Summary
holding trial court erred in not dismissing contract claim pursuant to Rule 91a because contract, as a matter of law, was not breached
Summary of this case from Patterson v. Five Point Capital Midstream Funds I & II, L.P.Opinion
No. 04-19-00180-CV
06-26-2019
IN RE FARMERS TEXAS COUNTY MUTUAL INSURANCE COMPANY
PETITION FOR WRIT OF MANDAMUS CONDITIONALLY GRANTED IN PART AND DENIED IN PART
The real party in interest, Cassandra Longoria, sued her insurance company, Farmers Texas County Mutual Insurance ("relator"), for negligent failure to settle. Relator filed a Rule 91a motion to dismiss, which the Honorable Karen Pozza denied. Longoria later amended her petition to allege a cause of action for breach of contract. Relator filed a second Rule 91a motion to dismiss, which the Honorable Laura Salinas denied. In this original proceeding, relator asserts the trial courts abused their discretion by denying the motions to dismiss. We grant relator mandamus relief on Longoria's breach-of-contract claim, but deny mandamus relief on Longoria's negligent-failure-to-settle claim.
BACKGROUND
Following a 2016 motor vehicle accident, Gary Gibson sued Longoria for injuries he allegedly suffered in the accident. Gibson sought damages in the amount of $1 million, which exceeded Longoria's $500,000 policy limits. Gibson designated experts, but relator's attorney, who represented Longoria, failed to do so.
Two years later, the parties engaged in mediation. By this time, Longoria had retained her own attorney to represent her in the event of any liability in excess of the policy limits. The mediator recommended the case settle for $350,000. Gibson sent a Stowers demand to relator advising the insurance company he would accept the proposed settlement of $350,000, but relator rejected the proposal and offered only $250,000. Despite Gibson withdrawing the offer to settle and stating his intention to proceed to trial, Gibson and Longoria's personal counsel later re-opened negotiations to settle. Gibson again stated he would settle for $350,000. Because relator again offered only $250,000 and Longoria was now facing a trial on the merits, Longoria offered to pay the $100,000 balance. Gibson accepted the offer, and Gibson and Longoria entered into a "Settlement Agreement and Release." Relator paid $250,000 and Longoria paid $100,000. Longoria then sued relator alleging it unreasonably refused to settle Gibson's claim.
Relator filed a Rule 91a motion to dismiss asserting two grounds. First, relator asserted that because Gibson's suit against Longoria settled, there would never be a final judgment against her in excess of policy limits. Therefore, according to relator, Longoria had no cause of action for negligent failure to settle because such a claim required that a negligent failure to settle result in an excess judgment against the insured. Second, relator asserted the trial court lacked subject-matter jurisdiction over the suit for the same reason—because Gibson's suit against Longoria settled, there would be no judgment in excess of policy limits against her; therefore, she suffered no injury and her claim was not ripe for adjudication. Following a September 12, 2018 hearing, the trial court denied the first motion to dismiss.
Longoria later amended her petition to add a breach of contract claim asserting relator breached its contract by failing to defend the suit because relator did not timely designate an expert and by failing to accept an offer to settle the lawsuit. Relator filed its second Rule 91a motion to dismiss arguing it had no contractual obligation or duty to pay damages until it was determined Longoria was legally responsible for any damages, which would not occur because the lawsuit settled. Relator also argued it had no duty to defend or settle because the insurance policy gave it the right to defend or settle claims against Longoria "as [it] consider[ed] appropriate." Following a December 19, 2018 hearing, the trial court denied relator's second motion to dismiss and awarded Longoria attorney's fees.
Relator filed its petition for writ of mandamus challenging both trial court orders and Longoria filed a response, to which relator replied.
MANDAMUS STANDARD OF REVIEW
Mandamus is an extraordinary remedy that will issue only to correct a clear abuse of discretion when there is no other adequate remedy at law. In re Sw. Bell Tel. Co., L.P. , 235 S.W.3d 619, 623 (Tex. 2007) (orig. proceeding). "A trial court has no ‘discretion’ in determining what the law is or applying the law to the facts. Thus, a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion, and may result in appellate reversal by extraordinary writ." Walker v. Packer , 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding).
Relator also must demonstrate it has no adequate remedy at law. In re Prudential Ins. Co. of Am. , 148 S.W.3d 124, 135-36 (Tex. 2004). "Mandamus review of significant rulings in exceptional cases may be essential to preserve important substantive and procedural rights from impairment or loss, allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from final judgments, and spare private parties and the public the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings." Id. at 136.
