law there were two issues i'd like to use or addressed in the time here today first issue is the end i stack of provisions that texas has and how it applies this case the second is to respond to one defense are they entitled to seek a separate defense from another general oddity carrier for ellis under the anti stacking rule and this court case where there was no duty to indemnify they want the trial the case and the question in there was which carrier could a select to pay the defense of this court in two thousand and twelve said under the garcia case you can pick the paid the coverage a paper to do to defend they were off the hook i mean you're creating a rule where the incentive would be never to defend with those multiple policies because then when someone does your off the hook right in the well why not because under garcia the court said that if s right to pursue oklahoma's surety for its subrogation rights that exist are recreated under the the garcia case the second case again trying to respond north american specially versus royal surplus two thousand and eight in that case the defendant insured wanted to put the fence under one policy and put in dimity under another policy and this court said no you get one you get to pick one and that's the one that pays that would exhaust it so there was no longer a duty to defend and the question then was could the insured go and pick another primary carrier or was the exhaustion vertical as opposed to horizontal the trial judge in that case judge fall some said no you have to drop a whole exhaustion you don't get to pick multiple primary carriers for defense or for indemnity and that issue is before this court was argued in february double exposure and the court i believe in the garcia case was very clear that the carrier who selected they pay and then they are charged with the task of recruiting from the other can't be betteroff you can't multiply coverage isn't it through the courts of used to say you can't multiply coverage to goes to the definition if the court says when you have a continuing injury and you look at the definition of occurrence in policy it includes repeated exposure to the same originally the same conditions and going back as far as the garcia case the court said based on that policy which you don't get to recover from everyone you get if you recall that was  submit to the court that are pertinent it pertain to this case the first one that apartment and change to this case is rule number two and rule number two is according to judge by justice boyd the also have to look at the remainder of the rules and the other one that's relevant is rule number four and rule of before is the independent injury and just as boyd when he articulated really says are two aspects  not permit the insurer to recover any damages beyond the benefits unless the violation causes an injury that is independent from the loss of benefits punitive or violation of the the code you've got to show independent injury the second case that was cited by the texas supreme court in support of that will force a case out of the southern district ray miller it was powell versus national union fire insurance company and in the pal case which is cited as an example with approval by the texas supreme court that was a case where there was coverage and they were trying to seek damages under five forty one of the insurance code and what judgment gray miller says in that case is that nationally in a search in response to powers motion for s judgment as a basis for most national motion for summary judgment that powell has failed to allege damage independent of the damages arising from the underlying breach of the insurance contract my fault we held in great america and  district is that there was clearly coverage in that case and this is horrific that the courts are going and that is contractual damages or actual contractual damages may be recoverable is damages under an insurance code violation if the insured can demonstrate an independent injury before they work damages at all now under vaile under the rule of or two they can be damages but is a predicate the insured is required to show independent injury in fact since when choco was decided there had been three decisions that had interpreted one of them was in fact kill tool for a sort of thing that provided the court with two of them one that's really what governs this case because of the no stacking but there's two other ones that have come down one is state farm versus web owned by a fourth of two thousand and seventeen which is the bow muckle of appeals in there the and they were trying to get chapter five forty one damages and the court of appeals in that case following the language from a chaka that i just quoted the court said basically we hold that webb could not recover extra contractual damages beyond the policy benefits for his claims under the insurance code because he failed to demonstrate damages independent from the loss of the benefits so they said you're limited just to your policy benefits unless you can show independent in a later may twenty third two thousand and seventeen houston fourteenth court of appeals there's a case called national security fire verses hurst h u r s t again the court said it's undisputed that hearst had a right to receive benefits under the insurance policy so coverage was clearly established in that case but the court goes on in order to recover any damages beyond the policy benefits the statutory violation or bad faith must cause an injury that is independent from the loss of the benefits and basically they were yes your policy benefits can be damages but in order to use those as damages you've got to show an independent injury in this case judge allison found there was no independent injury despite the efforts from counsel for swinnerton and we believe based on the law that existed at the time versus the law that currently exist and in shock that he made the this it can be damages so if you show independent injury and you're trying to get punitive damages or you're trying to get treble damages and you show it in injury they can be troubled or if we're dealing with the unit of damage cap under forty one point eight and the question is you know what are the damages that are going to be used to determine the cap they can be used to determine the cap but they're only can be used to