Crum & Forster Specialty Insurance Company v. Creekstone Builders, Inc., Nashville Creekstone, LLC Stephen Keller, Everett Jackson, and Creekstone SC I, LLC
01-14-00907-CV
| Tex. App. | Nov 30, 2015Background
- Insurer Crum & Forster issued general liability policies to related Creekstone entities through a Texas broker, delivered in Texas; policies contain a State Operations Exclusion (SOE) excluding coverage for South Carolina operations.
- Creekstone SC I was sued in South Carolina in 2010 for construction defects; a South Carolina judgment for >$55 million was entered against Creekstone SC I in 2014.
- In May 2014 Crum & Forster filed a declaratory-judgment action in Texas seeking a ruling that the judgment is not covered because of the SOE.
- Creekstone moved to dismiss the Texas action on forum non conveniens (and also argued a failure to join an indispensable party); the trial court granted dismissal on both grounds.
- A First Court of Appeals panel affirmed dismissal on forum non conveniens grounds; Crum & Forster filed this motion for rehearing and en banc reconsideration arguing the panel misapplied the doctrine by focusing on the underlying tort rather than the Texas coverage dispute and by relying on conclusory/insufficient evidence.
Issues
| Issue | Plaintiff's Argument (Crum & Forster) | Defendant's Argument (Creekstone) | Held |
|---|---|---|---|
| Whether Texas is a substantially inconvenient forum under forum non conveniens | The coverage dispute is a Texas contract case (policies issued/delivered in Texas, broker in Houston); defendants failed to prove Texas is inconvenient | The underlying tort and witnesses are in South Carolina, and related coverage litigation exists there, so South Carolina is the proper forum | Panel affirmed dismissal on forum non conveniens (motion challenges that ruling) |
| Whether movants presented "some evidence" to support dismissal | Movants presented only conclusory affidavits and pleadings; did not identify witnesses, documents, or connection to South Carolina relevant to the coverage dispute | Movants relied on affidavit and attached pleadings to show connection to South Carolina and pending South Carolina coverage suit | Motion asserts evidence was insufficient; panel accepted movant evidence and affirmed dismissal |
| Proper focus of forum non conveniens factors (underlying tort vs coverage contract) | Analysis should center on factors tied to contract formation/interpretation (policies issued in Texas); underlying tort is irrelevant to coverage determination | Emphasize practical overlap with the underlying South Carolina dispute and multiplicity of suits favoring dismissal | Panel focused on underlying tort connections; motion argues that was error |
| Use of pleadings and non-party affidavit as evidence | Pleading allegations and a non-party’s conclusory affidavit do not constitute competent evidence of inconvenience | Such materials show that the dispute and witnesses arise from South Carolina | Motion argues reliance on these was improper; panel nonetheless treated them as sufficient evidence |
Key Cases Cited
- Exxon Corp. v. Choo, 881 S.W.2d 301 (Tex. 1994) (forum non conveniens is an equitable doctrine to avoid imposing an inconvenient forum)
- Quixtar Inc. v. Signature Management Team, LLC, 315 S.W.3d 28 (Tex. 2010) (movant need not list full witness testimony but must supply enough information to enable balancing of interests)
- Piper Aircraft Co. v. Reyno, 454 U.S. 235 (U.S. 1981) (central focus of forum non conveniens inquiry is convenience; public and private interest factors govern dismissal)
- State Farm Fire & Casualty Co. v. Gandy, 925 S.W.2d 696 (Tex. 1996) (declaratory-judgment actions are appropriate to resolve insurance coverage disputes)
- Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 279 S.W.3d 650 (Tex. 2009) (duty questions turn on policy language; contract interpretation controls coverage disputes)
- In re Pirelli Tire, L.L.C., 247 S.W.3d 670 (Tex. 2007) (forum non conveniens dismissal supported where key evidence and witnesses are located abroad)
- Mercer v. Daoran Corp., 676 S.W.2d 580 (Tex. 1984) (determination of indispensability is a question for the court, not lay affidavit opinion)
- Baker v. Bell Helicopter Textron, Inc., 985 S.W.2d 272 (Tex. App.—Fort Worth 1999) (forum non conveniens depends on the particular facts and circumstances of the case)