1. Co. v. Hood, 895 F.Supp. The firm's new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112. relation to an action brought by a party with no apparent justiciable interest. Co. v. Cooper Machinery Corp., 817 F.Supp. Sept. 1, 1985. As such, there should be no collateral estoppel of the insurer, based upon the outcome of the issue in the underlying case. The Murphys opposed Wells Fargo's motion, arguing, among other things, that Wells Fargo's claims should not be characterized as requesting declaratory relief. App.Austin 1998, no pet. 1969); see also Allstate Ins. When there is uncertainty as to the legal obligations or rights associated with a potential future course of action, declaratoryrelief offers an immediate means to resolve this uncertainty. 37.007. The focus is on the factual allegations that show the origin of damages, rather than the legal theories alleged. A declaration does not prejudice the rights of a person not a party to the proceeding. (whether driver qualified as an insured); John Deere Ins. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. Civ. In part, of course, the scope of discovery will be determined by the nature of the issue. See, e.g., Ohio Cas. The Federal Declaratory Judgment Act creates a remedy, not a basis for jurisdiction. denied) (refusing to allow use of extrinsic evidence to disprove alleged facts). Ins. Co., 316 U.S. 491 (1942); Wilton, 515 U.S. 277. Co. v. Gjonaj Realty & Mgt. 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. A declaration does not prejudice the rights of a person not a party to the proceeding. Co., 143 F.3d 192 (5th Cir. App.Fort Worth 1986, writ refd n.r.e.). These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. 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. 461 (1937); Nashville, Chattanooga & St. Louis Ry. 1992), cert. Ins. Texas, Inc., 64 S.W.3d 497 (Tex. In Gandy, the court broadened the scope of re-litigation, noting that in no event, however, is a judgment for plaintiff against defendant rendered without a fully adversarial trial, binding on defendants insurer . 2023 Thompson, Coe, Cousins & Irons, LLP. Corp., 377 F. Supp. 97 (E.D. 1271 (N.D. Tex. & Rem. 688, 699 (1936). See Natl Union Fire Ins. App.Beaumont 1972), affd other grounds, 496 S.W.2d 552 (Tex. 713-403-8210, 601 Poydras In duty to defend cases, the issue of whether extrinsic evidence is even relevant would likely arise. App.Houston [1st Dist.] I App.Fort Worth 1973, writ refd n.r.e.). Co., 579 S.W.2d 523 (Tex. 65. The Fifth Circuit reviewed abstention under the Burford and Colorado River doctrines, and concluded that neither was applicable. <> App.Houston [14th Dist.] C.M.W., 53 S.W.3d 877 (Tex. Co., 767 F.Supp. Clearly, the insurer should be entitled to discovery of anything that has been discovered in the underlying suit. 169 (S.D.Tex., 1935); Borchard, Declaratory Judgments (1934), passim. of Trans., 999 S.W.2d 881, 883 (Tex. & Liab. 1983). Twenty-Fifth Floor - Plaza of the Americas The most common exception for extrinsic evidence is when the pleadings simply do not assert facts that would determine coverage. As a matter of law, the duty to defend is broader than the duty to indemnify, and an insurer's duty to defend is triggered as long as there is a "reasonable possibility" that the insurer may have to indemnify the insured under the policy. Defense counsel may, nonetheless, have protected certain information from disclosure, for fear that it was effect coverage, and violate counsels own ethical obligations. P. 26; Tex. <> App.Corpus Christi 1992, writ denied) (whether boat was being used for business pursuit); International Serv. Co. v. Murray, 437 S.W.2d 264, 265-66 (Tex. Co. v. Taylor, 832 S.W.2d 645 (Tex. . See TEX. costs and declaratory judgment). See Granite State Ins. Co. v. Bailey, 133 F.3d 363, 368 (5th Cir. endobj 2004). (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. Protective orders are still relatively simple, and can usually be subject to an agreed motion in federal court. Civ. Oftentimes, the insurer has no duty to indemnify. Group, Inc., 946 F.Supp. 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. Although the trial court vacated the default judgment, on appeal, the Second Department reversed the lower court's order and reinstated the judgment against the insureds. Cty. The petition in the underlying suit was amended, however, and all references to alcohol were deleted. The court, however, concluded this was not a county in which a substantial part of the facts giving rise to the coverage dispute arose. (on petition for mandamus, found claimant was not third party beneficiary and had no right to intervene in declaratory action). Co., 502 S.W.2d 232 (Tex. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir. Co., 61 F.3d 389 (5th Cir. dYU1oprU.:1FlU;{~_%uIMT6cHE 7o1E-j=E.s nR&%*%")QmLd~s`MF_]jd%DhjP1h 4 z#G?o 0Xj[f e /R&K(KX K$ TBu /5v+nA%. He can be reached at mzigelman@kdvlaw.com. 1998); see also Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741 (Tex. action seeking a declaratory judgment." , See Wilton 515 U.S. at 288; Dizol, 133 F.3d at 1223, 1225 & n.5. 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. Bonham State Bank v. Beadle, 907 S.W.2d 465 (Tex. In Wade, the insurer argued that it was not challenging the veracity of the facts alleged, but had a defense independent of the pleadings. Sec. US Senate panel seeks ethics details from Supreme Court. E.g., Wilton v. Seven Falls Co., 515 U.S. 277 (1995); American States Ins. Id. Civ. App.Corpus Christi 2000, no writ). Sec. P., also addresses declaratory judgments, by reference to 28 U.S.C. App.Austin, Oct. 2, 2003, no pet. Co., 96 S.W.3d 673 (Tex. In a straight complaint allegation case, for instance, there should be extremely limited discovery, beyond verification of the pleadings and the policy. See Tri-Coastal Contractors, Inc. v. Hartford Undwrs Ins. 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. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. There are exceptions, however, (1) when conduct estops a party from asserting prior active jurisdiction; (2) where parties are lacking; or (3) where there is lack of intent to prosecute. 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. (c) The enumerations in Sections 37.004 and 37.005 do not limit or restrict the exercise of the general powers conferred in this section in any proceeding in which declaratory relief is sought and a judgment or decree will terminate the controversy or remove an uncertainty. Ins. Despite the complaint allegation rule, Texas courts have always recognized that there are circumstances in which the court must look to extrinsic evidence to determine whether a duty to defend exists. 1995, no writ); Employers Cas. Co. v. Carmichael, 1998 Tex. (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 a 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 thereunder. A common way of eliminating this uncertainty is with a declaratory judgment action, also called a declaration. Co. v. Gandy, 925 S.W.2d 696 (Tex. App.San Antonio 1998, pet. App.Houston 1998, pet. The district court dismissed the declaratory action on the defendants motion based on 28 U.S.C. The petitioner must have a practical interest in the declaration sought and all parties having an interest therein or adversely affected must be made parties or be cited. App.Texarkana 1967, no writ) (auto excluded); International Serv. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 1968). 1023, 1026 (N.D. Tex. Co. v. Burch, 442 S.W.2d 331 (Tex. See State Farm Mut. Ins. Co. v. Port Auth. Frontier Pac. The abundance of case law allowing extrinsic evidence, however, suggests that the exception will continue. Civ. App.Houston [1st Dist.] that AHCA Comply with Fla. Stat. App. endobj R. Civ. tort and environmental coverage. A future interest in a potential judgment has been held insufficient to allow intervention. endobj 37.0055. 11 0 obj 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. Co. v. Sweatt, 978 S.W.2d 267 (Tex. Co. v. Quinn-L Capital Corp., 3 F.3d 877 (5th Cir. endobj "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. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Burch involved a declaration that the insurer owed defense, and also owed indemnity for the insureds liability for his wifes torts. The federal act allows the court to declare the rights of any interested party.. denied); State Farm Lloyds v. Declaratory Judgment These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. . App.Fort Worth 1961, writ refd n.r.e.) 504-526-4350, 408 St. Peter Street, Suite 510 The courts appear to be split, with federal courts being somewhat more lenient in allowing the use of extrinsic evidence in this circumstance. Co. v. Griffin, 955 S.W.2d 81 (Tex. In re Houston Specialty Insurance Co., 569 S.W.3d 138 (Tex. See, e.g., State Farm Lloyds v. See Firemans Ins. Id. Co. v. Truckin USA, 122 F.3d 270, 272-73 (5th Cir. When an issue has been litigated in the underlying case, when can it be re-litigated in the coverage dispute? App.El Paso 1976, writ refd n.r.e.) LEXIS 7982 (Tex. App.Corpus Christi 2002, pet. 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. ), Notes of Advisory Committee on Rules1937. An action or proceeding is not open to objection on the ground that a declaratory judgment or decree is prayed for. The most significant is that there must be a justiciable controversy between the parties. 1996); Williamson v. State Farm Lloyds, 76 S.W.3d 64 (Tex. Tex. 3 0 obj 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.
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