The focus is on the factual allegations that show the origin of damages, rather than the legal theories alleged. Federal courts are especially reluctant to exercise jurisdiction if there is a parallel state court proceeding even if subsequently filed that includes all necessary parties and will resolve the issues. 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. See United Services Life Ins. See, e.g., Ohio Cas. Co. v. Louisiana Farm Bureau Federation, 996 F.2d 774, 778 (5th Cir. COURT REFUSAL TO RENDER. denied) (refusing to allow use of extrinsic evidence to disprove alleged facts). 1, eff. Declaratory judgment actions are oftentimes filed in federal court. denied sub nom. When an issue has been litigated in the underlying case, when can it be re-litigated in the coverage dispute? The industry leader for online information for tax, accounting and finance professionals. action seeking a declaratory judgment." , See Wilton 515 U.S. at 288; Dizol, 133 F.3d at 1223, 1225 & n.5. Twenty-Fifth Floor - Plaza of the Americas. In this. See TEX. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. In St. Paul Ins. App.Austin 1999, pet. : the evidence and arguments presented supporting the defendant's opposition see also accord, alibi . See Bituminous Cas. There are a number of instances in which extrinsic evidence may be at issue: Extrinsic evidence may be used to show that the person sued does not qualify as an insured, or that the vehicle or equipment in issue is not insured. Co. v. Murray, 437 S.W.2d 264, 265-66 (Tex. App.Austin 1998, pet. See, e.g., State Farm Fire & Cas. (although judgment reversed on coverage, no indication courts refusal to award fees to either party was abuse of discretion). The insured had initially defaulted in the underlying action, and the insurer reserved its right to seek reimbursement if the default judgment was not vacated. App.Fort Worth 1998, no pet.) at 68. 869, 93 A.L.R. Co. v. Cowan, 945 S.W.2d 819 (Tex. Federal: Declare Assess Act, 28 U.S.C. There are several defenses that should be considered in a suit for declaratory relief in both state and federal court. The court noted that the Griffin exception did not apply, but that a justiciable controversy existed, as the judgment clarified the rights of the parties under the contract; especially because the policy includes a provision under which Ranger could be relieved of its duty to defend by tendering its limits. endobj 120.53. Co. v. Plummer, 13 F.Supp. Sept. 1, 1985. 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. Co., 61 F.3d 389 (5th Cir. Co. v. Patriot Sec., Inc., 926 F.Supp. In duty to defend cases, the issue of whether extrinsic evidence is even relevant would likely arise. Texas Dept of Public Safety v. Moore, 985 S.W.2d 149, 153-54 (Tex. . 925 S.W.2d at 714. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 12 0 R/Group<>/Tabs/S/StructParents 1>> Declaratory judgment actions in the United States are defined by a statutory framework first developed by the National Conference of Commissioners on Uniform State Laws in 1922 and designed to expand the role and authority of courts in settling disputes. that AHCA Comply with Fla. Stat. The issue becomes more murky when allegations triggering coverage are alleged, but are in conflict with the actual facts. . CIV. Co. v. Gaskins, 572 S.W.2d 573, 575 (Tex. App.Houston [1st Dist.] 65. xko9.ou _:=;0b+w)m3]WTy:>yYWOv]vs|?V~>zw"{}v~eM/XVY&R~Eou6Wv/ *]nT:^\-G:[A? SECOND AFFIRMATIVE DEFENSE. The Fifth Circuit reviewed abstention under the Burford and Colorado River doctrines, and concluded that neither was applicable. District courts have articulated several reasons for why mirror-image counterclaims should be dismissed. 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. See, e.g., Western Heritage Ins. A declaration does not prejudice the rights of a person not a party to the proceeding. 1997); Trinity Universal Ins. Where extrinsic evidence is offered, however, the scope of discovery should be broader. App.Amarillo 1997, no pet.). Sec. 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. There are exceptions, of course. Nor can an insurer join the claimants and address the issues through interpleader. Auto. Id. ); Rice v. Alamo Rent-A-Car, Inc., 987 S.W.2d 231 (Tex. 1996) (insurer not estopped from litigating employment issue). See Scottsdale Ins. PRAC. See, e.g., Texas Assn of Bus. For more information, please contact the law firm at 817-335-8800. 