RULE 91A STANDARD OF REVIEW
Texas Rule of Civil Procedure 91a provides that "a party may move to dismiss a cause of action on the grounds that it has no basis in law or fact." TEX. R. CIV. P. 91a.1. "A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought." Id. "A cause of action has no basis in fact if no reasonable person could believe the facts pleaded." Id. Evidence is not considered when a trial court rules on a Rule 91a motion. Id. at 91a.6. A trial court looks only to the "pleading of the cause of action, together with any pleading exhibits." Id. The trial court construes the pleadings liberally in favor of the plaintiff, looks to the plaintiff's intent, and accepts the plaintiff's factual allegations as true; and, if needed, draws reasonable inferences from the factual allegations to determine if the cause of action has a basis in law or fact. See id. at 91a.1; Vasquez v. Legend Nat. Gas III, LP , 492 S.W.3d 448, 450 (Tex. App.—San Antonio 2016, pet. denied). Mere recitals of the elements of a cause of action, supported by only conclusory statements, do not suffice. Vasquez , 492 S.W.3d at 451.
"We review the merits of a Rule 91a motion de novo because the availability of a remedy under the facts alleged is a question of law and the rule's factual-plausibility standard is akin to a legal-sufficiency review." City of Dallas v. Sanchez , 494 S.W.3d 722, 724 (Tex. 2016) (per curiam). "In the case at bar, although we take all of [Longoria's] factual allegations as true, we need not afford the same deference to [her] legal conclusions or conclusory statements." Vasquez , 492 S.W.3d at 451. Rule 91a provides a harsh remedy with fee-shifting consequences that should be strictly construed. See Gaskill v. VHS San Antonio Partners, L.L.C. , 456 S.W.3d 234, 238 (Tex. App.—San Antonio 2014, pet. denied).
BREACH OF CONTRACT
Relator asserts the trial court abused its discretion by denying its motion to dismiss Longoria's breach of contract claim because Longoria never became "legally responsible" to pay Gibson's damages, the insurance policy contains a "no action" clause, and it cannot be held liable for defending Longoria or settling Gibson's claims against her as it deemed appropriate.
The elements of a breach of contract claim are (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff, (3) breach of the contract by the defendant, and (4) damages to the plaintiff resulting from the breach. Rice v. Metro. Life Ins. Co. , 324 S.W.3d 660, 666 (Tex. App.—Fort Worth 2010, no pet.). Longoria alleged relator breached its contract on two grounds: (1) failing to defend the suit by not timely designating expert witnesses on the issue of damages and causation and (2) failing to accept an offer to settle the suit for an amount within the policy limits despite knowing that its failure to timely secure an expert witness on damages and causation subjected Longoria to the substantial risk of a verdict in excess of the policy limits. Relator argued it had no contractual duty to pay damages or to defend rather than settle Gibson's lawsuit.
Both parties relied on the following provision in the insurance policy for their arguments:
During oral arguments, Longoria's counsel asserted this court may not consider the insurance policy because the policy was not attached as an exhibit to any of Longoria's petitions. However, because Longoria quoted the language on which she relies in her original petition and three amended petitions, we will consider this language in our analysis.
Insuring Agreement
A. We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident. Property damage includes loss of use of the damaged property. Damages include prejudgment interest awarded against the covered person. We will settle or defend, as we consider appropriate, any claim or suit asking for these damages. In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted. [Emphasis added.]
As to her first ground, Longoria contended in her plaintiff's petition that relator breached the contract by "failing to defend the suit by timely designating expert witnesses on the issue of damages and causation." Longoria contended that as a result of relator's failure to timely designate experts she "was faced with a trial without a single expert witness in her defense on the issue of the amount of damages and the causation of those damages." However, even construing her pleadings liberally in her favor, Longoria did not allege she suffered any damages as a result of relator's failure to timely designate experts. Therefore, we conclude her breach of contract claim has no basis in fact because she did not allege any damages for which she became "legally responsible" due to relator's failure to timely designate experts.
