In re Essex Ins. Co.
Decision Date | 21 November 2014 |
Docket Number | NO. 13–1006,13–1006 |
Parties | In re Essex Insurance Company, Relator |
Court | Texas Supreme Court |
Bryan P. Vezey, Joseph A. Ziemianski, Cozen O'Connor, Houston, Jason K. Fagelman, Fulbright & Jaworski LLP, Dallas, Marcy Hogan Greer, Alexander Dubose, Jefferson & Townsend, Zachary Spratt Smith, Fulbright & Jaworski LLP, Austin, for Relator.
David Tijerina, Dallas, Roger L. Turk, Thomas J. Henry, Law Offices of Thomas J. Henry, Corpus Christi, for Real Party in Interest Rafael Zuniga.
James Peirce Davis, Joseph M. Heard, Heard & Medack, P.C., Houston, Randal W. Hill, Randal W. Hill, P.C., Corpus Christi, for Real Party in Interest San Diego Tortilla.
Rafael Zuniga sued San Diego Tortilla (SDT) for personal injuries and then added a declaratory judgment claim against SDT's liability insurer, Essex Insurance Company, seeking a declaration that Essex must indemnify SDT for its liability to Zuniga. The trial court denied Essex's motions to dismiss, and the court of appeals denied Essex's petition for writ of mandamus. “In Texas, the general rule ... is that an injured party cannot sue the tortfeasor's insurer directly until the tortfeasor's liability has been finally determined by agreement or judgment.” Angus Chem. Co. v. IMC Fertilizer, Inc., 939 S.W.2d 138, 138 (Tex.1997) (per curiam) (citing Great Am. Ins. Co. v. Murray, 437 S.W.2d 264, 265 (Tex.1969) ); see also Aviles v. Aguirre, 292 S.W.3d 648, 649 (Tex.2009) (per curiam) () (citing Angus Chem., 939 S.W.2d at 138 ); State Farm Cnty. Mut. Ins. Co. of Tex. v. Ollis, 768 S.W.2d 722, 723 (Tex.1989) (per curiam) (). Because no exception to this “no direct action” rule applies here, we conditionally grant mandamus.
Zuniga sued SDT after he lost his hand while operating a tortilla machine at SDT's facility. Essex, which had issued a commercial general liability policy insuring SDT, investigated the accident and concluded that the policy does not cover Zuniga's claims because Zuniga was an SDT employee at the time of the accident.1 Zuniga and SDT denied that Zuniga was an employee and asserted instead that he was working at SDT as an independent contractor. While maintaining its position that Zuniga was an employee, Essex nevertheless agreed to defend SDT under a reservation of its right to refuse to indemnify SDT against any judgment, based on the policy's employee exclusion.
After Essex rejected Zuniga's offer to settle his claims against SDT for the policy limits, Zuniga filed an amended petition adding Essex as a defendant and seeking a declaration that the policy requires Essex to indemnify SDT for its liability to Zuniga. In response, Essex filed a motion to dismiss Zuniga's claims under Texas Rule of Civil Procedure 91a, arguing that the “no direct action” rule, Zuniga's lack of standing, and a lack of ripeness bar Zuniga from suing Essex until SDT's liability to Zuniga is determined. SDT retained separate counsel and filed a plea in intervention seeking the same declaratory relief that Zuniga had sought. Essex also moved to dismiss SDT's plea under Rule 91a. The trial court denied both of Essex's Rule 91a motions. SDT has since abandoned its plea in intervention and in this Court now supports Essex's position that Zuniga's claims against Essex must be dismissed.
We only issue mandamus “to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law.” Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992) (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) ). Thus, to obtain mandamus relief in this case, Essex must establish that (1) the trial court abused its discretion by denying Essex's Rule 91a motions to dismiss, and (2) Essex has no adequate remedy by appeal.2 See id. We conclude that it has done so.
Essex contends that the trial court abused its discretion by refusing to dismiss Zuniga's claims because the “no direct action” rule prohibits a plaintiff from directly suing a defendant's liability insurer to recover benefits under the insurance policy until the defendant's liability to the plaintiff has been established. See Angus Chem., 939 S.W.2d at 138. Moreover, Essex asserts, because SDT's liability to Zuniga has not yet been established, Zuniga's claims against Essex are not ripe and Zuniga lacks standing to assert them, and thus the trial court lacks jurisdiction over those claims. In response, Zuniga argues that his claims against Essex do not violate the “no direct action” rule because he is merely seeking a declaration that the Essex policy covers SDT's liability to Zuniga, as opposed to a money judgment against Essex in the amount of that liability and because the Texas Declaratory Judgments Act expressly permits him to seek such relief.
