Civ. A declaratory judgment is one which simply declares the rights of the parties, or expresser, the opinion of the court on a question of law, without ordering anything to be done. Nor can an insurer join the claimants and address the issues through interpleader. A common way of eliminating this uncertainty is with a declaratory judgment action, also called a declaration. Co., 767 F.Supp. Co. v. River Entertainment, 998 F.2d 311, 315 (5th Cir. 1995, no writ); Employers Cas. Civ. The Appellate Division, Second Department, held that although the insurer did not owe a duty to defend or indemnify, the insurer was not entitled to recoupment of defense costs reasoning that by allowing an insurance company to recover the costs incurred in defending an underlying action, the Second Department risks eroding the well-established rule that the duty to defend is broader than the duty to indemnify. A person interested as or through an executor or administrator, including an independent executor or administrator, a trustee, guardian, other fiduciary, creditor, devisee, legatee, heir, next of kin, or cestui que trust in the administration of a trust or of the estate of a decedent, an infant, mentally incapacitated person, or insolvent may have a declaration of rights or legal relations in respect to the trust or estate: (1) to ascertain any class of creditors, devisees, legatees, heirs, next of kin, or others; (2) to direct the executors, administrators, or trustees to do or abstain from doing any particular act in their fiduciary capacity; (3) to determine any question arising in the administration of the trust or estate, including questions of construction of wills and other writings; or. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. App. Co. v. Boll, 392 S.W.2d 158, 161 (Tex. The court in Griffin relied upon a change in the Texas Constitution, expanding the scope of district court jurisdiction and eliminating the minimum amount in controversy. Code, applied to breaches of an insurance agreement, this question was resolved by the Texas Supreme Court, on a certified question from the Fifth Circuit, in Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1 (Tex. JURY TRIAL. 1994). The insurer refused to pay the judgment, on the basis that the insureds conduct constituted a willful violation of a penal statute, and was thus excluded by the policy. V 8). App.Austin 1998, pet. A Texas court may also enjoin the litigants from moving forward on the same issues in any other jurisdiction. hearing as an action for a declaratory judgment and may advance it on the calendar." Federal courts have typically held that declaratory relief is discretionary, and a federal court has broad authority to stay or dismiss an action seeking a declaratory judgment. In cases involving duty to indemnify, there may be issues as to whether the indemnity facts were fully litigated in an actual trial, or whether the facts can be re-litigated, construing Gandy and Maldonado. APP. The county where the contract was formed may also be a proper venue. Similarly, courts have held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination. Insurers that issue policies containing a duty to defend, such as CGL policies, should familiarize themselves with the rules governing recoupment in the applicable jurisdiction. App.Fort Worth 1998, no pet.) 169 (S.D.Tex., 1935); Borchard, Declaratory Judgments (1934), passim. 1 Justice Smith was perhaps prescient in his dissent, concluding that a justiciable controversy existed. The court, however, concluded this was not a county in which a substantial part of the facts giving rise to the coverage dispute arose. Prior to the Grapevine Excavation case, the Fifth Circuit had construed 38.006 to exempt insurers from paying attorneys fees in breach of contract actions. % Under this rule, the insurers defense obligations are determined by the allegations of the pleadings and the language of the insurance policy, without regard to the actual facts. 1999) (insureds motion to transfer erroneously granted); Southern County Mut. App.Amarillo 1997, no pet.). For instance, when it is clear that a ruling on the merits of plaintiff's claims would . The court then noted the special concerns applicable in declaratory actions. 37.008 provides that the court may refuse to render a declaratory judgment if the judgment would not terminate the uncertainty or controversy giving rise to the proceeding. Co. v. Watson, 876 S.W.2d 145, 149 (Tex. 1170 (1933). The Statutory Basis for Declaratory Judgment Actions in Texas Lawsuits 37.011. (although judgment reversed on coverage, no indication courts refusal to award fees to either party was abuse of discretion). at 1280 (insurer not precluded from relitigating course and scope of employment). (A) A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status, or other legal relations there under. Youell & Cos v. Getty Oil Co., 510 U.S. 820 (1993); Service Mutual Ins. Federal: Declare Assess Act, 28 U.S.C. 1995); but cf. App.Houston [1st Dist.] Group, Inc., 946 F.Supp. 955 S.W.2d at 84 (construing Tex. App.Austin 1999, no pet.) Ins. Jul 20th, 2015 Collections and Foreign Judgments. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. C.M.W., 53 S.W.3d 877 (Tex. Corp., 817 F.Supp. Inasmuch as it often involves only an issue of law on undisputed or relatively undisputed facts, it operates frequently as a summary proceeding, justifying docketing the case for early hearing as on a motion, as provided for in California (Code Civ.Proc. & REM. 1991), affd in part, 961 F.2d 213 (5th Cir. PDF Affirmative and Defensive Pleadings in Insurance Coverage and Bad Faith & Liab. June 15, 2007. The Federal act is broader in scope. Supreme Court of Texas Denies Motion to Compel Arbitration on Alternate App. Attorney Analysis from Westlaw Today, a part of Thomson Reuters. See Firemens Ins. Insurers should be sure to work with competent counsel to be aware of all of their rights under applicable policies and the relevant controlling law and proceed accordingly. 