2283. App.Dallas 2001, pet. Id. DECLARATORY JUDGMENT ACTIONS - ryderlaw.com COURT REFUSAL TO RENDER. He can be reached at alipkowitz@kdvlaw.com. Recent cases discussing the enforceability of policy buy-backs suggest there may be other exceptions in which a statutory insurance requirement renders a claimant an intended beneficiary. xX]oF}G?SeW0W44q>EqU{s@N|Bt2&iw'PmH'4QH1_>{'Y7bLH
dB4uX;iYtI7F7*L^F PDF IN THE SUPREME COURT OF TEXAS - txcourts.gov See Fed. 2d 719 (S.D. ); Rice v. Alamo Rent-A-Car, Inc., 987 S.W.2d 231 (Tex. By Karl Bayer. ); but cf. In this instance, there may be legitimate concerns that the insurers discovery will inure to the benefit of the liability plaintiff, which is likely not in the interest of either the insured or the insurer. The district court dismissed the declaratory action on the defendants motion based on 28 U.S.C. . Co., 579 S.W.2d 523 (Tex. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. See, e.g., State Farm Fire & Cas. Twenty-Fifth Floor - Plaza of the Americas 1996) (nevertheless refraining from determining coverage for indemnity, on the basis of judicial economy). First Cause of Action: Declaratory Judgment under . App.Austin 1999, pet. PDF I. CAN YOU FILE BASIS FOR DECLARATORY RELIEF - Thompson, Coe, Cousins Explanation of the Constitution - from the Congressional Research Service xko9.ou
_:=;0b+w)m3]WTy:>yYWOv]vs|?V~>zw"{}v~eM/XVY&R~Eou6Wv/ *]nT:^\-G:[A? v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. Declaratory Judgment. The Fifth Circuit overruled prior case law to conform with the Supreme Courts ruling. Co. of N. Specifically, when does filing a declaratory judgment action on coverage defenses make good business sense and what are the advantages, and disadvantages, of being the plaintiff. An action or proceeding is not open to objection on the ground that a declaratory judgment or decree is prayed for. Co., 996 S.W.2d 207 (Tex. Ins. There are exceptions, of course. PDF IN THE SUPREME COURT OF TEXAS - txcourts.gov The Historic Hamm Building While for years there was a question in the Federal courts as to whether 38.001, Tex. The court may order a speedy hearing of a declaratory-judgment action. On Dec. 30, 2020, New York's Appellate Division, Second Department, issued a ruling which may have created a split in authority on the question of recoupment of defense costs among New York's appellate level courts. The Court also noted that where an insurer denies coverage and then loses a subsequent coverage dispute, it can be subject to "significant liability," creating a disincentive for the insurer to deny defense outright, and that equitable concerns support allowing recoupment. The court in Griffin relied upon a change in the Texas Constitution, expanding the scope of district court jurisdiction and eliminating the minimum amount in controversy. This article will discuss some of the recent decisions illustrating the different views that Courts have taken with respect to this issue, as well as the implications for insurance companies that issue duty to defend policies. 2021 :: Supreme Court of Texas Decisions - Justia Law Civ. Since the duty to defend is based solely on the live pleadings, a declaratory judgment is arguably based only on the pleading in effect, and is not determinative as to any subsequent amended or supplemental pleading. (As amended Dec. 29, 1948, eff. See, American Home Assur. App.Corpus Christi 2000, no writ). The insurer denied defense based on the liquor liability exclusion and filed a declaratory judgment action. 1991). Ins. <>
App.Austin 1987, no writ); Safeway Mng. App.Dallas 1998, pet. 869, 93 A.L.R. 1271 (N.D. Tex. A common way of eliminating this uncertainty is with a declaratory judgment action, also called a declaration. App.Beaumont 1972), affd other grounds, 496 S.W.2d 552 (Tex. See, e.g., City of Galveston v. Giles, 902 S.W.2d 167 (Tex. Instead, plaintiffs alleged River Entertainment was negligent for allowing the defendant to leave, in his own vehicle, when they should have known his driving ability was impaired. See Hartford Ins. Co. v. Block, 744 S.W.2d 940, 943 (Tex. denied) (any judgment on indemnity was advisory and beyond power and jurisdiction of the court); Campbell v. Commercial Standard Ins. A declaratory judgment is appropriate when it will terminate the controversy giving rise to the proceeding. endobj
