does the trial court's efforts here grave disservice by claiming that it did not rule on Jackson's motion to compel until November 6, 2015, and thus claiming prejudice because the court "retroactively" ruled on the motion giving them ten days to respond, despite the Relator's own acknowledgments that its claims are not truei by claiming that the trial court ordered them to produce discovery that "clearly" goes beyond the scope of discovery, even though the requests are those that Relator itself agreed are discoverable in the underlying claimi and, not least of all, by claiming and implying that the arguments Relator makes here and the evidence it submits are those which it presented to the trial court below in conjunction with its motion to sever and abate, when its arguments here are largely new and not one piece of evidence was offered by Relator to meet its burden. Relator failed to meet its burden and the necessary result was and is the denial of its motion to sever and abate. That the trial court did, as it was entitled to do under the Texas Supreme Court's opinion rn Liberty Nat. Fire fns. Co. v.

Akin, and its progeny. The trial court, in following that guidance, did not abuse its discretion.

Therefore, Real Party in Interest Thomas Jackson respectfully requests that this Court deny Relator's Petition for Writ of Mandamus, lift the stay on the proceeding below, and for any and all other relief to which he may be entitled or which the Court deems proper.

Respectfully submitted, Sloan, Bagley, Hatcher & Perry Law Firm East Whaley Street P.O. Drawer 29Og Longview, Texas 75606 Telephone: 903-757-7000 Telecopier: 903'7 57 -7 57 4

By /s/ Justin A.

GLENN A. PERRY Texas Bar No. 15801500 E' mail: [email protected] JUSTIN A. SMITH Texas Bar No. 24068415 E - mail: j smith@sloanfirm. com

ATTORNEYS FOR REAL PARTY IN II{TEREST _ THOI\{AS JACI(SON

CERTIFICATE OF SERVICE I hereby certify that pursuant to Rule 9.5, Texas Rules of Appellate Procedure, that a true and correct copy of the foregoing brief \ryas served upon the following counsel electronically, through the electronic filing manager, and via certified mail, return receipt requested, on this the 2"d day of December, 2015: Gregory R. Ave Jay R. Harris W'alters, Balido & Crain, LLP Meadow Park Tower, Suite 1500 IO440 North Central Expressway Dallas, Texas 7523L Appellate Counsel for Relator Carlos Balido Walters, Balido & Crain, LLP Meadow Park Tower, Suite 1500 IO44O North Central Expressway Dallas, Texas 75231 Trial Counsel for Relator: The Honorable Judge David Brabham Judge of the 188th Judicial District Court of Gregg County, Texas Gregg County Courthouse E. Methvin St., Suite 408 Longview, Texas 75601 By: /s/ Justin A. Smith GLENN A. PERRY Texas Bar No. 15801500 E-mail: [email protected] JUSTIN A. SMITH Texas Bar No. 24068415 E' mail: j smith@sloanfirm. com

CERTIFICATE OF COMPLIA}ICE Pursuant to Texas Rule of Appellate Procedure g.¿(ixg), the undersigned certified that this petition complies with the type- volume limitations of Texas Rule of Appellate Procedure 9.4(f)(ù(B). Exclusive of the exempt portions identified by Texas RuIe of Appellate Procedure 9.4(Ð(1), this response contains 9.647 including footnotes, headings, and quotations. In providing this word-count, the undersigned is relying on the word count generated by the computer program used to prepare the brief.

This brief has been prepared in proportionally spaced, 14- point text, and in Century font, using the computer program known as Microsoft Word QOLZ version).

Acknowledged: December 2, 2Ol5 By '- /s/ Justin A. Smith JUSTIN A. SMITH

TABLE OF CONTENTS TO REAL PARTY IN INTEREST'S APPENDIX Description Tab MR No. Affidavit of Justin Smith 1 Reporter's Record - Transcript of 2 MR139 - MR182 October I, 2OI5 Hearing Reporter's Record - Transcript of 3 MR 183 - MR 216 November 6, 2075 Hearing Plaintiffs Original Petition with 4 MR 217 - MR 226 Exhibit A - B Defendant's Orisinal Answer 5 MR 227 - MR 228 Plaintiffs First Amended Petition 6 MR 229 - MR 235 Plaintiffs Motion to Compel Discovery 7 MR 236 - MR 245 withExhibitsA-D Notice of Hearing on Plaintiff s Motion 8 MR 246 to Compel Plaintiffs Response to Defendant's I MR 247 - MR 269 Emergency Motion to Reset Hearing with Exhibit A 'C Plaintiffs Proposed Order on Plaintiffs 10 MR 270 - MR 271 Motion to Compel

APPENDIX TAB 1 AFFIDAVIT OF JUSTIN SMITH STATE OF TEXAS s s COUNTY OF GREGG s Before me, the undersigned notary, on this day personally appeared Justin Smith, the affrant, a person whose identity is known to me. After I administered an oath to affrant, he testif,red: My name is Justin Smith. I am over the age of 18 years of age, of sound mind, and capable of making this affidavit. The facts stated in this affidavit are within my personal knowledge and are true and correct.

I am an attorney licensed to practice law in the State of Texas and admitted to practice in the Fifth Circuit United States Court of Appeals, the United States District Courts for the Northern, Eastern and Southern Districts of the State of Texas, and the United States Court of Federal Claims. I and my firm are the attorneys of record for Thomas Jackson in Cause Number 2014-1365-4, styled Thomas Jacl<son v. AAA Texas County Mutual Insurance Company, pending in the 188th District Court for Gregg County, Texas. As part of my representation of Mr. Jackson, I have been personally involved in the preparation of motions and other filings in the underlying matter, have attended the hearings in this matter, and have reviewed the file.

Attached to my affrdavit, and incorporated into the brief and appendix of Mr. Jackson's response to AAA Texas County Mutual Insurance Company's Petition for Writ of Mandamus, are true and correct copies of documents relating to the underlying suit. Appendix Tab 2 is a true and correct copy of the Reporter's Record transcribing the hearing on Mr. Jackson's motion to compel discovery in the underlying suit and that took place on October 1,2015. The transcript identified as Appendix Tab 2 and marked as Mandamus Record ("MR") 139-182 was prepared and provided to my off,rce by the official court reporter for the 188th District Court of Gregg County, Texas, and was ordered by me to complete the record. The reporter's certification of the transcript is located at MR 182. Similarly, identified as Appendix Tab 3, MR 183-MR 216,is a true and correct copy of the Reporter's Record transcribing the hearing on AAA Texas County Mutual Insurance Company's ("AAA") motion to sever and abate and special exceptions in the underlying cause and which took place on November 6, 2015. The transcript identified as Appendix Tab 3 and MR 183-MR 216 was ordered by my offrce to complete the record and was prepared and provided to me by the official court reporter for the 188th District Court of Gregg County, Texas, whose certification is located at MR 216.

Appendix Tab 4, MR 217-MR226, is a true and correct file marked copy of Thomas Jackson's Original Petition, along with Exhibits A and B, filed in the underlying cause. Exhibit A to Mr. Jackson's Original Petition is a letter sent by AAA to my f,rrm on April 28, 2014, which appears as MR 1, attached to Mr. Balido's affidavit filed in conjunction with AAA's Petition for Writ of Mandamus. Exhibit B to Mr. Jackson's Original Petition is a letter sent by my firm to A,rd{ on May 2,2014, which appears as MR 2-MR 3, attached to Mr. Balido's aff,rdavit filed in conjunction with AAA's Petition for V/rit of Mandamus. Exhibit A and Exhibit B to Mr. Jackson's Original Petition, App. Tab 4 and marked MR 224-lr4P. 226, are true and correct copies of these letters f,rled with below and reflect the only filing of these letters in the underlying matter. The letters marked as MR 1 and MR 2-MR 3 are not true and correct copies of the letters filed with the trial court, as evidenced by the absence of the marking of the exhibits which accompanied their filing with the Original Petition. Marked as App. Tab 5, MR 227-MR is a true and correct copy of Defendant, AAA's, Original Answer filed in the underlying matter. Marked as App. Tab 6, MR 229-MR 235 is a true and correct copy of Mr. Jackson's First Amended Petition in the underlying matter.

Marked as App. Tab 7, MR 236-MR 245 is a true and correct copy of Mr. Jackson's Motion to Compel, filed on January 16, 2015, along with true and correct copies of the agreements entered pursuant to Texas Rule of Civil Procedure 1 1 in which Mr. Jackson extended AAA's deadline to respond to discovery, marked as Exhibit A through Exhibit D and filed with Mr. Jackson's Motion to Compel on January 16,2015. Marked as App. Tab 8, MP.246, is a true and correct copy of Mr. Jackson's Notice of Hearing on Plaintifls Motion to Compel, filed in the underlying matter.

Marked as App, Tab 9, MR 247-}i4Pt 269, is a true and correct copy of Mr. Jackson's Response to Defendant AAA's Emergency Motion to Reset the Hearing on Plaintiff s Motion to Compel, filed in the underlying matter on October 1,2015, along with a true and correct copy of the letter sent by my office on July 15,2015 to AAA's counsel seeking to meet and confer on discovery and requesting a privilege log and enclosing a copy of the motion to compel, filed as Exhibit A, a true and correct copy of the Notice of Hearing for the motion to compel file September 10,2015 and the fax confirmation sheet confirming service on AAA's counsel, filed as Exhibit B, and the letters prepared pursuant to Rule 11 extending discovery, hled as Exhibit C.

Marked as App. Tab 10, MR 270-MR 27I, is a true and correct copy of Plaintiff s

Proposed Order on his Motion to Compel discovery, which was filed by -y office on October 6, 2015, and signed by the trial court on October 26,2015. Prior to the filing of Plaintifls Proposed Order, App. Tab 10, on October 6,2015,I prepared a draft agreed order on the motion to compel and sent it, via email, to Nancy Raine, an attorney with Walters, Balido and Craine and counsel of record for AAA in the underlying cause. Ms. Raine sent to me a copy of her proposed changes to the draft via email on October 5, 2015, following which Ms. Raine and I had telephone conference to discuss the order memorializing the trial court's ruling at the October I, 2015 hearing. During that conference, Ms. Raine and I discussed and reached an agreement regarding which discovery requests related to which category of claims. Specifically, the parties reached an agreement as to which requests would be within the scope of discovery with respect to the underlying wreck, third party fault, underinsured status, and coverage, and which requests would only be within the scope of discovery for the remaining and extra-contractual claims. The only disagreement Ms. Raine and I had at the completion of our conference on October 5 or October 6,2015 was whether the trial court had ovemrled AAA's objections to Mr. Jackson's discovery.

Consequently, I filed the Proposed Order, marked as App. Tab 10, which reflected the parties' agreement with respect to the scope of discovery and the nature of the claims to which the requests related and which overruled AAA's objections consistent with the trial court's October 1,2015 ruling on the motion.

On November 13, 2015, Mr. Jackson filed his Motion for Partial Summary Judgment, on the grounds that there is no genuine issue of material fact that Ms. Tompkin's was negligent, that her negligence caused the wreck which forms the basis of the underlying suit, that there is no genuine issue of material fact that the wreck proximately caused Mr. Jackson to pay or incur 547,I31.05 in liquidated past medical expenses. Mr. Jackson's motion for summary judgment also seeks, on the basis of the aforementioned findings, a declaration of Ms. Tompkin's liability and underinsured status, given her minimum limits automotive liability policy.

Filed in conjunction with AAA's Petition for Writ of Mandamus is an affidavit by Mr. Balido, attaching documents which he attests are "[t]rue and correct copies of the material documents filed with the trial court and which are central to the issues...." Attached to Mr. Balido's affrdavit is a document marked MR 4-MR 5 which was not filed in the underlying cause during my representation of Mr. Jackson. Further, the document marked as MR 4-MR 5

and attached to Mr. Balidos' affrdavit: (1) is not stamped or marked as having been filed with the trial court in the underlying matter; (2) is not attached to another document which was filed with the trial court in the underlying matter; and (3) not stamped or marked as an exhibit or attachment to any other document which was filed with the trial court in the underlying matter.

After seeing Mr. Balido's affidavit and the document attached thereto as MR 4-MR 5, I again reviewed the documents filed in the underlying matter, including each exhibits and attachment to those filings, beginning with the Original Petition filed on July 16, 2015 and ending with notice of this proceeding, filed on Novemb er 17 , 2015, in order to confirm that MR 4-MR 5 had not been filed in the underlying action at any point in time. I also reviewed the Register of Actions maintained by Gregg County, Texas and which reflects the filings, hearings, and orders for the underlying cause. In my accounting and review of the documents that have been filed in the trial court below, I could not locate the to Mr. Balido's affrdavit as MR 4-MR 5.

FURTHER, THE AFFIANT SAYETH NOT

SWORN TO AND SUBSCRIBED A. SMITH on ber 2, 2015 \ Notary Public in and for 2019 the State of Texas APPENDIX TAB 2

1 REPORTER'S RECORD VOI,TMElOF]-VOLUMES 2 TRTAL COURT CAUSE NO. 2OL4-1365-A THOMAS \TACKSON IN THE DISTRICT COURT \¡S GREGG COUMTY, TEXAS AAA TEXAS COUNTY MUTruAII rNST'RANCE COMPANY 188TH iTUDICIAL DISTRICT

I

11 PIJAfNTIFF I S MOTION TO COMPEL L2

I4 L6 the 1st day of OcEober, 2015, Ehe following On L7 proceedings came on to be held in the above-titled and 18 numbered cause before the Honorable David Brabham, ifudge 19 Presiding, held in Longview, Gregg County, Texas.

20 Proceedings reported by computerized stenotl4pe 2L machíne.

GREI,N\T FREEMAN, TEXAS CSR 8179 1-88TH DISTRTCT COURT E. METITVTN, SUITE 408 LONGVIEI^I, TEXAS 7560L 903.237 .2688

MR I39

1 ÀPPEÀR.LIICES MR. iTSTTN SMITH sBoT NO. 240684L5 ST,OA\I, BAGIJEY, ITATCHER E PERRY LAü¡ FIRM 1-01 EasÈ l{ha1ey Street Longview, Texas 75601 Telephone: 9o3.7s7.2000 6 REPRESENTING THE PL.A,INTIFF

I MS. NA}ICY R,ATNE sBoT NO. 00786183 r_0 ï/ùAJ,TERS, BAITIDO 6c CRAIN, L. L. P Meadow Park Tovrer, Suite 1500 11 1-0440 North Central Expresshray Da11as, Texas 75231- L2 Telephone: 2t4 .'149 .4805 l4 REPRESENTING THE DEFENDANT

L7 t_8 T9

2L REPORTERIS NOTE 22 Uh-huh = yes - Affirmative response Huh-uh = No - Negative response 23 QuotatÍon marks are used for clarity and do not necessarily indicate a direct quote.

GRELY-IÍ FREE}I.AÀI, TEXAS CSR 8179 188TH DTSTRTCT COURT 1O]- E.METITVIN, SUITE 408 IJONGVIEVìI , TEXAS 75501 903.237.2688

MR I4O

1 CHRONOIJOGICÀL TNDEX 2 VOIJUME 1 3 PIJAINTIFF I S MOTION TO COMPEL OcEober 1-, 2 015 5 PAGE vor.

6 PIJAINTIFF'S MOTION TO COMPET, Mr. Smith. 4 l_

I DEFENDAÀIT I S MOTION FOR CONTINUAIVCE 9 Ms. Raíne 15 1 L0 Mr- Smith 18 1 1L Court's ruling.... "25 1 L2 PIJAINTTFF I S MOTION TO COMPEI, 1"3 Ms. Raine 25 1 T4 Mr. Smith-... . .33 L 15 Ms. Raine - -3'l 1 16 Court's ruling. 40 I L7 Reporter's certifícaEe. ... 44 I L9

2L

TEXAS CSR 8179 GREIJY-AT FREEIT,IATI, 1-88TH DISTRICT COT]R?

101 E. METIIVIN, SUITE 408 LONGVIEW, TEXAS 75501_ 903.237 -2688

MR I4I

1 PROCEEDINGS 2 october 1, 20L5 3 (Opencourt, parties present) 4 THE COURT: All right. This is a civil case.

5 rhis ís 2or4-L365-4. This case is styled Thomas ilackson versus AAA Texas County Mutual Insurance Company. The matter before the court is a plaintiff's vIoÈion to compel.

I 'Justin Smith ís present representing the plaintíf f .

9 Counsel, would you identify who you are, 1_0 please?

11 Honor. My name Nancy MS. R.AIÀIE; Yes, Your L2 Raine. My last name is R-A-I-N-E, and I represent the 13 Defendant, AAA Texas.

I4 THE COURT: All rÍght. Ms. Nancy Raine Ís 15 presenE for the Defendant.

16 BoEh sides ready on the matter before the 17 Court?

18 MR. SMITH: Yes, Your Honor.

19 MS. RÂIIVE': Yes, Your Honor.

20 THE COURT: Okay. Mr. Smith, it's your 2L motion. You may proceed aE thís time.

22 MR. SMITH: Yes, Your Honor. ,fust kind of by 23 way of preview to begin with. IE is my motion, but on 24 motions to compel, the law is r don't have the burden of 25 proof t,o prove that the objections are improper. The burden GREI,N\T FREEMAN, TEXAS CSR 8L79 188TH DISTRICT COIJRT t_01 E. METITVIN, SUITE 408 LONGVIEW, TEXAS 75601 903. 237 .2688

v,R 142

1 is on the Defendant to prove that Èheir objections are proper.

3 this case ínvolves it's a UM/UIM No!ù, 4 case. Mr. Jackson was leaving work at a church and driving 5 down Pliler Precise Road on June L2E]n, 20L3. He was driving 6 behind anoÈher vehicle, and they came up Eo the Íntersection 7 of P1írer Precise Road and iludson Road and. there,s a traffic I stoplight there.

9 The vehicle ín front of Mr. ilackson, and 10 Mr- ,fackson. stopped at the red right. The light turned 1_ l_ green, the car in front of him went- Mr. ,Jackson proceeded L2 into the intersection on a green 1íght. And a woman, 13 Patrícj-a Tompkíns, who was drívíng north on ,Judson L4 approaching that red light, blew through the red light and 15 T-boned Mr. ilackson -

L6 He wound up in the ambulance and taken to Ehe L7 hospital. And he had lost, consciousness, \das d.isoríented, 1_8 largely due to, r guess, the adrenaline causíng his blood 19 sugar Eo drop, given hís diabetes. And he proceeded a 20 course of treatment.

2L In Ehe tíme sínce the wreck, Mr. ilackson has 22 i-ncurred approximatery 94T,o0o in past medical expenses.

23 And we have some letÈers that have been exchanged ín 24 discovery in this case regarding his necessary future 25 medical care.

GREI,YN FREEMAN, TE)GS CSR 8L79 188TH DISTRICT COURT E. METITVIN, SUITE 408 ïJONGVfEI^I, TEX.â,S 75601 903. 237 .2688 MR I43

1 Mr. ilackson filed a claim with his own Ínsurance company f.or the PIP benefits, and that was paid, $5,000. He filed a claím against patricia Tompkins' insurance company. She had a mínimum policy, g3O,OO0 limits polícy. Ari.d on consent of his U{/UIM carrier, patrÍcia Tompkins' insurer tendered the entirety of their undertyíng 7 insurance policy. Mr. ,Jackson, pursuant Èo his policy, Then 8 filed a claim on hís uM/UIM for the remaÍnder of his 9 damages.

10 And this case is a littte bit unusual in 11 that from the bad faith cases that are cíted in L2 Defendant's motion or their response to our Motion to 13 Compel. lrlhen Mr. Jackson presented his claim, the insurance L4 company, Iíke the insurance company has a requírement to do, 15 began íts investigatíon and made a determination as to 16 damages and offered him $20,000. And Mr. ilackson's response L7 \¡vas, " I think my damages are more than that, but if this is 18 the undispuÈed sum of my injury, tender Ehe undispuled sum L9 Eo me and then we'11 go about titigating the remainder.I 20 His ÌIM/UIM carrier refused and wouldn't tender any parÈial 2L palzment absent a full and complete release of the entirety 22 of his claims. This lítigatÍon ensued.

23 On October, I belíeve. the 1-6th of 20L4, we 24 served our interrogatories, our request for admissions and 25 our requesÈ for productíon on the Defendant. Their GREIJW FREEMAIV, TE)(AS CSR 8179 188TH DISTRICT COURT l-01 E. METlrVrN, SUrTE 408 LONGVTEW, TEXAS 75601 903.237 .2688

MR I44

1 responses l^tere due on Novernber 1-6th of 20L4. On 2 of z0r4 we gave them an extension of t.ime to November L7tr}: respond to discovery and didn't push a waiver of their objectíons. IrIe did it again and again and again. We ultimately gave them four extensions on theír d,eadline to respond to and object to our discovery. Irfe ultimately got that discovery on December 23rd, 20L4, and it's sorely I defícíent.

9 THE COURT: 201,5 or tL4?

10 MR. SMITH: 2014.

11 THE COURT: Okay. Thank you.

L2 I[R. SMITH: Over two months after we had 13 served the ÍnitíaI request.

1-4 THE COURT: Okay.

15 MR. SMITH: A number of thíngs have taken L6 place in the Íntervening months since we received the L7 request. Defendants e)<pressed an interest in doing early 18 mediation. Ultímately, that was held on September 29trln, and 79 it was unsuccessful.

20 turn to Ehe objections that, Vlhen we 2L Defendants have lodged in their responses to plaintíff's 22 díscovery request, theyrre virtually the same set of 23 objections over and over and over again, regardless of what 24 the nature of the interrogatory or the request for 25 production is.

GRELY-N FREEIJIAN, TEXAS CSR 8179 188TH DTSTRICT COURT E. METITVTN, SUITE 408 IJONGVIEV{, TEXAS 75601 903 -237 .2688

MR I45 I

1 Andessentially there are two kinds of discovery that r¡ve,re trying to conduct in our request for production, our request for admissíons, and our interrogatories. One is on our underlying breach of contract and declaratory judgment claim, because par! of the policy requires that you prove that the third. party was negligent and that she was an underinsured or an unínsured motorist.

9 So we've sentinterrogatories, for example, 10 that have requested, íf you contend that Mr. Jackson ís aE t_ t- fault for the colIísion that took place, give us the general L2 factual basis for that cont,ention,- if you contend that there 1_3 were any other causes or Ehird parties who are at fau1E L4 other than Patrícia tompkins, give us the general factual 15 basís for thaÈ contention. as RuIe Lg7 -L allows us to do.

L6 Those requests are not responded to, and they're objected.

L7 to. r_8 There are reguests for underlying information L9 like photographs, díagrams. Not just photographs of the 20 vehicle, but if photographs have been taken of the scene 2L during their investigatíon of the underlying matter, we want 22 those photographs. There's a corresponding int,errogatory 23 that goes to the authenticatÍon of those documents. provide 24 us the name of the person who took the photographs you 25 produced. along wÍth the date that he Èook those photographs.

TEXAS CSR 8179 GRELY-IV FREET¡IAI{.

188TH DISTRTCT COI'RT 1O]- E. METIÍVIN, SUITE 408 IJONGVIEbI, TEXAS 75501 903.237 .2688

MR 146

1 All of those requests relate to the 2 underlying matter. They're objected to on largely the same 3 grounds as every other request, which is, you're not allowed 4 to seek díscovery of bad faith craims in your action. Irterr, 5 Ehis case has both breach of contract and declaratory 6 judgment claims along with bad faith claims and extra-contract,ual claims for the Defendant's refusal to tender any partial payment of any undisputed sum thatrs due to Mr. ,Jackson.

10 Nornr, there ís no questÍon that the discovery 11 thaÈ is targeted to the underlying incident, the breach of L2 contract, declaratory judgment actíon to prove Èhat the 13 thírd party is at fault and that she's an underinsured L4 driver, there's no question that that díscovery is 15 permissible in thís action.

15 Defendant's objections are kínd of a L7 litEle bít of putting the cart before the horse. I¡Ihat they 18 ultimately want to do is they !Ìrant to sever off the bad L9 faitn extra-contractual claÍms and abate them. Now, they 20 filed a motion regarding that previously, and when we had 2t the discussion regarding having an early mediation, both 22 Plaíntiff 's Motíon to Compel, which $re hrere working on at 23 Ehe time, and their moEion to sever and abate were kind of 24 taken off the table so we would have an opportunity to 25 mediate and noÈ incur any additional and unnecessary GREr,nV FREEMAN, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVIN, SUITE 408 ï,ONGVIEV'I, TEXAS "7560L 903.237 .2688

MR I47

1 Iitigatíon expenses. z But wíth regard to those bad faith claims, those claíms are stÍII alive here. And essentially what 4 their objection ís, and they cite to a líne of cases that 5 have ordered severance and abat,ement when you had breach of 6 contract claims and bad faÍth craims broughÈ together in the 7 same lawsuit agaínst a IIjl/urM carrier. Their argument ís, I is that we can't do both at the same time. If you are 9 allowed to admit into evidence underlying investigative 10 materiars, which are discoverabre and rerevant to your bad 11 faiÈh claims or determinaEion of whether or not we are L2 likely liabIe for the underlying loss and the extent to 13 which we are líkely liable for the underlying loss, those L4 prejudice their right Eo stand on theír refusal to 15 acknowledge the craim and require the plaintiff to establish r-5 that the third party is at fauLÈ and that she was an I7 underinsured or unÍnsured motorÍst.

18 The difference beÈween those cases and this L9 case is that in alt the cases that Defendants cite to, alI 20 the bad faÍtfr claims relate to Ehe sufficiency of the 2t settlement offer. Basically, if you rÂrere to take it and 22 apply it to the facts of this case, you know, they mad.e a 23 $20,000 offer. In these other cases, the complaint is, 24 weII, you should have offered me 60 or 100 or j-00,OOO or 25 whatever, you know, the damages would be.

GREI,W FREEIiÍAN, TEXAS CSR 81?9 ]-88TH DTSTRTCT COURT 101- E. METTWIN, SUTTE 408 LONGVTEW, TEXAS 75601 903.237 .2688

MR I48 t_1

1 Thatls not Èhe nature of plaintiff's bad faith craims ín Ehis case. The nature of plaintiff's bad 3 faÍth claims in thís case is that you have done an 4 investigatíon, yoü have obviously made a deÈermínation that he ís due some amounE under the policy up to $20,ooo because that's what you offered. And when pIaíntiff requested that you tender the partial palzment of the undispuEed sum, you I refused to do so and essentiarty Eried to strong-arm him in withholdíng undÍspuËed sums that he's entitred to in an 10 atÈempt to kind of sÈrong-arm hím into signing a comprete 11 and final release of all hís claims. t2 THE COURT: Was the offer of 20 well, it,'s 13 not an offer, but was the $20,000, was that before he had L4 counsel or after he had counsel? l-5 MR. SMITH: After.

L6 THE COURT: Okay. t? Mr. Hatcher and MR. SI'/IITH: NoÌrr, 18 Mr. Robertson $¡ere t.he ones who were rit,ígating Èhis case at 19 that tíme.

