defenses to declaratory judgment action texas

1994). Co. v. Louisiana Farm Bureau Federation, 996 F.2d 774, 778 (5th Cir. Wade, 827 S.W.2d at 451. endobj 2003) (finding Texas allows only narrow exception); but see Gonzales v. American States Ins. Co. v. Patriot Sec., Inc., 926 F.Supp. P., specifically provides, with regard to joinder of third parties, that This rule shall not be applied, in tort cases, so as to permit the joinder of a liability or indemnity insurance company, unless such company is by statute or contract liable to the person injured or damaged. Most policies include a no action provision that provides that a third partys right of action against the insured does not arise until there is a settlement, to which the insurer has agreed, or a judgment against the insured. Co. v. Sweatt, 978 S.W.2d 267 (Tex. Co. v. Travis, 68 S.W.3d 72, 77 (Tex. & REM. <>>> Still, there are often strategic benefits to filing early. 2002); Monticello Ins. The Fifth Circuit reviewed abstention under the Burford and Colorado River doctrines, and concluded that neither was applicable. 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. Id. 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. Co., 767 F.Supp. 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. A court may not, however, refuse to exercise jurisdiction on the basis of a whim or personal disinclination. See, e.g., St. Paul Ins. (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 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 there under. When to file is often determined by what is at issue. Co. v. Burch, 442 S.W.2d 331 (Tex. 167, Sec. New Orleans, LA 70130 Austin, TX 78746 1997); Trinity Universal Ins. 120.53. 2023 Thompson, Coe, Cousins & Irons, LLP. 2283. Ins. What Is a Declaratory Judgment Action? Declaratory relief is an especially appropriate method for resolving coverage disputes, because of the limited options available for resolution of such disputes. defense n. 1 : the act or action of defending see also self-defense. 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. 1998) (whether release was sudden and accidental); Western Heritage Ins. Ins. ANSWER to COMPLAINT for declaratory judgment, affirmative defenses and COUNTERCLAIM filed by Clemens Franek against Jay Franco & Sons, Inc. (jmp, ). Civ. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. 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. Civ. Absent any indemnity obligation and the clear prejudice from late notice, the insurer commenced a declaratory judgment action seeking to recover the defense costs it incurred in defending the . 2201, and further provides for a jury trial. 2004). denied). P. 76A; 192.6(b)(5). 1998). Prac. 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. Co. v. Bradleys Elec., Inc., 993 S.W.2d 673 (Tex. Co., 143 F.3d 192 (5th Cir. . denied, 511 U.S. 1032 (1994). 1995, no writ); Employers Cas. Rules 12(b) and 12(h) . App.El Paso 1976, writ refd n.r.e.) 1968); National Sav. See Firemans Ins. 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. Corp., 377 F. Supp. (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. App.Austin 1987, no writ); Safeway Mng. September 1, 2007. A federal anti-injunction also exists. Co. v. Carmichael, 1998 Tex. 1993). endobj POWER OF COURTS TO RENDER JUDGMENT; FORM AND EFFECT. Ins. Civ. 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. He can be reached at [email protected]. 8 0 obj endobj When an issue has been litigated in the underlying case, when can it be re-litigated in the coverage dispute? The insurer denied defense based on the liquor liability exclusion and filed a declaratory judgment action. denied sub nom. ERISA/fiduciary-related claims, commercial general liability (CGL), admiralty and maritime, toxic/mass PARTIES. Ohio Cas. The complaint allegation rule can pose a problem with declaratory relief. Civ. stream App.Amarillo 2019). 1993); Trinity Univ. Group v. Lou-Con, Inc., 293 F.3d 908 (5th Cir. These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. Co. v. Wade, 827 S.W.2d 448 (Tex. Obviously, the nature of the coverage issue to be determined will also determine the scope of discovery. 37.001. 37.003. P., also addresses declaratory judgments, by reference to 28 U.S.C. For years, Texas courts concluded that a declaration of indemnity was premature, until the underlying suit was resolved. 