Co. v. Ochoa, 19 S.W.3d 452 (Tex. 11 0 obj App.Dallas 2000, pet. Co. v. Bradleys Elec., Inc., 993 S.W.2d 673 (Tex. Burch involved a declaration that the insurer owed defense, and also owed indemnity for the insureds liability for his wifes torts. Co., 502 S.W.2d 232 (Tex. defense n. 1 : the act or action of defending see also self-defense. 4 suit would prejudice both Essex and SDT in their defenses against Zuniga's claims because it would (1) create a conflict of interest for Essex,3 and (2) necessarily require the admission of evidence of liability insurance in violation of Texas Rule of Evidence 411.4 Because those policy reasons for the "no direct action" rule apply regardless of whether the plaintiff is seeking See Employers Cas. PRAC. Co. v. Boll, 392 S.W.2d 158, 161 (Tex. <> App.Fort Worth 1998, no pet.) 1023, 1026 (N.D. Tex. Amended by Acts 1987, 70th Leg., ch. Coverage disputes under liability policies are well-suited for declaratory actions. In duty to defend cases, the issue of whether extrinsic evidence is even relevant would likely arise. 1995) (whether trademark violation occurred during policy period). Recent cases discussing the enforceability of policy buy-backs suggest there may be other exceptions in which a statutory insurance requirement renders a claimant an intended beneficiary. Tex. at 1280 (insurer not precluded from relitigating course and scope of employment). Ins. 1998, pet. App.Corpus Christi 1975, writ refd n.r.e.) Indemnity is based on the actual facts establishing liability in the underlying suit. Absent any indemnity obligation and the clear prejudice from late notice, the insurer commenced a declaratory judgment action seeking to recover the defense costs it incurred in defending the . LEXIS 8494 (Tex. Explanation of the Constitution - from the Congressional Research Service Cigna Lloyds Ins. <>>> 2d 719 (S.D. The right to award costs and fees is discretionary, not mandatory. . 925 S.W.2d at 714. ), Notes of Advisory Committee on Rules1937. CODE 37.001-.011. 1993). Co. v. Cowan, 945 S.W.2d 819 (Tex. In a number of instances, courts have concluded that an insurer is entitled to re-litigate issues. Under most liability policies, the claimants are not third-party beneficiaries and have no direct rights, and no cause of action, against the insurer until there has been a settlement, to which the insurer agrees, or a judgment against the insured. (b) The declaration may be either affirmative or negative in form and effect, and the declaration has the force and effect of a final judgment or decree. Previously, multiple New York courts at both the trial and Appellate Division levels aligned with Nevada and the other listed states holding that an insurance company may recoup defense costs paid on behalf of an insured when it is ultimately determined that there was no coverage in connection with the underlying action, provided that the insurer reserved its rights to seek such reimbursement. Co., 628 S.W.2d 184 (Tex. 2000). While some older cases find an insurer cannot re-litigate facts, if it has wrongfully refused to defend, recent cases have held that an insurer is not bound, in any circumstance, where the facts allegedly establishing coverage are not fully litigated. The insured was located in Hidalgo County, the car was purchased in Hidalgo County, and the salesman contacted the agent by phone, from Hidalgo County, to add the car to the policy. The court of appeals determined that the Uniform Declaratory Judgments Act can be used for this purpose and affirmed the trial court's judgment to the same effect. title to the propertyan essential element of an action to quiet titleand, in the court of appeals' view, the pleadings alleged "the wrong cause of action," the court concluded that the Brumleys' pleadings did not support the judgment.9 6 603 S.W.3d 449, 451 (Tex. A justiciable controversy requires a real and substantial controversy over tangibles interests, and not merely a theoretical dispute. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Co. v. Trejo, 39 F.3d 585 (5th Cir. In addition to the county of the defendants residence or principal office, venue is generally deemed proper in the county where the liability suit is pending, or judgment is entered. Co., 981 S.W.2d 889 (Tex. Co. v. Patriot Sec., Inc., 926 F.Supp. The claims involved crop-dusting, which allegedly damaged abutting fields because of herbicide drift. