### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03- 08 -00 526 -CV

Tr uc k Ins ur anc e Exc hang e , A ppe lla nt

v. Mid-Continent Casualty Com pany , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 126TH JUDICIAL DISTRICT NO. D-1- GN-08- 0026 27 , HO NORAB LE SUZ ANNE COVINGTO N , JUDGE PRESIDI NG

O P I N I O N Appellant Truc k Insuranc e Exchang e (“ Truck” ) sued Appe llee Mid-Cont i n ent Casualty Company

(“Mid-Continent”) seekingreimburse ment for se ttlement and def ense c osts that Truck pa id to defe nd the parties’ mutual insured. After the parties filed cross-motions for summary jud g me nt, the tr ia l court g ra nte d judg me nt in M id- Con tin e nt’ s f avo r a nd awa rd e d M id- Con tin e nt i ts attorney ’s fe es. On appea l, Truck c halleng es the trial c ourt’s summary judgme nt in three issues and also asser ts that there wa s no evidenc e to suppor t the trial court’s awa

rd of attorney ’s fe es to MidContin e nt. We w ill a ff

ir m th e tr ia l c ourt ’s summa ry jud g me nt a

nd awa rd of a tto rn e y ’s fe e s.
BACK GR OUND Truck a nd Mid-Continent issued commerc ial g ener al liability policies to Dane shjou Com pa ny Inc . ( “ DC I ” ), an a

rc hit e c tur e and

c on str uc tio n f ir m. D CI ent e re d into a

n a g re e me nt t o desig n and construc t a multi-mil lion dollar home in Austin. When disputes arose be tween D CIand2

the prope rty

owner , DCIsued the proper ty owner for brea ch of contra ct and tortious interfer ence and, in response, the proper

ty owner filed counte rcla i m s against DCI for damag es re lated to def ective
c on str uc tio n b y DC I(“ c on str

uc tio n c a se ” ). DC Ia sk e d b oth Tr uc k a nd Mid -C on tin e nt to d e fe nd it ag ainst these counte rcla ims under their re spective policie s. M i d -C o n t i n ent denied c overa g e and
re fu se d to de fe nd

or ind e mni fy DC I be c a

us e , amon g oth e r t

hin g s, it c la ime d th a t th e a c ts a lle g e d in the construc tion case oc curr ed outside its policy cover ag e per iod. Truck, howe ver, a g ree d to defe nd DCIand spent millions defendingDCIthroug h a jury trial on the merits, in which the jury returne d
a ver dict ag ainst DCI
. I n addition to its de fense costs, Truck eventua lly paid $2,000,000 to fund a
se ttl e me nt o f t

he jud g me nt. Af te r t he jur y ’s ve rd ic t in the c on str

uc tio n c a se , Mid -C on tin e nt fi le d a div e rs ity su it in f e de ra l c ourt

a g a ins t D CI

and the pr op e rt

y ow ne r, se e kin g de c lara

tor y jud g me nt that it

ha d n o d uty to indemn if

y o r d e f e n d D CI in c o n n e c ti o nw it

hth e c o n s tr

u c ti o nc a s e ( “ f

e d e r a l c o v e r a g e c a s e ” ). Truck w as not a pa

rty to Mid-Conti nent’s fe dera l case , nor did D CI join Tr uck to the fede ral c ase. DCI soug ht to have the case dismiss ed based on Truck’ s absenc e, but the fe dera l court denie d DCI ’s motion because it determined Tr uck wa s not a nec essar

y party under fede ral rules of civil proce dure. The fe dera l district court then g rante d summary judgme nt for Mid-Continent, finding that MidContin e nt h a d n o d

uty to de fe nd or ind e mni fy DC Iin t he c on str uc tio n c a se be c a

us e the dama g e s in that c a se oc c ur

re d o uts ide Mid -C on tin e nt’ s c ov e ra g e pe ri o d ( “ f e d e r a l c o ve ra g e de c isi on ” ). Th e F if th Cir c uit a ff ir me d a nd the Sup re me Court

de nie d c e rt ior ari
. Whil e the f

eder al co v er age case was pe nding, T ruck f iled this case ( 1) re questing decla ratory judgme nt that Mid-Continent owe d DCIa duty to defe nd and indemnify

in connec tion“ Othe r ins ur anc e ” c la us e s p ro vid e that if

the ins ur e d h a s o the r i ns ur anc e c ov e ri ngthe same 1 e xpe ns e , th e ins ur e r i s n ot l ia ble fo r a ny g re a te r p ro po rt ion

of the los s th an th e c ov e ra g e amou nt i n it s p o li c y b e ar s to th e e n ti r e amo un t o f th e in s ur an c e c o v e r a g e av ailable. Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co. , 236 S.W .3d 765, 772 (Tex. 2007). 3 with the construction sui t and (2) seekingreimburse ment for de fense and settlement c osts that it had sp e nt i n th e c on st ruct ion

c a se un de r c la ims fo r c on tr ibutio n, su br og a tio n, and

br e a c h o f c on tr a c t. Af te r t he fe de ra l c ov e ra g e de c isi on iss ue d, the pa rt ie s fi le d c ro ss- mot ion s f or summa ry jud g me nt. Tr uc k a sse rt e d th a t, b a se d o n th e te rm s o f Mid -C on tin e nt’ s po lic y wi th DC I , Tr uc k wa s e nti tle d to summary judgme n t o n the issue of Mid-Continent’s duty to indemnify

