Case Information

*0 FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS 2/18/2015 1:13:42 PM CHRISTOPHER A. PRINE Clerk *1 ACCEPTED 01-13-00091-CV FIRST COURT OF APPEALS HOUSTON, TEXAS 2/18/2015 1:13:42 PM CHRISTOPHER PRINE CLERK

NO. 0l-13-00091-cv

IN TI{E FIRST COTIRT OF APPEALS AT HOUSTON, TEXAS

TESCO CORPORATTON (US) Appellant

V STEADFAST INSURANCE COMPANY Appellee

APPEALED FROM TFIE I2TI'JUDICIAL DISTRICT COURT I{ARRIS COLINTY, TEXAS

TESCO CORPORATION (US)'S MOTION FOR REHEARING TO TI{E HONORABLE FIRST COURT OF APPEALS:

coMES Now, Appellant TESCO coRpoRATIoN (us) (',Tesco,'), and files this, Motion Rehearing support thereof, Tesco would

respectfully show unto the Court follows:

ARG NT AND AUTH ORITIES This originates from cross motions summary filed whether general liability policy insurance issued Steadfast 4829-58'12-0226.v1

Insurance Company ("Steadfast") covered the punitive damage portion of a

judgment entered against Tesco in a Colorado personal injury lawsuit.

Originally, this Court entered an opinion in this declaratory action holding that the Trial Court erred granting summary in favor of Steadfast

Insurance Company ("Steadfast") against Tesco and remanded this case back the Trial Court for further consideration. Subsequently, Steadfast filed motion rehearing asserting that, given the resolution of the underlying personal injury

lawsuit prior the entry this Court's opinion favor Tesco, this appeal was

moot that the Court Appeals lacked jurisdiction render original

opinion. responded Steadfast's motion by pointing out the that

Tesco had requested attorney's fees at the trial court that Tesco had asserted

throughout appeal fhat, event Tesco successful, case must be

remanded determination an award attorney's fees.

Tesco's response also addressed two additional points: (l) Steadfast's mootness

argument arguing that falls collateral consequences

exception mootness doctrine; (2) that, event vacates its

opinion, then must also enter an order vacates Court opinion and

judgment.

This Court issued Opinion on February 2015 addressing only Steadfast's mootness argument and Tesco's first point under Section A its

response-that the appeal is not moot dispute concerning attorney's

fees was preserved as a live controversy. In doing so, Court relied Farmers

Tex. Cnty. Mut. Ins. Co. Grffin,868 S.w.2d 861,870 App.-Dallas 1993,

writ denied) arriving at the conclusion that there is not a live attomey's keeping "alive." For following reasons, there still remains a case

or controversy between Steadfast, Grffin is factually

distinguishable, and did not address Tesco's two remaining points in

opposing Steadfast' s mootness argument.

A. Grffin is Factuatly Distinguishable And Never Objected To

Attorney's Fees At Court or On Appeat Grffin clearly distinguishable. First, Grffin, Farmers requested that award it, prevailingparty following reversal trial court's declaratory judgment favor of Griffin, costs and attorneys' fees. Grffin,868 S.W.2d at 870. The

appellate court found that Farmers had raised attorneys' fees issue pleadings

or motions summary invoking the attorneys' provision Chapter Texas Civil Practice and Remedies Code. Id. Additionally, Farmers had not

presented point error attacking trial court's order denying Farmer's demand

attorneys' fees. Id.

Here, Tesco filed suit seeking judicial declaration on whether Steadfast had duty under the relevant policies pay the punitive damages award in the phathong

Lawsuit.l Tesco also sought the recovery of reasonable attorneys' fees and costs

pursuant Section 37.009 are equitable just. Tesco's pafüal summary judgment

addressed only the issues that Texas law applied the policies, that under Texas law,

punitive damages are covered unless excluded, that Steadfast waive its right assert

non-coverage of the punitive damages is estopped from asserting non-

coverage given its failure to issue reservation of rights letter point until after the

Phathong Verdict was entered. Tesco's motion left for later determination the issue of

attorneys' fees Section 37.009.