Longoria's second basis for her breach of contract claim is that relator breached the contract by "failing to accept an offer to settle the suit for an amount within the policy limits knowing that its failure to timely secure an expert witness on damages and causation further subjected Longoria to the substantial risk of a verdict well in excess of the $500,000 limits." In her plaintiff's petition, Longoria contended relator "was contractually obligated to use its funds, up to $500,000, to secure a release and settle claims for damages like those" sought by Gibson. Longoria contended relator breached its contract when it agreed to contribute only $250,000 toward the $350,000 settlement and "withheld the additional $100,000 in protection that [relator] had a duty to pay." Finally, Longoria contended relator breached the contract "by making a demand that [she] pay the $100,000 from her own personal funds because of the potential for gross negligence, a claim that had not been raised."
Insurance policies are contracts; therefore, the rights and duties they create and the rules governing their interpretation are those generally pertaining to contracts. Ulico Cas. Co. v. Allied Pilots Ass'n , 262 S.W.3d 773, 778 (Tex. 2008). The policy's language determines the insurer's duties. See Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Merchants Fast Motor Lines, Inc. , 939 S.W.2d 139, 141 (Tex. 1997) (per curiam). Here, the policy did not contractually obligate relator to pay any specific amount towards a settlement. Instead, relator was only obligated to "settle or defend" "as [it] consider[ed] appropriate." An insurance policy granting an insurer the right to "settle or defend, as we consider appropriate, ... any claim or suit asking for [bodily injury or property] damages" gives an insurer the "right to conduct the defense ... and to make other decisions that would normally be vested in the insured as the named party in the case." N. Cty. Mut. Ins. Co. v. Davalos , 140 S.W.3d 685, 688 (Tex. 2004).
Relator elected to settle thus fulfilling its obligation to "settle or defend" Gibson's claims against Longoria. See Martin-de-Nicolas v. AAA Tex. Cty. Mut. Ins. Co. , 03-17-00054-CV, 2018 WL 1868048, at *7 (Tex. App.—Austin Apr. 19, 2018, pet. denied) (mem. op.) (concluding policy provision "We may settle any claim or suit as we think appropriate," was not ambiguous and afforded insurer "the discretion to settle claims made against its insured ... without the insured's consent and without the need for a judicial determination regarding whether its insured was legally liable for the damages"); Ho v. Ins. Corp. of Am. , 01-95-01162-CV, 1997 WL 297578, at *4 (Tex. App.—Houston [1st Dist.] June 5, 1997, writ denied) (not designated for publication) (insured alleged insurer breached the contract by refusing to pay sooner and by refusing to supersede the judgment; holding no breach of contract because policy contained no deadline for payment and required no supersedeas bond and required only that insurer pay all covered claims against insured, which it did).
Even accepting Longoria's factual allegations as true, we conclude relator fulfilled its contractual obligation to "settle or defend" Gibson's claims against Longoria. Therefore, Longoria's breach of contract claim has no basis in law or fact and the trial court erred by denying relator's Rule 91a motion to dismiss the claim.
NEGLIGENT FAILURE TO SETTLE
Relator also asserts the trial court abused its discretion by denying its motion to dismiss Longoria's negligent-failure-to-settle (aka " Stowers ") claim because there can be no Stowers claim absent a judgment in excess of policy limits. Originally, Stowers damages arose from a judgment in excess of policy limits. See Am. Physicians Ins. Exch. v. Garcia , 876 S.W.2d 842, 849 (Tex. 1994) ("The Stowers duty is not activated by a settlement demand unless three prerequisites are met: (1) the claim against the insured is within the scope of coverage, (2) the demand is within the policy limits, and (3) the terms of the demand are such that an ordinarily prudent insurer would accept it, considering the likelihood and degree of the insured's potential exposure to an excess judgment."). Subsequently, the Texas Supreme Court extended Stowers to include a settlement in excess of policy limits in the context an excess carrier's cause of action against a primary carrier. See Am. Centennial Ins. Co. v. Canal Ins. Co. , 843 S.W.2d 480, 481 (Tex. 1992) ("We extend this court's holding in G.A. Stowers Furniture Co. v. American Indemnity Co. , 15 S.W.2d 544 (Tex. Comm'n App. 1929, holding approved), to permit such an action."). However, the issue of whether an insured has a Stowers cause of action against her insurance company when, as here, the case settles pre-trial and the insured has paid a portion of the settlement because the insurer refused to pay the entirety of the settlement demand has not been addressed by a Texas court. We are, therefore, presented with an issue of first impression.
