Reeves County, Texas and Arnulfo Gomez, Individually and as Sheriff of Reeves County v. Houston Casualty Company
2011 Tex. App. LEXIS 7480
Tex. App.2011Background
- This is a Texas Court of Appeals affirming a summary judgment for Houston Casualty in a declaratory action about defense/indemnity under a nonprofit policy.
- Reeves County and Sheriff Gomez sued in 2001 (settled 2002); insurers were named as third-party beneficiaries.
- Houston Casualty issued a claims-made policy (Dec 1, 2004–Dec 2005) for first-made claims alleging wrongful acts by the insured.
- In 2005, Olibas asserted civil-rights claims against Reeves County and Gomez; Houston Casualty refused coverage.
- Policy contains an interrelated acts provision under Other Conditions and Agreements, and the court treated it as a trigger to limit claims to the policy period.
- The court applied the eight-corners rule, concluded the 2005 claims were linked to the 2001 suit and thus not within the policy, and affirmed denial of defense/indemnity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend—interrelated acts timing | Reeves County argues interrelated acts link 2001 and 2005 suits, bringing 2005 within the policy | Houston Casualty contends interrelated acts are not an exclusion and the 2005 claim is outside the policy period | No duty to defend; 2005 claims not first-made during policy period due to interrelated acts |
| Duty to indemnify—timing and coverage | Deny indemnity only after underlying liability is determined; Griffin/role of indemnity in this context permits earlier adjudication | Indemnity duty hinges on facts and timing, and here the 2005 claim is not covered under the policy period | No duty to indemnify; underlying facts do not support coverage within the policy period |
Key Cases Cited
- KLN Steel Prod. Co., Ltd. v. CNA Ins. Co., 278 S.W.3d 429 (Tex.App.—San Antonio 2008) (duty to defend analyzed under eight-corners approach and burden-shifting)
- King v. Dallas Fire Ins. Co., 85 S.W.3d 185 (Tex. 2002) (eight-corners rule governs insurer’s duty to defend)
- Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819 (Tex. 1997) (duty to defend determined by pleadings and policy language)
- GuideOne Elite Ins. Co. v. Road Baptist Church, 197 S.W.3d 305 (Tex. 2006) (duty to defend scope and extrinsic evidence considerations)
- National Union Fire Ins. Co. of Pittsburgh, PA v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. 1997) (ambiguities resolved in insured’s favor; origin of damages focus)
- Adamo v. State Farm Lloyds Co., 853 S.W.2d 673 (Tex.App.—Houston [14th Dist.] 1993) (duty to defend – considerations of pleadings and policy terms)
- Columbia Cas. Co. v. CP Nat., Inc., 175 S.W.3d 339 (Tex.App.—Houston [1st Dist.] 2004) (related term interpreted to mean having a logical or causal connection)
- D.R. Horton- Texas, Ltd. v. Markel Intern. Ins. Co., Ltd., 300 S.W.3d 740 (Tex. 2009) (indemnity depends on facts proven and policy terms; procedural posture matters)