Finally, the Court stated that it strongly disagreed with the view that permitting recoupment would erode the duty to defend. Texas law provides innocent owners and holders of a security interest in property with a statutory defense to civil forfeiture of their property or interest in the property. Despite the insurers right to review any such documents without waiver of the privilege, and the likelihood that defense counsels concerns would be abrogated by the right to conduct discovery, there is still a question as to what extent defense counsels opinions or observations would be relevant to coverage. 37.001. 120.53. Jul 20th, 2015 Collections and Foreign Judgments. Co. v. Ward, 107 S.W.3d 820 (Tex. Plaintiff's Complaint fails to state a cause of action. ), Notes of Advisory Committee on Rules1937. See, e.g., Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). Co., 981 S.W.2d 889 (Tex. Under state or federal law, declaratory relief is only appropriate when there is an actual case or controversy. 606 S.W.3d 774 (Tex. LEXIS 7088 (Tex. Co. v. Burch, 442 S.W.2d 331 (Tex. 1993), cert. DECLARATIONS RELATING TO LIABILITY FOR SALES AND USE TAXES OF ANOTHER STATE. <> There was also a declaration that the insurer owed neither defense nor indemnity to the wife. . 925 S.W.2d at 714. 10, eff. Under most liability policies, the claimants are not third-party beneficiaries and have no direct rights, and no cause of action, against the insurer until there has been a settlement, to which the insurer agrees, or a judgment against the insured. denied); see also State Farm Fire & Cas. Explainer: How did the battle between Ron DeSantis and Disney escalate? App.Corpus Christi 2000, no writ). Tex. (As amended Dec. 29, 1948, eff. In this instance, there may be legitimate concerns that the insurers discovery will inure to the benefit of the liability plaintiff, which is likely not in the interest of either the insured or the insurer. Civ. Dallas, TX 75201 830-252-5100. 1974, no writ). Co., 96 S.W.3d 673 (Tex. R. CIV. 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. Strategy and Ethics in Declaratory Judgment Actions Since the duty to defend is based solely on the live pleadings, a declaratory judgment is arguably based only on the pleading in effect, and is not determinative as to any subsequent amended or supplemental pleading. PDF IN THE SUPREME COURT OF TEXAS - txcourts.gov 1993). 1995), the court held a minor, whose interests were affected, was properly made a party to a declaratory judgment action, and was bound by the judgment where the minors mother answered, as next friend, and a guardian ad litem was appointed. 2 and the commencement of foreclosure proceedings, into agreeing to convey her interest in the property to Mark in their divorce.1 Kyle sued Fidelity, its officers, and a related entity (collectively, Fidelity),2 as well as Mark,3 seeking forfeiture of principal and interest paid on the loan under Texas Constitution Article XVI, section 50(a)(6)(Q)(xi), a declaratory judgment that the deed of . As with the state act, one of the exceptions allows a federal court to enjoin re-litigation in state court to protect or effectuate its judgments. See Royal Ins. denied). ydXOEp Pzz2 -Ia5D(eUE02Xd#zG5 ;}srmVY9c~Vqz6#tUy/`ck$cVpxKCoo,}o{T#@TQ]%5|@Rtx~K9jptm> oL (B) A contract may be construed either before or after there has been a breach. App.Amarillo 1997, no pet.). Jan. 25, 2019) is a mandamus case involving an insurer's motion to dismiss a declaratory judgment action by a law firm seeking a declaration of non-liability for malpractice in representing the insurer and advising it did not owe a defense in an underlying suit. Cluett v. Medical Protective Co., 829 S.W.2d 822, 826 (Tex. PDF IN THE SUPREME COURT OF TEXAS - txcourts.gov endobj App.El Paso 2000, no pet. costs and declaratory judgment). & Liab. The declaratory judgment action allows relief, even where another remedy exists. Typically, the first-filed suit has dominant jurisdiction. 305 (H.B. In older cases, courts allowed broad introduction of extrinsic evidence in a declaratory judgment context. In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just. 1979, no writ) (not justiciable controversy); Boorhem-Fields, Inc. v. Burlington Northern Railroad Co., 884 S.W.2d 530 (Tex. V 8). Therefore, either diversity or federal question jurisdiction must still exist. App.Dallas 2001, pet. On the other hand, where the insured seeks a declaration that the insurer owes indemnity, before resolution of the underlying case, the opinion may be considered advisory, and declaratory relief may, indeed, be premature. Unfortunately, while 38.001, et seq., may allow recovery of attorneys fees by the insured, in a proper case, it provides no basis for recovery of fees by an insurer. For instance, when it is clear that a ruling on the merits of plaintiff's claims would . See, e.g., Sylvester v. Watkins, 538 S.W.2d 827 (Tex. The court may refuse to render or enter a declaratory judgment or decree if the judgment or decree would not terminate the uncertainty or controversy giving rise to the proceeding. On the other hand, the existence of another remedy, or unresolved issues, does not preclude declaratory relief. App.Corpus Christi 1982, no writ) (could not consider facts of ownership that conflicted with petition); Calderon v. Mid-Century Indem. Co. v. Murray, 437 S.W.2d 264, 265-66 (Tex. Advisory opinions are prohibited by both the state and federal constitutions. 