"[A]n issue of first impression can sometimes qualify for mandamus relief when the factual scenario has never been precisely addressed but the principle of law has been clearly established." In re State ex rel. Weeks , 391 S.W.3d 117, 122 (Tex. Crim. App. 2013) (orig. proceeding); see also In re Paxton , 05-17-00507-CV, ––– S.W.3d ––––, ––––, 2017 WL 2334242, at *2 (Tex. App.—Dallas May 30, 2017, orig. proceeding) (relying on Weeks to hold same). A "relator is entitled to relief only if the principle of law he relies upon is ‘positively commanded and so plainly prescribed under the law as to be free from doubt.’ " In re Medina , 475 S.W.3d 291, 298 (Tex. Crim. App. 2015) (orig. proceeding) (quoting In re Allen , 462 S.W.3d 47, 50 (Tex. Crim. App. 2015) (orig. proceeding)).
Here, the principal of law on which relator relies—that a Stowers claim always requires an excess judgment—is not so clearly established "as to be free from doubt." See In re Yamaha Golf-Car Co. , 05-19-00292-CV, 2019 WL 1512578, at *3 (Tex. App.—Dallas Apr. 8, 2019, orig. proceeding) (mem. op.) ("Mandamus is unwarranted here because the principle of law Yamaha urged the trial court to follow is neither positively commanded nor plainly prescribed under the law. As such, the trial court's ruling is not properly reviewed through mandamus."). We also note that "[d]ismissal [under Rule 91a ] is ... appropriate when Texas has rejected the pleaded cause of action—or has rejected the viability of that action under the circumstances pleaded by the plaintiff." Reaves v. City of Corpus Christi , 518 S.W.3d 594, 608 (Tex. App.—Corpus Christi 2017, no pet.) ; see also In re Odebrecht Constr., Inc. , 548 S.W.3d 739, 750 (Tex. App.—Corpus Christi 2018, orig. proceeding) (mem. op.) ("conclud[ing] that nothing in the pleading itself triggers a clear legal bar to his claim"). "[W]hen the plaintiff's own allegations, taken as true, trigger a clear legal bar to the plaintiff's claim, the cause of action has no basis in law." Reaves , 518 S.W.3d at 608. The viability of the claim pled by Longoria has not been clearly rejected by Texas law.
For these reasons, we must conclude relator is not entitled to mandamus relief on Longoria's Stowers claim.
ADEQUATE REMEDY AT LAW
Having concluded the trial court abused its discretion by denying relator's Rule 91a motion to dismiss Longoria's breach of contract claim, we next determine whether relator has no adequate remedy at law. We determine the adequacy of an appellate remedy by balancing the benefits of mandamus review against the detriments. See Prudential Ins. , 148 S.W.3d at 136. In deciding whether the benefits of mandamus outweigh the detriments, we weigh the public and private interests involved, and we look to the facts in each case to determine the adequacy of an appeal. In re United Servs. Auto. Ass'n , 307 S.W.3d 299, 313 (Tex. 2010) (orig. proceeding); In re McAllen Med. Ctr., Inc. , 275 S.W.3d 458, 469 (Tex. 2008) (orig. proceeding); Prudential Ins. , 148 S.W.3d at 136-37. Mandamus also "may be essential to preserve important substantive and procedural rights from impairment or loss, [and] allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from final judgments...." Prudential Ins. , 148 S.W.3d at 136. Mandamus will not issue when the law provides another "plain, adequate, and complete remedy." In re Tex. Dep't of Family & Protective Servs. , 210 S.W.3d 609, 613 (Tex. 2006) (orig. proceeding).
An order denying a Rule 91a motion to dismiss is an interlocutory order, for which there is no specific statute providing appellate jurisdiction for an interlocutory appeal. In re HMR Funding, LLC , 561 S.W.3d 662, 665 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding.). "In laying the groundwork for a rule mandating the early dismissal of baseless causes of action, the Legislature has effectively already balanced most of the relevant costs and benefits of an appellate remedy, and mandamus review of orders denying Rule 91a motions comports with the Legislature's requirement for an early and speedy resolution of baseless claims." In re Odebrecht Constr., Inc. , 548 S.W.3d 739, 745 (Tex. App.—Corpus Christi 2018, orig. proceeding) (mem. op.). Thus, the denial of a Rule 91a motion to dismiss is subject to mandamus review. In re Essex Ins. Co. , 450 S.W.3d 524, 528 (Tex. 2014) (orig. proceeding) (per curiam) (reviewing denial of Rule 91a motion to dismiss and concluding mandamus relief appropriate to spare the parties and the public the time and money spent on fatally flawed proceedings); In re Wood Group PSN Inc. , 04-18-00418-CV, 2018 WL 4760139, at *2 (Tex. App.—San Antonio Oct. 3, 2018, orig. proceeding) (mem. op.) (reviewing denial of motion to dismiss filed by twenty defendants); but see HMR Funding , 561 S.W.3d at 666 (concluding relator had adequate remedy from denial of Rule 91a motion because HMR Funding had already twice appealed the June 13, 2017 order to this court; therefore, "[i]ts mandamus will not spare the litigants or the public any wasted time or money"); see also ConocoPhillips Co. v. Koopmann , 547 S.W.3d 858, 880 (Tex. 2018) (not an original proceeding, but noting, "Burlington could have challenged the trial court's denial of its motion to dismiss at the time it was denied" and citing to Essex Ins. , 450 S.W.3d at 526 ).