and def end DCI . MidContin e nt a sse rt ed th at it wa s e nti tle d to summa ry jud g me nt o n T ru c k’ s c on tr ibutio n c la ims (1) be cause co-insur ers whose policies include “ other insura nce” clause s may

not bring suit for 1 contribut i o naga i n s tco -i n s ure rs o r, al t ern at i v el y , (2 ) b ec au s e n o co m m o no b l i gat i o nex i s t edb et wee n Truck a nd Mid-Continent after the fede ral c overa g e dec ision. Mid-Con t i n en t as s erted that it was
e nti tle d t o s umm ary

jud g me nt o n T ru c k’ s su br og a tio n a

nd br e a c h o f c on tr a c t c la ims be c a us e (1) DCI , in whose “shoe s” Truc k stood as subrog ee to DCI , had no cla ims ag ainst Mid-C o n t inent afte r the fe dera l cover ag e dec ision or, alternatively , (2) DCI h a d b e e n fully

defe nded and inde mnified in connec tion with the underly ing construction case. The dist rict court g rante d summary judgme nt in favor of

Mid-Continent on all Truck’s c laims wit h o u t specify ing its g rounds and, pur suant to a late r m oti on , a

wa rd e d atto rn e y ’s fe e s to Mid -C on tin e nt. Tr uc k a pp e a ls.
DI SCU SSIO N I n its first three issues, Truck argues that the trial court’s grant of summar y judgme nt in favor of

Mid-Continent was in error beca use (1) Truck is not bound by the federa l court dec ision4

reg ardingMid-Continent’s duty to inde mnify and defe nd; ( 2) the supreme c ourt’s dec ision in MidContine n t InsuranceCo. v. Liberty Mutual Insurance Co. , 236 S.W .3d 765 (Tex. 2007), does not apply to this case bec ause Mid-Contin en t b re ac h ed it s duty to defe nd its insured; and (3) MidContin e nt o we s it s in sure d a duty to d e fe nd un de r t he e ig ht c or

ne rs ru le s.
Stan dard of Revie w We reviewsummary

judgme nts de n o vo. Va le nc e Op e ra tin g Co . v . D or se tt , 164 S.W .3d 656, 661 (Tex. 2005). When, as here, both parties move for summ ary judgme nt and the tria l court g rants one motion and de nies the other, w e re view the summary -judg ment evidenc e pr es en ted by both sides and determine all questions prese nted and rende r t he judg ment the trial cour t should have rende red. Canyon Reg’ l W ater Auth. v. Guadalupe-Blanco Rive r Auth. , 258 S
. W.3d 613, 616 (T e x. 20 08 ); Sta teFa rm Llo y ds v . G e esli n , 267 S.W .3d 438, 442 (Tex. App.—Austin 2008, no pet.). When a trial cour

t’s order g rantingsummary

judgme nt does not specify the g rounds re lied upon, we must affirm the or der if a ny of the summary -judg ment g rounds ar e mer itorious. FM Pr op s. Op e ra tin g Co . v . Ci ty

of A us tin , 22 S.W .3d 868, 872 (Tex. 2000). Preclusive Eff

ect of the Federal Coverage D ecision T ru ck ’s fi rs ti s s u e o nap p ea l ad dre s s es th e p re cl u s i v e e ff ec t o f th e f

ed er al co v er age d ec i s i o n . M i d -C o n t i n en tar g u e d i n i t s m o t i o nfo r s u m m ary j u d gm en tth at th e f

ed er al co v er age decision pre cluded Tr

uck’s c laims in the present case beca use ea ch of Tr

uck’s c laims depende d on a findingthat Mid-Continent owed DCI a duty to defe nd or indemnify it in the construction case and that the fe dera l cover ag e dec ision had alrea dy deter mined that Mid-Continent owed DCIno suchBe cause the pinpoint cite to volume 553 of the United States Reports is not available, we 2 provide a para llel cite to the Supreme Court Repor ter. Since Semtek

was de cided, the T exas Supreme Court has held that fede ral law determines 3 the pre clusive ef

fec t of a fe dera l judgment in Te x as. See, e .g. , John G. and M arie Stella Kenedy Me m’ l Fou nd

. v . D e whu rst , 9 0 S
. W
. 3 d 2 6 8 , 2 8 7 (T ex . 2 0 0 2 ) ( ci t i n g Eagle Props., Ltd. v. Scharbaue r , 807 S.W .2d 714, 718 (Tex. 1990). Howe ver, the Texas Supre m e Court has not addre ssed Semtek

or Taylor dir e c tly and , ab se nt i nd ic a tio n to the c on tr ary , w e c on c lud e that Semtek and Taylor

control her e. We note that two of our sister courts a g ree . See H eartland Holdings, Inc. v. U.S. Trust Co. of Tex. N.A. , No. 14-08-00232- CV, 2010 WL 1373790, at *6 (Tex. App.—Houston [1 4 th D is t. ] Ap r il 8 , 2 0 1 0 , n o p et.); Madera Prod. Co. v. Atlantic Richfield Co. , 107 S.W .3d 652, 661 (Tex. App.—Texarkana 2003, pet. denied in pa

rt, pet. dism’d in part). 5 duty
. T ru ck does not disput e that the f eder al cove rag e dec ision is bi nding on Mid-Continent and DCIor that succ ess on its claims here depends on a finding contra

ry to the fe dera l cover ag e dec ision. Truck c ontends, howeve r, that it is not bound by the fe dera l cover ag e dec i s i o n b eca use it was not a par ty , or in privity