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. Ins. Proc. 37.005. A declaration does not prejudice the rights of a person not a party to the proceeding. Ins. The court, in the coverage action, concluded that there was a conflict of interest and a lack of privity, and therefore the insurer was not collaterally estopped from re-litigating the existence of false imprisonment. Group, Inc., 946 F.Supp. See London Mut. See United Services Life Ins. Co. v. WSG Investors, LLC, 09-cv-05237, 2012 WL 3150577 (E.D.N.Y. <> In re Houston Specialty Insurance Co., 569 S.W.3d 138 (Tex. The Federal act is broader in scope. (a) A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder. denied) (failure to satisfy burden is not finding of proof of opposite). See, e.g., Ohio Cas. Const. Still, there are often strategic benefits to filing early. See, e.g., Boring & Tunneling Co. v. Salazar, 782 S.W.2d 284, 289-90 (Tex. A separate issue exists, however, as to the facts and testimony relating to the liability event, and the evidence that has been accumulated or produced in the underlying case. Houston, TX 77056 1993). There is a contract, and a dispute over the parties rights and obligations under the contract. 2023 Thompson, Coe, Cousins & Irons, LLP. 169 (S.D.Tex., 1935); Borchard, Declaratory Judgments (1934), passim. In this holding, Nevada fell in line with other jurisdictions that also recognize an insurer's right to recoup defense costs where the insurer has specifically reserved such rights, including: California, Connecticut, Massachusetts and Minnesota. tort and environmental coverage. Specifically, when does filing a declaratory judgment action on coverage defenses make good business sense and what are the advantages, and disadvantages, of being the plaintiff. The amendment substitutes the present statutory reference. The award is subject to reversal only if it is arbitrary and unreasonable. Added by Acts 2007, 80th Leg., R.S., Ch. 1998). The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Id. Civ. Texas, Inc., 64 S.W.3d 497 (Tex. Id. Federal courts have typically held that declaratory relief is discretionary, and a federal court has broad authority to stay or dismiss an action seeking a declaratory judgment. As such, there should be no collateral estoppel of the insurer, based upon the outcome of the issue in the underlying case. Code, applied to breaches of an insurance agreement, this question was resolved by the Texas Supreme Court, on a certified question from the Fifth Circuit, in Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1 (Tex. endstream The issue becomes more murky when allegations triggering coverage are alleged, but are in conflict with the actual facts. Co. v. Tandy Corp., 986 F.2d 94, 95 (5th Cir. Pursuant to 37.003, a declaration may be either affirmative or negative in form and effect. The court remanded for consideration of these factors. See Tri-Coastal Contractors, Inc. v. Hartford Undwrs Ins. The court then noted the special concerns applicable in declaratory actions. 37.011. <> SHORT TITLE, CONSTRUCTION, INTERPRETATION. endobj 37.001. App.Fort Worth 1986, writ refd n.r.e.). See Great American Ins. Therefore, the claimants should not be necessary or indispensable parties, prior to the settlement or judgment. If the discovery is limited, or poorly conducted, or does not address the coverage issues, however, the insurer may seek additional testimony and evidence. Co. v. Truckin USA, 122 F.3d 270, 272-73 (5th Cir. Co. v. Louisiana Farm Bureau Fedn, Inc., 996 F.2d 774, 778 (5th Cir. The controversy is ripe, because the insurer is called upon to defend, and because the existence of coverage may impact the outcome of the suit. denied sub nom. Oftentimes, the insurer has no duty to indemnify. A common way of eliminating this uncertainty is with a declaratory judgment action, also called a declaration. Sec. June 15, 2007. Co. v. Ochoa, 19 S.W.3d 452 (Tex. However, each party must still plead for relief and carry its own burden of proof. For instance, when it is clear that a ruling on the merits of plaintiff's claims would . endobj Download PDF Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. Co. v. Grapevine Excavation, 241 F.3d 396 (5th Cir. App.Fort Worth 2000, no pet.). at 452. The insurer, Nautilus, agreed to defend the suit while also reserving its rights to disclaim coverage and obtain reimbursement of defense costs if it was determined that Nautilus did not owe a duty to defend. Finally, the Court stated that it strongly disagreed with the view that permitting recoupment would erode the duty to defend. 