Justia Texas Supreme Court Opinion Summaries

Stacey and Mark Bent sued USAA for breach of their homeowners’ policy and violations of the Texas Insurance Code. The Bents subsequently stopped making mortgage payments, and their lender foreclosed on their home. The Bents’ case against USAA, however, proceeded to trial. The jury concluded that USAA had not breached the homeowner’s policy but did violate chapter 541 of the Insurance Code. The trial court entered judgment on the jury’s verdict but later granted the Bents’ motion for new trial. The court of appeals conditionally granted a writ of mandamus directing the trial court to vacate its order and render judgment on the jury’s verdict, concluding that the trial court abused its discretion on each of its bases for ordering a new trial. The Bents sought relief in mandamus from the Supreme Court. The Supreme Court denied the Bents’ mandamus petition, holding (1) three of the trial court’s bases for ordering a new trial failed to satisfy the facial requirements set forth in In re Columbia Med. Ctr. of Las Colinas, Subsidiary, L.P. and In re United Scaffolding, Inc.; and (2) on the remaining basis at issue on appeal, the court of appeals correctly found that the record did not support the trial court’s stated rationale. View "In re Bent" on Justia Law

J&D Towing, LLC, a towing company, owned only one tow truck that was rendered a total loss when a negligent motorist collided with the truck. J&D filed a claim with American Alternative Insurance Corporation (AAIC) under an underinsured-motorist policy issued by AAIC requesting compensation for the loss of use of the truck. AAIC denied the claim. Thereafter, J&D sued AAIC seeking loss-of-use damages. The trial court entered judgment in favor of J&D. The court of appeals reversed, concluding that Texas law allows loss-of-use damages for partial destruction but not for total destruction of personal property. The Supreme Court reversed, holding that Texas law permits loss-of-use damages in total-destruction cases. View "J&D Towing, LLC v. Am. Alternative Ins. Corp." on Justia Law

U.S. Metals, Inc. sold ExxonMobil Corp. approximately 350 flanges for use in constructing diesel refinery processing units. In post-installation testing, several flanges leaked, and ExxonMobil decided it was necessary to replace them to avoid the risk of fire and explosion. ExxonMobil sued U.S. Metals for the cost of replacing the flanges and damages for the lost use of the diesel units during the process. U.S. Metal settled with ExxonMobil and then claimed indemnification from its commercial general liability (CGL) insurer, Liberty Mutual Group, Inc., for the amount paid. Liberty Mutual denied coverage. U.S. Metals sued in federal district court to determine its right to a defense and indemnity under the policy. Four questions were certified to the Supreme Court by the United States Court of Appeals for the Fifth Circuit. The Court concluded that the CGL does not cover most of the damages claimed and answered the circuit court’s questions accordingly. View "U.S. Metals, Inc. v. Liberty Mut. Group, Inc." on Justia Law

McGinnes Industrial Waste Corporation dumped pulp and paper mill waste sludge into disposal pits near the San Jacinto River in Pasadena, Texas (the site). After environmental contamination was discovered at the site, the Environmental Protection Agency (EPA) instituted superfund cleanup proceedings under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). During the period that McGinnes was dumping waste at the Site, it was covered by standard-form commercial general liability (CGL) insurance policies issued by Phoenix Insurance Company and Travelers Indemnity Company (together, the Insurers). McGinnes requested a defense in the EPA proceedings from the Insurers. The Insurers refused, determining that the proceedings were not a “suit” under the policy. McGinnes sued the insurers in federal court seeking a declaration that the policies obligated them to defend the EPA’s CERCLA proceedings. The district court granted the Insurers’ motion for partial summary judgment on the duty-to-defend issue. The U.S. Court of Appeals for the Fifth Circuit certified a question regarding the issue to the Texas Supreme Court. The Supreme Court answered that “suit” in the CGL policies at issue must also include CERCLA enforcement proceedings by the EPA. View "McGinnes Indus. Maint. Corp. v. Phoenix Ins. Co." on Justia Law

Candelario Lopez, who was hired by Interstate Treating to work on the installation of a gas processing plant, was transporting two other Interstate Treating employees to the job site when he died in an automobile accident. Lopez’s wife, Maximina Lopez, sought death benefits from Interstate Treating’s workers’ compensation insurance carrier, SeaBright Insurance Co. SeaBright denied coverage, concluding that Lopez was not acting in the course and scope of his employment at the time of the accident. A hearing officer, however, determined that Lopez was acting in the course and scope of his employment and ordered SeaBright to pay death benefits. The trial court affirmed the administrative decision. The court of appeals affirmed the trial court’s judgment. The Supreme Court affirmed, holding that Lopez was acting in the course and scope of his employment when he died, and Maximina was entitled to benefits. View "Seabright Ins. Co. v. Lopez" on Justia Law

