Texas Supreme Court Affirms Crosley Law's Underinsured-Motorist Verdict for Daniel Irwin

On April 5, 2016, Daniel Irwin was hurt in a collision with a driver who carried too little insurance to cover the harm she caused. The other driver's policy topped out at $30,000, and her insurer paid that full amount. Irwin's own Allstate policy included underinsured motorist (UIM) coverage of $50,000, money meant for exactly this situation.

Irwin sent Allstate a demand for his $50,000 in UIM benefits. Allstate offered $500. The gap was not small. His medical bills, lost earnings, physical impairment, and pain were real, and the insurer's number came nowhere near them. So Irwin took the unusual step of suing his own carrier.

Thomas Crosley of Crosley Law represented Irwin, with appellate work by Shawn Mechler and Amber Winer-Gebhart. Rather than file an ordinary breach-of-contract claim, the firm brought a declaratory-judgment action under the Texas Uniform Declaratory Judgments Act, asking the court to both fix Irwin's damages and declare Allstate liable under the policy. The advantage was concrete: the statute lets a prevailing party recover attorney's fees, which a bare contract suit against a UIM insurer often does not.

A Bexar County jury heard the case and put Irwin's total damages at nearly $499,000, covering medical expenses, physical pain and mental anguish, physical impairment, and lost earnings. Because UIM coverage pays only up to the policy ceiling, his contractual recovery from Allstate was capped at the $50,000 limit. The trial court added $45,540 in attorney's fees and costs.

Allstate fought the structure of the case all the way up, arguing that a policyholder could not use the declaratory-judgment statute this way and that the fee award should be erased. The San Antonio Court of Appeals disagreed, and in May 2021 the Texas Supreme Court affirmed in a 5-4 decision reported at 627 S.W.3d 263. Justice John Devine wrote for the majority that "a declaratory judgment in this instance is simply the remedy for resolving this contractual dispute."

The ruling settled a long-running split over whether Texas drivers can sue a UIM carrier by declaratory judgment and recover fees when the insurer lowballs a valid claim. Crosley called the decision "a breath of fresh air." Irwin kept his $50,000 in policy benefits and the $45,540 fee award.