with a par

ty , to that case
. To de te rm ine wh e the r a

fe de ra l ju dg me nt i n a

div e rs ity c a se bin ds a

no n-p art y in
s ubsequent litigation, we look to the law of the state in which the f eder al cour

t sits. S e m te k I n t’ l Inc. v. Lockhee d Martin Corp. , 5 31 U. S. 4 97 , 5 08 (2 00 1) ; se e als o Ta y lor v . S tur ge ll , 553 U.S. 880, 1 2 8 S
. C t
. 2 1 6 1 , 2 1 7 1 n . 4 (2 0 0 8 ) ( ci t i n g Semtek ) (“ For jud gm en t s i n d i versity

case s, fede ral law incorpora tes the rules of

prec lusion applied by the State in which the r ender ing c ourt sits.”). The 2 f e d e r a l c o v e r a g e d e c i s i o n r e s u l t e d f r o m a d i v e r s i ty a c t i o nan d w a s r e n d e r e d

i nT e x a s ; a c c o r d i n g l y,
we a pply Texas res judicata

law to determine the preclusive ef fec t of the fe dera l cover ag e dec ision. 3 “[R] es judicata

is the gen er i c term for

a g roup of r elated c oncepts c oncer ning the
con cl u s i v e effects g iven final judg ments.” Ba rr v . R eso lut ion Tru st C or p ., 837 S.W .2d 627, 628 (Tex. 1992). Ther e ar e two princ ipal cate g ories wit h i n t h i s doctrine: cla im preclusion and issue prec lusion. Id. Claim preclusion—also re fer red to g eneral ly

as “r es judicata ”—pre vents the6

relitig ation of a c laim or ca use of a ction that has bee n finally adjudicate d and “require s proof of the following elements: (1) a prior final judgme nt on the m erits by a court of compe tent jurisdiction; (2 ) i de nti ty

of the pa rt ie s o r t ho se in p ri vit

y wi th t he m; a nd (3 ) a se c on d a c tio n ba se d o n th e same claims as we re r aised or c ould have be en ra ised in the first ac tion.” Am sta dt v . U nite d S tates B ra ss Corp. , 919 S.W .2d 644, 652 (Tex. 1996)

. T r u c k d o e s n o td i s p u t e t h e f

i r s tan d t h i r d o f the se elements, but conte sts the second. Tr uck was not a party

to the fede ral c overa g e dec ision, thus we must determine whe ther Tr uck is in privit y wi t h DCIas to the cla ims determined by the fe dera l
cover ag e dec ision.

A pe rs on c an be in pr ivi ty wi th a pa rt y to a pr e vio us jud g me nt in a t le a st thr e e wa y s: (1) by controlling the ac tion that resulted in the judgme nt w ithout being a party to it; (2) by having its int e re sts re pr e se nte d b y a pa rt y to the a c tio n; or (3 ) b y

a c tin g a s a

su c c e sso r i n inte re st t o a

pa rt y to the prior ac tion. Amstadt , 9 1 9 S
. W
. 2 d at 6 5 3 (c i t i n g Getty Oil Co. v. Insuranc e Co. of N. Am. , 84 5 S. W.2 d 7 94 , 8 00 (T e x. 19 92 ); s e e a ls o Ta ylor , 12 8 S.Ct. a t 21 72 -7 3 ( re c og nizi nga t le a st six e xce pti on s to no n- pa

rt y pr e c lus ion ru le , inc lud ing pr e -e xistin g “ su bs tanti ve le g a l r e latio ns hip [s]
w i th th e p arty t o th e p r e v i o u s j u d g m e n t ” )
. B u t a s th e T e xa s S u p r e m e C o urt h a s n o t e d , “ [t ]h e re is no g ener al def

inition of privity

that can be automatically applied in all re s judicata c ases; the ci rc u m s t an ces of

eac h case must be examined. Ge tty Oi l , 8 45 S.W. 2d

a t 80 0. Th e re fo re , in revie wing the rec ord to deter mine if privity

exis ts, we ar e not bound by these thre e categ ories, but rathe r use the c ateg ories to guide our a naly sis here. An an aly sis to determine whe ther a person is in privity

with a par

ty to a prior judgme nt beg ins by examining t he intere sts the parties shar ed. Amstadt , 91 9 S.W. 2d a t 65 3. Pr ivi ty7

exis ts if the parties sha

re a n identity of in t er es ts in the basic leg al rig ht that is the subject of litigation. Id. Th e su

bje c t of b oth

the fe de ra l c ov e ra g e c a se and the pr e se nt c a se is D CI ’s lia bil ity policy with Mid-Continent and, more specific ally , whether Mid-Continent owed a duty under that policy to defe nd and indemnify DCIin connec tion with the construction case —or fr om DCI ’s perspe ctive, whe ther DCI was e ntitled t o defe nse and inde mnification from Mid-Continent in the construction case. The only substantive differ ence betwee n the t wo cases i s that Truck, rather than DCI , is assertingDCI ’s rig hts in the present c ase.

