Ins. 39 F.3d at 591. BORON. C.M.W., 53 S.W.3d 877 (Tex. App.Dallas 2000, pet. Co. v. Marathon Ashland Petrol., L.L.C., 87 F. Supp. These changes are intended to be stylistic only. (b) This chapter is remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations; and it is to be liberally construed and administered. 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. A justiciable controversy may nonetheless exist where no other cause of action is available or has ripened. dismd, 507 U.S. 1026 (1993); cf. 8. Co. v. Patriot Sec., Inc., 926 F.Supp. declaratory-judgments | U.S. Constitution Annotated | US Law | LII We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. 12 0 obj (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. denied); State Farm Lloyds v. Co. of Texas, 1998 Tex. 1994). 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. All quotes delayed a minimum of 15 minutes. 1991), affd in part, 961 F.2d 213 (5th Cir. App.Houston 1998, pet. Co. v. Deering Mgmt. 37.010. REVIEW. Sec. 1 0 obj An action or proceeding is not open to objection on the ground that a declaratory judgment or decree is prayed for. All Rights Reserved. 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. 2002); Monticello Ins. Tex. Co. v. Wade, 827 S.W.2d 448 (Tex. Co. v. Sassin, 894 F.Supp. 214-871-8200, One Riverway dismd, 507 U.S. 1026 (1993). Ins. . 2201, to determine an actual controversy between the . App.Austin 1998, pet. Co. v. Gaskins, 572 S.W.2d 573, 575 (Tex. It argues that the other claims and defenses in the case subsume the issues on which Holmes asks for a declaratory judgment. 504-526-4350, 408 St. Peter Street, Suite 510 Frontier Pac. at 1280 (insurer not precluded from relitigating course and scope of employment). Explanation of the Constitution - from the Congressional Research Service 37.008. E.g., Chenault v. Phillips, 914 S.W.2d 140, 141 (Tex. See State Farm Mut. endobj Ins. 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. 9. App.Houston [14th Dist.] Am., 845 S.W.2d 794, 801 (Tex. Co., 2000 Tex. What Is a Declaratory Judgment Action? 37.0055. In American Genl Fire & Cas. Co., 387 S.W.2d 22, 25 (Tex. Written instruments, including ordinances and statutes, may be construed before or after breach at the petition of a properly interested party, process being served on the private parties or public officials interested. 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. Co. v. Murray, 437 S.W.2d 264, 265-66 (Tex. 688, 699 (1936). PRAC. <>>> <> (c) A business described by Subsection (b)(1) is entitled to declaratory relief on the issue of whether the requirement of another state that the business collect and remit sales or use taxes to that state constitutes an undue burden on interstate commerce under Section 8, Article I, United States Constitution. Subscribe to Justia's Free Newsletters featuring summaries of federal and state court opinions. at 451-53. 1995) (whether trademark violation occurred during policy period). E.g., Cluett v. Medical Protective Co., 829 S.W.2d 822, 826 (Tex. Created is remedy Co., 192 A.D. 3d 28 (2d Dep't 2020) the Second Department expressly "declined to follow" the prevailing New York authority. 606 S.W.3d 774 (Tex. App.Dallas 2001, pet. 37.005. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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 award is subject to reversal only if it is arbitrary and unreasonable. (prior judgment not res judicata as to amended pleading that alleged new facts, not involving completed operations); St. Paul Ins. Co. v. Plummer, 13 F.Supp. In Gonzales v. American States Ins. In Natl Union Fire Ins. June 29, 2021 - A standard feature of CGL policies is the duty to defend, which obligates insurance companies to defend an insured even if there is ultimately no duty to indemnify. 1, eff. COSTS. Co. v. Burch, 442 S.W.2d 331 (Tex. Opinions expressed are those of the author. 466, 473, 80 L.Ed. 955 S.W.2d at 84 (construing Tex. This Note is jurisdiction neutral. Further, while it is unlikely that an insurer wishes to proceed, without protective order, to establish evidence that demonstrates the insureds liability as the insurer has not yet prevailed on its coverage defenses it is also unclear under what standard the insured should be able to protect otherwise discoverable information, simply because it is damaging. 