45 (N.D. Tex. 1993). See State Farm Fire & Cas. App.Dallas 2001, pet. App.Austin, Oct. 2, 2003, no pet. Proc. 2021 :: Supreme Court of Texas Decisions - Justia Law 1965, writ refd n.r.e.) Even before the Texas Supreme Courts opinion in Griffin, federal courts recognized that indemnity presented an actual controversy and was justiciable, prior to judgment in the underlying liability suit. PDF In the Circuit Court of The Second Judicial Circuit in And for Leon By Karl Bayer. (b) A contract may be construed either before or after there has been a breach. (a) In this section, "state" includes any political subdivision of that state. Added by Acts 2007, 80th Leg., R.S., Ch. App.Beaumont 1972), affd other grounds, 496 S.W.2d 552 (Tex. 1787), Sec. C.M.W., 53 S.W.3d 877 (Tex. Defendant restates its responses to allegations 1-64 as if fully set forth herein. 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. An action or proceeding is not open to objection on the ground that a declaratory judgment or decree is prayed for. Redwood also moves to dismiss Holmes's affirmative defense of failure of conditions precedent, arguing that the defense does not refer to any specific or particular unmet condition. stream defense n. 1 : the act or action of defending see also self-defense. When to file is often determined by what is at issue. App.Corpus Christi 1982, no writ) (could not consider facts of ownership that conflicted with petition); Calderon v. Mid-Century Indem. Co., 387 S.W.2d 22, 25 (Tex. Oct. 20, 1949; Apr. Code37.009 provides that in any proceeding under this Chapter, the court may award costs and reasonable and necessary attorneys fees as they are equitable and just.. 1995); but cf. Where the insurer is providing a defense, it is a party to the attorney-client privilege, and can share in communications between the insured and defense counsel, without waiver. R. CIV. Ins. This Note is jurisdiction neutral. The demand for relief shall state with precision the declaratory judgment desired, to which may be joined a demand for coercive relief, cumulatively or in the alternative; but when coercive relief only is sought but is deemed ungrantable or inappropriate, the court may sua sponte, if it serves a useful purpose, grant instead a declaration of rights. 3 0 obj See Bailey, 133 F.3d at 369 n.4; Travelers Ins. (B) asserts a claim that the party seeking declaratory relief is required to collect sales or use taxes for that state based on conduct of the business that occurs in whole or in part within this state. Because there was no judgment in the liability suit, the court concluded that any declaration regarding indemnity would be purely hypothetical.1 In 1997, the Supreme Court concluded that the law had changed, however, and determined that a declaration of indemnity was available, when the same facts that defeated a duty to defend also defeated a duty to indemnify. PDF IN THE SUPREME COURT OF TEXAS - txcourts.gov DEFINITION. CIVIL PRACTICE AND REMEDIES CODE CHAPTER 37. DECLARATORY JUDGMENTS - Texas costs and declaratory judgment). 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. Exclusive news, data and analytics for financial market professionals. A justiciable controversy requires a real and substantial controversy over tangibles interests, and not merely a theoretical dispute. 955 S.W.2d at 84 (construing Tex. App.Fort Worth 1978, no writ); Providence Lloyds Ins. 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. endobj App.Houston 1998, pet. Co. v. County of Nye0, Nev., 26 . Co. v. Quinn-L Capital Corp., 3 F.3d 877 (5th Cir. 512-708-8200, 700 North Pearl Street See here for a complete list of exchanges and delays. See, e.g., Dairyland County Mut. App.Corpus Christi 2000, no writ). The crop-dusting involved only one flight, but several passes during which herbicide was released, and during which wind direction and velocity varied. Genl Ins. tort and environmental coverage. 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. Pursuant to 37.003, a declaration may be either affirmative or negative in form and effect. In Bradleys Electric, the court rejected an argument from the insured that the county where the insurance contract was negotiated and executed was the only proper venue, but recognized it was also proper. 