Justia Texas Supreme Court Opinion Summaries

The Supreme Court reversed the judgment of the court of appeals reversing the trial court’s judgment in favor of Anadarko Petroleum Corp. and Anadarko E&P Co., L.P. (collectively, Anadarko), minority-interest owners in the Deepwater Horizon operation, on Anadarko’s claim that it was entitled to insurance coverage for the legal fees and related expenses Anadarko incurred defending against liability and enforcement claims, holding that a negotiated policy provision did not limit the excess coverage for defense expenses.In this appeal, Anadarko argued that the insurance policy covered all of its defense expenses, up to the policy’s $150 million excess-coverage limit. The policy’s underwriters (the Underwriters), however, argued that the negotiated policy provision capped the excess coverage, including coverage for defense costs, at twenty-five percent of the policy’s excess-coverage limit. The trial court granted Anadarko’s summary judgment motion in part. The court of appeals reversed and rendered judgment for the Underwriters. The Supreme Court reversed, holding that the provision at issue did not limit coverage for Anadarko’s defense expenses. View "Anadarko Petroleum Corp. v. Houston Casualty Co." on Justia Law

The Supreme Court denied the defendant hospital’s petition for a writ of mandamus challenging a trial court’s order requiring the hospital to produce information regarding its reimbursement rates from private insurers and public payers for the services provided to the plaintiff, holding that the trial court did not abuse its discretion in compelling production of the information.The plaintiff, who was uninsured, was treated by the hospital, which billed the plaintiff and filed a hospital lien for the cost of its services. The plaintiff sought a declaratory judgment that the hospital’s charges were unreasonable and its lien invalid to the extent it exceeded a reasonable and regular rate for services rendered. The plaintiff served requests for production and interrogatories on the hospital, including information about reimbursement rates from insurers and government payers. The hospital objected to the discovery requests, but the trial court ordered the hospital to produce the information. The hospital then filed a petition for a writ of mandamus, which the court of appeals denied. The Supreme Court affirmed, holding that the requested reimbursement rates were relevant to whether the hospital’s charges to the uninsured plaintiff were reasonable. View "In re North Cypress Medical Center Operating Co., Ltd." on Justia Law

In this insurance dispute, the Supreme Court held that the issue of whether the trial court properly disregarded some of the jury’s findings should be remanded to the court of appeals for reconsideration in light of this Court’s decision in USAA Texas Lloyds Co. v. Menchaca, __ S.W.3d __ (Tex. 2018).Plaintiffs sued their insurer, State Farm, for breach of contract and Insurance Code violations. The jury found that both parties breached the insurance contract but that Plaintiffs breached first. The jury then awarded damages for State Farm’s breach of the policy and for Plaintiffs’ extra-contractual claims. The trial court disregarded two of the jury’s findings about Plaintiffs’ breach of the insurance contract and rendered judgment for Plaintiffs. The court of appeals affirmed. While State Farm's appeal was pending, the Supreme Court issued its final opinion and judgment in Menchaca, which clarified whether an insured can recover policy benefits based on an insurer’s violation of the Texas Insurance Code even though the jury failed to find that the insurer failed to comply with its obligations under the policy. On appeal, the Supreme Court held (1) State Farm’s first issue should be remanded for reconsideration in light of Menchaca; and (2) as to the remaining issues, the court of appeals’ judgment is affirmed. View "State Farm Lloyds v. Fuentes" on Justia Law

The lower courts in this case erred by requiring a signatory to arbitrate its non-contractual claims against non-signatories.Jody James Farms, JV purchased a crop revenue coverage insurance policy from Rain & Hail, LLC through the Altman Group. The insurance policy contained an arbitration clause. Neither the Altman Group nor any of its employees signed the agreement. After Rain & Hail denied coverage for a grain sorghum crop loss suffered by Jody James and the parties arbitrated the dispute, Jody James sued the Altman Group and its agent (collectively, the Agency) for breach of fiduciary duty and deceptive trade practices. The Agency successfully moved to compel arbitration under the insurance policy. At arbitration, Jody James asserted that it had a right to proceed in court against the Agency because the Agency was a non-signatory to the arbitration agreement. The arbitrator resolved that issue and the merits of the dispute in the Agency’s favor. The trial court confirmed the award. The court of appeals affirmed. The Supreme Court reversed because (1) Jody James and the Agency did not agree to arbitrate any matter; and (2) Jody James may not be compelled to arbitrate under agency, third-party-beneficiary, or estoppel theories. View "Jody James Farms, JV v. Altman Group, Inc." on Justia Law

The Supreme Court withdrew its judgment and opinion issued in this case on April 7, 2017 and, while it reaffirmed the legal principles and rules announced in that opinion, it disagreed as to the procedural effect of those principles in this case. Its disposition remained the same, however, because a majority of the Court agreed to reverse the judgment of the court of appeals and remand the case to the trial court for a new trial.The primary issue in this case was whether Insured could recover policy benefits based on Insurer’s violation of the Texas Insurance Code even where the jury failed to find that Insurer failed to comply with its obligations under the policy. Here, the Court (1) unanimously reaffirmed the five rules it announced in the first opinion addressing the relationship between contract claims under an insurance policy and tort claims under the Insurance Code; (2) reaffirmed the holding in the first opinion that the trial court erred by disregarding the jury’s answer to a jury question; and (3) addressed the procedural effect of the Court’s holdings in this case but reached three different conclusions. The Court then remanded this case for a new trial. View "USAA Texas Lloyds Co. v. Menchaca" on Justia Law