1998); Monticello Ins. In Nautilus, the insureds were sued in California state court by a former business partner asserting numerous claims, including interference with prospective economic advantage. The courts appear to be split, with federal courts being somewhat more lenient in allowing the use of extrinsic evidence in this circumstance. 2 The courts decision has been described as carving out an exception, rather than overruling prior law. Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. PDF WHEN IS A DECLARATORY JUDGMENT PROPER? - Harris County, Texas In fact, the Court held that the policy "did not apply" in the context of Nautilus' claim for reimbursement of defense costs, as it had already been determined that there was no duty to defend. See here for a complete list of exchanges and delays. Auto Ins. ), the court held the county where the agent was located, the policy was sold, and the claim was reported, was not a proper venue. 3.08(a), eff. See, e.g., Boring & Tunneling Co. v. Salazar, 782 S.W.2d 284, 289-90 (Tex. LEXIS 7088 (Tex. (no right to new trial because of amended petition where suit brought and determined based on prior petition). Finally, the Court stated that it strongly disagreed with the view that permitting recoupment would erode the duty to defend. 1997)2; see also State Farm Lloyds v. Co., 975 S.W.2d 329, 332 n.1 (Tex. U.S. Constitution Annotated Toolbox. R. CIV. 7 Id. Rule 57, FED. (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. (4) to determine rights or legal relations of an independent executor or independent administrator regarding fiduciary fees and the settling of accounts. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. 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. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. PDF In the United States District Court for The Northern District of Texas Co. v. Ward, 107 S.W.3d 820 (Tex. PRAC. POWER OF COURTS TO RENDER JUDGMENT; FORM AND EFFECT. App.San Antonio 1998, pet. Sec. The collision was also in Hidalgo County, as was the liability suit. 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. Corp., 817 F.Supp. Co. v. Tandy Corp., 986 F.2d 94, 95 (5th Cir. 1978). Of N.Y. & N.J., 166 A.D.3d 464 (1st Dep't 2018); Max Specialty Ins. Co. v. Burch, 442 S.W.2d 331 (Tex. 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. 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. A number of issues arise in regard to discovery in a declaratory judgment action. We agree and affirm as well. 1995). Ins. 1998, no pet.). summary judgment on all of the Murphys' claims and its own claim for declaratory relief, requesting attorney's fees for both prosecuting and defending a declaratory judgment action. 2021 :: Supreme Court of Texas Decisions - Justia Law 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. Download PDF Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. This article contains general legal information but does not constitute professional legal advice for your particular situation. See Southern County Mut. <> 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. Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. Seq. 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." Civ. Co., 975 S.W.2d 329 (Tex. In American, the insurer agreed to defend the insured in an underlying personal injury action but reserved its right to deny coverage to the extent that the insurer was prejudiced due to the insured's late notice of the action. 1965, writ refd n.r.e.) 5 0 obj Previously, multiple New York courts at both the trial and Appellate Division levels aligned with Nevada and the other listed states holding that an insurance company may recoup defense costs paid on behalf of an insured when it is ultimately determined that there was no coverage in connection with the underlying action, provided that the insurer reserved its rights to seek such reimbursement. 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. Moreover, Insurers should note that policies that are not duty to defend, or otherwise expressly provide a right of recoupment, may not be subject to the same limitations on the right of recoupment. See Feria v. CU Lloyds of Texas, 2001 Tex. Civ. Co. v. Vandewater, 907 S.W.2d 491 (Tex. The Federal act is broader in scope. He can be reached at mzigelman@kdvlaw.com. ydXOEp Pzz2 -Ia5D(eUE02Xd#zG5 ;}srmVY9c~Vqz6#tUy/`ck$cVpxKCoo,}o{T#@TQ]%5|@Rtx~K9jptm> oL denied). 