Updates on Insurance Coverage, Construction Defect
and Commercial Auto Law Developments
in Texas and Louisiana
Welcome to the May 2017 edition of Evans & Co.'s Case Notes, a continuing digest of important new cases in the areas ofinsurance coverage, commercial liability, construction defect, and commercial transportation law, in states in which we work. We return from a very busy April 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.
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.
The TEXAS Supreme Court addresses the scope and nature of an assignment of claim, in connection with the insured-versus-insured claim exclusion found in most Directors’ and Officers Liability insurance policies. The court notes the intention of the exclusion is to minimize collusive suits, and so interprets the “successor in interest” language broadly, to deny coverage. The line of reasoning may be useful in litigation of other coverage exclusions.
Texas Court of Appeals, in a property loss case, underscores that it is the burden of the insured to establish that a loss occurred within the policy period. The case also provides guidance on what evidence will, or will not, prevent the granting of a “no evidence” motion for summary judgment. In a second case we digest, the court grants mandamus to prevent discovery on bad faith and extracontractual claims, where the claimant had not yet proven the loss was covered.
A Federal District Court, applying Texas law, finds a duty to defend a claim for defective work on a watercraft, despite the watercraft exclusion in the contractor’s CGL policy. We have never seen a watercraft exclusion raised by a CGL insurer in this context, though we can imagine the CGL carrier would have preferred to evaluate, rate, and insure the ship repairer under specialized wordings for that class of business – which still would not have excluded this loss. Here, the watercraft was not found to be in the “care custody and control” of the insured, nor was the damage to the watercraft limited to the insured’s work on same, triggering exposures beyond the “completed operations” exclusion.
In LOUISIANA, the Louisiana Court of Appeals takes up the interesting question of whether the CGL policy exclusion, for “injuries sustained by an employee” still defeats coverage where there are two separate insureds, which give claimants the benefit of the “separation of insured” clause. The claimant was the employee of one insured but not of the other.
We digest a Louisiana Court of Appeals case which sensibly requires proof that the at-fault vehicle was underinsured before UM/UIM benefits are triggered, and another where auto insurance conditions of coverage were deemed waived when it was shown that the insurer knew the driver was unlicensed and even accepted premium for insurance from him after the date of loss. In a third case an automobile liability exclusion in a CGL policy bars coverage where the claimant was injured during loading of her wheelchair into a transport vehicle – an important bright line between CGL, auto, and professional liability policy exposures. The discussion of “use” of the vehicle may prove useful in other contexts, such as UM/UIM claim.
The unusual underwriting model of Lloyds’ often presents challenges when Lloyd’s seeks to remove cases from state to Federal court. Here, we digest a Federal District Court case applying Louisiana law, which holds that the jurisdictional amount in controversy must be met with respect to each and every “name” or entity at risk under the syndicated policy. That could be a bar to removal on many broadly-subscribed policies. Citizenship of the “names” is also as issue in removal proceedings, to permit inquiry into whether there is true diversity.
Finally, for those few of you with interest in marine insurance coverage issues (from which, centuries ago, all coverage issues may be said to have sprung), we digest a collision (actually, allision) case involving multiple tugs, working in a flotilla, where the court construes and articulates the correct coordination between a defense owed under Protection and Indemnity and Hull, Collision and Tower’s liability coverages. (Hint, the answer is in the name of the policy.)
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.
Click here for our Case Notes for all states (32 pages).