Unlike in Grffin, Tesco did raise in pleading the issue of attorneys' fees pursuant Section 37.009. Further, unlike Grffin, the issue attorneys' not

before Tesco's motion for partial summary judgment. The fact that

Tesco did not raise issue attorneys' fees motion for partial summary does mean that the is not "live" or that Tesco is initiating issue for first time on remand.

When the declaratory relief has been determined summary judgment, issue whether attorney's fees are reasonable and necessary a question fact jury determine when jury is the trier of fact. City Garland Dallas Morning News, S.W.3d 351,367 2000). Tesco's claim attorney's under Section 37.009 t Von J. Phatong et ux v, Corporation (US), Case No. I0-CV-00780-MSK-MJW,

United States District Court of Colorado

remains pending despite the fact that substantive declaratory relief may purportedly

become moot during the pendency of this appeal. Hansen v. JP Morgan Chase Bank,

N.4.,346 s.w.3d 769,774-75 App.-Dallas no pet.) (,,[A] under

Declaratory Judgments Act remains a live controversy, even if all requests for substantive

declaratory relief become moot during the action's pendency, as long a claim for

attorney's fees under the Act remains pending.") As noted in Tesco's Motion for partial

Summary Judgment, the determination of attorneys' fees specifically left be

addressed the Trial following the Appellate Court's reversal of the judgment in

favor of steadfast and the granting ofjudgment in favor of Tesco.

Additionally, Steadfast, in its opposition Tesco's Motion for Partial Summary Judgment and Cross-Motion Summary Judgment, did not address attorneys' fees

issue. Since attorney's fees under Section 37.009 are not limited to a "prevailing party:'

Steadfast had opportunity object in dispositive motion at Court level to

any award attorneys' in favor Tesco. Steadfast did not do so, nor did move such fees favor. Although granted Steadfast's Cross-Motion for

Summary Judgment, attorneys' favor Tesco pursuant Section

37 '009 remained alive because statute does not require finding a party prevailed action. Bocquet v. Herring,972 S,w.2d 19,20 (Tex. l99s); See Tpx. Clv. pnnc.

& RsN4. Coos 37.009.

Moreover, having failed obtain ruling attorney's fees-in favor of and/or objecting such award favor Tesco--Steadfast had preserved *6 an objection attorney's fees pursuant to Rule 33.1 of the Texas Rules of Appellate

Procedure. Tex. R. App. P.33.1(a). "As general rule, a complaint is preserved for

appellate review only if the record establishes complaint made known to the trial

court timely manner and trial court ruled on the complaint." Franco v. Slavonic

MuL Fire Ins. Ass'n, r54 s.w.3d 777,794 App.-Houston [14th Dist.] 2004, no

pet.) (citing Tnx. R. App. P. 33.1(a)); see also Trayis v. City of Mesquite,830 S.W.2d 94,

100 (Tex. 1992) ("In an appeal from a summary judgment, issues be reviewed by

appellate court must have been actually presented considered by trial

court."). failed meet its obligation in this regard and has failed preserve appeal any complaints may have regarding Tesco's ultimate award attorneys' Section .009.

Thus, conduct the parties affîrmatively indicates there remains for determination by the fact finder the amount reasonable and necessary attorneys' to

award pursuant Section 37.009. The remains alive is unaffected by an Order

Vacating Court's Opinion Judgment or withdrawal Court's

Opinion Judgment matter.

B. The Appeal Not Moot Based on the Collateral Consequences

Exception Mootness Doctrine. As an alternative basis argument that the case is not moot, Tesco analyzed response the application the collateral consequences exception. The issue was addressed its February 3,2015 Memorandum on Rehearing. 4829-5812-0226.vt

The collateral consequences exception is invoked when vacating the underlying judgment will cure adverse consequences suffered party

seeking to appeal that judgment. Marshall v. Hous. Auth. City San Antonio,

198 S.W.3d 782, 789 2006), The circumstances which exist for the

exception apply are (1) concrete disadvantages have fact occurred, are

imminently threatened occur, or are imposed a matter law; and (2)

concrete disadvantages will persist even after judgment is vacated. Id. (cíting

Gen. Land office oxY U.S.A., Inc.,7B9 S.w.2d (Tex. 1990)) (noting

the collateral consequences exception invoked only when prejudicial events have

occurred whose effects will continue stigmatize after dismissal as

moot).