20 THE COURTT Okay.

2L 1t4R. SMITH: But my understanding is, and 22 based on correspondence that l,ve seen, is that Ehat 23 occurred after he had counsel.

24 THE COURT: Ar¡d teII me again. Mr . Smith, 25 your posítion is how was bhe g20,OO0 tell me again the GREL]TI\I FREEI,IA¡I, TEXAS CSR 8179 188TH DISTRTCT COURT E. METITVTN, SUITE 408 LONGVIEW, TEXAS 7560L 903.231 .2688 MR I49 L2

1_ context under which that came up.

2 lUR. SMITH: So, after Èhe third party 3 settlement ?

4 THE COURT: YES.

5 IIIR. SMITH: And I guess to kind of there 6 was negotiation wíth a third party when it became clear that 7 they were goíng to tender up theÍr policy. We sent the I consent to settle 9 THE COURT: I got that parÈ.

10 MR. SMITH: to the I'M/UIM. They consent 11 Eo the settlement. We got the third party money.

L2 THE COURT: Got thaÈ.

13 MR. SMITH: We then submitted the claim for L4 the remainder to the UM/UIM.

15 THE COURT: Right.

16 MR. SMITH: Once that claim was submítted -- t7 and f believe we were the ones who submitted Ehe claim on 18 Mr. ilackson's behalf .

19 THE COURT: Okay.

20 MR. SMITH: After thaE claim was submitted, 2L \,rre presume that an invest,igation was done because the 22 insurance code requires it, and they ultimately came back 23 and said, you know, rrhlerre going Eo of fer you $20, O0O. " 24 I¡Ihen we got that offer, Mr. Hatcher sent them 25 a letter saying, if this is the undíspuÈed sum, or if TEXÂS CSR 8179 GRETJ1ßÏ FREEMAN, 188TH DISTRTCT COTIRT E. METIIVIN, SUITE 408 r,oNcvrEw, TExAs 75601 903.237 .2688 MR I5O

1 there's an undisputed sum t,o which Mr. ,fackson is entitled, 2 then tender that money and we wíII litigate the remainder.

3 THE COURT: Okay.

4 MR. SMITH: What AÄA Insurance Company's 5 nothing. They just refused to tender Ehe response vras vras 6 partial payment, ot any partial payment for that matter.

7 THE COURT: Okay- I MR. SMITH: And so our posiEion ís, is that 9 at, Èhis time, based on Èhose bad faith claims, those bad 10 faith claims are proper. BuE even if they're not even if 11 there is some sort of relief that's reE:ired in order Eo I2 prevent any kind of prejudice to the ínsurance company, 13 aside from privíIege, those are all evídentÍary íssues not I4 discovery issues. l_5 And surely severance and abatement is one L6 avenue that, the Court, in its discretion, could use to T7 amelj,orate that prejudice. IÈ's certaÍnIy not the only l_8 medíum the Court could use. For example, Èhe Court could 1,9 use a bífurcation and bifurcate Ehe underlyíng dec action 20 and breach of contract from the bad faith claims. And that 2L way vre wouldn't have Eo have tt¡ro separate lawsuits, and we 22 could try it in two stages of the same proceeding.

23 If that's and, again, we dontt contend 24 that that's necessary in this case based on the posture of 25 the bad faith claims. But i-f. it ís, we would want a GREI,YI\T FREETiIAI$, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVIN, SUITE 408 r,oNGVrEW, TEXAS 75601 903 .237 .2688

MR I5I L4

1 bifurcation rather than severance and abatement. And it 2 wourd be far more efficient for us to go through and conduct 3 the díscovery that we need to conduct, and we would have to 4 do that íÉ this ís a bifurcation íssue.

5 So that is, in sum, t,he essence of their 6 objections. IE's essentially Ehe same thing over and over and over again, yraI1 aren't allowed to conduct discovery of I bad faiEh craims even if the discovery doesn't have anything Eo do wittr bad faith claims and relates to the underlying 10 incident. And because you're not allowed to Ery those ín 11 the same proceeding, you're not allowed to do discovery of I2 them in the same proceedíng.

13 No\,rr, one other issue that ,s kínd of on top of L4 this is that we had sent our meet and confer letter 15 attachíng this Motion Eo Compel on Juty 15th, I believe it's 16 dated , of 20L5. In Ehat meet and confer letÈer r^re had asked I7 for a conference to satisfy the Rules of Civil procedure.

18 But the other thing Ehat we had asked for, because replete L9 throughouE these objections are assertions of privilege, 20 attorney-client príviIege, work product privilege, the party 2L communicatíon príviIege, and a wiEness statement prj_vilege, 22 whích is not a privilege thaÈ even exísts. ürlitness 23 stat,emenEs are expressly díscoverable under L92 -3.

24 We've asked for a privilege log back on 25 ,Ju1y l-Sth of. 2oL5 so that we could get evidence and create a GRELYI\TFREEIIA¡I, TEXAS CSR 8179 ]-88TH DISTRICT COURT 1O]- E. METITVTN, SUTTE 408 LONGVTEW, TEXAS 7560L 903.237 .2688

MR I52

1 posítÍon \¡rith regard to whaE ís and what is not privileged that they have asserted is protected. And t,o date we haven'È receíved t,hat privilege 1og. so in addition to stríking the objectíons and. one thing that we would request ín the arternative is that an order compelling them to produce a privilege 1og so we can take those next steps in determining whether or not those privileges are I appropriate or proper.

9 THE COURT: Thank you, Mr. Smith.

10 Ms. Raíne?

11 MS. R.AI¡IE.- Thank you, your Honor.

L2 Your Honor, f apologize, I did not jump up a 13 rittre sooner. Yest.erday the Defendant filed an Emergency L4 Motion for continuance on plaintiff,s Motion to compel. Did 15 the Court receive that motion, your Honor?

T6 THE COURT¡ I did, yes.

L7 MS- RÀ.IJVE'.- I could argue that at thÍs time, 18 Your Honor, or ask the court if yourve made a ruling on the 19 Motion for Continuance.

20 THE COIIRT: !ve11, f haven,t . So in f airness 2L to you, you can teIl me what that posítion is on continuíng, 22 f'11 get their response, I can rule on that, and. then I 23 guess we'lÌ get back to the merits íf I overrule your 24 continuance. But t,ell me why you wanÈ the continuance on 2S this.

GRELW FREEMA}T, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVIN, SUITE 408 r,oNGVrE[,ü, TEXå,S 75501 903.237 .2688

MR I53

1 Ms . plaíntif f ,s f iled Rå.IIVE.- Your Honor, their Motion to Compel, as Mr. SmiEh staEed, back in ilu1y.

3 ürle were not notif ied of the hearíng date. Medíation was set, as Mr. Smith stated, two days ago on September 29t}n.

5 That was Èhe first we learned that there riras a hearing date set for today. rt was from the medíator.

7 THE COURT: And when was Ehat, ma,am? I'm I sorry.

9 flIS. RAIIVE.. September 29tr}:, two days ago.

10 THE COURT: Two days. Okay.

11 MS. RAI¡ÍE.- The day before yesterday. $Ie L2 mediated with ttlr. Davis, and t,he medíaEion did not go 13 through.

L4 And Mr. Smith is correct. We have pending 15 motions t,o compel, we have a pending motíon to sever and.

16 abate t,he extra-contractual claims ín this case- And T7 informally or by, you know, mutual agreement of a great 18 Iegal thought -- plot here, hre açtreed that we would table L9 those motions, not set them for hearing to interrupt the 20 Court's time and try to proceed to mediation, try to get the 2I case resolved.

22 THE COURT: Ríght.

23 the case did not resolve, MS. RÄIIVE.- So when 24 the next course of action would certainly be, let's get all 25 those pending motions out there set. for a hearing, which we GREIJYAT FREEMAN, TEXAS CSR 8179 ].88TH DTSTRICT COURT E. METIÍVIN, SUITE 408 r,oNGVrEhI, TEXAS 75601 903 .237 -2688

MR I54 L'l

t_ hlere prepared to - However, we were unaÌ^rare that do P1aíntiff's counsel had already set Eheír Motion t.o Compe1 hearíng for today. Had we realized that, we would have set our motion Èo sever and abate the extra-contractual claims at the same tj-me because we belíeve those two thíngs are int,errelated.

7 Further, our adjuster had a health emergency.

I He was not able to be physically present at mediatíon. He 9 had a pulmonary embolism. And that was last week, and he 10 was hospitalized. He's not able to travel, and he's not 11 able to work. But he can certainly participate by t2 telephone, whÍch ís what he did at mediation.

13 So I don't want the Court to think that we L4 attended mediation wi-thout proper settlement, authoríty or 1_5 anyone present. We did not have anyone physically present T6 from Ehe ínsurance company, but we certainly were mediating L7 in good faíth and were present in good faith to mediate that 18 mafter.

19 Your Honor, simply that, we just did not 20 receive notification. there's a lot of, you know, And 2L copies of faxes and e-mails and all that, and f don't, you 22 know, it's I believe it was a mistake, I belíeve a 23 clerical mistake. f am not saying Plaintiff's counsel 24 didn't send that to us. I didn't have a copy of the letter 25 they sent bo us. I beIíeve it was a clerical, electroníc, GRELYI{ FREEIVIAtrT, TEXAS CSR 8179 188TH DISTRICT COI]RT E. METITVIN, SUTTE 408 r,oNGVrEht, TEXAS 75601 903.237 .2688 MR I55

1 some sort of, you knor¡r, modern-day error in that we did noE receíve notice of today's hearíng but for being Eord by the mediator two days ago.

4 THE COURT: I,tIelI, let me hear t,heir response on that, and we'll see where hre are.

6 Mr. Smith, on Èhe motion to contínue the hearíng today. t should have got to thaÈ first. and f do apologize. Mr- Smíth?

9 MS. RÀI¡IE.- That r^ras my fault_ I,m sorry, 10 Your Honor.

11 MR. SMITH: Sure. I think the Court is well L2 ar¡rare that our standard practice is to try to work out any 13 kind of issues. You know, it,s understandable, someÈímes I4 these things occur. unexpected things, sometimes clerical 15 issues occur. That does happen.

L6 our concern was and Ís and remains that this I7 is not an isolated occurrence in this case. you know, vre 18 talked abouÈ when this discovery was sent oríginalry, and we 19 had to go through four different extensíons of time. some 20 of those occurred afÈer the deadline had already passed..

2L And then we have this as Ms. Raínes (síc) 22 discussed, you know, we had this agreement that we were 23 going to do an early mediation t.o avoíd these kind. of costs 24 and Ehings. That was in Aprit of this year.

25 THE COURT: The mediation?

GRELYN FREEIIAÀI, TEXA,S CSR 8179 ]-88TH DTSTRICT COIJRT E. METITVTN, SUITE 408 IJONGVIEW, TEXAS 7560T 903 .237,2688

MR 156 l-9

1 MR. SIUIITH: No, the di-scussion that lve were going to have an early mediation. trle worked for two monE,hs to geE, an agreeable mediation date. T,r¡e coordinated with Ehe mediator, Dick Davis, who we ultimately were able to get an agreemenÈ on. We got t4 dates Eo begin wíth ín.fune and iluly. None of those dates worked. We got another 13 or L4 dates for August and September at Eheir request. And what I they picked out of, you know, all the dates that vrere 9 available in a four-month window of tíme was the very last 10 available date for mediation, September 29tr}rl.

11 Thís case is set for trial ín February. An T2 early mediation should not take six months Eo occur. And 13 when you have a four-month period of time with over two L4 dozen available dates, ít shouldn't take until the very last 15 one to have mediation occur.

L6 And when we got that, available date from them L7 on ,June 24th of this year, it became pretty apparenE to us 18 that we could not rely upon any kind of dilígence on the t9 part of the Defendant to get Èhis case moving. That was the 20 impetus for us to finish our Motion to Compel, prepare a 2L Ietter to meet and confer, and send ít to them on July 15th, 22 20L5.

23 One of that they attached Eo their Èhe Èhings 24 responses is that after that was sent I goÈ. an e-maíI Èo 25 call them to confer on Ehat. I did t,hat three times. I GREIJYAI FREEIUAIV, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVIN, SUITE 408 T,oNGVIEW. TEXAS 75601_ 903 .237 .2688

MR I57

1 called Ehree t,imes on July 30th, on iluly 31st, and again on AugusE, 3rd -- to confer, and f never got a response back.

3 Set the moÈion or, [o, f didn't set the 4 motion -- I filed t,he motíon without setting it for a 5 hearing in the hope that if I filed it, urithout setting it 6 for a hearing, maybe I would get a call back and they wouÌd 7 actually confer on the substance of our discovery íssues and 8 we wouldn't have to be there or be here. On August lOÈh 9 I filed iÈ. I heard nothíng.

10 On September l-Oth we filed the notice of 11 hearing. I,{e díd it via the e-filing service, which, as the L2 Court knows, that servíce is supposed to serve all parties 13 electronically when the filing occurs.

L4 No\,rr, I understand it's Eechnology and that 15 technologícal issues can happen. So maybe t,here was a flub L6 on the e-fíling service. f don'E have any control over L7 that- I don't know. I presume that if bhey say, uÛ,Ie didn't 18 get the e-filing notice,tr Ehey didn't get it. But we also 1_9 served them by facsimile. We did iÈ two different ways. We 20 served them by two dífferent methods. I have the fax 2t confirmatíon saying Ehat, that went through and that, it went 22 Ehrough on September 10th of 2015.

23 THE COURT: Okay. Has Ms. Raíne, have you 24 been the only attorney in the case or have E,here been oEher 25 attorneys?

GRELYAI FREEMAtrI, TEXAS CSR 8l_79 I-88TH DISTRTCT COURT ]-01 E. METITVIN, SUITE 408 ïJoNGVIEW, TEXAS 75501 903.23'7 .2688 MR I58 2L

1 MS. RÄIJVE: There are other attorneys, your Honor. rrm an associate at the offÍce. one of our partners aÈtended medíation the day before yesEerd,ay, Ashley üthatley.

4 And carlos Batído is the read atborney on this case.

5 THE COURT: Okay. Okay. Of course, f guess you how does EhÍs work? Do you direct these Èhings to lead counsel or just to the firm? How does this work when I you have multipre atÈorneys? r don't know how thaÈ works.

9 IIR. SMITH: I can shor,v you -- I mean, on the l_0 e-fitíng service, iE depends on who's got the account. And t_L so for like for us, my e-filing account has me and my L2 paralegal and my secretary on it. t-3 THE COURT: Right.

L4 MR. SMITH: ff it's anoÈher att,orney on the L5 case, then ít vrill go to him, the paralegar, secretary, and.

15 probably me. L7 THE COURT: Okay.

18 MR. SMITH: On the facsimile that we sent, 19 the e-filing -- not the e-fitíng, facsimire r don't know 20 who theyrve got listed as their servíce contacts on t,hat.

21- THE COURT: Okay.

22 MR. SMITH: BrrL v¡íthrespect to the fax that 23 we sent, rrve got a copy of it here. r attached as Exhibit 24 B to our response to their emergency motÍon.

25 THE COURT: All right.

GRELnV FREEIIIA¡T, TEXAS CSR 81?9 188TH DISTRICT COURT E. METITVTN, SUTTE 408 r,oNGVrEW, TEXAS 75601 903 .237.2688

MR I59

1 MR. SMITH: Do you have a copy? Or I can provide you the one that I have.

3 THE COURT: That's E:<híbit B?

4 MR. SMITH: Exfiibít B.

5 THE COURT: Okay. That's that's your -- 6 MR. SFIITH: If I may approach, Judge? I'1I just gíve you my copy.

8 THE COURT: Yeah, let me look at that.

9 MR- SMITH: It,'s not to the Motion to Compel.

10 THE COURT: Okay. Thank you. l_1 IÍR. SMITH: That, f believe, is addressed to T2 Carlos Balido, the lead counsel, who signs all theÍr 13 pleadings in this case. t4 THE COURT: Right. Okay.

15 MR- SIUIITHI. And also the clerk of this court.

15 THE COURT: Ms. Raine, did y'a1l look in your L7 file? Did yìa1I get this fax?

18 MS. R.åIIVE.. i^Ie díd look ín our file, Your 19 Honor- We Iooked in our fíIe, Copytrax files, the fax 20 system, however the faxes come ínto our office. And, your 2L Honor, Ehe only thÍng we could point out ís. on the fax 22 confírmation page, which we received from plainÈiff's 23 counsel the day before yesÈerday, it notes that ít does 24 say someEhing about "TX incomplete, r' and Ehen it, says 25 'rtransaction okay, " and it says rrerror.', And I dontt GREI,W FREEII.AN, TEXAS CSR 8179 ]-88TH DISTRICT COURT IO1 E. METITVIN, SUITE 408 LONGVTEW, TEXAS 75501 903.237 .2688

MR 160

1 know -- I dontt know what atl that means.

2 THE C)URT: Ríght.

3 I'IR. SMITH: f can tell the Court what that means.

5 THE COURT: All ríght.

6 MR. SMITH: On all the fax confírmations that go through, those entries are there. And f actually pulled I an example of one, iludge, íf T may?

9 THE COURT: Sure.

10 SMITH: This ís a fax confirmatíon sheet I¿IR- l_1 Ehat was sent yesterday or the day before. you can see at L2 the top there's the ,'TX incomplet,e. " 1_3 THE COURT: Ríght.

I4 I4R. SMITH: And then down below the "error.rl L5 I¡lhat happens ís that Ehose entríes are always Èhere. I had.

L6 to double-check thÍs with my paralegal to make sure, but L7 thís ís how it works. If there is an incomplete fax, the 18 number wíII appear there. If it's a completed fax, the 19 numbers will go through there if there's an error. you can 20 see there on that entry, one of the numbers it went t,hrough 2t to; and on t,he ot.her one there's a number there that 22 indicates Èhere was an error in the fax. So it was noE, an 23 incomplete fax or an error in the facsímile. Both those 24 faxes went through boEh to the court and to opposing counsel 25 for t,he number that theytve got listed.

GREr,tnI FREEMAN, TEXAS CSR 8t_79 188TH DISTRICT COURT ].01 E. METIÍVTN, SUITE 408 LONGVIEüI, TEXÀS 75601- 903 _237 .2688

MR 16I

1 THE C)URT¿ All right.

2 MS. RAIIVE: And, Your Honor, just ín 3 response. The letter says the letter dated 4 September L0th, 20L5, says it was sent vj.a e-filing and 5 facsimile. When we contacted the Court to deÈermine if a notice letter was sent -- we talked to somebody in your court, Your Honor -- and they let us Èhey sent us a copy of the 1eÈter as well and said iÈ had not been e-filed. So, we looked in our e-filing system as well and we didn't have 10 Ír.

11 WelI, 1zol.r're saying t,hat the THE COURT: L2 notice of hearing letter dated September 10, you donrt 13 you don't thínk it was e-filed?

L4 MS. R.AIIVE.. That is correct . That was not 15 I believe that was not e-filed, and thaE was verified t6 through the court services. t7 THE COURT: Mr. Smith, what say you on L8 whether that r¡ras e-filed or not r guess is my next question?

19 SMITH: I mean, there's a file-mark MR. stamp 20 on the top right-hand corner of the page.

21- THE COURT: Yeah, I see Ehat. I wonder if it 22 shows in my documents here. Letrs see.

23 MS. R.AIIVE.. Your Honor, I don't want to 24 misrepresent to the Court. I belÍeve plaintiff's counsel 25 might have e-fited the letter t,o the Court, but it doesn't GRELNT FREEIVIAIV, TEXÄ'S CSR 8179 ]-88TH DISTRICT COURT E. METIryIN, SUITE 409 LONGVTEW, TEXAS 75601 903.237 .2688 MR 162

1 reflect an e-file thab went to Defense counsel. I díd not want to dispute that Plaintiff's counsel e-fi1ed the document with the Court.

4 THE COURT: Okay.

5 MS. RA.IIIE: I believe that is how they filed 6 it vriÈh Ehe Court, it just did not get re-sent out via 7 e-file to us. s THE COURT¡ Given all these issues, Counsel, 9 f'm going to overrule the Motion for Continuance, and we're 10 goíng to proceed with the Motion to Compel hearing. So you 11 may respond at this time to the as I understand it, the t2 burden ís on you, Ms. Raine, to now show why your objections 13 are appropriate. Do you agree wíth Mr. Smith on that?

L4 MS. RA.I¡IE.' That the burden is on me? l_5 THE COURT: That's what he said.

L6 MS - RÄ.I¡IE.. Yes, sir.

L7 THE COURT: Okay.

18 MS. RAI¡IE'.. To that extent,, yes, sir.

19 THE COURT: AtI right- You may proceed at 20 thís tíme then.

2L MS. RA.IIüE.' thank you- Your Honor, this 22 morning we fiLed Defendant's Response to P1aíntiff's Motion 23 to Compel. Did the Court receive a copy of our moÈion? If 24 not, Your Honor, I have a 25 THE COIIRT: I thÍnk -- Iet me I bel-ieve I GREI,T'IV FREEMAN, TEXAS CSR 81.79 188TH DISTRTCT COURT 101- E. METIÍVIN, SUTTE 408 r,oNGVrEW, TEXAS 7560L 903.237 .2588

MR 163

L have. Letrs see here. That came in let's see if e-fíle is at least goíng Eo do that for me. Defendant,s Response Eo Plaintiff's Motion to Compel?

4 MS. RAI¡IE'.. Yes, sir.

5 THE COURT: I have Ehat.

6 Mr. Smith, I'rTl going to let you get these 7 back before I lose them.

I MR. SIUIITH: Yes, Your Honor- Thank you.

9 MS. Rå.IÀIE.. And, Your Honor, the late filing 10 of the response goes to the lack of notice of hearing.

11 THE COURT: I undersEand.

L2 MS. RÄIJVE.. That.'s why all thaE is there. So 13 I appreciate you givíng us the opportunity to argue this.

T4 WeII, PlainÈíff's counsel stole my metaphor 15 because my metaphor was Plaintiff's counsel is put,ting the 16', carÈ before the horse. He's arguing bad faiÈh claims, he's L7 arguing extra-contractual claims. And rrrrerre just not there r-8 yet -

19 Your Honor, thís is a case agaÍnst the 20 PlaÍnÈíff is suing his insurance company for an underinsured 2L motorist claim. There is no cont,ractual duty to pay any 22 underinsured motoríst claims until the Plaintiff has proven 23 and received a signed judgment establishing negligence and 24 the underinsured status of the of the oEher motorist, of 25 the E.ort-feasor in this case. Merely accepting a settlement GRELYI$ FREEM;ATf, TEXAS CSR 8179 188TH DISTRICT COT]RT 1-01 E. METITVIN, SUITE 408 TJONGVIEW, TEXAS ?5601 903 .237 .2688

MR 164

1 offer, or whatever, from the tort-feasor does not move this 2 forward into a claim of underinsured benefits to the 3 insurance company as such that wourd rise to the revel of a 4 breach of contract. There is no contractual duty for the 5 lnsurance company to pay Mr. ,fackson untÍr t,here is a signed.

6 judg,rnent. And that's estabrished. by the Brainard. v. Trinity 7 Unìversa-l, case, your Honor -

I ft is the cart before the horse Ín Èhat the 9 lawsuÍt that is before the court is a breach of contract 10 case. Nolrr, there's a bunch of extra-contractual craíms on 11 top of it, breach of good faith and fair dealíng, and DTPA, L2 and deceptive practÍce act., protection act,, and violations 13 of the insurance code. None of those come into play until 1,4 there's established there has been a breach of conÈract.

15 And you donrt geE to the breach of contract unLil there has 16 been a faílure to pay an award of damages. so $re are not, L7 Èhere yet.

18 The primary purposeof underínsured insurance L9 is compensatory. rt's to protect against financíaI Ioss.

20 There is no loss Èo Mr. ,fackson until he recovers a signed 2L judgment from the court. plaintiff's discovery responses 22 ot, excuse me, discovery requesbs and their request, for 23 production of 34, there,s 22 Ehat have to deal that deal 24 with extra-cont,ractuar craÍms. Request for claim fí1es, 25 notes, traíníng, computer programs, documenE,s abouÈ GRET,nI FREEIUAN, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVTN, SUITE 408 IJONGVIEW, TEXAS 75601 903 .231 .2688

MR 165

1 settlement.

2 The interrogatories, again, they're 1íst.ed ín my response. fhe number thaÈ are, again, go to claim files, notes, trainíng, employees evaluation, employee identifícation, refusal to pay, release and policies, none of Èhat would go towards herping the plaintiff prove their case of neglÍgence and damages against the tort-feasor. ArI I that is for the extra-contractual issues.

9 Your Honor, not having the Motion t,o Sever 10 and Abate be able to be heard by the Court today, that is in 11 a sense my argument and my response to the court. The court I2 was and having a motion to reset this case on the Motíon 13 to Compel, we need for the Court to have all of those things L4 before it to elimínate the need for us to come back here 15 IaEer on on our Motion to Sever and Abate the 15 extra-contractual claims. t7 Plaintiff's discovery reguests to those ítems 18 that are extra-contractual, the fi1es, the notes, the 19 trainj-ng, the identification of everybody involved, is not 20 rerevant and ís inappropriate because it does not prove or 2t advance Plaint,iff's case towards proving líability and 22 damages.

23 The privÍleged materials Ehat he seeks about 24 evaluations and investigaEions, the settlement negotiations, 25 are goíng Eo be inadmissible to this jury to establish GREI,nI FREEIUAN, TEXAS CSR 8 179 188TH DISTRICT COURT ]-01 E. METTTVIN, SUITE 408 IJONGVTEW, TEXAS 75601 903. 237.2688

MR 166

1 liabiliE,y and damages. Plaintiff wants to argue and 2 litigale thís $20,000 settlement offer. He is going Eo introduce all kinds and interject all kinds of insurance 4 issues in front of the jury.

5 Nohr, granted, you get. Èhat, anyway because the 6 only defendant in the case is the insurance company. But 7 vüerre going to have we would have to defend ourselves I about settlement negotiations about whatts -- what was fair 9 and reasonable, what was saíd and not said. And Ehe jury is l_0 going to hear there's $20,000 on the table. lrlhether there 11 !ùas or wasn't, whether there should or shouldn'L be, that's L2 what the jury is going to hear. And that's prejudicíaI, 13 Your Honor.

L4 to have to reply to And forcíng the Defendant 15 those things in discovery at thís time ís unfaír, creates a t6 burden, because PlainEiff's counsel, frankly, may never get L7 there. He's goÈ to prove what hís damages are first, before 18 he ever gets to any sort of underinsured motorist coverage.

19 Again, the purpose of underínsured motorist 20 coverage is compensaEory, is t.o make sure Ehat there Ehe 2L insured does not incur a financíaI loss. There's no loss to 22 Mr. ,fackson right now. There's merely claims, purported 23 claims, purported money owed. We are not there yet.