determine the cap or punitive damages if there has been independent injury beforehand i think the law was you can't even use that and so it's sort of following vale that they brought it up to at least where you can use it for cap purposes for trouble purposes if there is an independent injury that  limited let me start with the anti stacking and just judge davis has to like question about practicalities i want to get into that in a moment the key here is a separation between the duty to defend the defense obligation is self we wrote in another words if the defense is within limits and it arose as defense dollars are being expended then the anti stacking rule has been applied in that instance only when the defense is outside of looks the anti stacking rule does not apply with respect to the duty to defend what's your best case for the case is right on point and it was cited in correctly by counsel north american specialty insurance company it's five forty one  five fifty two that is where we have a self eroding policy that means your self burning policy with the defense eats up the limits then the anti stacking would apply in that instance only with respect to the defense was they paid a million dollars toward settlement that one million dollars of the defense what is prescribed by arch the director for swinton to go towards the settlement it was never going to the defense it went to the settlement of the case that's undisputed on the record now something else is important here counsel blurs the distinction between targeting and the ability to select a carrier on risk which is a continuing loss never agreed to defend and if you take their position to its logical conclusion if all of the ai carriers deny coverage then the last one standing who agrees to defend that's the chosen carrier to defend that other carrier but let's go to the question we talked about the first step everybody is defending because nobody knows where the damages are the beginning of a commitment a lawsuit so the cameras can either agree to share and there's no contribution claims against each other but the other always see they would be subject to a contribution action so c n a could sue for contribution on this million dollars if paid that money went to indemnification is towards some of the case that's undisputed and in fact the contribution claim made by c n a if it ever goes against is separate and apart and distinct from the monies that the insured paid out of pocket the million dollars c n a paid to the carriers to the side of the case paid is its defense dollars to reimburse itself to its own defense counsel in other words these are two different buckets there's no double recovery here just because all we see is subject to contribution by c n a for the super contribution of the the not mince costs in a situation where there's one insurer is not providing a defense six c n a could have sued for contribution this actually into being on the one million it paid and we'd be seeking our six hundred fifty that we paid two separate buckets are not the same dollars one goes to defense reimbursement one goes to reimburse the carrier for indemnified the one million dollars towards the side of the on line action another point when a carrier denies coverage it waves and has stopped from asserting whether or not the insured controlled its defense correctly or incorrectly in other words the selection of counsel is the date of tender and they did not do so and they forfeited that right and this case is on that point as well look at the roads case at seven nineteen fed second at one sixteen and north county mutual at one forty southwest third sixty five these chorused have concluded that when a carrier denies courage it does so its own risk and the insurer can control the defense as it sees fit in this case insured one of the coconuts for to associate into lucifer's boy firm and paid those monies out of pocket to defend itself anything else on the anti stock and again i ask the court to look at the cases there's a distinction between the right to the case the insured would allow to target but the court did not get into the issue of stacking on the duty to defend it just said the obligation of the fender shared by all carers absolutely separately and distinctly and they have to defend all of the entire recover policy benefits as actual damages if there's no right to those benefits there's no right to benefits there's no actual damages that's veil decision of prior supreme court decision that case holds that where the insured establishes that the insurance company has unreasonably withheld policy benefits those benefits are recoverable as actual damages and that's important as what we have here here we have seen deceptive trade practices by o s c in his denial of coverage which i'll get into in a moment and the last policy benefits these two benefits under policy do need to defend the extent of property damage and timing of our property damage mr nice is the corporate designate he testified under oath as x and i think of committee level that the insurance company was wrong to deny coverage there are a series of deceptive practices here and rule two applies and we call that the entitlement to benefits rule where again when chaka we are firms veil that says where the insured has been entitled to coverage and it was unreasonably withheld those benefits are recoverable as actual damages riccardi list of any separate injury the actual damages  loss policy benefits what's sometimes called the benefit law school and if an insurance company owes policy benefits those benefits are actual damages if the insurance company through a misrepresentation of coverage or via to a violation of the statute causes a loss of those benefits once again the policy benefits are the measure of actual damages where we have a requirement of an independent injury arising from the statutory claim when in fact there is no current or under the policy where there's no coverage it that's when the independent injury must be established again where there's no coverage or tons of interest in misnamed doctrine but then why is that independent injury because if the policy benefits don't pay because you're not entitled to the policy there's no injury there so it really is just your interpretation as you really just need one injury it counts if you are old policy benefits which is your