A re view of Truck’ s claims in the prese nt case reve als the identity of intere sts shared by DC I and Truck re g ardingDCI ’s rig hts under the Mid-Continent policy . Truck’ s claim for decla ratory judgme nt seeks a f

inding that Mid-Continent owed D CIa duty t o d ef en d DC Iin the
c on str uc tio n c a se . T ru c k’ s cla im fo r sub ro g a tio n ass e rt s that Tru c k, a s su br og e e to t

he DC I ’s ri g hts , is e nti tle d to dam a g e s fr om Mid -C on tin e nt fo r Mid -C on tin e nt’ s fa ilure to de fe nd and ind e mni fy

DC I in t he c on str uc tio n c a se . T ru c k’ s c la im f or br e a c h o f c on tr a c t, wh ic h it a lso a sse rt s a s su br og e e to DC I , all e g e s that Mid- Contin e nt br e a c he d its duty to de fe nd and ind e mni fy DC I un de r i ts p oli c y wi th DC I
. F in a ll y , T r

u c k a s s e rts th a t it is e n ti tl e d to c o n tr ib u ti o n f r o m M id

- Co n ti n e n t b a s e d o nMidContinent’s “proportionate responsibility for DC I ’s
. . . costs of def ense a nd indemnity

in the [construction case].” The common threa d in these cla ims is DC I ’s rig ht to covera g e underthe MidContinent poli cy . That t hrea d exis ts beca use all Truck’ s claims derive from DCI ’s rig hts under the Mid -C on tin e nt c on tr a c t.

Be cause all Truck’ s claims ag ainst Mid-Continent derive entire ly from DCI and, as
a re su lt d e pe nd

up on DC I ’s ri g ht t o c ov e ra g e un de r i ts p oli c y wi th M id- Con tin e nt, Tr

uc k’ s inte re stAl t h o ug h a cla im for contribution is considere d a dire ct claim, rather than a derivative 4 claim, i t ex i s t s only

to the extent that the other insurer “ share [s] a common oblig ation” with the insurer se ekingcontribution. Mid-Continent , 2 3 6 S. W. 3d at 772. Thus, Truc k’s rig ht to contribution exis ts here only

if Mid-Continent is equally ob l i gat ed t o d efend and indemnify DCI . I t is in t hat sense that we char acte rize Truck’ s rig ht to contribution as deriving from DCI ’s rig hts under the MidC o n t i n e n tp o l i c y. 8 in the policy

is the same as D CI ’s. Thus, Truc k is in privity with DCI as to DCI ’s rig hts under the Mid-Continent poli cy . A per son whose rig hts deriv e t hroug h or fr om a par ty to a pre vious action deter mining thos e rights, i s in privity with the party throug h whom its rig hts are de rived. Amstadt , 919 S.W .2d at 653

. Truck is not asse rting its own c laims or sug g esting that it has any independe nt rig ht to recove ry

ag ainst Mid-Continent. Truck is simply asser ting DCI ’s rig hts that it acquired f rom
o r t h ro u ghDC I

— T ru ck ’s cl ai m s ar e s i mp l y re an i m at i o n s o f D C I ’s cl ai m s fr o m th e f ed er al co v er age decision. There fore , we hold that Truck is in privity with D CI as to the fede ral c overa g e dec ision.

4 See I d
. (h old ing pr ior

jud g me nt p re c lus ive a g a ins t pl a int if fs be c a us e pla int if

fs de ri ve d th e ir

c la ims fr om p art y to p ri or su it) ; Lemon v. Spann , 633 S.W .2d 568, 570-71 (Te x . App.—Texarkana 1982, writ ref ’d n.r.e .) (holdingthat plaintiff’s suit was bar red be cause his claims depende d on establishing liability ag ainst party

previously

found not liable). Truck a rgues that it is not in privity with D CI beca use DCI did not repre sent Truc k in th e f e d e r a l c a s e an d

b e c a u s e T r u c k c o u ld n o t “ c o n tr o l t

h e F e d e r a l C o v e r a g e Su it
. ” B u t, as dis c us se d h e re , a de qu a te re pr e se ntatio n a nd c on trol ov er the u

nd e rl yingsu it a

re no t th e on ly considerations in establishi ng privity
. S e e, e . g. , Amstadt , 9 19 S.W. 2d a t 65 3. Pr ivi ty

a lso e xists wh e n, a s w e ho ld h e re , a pe rs on ’s c la ims are de ri ve d f ro m a part

y to t he pr ior jud g me nt.We note, as does the c ourt in Heartland Holdings , the c ir c ula r re a so nin g that e xists in t his 5 are a of the law. Texas c ourts look to the law g overningthe pre vious procee ding when conside ring a judicial estoppe l claim, see D allas Sales C o . v. Ca r l i s l e Sil ver Co. , 1 3 4 S. W. 3 d 9 2 8 , 9 3 1 ( T e x. App.—Waco 2004, pet. denied) , while fe dera l courts g ener ally apply the law g overningthe subsequent proc eeding , see Rissetto v. P lumbers and Steamfitters Local 343 , 94 F.3d 597, 602- 04 (9th Cir. 1996).
9 F ur the rm or e , to the e xtent that T ru c k a sse rt s th a t its int e re st wa s no t a de qu a te ly re pr e se nte d, we mus t reiter ate that Tr

uck possessed no inter est separ ate a nd apar t from DCI
. Tr uc k a l s o a r g u e s th a t Da iry lan d Co un ty Mu tua l I ns uran c e Co. of T

e x as v . Ch ild

re ss , 650 S.W .2d 770 (Tex. 1983), i s dispositi ve of the privity issue here
. Dairyland , howeve r, involved the rig ht of an injured third pa rty —i.e., a third-pa