24 So, Your Honor, wê're asking that the Court 25 not not as enumerated ín Defendantrs response, I think GREI,]TI\I FREEM;AIV, TEXAS CSR 8179 188TH DISTRICT COURT L01 E. METIÍVrN, SUrTE 408 r,oNGVrEW, TEXAS 75601 903.237 .2688 MR 167

1 we clearly set out which of those issues are extra-contractual, which are not appropriate, which are privileged, which do not relate to the underlyÍng basis of the payment Èo Ehe breach of contract case.

5 ItIe will go through -- I personally will go 6 through with Plaintiff's counsel and work bhrough any of 7 those outstanding issues that, he feels can be that should I be produced in regards to his c1aim. But, Your Honor, it's 9 just not proper to Eo develop to allow Ptaintiff's 10 counsel to develop the extra-contractual issues when r,rre are 11 not there - I¡tre are not there at all -

L2 THE COURT: So let me be sure f understand 13 your position. You do agree thaE there are some of these L4 objections you need to address, but it's just you just 15 because you just got notice of the hearíng you haventt T6 had -- reaLized the hearing, you haven't had a chance to do t7 that? fs that not the extra-contractual matters, but the 18 other matters?

19 MS. Rå.I¡IE.. There area few in here, Your 20 Ifonor, in looking at thís late last night. And I will not 2L bore the Court with my other tired -- because you would not 22 believe the excuse we would have. But we díd not have 23 computer access in our office until 2 ot eLock yesterday 24 afternoon- I,rtre had a transfonner blow- I,{e riùere in the 25 office at I o'clock in the morning and stood at an empty GRETJYII FREEIqAÀI, TEXAS CSR 8179 188TH DISTRICT COURT E. METIÍVIN, SUTTE 408 rJoNGvrEüI, TEXAS 75601_ 903 .237 .2688

MR 168

1 desk until 2 o'clock in the afternoon, which is I canrt - - rrrhy my response is so late. So íC dídnrt get done until very, very laÈe. I'm out of breath. oh, I've also not s1ept, a lot, so I apologize if ilm out of breath.

5 That's my point from that.

6 Yes. In goíng through my discovery, t.he díscovery question by qrrestion. And, again, it was so long I because I went through it question by question to make sure I $ras covering every issue. And there are a few out there 1_0 where I think we can withdraw the objections.

11 THE COURT: Okay. t2 I don't know that there is MS. R-A.IIVE..

13 additional informat,ion. I did see that we had noE yet T4 produced a certífied copy of the policy and a recorded 15 statement of Ehe Plaintiff, which we certainly should have 16 done earlier. I apologize that was noE done. That was sent L7 over first thing this morning as I was dríving over to Gregg l_8 County.

19 THE COURT: Do you have any -- you know, he 20 was saying all these other issues in terms of do you have 2L any response Èo all that?

22 MS. R.å.I¡IE.. The issues about the lack of 23 response issue?

24 THE COURT: YES.

25 MS. R.åI¡IE.. I don't. I know Plaíntiff sent GRELYaT FREEI,ÎAÌitr, TEXAS CSR 8L79 ].88TH DISTRICT COURT ].0]. E. MEIIÍVTN, SUITE 408 I¡ONGVTEW, TEXAS 7560]- 903. 237 .2688 MR 169

1 out the leEÈers abouÈ you know, again, it's probably a better story shared over a cold beer Ehan in a courtroom, but I can tel1 you some stories abouE those extensions early 4 on. And I apologize for that. I mean, I don'E have an excuse for that. t¡tre did ask for extensions, Ehey weren,t 6 responded to, and I feel bad about that.

7 But, Ehis is not hís moEion is not about I the timeliness of the discovery. He wants to geE to he 9 wants to get past all that. He wants to get into the r_0 extra-contracEual issues and the training of the claims and 11 the claim files and the claim notes is really what they want L2 to get to.

13 P1aintÍffs haven't been harmed by this delay L4 other than being a little irritated at us. And f get that.

15 I appreciate being irritated at us. The case hasn't been 16 harmed. He's still able to go forward, he's stil1 able to I7 do the thíngs he needs Eo do to get ready for trial-. He !ìras 18 stíII able to do the things that, he needed to do to geE the L9 case ready for mediaEion. So and I'm not throwÍng away 20 medÍat,ion. I think werre going to get a mediator proposal 2L from Mr. Davis, and I hope that gets a lot of you know, 22 that gets everything resolved.

23 You have my personal word, Your Honor, from 24 here on out. IrlI caII Mr. Smith back within 24 hours of 25 receiving a call from him. I don't know what happened in GREIT]N FREEMAIV, TEXAS CSR 8L'79 188TH DISTRICT COURT E. METITVTN, SUITE 408 T,oNGVIEW, TEXAS 75601 903 237 .2688 _

MR I7O

1 that reg'ard earlier. And, again, yoü have my personal word.

2 that r will call hím. r will call within 24 hours of getting a call from him or e-maiI or a message and respond..

4 THE COART: All ríght. Let me hear back from Mr. Smith.

6 YIR. SMITH: f appreciaÈe the offer Èo meeE and confer after thís hearing on discovery thaÈ should have I been responded Eo before. It's a tittle bit IaÈe in the game for that. I mean, íf that meet and confer meet reaches r_0 an impasse, we're going to be back here again to get a 1-1 ruling on these objections.

I2 And, you know, the truth is is that this is 13 not some sort of gotcha situation, you know. The reason for L4 bringing up these multiple extensíons at the beginning is 15 noE to say that Ehej-r objections have been waived. .And no 16 one is here disputing that, you know, filing Ehe response to L7 the Motion to Compel that it shouldn'È be considered- you 18 know, they put ín the tíme and the effort to respond to the I9 MoEion to Compel. I don't have any íssue with Iísteníng to 20 their arguments.

2L The problem ís, if we waiÈ anoEher È,wo weeks 22 or three weeks to do a confer on discovery and reach an 23 impasse, and then we wind up back here, wê're just 24 pushing -- kícking the can down the road so to speak.

25 I would like to get this case moving on GRETJYI\I FREEMAN, TEXAS CSR 8]-79 188TH DISÎRTCT COURT 1O]- E. METTTVTN, SUITE 408 IONGVTEhI, TEXAS 75601 903 -237.2688

MR I7I

l_ discovery. These ínterrogatories these requests for 2 productíons, I can point the ones out specifically to the 3 Court that deal with the underlying subsEantive matters.

4 Those need to be responded to withín t,he next 1-4 days, and 5 Èhe objections need to be taken down.

6 And with respecÈ to these extra-contractual 7 claims, the argument is is thaE nobody has been hurt by I this, and t.hat's not, true. Mr. ilackson has been hurt by 9 this. You know, he's got $4?,000 in past medical e)q)enses.

10 Hers got $35,000 in settlement Eo date. He's got another, 1I what is that, L2,000 in past medícal expenses that are L2 sittíng out there in the wings that haven't been paid.

13 And the issue with thís argument on bad faith T4 and partíal paymenEs ís that, if you're arguíng about, Èhe r_5 suffíciency of the settlement offer, which is what all these r_6 courE cases that they cite to are talking about, you know, 17 if the issue is, we offered you 20 and you said, ro, \^¡e 18 don't want it, you owe us more, weI1, then you're right 19 because there hasn't been a request bhat the money bhat no 20 one dispute should be paid ís not being paid. The issue is 2L that youtre not gíving us more than whaE thís undisputed sum 22 is.

23 But where the Íssue is, we've done an 24 investígation. We've determined Èhat you are, under our 25 contracÈ, entitled to an award from your GREI,YN FREEM;AIV, TEXÀ'S CSR 8179 ]-88TH DISTRICT COT]RT ].01 E. METITVIN, SUTTE 408 ITONGVIEüV, TEXAS 75501 903 .237 .2688

ì¡R 172

I uninsured/underínsured motorist coverage. I^¡e're going to tell you that we have done our investigatíon impliciÈly by making this offer- And then when the insured says, ,,Okay, if this is the undísputed sum that I'm enÈÍÈIed to, I will Èake that, and comply with your obligatÍons under the insurance code to make timety and prompE payment on your 7 claims following an investígation and based on your ovrn I determination- " When the ínsurance company fails to do 9 t.hat, the injury occurs then.

L0 And where you see this in the context of 1"1 non-IIM/UfM claims is, let's say I,ve got a house. And, t2 well, and this just happened, f had a flood ín my house.

13 The insurance company comes in with an estimator, â!t L4 adjuster, to run out what all my damages are, the 15 measurements, the cost of the materials per exactÍmate (sic) 16 all this Ínformation. I¡lerve got a dispute. And he says, L7 the insurance company doesn't dispute that you're entitled 18 to X number of dollars, but with regard to this other 19 damage, we don't think it's related, and, therefore. we have 20 a díspute wíth respecÈ to Èhis measure of damages.

2L The insurance company makes a proffer of a 22 partial payment of which there is no dispute. And Èhe 23 insured says, 'rokay, we'l1 take Èhe partíal payment and then 24 we'lI have our dispute." And the insurance company says, 25 "No, [o, oo, hold on- Yes, this is a partial payment for GRET,YAT FREEI\,IAtrT, TEXAS CSR 8L'19 1.88TH DISÎRICT COURT 101- E. METHVIN, SUITE 408 IJONGVIEW, TEXAS 75601, 903. 237 -2688

MR I73

1 the undispuÈed portíon of your claims, but we're not goíng to give you the partial payment of the undísputed portion of your claims unless you sign a release thaÈ gÍves us indemnity or release of all the claims, including the ones that we dispute. " 6 That is an issue that f have not seen arise in the t M/UIM context. But when it arises in the first I party context wíth homeovmers insurance companies, and t.hose 9 policies, therers no qr.restion that you can brÍng the bad 10 faith claims and the underlying breach of contract claims 11 together.

L2 Therein lies kínd of the rub. Now, it ' s a 13 complicated area of law- Braínard says that you need Èo L4 have a judgment. en admíssion by the third party is not l_5 sufficient and a set,tlement by itself is not suffÍcient.

L6 Brainard doesn't, even talk about what the effect of havÍng L7 the IIM/UIM carrier consent to the settlement with a third l_8 party has on their contractual ob1ígations. And no case t9 does that I'm a\^rare of .

20 But t,he long and short of it is that the 2L substanEive claims, these interrogatories that ask for Ehe 22 general factual basís of their contenE,ions, photographs, 23 diagrams of the scene, of the parties involved. of the 24 witnesses, witness statements, those interrogatories, those 25 requests for productions, those objections absolutely need GRELnV FREEMjAÀI, TEXAS CSR 8179 188TH DISTRTCT COI]RT E. METIÍVIN, SUITE 408 LONGVIEI,TI, TEXAS 75601 9O3.237 .2688 MR I74

l_ to be overruled- 2 And with respect to E,he bad faith claims, 3 those objecÈions should also be overruled. ff there,s a 4 severance and abatement,, then we'11 conduct that discovery 5 in the severed case. ff there's a bífurcation, we'l1 6 conduct it in this case. But thatrs an evidentiary issue.

7 You know, if the Court overrules those objectíons and I permits the discovery of Ehe bad faith claims, and then 9 uItÍmately when they bríng Èheir motion to sever and abate, 10 if the Court finds that's proper and, in íts discretion 11 orders the severance and abatement, their obligation to L2 comply with that order will be abated with the remainder of 13 the craims. [{e won't have Eo come back here again whenever L4 that case kicks back up.

1_5 THE COURT: All right. Anythíng further?

L6 MS. RAI¡IE'.. Your Honor, just real briefly.

1,7 There is nowhere in the policy that ít,'s a 18 pay-as-you-go- It,s not Ehat you get to submit your claims T9 as you go along and the insurance company is obligated to 20 pay it just because that's what ís submitted t,o pay. So 2L it's not, werre going Eo pay -- you know, there's no 22 obligation to pay in increments at a time along the way 23 until Ehe whole bhing gets resolved- 24 Again, that is a lítigate t,hat is that,s 25 an evidentiary matter about settlemenÈ and about you GRET,YN FREEI,IAIV, TEXAS CSR 8179 188TH DISTRICT COURT E. METI{VTN, SUITE 408 LONGVTEVü, TEXAS 75601 903.237 .2688 MR I75

1 know, whether or not, there's been a proper settlement goes to the basis of the case only after there's been a prooÉ of damages. ff Èhere's no damages, there's no damages awarded 4 to Mr. ilackson, there's no therets no there's no need 5 to go further against the case against A.AA. Unt,il 6 Mr. ilackson establishes what his damages are, therers no 7 underinsured motorist claim to make, and therers no 8 contractual duty to pay him.

9 Your Honor, wê're coming back here again 10 because I've got to seE my MoÈion t,o Sever and Abate, Irve 1L got to set my Specíal Exceptions and declaratory judgment.

L2 If the Court wants the parties to try to work on discovery 13 response between now and the Eime that hearing is going to 1-4 be set, f 'ttr happy to do so- 15 Your Honor, just in brief and I know that 16 Plaintiff's counsel isn't presentíng his whole list of whaÈ L7 he would like to respond to certaín1y we can respond to 18 the identity of the picEures and who took them and things 19 like Èhat. But, again, going ínto the thought process of 20 who made the decision to pay and who made the decisíon to 2L deny and who thought Ëhis or that, that does go to the 22 underlying bad faith claims, which are the extra-contractual 23 claims, which, in my argument, should be severed and 24 separated from this lawsuit.

25 THE COURT: WeI1, if those were severed, GREI,YII FREEMAN, TEXAS CSR 8179 ].88TH DISTRICT COURT E. METTTVIN, SUITE 408 IJONGVIEV'I, TEXAS 75601- 903.237 .2688

MR 176

1 you'd still have to respond to that discovery eventually, 2 would you not?

3 I4S. RA-I¡IE.' If Plaintiff 's counsel gets 4 there. ff he gets there and E,here is an award of damages, 5 and AAA doesn't pay, then bhere's a breach -- then there 6 could be a claim of breach of contract. And if there's a 7 breach of contract, then perhaps there are those few oLher 8 claíms of breach of good faith and fair dealíng and 9 víolation of the insurance code. Itrs really just a step by t_0 step process, and Plaintiff's counsel ís speedíng ahead to 1t_ the end of the road.

L2 Your Honor, I'd also remind the Court thaL my 13 adjuster really Ís síck. And so I will do and I wíIl do L4 what r can to work with the office or work with his 15 supervisor, but in my response, as the Court probably knows I6 it, I was not able to provide an affidavit from when L7 líbigation was anticipated because it requires so much to 18 review those and Eo review that information. And the 19 adjuster that is assigned to the case is not at work and 20 able to do it. And certainly someone else in the office can 21- have access to that information, but not ín the tíme period 22 that I had today.

23 So, again, it's not I can't just pick up 24 the phone and call somebody who's going to be familiar wíth 25 whaE's goíng on with this case to get and in-depth, detaíIed GRELYN FREEIVIAN, TEXAS CSR 8r79 188TH DTSTRTCT COURT E. METTTVIN, SUITE 408 LONGVIEV,I, TEXAS 7560L 903. 237.2688 MR I77

1 answer. You know, the adjuster is workíng from home, and I think I'm not reatly supposed to call hím a 1ot. f think he's not supposed to be working.

4 THE COURT: All righÈ. Thank you, Counsel.

5 What relief are you asking for, Counsel, Mr. Smith?

7 MR. SMTTH: üIith respect to and I can give I you the specífic inEerrogatories and requests if that's what 9 you would prefer, or f can segregate it by category.

10 THE COURT: However you want to do it, just l_1 ÈeII me. L2 MR. SMITH: The easiest way of doing it is 13 for the requests and the interrogatories t,hat deal with the )-4 substantíve underlying c1aim, f would ask that Ehose 15 objections be overruled and that they be ordered, competled 16 to respond to those within 14 days. I,{ith respect to the bad I7 faíEh -- 18 THE COURT: I'm going to make that ruling.

19 okay. All right.

20 MR. SMITH: With respecÈ to Ehe bad faith 2T claims, perhaps the fairest way of dealíng wiËh that is to 22 overrule the objections and reguire a response within 30 23 days, or maybe even 45 days. That will give them t,j-me to 24 file theír motion to sever and abate. In the event that 25 íE's granted, that discovery would be pending in the severed GREI,YN FREEMAIV, TEXAS CSR 8179 ]-88TH DISTRICT COURT 101- E. METITVTN, SUITE 408 LONGVIEW, TEXAS 75601 903.237 .2688

MR I78 4L

1 cIaÍm, and they wonrt have Eo respond to it until Ehe abatement is removed. fn the event that it's bifurcated, then we already have an order thaÈ compels the production of that information, and we can kínd of keep this t,hing ro11íng.

6 THE COURT: I'11 make that ruling.

7 Anything further from either side?

I MR. SMITH: No, Your Honor, Ehat's all.

9 Plaintiff have MS. RÄ.IIVE.. Your Honor, does 10 Eo províde t,he specif íc requests and, f rm sorry, I missed 1_ t_ that first part. rs he goÍng t,o provide the specific items L2 that he belíeves meet the requirement for substantÍatly 13 underlying claims? t4 MR. SMTTH: I can do So. 15 THE COURT: He says he's going to do that.

16 MS. RA-IìIE.. Okay. Provide it to the Court t7 or -- we1I, I guess he provides it to you, and if I don't 18 agree with those numbers we,l-l be back on that as well.

L9 MR. SIUIITH: I'11 20 MS. RAIÀIE'.. I mean, I've got tro agree wiÈh 2I the photographs Irm sorry to interrupt.

22 MR. SIUIITH: Thatts f ine.

23 NIS. R^AIIVE: I agree like Eo the identiEy 24 of the photographs, but f don't want to agree to people's 25 thought processes and ideas, who made decísions to deny, GREr,lrN FREEMjAN, TEXAS CSR 8179 188TH DTSTRTCT COURT E. METITVIN, SUITE 408 r,oNGVrEW, TEXAS 75501 903.237 .26e8 MR I79

l_ because then Ehere is sort of concession thaE, we did some 2 make a decision t,o deny, and that,s not really what iE is.

3 MR. SMITH: So in that respect, I think the 4 easiest way to do it is for me to prepare a proposed order 5 with that segregated out and then to provide it to Defense 6 counsel. She can review it, . T.f. there is a dispute over f 7 think this is bad faith as opposed to substantive, then we I can have that conversation. And we'11 ultimately put an 9 agreed order ín front of the Court, or at least a proposed 10 order from each side íf we can'E reach an agreement.

1l_ And the other thing that I would add on that, L2 since she remínded me, regarding the pri-vileges, in r_3 conjuncÈion with these orders I would ask thaÈ a privilege L4 log be prepared within that same period of time with respect 15 to each one of these categories of díscovery. So on the 16 substantive claims, if there's privileged materials that are L7 being withheld, produce privÍlege logs within 14 days. On 18 the other one, bad faith extra-contractual c1aíms, produce l-9 privilege logs within 30 or 45 days.

20 THE COURT: I'll do 45 d.ays. All right.

2L Anything further?

22 MS. RåI¡IE.. No, Your Honor. I will point out 23 thaÈ f did give Mr. Smíth my ceII phone number since our 24 telephones htere out of service yesterday. So novr Mr. Smith 25 has no reason at all not to talk to me on a regular basís.

GREI,YIT FREEI.iTA¡I, TEXAS CSR gL't9 188TH DISTRICT COURT E. MET}IVIN, SUITE 408 IJONGVIEW, TEXAS 75601 903. 237 .2688 MR I8O

l_ THE C)URT: Thab sounds like a good plan.

2 I[R. SMITH: I might need to get thaÈ from you again. T,{as that in an e-mail?

4 MS. R.AI¡IE.. And in the letter - - vte sent it both, senE it Erùice. I,r¡e're covered.

6 THE COîIRT: Okay- Thank y'all for comÍng in.

7 Werre in recess.

I IIIR. SþIITH: Thank you, Your Honor.

9 (End of proceedings) t_0

I2 L4

L7 t_8 L9

2I

GRELY-ATFREEMAN, TE)(AS CSR 8179 188TH DTSTRICT COURT E. METIÍVIN, SUITE 408 r,oNGvIEW, TEXAS 75601_ 903 .23"7 .2688 MR I8I

l_ STATE OF TEI(AS ¿ COUMTY OF GREGG 3 T, Grel1m Freeman, OffÍcia1 Court ReporÈer in and for t.he 188th DistricÈ CourE of Gregg, State of Texas, do hereby certífy that the above and foregoing contains a true and correct transcription of all portions of evídence and other proceedíngs requested in writing by counsel for the parties to be included in this volume of Èhe Reporterts Record in the above-sbyled and numbered 10 cause, all of whích occurred in open court or in 11 chambers and were reported by me. L2 I further certify that thís Reporter's Record of the 13 proceedings truly and correctly reflects the exhíbits, L4 if any, offered by the respective parties.

15 I further certify that the toEal cost for the 16 preparatíon of Èhís Reporter's Record is 5264.00 and was L7 paid by Sloan, Bagley, Hatcher c Perry Law Firm.

18 hIITNESS MY OFFICIAL HA¡üD this the 25th day of L9 November 2015. s Grel Freeman 2t Gre yn Freeman, CSR Texas CSR 81-79 22 Official Court Reporter 188th District Court 23 Gregg CounEy, Texas l-oL 8. Methvj-n, suite 408 24 Longview, Texas 75601 Telephone: 903-23'7-2688 25 Expiration : 12 / 3L/ 2or5 GRET,YN FREEMAN, TEXAS CSR 8179 188TH DISTRICT COI]RT E. METITVIN, SUITE 408 f,oNcvrEw, TEXAS ?5501 903.237 .2688 MR î82 APPENDIX TAB 3

t_ REPORTER'S RECORD VOI,I]ME 1 OF 1 VOIJIIMES 2 TRIAT COURT CAUSE NO. 201,4.]-365-A 3 THOMAS iTACKSON ) IN THE DISTRTCT COURT ) 4 vs. ) GREGG COUNTY, TEXAS ) 5 AAA TEXAS COUNTY MUTUAL ) INST'RAI\TCE COMPAI\TY ) 188TH iTIJDICIAI, DISTRICT

I 10 DEFENDAIVT'S MOTION FOR SEVER;AI{CE AIID/OR PLEA IN ABATEMENT 11 & L2 SPECIAIJ EXCEPTIONS l_3 t4 L6 I7 On the of November, 2015, the following 5Eh day 18 proceedings came on to be held ín the above-titled and 19 numbered cause before bhe Honorable David Brabham, Judge 20 Presidíng, held in Longview, Gregg County, Texas.

2L Proceedíngs reported by computerized stenotlpe 22 machine.

GRELYN FREETIIAIV, TE)<AS CSR 8179 188TH DISTRICT COI]RT E. METIfl/TN, SUrTE 408 IJONGVIEI^I, TEXAS 75601 903.237 .2695 MR I83 a

L .APPEÀXÀIICES MR. t]uSTIN SMTTH sBoT NO. 240684t5 SIJOA¡I, BAGI,EY, HATCHER 6. PERRY LAW FTRM East lllhaley Street L,ongview, Texas 756',01.

Telephone: 903 .757. ?000 6 REPRESENTING THE PI,AINTIFF

I MS. NAI{CY RjAINE sBoT NO. 00786183 10 WAITERS, BAIIDO 6. CRjAIN, IJ.Ir. P Meadow Park Tower, Suite t-500 l-L 1-0440 North Central Erq)ressway Dallas, Texas 7523L t2 Telephone: 21-4 .749 .48 05 L4 REPRESENTTNG THE DEFENDANT

t7 l-9 20 REPORTERIS NOTE 2L Uh-huh = Yes - Affirmati_ve response Huh-uh = No - Negative response 22 Quotation marks are used for clarity and do not necessarily indicate a direct quote.

GRELTÀI FREEIUAII, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVTN, SUTTE 408 IJONGVIEW, TEXAS 75601 903 -237 .2688

MR I84

1 CHRONOI,OGICAT, INDEX 2 VOLUME 1 3 DEFENDAMT'S MOTTON FOR SEVER,A¡ICE Ä¡ID/OR PIJEA IN ABATEMENT 6c 4 SPECIA¡ EXCEPTIONS November 6, 20L5 6 PÀGE VOIJ.

7 DEFENDAÀTT ' S MOTTON TO SEVER AIID ABATE I Ms. Raine. 5 1 Mr. Smith 1 1_0 Ms. Raine L 1_1 Mr- smith 19 L T2 Court's ruIing..... 22 1 13 DEFENDA¡ITIS MOTION FOR SPECTAT EXCEPTIONS t4 Mr. Smith 23 1 15 Ms. RaÍne 23 1 16 Court's ruling. . .25,29 1 L7 ReporÈerrs certificate. 34 1 l_8 L9

2L

GREI,]TÀI FREEMAIitr, TEXAS CSR 8179 188TH DTSTRTCT COURT E. METITVTN, SUITE 408 IONGVIEI^¡, TEXAS 756OL 903.237 .2688 MR I85

1_ PROCEEDINGS 2 November 6, 2015 3 (Open court, parties present) 4 THE COURT: AII righE. This is a cívil matter. Thís is 2014-1365-4. fhis case ís styled, I believe, Thomas Jackson versus AA,iA Texas County Mutual Insurance Company. I believe, Counsel, vJê,re here on I Defendant's Motion for severance and Defendant's Motion for Special Exceptions. ff you'11 identify who you are for the t_0 court reporter and who you represent, please. Counsel?

L1 MR. SMITH: ilusÈin Smith here on behalf of l2 the Plaíntiff, Your Honor.

13 MS. R.AI¡IE.. Nancy Raine on behalf of the T4 Defendant.

15 THE COURT: AIl right. And, Ms. Raine, are 16 you ready on your moEions then?

L7 MS. R.AIJVE.. Yes, sir.

18 THE COURT: All right. You may proceed at 19 this time.

20 MS. R.A.INE: Your Honor, would you Iíke for me 2L to go forward and present the Motion to Sever and .Abate 22 first and then the Specía1 Exceptíons or present, them at the 23 same tíme?

24 THE COURT: .Iust, however you \¡rant to proceed.

25 f'm going to let you decide.

GREIJn\T FREEMAN, TEXÄ,S CSR 8179 188TH DISTRTCT COI]RT E. METIÍVIN, SUITE 408 roNGVrEW, ÎEXAS 75601 903.237.2688 MR 186

1 MS. RÄ.I¡IE.- That,s fine. Thank you, your Honor.

3 Your Honor, Defendant has filed a Motion to 4 Sever and Abate the extra-cont,ractual claims that the 5 Plaintiff has brought forth in this 1awsuit. this is a 6 lawsuit involving a motor vehicle accident. Thomas ilackson '7 is an insured person under a policy issued by AAA Texas.