1996) (insurer not estopped from litigating employment issue). 1998) (holding that Texas Declaratory Judgment Act was not controlling, substantive law, and did not justify fee award to defendants). Co. v. Deering Mgmt. denied); cf. (because claimant could not bring suit, she had no right to intervene); see, e.g., Graciela v. Tagle, 946 S.W.2d 504 (Tex. 2003) (finding Texas allows only narrow exception); but see Gonzales v. American States Ins. App.Houston [1st Dist.] 1992), cert. 2002, no pet. The petitioner must have a practical interest in the declaration sought and all parties having an interest therein or adversely affected must be made parties or be cited. Texas Air Control Bd., 852 S.W.2d at 444. 1973) (court had no authority to order declaration against insurer in response to insureds motion for summary judgment on insurers claims); Indigo Oil, Inc. v. Wiser Oil Co., 1998 TEX. Co., 418 S.W.2d 712, 715-16 (Tex. Texas is not a direct action state, and a claimant typically has no claim against an insurer until a judgment is obtained. App.Houston [1st Dist.] App.Fort Worth 1973, writ refd n.r.e.). . Answer, Affirmative Defenses, and Counterclaim to the First Amended Complaint for Declaratory Judgment ("Complaint") filed by Hartford Fire Insurance Company ("Hartford"), . App.San Antonio 1998, pet. Co. v. Childress, 650 S.W.2d 770, 775-76 (Tex. Ins. Courts recognize that when there are conflicting positions on coverage, as when the insurer reserves rights, there is no privity between the insured and the insurer on issues relating to coverage, which are also at issue in the underlying case. Co. v. Port Auth. See Bernard v. Gulf Ins. <> Instead, the purpose of a declaratory judgment action is to determine the parties' responsibilities in relation to a particular dispute. App.Dallas 2001, no pet.) Created is remedy App.Corpus Christi 1997, no pet.) Insurer's right to assert other policy defenses . (not justiciable controversy); Foust v. Ranger Ins. Cf. Disclaimer. Co. v. Burch, 442 S.W.2d 331, 337 (Tex. DEFINITION. ^9@VXB-'C(SOZ#jGT"1kfWj7i,9^'EJ See, e.g., Ruth v. Imperial Ins. SECOND AFFIRMATIVE DEFENSE. 3.08(a), eff. A justiciable controversy may nonetheless exist where no other cause of action is available or has ripened. If a proceeding under this chapter involves the determination of an issue of fact, the issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending. App. See State Farm Fire & Cas. (c) The enumerations in Sections 37.004 and 37.005 do not limit or restrict the exercise of the general powers conferred in this section in any proceeding in which declaratory relief is sought and a judgment or decree will terminate the controversy or remove an uncertainty. Written instruments, including ordinances and statutes, may be construed before or after breach at the petition of a properly interested party, process being served on the private parties or public officials interested. 1965, writ refd n.r.e.) Sec. There are exceptions, however, (1) when conduct estops a party from asserting prior active jurisdiction; (2) where parties are lacking; or (3) where there is lack of intent to prosecute. 2001) (when lease obtained); Guaranty Natl Ins. (B) A contract may be construed either before or after there has been a breach. denied, 511 U.S. 1032 (1994). Sec. 305 (H.B. 1996); Williamson v. State Farm Lloyds, 76 S.W.3d 64 (Tex. 37.008 provides that aforementioned court may refuse to render a declaratory judgements if the judgment become nay terminate and uncertainty or controversy giving rise to the proceeding. Page 2 / 14Defendant-Counterclaimant's First Amended Answer and Counterclaims 5. denied). App.Amarillo 1976, writ refd n.r.e. Tex. Moreover, the Second Department noted that the policy at issue did not expressly provide the insurer with a right to recoup defense costs. Defense counsel may, nonetheless, have protected certain information from disclosure, for fear that it was effect coverage, and violate counsels own ethical obligations. Acts 1985, 69th Leg., ch. See, e.g., City of Galveston v. Giles, 902 S.W.2d 167 (Tex. Aug. 2, 2012). 