rty benef iciary —to bring suit ag ainst an insurer who had obtained an ag ree d judgme nt a g ainst its insure d, the tortfea sor, that it was not liable under its poli cy with the insured. Dairyland , 650 S.W .2d at 774. I t did not a ddress the rig ht of a potential
c o- ins ur e r t o r e lit ig a te , thr ou g h c la ims de ri ve d fr om its ins ur e d, its ins ur e d’ s f ull y a dju dic a te d r ig hts to cover ag e under

a policy with another insurer. Ac cording ly , Dairyland does not prec lude our h o l d i n g th a tT r

u c k i s i np r i v i ty

w i thD C I. Finally , Truck a sserts t hat M id-Continent is j udicially estopped fr om contendingthat the fe dera l cover ag e dec ision bars Truc k’s claims in any way . Truck bases this c ontention on MidContin e nt’ s c ouns e l’ s st a te me nt t o th e fe de ra l c ourt tha t th e fe de ra l c ov e ra g e de c isi on wo uld “ lik e ly not result in prejudice or impairment of [Truck]’s r ights to pursue its claim ag ainst Mid-Continent.” We look to fe dera l la

w to de termine whether Mid-Continent is judicially estopped by its counsel’s state me nt. See H

eartland Holdings , 2010 W L 1 3 7 3 7 9 0 , at *6 n.9. Under fede ral law , judicial 5
e sto pp e l pr e c lud e s a party fr om a sse rt inga

po sit ion in a le g a l pr oc e e din g that is inc on sis te nt w ithWe are likewise not persua ded by Truck’ s argument that the fe dera l cover ag e dec ision 6 e xpre ssl y inc or po rate s Mi d- Contin e nt’ s st a te me nts re g ard ing th e possi ble e ff e c ts o n T ru c k in

its ru lin g . O ur

re vie w o f t

he fe de ra l c ov e ra g e de c isi on re ve a ls n o la

ngua g e lim iti ngits e ff

e c t. 10 a cla im taken by

that party

in the same or a

prior litigation. Pegram v . Herdrich , 530 U. S
. 2 11, 228 n.8 (2000).

Mid-Continent’s counsel’s statement was not, strictly speaking , a position; itwas a n op ini on by Mid -C on tin e nt’ s c ouns e l on the po ssi ble e ff

e c t of the ru lin g . No ne the le ss, a ssumin g it
was a position, t he wor d “likely” clear l y i n dicates the possibili ty that the judg ment could af fec t Truck’s ri gh t s . L og ically , if a pa rty leave s open the possibility that the judg ment could af fec t Truck’ s rig hts, it i s not inconsistent for that party to assert late r that the judg ment did, in fac t, affe ct tho s e rights. See Blac k ’s Law D ic tio na ry 834 (9th ed. 2009) ( defininginconsistent as “not
c omp a tib le wi th a

no the r f a c t or c la im” ). We c on c lud e that Mi d- Con tin e nt’ s c ouns e l’ s st a te me nt t o the fe dera l court wa s not inconsistent with i ts positi on in this case. Acc ording ly , we hold that Mi d- 6 Continent is not judicially estopped fr om assertingthat the fe dera l coverage decision bars Tr uc k’ s c la ims
.

Be cause we hold that Truc k is in privity with DCIas to the fe dera l cover ag e dec ision, Truck is pre cluded f

rom relitig ating the issues dec ided by t h at decision. F urther, be cause eac h of Truck’ s c la im s in

th e p r e s e n t c a s e r e qu ir e s a f in d in g th a t M id

- Co n ti n e n t o w e d D CI a d u ty , w h ic h would require relitig ating the fe dera l c overa g e decision, that decision disproves an essential ele ment of e a c h o f T ru c k’ s c la ims he re . T he re fo re , M id- Con tin e nt i s e nti tle d to summa ry jud g me nt.11

Tr uc k’ s Co ntri but ion Cla im Truck’ s second issue on a ppeal a ddresse s whether t h e Tex as Supreme Court’ s decision in Mid-Continent , 236 S.W .3d 765, would apply t o t h e fa cts of this case because MidContinent b re ac h ed it s duty to defe nd DCI . Havingalre ady deter mined that Mid-Continent was entitled to summary

judgme nt based on the pr eclusive e ffe ct of the f eder al cove rag e dec ision, we need not addre ss Truck’ s second issue. Se e FM Pr op s. , 22 S.W .3d at 872-73 (“ When a trial cour t’s
or de r gra nti ngs u mm a r y j ud g me nt d oe s n ot s pe c if

y the g ro un ds re lie d u

po n, the re vie wi ngc ourt

mus t aff irm summary

judgme nt if any

of the summary judgme nt grounds are meritorious.”). H oweve r, beca use Mid-Continent

d ir e c tl y a d dr e s s e s anin s ur e r ’ s a b il it y to b r in g a

d ir e c t a c ti o nf

or
re imb ur se me nt u

nd e r a ri g ht of c on tr ibutio n fr om a putativ e c o- ins ur e r, pr ov ide s a n a dd iti on a l ba sis for summary

judgme n t i n fa v or of Mid-Continent in the prese nt case , see M id-Continent , 236 S.W
. 3 d a t 7 7 2

- 7 4 , an d b e c a u s e o ur d e te r

mi n a ti o n th a t T r

u c k is b ar

r e d f r o m r e li ti g a ti ng the fede ral c overa g e dec ision depends on our a naly sis that Truck’s c laim for contr ibution derives, for pr ivi ty purp os e s, e nti re ly

fr om D CI ’s c on tr a c tua l r ig hts a g a ins t Mid- Con tin e nt, we wi ll a dd re ss MidContinent ’s application to thi s case .

