News:

Summary Judgment for Travelers on February 21, 2007

The firm won a summary judgment in Travelers favor in state court in Austin on February 21, 2007 in Olga Palacios v. AIC-Sunbelt Group, Inc. and Travelers Lloyds of Texas Insurance Company. The case involved a frequent litigant who sued Travelers and Plaintiff's insurance agent for allegedly failing to bind new coverage after the cancellation of her policy.  Plaintiff also alleged that her signature had been forged on a policy cancellation request. She sued for a variety of contractual and extra-contractual theories, including fraud, and asserted a large mental anguish claim. Travelers prevailed on limitations grounds as to all but one claim asserted, enforcing a contractual limitations period that was shorter than the one provided for by statute, and prevailed on a "no evidence" summary judgment on the only claim not barred by limitations, fraud.

Victory in Texas Supreme Court in February 2007

On February 9, 2007, The Texas Supreme Court issued its opinion in State Farm Life Insurance Company v. Martinez, 2007 WL 431043 (Tex. Feb. 9, 2007), __S.W.3d__ (Tex. 2007), reversing the Tenth Court of Appeals’ opinion that unfairly penalized State Farm for not choosing and apportioning among three competing claimants to the same $500,000 life insurance proceeds. Eva Ramos and Hamp Skelton split the oral argument, held in December 2006. The unanimous opinion vindicated our client's decision to file an interpleader action, paying the policy proceeds into the registry of the court, in the face of conflicting claims by the deceased's daughter, former wife (whose divorce decree made her “irrevocable beneficiary”) and widow whom the deceased had attempted to designate as sole beneficiary.  The opinion clarified how the Texas prompt payment statute (the former Tex. Ins. Code Art. 21.55) applies when insurers who face rival claims for the same benefits interplead the funds. 
State Farm Life Insurance Company v. Martinez, 2007

Victory on motion to dismiss for lack of jurisdiction on December 14, 2006

Austin Federal district judge Lee Yeakel granted our client’s motion to dismiss on jurisdictional grounds in  EIEIO, Inc. v. Waring Oil, Inc., et. al. on December 14, 2006.  Waring, a Mississippi corporation, had purchased goods and material s from the Plaintiff, a Texas company.  When disputes arose and Plaintiff sued in Austin, Waring moved to dismiss, citing the absence of minimum contacts with Texas necessary to support jurisdiction in Texas courts. The judge agreed, holding that no minimum contacts were present and, even had they existed, it would offend traditional notions of fair play and justice to force Waring to come to Texas to defend the suit.  The court’s opinion can be reviewed at the following link: EIEIO, Inc. v. Warning Oil, Inc.

Victory on Appeal on June 15, 2006

The Houston Court of Appeals [1st Dist.]  affirmed summary judgment for OmniBank and its former officer in Robert H. Bishop v. Sadler, OmniBank and Hardaway, 2006 WL 1669022 (Tex. App.--Houston [1st Dist.].  Bishop, who had guaranteed a loan to purchase a restaurant, sued the seller, the bank and the loan officer, alleging he was fraudulently induced by all into guaranteeing the loan.  He first brought an adversary proceeding in bankruptcy court against the buyer whose loan he guaranteed, but lost  in that proceeding.  Omnibank obtained summary judgment on collateral estoppel grounds and the court of appeals affirmed.

Summary Judgment for Bank Client June 6, 2006

In June 2006, Skelton  Woody obtained a summary judgment for OmniBank in a lender liability case brought by a land developer. The plaintiff, JBTB, Inc., had borrowed money from the bank to develop raw land into residential lots for sale to a large national homebuilder. JBTB under-budgeted by approximately $900,000 and went back to the bank for an additional loan, which the bank made. Disputes arose over the terms and conditions of the new loan, the timing of the funding and certain draw requests. JBTB sued alleging oral misrepresentations, breach of contract.   OmniBank moved for summary judgment and the Travis County District Court granted the motion.