2d 719 (S.D. App.Houston [14th Dist.] Co. v. WSG Investors, LLC, 09-cv-05237, 2012 WL 3150577 (E.D.N.Y. This is an action for declaratory judgment pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. Co. v. County of Nye0, Nev., 26 . See, e.g., Stroop v. N. County Mut. Bonham State Bank v. Beadle, 907 S.W.2d 465 (Tex. Clearly, the insurer should be entitled to discovery of anything that has been discovered in the underlying suit. 45 (N.D. Tex. Suite 300 A court can dismiss a declaratory action even if it fails to meet the stringent standards for abstention. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. See Firemens Ins. In a number of instances, courts have concluded that an insurer is entitled to re-litigate issues. App.Fort Worth 1986, writ refd n.r.e.). Acts 1985, 69th Leg., ch. (b) In any proceeding that involves the validity of a municipal ordinance or franchise, the municipality must be made a party and is entitled to be heard, and if the statute, ordinance, or franchise is alleged to be unconstitutional, the attorney general of the state must also be served with a copy of the proceeding and is entitled to be heard. Id. 2201. 1996) (nevertheless refraining from determining coverage for indemnity, on the basis of judicial economy). Co. v. Bailey, 133 F.3d 363, 368 (5th Cir. See, e.g., Dairyland County Mut. Civ. Auto Ins. By Karl Bayer. PDF IN THE SUPREME COURT OF TEXAS - txcourts.gov If any facts within the scope of coverage are determined, however, an insurer is required to defend. Sept. 1, 1985. Twenty-Fifth Floor - Plaza of the Americas art. Insights in Action: Corporate law departments find their outside firms innovation lagging, but there may be little incentive to change, Messaging platform & personal device use is a firm-wide compliance problem, What a law firm Client Development Manager says about client listening programs, Law firm leaders express the benefit of strategy, culture & adaptability to weather these uncertain times, U.S. officials lead urgent rescue talks for First Republic, DeSantis' showdown with Disney carries political risk. !`g)a00-k@@eU As such, there should be no collateral estoppel of the insurer, based upon the outcome of the issue in the underlying case. Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. Added by Acts 2007, 80th Leg., R.S., Ch. See Southern County Mut. 2021 :: Supreme Court of Texas Decisions - Justia Law 2 a : the theory or ground that forms the basis for a defendant's opposition to an allegation in a complaint or to a charge in a charging instrument (as an indictment) ;also. App.Dallas 2000, pet. A declaratory judgment is a binding judgment from a court defining the legal relationship between parties and their rights in a matter before the court. App.Dallas 1992, writ denied); U.S. Fire Ins. (prior judgment not res judicata as to amended pleading that alleged new facts, not involving completed operations); St. Paul Ins. 466, 473, 80 L.Ed. . xko9.ou _:=;0b+w)m3]WTy:>yYWOv]vs|?V~>zw"{}v~eM/XVY&R~Eou6Wv/ *]nT:^\-G:[A? See, e.g., Texas Assn of Bus. Exclusive news, data and analytics for financial market professionals. An action or proceeding is not open to objection on the ground that a declaratory judgment or decree is prayed for. In duty to defend cases, the issue of whether extrinsic evidence is even relevant would likely arise. In Chiriboga v. State Farm Mut. Ins. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. at 468. 1997), the Supreme Court reaffirmed the complaint allegation rule, with dicta suggesting that the exception for extrinsic evidence would be narrowed. When Can You File a Declaratory Judgment Action' - Insurance Journal Tex. Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. See, American Home Assur. o FRCP Rule 57. On March 11, 2021, the Nevada Supreme Court, in a 4-3 decision, held in Nautilus Insurance Company v. Access Medical, LLC, 2021 WL 936076 (Nev. 2021) that an insurance company is entitled to reimbursement of defense costs where a determination is ultimately made that the insurer did not owe a duty to defend, and the insurer expressly reserved its right to seek recoupment. See here for a complete list of exchanges and delays. Co. v. Tandy Corp., 986 F.2d 94, 96 (5th Cir. Co. v. River Entertainment, 998 F.2d 311, 315 (5th Cir. Federal: Declare Assess Act, 28 U.S.C. Sec. Jurisdictions continue to be split over insurer's right to recoup All Rights Reserved. Rules 38 and 39 govern a demand for a jury trial. Sec. App.Texarkana 2003, pet. R. CIV. Corp., 377 F. Supp. Id. The insurer, Nautilus, agreed to defend the suit while also reserving its rights to disclaim coverage and obtain reimbursement of defense costs if it was determined that Nautilus did not owe a duty to defend. See, e.g., Standard Fire Ins. 37.009. The focus is on the factual allegations that show the origin of damages, rather than the legal theories alleged. PRAC. Insurer's right to assert other policy defenses . SECOND AFFIRMATIVE DEFENSE. App.Texarkana 1967, no writ) (auto excluded); International Serv. denied); cf. 1787), Sec. 30, 2007, eff. Co. v. Deering Mgmt. App.Dallas 1992, writ denied) (insurer not collaterally estopped from challenging findings); United States Fire Ins. The Supreme Court of Texas has ruled that a company did not waive its right to arbitration by bringing a "friendly" declaratory judgment action.
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