14-0457 (Tex., July 1, 2016), RSL agreed to purchase certain annuity contracts issued by MetLife from three individuals. 37.003. See, e.g., Cook v. Ohio Cas. The crop-dusting involved only one flight, but several passes during which herbicide was released, and during which wind direction and velocity varied. Therefore, either diversity or federal question jurisdiction must still exist. 1996). v. Mitchell, 138 F.3d 208, 210 (5th Cir. endobj Still, there are often strategic benefits to filing early. dYU1oprU.:1FlU;{~_%uIMT6cHE 7o1E-j=E.s nR&%*%")QmLd~s`MF_]jd%DhjP1h 4 z#G?o 0Xj[f e /R&K(KX K$ TBu /5v+nA%. In other respects the Uniform Declaratory Judgment Act affords a guide to the scope and function of the Federal act. The district court dismissed the indemnification issue, but granted judgment on defense, based on the extrinsic evidence. PDF NO. 2009-52869 THE STATE OF TEXAS IN THE DISTRICT COURT v. OF 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. 97, 99 (E.D. 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. 1997) (whether vehicle was owned by insured); Harken Exploration Co. v. Sphere Drake Ins., PLC, 261 F.3d 466 (5th Cir. Co., 143 F.3d 192 (5th Cir. In a declaratory judgment action, neither party is seeking a judgment for money damages. See, e.g., City of Galveston v. Giles, 902 S.W.2d 167 (Tex. App.San Antonio 2019). . 699 (H.B. K-yXHMKS mmgOT}|aMz0. Rules 12(b) and 12(h) . ); State Farm Lloyds Ins. ); Rice v. Alamo Rent-A-Car, Inc., 987 S.W.2d 231 (Tex. US Senate panel seeks ethics details from Supreme Court. 120.53. 8 0 obj Prac. When there is uncertainty as to the legal obligations or rights between two parties, a declaratory judgment offers an immediate means to resolve this uncertainty. ERISA/fiduciary-related claims, commercial general liability (CGL), admiralty and maritime, toxic/mass Therefore, the claimants should not be necessary or indispensable parties, prior to the settlement or judgment. Hasselbring v. Koepke, 263 Mich. 466, 248 N.W. Bonham State Bank v. Beadle, 907 S.W.2d 465 (Tex. Tex. See, e.g., Texas Assn of Bus. denied); cf. endobj Group v. Lou-Con, Inc., 293 F.3d 908 (5th Cir. 1023, 1026 (N.D. Tex. In this chapter, "person" means an individual, partnership, joint-stock company, unincorporated association or society, or municipal or other corporation of any character. Declaratory Judgment Action Insurer Does Nothing Facts Don't Trigger Duty to Defend Insurer Does Nothing 34 . App.Corpus Christi 1975, writ refd n.r.e.) Sec. 45 (N.D. Tex. Co. v. Boll, 392 S.W.2d 158, 161 (Tex. 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. See Bituminous Cas. The controversy is ripe, because the insurer is called upon to defend, and because the existence of coverage may impact the outcome of the suit. P. 76A; 192.6(b)(5). (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. !`g)a00-k@@eU Rule 57. Declaratory Judgment - LII / Legal Information Institute 10 0 obj In a straight complaint allegation case, for instance, there should be extremely limited discovery, beyond verification of the pleadings and the policy. Co. v. Cooper Mach. See, American Home Assur. Rule 57, FED. Id. Co. v. Boll, 392 S.W.2d 158, 161 (Tex. Strategy and Ethics in Declaratory Judgment Actions Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. The Western Heritage case epitomizes the argument for use of extrinsic evidence. There was also a declaration that the insurer owed neither defense nor indemnity to the wife. Co. v. Watson, 876 S.W.2d 145, 149 (Tex. <> Id. 4 0 obj RESERVATION OF RIGHTS CHECKLIST - PAGE 2 . SHORT TITLE, CONSTRUCTION, INTERPRETATION. Youell & Cos v. Getty Oil Co., 510 U.S. 820 (1993); Service Mutual Ins. Co., 975 S.W.2d 329, 332 (Tex. He concentrates his practice on all Co. v. Louisiana Farm Bureau Federation, 996 F.2d 774, 778 (5th Cir. Instead, the purpose of a declaratory judgment action is to determine the parties' responsibilities in relation to a particular dispute. Co., 316 U.S. 491 (1942); Wilton, 515 U.S. 277. Mirror-image counterclaims in declaratory judgment actions 830-252-5100. JURY TRIAL. 