General Agents Insurance Co. of America v. Naggar
2011 Tex. App. LEXIS 3305
| Tex. App. | 2011Background
- El Naggar sued Traxel Construction and related parties; Gainsco issued a CGL policy to Traxel.
- After a mistrial in the first trial, Gainsco and Traxel executed a buy-back agreement—Gainsco repurchased Traxel’s policy for $50,000 and Traxel released Gainsco from claims.
- A second trial awarded judgment against Traxel; El Naggar then sued Gainsco and other insurers to collect the judgment.
- El Naggar moved for declaratory relief asserting the buy-back violated Texas public policy, the Insurance Code, or the UFTA and was unconscionable; Gainsco cross-moved for summary judgment.
- The trial court granted El Naggar’s motion and voided the buy-back; on appeal, the court held the buy-back is not void as against public policy.
- The court distinguished Ranger Ins. Co. v. Ward and reversed, rendering judgment that the buy-back is not void as against public policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the buy-back violate public policy? | Naggar claims the buy-back is void under public policy. | Gainsco contends the buy-back is not void; no public-policy violation. | Buy-back not void as against public policy; reverse and render. |
Key Cases Cited
- Ranger Ins. Co. v. Ward, 107 S.W.3d 820 (Tex. App.‑Texarkana 2003) (compulsory-insurance/statutory context; release contrary to policy)
- Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853 (Tex. 1995) (nonsuit effects on merits of adjudicated claims)
- In re Team Rocket, L.P., 256 S.W.3d 257 (Tex. 2008) (res judicata/collateral estoppel efficiency concerns on appeals)
- Lawrence v. CDB Servs., Inc., 44 S.W.3d 544 (Tex. 2001) (public-policy analysis; look to underlying statutes)
- Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653 (Tex. 2008) (public-policy considerations and absence of clear legislative intent)