In Re Westport Insurance Corporation v. the State of Texas ( 2024 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
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NO. 09-24-00127-CV
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IN RE WESTPORT INSURANCE CORPORATION
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Original Proceeding
1st District Court of Newton County, Texas
Trial Cause No. CV22-15083
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MEMORANDUM OPINION
Relator Westport Insurance Corporation (“Westport”) filed a petition for a
writ of mandamus to compel the trial court to enforce a forum selection provision in
an insurance policy. We temporarily stayed all proceedings in Trial Cause Number
CV22-15083 and requested a response from the Real Party In Interest, Burkeville
Independent School District (“Burkeville”). Having considered the parties’
arguments and authorities, we deny the petition for a writ of mandamus.
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Background
Burkeville purchased an insurance policy from a property and casualty fund
risk pool, Risk Management Cooperative of Texas, formerly known as Texas Rural
Education Association Risk Management Cooperative (“RMC”), for property
damage coverage under TREA RMC Policy No. 176901 (“the Policy”). Several
Insurers, including Westport, National Fire & Marine Insurance Company,
Ironshore Specialty Insurance Company, Colony Insurance Company, Westchester
Surplus Lines Insurance Company, and Starr Specialty Lines Insurance Company,
participated and agreed to provide coverage for property damage for the policy
period effective September 1, 2019, through August 31, 2020.
After sustaining property damage during Hurricane Laura in August 2020,
Burkeville filed a lawsuit against RMC, the Insurers, a third-party adjusting
company, Sedgwick Claims Management Services, Inc., (“Sedgwick”) and adjuster
John E. Green (“Green”). Burkeville alleged the replacement cost of the covered
damage to Burkeville was $2,349,846.61, and that rather than pay this amount or
provide explanations for their refusal to pay, the defendants hired new adjusters,
Sedgwick and Green, who failed to conduct a reasonable investigation and failed to
provide a basis for the decision to not issue the full proceeds owed under the Policy.
Burkeville asserted claims against Westport and the other Insurers for breach of
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contract, and for noncompliance with the Insurance Code provisions regarding
Unfair Settlement Practices and Prompt Payment of Claims.
Westport filed a motion to dismiss Burkeville’s petition about six weeks after
the lawsuit commenced with the filing of Burkeville’s original petition. In a
memorandum of law filed in support of its motion on March 6, 2023, Westport
argued Burkeville filed the lawsuit in Newton County in violation of the Policy’s
provision placing exclusive jurisdiction for the parties’ disputes in the courts of the
State of New York. Burkeville filed a response on August 7, 2023. On September
28, 2023, Westport reset the videoconference hearing date to November 29, 2023,
for reasons that are not stated on the record. The trial court held a hearing on
Westport’s motion on November 29, 2023, more than 10 months after Westport filed
the motion to dismiss. The trial court signed an order denying the motion on
December 1, 2023. Westport filed its mandamus petition more than four months after
the trial court signed the written order denying Westport’s motion to dismiss.
Delay in Seeking Relief
Burkeville argues that we should deny Westport’s mandamus petition because
Westport failed to diligently seek enforcement of the Policy’s forum selection
provisions. Westport counters that it filed a motion to dismiss promptly and
attributes the delay to scheduling conflicts and unavailable dates due to the trial
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court’s busy calendar. Westport provides no citation to the mandamus record where
it made any attempt to secure prompt consideration of its motion.
Equitable principles largely control the availability of mandamus relief.
Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex.1993) (orig. proceeding).
An appellate court may deny mandamus relief if the relator delayed seeking the relief
sought in a mandamus petition without justification. See id. In Rivercenter, the
relator waited over four months after the opposing party filed a jury demand before
asserting its rights to the contract’s jury waiver provisions in a commercial lease
dispute. Id. The record revealed no justification for the delay. Id. The Supreme Court
held the relator failed to show diligent pursuit of any right to a non-jury trial. Id.The delay must be attributable to the relator. The relator in American Airlines,
received notice of the order four months after it issued, and the preconditions for the
apex deposition had not occurred at the time the Supreme Court considered the
mandamus petition. In re Am. Airlines, Inc., 634 S.W.3d 38, 43 (Tex. 2021) (orig.
proceeding). In General Electric Capital, the relator’s delay in seeking mandamus
relief was attributable to the failure to give notice of the order by the real party in
interest. In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 315 (Tex. 2006) (orig.
proceeding).
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Here, Westport suggests the delay in obtaining a ruling by the trial court is
attributable to the trial court’s busy schedule, but the mandamus record is silent
regarding the reason for the delay.
“[D]elay alone does not generally establish waiver.” In re Sw. Bell Tel. Co.,
L.P., 226 S.W.3d 400, 405 (Tex. 2007) (orig. proceeding) (citation omitted). For
instance, the relator in International Profit Associates “could have been more
diligent in its efforts to have a corrected order entered,” but the trial court and the
real party in interest were to blame for the error and delays that hindered the relator’s
ability to seek mandamus relief. Int’l Profit Assocs., Inc., 274 S.W.3d 672, 676 (Tex.
2009) (orig. proceeding). The appellate court will not deny mandamus relief for an
unexcused delay absent some prejudice to the real party in interest. For instance, in
Oceanografia, the record did not show prejudice where the real parties in interest
incurred litigation expenses after the forum non conveniens motions were initially
denied but their efforts could be used in the convenient forum. In re Oceanografia,
S.A. de C.V., 494 S.W.3d 728, 731 (Tex. 2016) (orig. proceeding).
Westport suggests that Burkeville used the extra time to receive discovery that
“will undoubtedly be useful in any subsequent New York litigation Burkeville
chooses to pursue.” But, Burkeville explains that it proceeded with the
understanding that its claims will be resolved in Newton County under Texas law
and developed its legal theories accordingly.
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We conclude that Westport has not shown diligent pursuit of its rights under
the contractual forum selection clause, and that Burkeville has demonstrated
prejudice from Westport’s unexcused delay. Accordingly, we lift our stay order of
April 5, 2024, and deny the petition for a writ of mandamus.
PETITION DENIED.
PER CURIAM
Submitted on May 6, 2024
Opinion Delivered October 24, 2024
Before Golemon, C.J., Johnson and Wright, JJ.
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