Victory on Appeal on January 12, 2006

In Jennings v. State Farm Lloyds, 2006 WL 66408 (Tex. App.--Austin), the Austin Court of Appeals affirmed a case that clarified the scope of coverage afforded under homeowners' policies. The policyholders, who had been sued by the buyers of their house for failures to disclose defects, sought what amounted to "seller's errors and omissions" coverage under their homeowner's policy. The Jennings opinion clarified the difference between property damage covered by homeowner's insurance and "economic damages" flowing from failures to disclose or failure to live up to promises to the buyers.

Victory on Appeal on September 7, 2005

In State Farm Lloyds v. Blacklock, 2005 WL 2155635 (Tex. App.--Waco, September 7, 2005) the Waco Court of Appeals agreed with State Farm’s Daubert/Robinson challenges to all three of Plaintiffs’ expert witnesses, reversed the trial court’s judgment and rendered judgment for State Farm. This was an important win for State Farm in that these three experts had appeared in scores of cases against the company. Skelton & Woody won a similar “reverse and render” against the same plaintiff’s lawyer in State Farm Lloyds v. Mireles, 63 S.W.3d 491 (Tex. App.--San Antonio 2001), also prevailing on a Daubert/Robinson argument to the effect the trial court abused its discretion in permitting an engineering expert’s testimony.

Appellate Victory in the Fifth Circuit in May 2005

In Meyers v. State of Texas, 410 F.3d 236 (5th Cir. 2005), the Fifth Circuit reversed the district court’s dismissal of this class action filed by disabled individuals on behalf of all purchasers of parking placards for the disabled in Texas. Skelton & Woody served as co-counsel with attorneys from Florida in this case. The decision frees the class plaintiffs to pursue their claim that the state violated the Americans with Disabilities Act by charging disabled persons a fee for disabled parking placards.

Jury Trial Results in 2005

On February 18, 2005, Hamp Skelton concluded a two-week trial as lead counsel for Travelers in an insurance coverage/bad faith case tried in Houston: Odle v. Travelers Personal Security Ins. Co., Cause No. 2001-64738, in the 125th District Court of Harris County, Texas. Despite the plaintiff’s request for a multi-million-dollar recovery and the state district judge’s decision to submit a 25-question jury charge (inquiring about common law bad faith, deceptive trade practices, unfair and misleading insurance practices, unconscionable conduct, intentional conduct, malice, mental anguish and punitive damages), the largely blue collar Houston jury returned a verdict for Travelers. It was a complete victory for Skelton & Woody’s client: the jury found no breach of the policy and thus no extra contractual exposure. Juries have proven quite reluctant to award zero in such cases, as the bond between individual plaintiffs and jurors who are also policyholders has proved difficult to overcome.

This was an especially hard-fought case, brought by a plaintiff’s lawyer who has extracted much money from the industry over the past several years, using advertising and a small stable of engineers whose “expert” opinion invariably supports maximum coverage and maximum lawsuit damages. He had sued the Travelers and its employee who managed the litigation itself (who never had any involvement before suit was filed) for fraud. The judge refused to grant any summary judgment motions. The jury, however, indicated in post-trial informal interviews that they did not appreciate the personal attacks levied by the plaintiff’s attorneys, and that they found defense counsel “better prepared and more professional” at every stage of the trial.

The opposing counsel was also the same lawyer who brought State Farm Lloyds v. Mireles, 64 S.W.3d 491 (San Antonio, 2001, no pet.), also tried and appealed by the firm, in which the appellate court reversed and ordered that the plaintiffs “take nothing.” The decision turned on the plaintiff’s reliance on an “expert” engineer whose testimony and opinions failed to satisfy the minimum requirements for admissibility of expert testimony under Texas law.  See our appellate law section for more details on the Mireles case.

Summary Judgments in 2005

Summary Judgment for St. Paul in Medina County Case

The Estate of Geneva Hunt sued St. Paul and broker, Marsh, Inc., claiming $5 million in underinsured motorist (UIM) coverage in connection with a fatal accident between two 18-wheeler trucks. Hunt's employer, Reynolds Trucking, had purchased a $5 million liability policy from St. Paul, but had only bought the $55,000 statutory minimum UIM coverage. Hunt's estate sued for failure to procure proper coverage and a host of extra-contractual theories. The case was heard in Hondo, Texas by an excellent judge who "rides the circuit," sitting in several counties west of San Antonio. Hamp Skelton successfully argued for summary judgment, which was entered at the hearing on April 21, 2005.

