App.Texarkana 1967, no writ) (auto excluded); International Serv. App.Amarillo 2019). K-yXHMKS mmgOT}|aMz0. But, because courts have recognized that, where a coverage issue exists, there is no privity between the insured and the insurer, there is an argument that an insurer should be allowed to litigate facts in a declaratory judgment, regardless of whether the facts are also being litigated in the underlying suit. In common law, a defendant may use defenses to prevent or limit liability.A defense can either allege a failure to state a claim, or affirm the existence of a claim and present additional reasons that prevent the plaintiff or prosecutor from prevailing on a cause of action, a demand for relief, or otherwise obtaining the result requested. Voluck LLP and chair of its general liability coverage practice group. The declaratory action may also bring the coverage issues into focus for the plaintiff, and assist the insured in negotiating settlement. Rule 57, FED. denied) (judgment of negligence in underlying case did not establish that negligent acts caused bodily injury, and did not preclude insurer from establishing intentional conduct); Deering Mgmt. denied, 511 U.S. 1032 (1994). A future interest in a potential judgment has been held insufficient to allow intervention. (whether policy was void or loss was covered presented justiciable controversy); American States Ins. 6 0 obj See Granite State Ins. Recent cases discussing the enforceability of policy buy-backs suggest there may be other exceptions in which a statutory insurance requirement renders a claimant an intended beneficiary. 1, eff. Co. v. Bailey, 133 F.3d 363, 368 (5th Cir. A court may not, however, refuse to exercise jurisdiction on the basis of a whim or personal disinclination. See, e.g., St. Paul Ins. Co. v. WSG Investors, LLC, 09-cv-05237, 2012 WL 3150577 (E.D.N.Y. See, e.g., Sylvester v. Watkins, 538 S.W.2d 827 (Tex. 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. Declaratory relief is an especially appropriate method for resolving coverage disputes, because of the limited options available for resolution of such disputes. Co. v. Vic Mfg. Exclusive news, data and analytics for financial market professionals. of Trans., 999 S.W.2d 881, 883 (Tex. 37.009. 1969); see also Allstate Ins. Co., 981 S.W.2d 889 (Tex. Code Crim. Ins. at 313. (B) A contract may be construed either before or after there has been a breach. 8. Further relief based on a declaratory judgment or decree may be granted whenever necessary or proper. An insurer should not be held to have waived its right to litigate coverage by defending under reservation of rights, or by delay in filing a declaratory judgment action. <> For years, Texas courts concluded that a declaration of indemnity was premature, until the underlying suit was resolved. Declaratory Judgment These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. 1364 (N.D. Tex. 1998, pet. In determining amount in controversy, the court may consider policy limits and defense costs, and is not necessarily limited by the damages pleaded in the underlying suit. The county where the contract was formed may also be a proper venue. (d) In determining whether to grant declaratory relief to a business under this section, a court shall consider: (1) the factual circumstances of the business's operations that give rise to the demand by the other state; and. 37.006, TEX. 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.. 37.007. 37.004. denied). denied); State Farm Lloyds v. Texas Dept of Public Safety v. Moore, 985 S.W.2d 149, 153-54 (Tex. Tex. App.Dallas 2001, pet. 1995, no writ); Employers Cas. Rules 12(b) and 12(h) . See Great American Ins. All orders, judgments, and decrees under this chapter may be reviewed as other orders, judgments, and decrees. dismd, 507 U.S. 1026 (1993). Co. v. Delaney, 386 S.W.2d 648 (Tex. Co., 975 S.W.2d 329, 332 n.1 (Tex. Co. v. Am. 2002); Monticello Ins. 37.002. 1998, no pet.). Control of defense and directing actions of defense counsel in conflict situation (Utica Mut. endobj In Nautilus, the insureds were sued in California state court by a former business partner asserting numerous claims, including interference with prospective economic advantage. 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. Id. Co. v. Griffin, 955 S.W.2d 81 (Tex. In a number of instances, courts have concluded that an insurer is entitled to re-litigate issues. Co. v. Gjonaj Realty & Mgt. In addition to the county of the defendants residence or principal office, venue is generally deemed proper in the county where the liability suit is pending, or judgment is entered. There are exceptions, of course. Because the insurer would be allowed to re-litigate, after the underlying case is resolved, there is no reason to delay the inevitable. <> A federal court cannot, however, stay a pending suit for declaratory relief to allow the parties to re-file suit in state court, as the state court will have no jurisdiction. 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. 2201, and further provides for a jury trial. C.M.W., 53 S.W.3d 877 (Tex. & Rem. (Deering, 1937) 1062a), Michigan (3 Comp.Laws (1929) 13904), and Kentucky (Codes (Carroll, 1932) Civ.Pract. 37.006. In this instance, both state and federal courts have readily allowed the use of extrinsic evidence to determine the duty to defend. Wade, 827 S.W.2d at 451. The federal act allows the court to declare the rights of any interested party.. ); Taylor v. State Farm Lloyds, 2003 Tex. Attorney Analysis from Westlaw Today, a part of Thomson Reuters. Insurers should also be sure to expressly reserve their right to recoup the costs in their coverage position letters. % App.Corpus Christi 2000, no writ). 2 The courts decision has been described as carving out an exception, rather than overruling prior law. See Feria v. CU Lloyds of Texas, 2001 Tex. Acts 1985, 69th Leg., ch. Id. 2d 719 (S.D. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 10 0 obj The collision was also in Hidalgo County, as was the liability suit. Id. App.San Antonio 1998, pet. 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. Cty. 1973) (court had no authority to order declaration against insurer in response to insureds motion for summary judgment on insurers claims); Indigo Oil, Inc. v. Wiser Oil Co., 1998 TEX. Prac. Civ. In re Houston Specialty Insurance Co., 569 S.W.3d 138 (Tex. The complaint allegation rule can pose a problem with declaratory relief. Id. Federal: Declare Assess Act, 28 U.S.C. endobj 169 (S.D.Tex., 1935); Borchard, Declaratory Judgments (1934), passim. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. 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.
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