Darwin National Assurance Company v. McCathern Mooty LLP, 3:10-cv-02486

Darwin issued a Lawyers Professional Liability Policy to McCathern for Sept. 18, 2009 to Sept. 18, 2010.
Darwin seeks a declaration that it has no duty to defend or indemnify McCathern in the Robison action.
The Robison action involves settlement disputes over a potential Stowers settlement with West Star and the Lexington Policy.
McCathern reportedly accepted a May 5 Stowers demand on May 8, 2009, which Robison’s counsel later repudiated.
No final settlement decision has been reached; the Texas Supreme Court has stayed related proceedings, and the Robison action remains unresolved.
McCathern moves to dismiss or stay, arguing there is no ripe claim against it for the duty-to-defend issue.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is Darwin’s declaratory action ripe to decide the duty to defend?	Darwin argues there is an actual controversy given the pending state proceedings and potential coverage issues.	McCathern contends there is no presently ripe claim since no suit has been filed against it and the settlement issue is unsettled.	Not ripe; declaratory judgment action should be dismissed.
Does the eight-corners rule or extrinsic evidence affect the duty-to-defend analysis here?	Darwin asserts a potential coverage issue based on actions during settlement discussions.	McCathern argues extrinsic evidence is not applicable and the duty to defend cannot be reached absent an underlying suit.	Eight-corners rule applies; extrinsic evidence not applicable; no controversy to decide.
Should the case be dismissed under discretionary factors for declaratory judgments?	Not specifically stated beyond asserting ripeness.	Court should exercise discretion to dismiss to avoid unnecessary federal proceedings.	Yes, discretionary factors weigh in favor of dismissal.
Would retaining the case in federal court serve judicial economy given state-action pendency?			No clear judicial-economy benefit; state action pending with unresolved settlement issue.

Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891 (5th Cir. 2000) (ripeness and justiciability in declaratory actions)
Medimmune, Inc. v. Genentech, Inc., 549 U.S. 118 (U.S. 2007) (ex ante determination of rights and ripeness in DJ actions)
St. Paul Fire & Marine Ins. Co. v. Green Tree Fin. Corp.–Tex., 249 F.3d 389 (5th Cir. 2001) (eight-corners rule and duty-to-defend framework)
Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523 (5th Cir. 2004) (extrinsic evidence exception limited and not applicable here)
American States Ins. Co. v. Bailey, 133 F.3d 363 (5th Cir. 1998) (illustrates ripeness concerns in insurer declaratory actions)