TEXAS UPDATE
By CHAMBERLAIN-McHANEY
TEXAS LAWYERS
The Catwoman resurfaces, the Supremes score a new judge,
insurance premiums remain up, Homebuilders score an interesting if not
controversial victory and the Texas Longhorns score 49 unanswered points in a
win on Saturday night. With all this news, Texas Update is truly blessed.
TEXAS SUPREME COURT GETS NEW JUDGE: TODAY, Gov. Rick Perry appointed
former Houston trial judge David M. Medina to the
Texas Supreme Court. Medina, 46, will fill a spot left open by Perry's
promotion of Wallace Jefferson to become Chief Justice,
the first African American to serve in that post. Medina is a conservative who joins an all-republican and
equally conservative supreme court. The Gov. still
must fill one remaining open seat on the court.
TEXAS PREMIUM ROLLBACK LAW HELD UNCONSTITUTIONAL: YESTERDAY, a
state trial judge here in Austin struck down a
new state statute which empowered the Texas Department of Insurance to
retroactively reduce Homeowners Insurance premiums. In August of
2003, the Insurance Department ordered premium cuts for Farmers, State Farm and
22 other companies, saying their rates were out of line with their losses. State
Farm and Farmers then sued the state contending
the new law was unconstitutional. The trial court agreed
stating that the procedures and timetables in Senate Bill 14 (passed by the
legislature in 2003) were indeed unconstitutional. Insurance company
representatives were spotted after the hearing doing a celebratory Macarena
dance on the courthouse lawn. The Insurance Department vowed to pursue
other options to bring homeowners premiums down.
ACROSS STATE LINES: Los Angeles: Actor Jim Belushi
has filed suit a $1 million suit against neighbor, actress Julie Newmar, alleging she is on a campaign of
harassment to drive him from his home. He alleges she has defamed him by
calling him a "peeping tom," "a voyeur" and
"sick." Newmar, now 71, played
Stupefying Jones in L'l Abner and Catwoman in
the 1960's Batman TV series. Although TxUp usually
avoids becoming involved in neighborhood disputes (except
our own, of course), we have to side with Newmar
on this one. Belushi is, well, just Belushi, but Newmar is
stupefying.
TEXAS COURT HOLDS CGL CARRIER HAS DUTY TO DEFEND
HOMEBUILDER IN SUIT ALLEGING CONSTRUCTION DEFECTS: Adding to the continuing controversy and
confusion, a Texas court of appeals has ruled that a CGL carrier
has a duty to defend a homebuilder in a suit brought by a homeowner over
construction defects. The homeowners sued the homebuilder claiming
foundation problems and sought damages arising from the homebuilder's
negligence and malice, breach of contract and warranty, deceptive trade
practices and fraud. The CGL carriers brought a declaratory judgment
action against the homebuilder saying they had no duty to defend the underlying
claims because of policy terms and exclusions. Essentially, the insurers
argued that damages arising from a contract breach and an intentional tort
cannot be recast as negligence claims and are not covered. The trial
court agreed and granted summary judgment to the insurers.
The Dallas Court of Appeals reversed and remanded the
case. The court recognized that there were
numerous conflicting court decisions in the state on this very issue, but
stated that the pleading in the underlying case contained an alternative claim
of negligence which invoked a duty to defend. Said the
court: "The insurers ask this court to ignore the negligence
allegations in the underlying statement of claims.
However, Texas courts will not look beyond the pleadings and
determine facts when the issue is duty to defend, as opposed to duty to
indemnify." TxUp
expects the Texas Supreme Court to enter the fray and settle the conflict among
the lower appellate courts on this issue. GEHAN HOMES, LTD, V. EMPLOYERS MUT. CAS. CO., (TEX. APP-DALLAS
2004).
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