I ThaÈ is not, ín contention that that policy is Èhere. I 9 Ehink, there's been discovery exchanged, and coverage and 10 issues of those things are not ab issue. t_1 Your Honor, thís is a UfM underínsured L2 motorj-st claím. rt'is actually a lawsuit to est.ablish the 13 conditions precedent in order then for the plaintíff to try I4 to make a claim for his UfM benefíts. l_5 It is Defendant's position, your Honor, lhat L6 there fÍrst must be a judicial determínatíon by the 1-7 Praintiffs of tiability, actual damages, and the status of L8 the tort-feasor as being an underinsured motoríst before L9 there is a judgment presented to the Defend.ant in whích 20 damages should be paid. And until there is a judicíaI 2t determination, which is a judgment, presented to the 22 DefendanÈ, there ís no there is no there is no breach 23 of contract. There ís no damages.

24 The Defendant does not have an obligatíon to 25 make a payment just because a claim has been fíIed. The GREIJW FREEII,AIV, TEXAS CSR 8]-79 188TH DISTRICT COIJRÎ ]-01 E. METI{VTN, SUITE 408 IJONGVTEW, TEXAS 75601 903.237 .2688

MR I87

1 Defendant has no obligatíon to make a payment just because discovery has been exchanged. The only oblígat.ion thaE the Defendant has t,o make a pa]¡ment to praint,iff in t,his claim Ís if there has been judícial d.eÈermination and the conditÍons precedent have been estabtished.

6 fn Plaintiff's discovery they have asked for numerous questions, discovery of extra-contractual craims I regarding claim manuals and individual ínformation about 9 agents. Your Honor, wê're asking the court Eo sever the 10 extra-conÈractual claíms out of this lawsuit because they 11 are highly prejudicial to the insured. They also go inÈo I2 matters invorving settrement, and. we do not believe that 13 that information is proper to introduce to the jury. And l4 Ít's a waste of judicial and. party resources to enter into 15 and engage in discovery for extra-contractuar claims ín I6 which the Plaintiff may not ever get there.

L7 Your Honor, wê,re also asking the Court to 1_8 abate the extra-contractual demands and craims mad.e in this 19 lawsuÍt, again because it goes towards discovery that wilr 20 be produced that could be prejudícía1 or privíIeg'ed, 2L excuse me and undiscoverable. Again, E,hatrs a riì/aste of 22 judicial and party resources.

23 The harm Eo the Defendant is listed in 24 Defendant's responses to the Motion to compel. we believe 25 we've ouÈlíned what those harms are. But also, your Honor, GRETJYII FREEM;AN, TEXAS CSR 81?9 188TH DTSTRICT COURT E. METITVIN, SUITE 408 rroNcvrEw, TEXAS ?5601 903.237 .2688 MR I88

1 a couple of weeks açlo we r^rere here before you on the 2 Praintiff 's MoEion t,o compel, and the court signed an agreed 3 order. And in that agreed order it enumerates the specific 4 ibems that the courE held off in demanding or ord.ering the DefendanE to comper untir after this hearíng. But, your Honor, r'd ask you to take judícial notice of the court's order on that matter. rt lists ouÈ the specifíc admissj_ons, I request for production and interrogatory ansvrers that the Defendant is being asked to ansrrrer and to prod,uce ín terms l_0 of the extra-contractual claims. And a1so, agaín, your 11 Honor, that's in the court's file, that's in Defendant's L2 responses to the Mot,ion to Compel.

13 P1aÍntiff filed a response to the Motion to L4 sever and Abate. Agaín, your Honor, we just berieve that 15 Plaíntiff has brought, rearry has brought a rawsuit to L6 establísh the conditíons precedent. They tríed to couch ít L7 ín terms of a breach of contract, buE therers no there's 18 no breach of contracÈ because there's been no judicial L9 determinat,ion of damages to be paid.

20 Also, Èo segue into Ehe Special Exceptions, 2L Plaintiff has calred Eheir lawsuit a declaratory judgment.

22 Your Honor, this is not, an issue where h¡erre asking the 23 Court or the Court is being asked to decide on the 24 construction of the contract. And,, again, it,s not an issue 25 of coverage. The only reason to carl it a decraratory GREIJ]'Iü FREEIUAÀT, TEXAS CSR 81?9 1.88TH DISTRICT COIIRT E. METITVTN, SUITE 408 LONGVTEü¡, TEXAS 75601- 903.237 .2688

MR I89 I

1 judgment is Eo circumvenÈ Ehe Court's order to or the 2 Court's decision ín Brainard for the Ptaintiffs to seek 3 attorney's fee.

4 And, Your Honor, the Supreme Court. case Brainard states that t,here are no attorney fees to be paid until there's been a judicial determination of condítions precedent, whÍch, again, is for the Plaintiffs to establísh I liability, actual damages and bhe status of the tort-feasor.

9 Calling it a breach of contract, calling it a declaratory 10 judgment, ít's stitl what it is. And what it is is just a l_1 suit to come forward before the Court to establish the L2 conditíons precedent so the Plaintiffs can seek recovery r_3 under his UIM policy.

I4 To Ehat, Your Honor, the Court the 15 Defendant would ask the CourE Co granE EheÍr Motion to Sever L6 and Abate and to grant Eheir Specíal Exceptions to L7 Plaintiff 's Second Amended Petition.

18 THE COURT: Thank you, Counsel.

L9 All right. Mr. Smith, you may respond at 20 thís time.

2L IIIR. SMITH: Yes, Your Honor. Kind of as an 22 initial matter, you know, we were here probably abouE a 23 month ago talkíng about this case. ft involves a car wreck.

24 Mr. Jackson was driving on iludson or P1iler Precise Road 25 heading out to the intersection of iludson Road. And he had GREI,NÏ FREEIUAN, TEXAS CSR 8179 188TH DISTRICT COI]RT E. METIIVIN, SUITE 408 IJONGVIET¡I, TEXAS 75601 9O3.237 .2688

MR I9O

1 a stoplight. He stopped at the stoplight,. IÈ turned green.

2 He went through Èhe intersection to make a lefE-hand turn on 3 the other síde of t,he intersect.ion. And patricia Tompkins, who is the third party, ran through Èhe red 1íght and.

5 T-boned him.

6 He's got about, I think, in excess of $go,ooo in medical expenses to date. And we expect that he's going to have future medical. And all thÍs has been presented to 9 the Defendant ín the form of Èhe medícal records, billíng 10 records, and letters from treating physicíans.

11 Now, when we r¡rere here about a monÈh ago, one t2 of the things we were talking about is discovery. But this 13 issue that werre talking about here Èoday came up, and L4 that's why we had this kínd of, you know, w€'11 do this 15 breach of contract underlyíng liabílity discovery fírst and L6 then abate the remainder of Ehat until ure can have this L7 hearing.

1_8 Now,this hearing, this severance and t9 abatement issue, which I'11 take up first, the Defendant has 20 the burden of proof on establishing that severance and 2L abatement is proper. The trial court ís generally granted a 22 wide array of discreÈíon j-n determiníng how it's going to 23 conduct the trial and how discovery is going to proceed.

24 And what the Defense have asserted in their 25 motíon is that, you know, despite the fact that. Èhe tríal GREr,lrÀI FREEIIA¡I, TEXAS CSR 81?9 188TH DISTRICT COURT E. METITVIN, SUITE 408 IJONGVIEI{, TEXAS 75601_ 903.237 -2688

MR I9I

1 coure is generally vested !ùith wide díscretíon, it has no 2 discretion in this case to order a severance and abatement.

3 And bhat's not true.

4 Now, Èhere are bhree different claims here 5 that wefre kind of talking about. Four if you include the 5 declaratory judgrment action. One of those claims is a 7 breach of contracE claim, and there's two of those ín this I case. One breach of contract claim says, look, rire presented 9 all of thís information to you, you did an evaluation and 10 investigation of this case, and you determÍned that in 11 excess of the t,hird party policy limiEs which have been L2 paid, and in excess of the plp benefits that have been made, 13 Mr. rJackson was entÍtled to $20,000. And when we made the L4 demand that you pay that undísputed sum to us, 1rou refused 15 Eo do so. And that's a breach of contract.

L6 That is also t,he basis of our bad faiÈh L7 claíms. And al1 the cases that are in their motion for 18 Severance and Abatement, all of them, you know, Trínity t9 tfníversal dealt with a third party and a uM/urM carrier who 20 had been joíned in the same suit before bhe third party 27 claims had been disposed of. There's anolher case in there 22 where the IIM/UIM carrier and -- sorry, not the UM/UIM 23 carrier, the Defendant driver and the Defendant driver's 24 insurance company, what would be his liabílity insurance 25 company, his adjusEer was enjoined in the same lawsuit.

GRELYtrI FREEIUAII, TEX3'S CSR 8t_79 188TH DISTRICT COTIRT ].01 E. METI{VIN, SUITE 408 IJONGVIEh¡, TEXAS 75601 903.237 .2688 MR I92 1t_

1 Obviously, there are different considerations there than Ehere are here. All of the IrM/urM cases in their motion, all of the bad faith cases where they said that 4 severance and abatement was mandatory, is where the bad 5 faíth claims were premised on the inadequacy or the 6 deficíency of the settlement offer.

7 And essentially what you'1I see Ís take, I for example, the Supreme Courb case in AJ<in. fn Akin the 9 insurer had tendered partial payment of an undisputed. sum.

10 And then thereafter, when there was litigation on the 11 disputed sum, they moved for severance and abatement. And L2 in that case the Texas supreme court adopted a very flexible 13 standard for trial courts and appeltate courts to review 1-4 severance and abat,ement. And what it said was, we're not 1_5 going Èo adopt a hard-and-fast rule that says that severance I6 and abatement is required anytime you have contractual L7 claims and bad faíth or extra-contractual craims joined ín 18 bhe same lawsuit. We're not going to have that 1_9 hard-and-fast ruIe. Triar courts need to rook at the cases 20 that theylve got and make a determÍnaÈion based on the facts 2L that they're presented.

22 IE did say there are certain bad faith cases, 23 contractual cases, where ít would be mandatory t,o have a 24 severance and abatement, And that ís where the insurer has 25 made a sett.lement offer for the entire contractual claím.

GREITI'ÀI FREEI,IAN, TEXAS CSR 8179 188TH DISTRICT COT]RT E. METITVTN, SUTTE 408 IJONGVIEI,T¡, TEXAS 7560L 903.237 -2688

MR I93 L2

1 we don'E have that here. so werve got one breach of 2 contract craim that says, y,aII made an offer saying this ís 3 what we believe that he's entítled to, that's a breach of 4 contract and that's bad faith. There,s no bad faith claim 5 in this lawsuit saying Ehat that offer was insufficient.

6 And so with respect to that breach of conÈract claim and 7 those extra-contractuar claims, whaÈever the court decides I Èo do, those two claims need to stay together because they 9 arise out of the exact same facts and. they d.eal wiEh the 10 exact same legal issues.

11 Now, there,s another breach of contract, L2 claím, which is the one that Ms. Raines (síc) is talking 1_3 abouE, this kind of tradítionar aNr/rJrM claim that says you T4 breached the contract and you breached. the contract because 15 the third party was líabre for it. Mr. ilackson suffered L6 actuar damages, and his actual damages are in excess of what I7 the third party's limits are.

18 Norirr. Akin -- and therers a case out of the 1-9 court of eppears of Er paso, whích specifically deals with 20 this issue in the uM/urM context. what that case decided 2t was, pursuant to.akin, when you have a a proffer of an 22 undisputed sum, t.hat 's not suf f Ícient to arise Èo the revel 23 where severance and abatement Ís mandatory. The question 24 there is whether or not there was a setElement offer for the 25 enti.re contractual claim.

GREI,YIV FREE¡¿AII, TEXAS CSR 8179 188TH DTSTRTCT COURT E. METITVTN, SUITE 408 rJoNcvrEW, TEXAS 75601 903 -237 .2688

MR I94

1 And because the burden was on the insurance company, who was moving for severance and abatement, Ehey looked at evidence. And what the insurer in that case did to prove that there was contractual or there was an offer of settlement for the entire contractual claim, was they puE on letters and affidavits from their insurance adjustors.

7 We don'E, have any evidence of that here. And so the only way Ehat there,s goíng Èo be a mandatory severance and abatement, as the defendant claims, is íf they 10 puE on thaÈ proof thaE there rÀras an offer for Ehe entíre 11 contractual cIaim. They haven't done that. And so the L2 trial court retains its discretíon on whaÈ it wants to do in 13 terms of looking at the facts of Èhis case and what ís L4 appropriate to provide whatever protection the court deems 15 is necessary.

16 The Court has the discretion to order a T7 severance and abatement. The court also has discretion to 18 order a bifurcation of the trial so Ehat any kind of 19 prejudice, things that woutd be ínadmissíbre on the breach 20 of contract, declaratory judgment, will still be 2L inadmissible for those claíms. And. after Ehat issue is z¿ tried, we wourd have a bifurcated trial on the bad faich 23 claims and the breach of conE,ract claim that, assert,s that 24 your faj-lure to tender the amount that, you determined Èo be 25 owed was a breach of contract and bad faíth.

GRETJYN FREEIUAN, TEXAS CSR 8]-79 188TH DTSTRTCT COURT 1O]- E. METITVIN, SUTTE 408 LONGVIEI^I, TEXAS 75601_ 903.237 .2688

MR I95 t4

t_ The Court retains the discreÈion to do Ehat.

2 fE also retaíns the discretíon to not do anything at all.

3 rf íb just wanE,s to have everything in one triar proceeding 4 and the discovery all proceed together, the CourE, has the 5 discreti-on t,o do that.

6 Now, wiEh respect to severance and abaÈement 7 versus doing a bifurcatíon, there are pluses and minuses on I both sides - You know, they wanE, severance so that 9 inadmissible evídence doesn,! go to the jury on the 10 determínation of whet,her the third party is líable and is 11 acÈual1y an underinsured moEorist. They don't want L2 inadmissibte evidence Eo go in on Ëhat claim. r think that 13 that's a varíd concern that they have. severance wourd deal L4 with that issue. Also bifurcation would deal with that 15 issue.

15 The other complaint that theytve got is on L7 the abatement. And they're saying that we donrt want to do 18 discovery of anyEhing that deals wiÈh extra-contractual r_9 claims untÍI after we got a t.rial and the determinaÈ,ion is 20 then, we1I, how long are vre going to abate this second 2L proceeding? Is it going to be through Ehe fínal judgment?

22 Is it going to be through final appeals? And therein is a 23 concern Èhat severance and abatement gives rise to that we 24 don'E have on bi-furcatíon.

25 You know, there's going to be a lot of things GREI,YI\I FREEIUAN, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVIN, SUTTE 408 T,oNGVIEW, TEXAS 75601 903.237 .2688 MR 196 L5

1 ín this lawsuit thaE's going to relate to both breach of contract and bad faith. you know, the nature of any investígatíon Èhat they did inÈo underlying facts, their termination of of coverage is going to be an íssue in the underlying case. Because as Ms. Raines poínts out, one of the thíngs youlve got to prove is that, yoü know, she's the third party was Iíable and that she was also an I underinsured motorist. So there's goíng t,o be overlap there. A Iot of the same witnesses wirl be calred. wer1, 10 at least in terms of the third parÈíes and maybe some 11 insurance adjustors as we1l.

L2 ff we abate the discovery, dependíng on how 13 long we abate iL and there's a case thaE's cíted ín our L4 response that deals with that. ft,s the Texas Farmers 15 rnsurance company v- cooper- And there they were díscussíng 16 the propriety of an abat,ement. And in bhat case they I7 determined that abatement was noE proper because the insured 1_8 had not met its burden of proof to show that iE was that 19 íb was proper.

20 .And the concerns that the Court had in pexas 2L Fatmets rnsurance company v. cooper are the ones Èhat r rm 22 talking about now. Specifically thaE, even assuming -- this 23 is what the court said -- even assuming that rexas Farmers 24 prevails on the contract claím, which is cerEainly not 25 foregone, this is only one aspect of judicíal economy when GRELYN FREEMAI\tr, TEXAS CSR 8179 188TH DISTRICT COIJRT E. METTÍVIN, SUrTE 408 I,ONGVIEI^I, TEXAS 75601 903.237 .2688 MR I97 t_6

1 it Ealks about the standard for abatement. ff discovery in 2 Ehe extra-contractual case is sÈayed until the uninsured motoríst claim is final, years may pass, witnesses may die or disappear, files may be lost, and memorj-es wilt undoubtedry fade. Rather than minimízíng pretrial efforts, abatement may require that discovery be conducted twíce as t,he carrier may successfully argue iC inítiaIIy prepared for I trial only on Kidd's contractual claim, not his ext,ra-contractual claims. Moreover, it, is possible that the 10 entíre lawsuiÈ, conEractual and extra-contractual, is l_1 subject t,o disposition before trial. Numerous pretrial L2 ruIíngs may affect both contractual and extra-contractual L3 claims -

L4 there's concerns on both sides in And so 15 terms of severance and abatement or bifurcation. we berieve L6 that bífurcation ís going to e>cpedite this proceeding, t,hat l7 bifurcaÈion will provide any kind of protection they need 18 from the jury hearing inadmíssible evídence. That would be L9 evidence that would be Ínadmissíble on a termínation of 20 whether the third party was 1íable and that the actual 21- damages exceeded per policy limíts. whereas, severance and, 22 abatement is going to cause a great deal of delay in this 23 case.

24 Sínce the Court retains the díscretion of 25 whab it wants to do and what it feels ís proper, we feel the GREI,YIü FREEMA¡ü, TEXAS CSR 81?9 188TH DISTRICT COURT ]-01 E. METIÍVIN, SUITE 408 LONGVIEW, TEXAS 7560L 903 -237.2688 MR I98 L7

t_ Court should enter ín a bifurcaEion if it feels that some 2 protection is necessary in order to protect the Defendant,'s 3 interesE but also keep this thing movíng along so that we 4 can get it resolved as quickly as possible.

5 THE COART: Thank you, Mr. Smith.

6 Bríef response, Counsel?

7 MS. R.AI¡IE.. Yes, Your Honor. Your Honor, I this is not a motion to enforce seEtlement. This is not a 9 breach of contract. The insurer, A-?\A Texas, is under no 10 contractual duty to pay a claim brought under a UIM policy 11 until liability ís establÍshed and actual damages are proven L2 and the tort-feasor status, period. There this is noE a 13 breach of contract c1aim.

L4 Plaintiff keeps bríngíng up the $20,000 offer 15 to settle Ëhis case. This !'ras an of f er Èo settle, plaintif f L6 would not sign a full and final release of all claims I7 because they wanted that to be a partíal a partial amount 18 that they only wanEed - - so t.here was no thís is no t9 breach of contract. This i-s not a Motíon to Enforce 20 Settlement.

2L Your Honor, bifurcaEion is not proper in this 22 case. We're asking the Court to abate because of the 23 discovery that Plaíntiff has already put forth, and may 24 continue to put forth, in terms of the reqr:irements of 25 havíng to answer all the inEerrogatoríes, requests for GREIJnV FREEIUAìI, TEXAS CSR 8L79 188TH DISTRICT COURT t_0L E. METIÍVIN, SUITE 408 TJONGVIEW, TEXAS 7550]. 903. 237 .2688

MR I99

1 production, and admíssions that have been presented to the Defendant.

3 Your Honor, we just feel líke, although the 4 law is very clear on the issue, thaÈ werre not vr¡erre just 5 not there yeÈ. Thís is praintiffs first have to prove 6 that t,hey are confounded and have a judicial determinatíon 7 regarding the conditions precedent.

I THE COURT: Do you excuse me. Do you 9 agree that this is within the discretion of the court to L0 make the decisÍon to sever and to abate?

11 MS. RÄIIVE'.- Not ín this case, your Honor, L2 because this is not a breach of contract case. And. r 13 belíeve the courts wilr support an ord.er to dírect the court 1-4 to abate and sever the extra-conEractuar claims in this case 15 because there's been no breach of contract. There's only a 16 breach of contract if Èhere's been a judgment presented to t7 the Defendant after the conditions precedent have been met, 18 and then the Defendant doesn't pay their judgment that's 19 owed less any credíts or offsets Ehat were made.

20 So, f mean, bottom line is if there's a trial 2L in t.his case and praintiffs are t,hey get an award of 22 damages from the jury as to as to the liability 23 established, how much Mr. ,Jackson's damages are, and that 24 the tort-feasor driver, Ms. Autrey (sic). was under she 25 was underinsured, there's going to be a boEtom line number GREIJYTÙFREEMAN, TEXAS CSR 81?9 ].88TH DTSTRICT COI'RT rO1 E. METIil/IN, SUITE 408 r,oNGVrEW, TEXAS 7560]- 903.237 .2698

MR 2OO

1 of Èhat. From that bottom line number, we,re going to ) subtract ouE the amount thaE Ms. Autrey's (sic) insurance has already paid and any plp payments to offset.. Then there's goíng to be a balance Ehat's owed. AAA Texas has 30 days Èo pay any balance that is owed. If they fail to do 5 Ehat within 30 days, that coul-d be a breach of contract.

7 THE COURT: Thank you. Counsel, bríefly I respond to that last issue, Mr. Smíth.

9 MR. SMITH: Yes, I will. And this kind of 10 overlaps with the Special Exceptions Íssue as welI.

1_ l_ Ms. Raines keeps on saying this is not a breach of contract I2 case, it's not a breach of contract case. Every síng1e case 13 that she cites in her motion, every single case that's cited.

L4 in our response, talks about contractual c1aíms versus 15 extra-contract,ual claims.

16 And so, you know, she says that and this L7 was ínitiaIly thaE ít,s not a breach of contract,, Ít's not a 18 declaratory judgment, ít,s just a request for a judícial 19 determination of tiability and underinsured status- r don't 20 know how you do thaÈ without a cause of action. r mean, you 21- have to have somethíng to put t,hese things in, in ord.er to 22 put ít in front of È,he jury and have them fifl out the jury 23 verdict form. rtts not going to be a questionnaire that 24 says, you know, is she liab1e, ís she an underinsured 25 motorist. It's going Èo be in the conEext of is t,here a GRET,YN FREEMAN, TEXAS CSR 81.79 188TH DTSTRICT COURT E. METIil/IN, SUITE 408 LONGVTEhT, TEXAS 75601 903.237 .2688 MR 2OI

1 breached contract. And the declaratory judgment provides the framework for the remainder of it.

3 So I don't understand -- and I haven,t seen any law thaÈ says that t,hese are not breach of conÈract claims. Every case Èhat I,ve seen, wheEher it's cited in her motion or ours, characterizes Èhís issue as contractual claims versus extra-contracÈual claims.

8 And f will agree that therets some confusion 9 in the law gíven Brainard, given what Brainard saíd. is, you 10 know, you're entitled yourre legalIy entitled to recover.

11 You're legally entítled to recover when you established that L2 the third party ís liable and that she ís an underinsured l_3 motorist.

L4 But there's no f ramework in which t,o make r_5 that judicial determination absent breach of contract and/or 16 declaratory judgment. There's no cause of action that says, 77 you know, are you an underinsured moÈorist status, are you 18 liable for the third party. There has to be something that t9 you put these thíngs in ín terms of a cause of action.

20 Notrl, the last thÍng that she said r¡ùas on thís 2L contingenE claims, rig}:^iu? You can'È, have a an 22 enÈitlement to recover until you get a judicial 23 determination of the Iíabilit.y of the third parÈ,y and the 24 unínsured status. That's not any different than any other 25 contíngent claim that's broughE togebher. f mean, you think GRELW FREEMAII, TEXAS CSR 8179 1-88TH DTSTRTCT COURT 1O]- E. METI{VIN, SUITE 408 ITONGVIEW, TEXAS 75601 903.237 .2688 MR 2O2 2L

1 about negligence and gross negligence. The punitive damages z question is always contíngent upon a finding of negligence by unanimous verdÍct ín the underlying case.

4 And the case from EI Paso that f was quoti-ng 5 from a moment ago also brought up that íssue about, how 6 there's aII kinds of lawsuits where contingenE and 7 derívative cl-aims are brought together. And the courÈs have I always dealt with these by either Erying them together, 9 bifurcating or severing and abating them. The fact that you 10 canlt have what you need in order to satÍsfy thís 1egalIy l-1 entítIed to recover language ís judicial determination, L2 therefore, bad faith claims are contingent, ís not any 13 dÍfferent than any other contingent claim.

L4 Now, f will say Èhat, there is a dífference 15 because all Ehe cases that we've been talking about, with t6 the exception of Ehe El Paso Court of Appeals case, where L7 they put on evidence thaE it was a settlement offer for Èhe l_8 entire amount of the c1aim, every single one in the IIM/UIM 19 context talks abouÈ the inadequacy of the seEtlement offer.

20 fn .In Re .t'jre L'7oyds, whích is out of San 2t Antonj-o, they had made a settlement offer for g1oo,0O0 for 22 the entire contract claim at a mediation. And then after 23 that settlement offer for Ehe enti-re contract claim was 24 made, Ehey fited a Motion for Severance and Abatement. And 25 that was found to be mandatory.

GREIJII'ÀT FREEMA¡T, TEXÀ,S CSR 8179 188TH DISTRICT COT'RT E. METITVIN, SUITE 408 toNGVIEW, TEXAS 75601 903.237.2688 MR 2O3

1 In MiTLard, you had a bad faiEn case that was premised on the perceÍved deficÍencies ín Ehe settlement offer. And f think it's Malmard (phonetic), it was Ehe inadequacy of the seEtlement offer thaE gave rise to the severance and abaÈement.

6 Every single one of those cases you have the bad faith premised on inadequacy of the settrement, offer, I not the fact thaE. you had apparently a determination of coverage, an ínvestigation in coverage, and a determínation 10 that youlre entitred to a certain amount of money and then 11- we just don't pay it because we bry to strong-arm a fult and T2 final release ouE of you for the undisputed amount.

13 Now, Ms. Raines wants to say that Ehat's a L4 settrement offer for the entire amount of the contract, buE 15 she has to put on evidence that thaÈ's true because this Ís 16 her Motion for severance and Abatement, and she has to prove L7 that E.hose elements are met. And Èhere's no evidence here 18 thaE this was a settlement offer for the ent.ire amount of L9 the claim.

20 THE COURT: All right. Thank you, Counsel.

2L Very good work on both sídes.

22 f'm going to deny the Motion to Sever and 23 deny E,he Motion to Abate. I will bj_furcate the case.

24 Irlhere does thís leave us on Èhese Special 25 Exceptions?

GRELYN FREEMAII, TEXAS CSR 8179 188TH DISTRICT COI]RT E. METT{VTN, SUITE 408 IJONGVIEIV, TEXAS 7560L 903.237 .2688

MR 2O4

1 MR. SMTTH: lr1ith the Special ExceptÍons, Ehis 2 ís the confusion thaÈ u¡e were Ealking abouÈ a second. ago.

3 rÈ's either got to be a breach of conËract claim or a declaratory judgment claim or both. r mean, we have to have a cause of actíon to put thÍs in front of the jury.

6 Ms- Raines says iÈ's not a breach of conEract. we1l, if j-t's not a breach of contracÈ, then we have to have I something Èo put in front of the jury, cause of action. And.

9 that's why the declaratory judgment craim is pred. in there, 10 because of this confusion that aríses and. because ure have, 11 you know, statements they're saying it's not a breach of L2 contract craim. we've got to have something as a cause of 13 action Eo bring -- to bring thís in front of the jury. rf L4 i-t's if it's not one of those two, r have no i-dea what it 15 ís.