See here for a complete list of exchanges and delays. Rules 12(b) and 12(h) . (b) A district court has original jurisdiction of a proceeding seeking a declaratory judgment that involves: (1) a party seeking declaratory relief that is a business that is: (A) organized under the laws of this state or is otherwise owned by a resident of this state; or, (B) a retailer registered with the comptroller under Section 151.106, Tax Code; and, (A) is an official of another state; and. Proc. CIV. Co. v. Delaney, 386 S.W.2d 648 (Tex. 1989, no writ); In re Fontenot, 13 S.W.3d 111 (Tex. Civ. Co. v. Tex. Co., 981 S.W.2d 861 (Tex. In considering whether to afford a defense under a policy, insurers must also carefully review the relevant policy language and be aware of the potential limitations on the right to recoupment. App.Dallas 2001, pet. Nautilus also simultaneously commenced a declaratory judgment action in federal court seeking a declaration that it did not owe a duty to defend because the underlying action did not allege "personal and advertising injury.". The underlying liability suit arose from an accident in which one defendant, while intoxicated, hit the plaintiffs vehicle, killing their daughter. CODE 37.001-.011. He can be reached at estern@kdvlaw.com. App.Corpus Christi 1992, writ denied) (whether boat was being used for business pursuit); International Serv. 37.008. The landowner-appellant appealed a declaratory judgment excluding guests of his commercial lodge from freely using reserved lot areas on some property (essentially gutting the commercial. 2000). Co. v. Gandy, 925 S.W.2d 696 (Tex. The declaratory judgment action allows relief, even where another remedy exists. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. New Orleans, LA 70130 1996). 1992), cert. DEFINITION. App.Houston 1965, writ refd n.r.e.) These rules govern the procedure for obtaining a declaratory judgment under 18 U.S.C. 2 a : the theory or ground that forms the basis for a defendant's opposition to an allegation in a complaint or to a charge in a charging instrument (as an indictment) ;also. In RSL Funding, LLC v. Pippins, No. Co. v. Carmichael, 1998 Tex. 86.011 Et. 37.010. REVIEW. App.Texarkana 1967, no writ) (auto excluded); International Serv. Pursuant to 37.003, a declaration may be either affirmative or negative in form and effect. Strategy and Ethics in Declaratory Judgment Actions These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. Code, applied to breaches of an insurance agreement, this question was resolved by the Texas Supreme Court, on a certified question from the Fifth Circuit, in Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1 (Tex. 37.007. App.Houston [1st Dist.] 1992), cert. Federated Mut. For LEXIS 7982 (Tex. Co. v. Group, Inc., 946 F.Supp. dYU1oprU.:1FlU;{~_%uIMT6cHE 7o1E-j=E.s nR&%*%")QmLd~s`MF_]jd%DhjP1h 4
z#G?o 0Xj[f e /R&K(KX K$ TBu /5v+nA%. 688, 699 (1936). 131 (E.D. These changes are intended to be stylistic only. 2001) (when lease obtained); Guaranty Natl Ins. Ins. Indemnity is based on the actual facts establishing liability in the underlying suit. The controversy must necessarily be of a justiciable nature, thus excluding an advisory decree upon a hypothetical state of facts. Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 325, 56 S.Ct. 1992), cert. App.Fort Worth 1973, writ refd n.r.e.). Insights in Action: Corporate law departments find their outside firms innovation lagging, but there may be little incentive to change, Messaging platform & personal device use is a firm-wide compliance problem, What a law firm Client Development Manager says about client listening programs, Law firm leaders express the benefit of strategy, culture & adaptability to weather these uncertain times, U.S. officials lead urgent rescue talks for First Republic, DeSantis' showdown with Disney carries political risk. In a straight complaint allegation case, for instance, there should be extremely limited discovery, beyond verification of the pleadings and the policy. 1995), the court held a minor, whose interests were affected, was properly made a party to a declaratory judgment action, and was bound by the judgment where the minors mother answered, as next friend, and a guardian ad litem was appointed. All quotes delayed a minimum of 15 minutes. When to file is often determined by what is at issue. Ins. Co. v. Tandy Corp., 986 F.2d 94, 96 (5th Cir. . See Brillhart v. Excess Ins. The Supreme Court of Texas has ruled that a company did not waive its right to arbitration by bringing a "friendly" declaratory judgment action. Co., 767 F.Supp. Jurisdictions continue to be split over insurer's right to recoup District courts have articulated several reasons for why mirror-image counterclaims should be dismissed. The Murphys opposed Wells Fargo's motion, arguing, among other things, that Wells Fargo's claims should not be characterized as requesting declaratory relief. State Farm argued the policy changes were made in Milam County, where the agent was located, and the policy was sold. ); State Farm Lloyds Ins. & Liab. Co. v. Plummer, 13 F.Supp. Co., 2000 Tex. Guar. Sept. 1, 1987; Acts 1999, 76th Leg., ch. Suite 400 Corp., 377 F. Supp. Clearly, the insurer should be entitled to discovery of anything that has been discovered in the underlying suit. App.Houston [1st Dist.] If the discovery is limited, or poorly conducted, or does not address the coverage issues, however, the insurer may seek additional testimony and evidence. 