CONCLUSION
We conditionally grant relator's petition for writ of mandamus in part and order the trial court to (1) withdraw its January 25, 2019 "Order on Motion to Dismiss," and (2) enter an order granting relator's Rule 91a motion to dismiss Longoria's breach of contract claim. We deny mandamus relief challenging the trial court's denial of relator's Rule 91a motion to dismiss Longoria's negligent-failure-to-settle claim. Because the trial court's January 25, 2019 order awarded Longoria attorney's fees and because we grant the petition for writ of mandamus in part, we further order the trial court to reconsider its award of attorney's fees. The writ will issue only in the event we are notified the trial court fails to comply within fifteen days from the date of this opinion.
DISSENTING OPINION
Dissenting Opinion by: Sandee Bryan Marion, Chief Justice
I concur in the majority's decision to grant relator Farmers Texas County Mutual Insurance Company's ("Farmers") petition for mandamus as it pertains to real party in interest Cassandra Longoria's breach of contract claim. Because I believe there can be no negligent failure to settle (or " Stowers ") claim absent a judgment in excess of policy limits, however, I respectfully dissent from the majority's decision to deny the petition as it pertains to that claim.
The Stowers Doctrine
Under the common law Stowers doctrine, when responding to settlement demands within policy limits, an insurer has a duty "to exercise ‘that degree of care and diligence which an ordinarily prudent person would exercise in the management of his own business’ ...." Am. Physicians Ins. Exch. v. Garcia , 876 S.W.2d 842, 848 (Tex. 1994) (quoting G.A. Stowers Furniture Co. v. Am. Indem. Co. , 15 S.W.2d 544, 547 (Tex. Comm'n App. 1929) ). A Stowers claim arises when an "insurer's negligent failure to settle results in an excess judgment against the insured." Phillips v. Bramlett , 288 S.W.3d 876, 879 (Tex. 2009).
To plead a Stowers claim, the insured must allege: "(1) the claim is within the scope of coverage; (2) a demand was made that was within policy limits; and (3) the demand was such that an ordinary, prudent insurer would have accepted it, considering the likelihood and degree of the insured's potential exposure to an excess judgment." Seger v. Yorkshire Ins. Co., Ltd. , 503 S.W.3d 388, 395–96 (Tex. 2016). "When these conditions coincide and the insurer's negligent failure to settle results in an excess judgment against the insured, the insurer is liable under the Stowers Doctrine for the entire amount of the judgment, including that part exceeding the insured's policy limits." Phillips , 288 S.W.3d at 879. Therefore, to plead a Stowers claim, the insured must allege the three elements giving rise to a duty and Stowers damages, i.e. —the difference between an excess judgment and policy limits. See id.
Analysis
Here, the parties' dispute concerns damages and whether Longoria's pleadings, "taken as true, together with inferences reasonably drawn from them, ... entitle [Longoria] to the relief sought." See TEX. R. CIV. P. 91a.1. Farmers argues Longoria's failure to plead that any negligence on Farmers' part resulted in an excess judgment is fatal to Longoria's Stowers claim. In response, Longoria argues the existence of an excess judgment against the insured is not a required element of a Stowers claim.
While recognizing that Stowers damages may arise from a judgment in excess of policy limits, the majority concludes the precise question presented in this case is one of first impression. Specifically, the majority states no Texas court has determined "whether an insured has a Stowers cause of action against her insurance company when, as here, the case settles pre-trial and the insured has paid a portion of the settlement because the insurer refused to pay the entirety of the settlement demand." Although it appears no Texas court has addressed the precise fact pattern at issue here, I do not believe this case presents a novel question of law. Applying supreme court precedent, I would hold the law is settled that there can be no Stowers liability absent a judgment in excess of policy limits, even under these circumstances.
