He can be reached at estern@kdvlaw.com. Civ. 97 (E.D. 959, Sec. App.Texarkana 2003, pet. <> 1968); National Sav. State Farm argued the policy changes were made in Milam County, where the agent was located, and the policy was sold. App.Houston 1998, pet. Co. v. Gandy, 925 S.W.2d 696 (Tex. App.Houston [14th Dist.] v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. Sec. Insrs v. American Home Assur. 2201-2202 2201. In this instance, both state and federal courts have readily allowed the use of extrinsic evidence to determine the duty to defend. The Court held that insurers are entitled to recoupment even where the policy at issue does not expressly provide such a right. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. The Federal act is broader in scope. Am., 845 S.W.2d 794, 801 (Tex. For App.Austin 1999, no pet.) ); State Farm Lloyds Ins. Co. v. Cooper Machinery Corp., 817 F.Supp. 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. Co. v. Travis, 68 S.W.3d 72, 77 (Tex. The petition in the underlying suit was amended, however, and all references to alcohol were deleted. A person interested as or through an executor or administrator, including an independent executor or administrator, a trustee, guardian, other fiduciary, creditor, devisee, legatee, heir, next of kin, or cestui que trust in the administration of a trust or of the estate of a decedent, an infant, mentally incapacitated person, or insolvent may have a declaration of rights or legal relations in respect to the trust or estate: (1) to ascertain any class of creditors, devisees, legatees, heirs, next of kin, or others; (2) to direct the executors, administrators, or trustees to do or abstain from doing any particular act in their fiduciary capacity; (3) to determine any question arising in the administration of the trust or estate, including questions of construction of wills and other writings; or. Subscribe to Justia's Free Newsletters featuring summaries of federal and state court opinions. tort and environmental coverage. 1965, writ refd n.r.e.) Insurers should also be sure to expressly reserve their right to recoup the costs in their coverage position letters. 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. 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. 1, eff. . COURT REFUSAL TO RENDER. It is axiomatic that the duty to defend is broader than the duty to indemnify. Co. v. Trejo, 39 F.3d 585 (5th Cir. 2283. 1983). Protective orders are still relatively simple, and can usually be subject to an agreed motion in federal court. 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. The Federal Declaratory Judgment Act creates a remedy, not a basis for jurisdiction. 6 0 obj Co. v. Vic Mfg. denied) (refusing to allow use of extrinsic evidence to disprove alleged facts). Plaintiff's Complaint fails to state a cause of action. Co. v. Boll, 392 S.W.2d 158, 161 (Tex. : the evidence and arguments presented supporting the defendant's opposition see also accord, alibi . The Texas Supreme Court concluded that 38.006 allowed recovery of attorneys fees for breach of contract unless attorneys fees are otherwise available. 688, 699 (1936). Co. v. WSG Investors, LLC, 09-cv-05237, 2012 WL 3150577 (E.D.N.Y. In the event of a legal controversy, both parties generally want to avoid any legal uncertainty and insecurity that could arise out of a dispute. art. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. The declaratory judgment action allows relief, even where another remedy exists. App.Corpus Christi 1982, no writ) (could not consider facts of ownership that conflicted with petition); Calderon v. Mid-Century Indem. 1994). While abstention doctrine is more frequently an issue in federal court, state courts can also abstain. % The Law Dictionary is not a . Declaratory Judgment These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. See United Services Life Ins. E.g., Cluett v. Medical Protective Co., 829 S.W.2d 822, 826 (Tex. In other respects the Uniform Declaratory Judgment Act affords a guide to the scope and function of the Federal act. U.S. Constitution Annotated Toolbox. Instead, plaintiffs alleged River Entertainment was negligent for allowing the defendant to leave, in his own vehicle, when they should have known his driving ability was impaired. denied); ANR Prod. Co., 981 S.W.2d 861 (Tex. 606 S.W.3d 774 (Tex. Foust v. Ranger Ins. In part, of course, the scope of discovery will be determined by the nature of the issue. denied). 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. Civ. App.Houston [1st Dist.] A justiciable controversy requires a real and substantial controversy over tangibles interests, and not merely a theoretical dispute. Co. v. Blevins, 741 S.W.2d 604, 606 (Tex. There is a contract, and a dispute over the parties rights and obligations under the contract. 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. On the other hand, in some instances, principally those in which only indemnity is at issue, or where stay or abstention is likely, there may be no benefit to early filing. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia. 1996); Williamson v. State Farm Lloyds, 76 S.W.3d 64 (Tex. 1996). App.Fort Worth 1992, writ denied) (insurer not estopped by failing to have declaratory judgment determined before judgment in underlying case). (although judgment reversed on coverage, no indication courts refusal to award fees to either party was abuse of discretion). Twenty-Fifth Floor - Plaza of the Americas While federal abstention doctrine is equally applicable to declaratory judgments action, courts are particularly vigilant in exercising their discretion to protect comity and prevent forum shopping. 713-403-8210, 601 Poydras 131 (E.D. 1998); see also Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741 (Tex. 1995). The right to award costs and fees is discretionary, not mandatory. Advisory opinions are prohibited by both the state and federal constitutions. Co. v. Ochoa, 19 S.W.3d 452 (Tex. In Natl Union Fire Ins. Co. v. Kelliher, 343 S.W.2d 278 (Tex. 2023 Thompson, Coe, Cousins & Irons, LLP. 1993) (whether accident arose from liquor liability); Acceptance Ins. These changes are intended to be stylistic only. stream 45 (N.D. Tex. 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. They allow businesses or individuals to seek a court's direction at the early stages of a controversy. See, e.g., State Farm Fire & Cas. The issue becomes more murky when allegations triggering coverage are alleged, but are in conflict with the actual facts. Issues also arise, when the underlying case is still proceeding, as to the extent to which the insurer can discover information which could also be relevant, and potentially damaging, in the underlying liability suit. (whether policy was void or loss was covered presented justiciable controversy); American States Ins. A declaration may not be rendered if a special statutory proceeding has been provided for the adjudication of some special type of case, but general ordinary or extraordinary legal remedies, whether regulated by statute or not, are not deemed special statutory proceedings. 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. at 68. Co. v. Taylor, 832 S.W.2d 645 (Tex. 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. CIV. Jul 20th, 2015 Collections and Foreign Judgments. 2000). See Murray, 437 S.W.2d 264 (Tex. In this chapter, "person" means an individual, partnership, joint-stock company, unincorporated association or society, or municipal or other corporation of any character. App.Austin 2003, no pet. Co. v. Wade, 827 S.W.2d 448 (Tex. 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. Circuit Court of Appeals certified the question of whether an insurer is entitled to recoupment of defense costs based on a reservation of its rights to seek recoupment to the Nevada Supreme Court. 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. Co. v. Gaskins, 572 S.W.2d 573, 575 (Tex. Explanation of the Constitution - from the Congressional Research Service The application must be by petition to a court having jurisdiction to grant the relief. declaratory judgment action. Co. v. Sassin, 894 F.Supp. Co., 143 F.3d 192 (5th Cir. 2d 719 (S.D. Insurer's right to file declaratory judgment action 9. 2010), Sec. 120.53. App.El Paso 2000, no pet. A trial court has discretion to enter declaratory judgment if it will serve a useful purpose or will terminate the controversy between the parties. Id. Co. v. Am. ANSWER to COMPLAINT for declaratory judgment, affirmative defenses and COUNTERCLAIM filed by Clemens Franek against Jay Franco & Sons, Inc. (jmp, ). Acts 1985, 69th Leg., ch. 1993); American States Ins. Specifically, when does filing a declaratory judgment action on coverage defenses make good business sense and what are the advantages, and disadvantages, of being the plaintiff. Co. v. River Entertainment, 998 F.2d 311, 315 (5th Cir. Sept. 1, 1999. However, each party must still plead for relief and carry its own burden of proof. If a proceeding under this chapter involves the determination of an issue of fact, the issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending. When to file is often determined by what is at issue. Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. Const. Co. v. Tandy Corp., 986 F.2d 94, 96 (5th Cir. See here for a complete list of exchanges and delays. Ins. xX]oF}G?SeW0W44q>EqU{s@N|Bt2&iw'PmH'4QH1_>{'Y7bLH dB4uX;iYtI7F7*L^F dismd by agrmt.) Rule 38(c), TEX. A declaration does not prejudice the rights of a person not a party to the proceeding. See, e.g., Commercial Metals Co. v. Balfour, Guthrie & Co., Ltd., 577 F.2d 264 (5th Cir. Sec. In Chiriboga v. State Farm Mut. (auto liability insurer seeking declaratory relief was not subject to cross-action by injured party, or consolidation of liability and coverage suit); see also Firemans 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. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate.
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