1995). App.Houston 1998, pet. Federal courts are especially reluctant to exercise jurisdiction if there is a parallel state court proceeding even if subsequently filed that includes all necessary parties and will resolve the issues. App. Supreme Court of Texas Denies Motion to Compel Arbitration on Alternate R. CIV. Added by Acts 2007, 80th Leg., R.S., Ch. (c) This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees. The complaint allegation rule can pose a problem with declaratory relief. E.g., Cluett v. Medical Protective Co., 829 S.W.2d 822, 826 (Tex. Ins. 1968) (J. Smith, dissenting). A developing issue has been the extent to which declaratory relief is available to determine an insurers indemnity obligations, while the underlying suit is pending. tort and environmental coverage. 2004). In re Houston Specialty Insurance Co., 569 S.W.3d 138 (Tex. The court, however, concluded this was not a county in which a substantial part of the facts giving rise to the coverage dispute arose. 37.009. Despite the insurers right to review any such documents without waiver of the privilege, and the likelihood that defense counsels concerns would be abrogated by the right to conduct discovery, there is still a question as to what extent defense counsels opinions or observations would be relevant to coverage. 1998). Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. (b) In any proceeding that involves the validity of a municipal ordinance or franchise, the municipality must be made a party and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be unconstitutional, the attorney general of the state must also be served with a copy of the proceeding and is entitled to be heard. denied); see also State Farm Fire & Cas. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. App.Dallas 1992, writ denied); U.S. Fire Ins. Co. v. Burch, 442 S.W.2d 331, 337 (Tex. Civ. 1991), affd in part, 961 F.2d 213 (5th Cir. App.Dallas 2001, pet. 1998); see also Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741 (Tex. DECLARATORY JUDGMENT Definition & Legal Meaning - The Law Dictionary Tex. Rule 57. (a) In a case of actual controversy within its jurisdiction, except with respect to Federal taxes . DECLARATIONS RELATING TO LIABILITY FOR SALES AND USE TAXES OF ANOTHER STATE. App.Texarkana 1994, no writ) (possibility that liability triggering indemnity would be incurred was a feature hypothetical event, and court had no power to pass upon hypothetical or contingent situation); Fort Worth Lloyds v. Garza, 527 S.W.2d 195 (Tex. Further, while it is unlikely that an insurer wishes to proceed, without protective order, to establish evidence that demonstrates the insureds liability as the insurer has not yet prevailed on its coverage defenses it is also unclear under what standard the insured should be able to protect otherwise discoverable information, simply because it is damaging. 37.008 provides that the court may refuse to render a declaratory judgment if the judgment would not terminate the uncertainty or controversy giving rise to the proceeding. On the other hand, the existence of another remedy, or unresolved issues, does not preclude declaratory relief. Ins. Co., 387 S.W.2d 22, 25 (Tex. denied). Where the insurer is providing a defense, it is a party to the attorney-client privilege, and can share in communications between the insured and defense counsel, without waiver. In cases involving duty to indemnify, there may be issues as to whether the indemnity facts were fully litigated in an actual trial, or whether the facts can be re-litigated, construing Gandy and Maldonado. 2003) (finding Texas allows only narrow exception); but see Gonzales v. American States Ins. 1993). 1969); Getty Oil v. Ins. stream
14-0457 (Tex., July 1, 2016), RSL agreed to purchase certain annuity contracts issued by MetLife from three individuals. 97 (E.D. The following state regulations pages link to this page. PDF United States Court of Appeals for The Ninth Circuit 2d 601, 621-22 (E.D. Auto Ins. K-yXHMKS mmgOT}|aMz0. The issue becomes more murky when allegations triggering coverage are alleged, but are in conflict with the actual facts. See, e.g., Ruth v. Imperial Ins. denied, 511 U.S. 1032 (1994). A number of issues arise in regard to discovery in a declaratory judgment action. See Bocquet v. Herring, 972 S.W.2d 19 (Tex. See Bailey, 133 F.3d at 369 n.4; Travelers Ins. 10 0 obj