The Phillips decision is instructive. 288 S.W.3d 876. In that case, the supreme court addressed the interplay between the Stowers doctrine and the statutory damages cap in a health care liability claim. Id. at 878–79. The court explained that where the statutory damages cap is less than the insurance policy limits, there can be no Stowers damages because there can be no excess judgment:
[T]he Stowers Doctrine and the statutory cap both shield the insured physician from excess liability: the first from liability in excess of policy limits, the latter from liability in excess of the legislatively fixed cap. But because the cap limits damages without regard to insurance coverage, its application will always affect Stowers liability to some degree. When the cap is above the amount of insurance coverage, it will simply restrict Stowers liability. When the cap falls below the amount of the policy, however, the cap will eliminate the possibility of any excess liability against the insured and, with that, any common-law claim under the Stowers Doctrine.
Id. at 879 (emphasis added). In other words, there is no Stowers claim unless the insured is liable for an amount in excess of policy limits. The court emphasized that "excess liability" is "one critical element" of a Stowers claim. Id. While the Phillips majority did not state that an excess "judgment" is a critical element of a Stowers claim, it stands to reason there can be no Stowers liability without one because the insured has no legal obligation to pay anything absent a judgment.
Longoria, however, argues an insured may incur excess liability by way of a settlement within policy limits. According to Longoria, her alleged damages (which are undisputedly less than her $500,000 policy limits) are Stowers damages because she would not have incurred them but for Farmers' negligent mishandling of the underlying litigation, which she claims exposed her to a potential judgment of up to $1 million. But the Stowers doctrine does not protect an insured against potential liability, nor does it protect an insured from incurring an excess judgment in the first place. Rather, it affords an insured a remedy in the event of an excess judgment. As the dissenting opinion in Phillips states, the purpose of the Stowers doctrine is "to afford the insured a safe harbor should its insurer unreasonably refuse to settle a claim within policy limits and the insured thereafter suffer an excess judgment ." Id. at 884 (O'Neill, J., dissenting) (emphasis added).
Longoria also relies on the supreme court's decision in Canal , an equitable subrogation case involving excess insurance carriers. See Am. Centennial Ins. Co. v. Canal Ins. Co. , 843 S.W.2d 480 (Tex. 1992). In Canal , the primary carrier provided coverage up to $100,000 and handled the investigation and defense of a negligence case brought against the insured. Id. at 481. After the underlying case settled for $3.7 million, the two excess carriers brought suit against the primary carrier, alleging the primary carrier's mishandling of the litigation forced the excess carriers to pay the full settlement less the primary carrier's $100,000 contribution. Id. Answering a question of first impression in Texas, the supreme court held the excess carriers could assert an equitable subrogation action against the primary carrier. Id. at 483. The court explained its reasoning:
[O]ur prior decisions in Stowers and Ranger County [Mut. Ins. Co. v. Guin , 723 S.W.2d 656 (Tex.1987) ] imposed clear duties on the primary carrier to protect the interests of the insured. The primary carrier should not be relieved of these obligations simply because the insured has separately contracted for excess coverage. In this situation, where the insured has little incentive to enforce the primary carrier's duties, the excess carrier should be permitted to do so through equitable subrogation.
Id. (internal citations omitted).
Unlike an insured, who has no legal duty to pay a settlement she has not consented to pay, excess carriers can be liable for the full amount of any settlement in excess of the primary carrier's policy limits. Therefore, for policy reasons, Canal created a narrow rule permitting an excess carrier to assert a Stowers claim against a primary carrier even where the excess liability is the result of a settlement in lieu of a judgment. The Canal rule simply has no applicability where there is no excess coverage. But even if we were to read Canal as permitting an insured to bring a Stowers claim in the absence of an actual judgment, as Longoria encourages us to do, the Canal rule would not relieve the insured of the burden to plead damages in excess of the primary policy limits. Longoria has not done so here, nor can she, as the settlement she agreed to was within her policy limits.
Because Longoria did not plead the existence of a judgment in excess of policy limits, I would hold she failed to plead a viable Stowers claim and, therefore, the trial court clearly abused its discretion by denying Farmers' motion to dismiss the claim. Accordingly, I respectfully dissent from the majority's decision to deny the petition for mandamus as it pertains to Longoria's Stowers claim.