Opinion ID: 7489
Heading Depth: 2
Heading Rank: 6

Heading: Award of Attorneys' Fees in the Present Action

Text: 56 Lafarge also sought recovery of its attorneys' fees expended in pursuing the instant litigation against Hartford for breach of the insurance contract. Under Texas law, [a] person may recover reasonable attorney's fees from an individual or a corporation, in addition to the amount of a valid claim and costs, if the claim is for ... an oral or written contract. Tex.Civ.Prac. & Rem.Code Sec. 38.001(8). However, [section 38.001] does not apply to a contract issued by an insurer that is subject to the provisions of ... Article 21.21, Insurance Code ... Tex.Civ.Prac. & Rem.Code Sec. 38.006(4). The key question, then, is what it means to be subject to article 21.21 of the Texas Insurance Code. Hartford claims that any entity that could potentially face liability under article 21.21 is exempt from an award of attorneys' fees. Lafarge responds that an insurer is only subject to article 21.21 if it has been successfully sued under that article; because Lafarge's Texas Insurance Code claims were dismissed on summary judgment, Lafarge argues, Hartford was not subject to article 21.21 and Lafarge should be allowed to recover its attorneys' fees. 23 57 After an extensive discussion of the somewhat conflicted interpretations of Texas law on this subject, the district court determined that Lafarge was entitled to its reasonable attorneys' fees. In reaching this conclusion, the district court determined that it was bound to follow the opinion of the highest Texas court that has spoken on the matter. It therefore looked to the Texas Supreme Court's decision in Barnett v. Aetna Life Insurance Co., 723 S.W.2d 663 (Tex.1987), and determined that the court, by reference to lower court decisions, at least implicitly had adopted an interpretation allowing an award of attorneys' fees in a breach of duty to defend suit. See id. at 667. In so doing, however, the district court determined that this Court's decision in Bituminous Casualty Corp. v. Vacuum Tanks, Inc., 975 F.2d 1130 (5th Cir.1992), incorrectly interpreted Texas law. 58 In Bituminous Casualty, we recognized that the Texas appellate courts had allowed parties to recover attorneys' fees in insurance contract cases both before and after the Texas Supreme Court's decision in Dairyland County Mutual Insurance Co. of Texas v. Childress, 650 S.W.2d 770 (Tex.1983). Bituminous Casualty, 975 F.2d at 1133 & n. 4. Nevertheless, we noted that Dairyland itself precluded an award of attorneys' fees in these circumstances: Art. 2226 [the predecessor to section 38.006] does not apply to contracts of certain insurors who are identified in those sections of the Insurance Code enumerated in Art. 2226. Id. at 1133 (quoting Dairyland, 650 S.W.2d at 775) (footnote and internal quotation marks omitted). We therefore concluded that [t]his language implies that an insurer who falls within the provisions of section 38.006 is exempt from the payment of attorney's fees and that only those insurers who do not qualify for the exemption are subject to the payment of attorney's fees. Id. 59 We recognize that, after Dairyland, the Texas Supreme Court subsequently allowed an insured to recover attorneys' fees in a breach of contract action. Barnett, 723 S.W.2d at 667. However, it does not appear from that opinion that the insurer ever argued that section 38.006 precluded an award of such fees against it; indeed, the parties had previously stipulated to a reasonable fee for prosecuting the breach of contract action. Id. It is therefore not clear that Barnett can be construed as implicitly overruling Dairyland's interpretation of section 38.006. We acknowledge too, as we did in Bituminous Casualty itself, that despite Dairyland and our interpretation of it in Bituminous Casualty, Texas appellate courts continue to award attorneys' fees to insureds who successfully prosecute breach of contract suits against their insurers. Indeed, decisions of this Court, both before and after Bituminous Casualty, have assumed that awards of attorneys' fees to successful litigants are appropriate in these circumstances. See Gulf Chemical & Metallurgical Corp. v. Associated Metals & Minerals Corp., 1 F.3d 365, 373 (5th Cir.1993); Enserch Corp. v. Shand Morahan & Co., 952 F.2d 1485, 1500-01 (5th Cir.1992). 60 However, it is well-settled in this Circuit that one panel may not overrule the decision, right or wrong, of a prior panel, in the absence of an en banc reconsideration or superseding decision of the Supreme Court. Bertram v. Freeport McMoran, Inc., 35 F.3d 1008, 1016-17 (5th Cir.1994) (citation and internal quotation marks omitted). Moreover, a prior panel decision should be followed by other panels without regard to any alleged existing confusion in state law, absent a subsequent state court decision or statutory amendment which makes this Court's [prior] decision clearly wrong. Broussard v. Southern Pacific Transportation Co., 665 F.2d 1387, 1389 (5th Cir.1982) (en banc) (citation and internal quotation marks omitted; emphasis added). Thus, although numerous Texas appellate court decisions have assumed that attorneys' fees are recoverable in cases such as this, 24 the parties have not cited any post-Bituminous Casualty case from a Texas court, and we have found none, that directly confronts the issue we clearly resolved in Bituminous Casualty. 61 In these circumstances, we must follow the holding of Bituminous Casualty. The award of attorneys' fees to Lafarge for the prosecution of this suit is reversed.