Appellate Law

A Different Result in Frank?s Casing

By D. Todd Smith

With today’s orders, the Texas Supreme Court issued a new opinion in Excess Underwriters at Lloyd’s, London v. Frank’s Casing Crew & Rental Tools, Inc. (No. 02-0730), possibly the oldest case on the Court’s docket.  The Court originally decided the case in May 2005, but granted respondent’s motion for rehearing in January 2006 and heard re-argument a month later.

In its original opinion (authored by then-Justice Owen, joined by Chief Justice Jefferson and Justices Hecht, Medina, and Green) the Court held that excess insurance carriers who correctly disputed coverage, but nevertheless settled third-party claims against their insured, were entitled to recoup the settlement payments from their insured.  The new opinion (authored by Justice O’Neill, joined by Chief Justice Jefferson and Justices Medina, Johnson, and Willett) does an about-face and holds that no reimbursement obligation is implied when the policy involves excess coverage, the insurer has no duty to defend under the policy, and the insured acknowledges that the claimant’s settlement offer is reasonable and demands that the insurer accepts it.

Justice Hecht (joined by Justice Green) and Justice Wainwright each delivered dissenting opinions.  Justice Brister did not participate in the decision.

Expect considerable media attention to this case.  It may receive more coverage than any other decision the Court makes this year.

Full post as published by Texas Appellate Law Blog on February 01, 2008 (boomark / email).