Justia Texas Supreme Court Opinion Summaries

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

“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