Source: http://texas-opinions.com/08-Ulico-Casualty-Co-v-APA-Tex-2008-by-Johnson-insurance-law-waiver-estoppel-no-coverage.html
Timestamp: 2019-04-23 09:01:41+00:00

Document:
Chief Justice Jefferson filed a concurring opinion.
suit against the insured that was not reported until after the policy expired.
Extended Reporting Period, if elected.
notified of the suit until APA’s agent forwarded notice of suit on November 5, 1999.
judgment in APA’s favor in September, and an appeal by the Allen plaintiffs was dismissed.
and estoppel findings for $616,468.55.
entitled to recover attorney’s fees pursuant to Texas Civil Practice and Remedies Code section 38.001(8).
Id. at 108-10. The court remanded the case for a determination of the amount of attorney’s fees. Id. at 110.
notice of the suit, and that Ulico agreed separately from the policy to pay defense costs for the Allen suit.
separately agreed to cover the Allen suit defense costs.
Ulico’s actions after it received notice of suit created obligations to APA.
doctrines because Ulico submitted the proposed questions which the trial court included in the charge.
waiver or estoppel, and (2) there is no evidence to support the jury’s answers to either of the questions.
Proceeding to the merits of Ulico’s complaints, we note that insurance policies are contracts. Barnett v.
the insurer must assert any applicable exclusion or limitation to avoid liability. See Employers Cas. Co. v.
the insurer has the “right”—to assert any exclusions or limitations as affirmative defenses. See id.
obtaining knowledge of the facts; (5) who detrimentally relies on the representations.”); Trammell Crow Co.
doctrine in that it estops a promisor from denying the enforceability of [a] promise.”).
2. Can the Doctrines be Used to Rewrite the Policy?
acknowledged that the policy specifically excepted injuries from gunshot wounds from coverage. Id. at 165.
claims and proof of injury.
doctrine cannot be made to serve that purpose. Id. at 166 (quoting Craddock v. Wash. Nat’l Ins. Co., 83 S.
liability contrary to the express provisions of the contract the parties did make. Id. (quoting Ruddock v.
covering a risk not assumed by the insurer. Id. at 167.
vehicle. Id. Bearden sent McGuire a non-waiver agreement which McGuire signed and returned. Id.
based on our holding in Employers Casualty Co. v. Tilley, 496 S.W.2d 552 (Tex. 1973). McGuire, 744 S.W.
policy. Washington Nat. Ins. Co. v. Craddock, 130 Tex. 251, 109 S.W.2d 165 (1937).
estoppel cannot create a new and different contract with respect to risks covered by the policy. Great Am.
Reserve Ins. Co. v. Mitchell, 335 S.W.2d 707 (Tex. Civ. App.—San Antonio 1960, writ ref’d).
analyze or discuss the exception because it was not outcome-determinative. Id. at 603 n.1. We do so now.
policy. Id. The attorneys chosen and paid by Farmers continued to represent Clifton in the liability suit. Id.
policy covered Clifton for the accident and that Farmers had a duty to defend him in the liability suit. Id.
estopped from raising them. Pacific Indemnity Co. v. Acel Delivery Service, Inc., 485 F.2d 1169 (5th Cir.
81 A.L.R. 1326 (1932); 38 A.L.R.2d 1148 (1954); 7C Appleman, Insurance Law & Practice s 4892 (1979).
noncoverage.” Pacific Indemnity Co. v. Acel Delivery Service, Inc., supra. Id. at 521-22.
the cases cited by Wilkinson support its conclusion otherwise, as the following review of them shows.
To begin with, the Wilkinson court failed to state the complete basis for the rule in its quotation from Acel.
appeal. Id. at 1173 (emphasis added) (citations omitted).
1171. The trial court and court of appeals held that the incident in question was not covered by the policy.
rights when it had knowledge of facts indicating possible lack of coverage and the insured was prejudiced.
1176; see Tilley, 496 S.W.2d at 561.
Underwriters would have no liability for accidents or injuries occurring if the driver was intoxicated. 40 S.W.
witnesses, it thereby waived the defensive clauses in the policy of insurance. Id. at 235 (emphasis added).
The court cited as controlling authority this Court’s decision in American Indemnity Co. v. Fellbaum, 263 S.
intention of the parties when the contract was made. Id. at 909-10.
of its contract with insured, of the action brought against the insured to recover damages." Id. (quoting Am.
Indem. Co. v. Fellbaum, 225 S.W. 873, 874 (Tex. Civ. App.—San Antonio 1920), aff’d, 263 S.W. 908 (Tex.
1924)). The Ferris court went on to cite Murrah; Dallas Coffee & Tea Co. v. Williams, 45 S.W.2d 724 (Tex.
defensive provisions in an indemnity policy, but did not hold that waiver expanded the risks covered.
by assuming the defense of the insured.
attorneys defended its insured in the suit. Id. The trial court refused to enter judgment against Maryland. Id.
liability thereon. Id. at 1218.
was wholly without jurisdiction over it. The judgment as to it was therefore a nullity.” Leap v. Braziel, 121 S.W.
2d 334, 336 (Tex. 1938).
unconditionally liable for the amount of the judgment rendered . . . .
rights or non-waiver agreement. The cases cited in Wilkinson, however, do not support its conclusion.
circumstances is insufficient justification for judicially rewriting the parties’ agreement.
advising Employers as to its late notice defense. Id.
We think prejudice to Tilley . . . has been shown as a matter of law.
the [personal injury] suit. Id. at 561.
See Wilkinson, 601 S.W.2d at 522.
S.W.3d at 316; Jernigan, 111 S.W.3d at 156; Bocanegra, 605 S.W.2d at 851; Tilley, 496 S.W.2d at 559.
sustains because of the insurer’s actions.
defending the Allen Action is not covered by the Policy?
coverage. Craddock, 109 S.W.2d at 166-67; McGuire, 744 S.W.2d at 602-03. We adhere to that position.
Changing a policy’s coverage to encompass risks otherwise not covered must be by contractual means.
Ulico issued a written endorsement changing the policy period.
either assumed control of APA’s defense or that APA was prejudiced by its actions.
one and two. We will consider the issues rather than remanding for review by the court of appeals. See Tex.
evidence supported the answer, and that Ulico’s actions were evidence that Ulico impliedly granted an ERP.
sole option, grant an Extended Reporting Period.
made by written endorsement to this policy signed by an authorized representative of [Ulico].
the system would not allow the entry of a claim that was outside the policy period.
We agree with Ulico. The policy expressly required written notice of a claim, which is what APA provided.
for which Ulico granted an ERP.
the verdict on that ground.
otherwise covered by the Policy, there was no consideration for the alleged agreement.
the APA for its attorney’s fees incurred in the Allen Action.
recovery of attorney’s fees, we conclude that APA’s contentions are without merit.
regarding the lack of an additional premium. See Tex. R. App. P. 33.1.
so as to constitute consideration.
costs, and there was no need for Ulico to obtain a jury finding of no consideration.
reversed. Judgment is rendered that APA take nothing.
 APA did not renew its liability policy with Ulico. It purchased a new policy from Legion Insurance Company.
 APA had a deductible that reduced its damages to less than the full defense costs.
present to the Supreme Court the error which renders the judgment incorrect”).
 However, we note in passing that, as discussed below, there was no evidence APA suffered detriment because of Ulico’s actions.
not address whether its reservation of rights was effective to preserve its right to deny coverage.
specifically stated that Ulico had agreed to reimburse APA for reasonable and necessary defense expenses.
whether Bowers had authority to execute such an endorsement.

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