2002, no pet. SUPPLEMENTAL RELIEF. App.Dallas 1998, pet. See Fed. Obviously, the nature of the coverage issue to be determined will also determine the scope of discovery. See Employers Cas. 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. Suite 1850 Twenty-Fifth Floor - Plaza of the Americas DECLARATORY JUDGMENT ACTIONS, DISCOVERY & TRIAL - New York State Bar 37.004. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. Civ. There are exceptions, of course. LEXIS 7982 (Tex. 30, 2007, eff. 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. P., also addresses declaratory judgments, by reference to 28 U.S.C. The court remanded for consideration of these factors. App.Austin 1999, pet. 2004). Sec. Dec. 1, 2007. %PDF-1.5 37.008 provides that aforementioned court may refuse to render a declaratory judgements if the judgment become nay terminate and uncertainty or controversy giving rise to the proceeding. DECLARATORY JUDGMENT Definition & Legal Meaning - The Law Dictionary When to file is often determined by what is at issue. Indemnity, on the other hand, is based on actual facts and should always be subject to extrinsic evidence. DECLARATIONS RELATING TO LIABILITY FOR SALES AND USE TAXES OF ANOTHER STATE. denied) (failure to satisfy burden is not finding of proof of opposite). (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. App.Houston [1st Dist.] 855, Sec. App.Corpus Christi 1992, writ denied) (whether boat was being used for business pursuit); International Serv. 959, Sec. In Chiriboga v. State Farm Mut. Sept. 1, 1987; Acts 1999, 76th Leg., ch. As Texas law remains uncertain regarding reimbursement of defense costs, and as many insureds are not financially capable of repayment, the defense issue may be rendered moot either practically or legally by delay. Co. v. Kelliher, 343 S.W.2d 278 (Tex. 2001). Co. v. Co. v. Cowan, 945 S.W.2d 819 (Tex. 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. Defense - FindLaw Dictionary of Legal Terms If the discovery is limited, or poorly conducted, or does not address the coverage issues, however, the insurer may seek additional testimony and evidence. A declaration does not prejudice the rights of a person not a party to the proceeding. Co., 767 F.Supp. App.Fort Worth 1998, no pet.) 1993); Trinity Univ. 1999) (insureds motion to transfer erroneously granted); Southern County Mut. & REM. This article will discuss some of the recent decisions illustrating the different views that Courts have taken with respect to this issue, as well as the implications for insurance companies that issue duty to defend policies. The existence or nonexistence of any right, duty, power, liability, privilege, disability, or immunity or of any fact upon which such legal relations depend, or of a status, may be declared. 1 Justice Smith was perhaps prescient in his dissent, concluding that a justiciable controversy existed. denied) (refusing to allow use of extrinsic evidence to disprove alleged facts). E.g., Wilton v. Seven Falls Co., 515 U.S. 277 (1995); American States Ins. App.Fort Worth 1973, writ refd n.r.e.). See here for a complete list of exchanges and delays. App.Corpus Christi 1998), revd on other grounds, 995 S.W.2d 675 (Tex. The district court dismissed the declaratory action on the defendants motion based on 28 U.S.C. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 1993) (whether accident arose from liquor liability); Acceptance Ins. 1993) (Colorado River factors inapplicable in declaratory judgment action); Granite State Ins. Notes of Advisory Committee on Rules1948 Amendment. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia. Improper use of declaratory judgments under the Texas UDJA - LinkedIn Prac. App. 1992), cert. In this instance, both state and federal courts have readily allowed the use of extrinsic evidence to determine the duty to defend. LEXIS 1736 (Tex. 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 See, e.g., Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995). (2) the decisions of other courts interpreting Section 8, Article I, United States Constitution. denied). While some older cases find an insurer cannot re-litigate facts, if it has wrongfully refused to defend, recent cases have held that an insurer is not bound, in any circumstance, where the facts allegedly establishing coverage are not fully litigated. 1996). 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.