9. Page 2 / 14Defendant-Counterclaimant's First Amended Answer and Counterclaims 5. Therefore, the claimants should not be necessary or indispensable parties, prior to the settlement or judgment. The collision was also in Hidalgo County, as was the liability suit. The firm's new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112. at 452-53; but see Tri-Coastal Contrs Inc., 981 S.W.2d at 863 (questioning scope of exception). Rule 57 also notes that the existence of another adequate remedy does not preclude a judgment for declaratory relief in cases where it is appropriate. In addition, Rule 57 provides that the court may order a speedy hearing as an action for a declaratory judgment and may advance it on the calendar.. 1968) (J. Smith, dissenting). <> defense | Wex | US Law | LII / Legal Information Institute 4 suit would prejudice both Essex and SDT in their defenses against Zuniga's claims because it would (1) create a conflict of interest for Essex,3 and (2) necessarily require the admission of evidence of liability insurance in violation of Texas Rule of Evidence 411.4 Because those policy reasons for the "no direct action" rule apply regardless of whether the plaintiff is seeking Tex. "gj6P'pn.g_9z# ?V#yof.j,^4{%y^LJ_z|0 eivLnBE.orQevfwe^_d \2P4^Gy-ts}] ;|^QRg-d^yX^OeGE?kP0+]kw/k}m+TssVg4Pv. Co. v. Ochoa, 19 S.W.3d 452 (Tex. Oftentimes, the insurer has no duty to indemnify. In state court, an order to seal discovery requires that the parties jump through a number of additional hoops, but protective orders are still available. App.Fort Worth 1973, writ refd n.r.e.). ), Notes of Advisory Committee on Rules1937. 37.001. Civ. Declaratory relief is an especially appropriate method for resolving coverage disputes, because of the limited options available for resolution of such disputes. (a) A court of record within its jurisdiction has power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. The award is subject to reversal only if it is arbitrary and unreasonable. While the law is less clear, Federal courts, applying Texas law, have reached a similar conclusion. Typically, an anti-suit injunction is appropriate in limited instances: 1) to address a threat to the courts jurisdiction; 2) to prevent the evasion of important public policy; 3) to prevent a multiplicity of suits; or 4) to protect a party from vexatious or harassing litigation. App.Texarkana 1994, no writ) (possibility that liability triggering indemnity would be incurred was a feature hypothetical event, and court had no power to pass upon hypothetical or contingent situation); Fort Worth Lloyds v. Garza, 527 S.W.2d 195 (Tex. R. Civ. Plaintiff's Complaint fails to state a cause of action. 2d 719, 725 (D. Minn. 2005) (applying Texas law); Forum Ins. denied) (failure to satisfy burden is not finding of proof of opposite). For years, Texas courts concluded that a declaration of indemnity was premature, until the underlying suit was resolved. It argues that the other claims and defenses in the case subsume the issues on which Holmes asks for a declaratory judgment. 12 0 obj DECLARATIONS RELATING TO LIABILITY FOR SALES AND USE TAXES OF ANOTHER STATE. These changes are intended to be stylistic only. County Mut. (a) In this section, "state" includes any political subdivision of that state. 1992); LaFarge Corp. v. Hartford Cas. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News. Download PDF Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. He concentrates his practice on all The abundance of case law allowing extrinsic evidence, however, suggests that the exception will continue. It is axiomatic that the duty to defend is broader than the duty to indemnify. The Fifth Circuit reviewed abstention under the Burford and Colorado River doctrines, and concluded that neither was applicable. Federated Mut. 1992), cert. The Burches were the plaintiffs, and were also the petitioners for declaratory relief. In the event of a legal controversy, both parties generally want to avoid any legal uncertainty and insecurity that could arise out of a dispute. Co. v. Gaskins, 572 S.W.2d 573, 575 (Tex. Thompson Coe on Best Lawyers Best Law Firms List for 12th Consecutive Year, Four Years Later: The Impact of Texas Insurance Code Section 542A.006 on Insurance Litigation, Texas Supreme Court Reverses Appeals Court Judgment, Affirms Trial Win for Thompson Coe Client, Developing Texas Insurance Law in the Appellate Courts, Update & Recap: Winter Storm Uri and Impact on Gulf Coast Coverage Cases, The Good, The Bad, The Ugly: Texas Appraisals, NEW June PC Webinar: Insurance Retrospective, Texas Supreme Court Issues Significant Decision on Exception to Eight Corners Rule, 2801 Via Fortuna See, e.g., Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). Insrs v. American Home Assur. 4 0 obj On the other hand, in some instances, principally those in which only indemnity is at issue, or where stay or abstention is likely, there may be no benefit to early filing. Absent any indemnity obligation and the clear prejudice from late notice, the insurer commenced a declaratory judgment action seeking to recover the defense costs it incurred in defending the underlying action.
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