1995); but cf. (because claimant could not bring suit, she had no right to intervene); see, e.g., Graciela v. Tagle, 946 S.W.2d 504 (Tex. See Travelers Ins. Sec. App.Dallas 2001, pet. In a number of instances, courts have concluded that an insurer is entitled to re-litigate issues. All Rights Reserved. Youell & Cos v. Getty Oil Co., 510 U.S. 820 (1993); Service Mutual Ins. The court may order a speedy hearing of a declaratory judgment action. App.Austin 1999, no pet.) 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. The application must be by petition to a court having jurisdiction to grant the relief. Sec. See here for a complete list of exchanges and delays. The dispute was over an unscheduled vehicle. Clearly, the insurer should be entitled to discovery of anything that has been discovered in the underlying suit. 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. The court, in the coverage action, concluded that there was a conflict of interest and a lack of privity, and therefore the insurer was not collaterally estopped from re-litigating the existence of false imprisonment. 1998), overruled on other grounds, State Farm Fire & Cas. 2201. 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. 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. 37.010. REVIEW. Co., 628 S.W.2d 184 (Tex. 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. See Great American Ins. Protective orders are still relatively simple, and can usually be subject to an agreed motion in federal court. App.Dallas 2001, pet. Opinions expressed are those of the author. In part, of course, the scope of discovery will be determined by the nature of the issue. the enforceability of a non-compete, considerations before initiating legal action, cease and desist letters, declaratory judgments, seeking damages, requesting injunctive relief, and potential remedies available under the Defend Trade Secrets Act (DTSA). Rule 57. 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. <> See, e.g., Western Heritage Ins. 606 S.W.3d 774 (Tex. 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. The court recognized that the insurer was defending, but the coverage issue would not be litigated in the underlying case, so declaratory relief was appropriate. Corp. v. Vacuum Tanks, Inc., 975 F.2d 1130, 1133 (5th Cir. defenses always be pled by motion. Following the Court's decision in Martin, the Texas Legislature amended the Declaratory Judgment Act to expressly provide that, notwithstanding section 22.001 of the Texas Property Code (the trespass-to-try-title statute), a claimant may sue for declaratory relief "when the sole issue concerning title to real property is the determination . The courts appear to be split, with federal courts being somewhat more lenient in allowing the use of extrinsic evidence in this circumstance. He concentrates his practice on all Genl Agency v. Cooper, 952 S.W.2d 861 (Tex. A declaration does not prejudice the rights of a person not a party to the proceeding. Co. v. Bailey, 133 F.3d 363, 368 (5th Cir. 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. Where extrinsic evidence is offered, however, the scope of discovery should be broader. 1, eff. denied); Ranger Ins. Sept. 1, 1999. (c) This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees. Co., 502 S.W.2d 232 (Tex. 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. The following state regulations pages link to this page. 688, 699 (1936). 1998). Created is remedy 1965). Declaratory Judgment These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. Sec. A number of issues arise in regard to discovery in a declaratory judgment action. Co. v. Tandy Corp., 986 F.2d 94, 95 (5th Cir. See, e.g., Cook v. Ohio Cas. . 1978). 28 U.S.C. ); Rice v. Alamo Rent-A-Car, Inc., 987 S.W.2d 231 (Tex. App.Corpus Christi 1998), revd on other grounds, 995 S.W.2d 675 (Tex. They allow businesses or individuals to seek a court's direction at the early stages of a controversy. In Foust v. Ranger Ins. A justiciable controversy may nonetheless exist where no other cause of action is available or has ripened. LEXIS 7550 (Tex. Moreover, the Second Department noted that the policy at issue did not expressly provide the insurer with a right to recoup defense costs. Therefore, the claimants should not be necessary or indispensable parties, prior to the settlement or judgment. denied). Co., 387 S.W.2d 22, 25 (Tex. Because the insurer would be allowed to re-litigate, after the underlying case is resolved, there is no reason to delay the inevitable. One of the factors the courts will review is whether the declaratory action is filed in anticipation of a state court suit. 