Justia Texas Supreme Court Opinion Summaries

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

Before resigning his director and treasurer positions with Briar Green, Robert Primo wrote himself two checks from Briar Green’s account totaling approximately $100,000. Briar Green made a claim for the alleged loss with its fidelity insurer, Travelers Casualty & Surety Company, which paid the claim in exchange for an assignment of Briar Green’s rights and claims against Primo. Travelers then sued Primo to recover the funds. Primo asserted a third-party claim against Briar Green and demanded that Great American Insurance Co., which carried Briar Green’s directors-and-officers (D&O) liability policy, defend him in the Travelers suit. Travelers subsequently non-suited its claims against Primo, and Primo non-suited his third-party claims. Primo then filed a contractual-indemnity action against Briar Green to recover the fees and expenses he had incurred in the Travelers suit. The suit resulted in a judgment for Primo. Meanwhile, Primo sued Great American in another action seeking reimbursement for the fees and expenses incurred in the Travelers suit. The trial court granted summary judgment for Great American. The court of appeals reversed. The Supreme Court reversed, holding that the policy provided no coverage for Primo’s claims because an insured-versus-insured exclusion in the D&O liability insurance policy applied. View "Great American Insurance Co. v. Primo" on Justia Law

Elie and Rhonda Nassar filed a claim with Liberty Mutual Insurance Policy under their homeowners’ policy when their property was damaged by Hurricane Ike. Disputes arose over the value of various items of damaged property, and this appeal concerned which party of the Liberty Mutual insurance policy covered the Nassars’ damaged fencing. At issue was the proper interpretation of two policy provisions that separate coverage for the “dwelling” and “other structures.” The trial court entered final judgment in favor of Liberty Mutual, concluding that the Nassars’ fencing was an “other structure.” The court of appeals affirmed. The Supreme Court reversed, holding that the Nassars’ interpretation of the policy language was reasonable and the policy was unambiguous, and therefore, the Nassars’ fencing was covered under the “dwelling” provision as a matter of law. Remanded. View "Nassar v. Liberty Mutual Fire Insurance Co." on Justia Law

Plaintiffs, who owned insurance policies with National Lloyds Insurance Company, filed independent lawsuits against National Lloyds, claiming they were underpaid on claims following two hail storms in Hidalgo County. The Multidistrict Litigation Panel of Texas (MDL Panel) granted the motions of other insurance carriers seeking to transfer cases arising from the hail storms to a pretrial court and subsequently transferred Plaintiffs’ claims to the same pretrial court. At issue in this case was National Lloyd’s failure to produce certain information requested by Plaintiffs. The pretrial court entered an order compelling National Lloyds to produce six categories of documents, including “management reports and emails,” and assessed sanctions for attorney’s fees. National Lloyds sought mandamus relief, asserting that the compelled discovery was overbroad. The Supreme Court conditionally granted mandamus relief, holding (1) the pretrial court abused its discretion in compelling production of the management reports and emails; and (2) because the pretrial court’s order was overboard as the management reports and emails, but because National Lloyds failed to produce five other categories of discovery, the sanctions award must be reevaluated. View "In re National Lloyds Insurance Co." on Justia Law

Bonnie Jones was injured during the course of her employment. Her employer’s comp carrier, American Home Assurance Company, paid her various benefits but did not pay her supplemental income benefits (SIBs) for the fourteenth quarter of 2011. Jones sued, and the parties settled. Under the Texas workers’ compensation regime, where SIBs are concerned, settlements cannot bypass a statutory formula or facilitate benefits were none were due as a matter of law. In this case, the settlement was noncompliant. The trial court approved the proposed settlement, and the court of appeals affirmed. The Supreme Court reversed, holding that a court cannot condone a noncompliant settlement regarding an SIBs award. View "Tex. Dep’t of Ins., Div. of Workers’ Comp. v. Jones" on Justia Law

After Randall Seger died while working on a hydraulic-lift drilling rig when it suddenly collapsed, his parents obtained a judgment against the drilling company. The drilling company then assigned its rights against the insurers to the parents, and the parents brought a Stowers action against the insurers. See G.A. Stowers Furniture Co. v. Am. Indem. Co. The court held that, because the evidence is legally insufficient to support a jury verdict to the contrary, Randall was a leased-in worker as a matter of law. In this case, plaintiffs' claimed loss was excluded from coverage under the commercial general liability (CGL) policy and the Stowers action fails as a result. The court did not reach the damages issue addressed by the court of appeals. Accordingly, the court affirmed the judgment, which reversed the trial court's judgment and rendered judgment that plaintiffs take nothing, but on different grounds. View "Seger v. Yorkshire Ins." on Justia Law

After Tenant moved into her apartment, her apartment and several adjoining units were severely damaged in a fire that originated in Tenant’s clothes dryer. Insurer paid Landlord’s insurance claim and then sued Tenant for negligence and breach of the Apartment Lease Contract. The jury found that Tenant breached the lease agreement and awarded $93,498 in actual damages and attorney’s fees from Insurer. Tenant filed a motion for judgment notwithstanding the verdict, asserting several grounds for avoiding enforcement of the contract. The trial court granted Tenant’s motion and rendered a take-nothing judgment. The court of appeals affirmed, concluding that the residential-lease provision imposing liability on Tenant for property losses resulting from “any other cause not due to [the landlord’s] negligence or fault” was void and unenforceable because it broadly and unambiguously shifted liability for repairs beyond legislatively authorized bounds. The Supreme Court affirmed in part and reversed in part, holding (1) the court of appeals properly rejected Tenant’s ambiguity defense; but (2) the court of appeals erred in invalidating the lease provision on public-policy grounds. Remanded. View "Philadelphia Indem. Ins. Co. v. White" on Justia Law