At issue in this discovery dispute arising in the context of multidistrict litigation (MDL) involving allegations of underpaid homeowner insurance claims was whether a party’s attorney-billing information is discoverable when the party challenges an opposing party’s attorney-fee request as unreasonable or unnecessary but neither uses its own attorney fees as a comparator nor seeks to recover any portion of its own attorney fees. The MDL pretrial court ordered the insurer in this case to respond to the discovery requests. The Supreme Court conditionally granted mandamus relief and directed the trial court to vacate its discovery order, holding (1) compelling en masse production of a party’s billing records invades the attorney work-product privilege; (2) the privilege is not waived simply because the party resisting discovery has challenged the opponent’s attorney-fee request; and (3) such information is generally not discoverable. View "In re National Lloyds Insurance Co." on Justia Law

Homeowners sued Builder for failing to construct their home in a good and workmanlike manner. Builder’s commercial general liability insurer (Insurer) refused to defend Builder in the suit. Judgment was granted in favor of Homeowners after a trial, and Builder assigned the majority of its claims against Insurer to Homeowners. Homeowners subsequently sought to recover the judgment from Insurer under the applicable policy. The trial court entered judgment in favor of Homeowners. The court of appeals affirmed. The Supreme Court reversed and, in the interests of justice, remanded the case to the trial court for a new trial, holding (1) the judgment against Builder was not binding on Insurer in this suit because it was not the product of a fully adversarial proceeding; but (2) this insurance litigation may serve to determine Insurer’s liability, although the parties in the case focused on other issues during the trial. View "Great American Insurance Co. v. Hamel" on Justia Law

A party’s attorney-billing information is normally not discoverable when the party challenges an opposing party’s attorney-fee request as unreasonable or unnecessary but neither uses its own attorney fees as a comparator nor seeks to recover any portion of its own attorney fees.Several lawsuits brought by insured homeowners against various insurers and claims adjustors alleging underpayment of insured property-damage claims were consolidated into a single multidistrict litigation (MDL) for pretrial proceedings, including discovery. In this discovery dispute, individual homeowners sought attorney fees incurred in prosecuting their claims. The homeowners sought discovery regarding the insurer’s attorney-billing information. The insurer argued that the requested discovery was overly broad and sought information that was both irrelevant and protected by the attorney-client and work-product privileges. The MDL pretrial court ordered the insurer to respond to the discovery requests. The court of appeals denied the insurer’s petition for mandamus relief. The Supreme Court conditionally granted mandamus relief and directed the trial court to vacate its discovery order, holding that, absent unusual circumstances, information about an opposing party’s attorney fees and expenses is privileged or irrelevant and, thus, not discoverable. View "In re National Lloyds Insurance Co." on Justia Law

Plasma Fab, LLC obtained a general liability insurance policy from Scottsdale Insurance Company and financed the policy with BankDirect Capital Finance, LLC. The agreement between BankDirect and Plasma Fab granted BankDirect authority, upon Plasma Fab’s default, to cancel the insurance policy after proper notice has been mailed under section 651.161 of the Texas Premium Finance Act (Act). Because Plasma Fab was habitually late in making premium payments BankDirect eventually sent notice of intent to cancel the policy. The notice, however, violated section 651.161(b) because BankDirect failed to comply with the Insurance Code’s ten-day notice requirement. Plasma Fab was subsequently sued for damages arising out of a fire, and Scottsdale denied coverage. Plasma Fab sued Scottsdale and BankDirect for breach of contract, arguing that Defendants had no right to cancel the policy because BankDirect mailed its notice one day late. The trial court granted summary judgment to Scottsdale and BankDirect. The court of appeals reversed as to Plasma Fab’s claims against BankDirect due to BankDirect’s failure to mail proper notice. On Appeal, BankDirect argued that the Supreme Court should adopt a “substantial compliance” approach to the Act. The Supreme Court affirmed, holding that, when decoding statutory language, the court is bound by the legislature’s prescribed means, not its presumed intent. View "Bankdirect Capital Finance, LLC v. Plasma Fab, LLC" on Justia Law

After Hurricane Ike struck Galveston island, Insured contracted her Insurer and reported that the storm had damaged her home. Insurer determined that its policy covered some of the damage but declined to pay Insured benefits because the total estimated repair costs did not exceed the policy’s deductible. Insured sued Insurer for breach of the insurance policy and for unfair settlement practices. As damages, Insured sought only insurance benefits under the policy, plus attorney’s fees and costs. The jury found that Insurer violated the Texas Insurance Code, and the violation resulted in Insured’s loss of benefits Insured should have paid under the policy but did not find that Insurer failed to comply with its obligations under the policy. The trial court entered final judgment in Insured’s favor. The court of appeals affirmed. The Supreme Court reversed the judgment of the court of appeals and remanded the case to the trial court for a new trial in the interest of justice after announcing five rules that address the relationship between contract claims under an insurance policy and tort claims under the Insurance Code. View "USAA Texas Lloyds Co. v. Menchaca" on Justia Law