16 THE COURT: Ms. Raine?

L7 MS. RÄIIVE.- Your Honor, you can caII ít L8 whatever you wanÈ to call it. Bottom line is prainËíffs do 19 not get to recover aLtorney fees on this cause of action.

20 They can leave ít they can carl ít a declaratory actíon.

2L They can call it whatever.

22 THE COURT: Is thaE what your Specj_a1 23 Exceptions address or is there other things?

24 MS. RÄÍJVE.- It addresses 25 THE COURT: Let me just say herers where r¡¡e GREI,YTI FREEIUAN, TEXAS CSR 8179 188TH DISTRICT COURT E. METITVIN, SUITE 408 rroNcvrEhl, TEXAS 75601 903.237 .2688 MR 2O5

1 are, Counsel. I'm going to have Eo briefly recess us 2 because Irve got a case comíng up behind where they're going 3 to call in at 10:55. So f donrt wanÈ Eo get in a bínd here 4 on that.

5 MS. R.4ItrIE: My order to the Court was going 6 to be to granL our -- grant that plaintiff replead this case 7 Eo to Eake out the declaratory judgment and to and our I claim for attorney's fees- So if I may approach the CourÈ?

9 THE COURT: Mr. Smith, what's your response 10 to that?

11 MR. SùIITH: f 'd like to see some law that L2 says that you can't recover attorney's fees on a declaratory 13 judgment case ín a IIM/UIM contexE . I haven,t seen law t,hat L4 says t.hat 15 MS. R.åIÀrE.- Your Honor,I have a Supreme 16 Court case Ehat's going to say that, if Èhis ís not a L7 declaratory judgment, which it is not, ít is not to 18 esEablish the construction of thís of t,his policy. It's 1_9 not a itrs not asking bhe Court to establish the 20 constructive íssues of this policy- Therefore, iÈ ís noÈ a 2L declaratory judgment, and you cannot collect attorney,s fees 22 on a case that Ís not on an issue that is not declarat,ory 23 judgment. It violates the American rule that the parties 24 are responsíble for theír o\¡ûn att,orney's fees.

25 THE COURT: Mr. Smith, I mean -- GREI,YN FREEIUAÀI, TEXAS CSR 8]-79 188TH DISTRTCÎ COI'RT E. METITVIN, SUITE 408 LONGVIEW, TEXAS 75601 903 .237.2688 MR 206

1 MR. SMITH: I'd like to have an opportunity to review the case law. And r think thís is probably something we can deal wíth at a later date on, you know, more fulI briefíng for the Court after frve had an opportunity to look at exacEty what the issues are and determine if this this is the rure in un/urM context.

7 THE COURT: How much time would you need to I do that?

9 ¡4R. SMITH: Oh,probably a week to two weeks 10 THE COURT: A1I right.

11 MS- RA.IÀIE.- Your Honor, if f may approach I L2 can give Ehe Court a copy of thisZ 13 THE COURT: Sure.

L4 MR. SIUIITH: Is thís copy for me, Ms. Raínes?

15 MS. RAT¡TE.. Yes.

16 THE COURT:I wíIl take that, the issue of I7 the specíal Exceptions under advisement, give Mr. smith two t_8 weeks to respond. And is there anything erse, counsel, vre L9 need to do aÈ this hearing?

20 MS. RÄ.ItrIE: Your Honor, if you could sígn an 2L order today denying the Motion to Sever and. Abate.

22 THE COURT: If you have it prepared I wilI.

23 - RÄIJ\IE: Do you have an order?

MS 24 MR. SMITH: I do not have an order, but I'lI 25 present one to Ms. Raines- GREr,nV FREEMAN, TEXAS CSR 8l_?9 188TH DTSTRTCT COURT ].01 E. METIÍVTN, SUITE 408 r,oNGVrEW, TEXAS 75601 903 -237 .2688

MR 2O7

1 MS. RAIÀIE; I just vrant to make sure I walk out of here wíth a signed copy today.

3 THE COURT: SuTe.

4 MS. RÀ-I¡IE.. If that.'s all right wÍth you?

5 MR. SITIITH: yeah. And we should probably put in here the bifurcation, sínce that is what the Court ordered to do, right?

I THE COURT: I did. y,all want to add that?

9 Y'all want to add that on the one I sign?

10 MS. RAI¡IE'.. Your Honor, standard for Court 11_ that if you sign an order can hre go and get a copy, a I2 conformed copy of what the Court signed, or do you want us l_3 to make copies here?

L4 THE COART: Sure. No, w€'11 get you the 15 conformed copy. But do we need to add t,he bifurcation 16 issue? Do y'aII want to work on that language here? t7 MR. SMITH: yeah, I think thatts fine. That 18 way we've got 19 THE COURT: f tell you what I,m going to do.

20 I'm goíng to recess this hearíng and let y'alI work on that 2I order, because I've got a phone call coming Ín on this next 22 hearing. And I can come back to you if f need to go on the 23 record- ilust give me just a few minutes, okay?

24 IIIR. SMITH: Yes, Your Honor.

25 THE COURT: Okay. frm going to recess this GRELYN FREEUAN, TEXAS CSR 8179 188TH DISTRTCT COURT ]-01 E. METI{VIN, SUTTE 408 IJONGVIEW, TEXAS 75601 903.237 .2698

MR 2O8

L maE,ter, and thank you very much. We'lI come right back to it íf we need to.

3 MR. SMITH: Thank you, your Honor.

4 MS. R.AIIVE; Thank you, Your Honor.

5 (Recess )

6 THE COURT: All right. Let's go back on the record if we cou1d, Counsel, ín the Jackson matter.

I Have yraII worked on an order that's agreeable in form at least?

10 IzIR. SI{ITH: Yes, Your Honor, f belíeve we 11 have.

L2 Ms. Raines, is that language agreeable to l_3 you?

L4 MS. RA-IJVE.- Well, Your Honor, I just want to 15 crarify. rs your íntention Èo bifurcate Èhe Ería1 and abate I6 the extra-contractual claims as well so $re,11 have L7 because we berieve that we need to have a separate Erial?

18 üIe need to have a separate jury hear the extra-contractual 19 claims. Otherwíse, $rê're picking a jury for t,he underlying 20 UIM claims, but also adding in all the extra-contractual 2L claims, which, agaín, is what we are opposed to. So Irm 22 asking the court, is the court's intention to bifurcate the 23 extra-contractual claims as well as to abaÈe to abate 24 those extra-contractual claíms?

25 And for, Your Honor, we were talkíng GREI,NV FREEMA¡I, TEXAS CSR 8179 188TH DISTRICT COURT 101- E. METITVIN, SUITE 408 IJONGVIEW, TEXAS 75601 903 -237 .2688

MR 2O9

1 earlier -- f have a case for the Court, Eo revíew. It's a z ít's In Re Fazmers Texas County Mutual Insurance Company, texas Court of Appeals out of Austin. The case number is 03-15-00527.

5 May f approach, Your Honor?

6 THE COURT: SuTe.

7 MS. RÄII\IE.. Your Honor, that case deals with I that the Court needs to shaIl sever and abate 9 extra-contractual claims from UIM claims. So I just wanted 10 to clarify if that's the Court's ruling was to bifurcate the 1- 1_ case and abate the extra-contracEual claims to a separate L2 jury.

13 THE COURTT My understanding was a 1-4 bífurcation is just íE's before the same jury.

15 Mr. Smith, is that your understanding?

16 MR. SþIITH: Mine as well, Judge.

T7 THE COURT: I mean. that's what bifurcation l_8 is. Otherwise, you would abate it, and ít would be before 19 another jury. But is this the case, Mr. Smith, f/ou had -- 20 were you aware of this case when you r^rere responding?

2L MR. SMITH: I don't Ehink that and 22 Ms. Raines can correct me if I'm mistaken -- but I don't 23 believe this ís the case that was cited in their motíon. ft 24 may be a case that has been cited by some of Ehe cases that 25 are cited ín their motion.

GREL]TI\I FREEMAÀI, TEXAS CSR 8179 188TH DISTRTCT COURT E. METITVTN, SUTTE 408 r,oNGvrEbI, TE)AS 75601 903 .237 .2688 MR 2IO

1 MS. RÄIJVE.- Your Honor, this case was not cited in our motion, ro.

3 MR. SMITH¡ I don't know how it would -- let me see real quick.

5 THE COURT: Well-, they severed here but denied t.he abatemenÈ; is that what the judge did?

7 Honor. And so it was MS- RÄ-I¡IE.. Yes, Your I an appeal wíthin the Court to rule that it should be severed 9 and abated.

10 THE COURT:lrlel1, I think that,s a different 11 situation. Because I'm going to I'm denying the L2 abatement, and we're going to bifurcate. And so then the 13 íssue would be, we're goíng to proceed with full díscovery L4 on all issues.

15 So Ehís orderthatrs presented Èo me says L6 that MotÍon for Severance and plea in Abatement is denied in I7 íts entirety. Extra-contractual claims will not be severed.

18 Extra-contractual cl-aims are not abated- The Court orders 19 that the trial shaIl be bifurcated as to the plaintiff's 20 extra-contractual claims .

2L I'm prepared to sign this order.

22 Mr. SmiEh, anything further?

23 I4R. SMITH: I don't have anything further at 24 this time, ,Judge.

25 THE C)URT: All right. All right. I'I1 get, GRELhI FREEMAN, TEXAS CSR 8179 1-88TH DISTRICT COI]RT E. METITVIN, SUITE 408 IJONGVTEW, TEXAS '15601 9 03 .237 -2688

MR 2II

1 each one of you a conformed copy here.

2 (of f - the-record discussion) 3 THE COURT: Counsel, do y'a1l have another issue?

5 MR. SMITH: Yeah,I think we may, your Honor.

6 As you recall- at the 1asÈ hearing that we had, we had had a discussion about we wourd get t,ogether and I Èalk about whÍch discovery related to which issue.

9 THE COURT: Correct.

10 MR. SMITH: üIe did that, and we reached an 11 agreement as to whj-ch discovery related to which issue. hle t2 had a dísagreement about -- my recollect.ion of what, the 13 court's order was is that the objections were overruled and L4 they would respond to discovery. Ms. Raine,s recollection 15 was Èhat bhe Court did not overrule theír objections. And L6 so r have submiÈted a proposed order with my recollection L7 overruling the objections.

18 f don't know that we have a signed copy of 19 that, and thatrs what Ms. Raines and I were discussíng.

20 THE COURT: After that hearing, I recall I 2L never got I thought what I was going to get was an agreed 22 order as to form. And f don't thínk I ever got, that. So I 23 sent some orders back on the queue e-file. Maybe each of 24 you had sent a proposed order. f can'È remember now.

25 MR. SMITH: f think f 'm the only one who sent GRELn\T FREEMAIV, TEXAS CSR 8179 ]-88TH DISTRTCT COURT E. METITVTN, SUITE 408 IJONGVIEI^I, TEXAS 75501- 903.237 .Z6BB Ì{tR 212

1 a proposed order.

2 THE COART: Okay- Did I not sign that?

3 I¡eE, I s see.

4 Let's see, here's a proposed order that I returned. rJet's see if that's the one you sent, Mr. smith.

6 MR. SMITH: Yes, this is Ehe one that I senE, to you.

I THE COURT: Here is one let, me look at thís one. Here's a proposed order that r returned it 10 because r said the lawyers would submit an ord.er urith L1 signatures as to form, and r never got that. r think ret L2 me see if r can copy this.

13 MS. R.4.IJVE': Your Honor, we have an agreed L4 order that Plaintíff's counser prepared that we díscussed.

15 And then r think there was just some miscommunication as to t6 if it was agreed as to form.

L7 And, Your Honor, w€'re ready at this tíme to 18 present that to you as an agreed order on the motion, 19 Plaintiff's Motion to compel hearing. And it's agreed. by 20 the parties to form.

2L THE COURT: Okay. Ir11 sign that then.

22 MS. RåItrIE; Your Honor, I would just also 23 rike to make clear for bhe record., that is the order that r 24 referenced in my argument here today because ít crarifies 25 the extra-contract,uar discovery questions and responses that GREL]TI\I FREEMAN, TEXAS CSR 81_?9 188TH DISTRICT COURT E. METITVIN, SUITE 408 r.oNGvIEW, TEXAS 75601_ 903 .237 .2688 MR 2I3

1 have been propounded to Defendant to answer as paït of the extra- contracEual díscovery.

3 THE COURT: Okay. So 4 MS. RAfiüS.. And I apologize, I thought the order had been signed earlier and maybe it's a mistake Èhat f just did not receÍve a copy.

7 THE COART: So thís is the order consístent I with my prior ruling?

9 MR. SMITH: That's my recollection of it.

10 Apparently, \^re're nor¡¡ agreed t,o form.

11 MS. RÄIÀIE: Yes, Your Honor.

L2 THE COURT:Okay. f 'm going to sign it and 13 I'11 get you a conformed copy, each one of you, on this one T4 MR. SNIITH: Thank you, Your Honor.

15 THE COURT: Sorry for the l_6 f apologize. I didn't, know that MR. SIUIITH: L7 was sent back. I'm sure ít was, and f just guess f dídn,t 18 see it.

1_9 THE COURT: AIt this e-filing is new to me. 20 I4R. SMTTH: Technology is a blessing and a 21- curse -

22 THE COWT: All right. AnyÈhing further, 23 Counsel, from either side?

24 MR. SMTTH: No, Your Honor.

25 MS. RÄTÂIE; No, Your Honor.

GREr,irt\T FREEMA¡ü, TEXAS CSR 8179 ]-88TH DISTRICT COIJRT 1O]- E. METITVIN, SUITE 408 LONGVTEW, TEXAS 75601_ 903 .237 .2688

MR214

1 THE COURT: AtI right. Good luck. Y'aIl have a safe Èrip back.

3 MR. SMITH: Thank you, Your Honor.

4 THE COURT: Okay.

5 (End of proceedings)

I 1_0

11_

L2

L4

l_8

2L

GREIJYÀI FREEMAI{, TEXAS CSR 8179 188TH DTSTRTCT COURT E. METTIVTN, SUITE 408 ïJONGVIET¡¡, ÎEXAS 75601, 903.231 .2688

MR 2I5

1 STATE OF TE)GS COI'NTY OF GREGG 3 T, Gre1yn Freeman, Official Court Reporter ín and for the 188th District Court of Gregg, State of Texas, do hereby cerÈify that the above and foregoing contains a t,rue and correct transcrÍption of all portions of evidence and other proceedings requesbed in writing by counsel for the partíes to be included in this volume of 9 the Reporter's Record Ín the above-styled and numbered 1_0 cause, all of which occurred in open court or in 1t_ chambers and were reported by me. L2 f furEher certífy that this Reporter's Record of the L3 proceedings truly and correctly reflects the exhibits, L4 if any, of fered by the respect,ive parties.

15 f further certify that the total cosE for the L6 preparatíon of thís Reporter's Record ís g204.OO and was L7 paid by Sloan. Baqlev. Ha tcher 5E Perry Law Firm.

L8 !ìTITNESS MY OFFICIAIJ HA¡üD Ihis The 25Th day of L9 November , 207-5.

/s/ erelyn Freeman 2L Gre1yn Freeman, CSR Texas CSR 8179 22 official Court Reporter 1-88th DistricL CourE 23 Gregg County, Texas E. MeE,hvín, Suite 408 24 Irongview, Texas 7560L Telephone: 903-23'7-26e9 25 Expirat,ion: 1,2/3t/201,s GREL]T\T FREEMAIü, TEXAS CSR 81-79 188TH DISTRTCT COI]RT 1.01 E. METHVTN, SUITE 408 r,oNGvIEW, TEXAS 7560L 903.237 .2688 MR 216 APPENDIX TAB 4 Electronically Submitted 711612014 l1:11:41 AM Gregg County District Clerk By: Debbie Kinney ,deputy

2014-1365-A CAUSE NO. THOMAS JACKSON $ IN THE DISTRICT COURT Plaintiff, $ $ vs. $ GREGG COUNTY, TEXAS $ AAA TEXAS COUNTY MUTUÀL $ INSURANCE COMPANY $ Defendant $ JUDICIAL DISTRICT

PLAINTIFF''S ORIGINAL PETITION & R.EOUEST F'OR DISCLOSURE Thomas Jackson, Plaintiff, files this Original Petilion, and in support thereof would respectfully show the Court as follows: A. DISCOVERY CONTROL PLAN l. Discovery is intended to be conducted uncler Level 3 of Tex. R. Civ. P, 190.4.

B. PARTIES 2. Plaintiff, Thomas Jackson, is a resident of Gregg County, Texas. Plaintiff s

Driver's License number is XXXXX037. Plaintiff s Social Security number is XXX-XX-X454.

3. Defendant, AAA Texas County Mutual lnsurance Company, is an entity doing business in the State of I'exas, This Defendant may be served with due process herein by serving its registered agent for service, C T Corporation System , l02I Main Street, Suite I 150, Houston, Texas 77002.

C. JURISDICTION & VENUE 4. The Court has jurisdiction over the controversy because the damages are within the jurisdictional limits of the court. Plaintiff seeks monetary relief in excess of $ 100,000.00 but not rnore than $ 200,000.00.

L

MR217 5, Pursuant to Tex. Ins. Code $ 1952.110, venue is proper in Gregg County as the county in which the accident occurred.

D. AGENCY/RESPONDEAT SUPERIOR 6. Whenever it is alleged in this petition that Defendant, AAA Texas County Mutual Insurance Company, did any act, omission or thing, it is meant that Defèndant's employees, agents, officers, directors, servants, apparent agents, ostensible agents, agents by estoppel and./or representatives did such act, omission or thing and that at the time such act, omission or thing was done it was done with the actual or implied knowledge of Defendant, AAA Texas County Mutual Insurance Company, or was done wíth the full authorization or ratification of Defendant, AAA Texas County Mutual Insurance Company, or was done in the normal and routine course and scope of agency or employment of Defendant's employees, agents, officers, ditectors, sewants, apparent agents or ostensible agents, agents by estoppel and/or representatives.

E. FACTS

7 - Thís lawsuit results from a collision that occurred on June 72, 2013 at approximately 8:58 p.m. in Longview, Gregg Uounty. 'l'exas. Plaintifl I'homas Jackson, was operating his vehicle westbound on Pliler Preoise Road in a saf'e, reasonable and lawful manner, when he stopped in obedienceto a traffic control device at the intersection of Judson Road and Pliler Precise Road. After stopping, and in obedience to the traffic control device, Plaintiff proceeded to continue traveling westbound into the intersection of Pliler Precise Road and Judson Road. Patricia Tompkins was traveling northbound on Judson Road when, with complete disregard for the saf'ety and welfare of other persons or property, she disregarded the traffic control device striking the driver's side of the vehicle being driven by Plaintiff, causing the collision made the basis of this lawsuit.

I

MR 2I8 8. At the time of the collision, PlaintifTs vehicle was covered by a policy of automobile insurance in full force and effect, which is the subject of this lawsuit. The policy of automobile insurance was issued by Defendant and included uninsured/underinsured motorist coverage as defined under the policy and/or by statute.

9. Plaintiff timely and properly notified Defendant of the motor vehicle collision that is the subject of this suit. Plaintiff has fully complíed with all of the conditions of that insurance policy prior to his filing suit against Defendant. All conditions precedent have been performed or have occurred. Further, Plaintiff has complied with requests for provision of information to the Defendant, 10. As a result of the collision caused by Patricia 'fompkins, Plaíntiff sustained damages that exceed the amount of available and collectible liability insurance coverage issued to Patricia Tompkins and which covered her negligent actions. Defèndant refused to consider Plaintift's injuries, medical billing paid or incured by or on behalf of Plaintiff and failed, and continues to fail, to fully compensate Plaintiff for tlie injuries caused by Patricia Tompkins, an underinsured motorist, and gìve Plaintiff the benefit of the bargain of his uninsuredl/underinsured motorist coverage present in the insurance policy, in violation of Texas law as described herein below. As a result of their acts and/or omissions, and unlawful conduct as described herein below, Defendant proximately caused Plaintiff injury.

F. BRßACH OF INSURAIïCE CONTRACT ll. All of the premiums that were due on the AAA Texas County Mutual Insurance Company policy wíth Thomas Jackson as the named insured, at the time of the wreck, had been paid and the policy was in full tbrce and effect at the time of the collision. Defendant, AAA Texas County Mutual lnsurance Company, kept its insured's rnoney and had obligations as

MR 2I9 described in the insurance policy that was in effect at the time of the incident in question, Defendant to date has failed and refused to pay the money due under the policy, despite denrand, Specifically, Defendant has determined that Plaintiff s underinsured motorist claim is worth at least $ 25,000, as evidenced by its offer to pay $ 20,000 in addition to $ 5,000 previously paid as

personal injury protection policy limits (see Exhibit A). I'Iowever, despite Plaintiffls demand for payment of this undisputed portion of his underinsured motorist coverage (see Exhibit B), Defendant has refused to tender this amount. This failure and reñrsal to pay constitutes a breach of contract and demonstrates bad faith. Further, Defendant's failure to properly value and fully pay Plaintifls damages pursuant to its obligatíons in the policy at issue likewise constitute a breach of contract and demonstrate bad faith,

G. PETITION FOR DECLARATORY RELIEF

12. Based on the foregoing facts, and pursuant to the policy of insurance in tbrce and effect between Plaintiff and Defendant AAA Texas County Mutual Insurance Company at the time of the wreck, Plaintiff seeks a declaratory judgment pursuant to Tex. Civ. Prac. & Rem, Code Ch. 37 construing the contract of insurance and declaring Plaintiffls rights and obligations under the contract. Specifically, Plaintiff seeks a finding that Patricia Tompkins is an

underinsured motorist, that PlaintitT is entitled to recover from Defendant Plaintiffls damages resulting fronr the motor vehicle collision the subject of this suit, that Plaintiffls damages fall within the coverage afforded Plaintiff under the policy with Defendant, and specifying the amount of damages, attorney's fees, interest, and court costs that Defbndant is obligated to pay.

13. Defendant AAA Texas County Mutual Insurance Company's conduct is a

proximate and producing cause of damages to Plaintiff. Such damages include, but are not limited to, unpaid benefìts, medical expenses, physical impairment, lost eamíng capacity, and

MR 22O pain and mental anguish, Such damages have occurred in the past and are likely to continue in the future.

14. As a result of Def'endant AAA Texas County Mutual lnsurance Company's conduct, Plaintiff has incurred attomey's fees through trial and appeal.

H. BREACH OF DUTY OF GOOD X'AITH AND FAIR DEALING 15. Without adequate explanation or justification, AAA Texas County Mutual lnsurance Company, by and through its agents, breached its duty of good faith and fair dealing by denying or delaying payment of benefrts to Plaintiff in accordance with his insurance agreenrent when it was reasonably clear that it should do so. As a result, AAA Texas County Mutual Insurance Company is in violation of Tex. Ins, Code, Chapter 542, et. søq. Further, AAA Texas County Mutual Insurance Conrpany has engaged in unfair claim settlement practices in violation of Tex. Ins. Code, $$542,056, 542,057, and 542.058. As a proximate result of these actions, Plaintiff suffered damages, which are more fully outlined herein below' T. DAMAGES 16. As a proxirnate result of the collision, Plaintiff, Thomas Jackson, sustained

serious personal injuries, specihoally including neck, back, and head injuries and injuries to his body generally. Plaintiff believes some of his injuries are perrnanent in nature and have had a serious effect on his health and well-being. In connection with such injuries Plaintife Thomas Jackson, has suffered physical pain and mental anguish in the past, is suffering at the present,

and in all reasonable probability will continue to suffer for the rest of his life. Futther, it has been necessary for Plaintifl Thomas Jackson, to pay or incur reasonable and necessary medical expenses in the past and in all reasonable probability will incur reasonable and necessary medical €xpenses for the treatment of his iqjuries in the future. In additíon, he has sustained loss of

l,IlR 221 eamings and physical impairment in the past and will in all probability continue to sustain a loss of eaming capacity and physical impairment in the future. Ptaintiff, Thomas Jackson, sues for the recovery of past and future medical expenses, past and future physical pain and mental anguish, past Ioss of earnings, past and future loss of earning capacity, and past and future physical impairment; all in an amount in excess of the minimum jurisdictional limits of this Court.

Plaintiff is seeking a reasonable amount to be determined by the jury for his injtries.

17. In addition, Plaintiff is entitled to recover attorney's fees pursuant to Tex, Ins.

Code 9542.06 and interest at eighteen percent (18%) pursuant to Tex. fns. Code $542.060.

J. DOCUMENTS TO BE USED 18. Pursuant to Tex. R. Civ. P. 193.7, Plaintiff intends to use all documents

exchanged and produced between the parties including, but not limited to, correspondence and discovery responses, during the trial of the above-entitled and numbeted cause.

K. REOUEST FOR DISCLOSURE

19. Pursuant to Texas Rule of Civil Procedure 194, you are requested to disclose, within frfty (50) days of service of this request, the information or material described in Rule lea.2 (a)-(l).

L. PRAYER

\ryHEREFORE, PREMISES CONSIDERED, Plaintifï request that the Defendant be cited to appear and answer and that upon hnal hearing hereon Plaintiff recover as follows:

a. Actual damages within the jurisdictional limits of this Court; b. Prejudgment and post-judgment interest as allowed by law; c. Declaratory relief as outlined in the petition;

v,R222 d. Costs of Court and attorney fees; and e. All other relief the Court deems appropriate.

Respectfu lly subnritted, SLOAN, Y & PERRY LAW FIRM

By: M. Hatcher State Ba¡ No.24002243 Alan J. Robertson State Bar No.24067952 Post Office Drawer2909 East Whaley Street Longview, Texas 75606 Telephone : (903) 757-7000 Facsimile : (903) 757-7574 Email : [email protected] ATTORNEYS FOR PLAINTIFF

rurR 223 ørl2E/2øø2 L7tiL6 4Ë922L6ø25 AAA ÍEXAS CLAIM5 PAGE øLIø1.