I n Mid-Continent , tw o p ri mary lia bil ity c arr ie rs , L ibe rt

y Mutua l and

Mid -C on tin e nt, provided $1,000,000 eac h in liability cover ag e for a cla im ag ainst their common insured. Id. at 769. Both insura

nce policie s had an “ other insura nce” clause , which limits t he insurer s liabilit y in the event other insurance cover s the same loss. Id. Th e tw o in sure rs c oo pe ra tiv e ly pr ov ide d a

de fe ns e for the insure d, but dif

fer ed in the ir opinions reg ardingthe settlement value of the c ase. Id. at 770. L iberty Mutual, who also ca

rried e x cess c overa g e for the insured, a g ree d to settl e t h e ca s e for12

$1,500,000 and demande d that Mid-Continent pay half that amount. Id. Mid-Continent, however, havingdeter

mined that the ca se wa s only worth $300,000, contributed only $150,000 toward settlement. Id. L ibe rt

y Mutua l pai d the ba lanc e of the se ttl e me nt an d th e n s ue d M id- Con tin e nt t o
rec over the amo u n t i t h ad paid ove r its pro rata share , asser

ting c laims for contribution and subrog ation. Id
.

Th e Te xas S up re me Court re je c te d L ibe rt

y Mutua l’ s c on tr ibutio n c la im, c iti ngits
ear lier dec ision in Traders & Gene ral Insurance Co. v. H icks Rubbe r Co. , 169 S.W .2d 1 4 2 ( T e x. 19 43 ), wh ic h he ld that the e xiste nc e of an “ oth e r i ns ur anc e ” c la

us e in t he po lic y pr e c lud e s a

c la im for c ontribution asserted by one co- insurer a g ainst another. T he cour t stated:
The effe ct of the [ “other

insurance ”] clause pr eclude s a direc t claim for c ontribution amonginsurers be cause th e cl au se make s the contra cts sever al and indepe ndent of eac h other. With independent contra ctual oblig ations, the co-insure rs do not meet the common obligation requireme nt of a c ontribution claim—eac h co-insure r c on tr a c tua lly

a g re e d with the ins ur e d to pa y on ly its pr o r a ta

sh are of a c ov e re d lo ss; the co- insurers did not contra ctually ag ree to pay

eac h other’s pr o rata

share
. Mid-Continent , 2 3 6 S
. W
. 3 d at7 7 2 (c i t at i o n s o m i t t ed ) ( ci t i n g Hicks Rubbe r , 169 S.W .2d at 147, and Employe rs Cas. Co. v. Transport Ins. Co. , 4 44 S.W. 2d 60 6, 60 9 ( Te x. 19 69 )) . T hu s, the su pr e me court he ld that when co-pr imary insurance policies contain “ other insura nce” clause s, “a c o-insurer pa yingmor e tha

n it s p ro po rt ion a te sh are c ann ot r e c ov e r t he e xce ss f

ro m th e oth e r c o- ins ur e rs ” throug h contribution. Id. (q u o t i n g H ic k s R u bber , 169 S.W .2d at 148). Just as in Mid-Continent , the po lic ie s at is su e he re c on ta in “ oth e r i ns ur anc e” cl a us e s, and Tr uc k p a id m or e tha

n it s proportionate share
. Thus, apply ing the holdings in Mid-Continent , Em plo y e rs , and Hicks Rubbe r to t he fa c ts i n th is c a se , T ru c k h a s n o d ir e c t r ig ht o f c on tr ibutio n a g a ins t Mi d- Con tin e nt.13 Tr uc k a rgue s th a t Mi d- Con tin e nt should be distinguished be cause both co-insure rs in Mi d- Con tin e nt defe nded the insured, unlike here wher e only Truck pr ovided a de fense . Ba sed on that di sti nc tio n, Tr

uc k a sse rt s th a t Mid-Continent do e s n ot p re c lud e a c on tr ibutio n c la im a g a ins t a co-insure r that bre ache s its duty to defen d
. W e ar e not per suaded by this argument. First, the
su pr e me c ourt ’s ho ldi ng wa s th a t, i n th e a bs e nc e of a c on tr a c tua l a g re e me nt b e tw e e n th e ins ur e rs to be oblig ated f

or the propor

tional amount, the prese nce of “other insurance ” cla

uses in the policies prec ludes an equitable contribution claim. Id. a t 773. Se c on d, and c ru c ia l to the fa c ts he re , in bo th
o f t h e ca ses on which Mi d- Con tin e nt r e l i e d , th e n o n - p ayi n g c o - i n s ur e r h a d b r e a c h e d i t s d uty to defe nd the insured. Se e Em plo y e rs , 444 S.W .2d at 607; Hicks Rubbe r , 169 S.W .2d at 591. Tr uc k a lso a sse rt s th a t Mid-Continent does n o t apply

to claims for c ontribution of defe nse costs, re lying, a

mong othe r sourc es, on the F ifth Circuit’s rec ent opinion in Trini ty Uni v e rsal Insurance Co. v

. Employe rs Mutual Casual ty Co. , 592 F.3d 687 ( 5th Cir. 201.). I n Trin ity , th e F if th Cir c uit fo un d th a t “

