Texas Appellate Lawyer & Attorney : D. Todd Smith Law Firm : Appeals, Sanctions, Summary Judgment : Austin, Texas

After last week's barrage (from which I'm not the only one still recovering), the Texas Supreme Court issued just two decisions with this week's orders.

In Ansell Healthcare Products, Inc. v. Owens & Minor, Inc. (06-0386) (per curiam), the Court followed last week's decision involving the same parties and issues, Owens & Minor, Inc. v. Ansell Healthcare Products, Inc. (No. 06-0322).  There, the Court held that, under Section 82.002 of the Civil Practice and Remedies Code, manufacturers must indemnify an "innocent seller" only for the portion of the defense associated with the seller's own products.  Because the court of appeals' decision conflicted with that rule, the Court reversed and remanded to the trial court for further proceedings.

In Texas Mutual Insurance Co. v. Ledbetter (No. 06-0814), the Court concluded that an insurance carrier should have been allowed to intervene and assert its statutory subrogation claim to the "first money" paid out in a court-approved wrongful-death settlement.  Although the plaintiffs had an absolute right to nonsuit their own claims, the carrier's intervention was a pending claim for affirmative relief that could not be prejudiced by a nonsuit.  The Court affirmed the court of appeals' judgment reinstating the intervention, but otherwise reversed and remanded the case to the trial court to sort out the details.

In other noteworthy developments, the Court granted rehearing in Entergy Gulf States, Inc. v. Summers (No. 05-0272), a controversial decision publicly rebuked by legislators.  No date has been set for oral argument.

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The Texas Supreme Court issued one opinion with this week's orders.  In El Paso Hospital District v. Texas Health & Human Services Commission (No. 05-0372), the Court granted the District's motion for rehearing, withdrew the opinion issued on August 31, 2007, and substituted another in its place.

In both instances, the Court held that HHSC's February 28 cutoff for gathering data for Medicaid patients was an agency rule and, because HHSC did not follow proper rule-making procedures, declared the rule invalid.  Originally, the Court "remanded the rule to [HHSC ] for further action."  But the Court acted more decisively in the opinion on rehearing,"revers[ing] the court of appeals' judgment and render[ing] judgment declaring the rule invalid and enjoining its enforcement."

In light of its new disposition, the Court remanded the case to the trial court for further proceedings, specifically a review of individual claims data excluded by the February 28 cutoff.

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With today's orders, the Texas Supreme Court issued a new opinion in Excess Underwriters at Lloyd's, London v. Frank's Casing Crew & Rental Tools, Inc. (No. 02-0730), possibly the oldest case on the Court's docket.  The Court originally decided the case in May 2005, but granted respondent's motion for rehearing in January 2006 and heard re-argument a month later.

In its original opinion (authored by then-Justice Owen, joined by Chief Justice Jefferson and Justices Hecht, Medina, and Green) the Court held that excess insurance carriers who correctly disputed coverage, but nevertheless settled third-party claims against their insured, were entitled to recoup the settlement payments from their insured.  The new opinion (authored by Justice O'Neill, joined by Chief Justice Jefferson and Justices Medina, Johnson, and Willett) does an about-face and holds that no reimbursement obligation is implied when the policy involves excess coverage, the insurer has no duty to defend under the policy, and the insured acknowledges that the claimant's settlement offer is reasonable and demands that the insurer accepts it.

Justice Hecht (joined by Justice Green) and Justice Wainwright each delivered dissenting opinions.  Justice Brister did not participate in the decision.

Expect considerable media attention to this case. It may receive more coverage than any other decision the Court makes this year.

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