Gavion v. ACE American Insurance Company, 4:16-cv-01930

In August 2009 Michael J. Gavion, Jr. drove a Xerox company vehicle and was struck by an H‑METRO train; Amanda Jackson, a passenger, was injured.
The Jacksons sued Gavion and ACE American in Louisiana state court; ACE American was dismissed from that action under Louisiana direct action law.
Gavion did not appear in the Louisiana action, never tendered the suit to ACE American, and never requested a defense; the Jacksons obtained a default judgment against Gavion for $185,000.
Gavion assigned any rights he might have against ACE American to the Jacksons and later pursued suit in Texas; ACE removed and moved for summary judgment.
ACE served requests for admission on Gavion; Gavion initially failed to respond but the court granted a limited extension and accepted his later responses.
The dispositive legal question was whether ACE owed a duty to defend Gavion when Gavion never sought or demanded a defense before the default judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ACE owed a duty to defend Gavion in the Louisiana suit	Gavion/assigns contend ACE knew of the suit (was served) and should have defended or indemnified him	ACE argues Gavion never tendered the suit or requested a defense as required by the policy, so no duty arose	No duty to defend; summary judgment for ACE
Effect of Gavion's failure to tender/request defense under the policy	Failure was immaterial because ACE was aware of the suit	Failure to request a defense defeats coverage; insurer prejudiced as a matter of law	Gavion's failure to request a defense precludes recovery
Whether ACE was prejudiced by lack of timely notice	Gavion argues ACE had actual awareness and thus no prejudice	ACE asserts lack of timely tender deprived it of the opportunity to defend	Court found prejudice as a matter of law and rejected coverage claim
Procedural: Requests for admission deemed admitted or extended	Gavion sought to strike or extend time to respond, offering reasons for delay	ACE sought to have the requests deemed admitted under Rule 36	Court granted Gavion a time extension in part and considered his responses timely, but summary judgment still granted to ACE

National Union Fire Ins. Co. of Pittsburgh, PA v. Crocker, 246 S.W.3d 603 (Tex. 2008) (insurer owes no duty to provide an unsolicited, unrequested defense)
Maryland Casualty Co. v. Am. Home Assur. Co., 277 S.W.3d 107 (Tex. App.—Houston [1st Dist.] 2009) (late notice that prevents insurer from defending constitutes legal prejudice)
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard; genuine dispute if reasonable jury could find for nonmovant)
Celotex Corp. v. Catrett, 477 U.S. 317 (party moving for summary judgment need not negate opponent's claim but must show absence of genuine dispute)
Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir.) (nonmovant must produce evidence of specific facts creating a genuine issue)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (party must do more than present metaphysical doubt to avoid summary judgment)
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133 (court must draw all reasonable inferences for nonmovant but may not weigh credibility)