713-403-8210, 601 Poydras The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Co. v. Hood, 895 F.Supp. Amended by Acts 1987, 70th Leg., ch. Indemnity, on the other hand, is based on actual facts and should always be subject to extrinsic evidence. App.Houston [14th Dist.] 9 0 obj
Thus, an insured can seek an affirmative finding of coverage, or an insurer can seek a negative determination that coverage does not exist. 39 F.3d at 591. Sept. 1, 1985. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. Burch involved a declaration that the insurer owed defense, and also owed indemnity for the insureds liability for his wifes torts. CSAT Versus Denton - Original Answer and Counterclaim - TML App.San Antonio 1998, pet. When there is uncertainty as to the legal obligations or rights between two parties, a declaratory judgment offers an immediate means to resolve this uncertainty. endobj
1999) (insureds motion to transfer erroneously granted); Southern County Mut. The Court held that insurers are entitled to recoupment even where the policy at issue does not expressly provide such a right. at 332. See Tri-Coastal Contractors, Inc. v. Hartford Undwrs Ins. Rule 57 also notes that the existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. In addition, Rule 57 provides that the court may order a speedy hearing as an action for a declaratory judgment and may advance it on the calendar.. Answer, Affirmative Defenses, and Counterclaim to the First Amended Complaint for Declaratory Judgment ("Complaint") filed by Hartford Fire Insurance Company ("Hartford"), . denied). App.El Paso 2000, no pet. It may be appropriate for courts to abstain, in certain circumstances. Co. v. Ochoa, 19 S.W.3d 452 (Tex. 1995) (whether trademark violation occurred during policy period). 37.004. ANSWER to COMPLAINT for declaratory judgment, affirmative defenses and COUNTERCLAIM filed by Clemens Franek against Jay Franco & Sons, Inc. (jmp, ). 2002); Monticello Ins. Unfortunately, while 38.001, et seq., may allow recovery of attorneys fees by the insured, in a proper case, it provides no basis for recovery of fees by an insurer. See, e.g., Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). San Antonio, TX 78216 7) whether the federal court is being called on to construe a state judicial decree involving the same parties and entered by the court before whom the parallel state suit between the same parties is pending. Declaratory Judgment Action Insurer Does Nothing Facts Don't Trigger Duty to Defend Insurer Does Nothing 34 . LEXIS 1736 (Tex. Dec. 1, 2007. (c) The enumerations in Sections 37.004 and 37.005 do not limit or restrict the exercise of the general powers conferred in this section in any proceeding in which declaratory relief is sought and a judgment or decree will terminate the controversy or remove an uncertainty. An insurer should not be held to have waived its right to litigate coverage by defending under reservation of rights, or by delay in filing a declaratory judgment action. Texas law provides innocent owners and holders of a security interest in property with a statutory defense to civil forfeiture of their property or interest in the property. Co. v. Vandewater, 907 S.W.2d 491 (Tex. o FRCP Rule 57. Co. v. Am. 1978). Saint Paul, MN 55102 214-871-8200, One Riverway Ins. Defense - FindLaw Dictionary of Legal Terms Of N.Y. & N.J., 166 A.D.3d 464 (1st Dep't 2018); Max Specialty Ins. Co., 502 S.W.2d 232 (Tex. See, e.g., Commercial Metals Co. v. Balfour, Guthrie & Co., Ltd., 577 F.2d 264 (5th Cir. 1995). The federal act allows the court to declare the rights of any interested party.. Prior to the Grapevine Excavation case, the Fifth Circuit had construed 38.006 to exempt insurers from paying attorneys fees in breach of contract actions. 6 0 obj
PDF Preserving Coverage Defenses dismd, 507 U.S. 1026 (1993). A court may not, however, refuse to exercise jurisdiction on the basis of a whim or personal disinclination. See, e.g., St. Paul Ins. Co. v. Bradleys Elec., Inc., 993 S.W.2d 673 (Tex. Co., 981 S.W.2d 861 (Tex. A court can dismiss a declaratory action even if it fails to meet the stringent standards for abstention. Co. v. Cooper Machinery Corp., 817 F.Supp. 1998). Aug. 2, 2012). On the other hand, where the insured seeks a declaration that the insurer owes indemnity, before resolution of the underlying case, the opinion may be considered advisory, and declaratory relief may, indeed, be premature. App.Houston [14th Dist.]