A¡AA fsx¿s County Mutual Insurance Gompany (t I \ O-SàO Hortn State Hlghwal I f rving, Texas 7 5039-2.402 Texas April2E,2014

M. Ravmond Hatcher, Esq' Sloan, BagleY, Hetoher & Perry EastWhalcY St' Longvicw, TX 75601 RE: Insured: Thomas Jackson Thomas Jackson Client(e): Clairr#: 01'1137187 Loss Date: 6t1Aß Elcar Mr- Hatcher; ived in our comPact ed Motorlst etter You dmedical ofYour" ain to Your client's care' the y review the facts and circr¡nstanoes sunounding We have you have provided' unfortunately' we arÊ rBfetsnce m"ntàt¡on unable to rYour client $20,000'(X) UIM to ¡l tne adverse canier and the aid' below so Plcase oresent our ofier to your client and contad me at the tolephone number li'sted .n m"y Oi"arss and concludc this matter'

Clalms Service 6s5s N. State HighwaY 161 lwlng, TX 75039 'ir¡wri'a;óe.222.9208É21837eor469.221'837s

^rtt NI)

lngurf,ncoptovldedtogutl[IEdAAATðtasmcmblrsbylhêlnterlnsul€nceExchangeofthoAutomoblþGlubendilgañlllateg Ì,llR 224 I I:T JoftN l). .sÍ.o^N JR. .+ J. nY^N FOrùrLËR r LAURIIEN ll, BAGLIIY SLOAN, BAGLEY AlrtNJ. RODERTSoN M. NAYMOND II.{'I'CHER HA¡:CHER & PERRY CARSONR. RUNGE GI,ßNN A. PIìRRY¡+ JUSTTN sMrTrr 'Borrd (.ìcttil¡cú I'cnr¡rd Ltiury liirl llt I.AVV FIRM ^A.

WILLTAMX, KING r N¡ri¡rt¡l lJo¿rl ol 1'rìrl i\lvoc*1, LONGVIDW. f TOUSTON

May2,2014

Mr, Frederick Annour Yía Facstmile No,: ß69 221-6025 AAA Texas County Mutual lnsurance Company 6555 N. State Highway 161 Inring, Texas 75039 Re: Ou¡ ClienVYour lnsured: Thomas Jackson Date of [ncident: hne 12,2013 Claim No.: ottt57387 Dear Mr. Armour: Thank you for contactíng our offrce rec€lrtly regarding your evaluation of rny client and yotrr insurcd, Thomas Jackson's, underinsured motorist claim.

In your letter of April28,20l4, you indicate that you are offedng $20,000.00 in addition to the $5,000.00 PIP benefits proviously paid to Mr. Jackson by AAA for his injuries, as settlemcnt of his claims (over and above of the $30,000.00 third-party policy limits received by Mr. Jackson). By offering this arnount, it is clear that AuAú{ has performed iæ evaluation of l\dr. Jackson's UIM claim and determined that the UIM claim is worth at least $25,000.00 ($20,000.00 plus $5,000.00 previously paid PIP bcncfits). As such, thcrc is no rcasor that AAA should delay payment of this amount that iself acknowledges is due on this first party claim.

This letter is to request that you forward a check in the amount of your evaluation payable to this firm and your insured, Mr. Jackson. Because yoru insured vehemently disagrces l\'ith AAA's evaluation of the value of his claim, the payment of this amount is in no way to be considered "settlement" of Mr. Jackson UIM claim with AAA for the injuries that he sustained in the subject collisíon.

in writing that you will forward the $20,000.00 payment as requested and Please confirm that your insured may negotiate the check without the negotiation being considered any type of rclease of her rights to seek additional amounts under the policy in the future.

Tharù you for your attention to this matter.

101 Eest \Whaley Srreet, Longview, Texas 7560 t Phone 9Q3.7 57.7000 I Facsirnile 903.7 57,7574 I www.sloanfi rm.c<¡rn SrceN, Blolnv, Hnrcnen & PBnny Llw Fn¡r¡ lvlay2,2014 Page2

Yor¡rs Slon¡, & PBnny LnwFm¡r,r

RI\, HATCHER

MRlVpau Japkson 1392{101

MR 226 APPENDIX TAB 5 A/ LB/2ØI4 LØ24Ø 2t4-76Ø-167Ø ?!4-?ãØ-t6?ø D 2/3 El€ctron¡cally Submitted 911120144i421o1 pM cregg County District Clerk By; Debble Kinney ,deputy

CAUSE NO. 2014-1365-A B\\ \t{ THO¡vÍAS JACKSON $ fN THE DISTRICT COIIRT OF $ VS $ GRECG COUNTY, TEXAS fuAÁ TÐLTS COUNTY MUTUAL 6 Ij\TSTIRáNCE COMPANY I 188N IuDIcIAL DTSTRICT DEFENDANT' S ORIGN{AI, ANS WER COMES NOW AAA Texas County Mutual Insura:rse Company, Defenda¡rt in the above styled and nurnbered cause and files íts Oliginal Answcr to the Plaintiffs Original Petition and in support thereof would rcspcctfirlly represerú and show unto the Court the following: I.

Defendânt AAA Texas County lVfutual lnsurance Cornpany denies eaoh and every, a]l and singular, tbe material allegations contain€d in Plaintiffs Original Petition and demands strict proof thereof- u.

Defendaut AAA Texas County Mutual Insurance Company demands a hial byjury, WHEREFORE, PRDMISDS CONSIDIIRED, Defendant AAA Tcxas County Mutual I¡su¡ance Company prays that upon finalhial andheæing hueof, that ao tecovory be had from Defendant AAA Texas County Mutual Insurance Company, but that Defendant AAA Texas Comty Mutual Insruance Company go hence without delay and recover its costs, and for such other and ñrther relief to which Defendaut AAA Texas County Mutual Insurance Company may be justty entitled and will ever pray,

DEFBNDANT' S ORIGINAL ANSWER Page 1

MR227 A/ L8/2øL4 LØtAØ 21.4-2Gø-1.6?Ø, ?1,4-?6ø-L6?Ø t 3/3

Respectfully submitted, WALTERS, BALIDO & CRAIN, L,L.P

L CARLOS A. BALIDO State Bâr No, 01631230 MeadowPark Tower, 15ü Floor 10440 North Central Expressway Dallas, T)(7523l TeL:214-749-4805 Fax: 214-760- 1670 oarlo s, bali do @w-b cl¡rwlìrm, co nr

qERInTcATE OF SERVTCE This ís to certiffttrat a true and correct copy ofthe foregoing document has been mailed, faxe{ or hand delivercd to parties of ín compliarrce with Rulc 2la of thc Texas Rulee of Civil Procedure, on 20r4_ M. RaymondHatcher Alan J. Robenson Sloa4 Bagle¡ Hatchor &Pwry lawFirm P, O. Drawer2909 East Whaley St¡eet Longview, TX 75606 lel: 903-757-7000 fax: 903-757-7574 úatpþçr@sloarrfi rm. com

L CARLOS A. BALIDO I

DEFÞNDAI.IT'S ORIGINA.L ANSWER Page2

MR 228 APPENDIX TAB 6 Electronically Submitted 91312014 8:47:54 AM Gregg County District Clerk By; Natalie Goodan ,deputy

CAUSE NO.2014 - 136s -A THOMAS JACKSON $ IN THE DISTRICT COURT $ vs, $ oF GREGG COLTNTY, TEXAS $ AAA TEXAS COUNTY MUTUAL $ INSURANCE COMPANY $ 188fh JUDICIAL DISTRICT PLAINTIFF'S FIRST AMBNDED PETITION TO THE HONORABLE COURT: Plaintiff Thomas Jackson files this, his First Amencled Petition, and in support thereof respectfully shows the Court the following: A. DISCOVERY CONTROL PLAN 1. Plaintilï intends that cliscovery will be conducted pursuant to a Level 3 discovery controlplan. Tex. R, Clv, P. 190.4.

B. PARTIES 2, Plaintiff Thomas Jackson, an individual, is a resident of Gregg County, Texas.

Plaintiff s Texas driver's license number is XXXXX037. Plaintiff s Social Securitv number is XXX-XX-X454, 3. Defendant AAA Texas County Mutual Insurance Cornpany has generally appeared herein and is before the Court for all purposes.

C. JURISDICTION AND VENUE 4. The Court has jurisdiction over the controversy because the damages well exceed the Court's jurisdictional minimum. Plaintiff seeks monetary relief in excess of $100,000.00 but not exceeding $200,000.00.

5, Pursuant to Texas Insurance Code $ 1952.110, venue is proper in Gregg County.

Texas, which is the county in which the subject wreck occured.

MR 229 D. AGENCY / RESPONDEA'I SUPEIITOR 6. Whenever it is alleged in this petition that Defendant, AAA Texas County Mutual Insurance Company, did any act, omission or thing, it is meant that Defendant's employees, agents, officers, directors, servants, apparent agents, ostensible agents, agents by estoppel and/ot representatives did such act, omission or thing and that at the titne such act, omission or thíng was done it was done with the actual or implied knowledge of Detèndant, AAA Texas County Mutual Insurance Company, or was done with the lull authorizatíon or ratifìcation of Defendant, AAA Texas County Mutual Insurance Company, or was done in the normal and routine course and scope of agcncy or employrnent of Defendant's employees, ageuts, officers, directors, servants, apparent agents or ostensible agents, agents by estoppe[, and/or representatives.

E. FACTS 7. This lawsuit results from a collision that occuned on Jutre 12,2013, at approximately 8:58 p.m. in Longview, Gregg County, Texas. Plaintiff Thomas Jackson was operating his vehicle westbound on Pliler Precise Road in a safe, reasonable and lawtil manner) when he stopped in obedience to a traffic control device at the inter.section of Judson Road and Pliler Precise Road. After stopping, and in obedience to the traffic control device, Plaintiff proceeded to continue traveling lvestbound into the intersection of Pliler Precise Road and Judson Road. Patricia Tompkins was traveling northbound on Judson Road when, with complete disregald for the safety and welfare of other persons or property, she disregarded the traffic control device striking the driver's side of the vehicle being driven by Plaíntiff and causing the collision made the basis of this lawsuit.

8. When the collision occurred, Plaintiffs vehicle was covered by a policy of automobile insurance in full force and etI'ect, which ís the subject of this lawsuit. The polícy of

MR 23O automobile insurance was issued by Defendant and included uninsured/underinsured motorist coverage as defined under the policy and/or by statute.

9. Plaintiff timely and properly notified l)efendant of the motot vehicle collision that is the subject of this suit. PlaÍntiff has tilly complied with all of the conditions of that insurance policy prior to his hling suit against Defèndant. All conditions precedent have been performed or have occuned. Further, PlaintifÏ has complied wíth requests for provision of information to the Defendant.

10. As a result of the collision caused by Patricia Tompkins, Plaíntiff sustained damages that exceed the amount of available and collectibte liability insurance coverage issued to Patricia Tompkins and which covered her negligent actions. Delendant refused to consider Plaintifï s ir{uries" medical billing paid or incurred by ot on behalf of Plaintiff and failed, and continues to fail, to fully compensate Plaintiff for the injuries caused by Patricia Tornpkins, an

underinsured motorist, and give Plaintifithe benefit of the bargain of his uninsured/underinsured motorist coverage present in the insurance policy, in violation of Texas law as described herein below. As a result of their acts and/or omissíons, and unlawful conduct as described herein below. Defendant proximately causecl Plaintiff injury, F.. BREACH OF INSURANCE CONTRACT I l, All of the premiums that were due on the AAA Texas County Mutual Insurance Company policy with Thomas Jackson as the named insured had, at the time of the wreck, been paid and the policy was in full force and effect at the time of the collision. Defendant, AAA Texas Courrty Mutual Insurance Company, kept its insured's premiums and had obligations as described in the insurance policy that was in effect at the time of the incident in question, Defendant to date has failed and refused to pay the money due under the policy, despite demand.

J

MR 23I Specifically, Defendant has determined that Plaintiff s underiusured motorist claim is worth at least $ 25,000, as evidenced by its offer to pay $ 20,000 in addition to $ 5,000 previously paid as personal injury protection policy limits (see Exhibit A). However, despite Plaintiff's demand for payment of this undisputed portion of his underinsured motorist coverage (see Exhibit B), Defendant has refused to tender this amount. This failure and ref'usal to pay constitutes a breach of contract and demonstrates bad faith. Further, Defendant's f'ailure to properly value and fully pay Plaintiffs damages pursuant to its obligations in the policy at issue likewise constitutes a breach of contract and demonstrate bad faith^ G. PETITION FOR DECLARATORY RELIEF 12. Based on the foregoing facts, and pursuant to the policy of insurance in force and effect between Plaintiff and Defendant AAA Texas County Mutual Insurance Company at the time of the wreck, Plaintifi seeks a declaratory judgment pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code construing the contract of insurance ancl declaring Plaintiff s

rights and obligations under the contract. Specitically, Plaintiff seeks finclings that (l) Patricia Tompkins is an underinsured motorist, (2) that Plaintiff is entitled to recover from Defendant Plaintiff s damages resulting from the motor vehicle collision the subject of this suit, (3) that Plaintiffs damages fall within the coverage afl'orded Plaintiff under the policy with Defendant, and (4) a finding specifying the amount of damages, attomey's fees, interest, and court costs that Defendant is obligated to pay.

13. Det'endant AAA Texas County Muttnl Insurance Company's conduct is a proximate and producing cause of damages to Plaintifï, Such damages include, but are not limited to, unpaid benefìts, medical expenses, physical impainnent, lost earning capacity, and

MR232 pain and mental anguish. Such damages have occurred in the past and are likely to continue in the future.

14, As a result of Defendant AAA Texas County lVfutual Insurance Company's concluct, Plaintiff has incurred attorney's fees through trial and appeal.

H. BRE.,\CH OF DUTY OF GOOD FAITH AND FAIR DEALING 15. Without adequate explanation or justification, Delendant AAA Texas County Mutual Insurance Cornpany, by and through its âgents, breached its duty of good faith and fair dealing by denying or delaying payment of benefits to Plaintiff in accordance with its insurance agreement with Plaintiff when it was reasonably clear that it should pay said benefits to Plaintiffl Accordingly, Det'endant is in violation of 'fexas Insurance Codc, Chapter 542. et seq. Further, Defendant has engaged in unfair claim settlement practices in violation of Texas Insurance Code $$ 542,056, 542.057, and 542.058. As a proximate result of these actions, Plaintitt suffèred damages, which al'e more fully outlined herein bclow.

I. DAMAGES ló. As a proxirnate result of the collision, Plaintiff Thomas Jackson sustained serious personal injuries, specifically including neck, back, and head ínjuries and injuries to his body generally. Plaintiff believes some of his injuries are permanent in nature and have had a serious etfèct on his health and well-being. [n connection with such injuries, Plaintiff Thomas Jackson has sufTered physical pain and mental anguish in the past, is suffering at the present, and, in all reasonable probability, will continue to suffer f-or the rest ol'his lifb. Fuúher, it has been necessary for Plaintiff, Thomas Jackson, to pay or incur reasonable and nece.ssary medical expenses in the past and in all reasonable probability will incul reasonable and necessary medical expenses fbr the treatment ol his ínjuries in the future. In addition, he has sustained physical

MR 233 impainnent in the past arrd wilt in all probabilíty continue to sustain physical impairment in the futurc. Plaintiff Thomas Jackson sues f'or the recovery of past and fluture medical expenses, past and future physical pain and mental anguish, antl past and future physical impairment; all in an amount in excess of the minimum jurisdictional limits of this Court. Plaintiff seeks a reasonable amount to be determined by the jury for his injuries.

17, In addition, Plaintiff is entitled to recover attorney's tèes and interest on the amount of his claim at eighteen percent (1S%) per year pursuant to Texas Insurance Code $

542,060.

J. DOCUMENTS TO BE USED 18. Pursuant to Texas Rule of Civil Procedure 193.7, Plaintii'f intends to use all documents exchanged and produced between the parties including but not lirnited to correspondence and discovery responses during the trial of the above-entitled and numbered cause, K. PRAYER FOR RELIEF PREMISES CONSIDERED, Plaintiff requests that the Defendant be cited to appear and answer and that, upon tìnal hearing hereon, PlaintitTrecover as t-ollows: a. Actual damages within the jurisdictional limits of this Court; b. Prejudgment and post-judgment interest as allowed by law; c. Declmatory relief as outlined in the petition; d. Costs of Couft and attorney's fees; and e. All otlier relief to which Plaintiff may show himselfjustly entitled.

MR 234 Respectfu lly submitted, SLoAN, Bacuy, H,qrcHeR & Pennv L¡.w Ftnvt

M, RA R State Bar No,24002243 rhatcher@slo anfirm. com ALAN J. ROBERTSON State Bar No,24067952 arobertson@ sloanfirm. com East Whaley Street Longview, TX 75601 Telephone 903-7 57 -7000 Facsimile 903-7 57 -757 4 ATTORNEYS FOR PLATNTIFF

CERTIFICATE OF SERVICE e'rd i hereby certify that on this J_ lay of September,2}74, a true and correct copy of the ftrregoing document was sent by certitied mail, retum receipt requested, facsimile transmission, and/or e-mail in accordance with the Texas Rules of Civil Procedure to the following counsel of record: Mr. Carlos A, Balido WALTERS, Balroo & CnR¡w, L.L.P Meadow Park Tower, l5tl' Floor 10440 North Central Expressway Dallas, TX 75231

M. RAYM ALAN J. T'SON

MR 235 APPENDIX TAB 7 Electronically Submitterl l'l 6 /20 1 5 3:02:45 P l\A Grsgg County Dis(rict Clerk By: Debbie Kinney ,deputy

CAUSE NO. 2014 - l36s _ A THOMAS JACKSON $ IN THB DISTRICT COURT $ vs OF' GREGG COTINTY, $ Tf,XAS $ AAA TEXAS COUNTY MUTU.{L $ INSURANCE COMPANY T88'h JUDICIAL DISTRICT $

PLAINTIFF'S MOTION TO COI}ÍPEL DISCOVERY TO TIJE HONORABLE COURT: Plairrtiff Thotnas .faokson fiIes this, his lVfotion ro Compel Discovery. plainriff requests that this CoLu't sign an otcJer compelling Delenclant AAA Texas County Mutual lnsr¡rance Cornpany ("AA,A") to fully ans'uvet'/responcl to PlaintitÏ Thomas .fack¡-on's Fírst Request ttr¡ Admissions. First Set of Interrogatories, and First Request lor procluction.

In support thereof, PlaintitlLespectfully shows the Court the following: I. TNTRODUCTION This lawsuit results fì'om a motor vehicle collisior, occurring on or about June I z, 2013, in Glegg Courrty, J'exas, The collision occurrecl at the intersection of pliler. precise Roaci and Juclson Road in Lortgview. Texas. At that time, Plaintiff Thornas Jackson was the dr.iver of a vel:ìcle lawfully and safely traveling westbound on Pliler Precise Roacl, Jackson stoppecl i. obedicnce to a traffic lighl at the intersection of Juclson Road and pliler precise Road, After stopping' md in obedience to the tratTc light, Jackson continued traveling westbouncl into t6c intersection of' Plì.]er precise Road ancl Judscrn Roa.d. paÍicia lompkins was traveling nofthbourrd on .Iudson Road when, with complete rlisregarcl for the satbty ancl welfare of other persons or properfy, she disregarded the red light, struck the driver's side of Jackson,s vehícle, and caused the collisíon made the basís of'this lawsuit.

MR 236 When the collisiorr occllrted, AAA covered Jtckson with a personal aLrtomobile ínsurance policy. AAA's policy inclucled underinsruecl rnotorist coverage, .Iackson's injuries and damages exhausted the limits of Ms. Tompkins's liability insurancc coverage, so Jackson now seeks to enforce against AAA the itrsurance policy for which both hc anct AAA bargained and for which Jackson paid premiurns.

A.4A has prevíously ottþred to pay Jackson $20.000.00 of its $100,000.00 unclerinsured motorist coverage in additíon to the $5,000.00 personrrl injury protection coverage it previously paid and the $30,000.00 of liabiliry insurance paicl by N4s, Tompkins's insurer Despite J¿tckson's demand th¿rt ¡\AA pay this t)mount (ancl thc pru'ties continue to Iitigatc the amount(s) about which they disagree), AÂA let-r.¡ses to pay the $20,000.00 which it has ah.eacly oU'erecl.

Discovery in this malter is governed by a Level 3 discovery control plan. This mattcr has not yct been set f'or trial.

fl. DBF'TCIENCIES IN DB¡-¡]NDAIíT''S DISCOVERY RESPONSES No pafty to this lawsuit disputes that the e vent.s listecl below occurred on the con'esponding dates listed ;

o Octobcl l7r 2014: Jackson's counsel servrs AAA with Jackson's First Request for Admissions. First Request for Procfuctiou, And Filst Set of intenogatolies.

o Novembcr 11r 20t{; AAA's couusel requests (ancl Jackson's counsel grants) the firstof fotlt' extcnsions of AAA's deadlìne to respoud to Jackson's written <iiscovery. The partics agree to extend 4.4.4's deadline to Novembe r 2s,2014. Exhíbit A.

a Novcmber 25, 2011: r\AA's counsel obtains its second extension. The deadline to ob.iectirespond/answer is norv Decemher 10,201.t. Exhibit B. a Dccember 10, 20L4: AAA's counscl obtains its third extension. The deadline to object/respond/answer is now December 17,2014. Exhibit C.

a Dcccmber 17, 2014 AAA's counsel obiains its tburth antl final extension. The deadlÍne to ohr.iectirçspond/answer is now December 24,2014. Exhibit D,

MR 237 ¡ Deccntber 23,2014: AAA serves its Objections and Responses to plaintiffs First Request tbr Admission, its Objections ancl Responses to PlaintifÍ's First Request for Productìon, and its Objections and .A.nswers to Plaintiff s First Set of Intenogatories, Although AAA purports to answe¡ Jackson's discr-rvery. it r,vholly faìlcd to provide meani¡gful respclnses/answers, despite having over iwo months ancl four extensions of its deacllíne to respond, For exarnple: ' In responsc to Jackson's 34 requests folproduction, AAA objectecl to all but 7 requests and produced: o The Texas Peace Officer's Crash Report legarding the subject collision þrevierusly produced by Jackson in discovery); an<I o Black-and-white photocopíes of t',vo digital photographs, presumably of rhe car dliven by Jaokson when the subject collision occurred.

¡ ltr response to Jackson's 20 interrogafories. AAA objected tir nll but I inteuogatory and provided strbstantive answers subject to its objections to only 6 interrogatories.

' AAA objected that Jackson's Requcst for Admission 14, which statcs "Based upon your investigation(s) a:rd/or evaluatíon(s) of Plairrtiff's uninsurecliunderinsured moto¡ist cluim, you have detcrmined that Plaintiff has sustained damage in excess of the sum gf (l) PlaintifFs $5,000.00 personal iqju,y protection coverage and (2) Parricia I'ornpkins; $30,000.00 limit of liability insurance," is a two-part question ancl is vague.

o AAA objected that Jackson's Request for Aclmissíon 17, which states that, "[AAA has] -28,2014,; fàiled to pay any portion of the $20.000.00 that you offcled Plaintiff on April is vague ancl argumentative.

o A.4A objectecl that.lackson's Request fol Admission 18, whìch st¿ttes that,,'plaintiffhas complied with all conditions precedent to lecovering fiom the uninsured/underinsured nlotorist coverage coutained in your policy number TP401644335-1,"is vagge. Further, AAA responcls tlut, "fwlithout waiving this objectior and subject thereto, Detèncfant cannot a<imit or deny. Reasonable inquiry has been macle for this infbrmetion and the information known or easily obtainable is insufficient to enable Defenclant to adrnit or deny." Suoh lackadaisir:al efÏorts to lesponcl to written discovery can hardly be considerecl to be in the good tàith required by Tcxas Rule of Civil Procedure 193,2(c), See also [n re pat,kCiríes Bank, S'W'3d 859,877 (Tex. App.-Tyler 2013, no pet). Consequently. the Cour should l

MR 238 overrule all of Defèndant's objections and compel AAA to provide fulI and complete responses/answers. Sec Tex. R. Clv, P,193,2(c) ("An objection.,,that is obscurecl by numerous t¡ufounded objections...is u'aived unless the [C]ourt excuscs thc waiver tbr goocl cause shown,"),

TII. FACTS NOT APPARßNT F'ROIU THE RECORI) Jackson attaches the tbliowing exhibits to his Motion fbr the Court's rcf'erence and incotporates thern helein as though they were ser forth verbatim: Exhibit A Novernber 17,2014, Rule I I Agreement extending AAA,s deadline to object/respondlalrswer .lackson's written discover-rz tequests untìl November 25, 2014.

Exhibit B Novenrber 25,2014, Rule I I Agreement extending AAA's deadline to object/responcVanswcr Jackson's ',witten discovery requer'ts until December 10. 201 ¿1.

Exhibir C Decenrtrer 10,2014, Rule ll Agreemcnt extending AAA's dcadline to objecti'respond/answer .lackson's written discovery requests until Decembcr 17,2014.

Exhibit D Decernber 17,2014, Rule ll Agrcement extending AAA's deadline to objecVrespond/answer Jackson's written discovery (eqì"lcsts unti I December 24, 2014, Exhibit E Det'cndant AAA Texas Count¡r Mutual Insurauce Cornpany's Objectíons and Responscs to Plaintilf' f'homas Jackson's First Reqtrest f-or Production Exhíbir F Defendant AAA Texas Count¡- Mutual lnsru¿rnce Company's Objections and Answers to Plaintiff fhomas Jackson's First Set of Interrogatories Exhibit G Defendant AAA Texas County Mutual lnsurance Company's Otrjectioris and Responsc.s to Plaint.iff 'Ihomas Jackson's First Request for Adlni.ssions

V. PRA.YETì FOR RtrLIEF' PREMISES CONSIDERED, Plaintifï Thomas .lackson requests that the Court hear and

I

MR 239 ovem¡le Defendant AAA Texas County Mutual Insurance Company's objections to Jackson's First Request for Production, First Set of fntenogatories, and First Request for Admissions, compel AAA to provide fr¡ll and complete answerVresponses to same, and grant all suoh other and ñ¡rther relief to which Jackson may show himselfjustly entitled.

Respectfu lly submitted,

M. RAY TCHER Staûe BarNo.24002243 rhatcher@sloanfi rm.com ALAN J. ROBERTSON State BarNo.24067952 arobcrtson@sloanf ïrm.com SLoAN, BAcLEy, Hnrcuen & Prnnv Lnw Fnn¡ l0l East Whaley Street Longview, Texas 75601 Telephone 903-757-7000 Facsimile 903-757-7574 ATTORNEYS FOR PLAINTIFF

(: I hereby cefifr that on this the of January, 2015 atrue and correct copy of the foregoing document was served in accordance with the Texas Rules of Civil Procedure on the following counsel of record; Mr. Carlos A. Balido WALTens, B¡r.loo & Cunv, L.L.p. 10440 North Central Expressway, Suite 1500

M Dallas, Texas 75231

D HATCHER ALAN J. ROBERTSON

MR 24O WALTERS BATIDO & CRAIN

AusTlN * DAII-AS l DECATUR * HOusrOM CARI,OS A. BALIDO parùrer carlos.balido@wbclawfi rm,com (214) 347-8320 - Oirect Lina Ql 4) 141 -8321 . Dirco,t Facsirnil

Sloan, Bagley, Hatcher &, pety Law Firm l0l East Whaley Street Longview, Texas ?5601 Rer cause No' 201-1365-A; Thomas Jackron vs. AAA'fexas counry Muruar Ilsursyrcy company,In the r ggth Judiciar Disrrict, c.rgg couiíy, i**u..

