Updates on Insurance Coverage, Construction Defect
and Commercial Auto Law Developments
in Texas and Louisiana
Welcome to the August 2016 edition of Evans & Co.'s Case Notes, a continuing digest of important new cases in the areas of insurance coverage, commercial liability, construction defect, and commercial transportation law, in states in which we work. We return from our July siesta (actually we were too busy preparing trials) to write this month with updates in the states of Texas and Louisiana, with cases from state appellate courts, and from federal courts construing the laws of those states.
You may access our entire brief by clicking here, or Texas only here and Louisiana only here.
Please recall that our past Case Notes are archived at evanslawfirm.com and we would be pleased to bring current the decisions on which we've reported previously, at your request. We also have trial court decisions bearing on the issues covered, available on your request via email reply.
In TEXAS, we digest a construction defect insurance coverage case by the Texas Court of Appeals in which court considerswhether an insured under multiple policies (by virtue of AI status), has the right to sue one of those carriers for failing to pay 100% of the cost of defense – it paid about 50% – and whether failure to pay 100% is bad faith. The holding is that the insured has no right to apportion cost of defense once paid, though we think the insurers do, and if this insured had gotten an assignment of the other insurers’ right to reapportion, the insured might have prevailed.
In a 5th Circuit Court of Appeals case, applying Texas law, the Court discusses at length the application of the “professional services” exclusion to CGL coverage, and holds that engineering services are excluded.
A second 5th Circuit Case takes Texas’ “eight corners” rule regarding determining the duty to defend, to a literal limit, refusing to consider evidence extraneous to the complaint, which would have shown that the claimant was an employee and the liability suit was barred by workers’ compensation law. The only remedy available for the insurer and insured would be contemporaneous declaratory proceedings where the work status of the claimant was proven in discovery; in the liability case no party would have the incentive to develop facts regarding the policy exclusions.
We also digest two Federal District Court cases, applying Texas law, arising out of construction defect claims: one where an insurer failed to meet the difficult burden of proving there could be no duty to indemnify, and another where again, the “eight corners” rule was closely followed, leading to a holding that there was a duty to defend.
In LOUISIANA, the 4th Circuit Court of Appeals finds a way to increase liability insurance available to cover a truck collision case that resulted in three deaths and four other injuries – finding that the consignor of the cargo was the borrowing employer of the truck driver. Truck insurers take note – and consignors of cargo, who will be the most surprised by this result.
In a second case, the 4th Circuit Court of Appeals again finds coverage where truck “bobtail” insurance (applicable only when the tractor unit is unattached from any load) containing UM/UIM coverage, was responsible for a UM/UIM loss even where the tractor unit was hooked up to a trailer.
A third 4th Circuit Court of Appeal case, declines to find CGL coverage where a personal injury to an inspector arose out of untimely closing of a roll-down door on a delivery truck. The truck was “in use” even though it was stopped and idling.
We also digest Federal Court cases, applying Louisiana law, exploring the doctrine of waiver of policy terms and conditions by failing to reserve rights; interpreting whether an indemnity agreement is an “insured contract”; and analyzing whether a marine liability policy should respond for a shore-side casualty.
We hope you find these updates helpful and note that you may find them archived at our firm's website, evanslawfirm.com. We are always glad to provide enhanced interpretations of these and other cases for application to the particular facts of claims that you may be considering.
Clickherefor our Case Notes for both states. (30 pages)