We agree with Essex that Zuniga's claims against it are barred. Whether stated as claims for damages or for declaratory relief, Zuniga's claims against Essex must fail unless SDT is in fact liable to Zuniga for his injuries, which is why we have recognized that the “no direct action” rule applies to a declaratory judgment suit. See Angus Chem., 939 S.W.2d at 138 ( ). Allowing Zuniga to pursue claims simultaneously against SDT (for liability) and Essex (for coverage of that liability) in the same 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 declaratory relief or money damages from the insurer, we reject Zuniga's reliance on the Declaratory Judgments Act as a means to avoid the rule.
Zuniga argues that we have previously held that parties can seek a declaratory judgment regarding an insurer's duty to indemnify even before the insured defendant's liability has been determined. See, e.g., Burlington N. & Santa Fe Ry. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 334 S.W.3d 217, 219–20 (Tex.2011) ( ); Tex. Ass'n of Counties Cnty. Gov't Risk Mgmt. Pool v. Matagorda Cnty., 52 S.W.3d 128, 135 (Tex.2000) ( )(citing State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696, 714 (Tex.1996) ); Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex.1997) ( ). But none of these cases implicates the “no direct action” rule because in each of these cases, it was the insurer or the insured defendant, not the plaintiff, who sought declaratory relief, or the insured defendant's liability to the plaintiff had in fact been determined before the declaratory judgment suit was filed. See Burlington N. & Santa Fe Ry., 334 S.W.3d 217 ( ); Matagorda, 52 S.W.3d 128 ( ); Griffin, 955 S.W.2d 81 ( ); Gandy, 925 S.W.2d 696 (...
To continue reading
Request your trial-
Ex parte Perry
...1.07(a)(9)(F) (defining “coercion” as used in Penal Code).5 Tex.R. Civ. P. 91.6 Id. R. 166a.7 Id. R. 91a.8 See In re Essex Ins. Co., 450 S.W.3d 524, 528 (Tex.2014) (per curiam) (granting mandamus relief to remedy trial court's erroneous denial of Rule 91a dismissal motion; reasoning, under ......
-
Reaves v. City of Corpus Christi
...Similarly, the supreme court has specifically held that mandamus relief is available on the denial of a 91a motion. In reEssex Ins. Co. , 450 S.W.3d 524, 528 (Tex. 2014) (orig. proceeding) (per curiam).2. Overall Statutory ObjectiveFollowing the rule of Essex , this Court has granted mandam......
-
Villalobos v. Hudson Ins. Co.
...In re Essex Ins. Co., 450 S.W.3d 524 (Tex. 2014), lends support to its contention that Villalobos's case is not yet ripe. (Doc. 9 at 15). Essex is distinguishable from the instant case. Essex, the reviewing court discussed the “no direct action rule,” which provides that “an injured party c......
-
Sargeant v. Saleh, NUMBERS 13–15–00327–CV
...The adequacy of an appellate remedy is determined by balancing the benefits of mandamus review against the detriments. In re Essex Ins. Co., 450 S.W.3d 524, 528 (Tex.2014) (orig.proceeding); In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex.2008) (orig.proceeding). Balancing these interests......
-
Texas Rule Of Civil Procedure 91a
...429 S.W.3d 752, 754 (Tex. App.—Beaumont 2014, pet. filed). A party also may file a petition for mandamus. See In re Essex Ins. Co., 450 S.W.3d 524 (Tex. 5 See City of Austin v. Liberty Mut. Ins., 431 S.W.3d 817, 822 (Tex. App.—Austin 2014, no pet.)(reviewing trial court's grant of Rule 91a ......
-
CHAPTER 6 - 6-3 Procedure
...purpose, such as proving a witness's bias or prejudice or, if disputed, proving agency, ownership, or control."); In re Essex Ins. Co., 450 S.W.3d 524, 527 n.4 (Tex. 2014) (orig. proceeding) (per curiam) ("Texas law has long recognized the prejudice that results from the admission of eviden......
-
Chapter 8-10 Declaratory Judgment
...denied).[410] Tex. Civ. Prac. & Rem. Code Ann. § 37.005.[411] Tex. Civ. Prac. & Rem. Code Ann. § 37.004(b).[412] In re Essex Ins. Co., 450 S.W.3d 524, 527 (Tex. 2014).[413] Tex. Civ. Prac. & Rem. Code Ann. § 37.004(c).[414] Tex. Civ. Prac. & Rem. Code Ann. § 37.003.[415] Tex. Civ. Prac. & R......
-
Chapter 28-1 Motions to Dismiss Baseless Causes of Action
...Change to Tex. R. Civ. P. 91a.5(c).[23] ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 880 (Tex. 2018) (citing In re Essex Ins. Co., 450 S.W.3d 524, 526 (Tex. 2014) (by writ of mandamus) and GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 753-54 (Tex. App.—Beaumont 2014, pet. denied) (permissiv......