Steadfast's attempt vacate an opinion by a settlement stipulation after the matter had been appeal over seventeen (17) months would multiple

adverse consequences practical effects including: (1) Tesco would

lose right recover attorney's fees and costs because judgment

would become final, non-appealable judgment; (2) Tesco and Court would

have wasted considerable time effort reaching decision on significant legal

issues and matters public policy Texas insureds; (3) vacating Court's

opinion leaves an erroneous judgment in place, which will cause other

parties and other Texas courts spend more time effort re-litigating these

same issues and will allow Steadfast to argue this Court's well-reasoned opinion is no force and effect; and (4) Steadfast, by its own strategic settlement and

stipulation the Colorado District case, has been able to wait see this

Court's opinion then file these Motions.

Steadfast waited more than thirty (30) days to tell this Court or Coats I Rose it had entered into stipulation that would allegedly moot this court's issuance opinion. Steadfast, knowing Court was about lose jurisdiction this Court's decision could be moot, delayed the Motion Vacate until after this Court's opinion released. has laid behind law seek an

advantage. Proper and adequate notice would allowed actions be taken to

extend the Colorado Court's jurisdiction or Court's opinion. Hence, case also moot collateral consequences exception the

mootness doctrine.

C. Vacate One, Vacate All

In response, Tesco also posited that, event vacates its Opinion, then must also enter an order that vacates Court Opinion and

Judgment. Thompson v. Rícardo,269 S.w.3d 103-04 (Tex. App.-Houston

(The appellate court must vacate the trial court dismiss

underlying if there ceases be a controversy between litigating parties.);

Gen. Land office oxY U.S.A., hnc.,789 S.w.2d 569,570 1990) (stating if

[8]

no controversy continues to exist between the parties, appeal is moot the

court must dismiss the cause); Reule RLZ Investments, 4ll S.V/.3d 31,32 (Tex.

App.-Houston [14th Dist.] no pet.) (stating if a case is found be moot on

appeal, all previous orders and judgments must be set aside case

dismissed). To instruct otherwise would allow Steadfast attempt use an

erroneous Trial Court judgment future disputes with Texas insureds on issue

of punitive damages and choice law.

CON USION This Court should leave current Opinion and Judgment intact and remand case determination attorney's to which Tesco is entitled through that date. There is continuing legal and equitable dispute to

attorney's costs which is entitled given extensive effort

expended correcting an effoneous decision. This is especially

appropriate in case where has previously remanded this case that

very determination. should not be rewarded for its stipulation that

attempts destroy Court's jurisdiction. To do otherwise would result

waste of judicial resources and significant adverse practical effects on Tesco

and other Texas insureds.

Alternatively, the extent this Court finds that the moot no live controversy regarding attorney's fees remained pending, should only

withdraw its Opinion and Judgment, but also enter an order that vacates the Trial Opinion Judgment.

PRAYER For reasons stated above, Appellate Tesco Corporation (US) requests grant Motion Rehearing, leave current Opinion and Judgment intact, remand further proceeding, and

award all other relief in which Appellate shows justly entitled.

Respectfully submitted, COATS, ROSE, YALE, RYN4AN &.LEE, P.C.

B

S.L State Bar Number 725825 atsrose.corn Daniel F. Shank State Bar Number 18090400 dshank@coatsrose.com 9 Greenway Plaza, Suite (713) 65 1-01 I 1 (telephone) (7 13) 5 I -0220 (facsimile) ATTORNEYS FOR APPELLANT, TESCO CORPORATTON (US) t0

CERTIFICÄTE OF SERVICE As required Texas Rule Appellate procedure 6.3 9.5(b), (d), (e), I certiff I served Response Steadfast Insurance Company's Motion Rehearing Motion Vacate Opinion and Judgment on Appellee's

attorneys record 18th day February, z0l5, follows:

Blair Dancy

bdan cvlôbddsl .com

Rebecca DiMasi (Ò.bddpla .com

rdi

BucuaNaN DrMasr DANCv & GnaeousKr, LLp Great Hills Trail, Suite 300 West

Austin, Texas 78759

By email

Da V1

Date: February ^[1]