7) whether the federal court is being called on to construe a state judicial decree involving the same parties and entered by the court before whom the parallel state suit between the same parties is pending. Co. v. Fraiman, 514 S.W.2d 343, 346 (Tex. Co., 767 F.Supp. If no facts within the scope of coverage are alleged, an insurer is not required to defend. Plaintiff's Complaint fails to state a cause of action. that AHCA Comply with Fla. Stat. App.Beaumont 1999, pet. App.Dallas 2001, pet. 9 0 obj Genl Agency v. Cooper, 952 S.W.2d 861 (Tex. Tex. dismd by agrmt.) County Mut. 2 and the commencement of foreclosure proceedings, into agreeing to convey her interest in the property to Mark in their divorce.1 Kyle sued Fidelity, its officers, and a related entity (collectively, Fidelity),2 as well as Mark,3 seeking forfeiture of principal and interest paid on the loan under Texas Constitution Article XVI, section 50(a)(6)(Q)(xi), a declaratory judgment that the deed of . R. CIV. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. endobj 959, Sec. 1965). In considering whether to afford a defense under a policy, insurers must also carefully review the relevant policy language and be aware of the potential limitations on the right to recoupment. Co., 975 S.W.2d 329 (Tex. Co., 95 S.W.3d 702 (Tex. Sept. 1, 1985. In a straight complaint allegation case, for instance, there should be extremely limited discovery, beyond verification of the pleadings and the policy. Courts have struggled with the issue of what can be resolved in the declaratory judgment action, when the issue determining coverage may also be material in the underlying case. defenses always be pled by motion. denied). Co., 61 F.3d 389 (5th Cir. Ins. Under federal law, the Declaratory Judgment Act, itself, does not authorize attorneys fees. Co. v. River Entertainment, 998 F.2d 311, 315 (5th Cir. The Murphys opposed Wells Fargo's motion, arguing, among other things, that Wells Fargo's claims should not be characterized as requesting declaratory relief. 1993) (Colorado River factors inapplicable in declaratory judgment action); Granite State Ins. Ins. Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. Co. v. Am. endobj Obviously, the nature of the coverage issue to be determined will also determine the scope of discovery. 1996). 1992); LaFarge Corp. v. Hartford Cas. C.M.W., 53 S.W.3d 877 (Tex. Corp. v. Vacuum Tanks, Inc., 975 F.2d 1130, 1133 (5th Cir. See, e.g., Commercial Metals Co. v. Balfour, Guthrie & Co., Ltd., 577 F.2d 264 (5th Cir. Co., 316 U.S. 491 (1942); Wilton, 515 U.S. 277. Federal: Declare Assess Act, 28 U.S.C. When to file is often determined by what is at issue. R. Civ. Declaratory judgment actions are oftentimes filed in federal court. Saint Paul, MN 55102 Clearly, the insurer should be entitled to discovery of anything that has been discovered in the underlying suit. The application must be by petition to a court having jurisdiction to grant the relief. When an issue has been litigated in the underlying case, when can it be re-litigated in the coverage dispute? 1787), Sec. App.Houston 1998, pet. A declaratory judgment must be based on an actual controversy, and cannot be merely advisory. One of the factors the courts will review is whether the declaratory action is filed in anticipation of a state court suit. P., specifically provides, with regard to joinder of third parties, that This rule shall not be applied, in tort cases, so as to permit the joinder of a liability or indemnity insurance company, unless such company is by statute or contract liable to the person injured or damaged. Most policies include a no action provision that provides that a third partys right of action against the insured does not arise until there is a settlement, to which the insurer has agreed, or a judgment against the insured. (c) A business described by Subsection (b)(1) is entitled to declaratory relief on the issue of whether the requirement of another state that the business collect and remit sales or use taxes to that state constitutes an undue burden on interstate commerce under Section 8, Article I, United States Constitution. He can be reached at estern@kdvlaw.com. 461 (1937); Nashville, Chattanooga & St. Louis Ry. On March 11, 2021, the Nevada Supreme Court, in a 4-3 decision, held in Nautilus Insurance Company v. Access Medical, LLC, 2021 WL 936076 (Nev. 2021) that an insurance company is entitled to reimbursement of defense costs where a determination is ultimately made that the insurer did not owe a duty to defend, and the insurer expressly reserved its right to seek recoupment. 8. App.Texarkana 1994, no writ) (possibility that liability triggering indemnity would be incurred was a feature hypothetical event, and court had no power to pass upon hypothetical or contingent situation); Fort Worth Lloyds v. Garza, 527 S.W.2d 195 (Tex. Civ. See, American Home Assur. 955 S.W.2d at 84 (construing Tex. 10, eff. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. denied); State Farm Lloyds v. While the law is less clear, Federal courts, applying Texas law, have reached a similar conclusion. Jul 20th, 2015 Collections and Foreign Judgments. Co. v. Patriot Sec., Inc., 926 F.Supp. App.Austin, Oct. 2, 2003, no pet. The existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate. Co., 975 S.W.2d 329, 332 n.1 (Tex. Exclusive news, data and analytics for financial market professionals. The landowner-appellant appealed a declaratory judgment excluding guests of his commercial lodge from freely using reserved lot areas on some property (essentially gutting the commercial. 9. 1995). Nevertheless, some courts have concluded that declaratory relief is inappropriate where another cause of action is fully mature and provides an appropriate remedy at law. The abundance of case law allowing extrinsic evidence, however, suggests that the exception will continue. App.Corpus Christi 1998), revd on other grounds, 995 S.W.2d 675 (Tex. App. <> Eric B. Stern is a partner and co-deputy chair of the Data Privacy & Cybersecurity Practice at Kaufman Dolowich & Voluck LLP and concentrates his practice in insurance coverage litigation. declaratory judgment action. Fla. Stat. See State Farm Mut. Costs and fees are not dependent upon the outcome, and can be awarded to either the prevailing or the non-prevailing party. APP. When declaratory relief will not be effective in settling the controversy, the court may decline to grant it. Tex. 1995). ); Rice v. Alamo Rent-A-Car, Inc., 987 S.W.2d 231 (Tex. A court may not, however, refuse to exercise jurisdiction on the basis of a whim or personal disinclination. See, e.g., St. Paul Ins. Wade, 827 S.W.2d at 451. 1989, no writ); In re Fontenot, 13 S.W.3d 111 (Tex. (no right to new trial because of amended petition where suit brought and determined based on prior petition). See Hartford Ins. While abstention doctrine is more frequently an issue in federal court, state courts can also abstain. Facts and Procedural History. I Id. Co., 387 S.W.2d 22, 25 (Tex. LEXIS 1736 (Tex. The existence or nonexistence of any right, duty, power, liability, privilege, disability, or immunity or of any fact upon which such legal relations depend, or of a status, may be declared. Since the duty to defend is based solely on the live pleadings, a declaratory judgment is arguably based only on the pleading in effect, and is not determinative as to any subsequent amended or supplemental pleading. 97 (E.D. aspects of insurance coverage including directors and officers liability, professional liability, ), the court held the county where the agent was located, the policy was sold, and the claim was reported, was not a proper venue. However, in American W. Home Ins. Co. v. Sassin, 894 F.Supp. 1995, no writ); Employers Cas. Texas Dept of Public Safety v. Moore, 985 S.W.2d 149, 153-54 (Tex. at 451-53. The Court also noted that where an insurer denies coverage and then loses a subsequent coverage dispute, it can be subject to "significant liability," creating a disincentive for the insurer to deny defense outright, and that equitable concerns support allowing recoupment. A declaration does not prejudice the rights of a person not a party to the proceeding. denied) (judgment of negligence in underlying case did not establish that negligent acts caused bodily injury, and did not preclude insurer from establishing intentional conduct); Deering Mgmt. 1995). The fact that a declaratory judgment may be granted whether or not further relief is or could be prayed indicates that declaratory relief is alternative or cumulative and not exclusive or extraordinary. (auto liability insurer seeking declaratory relief was not subject to cross-action by injured party, or consolidation of liability and coverage suit); see also Firemans Ins. 167, Sec. 1968); National Sav. Federal courts have broad discretion as to whether to retain jurisdiction or dismiss declaratory judgment actions. Texas law provides innocent owners and holders of a security interest in property with a statutory defense to civil forfeiture of their property or interest in the property. District courts have articulated several reasons for why mirror-image counterclaims should be dismissed. 