Commerce & Industry Insurance Company v. Alexander
4:11-cv-03939
S.D. Tex.Jul 25, 2012Background
- CIIC issued a commercial excess liability policy to Houston Glass; White Construction contracted with Hill Country Glass and James Alexander/Houston Glass for glass installation on a condo project.
- White sued the subcontractors in state court for breach; CIIC sought a declaratory judgment that it had no duty to defend or indemnify Houston Glass or others.
- White obtained an interlocutory default judgment on liability in the Underlying Suit, later vacated by an agreed order (May 10, 2012).
- White counterclaimed for a declaratory judgment that CIIC owes a duty to defend and, under certain circumstances, to indemnify.
- CIIC moved to dismiss White’s counterclaim for lack of standing and ripeness, arguing White is not a named insured and indemnity is not ripe; the court addressed Rule 12(b)(1) and 12(b)(6) standards and applicable Texas law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to seek declaratory relief on CIIC duties | CIIC argues White lacks standing as a non-named insured | White relies on circuit-law allowing third parties to seek declarations when insurer names them | White has standing to seek declaratory relief on CIIC’s duty to defend/indemnify |
| Justiciability of indemnity before underlying judgment | Indemnity issue is not ripe while the underlying suit is pending | Under Griffin, some indemnity issues may be justiciable before final liability | Indemnity claim is nonjusticiable; dismissed without prejudice under Texas rule; defense-duty claim remains |
Key Cases Cited
- Md. Cas. Co. v. Pac. Coal & Oil Co., 61 S. Ct. 510 (1941) (standards for declaratory actions and controversy requirements via insurer-initiated suit)
- Dairyland Ins. Co. v. Makover, 654 F.2d 1120 (5th Cir. 1981) (injured third parties may be proper parties in insurer's declaratory action for coverage)
- Looney Ricks Kiss Architects, Inc. v. State Farm Fire & Cas. Co., 677 F.3d 250 (5th Cir. 2012) (insurer bringing third party into suit supports standing for declaratory relief)
- Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523 (5th Cir. 2004) (Texas law permits limited consideration of indemnity before underlying judgment in Griffin context; court’s discretion to decide/deny indemnity issue)
- Farmers Tex. County Mut. Ins. Co. v. Griffin, 955 S.W.2d 81 (Tex. 1997) (indemnity may be justiciable before liability determination under limited Griffin exception)