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. A number of issues arise in regard to discovery in a declaratory judgment action. Oftentimes, the insurer has no duty to indemnify. 2004). 2000) (staying declaratory action because of motion to join insurer in state court liability suit). 7 Id. 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. 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. BORON. App.Fort Worth 1986, writ refd n.r.e.). We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. Under Texas substantive law, attorneys fees may be available to the insured if the insurer has breached its duty to defend or indemnify. Co., 981 S.W.2d 889 (Tex. 10, eff. In re Houston Specialty Insurance Co., 569 S.W.3d 138 (Tex. I 305 (H.B. The landowner-appellant appealed a declaratory judgment excluding guests of his commercial lodge from freely using reserved lot areas on some property (essentially gutting the commercial. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. SHORT TITLE, CONSTRUCTION, INTERPRETATION. Civ. App.Corpus Christi 1982, no writ), the court declared that the rule was that use of extrinsic evidence was allowed to determine coverage, but not to determine facts that would establish the insurers liability. CIV. Citing the Travelers case, the court recited the relevant factors the court must consider in determining whether to dismiss a declaratory judgment action: 1) whether there is a pending state action in which all of the matters in controversy may be fully litigated; 2) whether the plaintiff filed suit in anticipation of a lawsuit filed by the defendant; 3) whether the plaintiff engaged in forum shopping in bringing the suit; 4) whether possible inequities in allowing the declaratory plaintiff to gain precedence in time or to change forums exist; 5) whether the federal court is a convenient forum for the parties and witnesses; 6) whether retaining the lawsuit in federal court would serve the purposes of judicial economy; and. The Fifth Circuit overruled prior case law to conform with the Supreme Courts ruling. Frontier Pac. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. The fact that a declaratory judgment may be granted whether or not further relief is or could be prayed indicates that declaratory relief is alternative or cumulative and not exclusive or extraordinary. Sec. It is not an abuse of discretion, however, to retain a suit, and to decide issues of indemnity, even before the underlying liability suit has reached judgment. Co. v. Am. Protective orders are still relatively simple, and can usually be subject to an agreed motion in federal court. Cluett v. Medical Protective Co., 829 S.W.2d 822, 826 (Tex. E.g., Wilton v. Seven Falls Co., 515 U.S. 277 (1995); American States Ins. The Murphys opposed Wells Fargo's motion, arguing, among other things, that Wells Fargo's claims should not be characterized as requesting declaratory relief. (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. 28 U.S.C. 9 0 obj See Farmers Tex. A Texas court may also enjoin the litigants from moving forward on the same issues in any other jurisdiction. Civ. This article contains general legal information but does not constitute professional legal advice for your particular situation. The amendment substitutes the present statutory reference. The Court also held that its decision is in line with what has "historically been the majority approach." The collision was also in Hidalgo County, as was the liability suit. 1997); Heyden Newport Chemical Corp. v. So. Co. v. Tandy Corp., 986 F.2d 94, 95 (5th Cir. Austin, TX 78746 In addition, in many instances, a protective order will allow broad discovery, without fear of disclosure to the plaintiff. Co. v. Blevins, 741 S.W.2d 604, 606 (Tex. Co., 502 S.W.2d 232 (Tex. In RSL Funding, LLC v. Pippins, No. Rule 57. Amended by Acts 1987, 70th Leg., ch. If the application is deemed sufficient, the court shall, on reasonable notice, require any adverse party whose rights have been adjudicated by the declaratory judgment or decree to show cause why further relief should not be granted forthwith. 1992), cert. & Ind. Co. v. Taylor, 706 S.W.2d 352 (Tex. <>>> At issue was a declaratory judgment action over whether medical expenses were owed to an insured worker, under The Workers Compensation Act, where the expenses were incurred after settlement of the employees negligence suit against a third party.