Our File No. t4g3-77JZS Dea¡ Counsel;

ff this accurately rcflects_our agreement,_please sign below where indìcated and retum a copy to me in accordance with Rule 11 of the Tìxas RuË, oicivil pro"eJui., T-l*"k you your professional courtesíes with this ro, mafter, Very truly yours, /s/ Cailos A. ßatido A. Balido

AGREED TO BY: for Plaintiff

M EA Do w pAR K TowER r..giå¡iiäiåiÏf ,::ffi ,t !.1,*, ro o DALr-As, rEXAs I : ztc FAX zcoffid¡tri,thï 4,t 4s,4lo5 7 523

ïútR 241 WATTERS BALIDO & WBC ^, CRAf N I-- l^v1/ ^nonNEVS,\t

-r AUSTIN I OATIAS i OSCATUR * HOUSTON

CARLOS A, BALIDO Purtner oarlos, botido@wbclawfi nn,com Ql41 341-8320 - Ditocf Lino Ql4) 347-8321 - Di¡ect Facsi¡¡ile

November 25,2014

Y l! E n t q.l I : -tÏ ub e f ,¡ l o t t ûitr t o í n l î r ¡ n. m n t Alan Rohsrtson Slonn, Bagley, Ifatchel' & pcny Law Fir,rn East Whaley Stlcet [,otrgvicw,'Iexos 75601 Re; Cause No,201-1365-A; Thomolt Jaclcson tt,ç, AAA Texat Counp Muluql Iwurunce Contpany Our Filc No, 1493.?7325 Dear Mr, Robertsonl Irlcage ollow this lctter to confirm thot th utanee Company , adnrissions, pl ruld lhis cunrport agreement lo 0u' 'tharù you fo. youl profcssional cooperation and courtesy in this rnar.r.er,

Very truly your,s, r\ ( | -'\-- àr#l' '-- n'aücro CAB:wjh i/l3lt012

WATTERS BALIDO & CRAIN t,L,P, MEADOW PARK IOWER 10440 NORTH CENTflAL EXPRES5WAY SUITE ISOO DALIAS/ TÉXAS 75231 FAt<: 2L4.76o,1670 TrlEpHoNEi 2L4,7 49,Agos www,lhFff¡¡çrg

t{tR 242 Novo¡lbc¡'25,201-4 Page2 AGREED TO BY:

,úL Alun Attoìrey fot Plaintiff

EXI{IBIT B

MR 243 L2/ Lø/2ø1,4 L2t?5 2L4^?€¡ø-1,6?Ø At4-?EØ-1,6?ø t zlz

.-. WALTËRS BALIDO & wBc CRAIN :. ^,t lr)nñf Ys ^r tAW

AUSTTN i o¡rus * oEc¡ruR * nousro¡¡ CARLOS A, BALIDO Pa¡tnrr carlos bal ido@wbolawlìnu,co¡n (21 4) 347 -8320 - Dircct Lino (2,l4) 34?-8321 - Di¡ect Facsirnil Deccmbcr' 10, 2014 Wa Føcsinll¿: 903. 757. 7574 M, Raymond H¿tcher Alan J, Robertson Shnn Bagley Hatcher & Pcny Luw Firm Eæl Whaley Sheet Longrricw, Tcx¡ls 7560 I Re; Cr¡use No, 2lJl'1365-A ?l.rr,mat Jacksc,t'r vc. .44A Texat Conrtgt Murual huut an¿e Conpany; In dre l88th Dishiot Çourt, Gregg Cuunty, Texas Or¡r File No. 1493-77325 Dea¡ Counsel: Please allorv this letter to gerve ae a Rule l1 Agreenrent in the above-referenced matter.

Spccificrrlly, you huvo ¡t8r'eÈd tu sxtunrl DEfbrrdant A.AA Texas Coulrly lr{utual Insurunr.re Compuny's deadlines to sel't,e reslronces and objections to Phinfiil's ttritteri disoovety requosts.

Defend¿utt AAA Texus CounÇ Mutuul lrsulun¡¡e Company's l'üsponsu$ and obþctiorrs to PJilintill's Requost t'ot' Disclosures, !'irsl Sut of Intefogalories, First Ràc¡uest tix Adnrissions un4 Firel Request for Production ¡ue norx due Decembe t 17 , 2014.

If this accurateltrreflEcts our agreement, pleasc sign below where indicated ud return a copJrton:e in ûccordoncu with Rulc ll of the Texas Rulcs o1'Civil Procedure, Thalk you t'ol your protêssional courtesies with this matter'.

Very tr-uly yorus, C¿rl¿s.'1. ßuli¡lo Carlos A. Balido

ÀGREED TO BY: t'or PlnintitT WALTERS SALIoo & CRAIN t,L,P, IV,IE/\DOW PARK TOWER 1U440 NONTfI CENIRAL EKPRFSSWAY StJIlE 15OO DALtÀ9, T€XAS 7523I Fex: 214,i6o, L67O IELEPHoNE: 214,749/g}s www. wbcla wfl rm,com EXt{tBtl c

NIR 2tt4 WALTERS l i BATIDO & I CRAIN t/\y/ ^lIORhtFYS ^f AUSTTN * o¡rres * ogcnruR * Housro¡¡ CARLOS A. BÀI.JDO Putnor carlos balido(@ wbc lawf irm, c on (21 4) 3 4':, -8320 - Diroct Lins (214) 341 -8321 - Drsct !'acsi¡nil Decernber 17,2014 lãu Frcsinùl¿: pLJ. 757, 7i 74 Al.¡n J, Rot¡elfson Sloan Bagloy Hatcher & peny Law Firm I0l B Whaley Street Longview, Tcxas 75d01 Ro; Cruse No' 20 l-1365-A; Tlrcnrat Jlc',tso¡¡ v¡, ,4AA Tex¿tt Cioz.rrúy lufult.taÌ Insttra¿ce Company; In the lBBth DisttictCourt, Gregg County, Texas Our File No. t493-77325 Dcar Coullsol Ple¡rsÉ ullow this letter to sËrv-e as u Rule 1l Agrcement in the übovc-refer'er¡oed r¡ufter, Specilically, you have agrccd to cxtend l)ct'endant -.q.t¿.

Company's de¡dlines to serve r€sponscs, ¿ulsrv€rs arrd fu*s count¡, Insur¿nce Mutt¡rl objections to plalntifis wrítterr dir.o,,,,o1, Itqucsts' Del'endiurt AAA Texas ,counly lvfufual Insu,'¡icu Compury's rùsporrses, **wor* nn,t obleotions to Plaintiff s Request fot Disclosurc, First Set of Intenogatori"ì, Firri Request for Arlmissions mcl Filst Request f'or productiolr urr ¡ro]\¡ ¡iuE Doccmb cr 24,2[14.

If this ¡tccurtttelv retlects_o_ur rgreËruen! please sign belou, rvüule indicatud md refurn ir oopy to trre in ¡ccordance rvith Rule 1l of dre TLxas RuËs ul'Civil prosedure. Thonk jou t'or yout professiorl¿rl courtesies wilh this nluttcr.

Very truly yours, /t/. shley Whøley AshleyVv'hatley

AGREED TO BYI Ala¡r J Attonrcy ibr Pluintill

WALTERS BALIDO & CRAIN L, L,P, MEADOW PARK TO\'!ER 1Û440 NORTH CENTRAL EXPRESSWAY SUITE 15OO DALLAS, TEXÀ5 75231 Fex: 214,760. 1ri70 TETEPHoNE ; 114,7 49.4EeS wËt{HËfi'60m

MR 245 APPENDIX TAB 8 Electronically Subm¡tted S/1O12O15 3:46:37 PM I Gregg County District Clerk - {.-- By: Kindell Whitley ,deputy }( JOI-rN t). sLoÂN '+ t,,\(]lilitiN t;. BACLTY SLOAN, I]AC LEY, ^t.r\NJ.

R(Jt¡uftl'soN C,ilì.SON R, tìUNtL M. rù\YlvtOND tU\1'CÊl Dt( HATCI-ltrR ¿i¿ PERRY .lUSl'l N r\. Stvl l'l'l.t (ìL.tiNN A. PlìßRY'+ lÂw f:lltñl (il.r\l' l(. ZIìt.ltS I' 'll¡,¡,lt r¡rrli¡l llr,'rul lrj¡¡¡r I,'¡l lr$ ,)l ¡il,'r,l í1, ,r¡l ¡l,l!.x-k! ',t I ¡,,r1 l.()N(;vl t:\\i . I t c) Us'r'oN

Septembel 10, 2015 VÍil E-filins nnd Focsíntile 2 I4-760-1670 Mr. Carlos A Balido WnlteRS, Bnuoo & CRRIN, L.L.P. Meadow Pa¡k Towers l5rlt Floor 10440 North Central ExpresswaY Dallas, Texas 75231 Re: Thomas Jqckson v. AAA Texcts County lululual Insurance Contpnny; Cause No: 2014-1365-A; In the l 88th Distlict Cotr¡t of Gregg County, Texas.

NOTICE OF }IEARING Dear Mr. Balido: Please be aclvised that a heariug on Plaintilß' þIotion to Compel Discovery is scheduled Thursday. October l. 2015 @ 1:00 n.m., in the 188th Judicial District Court of Gregg Courty, Texas.

If you have any questions, please fbel [r'ee to coutact our office.

Rose Feazell Paralegctl to Glenn A. Pety and Jttstín A. Smith Irf 3392.OOl JACKSON Viø E-filins and filcsímile (903)236-8603 Darvn Callow l88tl' District Court Gregg County, Texas

rrl i r,i', i,ri,r .-rr,rr i,,,,,,1,., i,, . ,í |il lrir,rt t)(ìì--i rìlJr i : 1,,¡,,i1 ti;', _i',, .,., .i,!,!ìrjrL,{¡,ri MR 246 APPENDIX TAB 9 Electronically Submitted 101112015 9:48:35 AM Gregg County Ðístrict Clerk By: Debb¡e Kinnoy ,deputy

CAUSE NO. 2014 - 13ó5 -A TTIOMAS.IACKSON $ IN THE DISTRICT COURT $ vs. $ OF'GREGG COUNTY, TEXAS $ AAA TEXAS COUNTY MUTUAL s INSURANCE COMPA¡I-Y $ 188Ih JUDICIAT, DISTRICT PLAINTIFF'S R.ESPONSE TO DEF'ENDANT'S EMERGENCY MOTION TO RESET HEARING TO THE HONORABLE COURT: Plairrtiff Thomas Jackson files this, his Response to Defèndant's Emergency Motion to Reset the Hearing on Plaintiff's Motion to Compel and. in support thereof, would respectfully show the Cou¡t as follows: I. ARGUMENT & AUTHORITIES As the basis for its emergency motion to reset the hearing on Plaintiffls motion to compel, Defendant argues two bases: tìrst, that they were not timely served with notice of the hearing; and, second, they have not had sufficient time to respond. ó'ee Def's Mtn, pg. I-2. On July 15,2015. Plaintiff sent a letter, enclosing his motion to compel, and seeking to meet and confer with Defendant on its discovery defìciencies. Ses Ex. A, Letter Dated 7/1712015.

Following this letter, PlaintifTattempted to contact Defendant th¡ee times, on July 30, 2015, July 31,20[5, and August 3,2015, to confer on the discovery deficiencies, without avail. S¿e Plt's Mtn to Compel, Certificate of Conference, Plaintiff f,rled its Motion to Compel on August 7, 2015, in the hope that the fìling might prompt Defendant to confer on the motíon, supplement its discovery, or at least respond. It did not. Defendant's second basis, that it has not had sufficient time to responcl, is without merit; Defendant has known the contents of Plaintiff s Motion to

Plaintiffs Response to Defendant's Emergency Motion to Reset Hearing Page 7

Ì{tR 247 Compel since July 15, more than sixty days prior to the hearing, and that Motion has been on file with the Court, and was served on Defendant, on August7,2015, over fifty days prior to the hearing.

On September 10, 2015, approximately trvo months after sending Plaintiff s initial meet and confer letter, ancl over a month after filing the motion, Plaintiff noticed the motion for hearing on October 1,2015. Defendant claims that it "received less than three days' notice prior to the hearing and has not had sufficient time to obtain and file evidence in support of its Response to Plaintifls Motion to Compel." Seø Def s Mtn, pg. 1. The notice of hearing was e- filed and, thus, should have been served on Defèndant electronically through the e-filing system, if Defendant maintains an e-filing account as it is required to do in Gregg County. Understanding that tech¡ical errors may occrtr, however, and presuming that they did not receive service through the e-filing system, Plaintitïa/so served them with the file marked copy of the notice of hearing by facsimile, a copy of which, along with the fax confirmation sheet, is attachecl hereto. ,9ee Ex. B, Notice of Hearing and Fax Confirmation, Thus, despite its protestations to the contrary, Detèndant has been provided notice of the hearing far in excess of the three-day minimum.

It is understandable that, from tíme to time, thlough innocent místake, oversight or tluough no fault of its own, a party will not be able to comply with or meet certain deadlines. In such instances, Plaintiff is inclined to accommodate opposing counsel and, by agreement, permit relief. Defendant's eleventh hour cry for delay on bases that have no merit, however, is the latest in a pattern of conduct which has caused intractable delay going back f'ol almost a year.In the past, Plaintiffs counsel has, consistent with its practice, provided repeated accorìmodations.

PlaìntÍffs Response to Defendant's Emergency Motlon to Reset Hearlng Page 2

MR 248 Those accommodations have not prompted Def'endant's dilatory conduct to be followed with any semblance of diligence.

On October l7'h, 2014, PlaintitT sent his first set of Interrogatories, Requests for Production, and Requests for Admission. Defendant's responses were due on November 16, 2014. OnNovember 17,2074, after having failed to comply wíth its deadline, Plaintitïprovided Defendant an extension to respond to discovery, moving the deadlìne to December l, 2014. See Ex. C, Rule 11 Agreements. On November 25,20t4, Plaintiff provided a second extension to Defendant, moving the deadline to December 10, 2014. See id. On December 10,2014, Plaintiff provided a third extension to Defèndant, moving the deadline to December 17,2014. See id. On December 17,2014, Plaintiff provicled a fourlh extension, moving the deadline t<l December 24, 2014. See id. On December 23,201,4, after more than sixty days and four extensions, Plaintiff finally received Defendant's responses to discovery, which were sorely deficient. The parties proceeded with certaín discovery and motion practice, On April 22,2014, Defendants' called to confer on Plaintiffs Motion to Quash certain unlimited depositions on written questions to Plaintifls medical providers. During that conversation, Defendant expressed its interest to engage in early mediation to avoid íncurring substantial litigation costs. The parties resolved their differences regarding the depositions on written questions and Plaintiff tabled his motion to compel began attempting to schedule mediation. Plaintiffls counsel circulated fourteen (14) available dates in June and July. Defendant was unavailable for all of them. At Defendant's request, Plaintiff s

counsel circulated twelve (12) additional available dates in August and September.

On June 24, 2015, after more than two months of attempting to scheclule mediation, Defendant, despite its expressed desire for early mediation, finally provided a mediation date. In

Plalntiff s Re spo ns e eo D efe nda nt's Emergency Motlon to Reset Heoring Page 3

MR 249 the four month window of time for which Plaintiff had provided available dates, Def'endant selected the very last available date of September 29,2015. This course of dilatory conduct, which became apparent on June 24, 2015, is what prompted Plaintiff to complete his motion to oompel and begin the process of attempting to confer on July 15,2015.In the more than sixty days ftrllowing that letter, despite repeated attempts to confer, the flrling of the motion, the filing and service of the notice of hearing (again, by two separate means), Defendant has been as unresponsive to Plaintiff s attempt to diligently litigate this case as it was in Octobet of last year, when Plaintitïprovided f-our separate extensions to Defendant's deadline to respond to the vety discovery that forms the basis of Plaintiff's Motion to Compel.

I. CONCLTJSION AND PRAYER For the reasons expressed above, Plaintiff respectftllly requests that the Court deny Defendant's Ernergency Motion to Reset the Hearing on Plaintiffls Motion to Compel, and for any and all other relief to which Plaintiff rnay be justly entitled.

Respectf ully submitted, SLoAN. BAcLEy, HRrcu¡n& Pennv Lnw FInv

/s/ Justin A. Smith GLENN A, PERRY State Bar No, 15801500 qperrv@,sloanfirm, com JUSTIN A. SMITH State Bar No, 24068415 [email protected] East Whaley Street Longview, Texas 75601 Telephone 903-757-7000 Facsimile 903-75'1-7574 ATTORNEYS FOR PLAINTIFF

Plointìffs Response to Defendunt's Emergency Motion to Reset Hear[ng Page 4

MR 25O CERTIFICATE OF SERVICE I hereby certify that on this the l't day of October, 2015 a true and correct copy of the foregoing document was served in accordance with the Texas Rules of Civil Procedtre on the following counsel of record: Mr. Carlos A. Balido Wllrens, B¡ltoo & CRerN, L.L.P. 10440 North Central Expressway, Suite 1500 Dallas. Texas 7523I /s/.Iustin A. Smith GLENN A. PERRY JUSTIN A. SMITH

Plølntiffs Response to Delendant's ßmergenq Motion to Reset Hearlng Page 5

tutR 25t * JOHN D. SLOÂN r+ LAUR.EEN 1¡, BACLEY SLOAN, BAGLEY J, RYAN FOWI.eR, A¡J|Nr. ROBERTSON M. RÂYMOND HATCHER HATCHER & PERRY CA.RSON R- RUNGE GLENN.4. PERRY'+ 'llo¡nl C<nilìrrl |cronal lnir¡,1 rirl t:w LAW FIRJV1 JUSTIN À SMTTH ,\roo¡r¡l tìn,rrrl ¡rf T-i¡l Âri,oc¡rr CIJ\y R zRr RST LONGVIEW - HOUSTON July 15,2015

Il'nLTERs, B,tttoo & CRAIN, L. L. p, Meadow Pa¡k Towers l5rh Floor l0M0 North Central Expressway, Suite 1500 Dallas, Texas 7SZ3l Re: Thomas Jøckson v, AAA To,s county Mutuar Insurance compøny;cause No. 2014-1365-A; In thc lSgth D¡strict court of Gregg count5r, Texas Dear Mr. Balido: Enclosed please find PlaintifPs Motion to Compel discovery from Defendants. This letter confer requirements under the Texas Rules of granted four extensions to their discovery s to PlaintifPs discovery and have obscured

If you wish to conference further on Defendant's responses to discovery, please feel to contact me prior to July 31, 2015. please note, however that , I will be out of the office from July 2l through July 29,2015. If I do not hear from you by July 3r ,2015,I wÍll be forced to file the enclosed Motion to Cornpel.

JAS/cfm Enclosure 3392.00I JACKSON

10I Easr \lhaley Srreer, Longview, To¡as 75601 Phone 901.757.7000 | Fasimi le 903,7 57,7 574 | www,sloanÊrrm,com EXHrBrl A MR 252 CAUSE NO.2014 - 1365 -A THOMAS JACKSON s IN THE DISTRICT COURT s v3. $ OF GREGG COUNTY, TEX.AS $ AAA TEXAS COUNTY MUTUAL $ INSURANCE COMPANY $ TSEIh JUDICIAL DISTRICT PLAINTTX'F'S MOTION TO COMPEL DISCOVERY TO THE HONORABLE COURT: Plaintiff Thomas Jackson fïles this, his Motion to Compel Discovery. Plaintiff requests that this Court sign an order compelling Defendant AAA Texas County Mutr¡al [nsurance Company ("ÀAA") to fully answer/respond to Plaintiff Thomas Jackson's First Request for Admissions, First Set of Interrogatories, and First Request for Production. fn suppof thereof, Plaintiff respectfully shows the Court the following: I. INTRODUCTION This lawsuit results from a motor vchicle collision occurring on or about June 12, 2013, in Gregg County, Texas. The collision occurred at the intersection of Pliler Precise Road and Judson Road in Longview, Texas, At that time, Plaintiff Thomas Jackson was the driver of a vehicle lawftrlly and safely traveling westbound on Pliler Precise Road, Jackson stopped in obedience to a traff,tc light at the intersection of Judson Road and Pliler Precise Road. After stopping, and in obedience to the traffic light, Jackson continued traveling westbound into the intersection of Pliler Precise Road and Judson Road. Patricia Tompkins was traveling northbound on Judson Road when, with complete disregard for the safety and welfare of other persons or property, she disregarded the red light, struck the driver's side of Jackson's vehicle, and caused the collision made the basis ofthis lawsuit.

EXI{IBIT A MR 253 When the collision occuned, AAA covered Jackson with a personal automobile insurance policy' AAA's policy included underinsured motorist coverage. Jackson's injuries and damages exhausted the limits of Ms. Tompkins's liability insurance coverage, so Jackson now seeks to enforce against AAA the insurance policy for which both he and AAA bargained and for which Jackson paid premiums.

AAA has already determined that Mr. Jackson was entitled at least $20,000,00 of its $100,000.00 underinsured motorist coverage, in addition to the $5,000,00 personal injury protection coverage it previously paid and the $30,000.00 of Iiability insurance paid by Ms. Tompkins's insurer. Despite Jackson's demand that AAA pay thís amount (and the parties continue to litigate the amount(s) about which they disagree), AAA refr¡ses to pay the $20'000.00 which it has already deterrnined Mr. Jackson is entitled to and which AAA offered.

Discovery in this matter is governed by a Level 3 discovery control plan. This matter has becn setfor trial on February 8,2016.

II. DEFICIENCTES IN DEFENDANT'S DISCOVERY RESPONSES No pafy to this lawsuit disputes that the events listed below occuned on the corresponding dates listed :

o October 17, 2014: Jackson's counsel serves AAA with Jackson's First Request for Admissions, First Request for Production, and First Set of intenogatories, o November 17r 2014: AAA's counseJ requests (andJackson's counsel grants) the first of four extensions of AAA's deadline to rr spond to Jackson's witten discovery. The parties agree to extend AAA's deadline to November 2sr2014, Exhibit A, a November 25r 2014: AAA's counsel obt¿ins its second extension. The deadline to objecVrespond/answer is now December 10,2014. Exhibit B.

a December lo, 2Dl4 AAA's counsel obtains its third extension, The deadline to objeclrespond/answer is now December 17,2014. Exhibit C.

December 17,2014: AAA's counsel obtains its fourth and final extension. The deadtine

EXHIBIT A MR 254 to objecvrespond/answer is now Decernber z4rz0l4. Exhibit D.

' I)ecember 23, 2014: AAA serves its Objectíons and Responses to plaíntiffs Fi¡st Request for Admission, its Objections and-Responses to Plaintiffs First Requesf for Production, and its Objections and Answe¡s to Plaintiffs First Set of Intenogatories.

Although AAA purports to answer Jackson's discovery, it wholly failed to provide meaningful responses/answers, despite having over two months and four extensíons of its deadline to respond. For example; r In response to Jackson's 34 requests for producfion, AAA objected to ¡ll but 7 requests and produced: o The Texas Peace Officer's Crash Report regarding the subject collision (previously produced by Jackson in discovery); anã o Black-and-white photocopies of mo digital photographs, presumably of the car driven by Jackson when the subject collision occurred, ' In response to Jackson's 20 intenogatories, AAA objected to alt but I intenogatory and provided substantive answers subject to its objections to only 6 intenogatories, o AAA objected that Jackson's Request for Admission 14, which states "Based upon your investigation(s) andlor evaluation(s) of PlaintifPs uninsured/underinsured motori'st cläim, you have determined that Plaintiff has sustained damage in excess of the sum of (l) PlaintifPs $:,0.00 personal injury protection cou"rage and (2) Parricia Tompkins; $30,000.00 limit of liability insurance,'tiÍi a two-part qurJioo and'is vague.

As4v{ objected that Jackson's Request for Admissíon 17, which states that, ,,[AAA ' hasl failed to pay any portion of the $20,000,00 that you offered Plaintiff on nprl)A,2014,; is vague and argumentatjve.

o AA\A objected that Jackson's Request for Admission 18, which states that, "plaíntiff has complied with all conditions precedent to recovering from the uninsured/underinsured y number TP4016443353,"is vague, Further, this objection and subject thereto, Defendant y has been made for this information and the s insufficient to enable Defendant to admit or deny." Such lackadaisical cfforts to respond to witten discovery can hardly be considered to be in the good faith required by Texas Rule of Civil Procedure 193.2(c). ,See also In re park Citíes

EXHIBIT A MR 255 Bank,409 S.w.3d 859,877 (Tex, App.-Tyler 2013, no pet,). Consequently, the cou¡r should ovem¡le all of Defendant's objections and compel AAA to provide full and cornplete responseVanswers, ,See Tex. R. C¡v. P. 193.2(e) ("An objection,..that is obscured by numerous unfounded objections.,.is waived unless the [C]ourt excuses the waiver for good cause shown,',), III. FACTS NOT APPARENT FROM THE RECORI) Jackson attaches the following exhibits to his Motion for the Court's reference and incorporates them herein as though they were set forth verbatim: Exhibit A - November 17,2014, Rule I I Agreement extending AAA's deadline to object/respond/answer Jackson's written discovery requests until November 25,2014.

Exhibít B - Novernber 25,2014, Rule I I Agreement extending AAA's deadline to objeclrespond/answer Jackson's written discovery requests until December 10,2014, Exhibit C - December 10, 2014, Rule I I Agreernent extending AAA's deadline to objecVrespond/answer Jackson's w¡ifen discovery requests until Decembet 17,2014.

Exhibit D - December 17,2014, Rule I I Agreementextending AAA's deadline to objecVrespond/answer Jackson's witten discovery requesfs until December 24,2014.

Exhibit E - Defendant AAA Texas County Mutual Insurance Company's Objections and Responses to Plaintiff Thomas Jackson's First Request for Production Exhibit F - Defendant AAA Texas County Mutual Insurance Company's Objections and fuiswers to Plaintiff Thomas Jackson's First Set of Intenogatories Exhibit G - Defendant AAA Texas County Mutual Insurance Company's Objections and Responses to Plaintiff Thomas Jackson's First Request for Admissions

V. PRAYERFOR RELIET' PREMÍSES CONSIDERED, Plaintiff Thomas Jackson requests that the Court hear and

EXHIBIÎ A MR 256 ovem¡le Defendant AAA Texas County Mutual Insurance Cornpany's objcctions to Jackson,s First Rcquest for Production, First Set of Intenogatories, and First Request for Admissions, compel AAA to provide full and complete answers/responses to same, and grant all such other and further relief to which Jackson may show himselfjustly entitled, Respecthrlly submitted, SLoAN, BAcLEy, Hnrcnen & pennv L¿w F¡nu

/s/.Iu.ctin Smtth GLENN A. PERRY State Bar No. 15801500 [email protected] JUSTIN A. SMTTH state Ba¡ No. 24069415 [email protected] l0l East Whaley Street Longview, Texas 75601 Telephone 903-757-7000 Facsirnile 903-757-7574 ATTORNEYS FOR PLAINTIFF

CERTTFTCATS OF SDRVIqE I hereby certifi that on thís the lsth day of July, 2015 a true and conect copy of the foregoing document was served in accordance with the'iexas Rules of Civil procedwe on the following counsel of record: Mr. Carlos A. Balido Wnr,rERs, B¡r.loo & CRn¡N, L.L.p. 10440 North Central Expressway, Suite 1500 Dallas, Texas 75231

GLENN A. PERRY ruSÎN A. SMITH

EXHIBIT A MR 257 ovemlle Defendant AAA Texas County Mutual Inswance Company's objections to Jackson's First Request for Production, First Set of Interrogatories, and First Request for Admissions, compel AAA to provide full and complete answers/responses to same, and grant all such other and fi¡¡ther relief to which Jackson may show himselfjustly entítled.