At issue in these two separate cases was whether a life settlement agreement or viatical settlement agreement is an investment contract and thus a security under the Texas Securities Act. In one case, Plaintiffs filed a class action alleging that Life Partners, Inc. violated the Texas Securities Act (Act) by selling unregistered securities and misrepresenting to purchasers that they were not, in fact, securities. In the second case, the State filed suit alleging that Life Partners had committed fraud in connection with the sale of securities. The Both district courts entered judgments for Life Partners. Both courts of appeals reversed in part, concluding that the life settlement agreements were securities under the Texas Securities Act. The Supreme Court affirmed, holding that that the agreements at issue in these cases were investment contracts, and thus securities, under the Texas Securities Act. View "Life Partners Holdings, Inc. v. State" on Justia Law

The insured in this case (Insured) managed the insurance needs of more than 100 commercial properties. Insured purchased an excess policy from Insurer. The excess insurance policy limited the coverage to “the least” of three alternative amounts. When Hurricane Rita hit the Gulf Coast, the hurricane damaged fifteen of the properties at issue. Insurer calculated “the least” of the three alternative limits separately for each covered item at each damaged property, on an item-by-item basis. Insured filed suit against Insurer to recover the difference between its losses and the amount that Insurer had paid, contending that “the least” of the three limits applied just once in any one occurrence to the total of all losses from all covered items at all of the damaged properties. The trial court agreed with Insurer’s construction of the policy and ordered that Insured pay nothing. The court of appeals reversed, concluding that Insured’s construction was correct, and awarded Insured $7.5 million. The Supreme Court affirmed, holding (1) both constructions are reasonable, and the policy is therefore ambiguous; and (2) because the Court’s rules require it to construe an insurance policy’s ambiguous coverage limitation in favor of coverage for the insured, the court of appeals’ judgment is affirmed. View "RSUI Indemnity Co. v. Lynd Co." on Justia Law

JAW The Pointe, LLC obtained insurance to cover an apartment complex located in Galveston from an insurer that purchased several policies providing multiple layers of coverage for the 300 complexes it insured. Lexington Insurance Company provided the primary coverage layer. Hurricane Ike struck, causing substantial damage to The Pointe apartments. Under city ordinances, JAW was required to be brought into compliance with current code ordinances. The insurance policy covered the costs of complying with city ordinances but only if the policy covered the property damage that triggered the enforcement of the ordinances. In this case, the property damage that triggered the ordinances resulted from wind, which the policy covered, and flooding, which the policy expressly excluded. Lexington informed JAW that the policy did not cover the losses JAW incurred to comply with the ordinances. JAW sued Lexington, asserting claims for violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act. The jury returned a verdict in JAW’s favor. The court of appeals reversed, concluding that the policy excluded coverage for JAW’s code-compliance losses. The Supreme Court affirmed, holding that the policy did not cover JAW’s losses, and thus JAW could not recover for Lexington’s bad faith failure to effectuate a prompt and fair settlement of the claim. View "JAW The Pointe, LLC v. Lexington Ins. Co." on Justia Law

This dispute arose from the 2010 explosion and sinking of the Deepwater Horizon oil-drilling rig, which killed eleven people and resulted in extensive subsurface discharge of oil into the Gulf of Mexico for nearly three months. The issue in this case concerned the extent of insurance coverage afforded to the oil-field developer, BP, as an additional insured under primary- and excess-insurance policies procured by Deepwater’s owner, Transocean. The U.S. Court of Appeals for the Fifth Circuit certified to the Supreme Court two questions regarding the interplay between the insurance policies and provisions in a drilling contract giving rise to Transocean’s obligation to name BP as an additional insured. The Court held (1) BP is not entitled to coverage under the Transocean insurance policies for damages arising from the subsurface pollution because BP, not Transocean, assumed liability for such claims; and (2) based on the Court’s analysis of the first issue, it did not reach the second question. View "In re Deepwater Horizon" on Justia Law

Farm Bureau County Mutual Insurance Company filed this declaratory judgment action against Cristil Rogers, Farm Bureau’s insured, seeking a declaration that it had no duty to defend or indemnify Rogers in an underlying tort action and requesting court costs and attorney fees. Rogers answered and prayed for recovery of her court costs and attorney fees. The trial court denied Farm Bureau’s motion for summary judgment, concluding that Farm Bureau had a duty to defend Rogers in the tort action. The order did not expressly address the parties’ claims for attorney’s fees. The court of appeals dismissed Farm Bureau’s appeal for lack of jurisdiction, concluding that the order denying Farm Bureau’s motion for summary judgment was not final and appealable because Rogers did not file a cross-motion for summary judgment. The Supreme Court affirmed, holding (1) the fact that Rogers did not file a cross-motion for summary judgment did not preclude the trial court from entering a final judgment; but (2) in the absence of the trial court’s intent with respect to the parties’ claims for attorney’s fees, the order at issue did not dispose of all parties and claims. View "Farm Bureau County Mut. Ins. Co. v. Rogers" on Justia Law