client you're saying and in the context where you're not owed benefits well you have to show some injury and it can't be the policy benefits but you have to show an injury outside of the payment a policy that i think that's aptly stated but at this other it's not really an in depth it's an injury rule requirement as you see it but i'd is correct and in fact if you look at the stokers shepherd i still hurts twenty two years old we haven't seen one of those cases yet that's how rare it is to find a separate injury one has no policy it's but it could be an example let's say the carrier slanders the insurer doing the claims handling but there's no coverage of it and that causes a loss business reputation or assess a suspension of income because of the impact of that is his business disparagement that would be a separate injury where there's no coverage under the policy that might be an example of something like that are you familiar with the belmont in houston court of appeals decision that opposing counsel says have been redmon sh not to allow trouble damages in your client's situation and and that's again a misstatement in this case i'll take you guys to please read those cases again it doesn't say that in fact in those in those cases there was no deceptive practice another words was contractual liability but there was no agreed just tortious breach of the policy benefits that's the issue here so if the policy in anatomy were trying to argue before us why there was this fraudulent or wrongful conduct if we were to be with you with him and shopping we just remain to judge ellison to decide that in the first instance whether there's actual liability under the statute in fact we tried the case on the deceptive practices and the judge said wait why do we do this you didn't show independent injury based on the court's prior ruling abi foreman shaka in a court to judge allison disregarded the veil case which has been reaffirmed just described and so that is the reasons why it needs to be remanded to term and whether the insurers entitled to extra contractual i believe one two or three times you know up to treble damages of the actual damage in the state court site in the state does not apply if the insurance statutory or ex or contractual claims are predicated on the loss being covered under the insurance policy or if the damages flow from the denial of a for policy benefits close quote the course in web the court found no deceptive practices or just a reasonable dispute between the parties trouble damages did not were not  given to the insurer in that case was a mere preacha contract claim breach of policy terms and conditions but not deceptive practices nor any other statutory duty so therefore extra contractual liability was not given but no what the court says court again independent injury will does not apply if the insured statutory or contractual claims are predicated on the loss covered under the policy and that is again the bail decision as well as much  indeed certain underwriters of lloyd's versus loan that we've given the justices copies i'm going to quote exactly what just a judge cost i just asked where is there extra contractual i built on page seventeen i'm going to quote again on this decision defendants have not demonstrated that the claim damage was covered under the policy so it's not covered what do we know we have to show a separate injury and the court goes on to say as noted in the language of them a charge to case quote a right to receive benefits under the policy is a prerequisite for these damag so the court states that the only route to damages for a statutory violation would be to demonstrate that they suffered an injury independent the policy because there's no coverage it would under the policy and that's the law low in case independent rule independent interval the first is that if an insurer statutory violation causes an injury independent of the right to recover benefits the insured might recover damages for that injury even if the policy does not entitle the insured to receive those benefits that's aspect number one so no coverage but you're wrong collect calls of some independent and they said there's a second aspect as well the council just focused on the first aspect the second aspect of the independent injury rule is this quote and ensures statutory violation does not permit the insurer to recover any damages beyond policy benefits unless the violation causes an injury that is independent from the loss of the benefits if so you've got to read both of you can't just look at one you've got to have two and right we're doing up to like in the late eighty's that was true but then the supreme court further modified it with twin city vs davis which they cited with approval which if for example if you wanted to recover punitive damages you had to show something other than and the court said that is still good but what the court did as well as reconcile it with some of its later decisions which said in order to get five fifty one damages there are these hurdles you have to get over such as independent injury that if did have a later and what they tried to do the court in been struck a is put them together and get a cohesive framework judges and lawyers alike to guide their decision making and so i agree with you judge cost of jail is still good law but the only principle that it was continued on is policy limits can be damages under chapter forty one if you meet the rest of the requirements and then the five rules set out the rest of the requirements that exist as the boma court appeals as the houston color peals have said no they also talk about the entire stacking north american special he says it it only applies to roading no actually what this court said is we're not going to treat a roading policies any differently than nonny road policies and so we're going to treat them the same and we're not going to let you pick two carriers under a roading concept more than one policy year because i mean for defense there's no way it gets their family with respect to cademy it was not a roading there was a big s i r for certain policy limits and so the academy development case they wanted to pick the one year where there was no self insured retention and that was the reason they picked the mid climbing here was because they didn't have the sel will take this matter under advisement