Justia Texas Supreme Court Opinion Summaries

“In Texas, the general rule…is that an injured party cannot sue the tortfeasor’s insurer directly until the tortfeasor’s liability has been finally determined by agreement or judgment.” Plaintiff sued San Diego Tortilla (SDT) for personal injuries after he lost his hand operating a tortilla machine. Plaintiff then added a declaratory judgment claim against SDT’s liability insurer, Essex Insurance Company, seeking a declaration that Essex must indemnify SDT for its liability to Plaintiff. Essex filed motions to dismiss Plaintiff’s claims, arguing that the “no direct action” rule barred Plaintiff from suing Essex until SDT’s liability to Plaintiff was determined. The trial court denied the motions, and the court of appeals denied Essex’s petition for writ of mandamus. The Supreme Court conditionally granted mandamus and directed the trial court to grant Essex’s motions to dismiss, holding that no exception to the “no direct action” rule applied in this case. View "In re Essex Ins. Co." on Justia Law

Mary Erving filed suit against National Lloyds Insurance Company, alleging that National Lloyds had underpaid her insurance claims. During discovery, Erving requested production of all claims from the previous six years involving three individual adjusters along with claim files from the past year for properties involving two adjusting firms that handled her claims. National Lloyds objected to the requests as overbroad and unduly burdensome, after which Erving moved to compel production. The trial court ordered production of the majority of the files. National Lloyds unsuccessfully filed a petition for writ of mandamus with the court of appeals and, thereafter, sought mandamus relief in the Supreme Court. The Court conditionally granted mandamus relief and directed the trial court to vacate its discovery order, holding that because the information Erving sought was not reasonably calculated to lead to the discovery of admissible evidence, the trial court’s order compelling discovery of such information was overbroad. View "In re Nat’l Lloyds Ins. Co." on Justia Law

Homeowner lived in a house that she insured with Farmers Insurance Exchange. The policy contained a clause suspending dwelling coverage if the house was vacant for more than sixty days. Homeowner subsequently moved into a retirement community. While the policy was still effective, fire from a neighboring house spread to Homeowner’s house and damaged it. Farmers denied Homeowner’s claim on the basis that the house had been vacant for more than sixty days. Homeowner sued Farmers for breach of contract. The trial court granted summary judgment for Homeowner on the contract claim. The court of appeals reversed and rendered judgment for Farmers, concluding that Farmers was not required to establish that the vacancy contributed to cause the loss in order to assert the vacancy clause as a defense. The Supreme Court affirmed, holding that Farmers was not precluded from relying on language in the vacancy clause in response to Homeowner’s claim, and the vacancy provision must be applied according to its terms. View "Greene v. Farmers Ins. Exch." on Justia Law

Jimmy Carty died in an accident during his employment for the state. The workers’ compensation carrier for state employees (carrier) began paying death benefits to Christy, Jimmy’s wife, and the couple’s three minor children. Christy, individually, as representative of her deceased husband’s estate, and as next friend of the couple’s children, brought suit against two defendants. The Cartys settled with the defendants. The district court subsequently calculated the carrier's reimbursement and apportioned the remainder of the settlement funds among Christy and the children “in the same ratio as they received death benefits.” The carrier appealed, challenging the apportionment. The court of appeals certified to the Supreme Court the question of “how a net recovery in excess of the amount of benefits paid by the workers’ compensation carrier should be apportioned among beneficiaries when multiple beneficiaries recover from a third-party tortfeasor.” The Supreme Court answered that when multiple beneficiaries recover compensation benefits through the same covered employee, the workers’ compensation carrier’s right to a third-party settlement is determined by treating the recovery as a single, collective recovery rather than separate recoveries by each beneficiary. View "State Office of Risk Mgmt. v. Carty" on Justia Law

Claimant suffered a compensable injury to his right ankle in 1991 and developed reflex sympathetic dystrophy in the injured ankle. In 1997, the appeals panel determined Claimant was entitled to Lifetime Income Benefits (LIBs). The workers' compensation carrier for Claimant's employer (Insurer) did not seek judicial review of that decision. More than a decade later, Insurer sought a new contested case hearing on Claimant's continuing eligibility for LIBs. A hearing officer found that Insurer could re-open the previous LIB determination but that Claimant remained entitled to LIBs. The appeals panel affirmed. Both parties sought judicial review. The trial court granted Claimant's motion for summary judgment, concluding that the hearing officer lacked jurisdiction to re-open the previous LIB determination. The court of appeals affirmed. The Supreme Court affirmed, holding that the Legislature does not allow permanent benefit determinations like LIBs to be re-opened.View "Liberty Mut. Ins. Co. v. Adcock" on Justia Law