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. 59.02(c). The Texas Supreme Court concluded that 38.006 allowed recovery of attorneys fees for breach of contract unless attorneys fees are otherwise available. <> denied); ANR Prod. Control of defense and directing actions of defense counsel in conflict situation (Utica Mut. The insurer refused to pay the judgment, on the basis that the insureds conduct constituted a willful violation of a penal statute, and was thus excluded by the policy. Co. v. Louisiana Farm Bureau Fedn, Inc., 996 F.2d 774, 778 (5th Cir. Co. v. Ochoa, 19 S.W.3d 452 (Tex. 1993), cert. The Supreme Court of Texas has ruled that a company did not waive its right to arbitration by bringing a "friendly" declaratory judgment action. Frontier Pac. App.Corpus Christi 2003, no writ). Answer, Affirmative Defenses, and Counterclaim to the First Amended Complaint for Declaratory Judgment ("Complaint") filed by Hartford Fire Insurance Company ("Hartford"), . Admiral Ins. (although judgment reversed on coverage, no indication courts refusal to award fees to either party was abuse of discretion). See, e.g., Standard Fire Ins. Sec. endobj endobj 86.011 Et. <> 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. 37.011. E.g., Wilton v. Seven Falls Co., 515 U.S. 277 (1995); American States Ins. Voluck LLP and chair of its general liability coverage practice group. 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. See United Services Life Ins. 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. (b) A district court has original jurisdiction of a proceeding seeking a declaratory judgment that involves: (1) a party seeking declaratory relief that is a business that is: (A) organized under the laws of this state or is otherwise owned by a resident of this state; or, (B) a retailer registered with the comptroller under Section 151.106, Tax Code; and, (A) is an official of another state; and. The Law Dictionary is not a . 639a3). App.Texarkana 1967, no writ) (auto excluded); International Serv. Ins. 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. & Liab. 1991), affd in part, 961 F.2d 213 (5th Cir. 959, Sec. 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. 2000). See, American Home Assur. See State Farm Fire & Cas. App.Houston [1st Dist.] See, e.g., State Farm Fire & Cas. 37.006, TEX. & REM. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. (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. 2000) (staying declaratory action because of motion to join insurer in state court liability suit). River Entertainment was joined because it owned Pepes where the defendant imbibed. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 12 0 R/Group<>/Tabs/S/StructParents 1>> oEN>-BZ=/c]-ZP4U3o>0!f$F = FQfB@DlClYthnA mML.;Emu =uT In this chapter, "person" means an individual, partnership, joint-stock company, unincorporated association or society, or municipal or other corporation of any character. Co. v. River Entertainment, 998 F.2d 311, 315 (5th Cir. Group, Inc., 946 F.Supp. It is still likely a court will not allow dual-track litigation of issues that affect liability and coverage. Co. v. Burch, 442 S.W.2d 331 (Tex. Dept. 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. 37.002. Indemnity, on the other hand, is based on actual facts and should always be subject to extrinsic evidence. Andrew A. Lipkowitz is an associate at Kaufman Dolowich & Voluck LLP and primarily focuses his practice in insurance coverage litigation and monitoring. 1974, no writ). Co., 542 S.W.2d 429 (Tex. Oftentimes, the insurer has no duty to indemnify. App.Fort Worth 1992, writ denied) (insurer not estopped by failing to have declaratory judgment determined before judgment in underlying case). App.Corpus Christi 1975, writ refd n.r.e.) While the law is less clear, Federal courts, applying Texas law, have reached a similar conclusion. Co. v. Port Auth. action seeking a declaratory judgment." , See Wilton 515 U.S. at 288; Dizol, 133 F.3d at 1223, 1225 & n.5. First Cause of Action: Declaratory Judgment under . 2201-2202 2201. County Mut. at 1280 (insurer not precluded from relitigating course and scope of employment).

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