Mi d- Con tin e nt left open the
. . . question of whethe r a c o-insurer that pay s more than its share of de

fe ns e c os ts may

re c ov e r s uc h c os ts fro m a c o- ins ur e r who vio late s it s d uty to defe nd a common insured.” Trin ity , 5 9 2 F
. 3 d a t 6 9 4
. T h e F if th Ci r c u it th e n w e n t o n to h o ld that “other insurance ” cla

uses apply only to the duty to inde mnify , not the duty to de fend, there fore a coinsurer who can prove the elements of contribution—common obligation a nd overpa y ment by one co-insure r—is entitled to seek c ontribution for its defens e co s ts. Id. at 6 9 5 (c i t i n g Texas Prop. & Cas. Ins. Guar. Ass’n v. Sout h we s t A ggregates, Inc

. , 982 S.W .2d 600, 606 (Tex. App.—Austin 1998,Southwest Aggregates a dd re sse d th e qu e sti on

of wh e the r a

n in sura nc e c omp any ’s duty

to 7 d ef en d i t s i n s ure d

co u l d b e re d u ce d b ec au s e t h e c l ai m s at i s s u e f el l p art i al l y

o u t s i d e t h e c o v er age period—i.e., is ea ch insurer ’s duty to defe nd deter mined by the ratio of that insurer’ s “time on the risk”—we held that it was not. Southwest Aggregates , 982 S.W. 2d a t 60 4, 60 7. We d id n ot a dd re ss the “ oth e r i ns ur anc e ” c la

us e s. 14 no pet.), for our hol ding that the policy “oblig ates the insure r to defend its insured, not to provide a pro rata def

ense.” ).

7 We disagreewi thT ru ck ’s ar gu m en t an d th e F i ft hC i rc u i t ’s an al y s i s o fMid-Continent
. Although the co-insure r in M i d

- C o n t i ne nt s o u ght reimburseme nt for only settlement costs, the supreme c ourt relied on Em plo y e rs and Hicks Rubbe r , two case s that involved a co- insurer subjec t to a n “other insurance ” clause seeking contribution for defe nse costs. Mid-Continent , 236 S.W .3d
a t 77 2; se e Em

plo y e rs , 4 44 S.W. 2d

a t 60 7 ( “ [T]he c la im h e re is f or a pr o r a ta pa rt of the sums p a id in s e ttl e me nt o f the su it a g a ins t th e ins ur e d a nd a s e xpe ns e s in

de fe nd ingthe su it. ” ); Hicks Rubbe r , 169 S.W .2d at 597 (“ When [ one insurer ] refused to fur ther a ssist i n the defe nse of the
. . . suit, [ the othe r c o - in s ur e r ] s h o u ld e r e d

th e e n ti r e b ur d e n , in c lu d in g th e a p p e a ls
. . . . I ns o d o in g it p a id o ut more than two- thirds of the costs and e x penses incur red.” ). B oth Em

plo y e rs and Hi c k

s R ub be r he ld that th e e xiste nc e of

an “ oth e r i ns ur anc e ” c la

us e pr e c lud e s a

c on tr ibutio n c la im fo r defe ns e c os ts. Based on the se Te xas S up re me Court pr e c e de nts , T ru c k’ s c on tr ibutio n c la im f or de fe ns e c os ts ag ainst Mid-Continent is barr ed as a matter of la

w. Having deter

mined that the federa l cover ag e decision prec ludes Truck f rom bring ing its claims for subrog ation and contribution, and also having deter mined that, under Mid-Continent , Truck is ba

rre d as a matter of law

from see king c on t ri bution fromMid-Continent, we nee d not
a d dr e s s T r

u c k ’ s th i r d

i s s u e th a tM i d

- C o n t i n e n to w e d D C I ad u ty t o d e f e n d an d i n d e m n i f y.15 AT TOR NE Y’ S F EES I n it s r e ma ini ngiss ue, Tr uc k a sse rt s th a t th e tr ia l c ourt a bu se d it s d isc re tio n in
awa rding attorney ’s fee s beca use there is no evidenc e that the fee s awa rded we re reasonable,
nece ssary , equitable, a

nd just. I n a p ro ceeding under the Uniform De clar atory J udg ments Act (“U DJ A”) , a cour

t may awa rd “r easona

ble and necessa

ry attorney ' s fee s as ar e equitable and just.” Te x. Civ . Pr a c . & Re m.C od e Ann. § 3 7. 00 9 ( Wes t 20 08 ). Whe the r a n a wa rd of a tto rn e y ’s fe e s is
rea sonable a

nd nece ssary

is a fac t question. Bocque t v. Herring , 972 S.W .2d 1 9 , 2 1 (T ex . 1 998). A trial cour

t’s awa rd of attorney ’s fe es under the UDJA is reviewe d for a n abuse of

discretion. Id. at 20-21. A trial court abuses its discr etion by awa rding fee s when there is insufficient evidenc e that the fe e s w e re re a so na

ble and ne c e ssa ry , o r whe n th e awa

rd is i ne qu ita

ble or un jus t Id . at 21. As evidenc e in support of its motion for atto rn ey ’s fee s, Mid-Continent attached aff idavits from its curre nt and forme r counsel stating (1) the number of y ear s the attorney

had bee n licensed, ( 2) that the attorney repr esente d M i d -C o n t i n ent in the ca se, (3) the dates of that
re pr e se ntatio n, and