Summary Judgment For Omnibank in Harris County (Houston)

In January 2005, we obtained summary judgment in favor of OmniBank and its officer in a fraud and misrepresentation suit brought by a disgruntled guarantor of a commercial loan, Bishop v. OmniBank, N.A., et. al., (157th District Court, Harris County, Texas, 2005).  We successfully argued that a previous adversary proceeding brought in bankruptcy court by this same guarantor, against the borrower, barred the subsequent suit making similar allegations against the bank.  The case was decided under the doctrines of res judicata and collateral estoppel.

Other Recent Decisions

Phillips Petroleum Co. v. St Paul Fire & Marine Ins. Co., 113 S.W.3d 37 (Tex. App.--Houston [1st Dist.] 2003, pet. denied)

We recently obtained and upheld a summary judgment for the insurer on a novel issue involving the enforceability of limits on defense costs paid under "fronting" policies, a form of self-insurance increasingly common in large commercial insurance programs. The decision is the first published Texas case construing a fronting policy. The Texas Supreme Court denied Phillips' petition for review in late 2004.

Guequirre v. State Farm Lloyds (Austin)

Summary judgment for State Farm in June 2004 on novel question interpreting policy watercraft exclusion.

J.L. Steel v St. Paul (Denton, Texas)

Summary judgment for insurer in 2003 novel case involving concurrent coverage by different insurers, which insurer is excess and which is primary.

Martin Marietta v. St. Paul Fire and Marine Ins. Co., 2002 WL 261437 (5th Cir. 2002)

St. Paul's policyholder sought a defense and indemnity in a suit against it by a downstream land owner who sued Martin Marietta for diverting the water of a stream. The case turned on whether Martin Marietta's conduct could be construed as an "accident" and thus an "occurrence" under a St. Paul policy. St. Paul considered the consequences of water diversion were inherently foreseeable and thus not accidental. We obtained summary judgment and the Fifth Circuit upheld. The decision is significant in that it is the first opinion in Texas or the Fifth Circuit to analyze whether water diversion can be accidental and in that it also upheld the district court's "no indemnity" analysis because there was"no set of circumstances" under which Martin Marietta could call its conduct accidental.

Lopez v. State Farm (U.S. District Court, San Antonio, Texas)

Summary judgment for State Farm on a limitations question, confirming that insurer who responds to policyholder by repeating a previous decision to deny a claim does not start limitations running anew.

State Farm Lloyds v. Mireles, 64 S.W.3d 491 (Tex. App.--San Antonio 2001, no pet.)

We obtained a reversal of an adverse judgment following a jury trial. Mireles is the first reported decision on application of the Daubert "junk science" rule to causation opinions in insurance coverage litigation. Finding the policyholder's engineering expert to have given "irrelevant and unreliable" opinions, the court of appeals reversed and rendered judgment. The opinion is important not only in the coverage field, but establishes clear rules for application of the trial court's "gatekeeper" functions over expert opinions in a broader context. It makes clear that even where strict application of the Daubert factors is not appropriate, the trial court must nonetheless assure the "fit" between the expert's opinion and the facts, and assure that there is not an "analytical gap" in the expert's opinions.

Closner v. State Farm Lloyds, 64 S.W.3d 51 (Tex. App.--San Antonio 2001, no pet.)

We prevailed in the jury trial of this case, convincing the Bexar County District Court to disqualify the plaintiff's engineering expert. The jury also found that the plaintiff's loss started before the inception of our client's policy. The San Antonio Court of appeals upheld the judgment in our client's favor. The opinion is important to Texas insurance law because:

(a) It is the first published Texas decision to pull together the various threads that made clear that policyholders bear the burden of proving first manifestation of a loss during the policy period; and

(b) Closner is the first published decision to apply the "loss in progress" doctrine to a foundation coverage case.