This post finishes my coverage of today’s order list. The first part of the coverage — including three other decisions and the three new cases set for argument — can be found in the preceding post.
Today’s fourth, fifth, and sixth decisions
The first two are certified questions from the Fifth Circuit involving questions of Texas insurance law.
Fairfield Insurance Co. v. Stephens Martin Paving, L.P., No. 04-0728. The Justices in this case agree about the substance of their answer to the certified question. But they divide into three camps about how broad a response the Court should give.
First, the easy part: All nine Justices agree that Texas public policy does not preclude this liability insurance provider from indemnifying an award for punitive damages based on gross negligence. The Court concluded that the Texas statutes governing the question do not prevent such indemnification agreements.
The disagreement begins only after that work is done. Although that statutory analysis answered the Fifth Circuit’s question as it applied to the dispute in the pending case, the opinion of the Court (written by Justice Wainwright) provided additional analysis in a Part III titled “Public Policy Considerations.” The Court began by explaining that this part of the opinion was not strictly necessary to the opinion (“Although the Legislatureâ€™s expressed direction ends our inquiry in the present case…”) but that a fuller description would help provide guidance because of “the import of this issue.” For that reason, the Court “discuss[ed] some of the considerations relevant to determining whether Texas public policy prohibits insurance coverage of exemplary damages in other contexts in the absence of a clear legislative policy decision.”
Meanwhile, four Justices, in an opinion authored by Justice Hecht, concurred to add additional analysis — “The Court provides some insight into the relevant considerations, but I would add to them and describe in more detail the way they should be analyzed.”
Justice Johnson, by contrast, did not join Part III of the majority opinion and instead wrote a separate concurrence to explain why. In his view,
I consider part III of the opinion to go further than necessary in responding to the certified question presented even in light of Texas Constitution article V, section 3-c. Accordingly, I do not join part III and express neither agreement nor disagreement with its substance.
If the majority opinion’s characterization of Part III is taken at face value — that it is unnecessary to “our inquiry in the present case” and is instead responsive to “the Fifth Circuit[‘s] … broad inquiry about Texas public policy” about which the Court “hesitate[d] to opine” without having future facts or policy language to examine — it may be interesting to see if future decisions of the Texas Supreme Court treat Part III of this opinion as binding precedent or as helpful dicta. That uncertainty is not to downplay the value of the majority opinion and Justice Hecht’s concurrence for litigants curious how these Justices approach these public-policy questions. But there is some force to Justice Johnson’s point in concurrence. If the Court later treats Part III as binding precedent, that itself could provide guidance to litigants (and perhaps to the Fifth Circuit) about the scope of questions that can be certified to the Texas Supreme Court.
National Union Fire Insurance Co. v. Crocker, No. 06-0868.
The Texas Supreme Court answered two questions that had been certified by the Fifth Circuit, concluding that (1) Texas law does not impose an extra-contractual duty on an insurer to notify a possible additional insured that it had coverage and (2) that, under Texas law, an insurer’s actual knowledge that a suit had been filed against an additional insured does not conclusively establish the absence of prejudice to the insurer from the insured’s failure to formally request a defense.
With regard to that first question, the Court answered that Texas law did not impose such a duty beyond the contract. Instead, any duty falling on the insurer is not triggered until the insured requests a defense.
With regard to the second question — which asks about whether an insurer can claim be prejudiced by the failure of an insured to give such notice when the insurer has independent, actual knowledge of the underlying suit — the Court distinguished its recent decision in PAJ v. Hanover Insurance Co. (covered here — and to which the author of today’s opinion dissented) by explaining that, “[i]n the pending case, … the additional insured’s notice was not merely late” but had never been given at all.
The Court went on to explain why an insurer might justifiably believe that the insured’s failure to provide notice might mean that the insured did not want an insurer-provided defense:
[a]s we have said, the requirement that an additional insured provide notice that it has been served with process is driven by a purpose distinct from the purpose underlying the requirement for notice of a claim or occurrence. Notice of service of process lets the insurer know that the insured is subject to default and expects the insurer to interpose a defense. An insurer cannot necessarily assume that an additional insured who has been served but has not given notice to the insurer is looking to the insurer to provide a defense. Potential insureds, for a variety of reasons, might well opt against seeking a defense from an insurer. For example, an additional insured may opt against invoking coverage because it wants to hire its own counsel and control its own defense. Indeed, Emeritusâ€™s counsel believed that Morris had done just that in this case. Counsel for Emeritus testified that he had asked Morris before his deposition if he could speak to him and Morris â€œrefused on the basis that he was waiting for a call from his attorney. [Emeritusâ€™s counsel] assumed that [Morris] had an attorney and did not want to talk to [Emeritusâ€™s counsel] on that basis.â€
Justice Willett delivered the opinion of the Court.
The sixth decision was the day’s only per curiam decision.
Chau v. Riddle, No. 07-0035. With a per curiam opinion, the Court reverses a summary judgment in favor of a doctor who had invoked Texas’s “good samaritan” statute and remands the case to the court of appeals to consider the other issues raised in the case.
The doctor (RIddle) was the on-call anesthesiologist for the labor and delivery suites and, while on shift, administered anesthesia to Chau during her emergency cesarean section. One of Chau’s twins was born not breathing; Riddle was asked to, and did, intubate, and then immediately left the area. When the neonatologist arrived, it was discovered that the intubation had gone down the infant’s esophagus instead of his trachea.
The doctor invoked Texas’s “good samaritan” statute, which shields medical providers from liability in certain circumstances in which the care goes beyond their normal duties. The court of appeals affirmed a summary judgment on his behalf, citing that statute.
The Texas Supreme Court reversed, holding that there was a fact question as to whether this doctor was acting within his duties and thus was not shielded by this statute. For that reason, summary judgment on that defense was inappropriate:
Our application of the statute in this case is consistent with the legislative purpose behind extending the Good Samaritan defense to medical professionals in hospital settings. The statute is intended to increase the incentives for physicians to respond voluntarily to medical emergencies, even if they occur in a hospital. McIntyre, 109 S.W.3d at 745. The exclusions built into the statute ensure that medical professionals are only entitled to the defense if their actions are truly voluntary, not simply part of the professionalâ€™s ordinary duties. See Tex. Civ. Prac. & Rem. Code §74.001(b)–(c). As such, this case can be distinguished from McIntyre, where we upheld the doctorâ€™s assertion of the Good Samaritan defense. There, Douglas McIntyre, an obstetrician, was in the hospital visiting one of his patients when he responded to a page over the intercom requesting that a doctor immediately assist with Debra Ramirezâ€™s delivery. Unlike in this case, McIntyre was not part of Ramirezâ€™s labor and delivery team, was not on-call, and was not expected to respond to such an emergency. Instead, he was going about his scheduled appointments when he voluntarily came to another patientâ€™s aid. McIntyre, 109 S.W.3d at 743, 749. In contrast, there is evidence here that it was part of Riddleâ€™s job as the anesthesiologist in the delivery room to intubate a newborn if the circumstances required.
Given the legislative purpose behind the Good Samaritan defense and the fact that Riddle was part of the labor and delivery team, we cannot agree with the court of appealsâ€™ conclusion that Riddle established his entitlement to the defense as a matter of law.
The Texas Supreme Court did not resolve the alternate grounds advanced by the doctor for affirming his favorable summary judgment. Those issues were instead remanded to the court of appeals.