Respectfirlly submitted, Slonw, B,a,cLEy, HnrcHgR & pennv L¡w Flnu /s/ Justín A. Smith GLENN A. PERRY State Bar No, 15801500 gpeny@sloanfirm,com JUSTTN A. SMITH State Bar No. 24068415 í[email protected] l0l East Whaley Street Longview, Texas 75601 Telephone 903-757-7000 Facsimile 903-757-7574 ATTORNEYS FOR PLAINTIFF

CERTIFICATE O[' SERVICE - I hereby certify that on thís the l5th day of July, 2015 a true and correct copy of the foregoing docr¡nent was served in accordance with the Texas Rules of Civil proceduró on the following counsel of record: Mr. Carlos A. Balido WnlreRs, Bnuoo & CRnn, L.L.p. 10440 North Central Expresswey, Suite 1500 Dallas, Texas 75231

GLENN A. PERRY JUSTIN A- SMITI{

EXHIBIÎ A tutR 258 lorfN D. sroANJR '+ )k I.{UR8INF, EAGI.SY SLOAN, BAGTEY, Âr.Aìrr. RoBERIIiON C.{8SONR, RUNGE M. NÂTMONDHATCI{ER HATCHER & PERRY tusl'tNn"sMrTH GLB{NÁ" PERRY'+ 'l!¡d Csifli I'Fo¡ lrtl LAW FIRM CIJIY R ZG¡.8ST lnfoqr lew .ñ-úlqdl lo¡r{ of Trü¡ ^¿@y TONGVIry.HOUSTON

FACSIMILE TRANSMITTAL LETTER July 15,2015

TO: Carlos A. B¡lido COMPAhIY¡ Yallers Bofldo & Crain, LLP FAX: (2t 4) 1 60-167 0 or Ql4, 341 -8321

fiRoûr: Claudia Fuentes-Mertinez Legal Secretøry þ fusün,4. Smíth RE: Thomas føchson v. &4u4 Tcxøs County Mutua| Insaronce Company 3392-00r ORIGINALMAILED: Ycs, Regular U.S. MaÍt NI.IMBER OF pAcES, INCLITDING THIS COVER LETTER: 7 Ple¡se sec ¡ttached.

rn TntxsulssloN rs NoT coMpLETE, PLEASE CALL (903) 757-?000.

CONX'IDENTHLITY NOTICE: Thls fôcrimllo tr¡nsmigsion (and/or thc documcnb accomprnylng ll) may contaln confidonti¡l informstlon belonging to lhe scnder whicù is prolcctrd by tho rltorney-client privlloge. Tho inform¡tlon i¡ intendeú only for the use of the indlvldorl or gntlty n¡med obove. lf you rre not thc intcnded rociplcnt, you ¡re hercby notified thrt eny dlsclosuro, copying' di¡tribufion or tho toking of rny rctlon in roll¡ncc on (he contcnk of lhí¡ lnform¡tlon is un¡uthorized rnd strictly prohibitcd. lf you have rocclved thie tr¡n¡misslon ln srror, please immcdlotely notlfl us by tclcphonc to arrunge for lhc roturn of the documcnb.

I 0 I tast V4rde¡ Strecr, Long,ior','[c"-as 7i60 I Phone 903,757.7000 | hceinríla 903.757.757 4 | rlsrrtlonnfi rrn.corn EXI{IBIT A MR 259 07/L5/20r5 ffED 13:14 FAX 903 757 8750 Sloan Bagley gatcher Øloor r a r ** * ** a * *irt**t I t t t t t ttt Ð *rr FN( MttLrr Ex REPORT rri * rrt rt*l*rr****t *t*f t******

JOB NO. 0620 DEP[. TD 33920 01 Pes. 7 fX INCO¡@LEIE SRAI¡SÀCÎION 0K 12I{7601670 ERROR :::::_o""'

lQtlN D. SLOÁNJR. '+ SLOAN, BAGLEY, ÂIJINJ, IOEERßON i^rrnB8¡Ín DÀcLEy c^fisoN n, RUNcs M, Î/TYMOND tû{ÎC}mR HATCHER & PERRY JUSflNrl. SM¡I'H OI¡NN À PDRIY'+ cr,aY R, z[r¡sr 'lo¡td ü¡llî¡d ft¡c¡¡l lnlury'hltl ltu tAW FIRM ñord ol 'l1t¡l I.ONGVIBV. HOUSTON 'Nrlutrl ^'ltsry

FACSTMILE TRANSMITTAL LBTTER July 15,2015

TO: C¡rlos A. Bslido COMPANY: Wnlte¡s Snlldo & Cmln, LLP FAX: (2141760-t670 or (214 ) 347-8321

Í'ROM¡ Cl¡udin f,'ucntes-M¡rllnez Legal Secrutary to lustln A. Smlth RE: Thomas Jockson v. ,4,4,4 Teras County Mutuol Insurance Company 3392-001 ORIGINAL MAILED: Yw, Rogular U.S. M¡il NUMBEROP PAGES, TNCLUDINC TIIIS COVER LETTER:7 PleRso ¡ec ¡tlnched.

rF TRANSMISSTON IS NOT COMPLI¡TE, PLEÀSE CALL (903) 757-7000.

CONFIDENTIALITY NOTICE¡ Thlc f¡c¡lmllo trnn¡mlrslon (nnd/or lio documonar ll) niy conarh confldonllal lnlbrm¡tlo¡ bolor3lng lo lho randor wbleh l¡ protccl.d by rccomptnylng Ito rttornry-ollenl prhllo¡c. Th¡ lnfornntlon l¡ lntondd only for lh¡ u¡o of lho lndlvldt¡rl ot .nl¡ly n¡nrü rbova. lf you rrc not th. lahndrd r.clelcoa, you rrc hü.by nollflüd lhîa iny dJrolocurc' 0r tho lîllnl ¡f rny rcllon ln rollrncc on lho conlrnlr o? lhl¡ lnlormrtlon l¡ copyln3, rllclrlburlon unruthorl¡cd rnd strlctly prohiùltcd. lf you hnvo rccelvod thls trnnrmlulon ln orrort ploirc lmñ0dl¡toly noll$ ur by tolophonc to trrnngc for llto rolurn olths documcntt.

EXHIBIT A MR 260 Elrclrcnlcalþ Subnlltrtl e/tü2016 3:4037 PM Gllgg ComU OlciddClerk Ð: Klndell Wttltlcy depuf * JOHN D. $l'O¿11{'r SLOAN. BACLEY ,ü!ÂNr, ROI¡ERTSON uun¡4b¡ r, t,tc¡llÌ QITBON R. ITI'IVGE Àt n^lltfoND¡{AlcHßn HATCH ER & PERRY JUSTINA, Sï{tTt{ 'cr¡htl¿nÉinv.+ I.AW FIITM cl.^tn. zÉ,usr '¡¡ú CarlA¡ ¡Þ{ l.Í¡7 Îrùt lil aN¡¡{d ño¡r'l uf'trt¡l Âri.*¡t t.oNGVlË\r? - HOUS'ION

SePtember 10,2015

YlsE llllna and Ft$lnilc 2H'760'1670 Culp¡"ABi¡lído Ir,fr.

W-'¡¡tgRs,B¡t-Do & GRôtw' L.L.P. tr4oadow Pqrk Tgwers lltr Floor 1,0440, Ñç4b,Gçntrul ExPresewaY Dalfre,,Tem¡'15231 Re: Jqclxonv. ,ù4íTexas County Mulual lnntrance Company; CauseNo: Thomas 20l4rl 865.-A; In the [88û Distict Court of &egg County, Tsxas.

NOTTCE On ITEARINg DçuìÍr. Balido: Flense b.e adviscd that a hea¡ing on Plaintiffs' Motio¡t to Compel Discov9.ry ls schedulsd ø ftunÈsll gcloter f. AILIS f¡00 n-,m,. in the l88tl¡ Judicial.Disbict €or¡¡t of GtQgg Counff' Tèxas, Ifyou haye any questíons, pleæe fcel fice to cootact our ofhce.

Rosc Feazell Porolegal lo Glenn A, PerrY and fusünA. Smlth hf 3392.001JACKSON

Itßü DJ.stíct corut Orogg'CorrntV; Texas

l0l Frrl Vhrrlcy Srrccr, l.urrgvíurr,'fc¡r¡ 7t6Ol Itholç l)03.717.7(100 l l:ncrinrils !01.75T,757{ l rrrnr.slt:rnfirrrr,rorr

EXI{tBrl B MR 26I 091t012015 rEU l51 52 FAx 903 75't 7574 Sloan !aw Fír¡¡ üoor *r a rt *rIr tf,r * t I È **tt tt rI*r I .tt FN{ üuLrt îx Rf,¡roRr r*r

.loB üo. 0s9t DEE8, ID 3392001 PGg. 2 ÎX f¡tcoupr¡¡lE TnAlrgÂc!Îoll or l,2Irr60r670 9032368603 ERNOR

FACS¡MTLE IIIANSMTTTAL LET.TDR Soptorn[cl f5,2015

TO: Cnrlos A, Bnlido COMPANY: jlolta¡s Bnlhlo & Crnhb LLP IIAX: (2141160-l(u'0 TOt Dnwn Cnllow COMPANY: !8dþ Dl,çt¡ict Ctnrl, Gregg Coutly, Tuns FAX: (903)23G8603

FROM: Roso Fonuoll Podagnl to Glsnn Å. Peny øul fnsiln à Suúth RD: Thoant fockson v. ¡lÁÁ lltxas Conngt Mulnnl Conpnny 3392.00r ORICINAL MAlLltrD: No¡ fnehrllo only¡ NUMBER Otr PAGDS' INCLUDING'fHlS COVER LGTTER: 2 I

I Plonsc sce nltrchctl, Phrlntiffs Nollco of Honring on lts Motlon to Compel Dhcovory. ¡

rlr TRANSMIÍ¡SION tS NOT COMPLDTE, pLnASD CArL (90ti ?57-7000. i NOTICIX¡ Tlrl¡ lht¡lmllo lr¡nsnrbslon lho dooun¡oul¡ oroompnnyln¡ ll) mny conhln collhlonllnl lnlb7rrnll0r lrôlonglng lo lho whlcl¡ l¡ prolcclcd òy lho nllomo¡ollonl 0rlrlto¡0, TÛo ft¡lbrn¡¡llon h lnlondoú onl, for llto ruo of Intllvtftrnl ot onllty nnnod nbovo, lf you lro nol llro lnlontlorl lhnt ¡ny dlrôlororo, copylng" dhlrll¡ulloo or llro lnhlng of nny of ll¡f¡ lnlbrnqtlon lr unIul[orl¡od nnd rhlß(ly proltlbllctl. lf you ltnvo ro¡olvcrl lhl¡ ln orrorr plonto lmmo¡llnloly nol¡ly u¡ lry aolol¡hono ao nrrrurto for llrô toht'h ollh0 rlost¡nlonlr.

EXI{IBIT B MR 262 * -5,to,A'bl Lr\W lBt\4 ffit LoNÊ'1,ptt_HoúSIóN

FACSIMILE TRANSMITTAL LETTER Scptembcr 15' 2015

TO¡ C¡rlos A. Bslldo COMPANY¿ Wahe¡s Bditlo & Croìn' LLP SAX¡ (2141760-1670 TOI D¡wn C¡llow COMPAI{Yz IEdn Dlstrlcl Coa¡t, Gregg County, Tuas FAX; (903)236-8ó03

Tß,OM: Rose Fe¡zell Prrolegal to Clenn A. Peny ond ,IusilnA,9mlth RE¡ Thomas ,Iackson u.4',A Texrc Coung Matual nl¡^*" Company 3392-00r ORICINAL MAT ED: No' facslmlle onlY; I NI'MBDR OF PAGES, INCLT'DING TEISCOVERLBTTER: p Plea¡e see ettsched, PleiotifPs Notice of Hearing on its Morion ti Compel Dlscovcry. I

IF rnrxsußsloN Is NoT CoMPLETE, PT,EASE CALL 737:1000.

CONFIITEDITIALITY NOTICE: This f¡cglmlls tr¡n¡ni¡¡lon lhc documcol¡ rccompenying lt) rnay cootaln conlidcntl¡l lnform¡tlon Dololtg,log to the whlch lc protectod by lhc ottornoy+lhnt prlvilogc. Tho lnformotion lc Inlcndcd only for tho u¡¡ the lndlvfduql or €nllty o¡med ¡hovs lf you aro not tho lntonded rsclplc¡t' you rro hrreby that ¡oy dl¡clo¡urq copylngt dhtrlbullon or the toklng of nny nsfaon ln r¡llRnc¡ on the oi lhl¡ lnform¡tfon ls Il uo¡uttorlz¡d ¡nd ¡lrlctly prohlbltcd. you ltrve rccelved this ln crror, plcrie imardlolcþ noll$ ur by tolcphonr to errongo for ll¡o rellrn ottho

EXHIBIÎ B MR 263 ,oHN D.Sr.OlW'r lÁt REElt t.8¡[C1..ÉY t' SI,OA¡I, BAGTEY A¡.¿{Nr. ROoERTSON GANSON & RUNGE M, RAYMOND HATCHER HATCHER & PERRY JUSTTNÀSMITH GLE{N À PERRY'+ LAW FIRM ct vR" zEl¡¡¡T çrr¡llr¡ Ètrrr¡ lolùrt I'rl¡l t¡w 'B.,rrú rñrirrul 0oll of 'frirl Àft*7 LONGVII]T. HOUITTON

Septembcr 10,2015

Cause No:

NOTICE OF IIEARING DcarMr. Balido: I

Please be advíged that a hoaring on Plaíntiffs' Motion to Comfrel Discovery is scheduled Thur¡d¡yr-October I. 2015 tô l:00 n'm.. in the l88th Judicial Dish{'ct Court of Gtegg County, Texas- I

Ifyou have any questiont, please feel free to contact our offrce.i

Rose Feazcll Paralegal to GleÅnA. Perry and JustínA. Smlth kî 3392-00t JACKSON Wa E-ßllns and facsûnlle (90il2i6-8603 DaumCallow t88t D¡strict Court Gregg County, Texas I

I . I 0 I E*c rù0hcley .Srest. le¡gy¡.t*, 'l'exos 7 f 60 I I Phone 903.757.7000 | Facsirnil e rO3,717,7j74 I,*wrv.slocrrfi rt,<om

EXr{tBtl B ;

füR 264 WATTERS BALIDO & C RAIN

AU5IIN i DAUAS T DECAIUR T HOUSTON

CARI,OS A. BALIDO Panner carlos. bal ido@wbc lawfi rm. com (214) 347-8320 - Direct Line (214)341-8321 - Direct Facsimil November 17,Z0l4 Yis Emall: ¡høtqh eñø.s losnlìnn.co m Vla E nsil: o¡oberston(ãs lo¿nlìfltlcom W o E mü l: oas u llø r(ùúo ¿ nllr m co m M. Rayrnond Hatoher Sloan, Bagley, Hatoher &Perry Law Firrn l0l East Whaley Street Longview, Texas 75601 Re: Cause No. 201-1365-A; Thomas Jaclcson vs. AAA Texas County Mulual Insurance Company,In the l88th Judicial District, Gregg County, Texas.

Our File No. 1493-77325 Dear Counsel: Please allow this letter to serve as a Rule I I Agreement ín the above-referenced rnatter.

Specifically, you have agreed to €xtend Defendant AAA Texas County Mutual Insurance Company's deadlines to serve responses and objections to PlaintifPs written discovery requests.

Defendant AAA Texas County Mutual Insurance Company's responses and objectíons to Plaintiffs Requests for Disclosure, Plaintiffls First Requests for Productíon, PlaintifËs First Set of Intenogatories, and Plaintiffs Requests for Admissions are now due December lrZ0l4, If this accurately reflects our agreemenÇ please sign below where indicated and retun a. copy to me in accordance with Rule I I of thc Texas Rules of Civil Procedure. Thank you for your professional courtesies with this matter.

Very truly yours, /s/ Carlos A. BalÍdo A. Balido

AGR"EED TO BY: for Plaintiff WALTERS OALIDO & CRAIN L,L.P. MEADOWPARKTOWER 10440NoRTHCSNTRA|-EXpRESSwAy SutlE1S0O DALrAs,TEXAS 75231 F tx:. 2t4.76O,1620 Teupxor,tL: 214,7 49ÁgOS www.wþclawflrm.com EXHIBIT C MR 265 WA LTER S BALIDO & CRAIN AIIORNËYS AI I,AW

AUSTIN * DALTAS T DECATUR * HOUSTON

CARLOS A. BALIDC} Parlner carlos, botido@rvbclqrvfi nn, conl (2t 4) 347.8320. Diroot Line (214) 34'1-8321 - D,iroct Facsirnile

Novernber 25,2014

VÍn Enu¡ ìl : uJlt h.¿ rsltttt(ihthn u li t'tu. co t tt Alar¡ Roberlso¡r Slonn, Bagley, ttatcher & Pcny Law Fír¡n l0l East V/holey Strcet [,ongvicw, Texas 75601 Re: Cause No,20l-f 365-A; Thltlt¿t;'Jaclçron vs. AAA Texut Counly Mulual Insar(ince Conrpaqt Our File No. 1493-77325 Dear lvl¡'. Itobertsonl I)lense allow lhis letter to confirm that ths Plaintiff has agreed to extend Defenclant, AAA 'fexas CountyMuhral Insulzurce Company's, cleadline to sel've ils objections and/or resporrses to PlailrtifPs intert'ogatories, adnrissions, ptoduction, and disclosure requests untÍl V/ádnesday, l-)ecenrbcr 10, 2Cll4, Should this comport with yotu understanding, please sígn where indicatjd ancl letuln youl sigratory agreement to oul office via facsimile or e-msil.

'thanlc you fot your plofcssiotul cooperalion and corutesy in this mattcr.

Very truly yours,

1r- c\l-*/a I Balido CIAB:wjh //13,1 l0lz

WALTTRS ÐALIDO & CRAIN L.L,P. MEADOW PARKTOWER 10440 NORTH CENTRAL EXPRE5SWAY SUlfE15OO DALIA5, TEXA5 75231 F Axi 274.7 60.t670 TEtEpHOfl r i 2L4.7 49.4805 www,wbclawflrm.coÍt EXHIBIT C MR 266 Novcnrbcr' 25,20,4 Page2 AGREED TO BY;

,TL ¿\lun Attorney for Plaintlff

EX}IIBII G MR 267 12/tø/2Ø14 t2:?5 2L4-76ø-167Ø 214-16ø-1,67ø tr 2/2

WALTERS EALIDO & CRAIN roRNrYs rAw ^i ^1

AUSÍTN t O¡U¡S I orCnrUR I HoUSTON CARLOS A. BALIDO Part¡o¡ car)os.b alido@wbolaw finn, co¡n (21 4\ 347 -8320 - Direct- l. ine Ql 4) 34'l -8321 - Direc¡ Facsim il I)ese,rîbel l0,2tJL4 W Facsimil¿: 003. 75 7. 75 74 IVL Raynond Hatclter Alan J, Robertson Slonn BagloyHatohur & Peny Lrw Firm East \Vhaley Skeet Longvieu', Texus 75601 Ru C¡ruvc No, 20I-13ó5-4. I'homn Jucbsrlnvt..4^4A Texar Cottttî¡'Muluul Iruu¡'ance Cornpany; In lhe l88th Distrr¡:t Court, Oregg County, Texus Our File No. 1493-77325 Dea¡ Counsel: Please allorv this letfer lo señre aÉ a Rule 1f Agreement in the above-referenced mafter.

Spet iliculfy, you huvü agroucl tr¡ cxtflrl Dcfbn¡l¿rnt AAA Tcxas Ctrunt5r Nlutu¡rl Insuranoe Conrpany's de¡dltnes to servo responsÞs and objections to PlaintifT's lvritten disoovety r€quests.

Defeudurt AAA Texus Corutv Muturrl l¡sr¡liluce Compuy's rËsponsËs ull objections to Plaintiffs Roquust tirr Disclosures, First Sct of Intcrrogltories, First Requcst 1'or Adnrissions ¿urcl First Request for Producf otr rrË now due December 17,2O14.

If lhis accuratel.r, refleots our agrèrment, please sign below where índicated and re hrrn a copy to mc in ûccoldonce wilh Rule ll of the Texr¡s Rules of Civil Procudul'e. Thurk you t'or your proibssional courtesies $Jiih this rnalter'.

Very huly yotu's, Cnrlæ.4. Balido Carlos A. Balído

AGREED TO BY: A är Pluintitf WALTERS BALIDO & CRAIN L,t,P. MEADOWPAßKTOWER IO44ONORf}ICENTRATEXPRESsWAY SUIÎE15OO DALLÀ9,TTXAS 75]31 F¡x: 214,76o.t670 TETEpHoNE; 214.749.4805 www.wbclawflrm,com

EXHIBIÎ C MR 268 WALTERS BALIDO & CRAIN Ài IoRNËYS AÍ IAW

AUSTTN i O¡lr¡s * OeC¡run f xousro¡v CARLOS A, BA],IDO partne¡ car lor, b a lido@wb clawfinn, oom (214) 347-8320 - Dirsor Lins (214) 347-8321 - Diroct Facsimil December L7,2014 Vta Fucsimile : I 0 3. 7 5 7. 7 5 7 4 Alun J, Robertson Sloan Bagley Halchor & Pcrry Law Firm E Wh,rloy Stleet Longview, Tuxas 75601 Ro: Cause No. 201-1365-A; Tlrcrnas Jackson vr. ,4.4A Tesic¡¡ Coltnly luhlual htslu'atlce Company; Irr the 188th District Court, Gregg Counfy, Texas Our File No. 1493-77325 Dual Counsol: Plcase r¡,llow this lettq' to serl'c as u Rule 11 Agreernout irr the ¡rbove-refelerced nttttel'.

Specificilty, you harrc agreod to extend Def'Êndmt A{A Texas Coun$ lvftrtual Insuranric Cornpany's deadlines to serve Íesponses, arrsu,/ers and objections to Plaintiffs l¡ßitten discovery roquosts, Detþnd¿¡Ít AAA Texus County Mutunl Insututce Compun'y's r¿sporlsËs, ¡nswers ancl objections to Plaintiff s Request for Disclosute. First Set of Interrogatories, First Rcquest for Atlrnissions ¡urrl Fir'st Ruquest f'ol Protluotion ilrË now duo l)rcrmber 24' 2[14.

If this uucunrtcl-v retlects our ¿rg'eemünt, plcusc sign belor,r' rvhere indicuted ¡urd rufurn rt copy to nre in ¡coordancs with Rule 1I of tho Texas Rufes of Civil Procedure, Th¡nk louf'or your professioral courtesies with this rnatter.

Very trulyvor¡rs, /s/.$hley WúLey AshleyWhatley

AGREED TO BY: Alan J, Attutuey tirr PluintitT

WATTERS SALIDO& CRAIN L,L.P, MEADOW PARI(TOWER 10440 NORTH CENTRAL EXPRE5SWAY SUITI 15OO OALLA', TEXAS 75231 FAX, 214,760,1670 TEtEpHoNer 214,749.4805 www,wbclawfírrn,com

EXHIBIT C MR 269 APPENDIX TAB 10 Electf on¡callY Submitted OCTOBER 27,2015 2:08 A M.

Gregg County District Clerk By: Kindell Whitley ,dePUtY

CAUSE NO.2014 - ß65 - A s IN TIIE DISTRICT COURT THOI\{AS JACKSON s s oF GREGG COUNTY' TEXAS vl¡. s fuL[ TE)(/{S COIINTY MUTUAL s s 188Ih JUDICIAL DISTRICT INSURAIYCE COMPATTTY

After considering Plaintiff, Thomas Jackson's Motion to compel' the response' any evidence submitted therewith, and arguments of counsel' the Court frnds the Motion to be well Compel' uken and therefore GRANTS Plaintiffs Motion to Itistherefore,ORDERED,ADJUDGEDandDECREEDthatPlaintiffsMotionto responses to Plaintiffs compel ís GRAI.{TED and that all objections asserted by Defendant in its and First Requests for Production are First Requests for Admission, First set of Intenogatoúes, hereby OVERRULED.

TheCourtfurtherFINDSthatthefollowingrequestsarerelatedtotheincident Plaintiffs claims for underlying the suit, PlaintifPs claims for breach of co¡tract and/or Plaintiffs Request for Admission No. 18; Plaintiffs Interrogatories Nos' declaratory judgment: ll, 12,13,15, and 20; Plaintiffs Requests for Production Nos' 2'3'4'5'7'9' 1,2,4,5,7,g,10, 18, 25, and 29; andPlaintíffs Request for Production No. 34, to the 10, 11, |2,13,15, 16, 17, extent it pertains to these immediately aforementioned discovery requests' It is' therefore' these requests and intenogatories and produce oRDERED that Defendant shall frrlly respond to all responsive information and documents by october 15, 2015. It is firther ORDERED that shoutd any information or material be withheld on the basis of privilege from Defendant's the information responses to this discovery, Defendant shall produce a privilege log identiffing

Pagc I

MR 27O sufficient for the court and Plaintiff to witrrheld, the specific privilege(s) asserted, information of those privileges, and any and all other information required by Texas assess the applicabte Rule of Civil Procedure 193.3by October 15,2015' fifther FINDS that that the following requests are related to PlaintifPs exba- The court 17; Plaintiffs Interrogatories Nos' 3, contactual claims: plaintiffs Request for Admission No. Nos. 1, 6, 8, 14, 19, 20,21'22' 6, g, 14, 16,17,18, and 19; Plaintiffls Requests for Production Production No' 34' to the extent 23,24,26,27,28,30,31,32,and 33; and Plaintiffs Request for it pertains to these immediately aforementioned discovery requests' It is, therefore, oRDERED and produce all that Defendant shall firlly respond to these requests and interrogatories responsive information and documents within forty-five (45) days of October l' 2015' It is withheld on the basis of privilege fiuther ORDERED that should any information or material be from Defendant,s responses to this discovery, Defendant shall produce a privilege log ír¡formatíon suffrcient for identifuing the information withheld, the specific privilege(s) asserted, and any and all other the court and Plaintiff to assess the applicable of those privileges, information required by Texas Rule of Civil Procedure 193.3 within forty-five (45) days of October 1,2015.

October 26th SIGNED on 2015. '1 Í,

JTJDGE PRESIDING

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