Declaratory Judgments For Insurance Cases

Weatherford insurance lawyers and those in Aledo, Azle, Springtown, Hudson Oaks, Cool, Millsap, Brock, and other places in Parker County need to have a good understanding of declaratory judgment actions.
The Austin Court of Appeals issued an opinion in 1998, that was a declaratory judgment action. The style of the case is, Calderon v. Mid-Century Insurance Company of Texas.
Here is the relevant information:
While driving a car owned by Mientus, around a parking lot, Calderon hit a curb, a car, and Nicky Ornelas, who was standing next to another car. Ornelas sustained injuries and filed a lawsuit. Mientus’ insurance company, State Farm Mutual Insurance and the Calderons’ insurance company, brought suit against the Calderons and others seeking a declaratory judgment that neither carrier had a duty to indemnify the Calderons in the underlying lawsuit. Both carriers filed Motions for Summary Judgment, which were granted. The Calderons objected that the trial court considered evidence outside the pleadings in the underlying case to determine that Calderon drove the car involved in the accident without a reasonable belief that she was entitled to do so and, therefore, was not covered. Calderon appealed.
This appeals court reversed and rendered, saying that the trial court was not entitled to rely upon evidence that was extrinsic to the pleadings in making its determination of the duty to defend and indemnify. The underlying lawsuit pleadings alleged that Calderon had permission to drive the car at the time of the accident. Under the Mid-Century policy, Mid-Century must defend suits arising from bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident. The policy excludes from coverage any person using a vehicle without reasonable belief that the person is entitled to do so. Mid-Century argued that the trial court could consider extrinsic evidence in deciding its duty to defend. Mid-Century argued and contended that according to the extrinsic evidence, Caldron did not have permission to drive. Therefore, the policy would expressly exclude coverage. The Court of Appeals reviewed other decisions discussing this issue. It concluded that the cases were distinguishable. The Court held that the eight corners rule applies in citing Mid-Century’s duty to defend and extrinsic evidence cannot be considered. In the underlying petition, Caldron allegedly had permission to drive the car. Taken as true, the allegations negates the exclusionary provision cited by Mid-Century. Therefore, the underlying petition alleges facts within the scope of coverage and Mid-Century has a duty to defend the Calderons. With regard to the duty to indemnify, a determination at this time is premature.
These declaratory judgment actions are commonly used by the insurance companies to keep from paying claims. When it happens, an experienced Insurance Lawyer must be consulted immediately.