TEXAS UPDATE

 

By CHAMBERLAIN McHANEY

 

TEXAS LAWYERS

 

 

HALLOWEEN UPDATE:  Last year, TEXAS UPDATE went trick or treatin’ and only received a bag full of restraining orders.  This year we decided to undergo a radical makeover.  We dressed up as oil company executives and received a bag full of $200 billion dollars. 

 

IS A CLAIM FOR FAULTY CONSTRUCTION COVERED UNDER A CGL?  About a month ago, we reported that a Dallas Federal Court ruled a contractor’s unintentional, faulty workmanship was an “occurrence” and is covered.  That court relied on a long line of Texas cases which supported that conclusion while at the same time recognizing that there was a long line of Texas cases that supported the opposite conclusion.  Home Owners Management Enterprises, Inc, v Mid-Continent Insurance Co.  (N.D. Tex.2005).  And we asked you this question:  Will the controversy ever end?  You responded with stony silence, but we suspect that you are secretly curious nonetheless. 

Believe it or not, the Texas Supreme Court has now agreed to answer a version of this question in the case of Lamar Homes Inc. v. Mid Continent Casualty Co. (on certified questions from the Federal Fifth Circuit Court of Appeals).   The oral argument set for February 14 will address these issues:
            (1)  When a homeowner sues his general contractor for construction defects, alleging only damage to or loss of use of the home itself, do such allegations allege an “accident” or “occurrence” sufficient to trigger the duty to defend or indemnify under a commercial general liability insurance policy?
            (2)  When a homeowner sues his general contractor for construction defects and alleges only damage to or loss of use of the home itself, do such allegations allege “property damage” sufficient to trigger the duty to defend or indemnify under a commercial general liability policy?

The Supreme Court has also agreed to address this issue:
           (3)  If the answers to those questions are yes, does Texas Insurance Code article 21.55 apply to a commercial general liability insurer’s breach of a duty to defend? 

We have been waiting a long time for some guidance in this area of insurance or coverage (or non-coverage).  Hopefully, we are close to receiving the answer. 

 

NEW FEATURE:  TEXAS UPDATE Sports Page.  Last weekend, while trailing the Texas Longhorns 52-0 at halftime, Kansas head football coach Mark Mangino was asked if he had a revised game plan for the second half.  Responded Mangino:  “No, but I just saved 15% on my car insurance!” 

 

   FROM THE TEXAS UPDATE MAILBAG:

Dear Tx/Up:  Is it true that the King can sue a citizen whenever it feels like getting around to it and without fear of the suit being barred by the statute of limitations?  Just curious, Ben, Dallas.

 

            Dear Ben: If you are asking about the real King, like in Elvis, the answer is no.  Besides, we don’t think he feels up to filing any suits these days.  He’s left that to Pricilla and Lisa.  On the other hand, if you are asking about the other King, like in the government, the answer is generally yes.  The state is generally not barred from bringing a suit by the statute of limitations, and specifically is not barred from bringing a tardy suit by the two year statute of limitations which covers property damage and personal injury claims.  Tex R. Civ. P.  § 16.061.  However, some courts have held that the government’s suit can be barred by the equitable doctrine of latches when it unreasonably delays asserting its rights.  Good luck on that.  As they say, the King can do no wrong.

 

CHAMBERLAIN McHANEY IS AN AV (HIGHEST RATED) FIRM AND LISTED IN BEST’S RECOMMENDED INSURANCE ATTORNEYS.

 

DAVID E.CHAMBERLAIN

CHAMBERLAIN McHANEY

AUSTIN & SAN ANTONIO

512.474.9124