An Insured obtained an insurance policy to reimburse its expenses in regaining control of an oil well in the event the well blew out. The well subsequently blew out and caught fire. The Insured represented to the Insurer that it owed 100 percent working interest in the well, andthe Insurer paid claims accordingly. After the Insurer discovered that the Insured might have possessed less than 100 percent working interest in the well, the Insurer filed a lawsuit for a return of its payments under breach of contract and equity claims. The court of appeals entered summary judgment in favor of the Insurer on its equity claims, but a different court of appeals overturned the prior rulings, concluding that the Insurer had no equitable right to reimbursement. The Supreme Court agreed with the court of appeals that the Insurer could not proceed on its equity claims but for different reasons, holding that because the insurance contract addressed the Insured’s conduct, the Insurer could not rely on its equity claims. Remanded to the court of appeals to address the contract claims. View "Gotham Ins. Co. v. Warren E&P, Inc." on Justia Law

Ewing Construction Company entered into a contract with a school district to serve as general contractor on a project. The school district later filed suit against Ewing for faulty construction. Ewing tendered defense of the underlying suit to Amerisure Insurance Company, Ewing's insurer under a commercial package policy that included commercial general liability coverage. Amerisure denied coverage, and Ewing filed suit in federal district court seeking a declaration that Amerisure breached its duty to defend and indemnify Ewing for damages awarded in the underlying suit. The district court granted summary judgment for Amerisure, concluding that the policy’s contractual liability exclusion applied to exclude coverage because Ewing assumed liability for its own construction work pursuant to the contract such that it would be liable for damages arising out of its defective work. On appeal, the court of appeals certified questions to the Texas Supreme Court, which answered that “a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, does not ‘assume liability’ for damages arising out of the contractor’s defective work so as to trigger the contractual liability exclusion.” View "Ewing Constr. Co., Inc. v. Amerisure Ins. Co." on Justia Law

Homes built with an exterior insulation and finish system (EIFS) suffer serious water damage that worsens over time. Homebuilder began a remediation program in which it offered to homeowners to remove exterior EIFS from the homes it had built and to replace it with conventional stucco. Almost all the homeowners accepted Homebuilder's offer of remediation. Homebuilder sought indemnification for the costs from its insurers (Insurers). Insurers denied coverage, preferring instead to wait until the homeowners sued. This litigation ensued. Now, only one insurer remained. The court of appeals reversed the trial court's judgment in favor of Homebuilder, finding (1) Homebuilder failed to establish its legal liability to the homeowners to trigger Insurer's coverage; and (2) Homebuilder failed to offer evidence of damages covered by the policy. The Supreme Court reversed, holding (1) Homebuilder's settlements with the homeowners established both Insurer's legal liability for the property damages and the basis for determining the amount of loss; and (2) Insurer's policy covered Homebuilder's entire remediation costs for damaged homes. View "Lennar Corp. v. Markel Am. Ins. Co." on Justia Law

A staffing services company (Company) furnished workers for the City, including Respondent. During the course of his employment, Employee lost an arm working on a garbage truck driven by an employee of the City. Respondent sued the City and its employee (collectively, Petitioners). Petitioners filed a motion for summary judgment, asserting governmental immunity based in part on the exclusive remedy under the Texas Labor Code, which provides that recovery of workers' compensation benefits is the exclusive remedy of an employee covered by workers' compensation insurance. The trial court dismissed the case. The court of appeals reversed, holding that a fact question remained whether Respondent, who was paid by Company, was within the specific terms of the City's workers' compensation coverage. The Supreme Court reversed and dismissed the case, holding that, as a matter of law, the City provided Respondent's workers' compensation coverage, and therefore, Respondent's exclusive remedy was the compensation benefits to which he was entitled. View "City of Bellaire v. Johnson" on Justia Law

Petitioner suffered an injury while in the course and scope of his employment. The employer's workers' compensation insurance carrier paid medical benefits but contested the extent of Petitioner's entitlement to impairment income benefits. The Department of Insurance's Workers' Compensation Division determined that Petitioner had an impairment rating of twenty percent. The trial court reversed the agency's decision, ruling that Petitioner had no valid impairment rating. The court of appeals affirmed. While Petitioner's appeal to the Supreme Court was pending, the Court held in American Zurich Insurance Co. v. Samudio that the absence of a valid impairment rating that had been submitted to the agency did not deprive a reviewing court of subject matter jurisdiction. In light of its decision in Samudio, the Court then reversed and remanded to the trial court with instructions that the court remand the case to the Division in light of its determination that Petitioner had no valid impairment rating. View "DeLeon v. Royal Indem. Co." on Justia Law