(4 ) t he amou nt o f f e e s and e xpens es th e a tto rn e y

bil le d M id- Con tin e nt i n th is
c a se ($ 22 4, 11 6. 55 and

$5 4, 40 9. 24 re sp e c tiv e ly

). In a dd iti on , b oth

a ff ida vit s st a te a s f

oll ow s:
B a se d upo n th e kn ow le dg e and e xpe ri e nc e of

the lawye rs inv olv e d, the c omp le xity o f t h e i s sues involved in the ca se, the time and la bor re quired, the nove lty and difficulty of the que stions invol ved, and the skill requisite t o p er fo rm the leg al service s rende red, the se fe es and e x penses incur red by Mid-Cont i n en t wer e r e a s o n a b l e an d n e c e s s ar y.
The trial c ourt’s orde r g ranti n g Mid-Continent’s moti on for attorney ’s fe es indicate s that the trial
c ourt c on sid e re d th e se a ff

ida vit s, wh ic h w e re a tta c he d to Mid- Con tin e nt’ s mo tio n, in r e nd e ri ngits16

decision. Truc k contends on a ppeal that these aff

idavits c o n t ai n no basis for f act- finding and ar e
no thi ngmor e tha

n uns up po rt e d c on c lus ion s a bo ut r e a so na

ble ne ss. Al t h o u gh these a ffidavits do not addre ss eac h of the fa ctors set for th in A r thur Andersen &Co. v. Perry E quipment Corp. , 945 S.W .2d 812, 818 (Tex. 1997), t he affidavits wer e
u n co n tradicte d. See R agsdale v. ProgressiveVoters League , 8 0 1 S. W. 2 d 8 8 0 , 8 8 2 ( T e x. 1 9 90). “Te stimony

from a pa rty ’s attorne y

about a party ’s attorney s’ fees i s taken as true as a matter of law if the testimony

‘is not c ontradicte d by any other witness and is c lear , positive, dire ct, and fr ee f rom contra diction.’” In re A.B.P

. , 291 S.W .3d 91, 98 (Tex. App.— Da l l as 2 0 09, no pet.) (c itation omi tte d) . “ Th is i s e sp e c ia lly tr ue wh e re the op po sin g pa rt y ha d th e me ans and op po rt un ity to disprove the testimony

but failed to do so.” Id. Truck did not submit controver ting e vidence
. Fur ther, Tr uck’s c ounsel conc eded that they wer e not contestingthe hourly rate char g ed to MidContinent because those hourly rate s were rea sonable. We a lso no te that be c a

us e the iss ue of a tto rn e y ’s fe e s wa s su bmi tte d to the tr ia l c ourt , the court c ou ld l oo k at th e e nti re re c or d, the e vid e nc e pr e se nte d o n r e a so na ble ne ss, the amou

nt i n controversy , the common knowledg e of the participa nts as lawy ers a

nd judge s, and the re lative
succe ss of the par

ties. See id. Having g rante d summary judgme nt here , the t rial court was a war e of the dispute and the succe ss of the par ties. Moreove r, we can pr esume that the tria l court took judicial notice of the usual and c ustomary attorney ’s fe es for

the servic es provided. See F irst N at’l Acc eptanceCo. v. Bishop , 1 8 7 S
. W
. 3 d 7 1 0 , 7 1 7 ( T e x . Ap p . — C o r p u s C h r i s t i 2 0 0 6 , n o p e t
. )
. F i n a l l y, it was within the trial court’s discr etion to awar d an amount diffe rent fr om the amounts incurre d as stated in Mid-Continent’s affidavits. See Chase Home F in., L.L .C. v. Cal W

. Rec onvey ance Corp. ,Mid-Continent also presented de tailed bi lling st atements fr om its attorney s for in c am e ra 8 re vie w b y the tr ia l c ourt

a t th e he ari ngon

its mot ion

fo r atto rn e y ’s fe e s. Tr

uc k a rgue s th a t be c a

us e tho se bil lin g state me nts we re no t a dmi tte d in e vid e nc e , th e y

are no t pr op e rl y

pa rt of the a pp e llate rec ord. Howe ver, be cause we hold that Mid-Continent’s aff idavits a lone are sufficie nt to support the trial cour

t’s awa rd, we need not a ddress whe ther those state ments were proper ly in the rec ord. 17 309 S.W .3d 619, 634 n.11 (Tex. App.—Houston [14t h Dist.] 2010, no pet. h.). Ac cording ly , we conclude th a t M id

- Co n ti n e n t’ s a f f id av it s w e r e le g a ll y

an d f a c tu a ll y s u f f ic ie n t t o s u

p p o rt t h e tr ial court’s a war d of $136,532.78 as attorney ’s fe es to Mid-Continent. See Tex as Co mm erce Bank, Nat’l Ass’n v. New , 3 S.W .3d 515, 517-18 (Te x . 1999). We overrule Truck’ s fourth issue. 8
CO NC LU SION Be cause the fe dera l c overa g e decision pre cludes Tr uck fr om relitigating the que stion of whe ther Mid-Continent owed DCI a duty to defe nd and indemnify and bec ause Tr

uck has no dir e c t r ig ht o f c on tr ibutio n f ro m Mi d- Contin e nt, we affi rm the tr ia l c ourt ’s summa ry jud g me nt i n favor of Mid-Continent. Having overr uled Truc k’s issue re g ardingattorney ’s fe es, we also aff irm the tr ia l c ourt ’s awa

rd of a tto rn e y ’s fe e s to Mid -C on tin e nt.

__________________________________________ David Pury ear , J ustice Be fore J ustices Patterson, Pury ear and Pember

ton; Concurre nce by

J ustice Pemberton Affir med Filed: August 27, 2010