Case Notes


Federal court holds pollution exclusion does not apply to injuries caused by direct, personal exposures

October 11th, 2020 By Jeffrey C. Glass

In Canal Indemnity Company v. CalJet II, 4:2019cv02945  (opinion available on PACER), a Texas federal judge recently held pollution exclusions did not bar coverage for a suit involving a truck driver who allegedly died from cancer caused by exposure to the carcinogen benzene in gasoline, a cargo the driver loaded and unloaded. Although Texas courts have previously held that pollution exclusions are not limited to typical cases of environmental pollution, U.S. District Judge Alfred H. Bennett of the Southern District
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Fifth Circuit Affirms No Duty To Defend Against Criminal Charges Under Pollution Liability Policy

September 27th, 2020 By Erin Holmes

On September 4, 2020, the United States Court of Appeals for the Fifth Circuit upheld a district court’s decision that AIG Specialty Insurance Company (“ASIC”) was not liable for more than $12 million dollars in legal expenses incurred by Waste Management, Inc. (“Waste”) for defending criminal charges that were brought against the company for environmental contamination, agreeing with the lower court that there was no duty to defend the criminal case under the insurer’s pollution liability policy.  See Waste Management
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COVID-19 Case Note: Government mandated shutdown did not cause direct physical loss required to trigger business interruption coverage.

September 13th, 2020 By Sheila Tan

For many businesses in Texas that have been shut-down or restricted by state and local government orders due to the ongoing Covid-19 pandemic, one of the most pressing questions raised is: is there business interruption coverage? And for at least some barber shops in Bexar County, the Western District has answered with a definitive no. In Diesel Barbershop et al. v. State Farm Lloyds, No. 5-20-CV-461-DAE, Plaintiffs run barbershop businesses that were classified as “non-essential businesses” and forced to cease
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The More Things Change …The More They Stay the Same

August 11th, 2020 By Tara Mireur

The San Antonio Court of Appeals recently granted Progressive Insurance Company’s petition for writ of mandamus and directed the trial court to vacate its order denying Progressive’s motion to sever and abate the plaintiff’s extra-contractual allegations. In In re Progressive County Mutual Insurance Company, 2020 WL 3815927 (Tex. App. – San Antonio July 8, 2020, n.p.h.), the plaintiff, after settlement with the tortfeasor, brought a declaratory judgment action for recovery of UIM benefits under her insurance policy and alleged violations
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Court nixes attempted end-run around Brainard.

July 20th, 2020 By Lauren Burgess

The Southern District of Texas, McAllen Division recently issued an opinion in a UIM case that precludes the recovery of extra-contractual damages absent a finding that the insured was entitled to benefits. In Garza v. Allstate, the plaintiff brought suit against Allstate for violations of Chapter 541 of the Texas Insurance Code on the basis that Allstate denied his underinsured motorist claim “without providing any explanation.” Plaintiff specifically alleged that he was “not seeking any of the proceeds of the
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Texas Supreme Court finds for carriers in Air Ambulance decision.

July 6th, 2020 By Robert Josey

On June 26, 2020, in a 7/2 ruling, the Texas Supreme Court issued its decision in Texas Mutual Insurance Company v. PHI Air Ambulance, reversing the Austin Court of Appeals and holding that: (1) federal law does not pre-empt the Texas Department of Insurance – Division of Workers’ Compensation (the Division) from determining fair and reasonable rates for air ambulance services; and (2) federal law does not require the Division to mandate Carriers pay more than a fair and reasonable
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Fourth Court of Appeals Imposes New Post-Accident Duty on Auto Insurers

May 31st, 2020 By Catherine Hanna

            On April 1, 2020, a divided en banc Fourth Court of Appeals imposed a new post-accident duty on auto insurers. In a case of first impression, the Court reversed a Bexar County trial court’s summary judgment in favor of an auto insurer. The Appellate Court found that the auto insurer had a duty to exercise reasonable care when it instructed its insured driver to take photographs of her vehicle immediately following a one-car accident because of the special relationship
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Texas Supreme Court Recognizes Eight-Corners Exception for “Collusive Fraud”

May 3rd, 2020 By David L. Plaut

For the first time, the Texas Supreme Court has recognized an exception to the eight-corners rule and allowed the consideration of “extrinsic evidence” when assessing a carrier’s duty to defend its insured under a liability policy.  In Cause No. 18-0837, Loya Insurance Company v. Osbaldo Hurtado Avalos et al. (Tex. May 1, 2020), the Texas Supreme Court adopted “an exception to the eight-corners rule” finding a trial court “may consider extrinsic evidence regarding whether the insured and a third party
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Show Me the Money? Not So Fast!

April 26th, 2020 By Sheila Tan

In a personal injury case, tort claimants typically submit medical bills showing treatment received for injuries. Settlements paid out of insurance policy benefits are often meant to cover such expenses. After settling, plaintiffs’ attorneys routinely negotiate a reduction of the submitted bills directly with the medical providers, leading to a bigger share of the recovery for their clients.What happens when a carrier pays a hospital’s bill directly? Such direct payments generally reflect a reduction in the original billed amount. We’ve
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Is Eight Enough, Part 3: Texas Supreme Court Rejects District Judge’s Exception to the “Eight Corners Rule”

April 19th, 2020 By Jeffrey C. Glass

We recently wrote about a question, certified to the Texas Supreme Court by the Fifth Circuit Court of Appeals, regarding the continuing validity of the “eight corners” rule.  The U.S. District Court decision under review was one of a series of decisions authored by Judge John McBryde finding that because the eight corners rule originally derived from policy language requiring the carrier to defend claims even “if the allegations of the suit are groundless, false or fraudulent,” policies without such
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