37.006, TEX. In any proceeding under this chapter, the court may award costs and reasonable and necessary attorney's fees as are equitable and just. Id. Andrew A. Lipkowitz is an associate at Kaufman Dolowich & Voluck LLP and primarily focuses his practice in insurance coverage litigation and monitoring. This article will discuss some of the recent decisions illustrating the different views that Courts have taken with respect to this issue, as well as the implications for insurance companies that issue duty to defend policies. 651-389-5000, 10001 Reunion Place App.El Paso 2000, no pet. (c) This chapter shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it and to harmonize, as far as possible, with federal laws and regulations on the subject of declaratory judgments and decrees. App.San Antonio 1998, pet. Of N.Y. & N.J., 166 A.D.3d 464 (1st Dep't 2018); Max Specialty Ins. 830-252-5100. In a declaratory judgment action, neither party is seeking a judgment for money damages. Federal courts are especially reluctant to exercise jurisdiction if there is a parallel state court proceeding even if subsequently filed that includes all necessary parties and will resolve the issues. Filing 34 ANSWER to COMPLAINT for declaratory judgment, affirmative defenses and COUNTERCLAIM filed by Clemens Franek against Jay Franco & Sons, Inc. (jmp, ). P., also addresses declaratory judgments, by reference to 28 U.S.C. The policy provided limits of $100,000 per occurrence and $200,000 in the aggregate. 1978). 1968). Opinions expressed are those of the author. A future interest in a potential judgment has been held insufficient to allow intervention. Therefore, either diversity or federal question jurisdiction must still exist. (As amended Dec. 29, 1948, eff. Compare Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 57 S.Ct. Co. v. Griffin, 955 S.W.2d 81 (Tex. Judges have always been suspect of declaratory judgment actions and, more particularly, the "mirror image" case where the alleged wrongdoer takes on the role of the plaintiff. 1271 (N.D. Tex. COURT REFUSAL TO RENDER. In common law, a defendant may use defenses to prevent or limit liability.A defense can either allege a failure to state a claim, or affirm the existence of a claim and present additional reasons that prevent the plaintiff or prosecutor from prevailing on a cause of action, a demand for relief, or otherwise obtaining the result requested. action seeking a declaratory judgment." , See Wilton 515 U.S. at 288; Dizol, 133 F.3d at 1223, 1225 & n.5. See, e.g., Sylvester v. Watkins, 538 S.W.2d 827 (Tex. Ins. <> In St. Paul Ins. LEXIS 7088 (Tex. In Chiriboga v. State Farm Mut. See, e.g., Standard Fire Ins. See Natl Union Fire Ins. See McCarthy Bros. Co. v. Continental Lloyds, 7 S.W.3d 725 (Tex. Declaratory Judgment These rules govern the procedure for obtaining a declaratory judgment under 28 U.S.C. See, e.g., State Farm Lloyds v. App. Co. v. Cooper Mach. Ins. He concentrates his practice on all App.San Antonio 2019). 688, 699 (1936). Dallas, TX 75201 Unfortunately, while 38.001, et seq., may allow recovery of attorneys fees by the insured, in a proper case, it provides no basis for recovery of fees by an insurer. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. App.Texarkana 2003, pet. 65. See Firemens Ins. App.Fort Worth 1961, writ refd n.r.e.) Westport v. Atchley, Russell, Waldrop & Hlavinka, 267 F. Supp. endobj Co., 981 S.W.2d 861 (Tex. In fact, the Court held that the policy "did not apply" in the context of Nautilus' claim for reimbursement of defense costs, as it had already been determined that there was no duty to defend. See Bailey, 133 F.3d at 369 n.4; Travelers Ins. In older cases, courts allowed broad introduction of extrinsic evidence in a declaratory judgment context. The most common exception for extrinsic evidence is when the pleadings simply do not assert facts that would determine coverage. In the event of a legal controversy, both parties generally want to avoid any legal uncertainty and insecurity that could arise out of a dispute. 37.008 provides that the court may refuse to render a declaratory judgment if the judgment would not terminate the uncertainty or controversy giving rise to the proceeding. There are exceptions, of course. In Natl Union Fire Ins. K-yXHMKS mmgOT}|aMz0. On the other hand, where the insured seeks a declaration that the insurer owes indemnity, before resolution of the underlying case, the opinion may be considered advisory, and declaratory relief may, indeed, be premature. App.Austin 2003, no pet. In Gandy, the court broadened the scope of re-litigation, noting that in no event, however, is a judgment for plaintiff against defendant rendered without a fully adversarial trial, binding on defendants insurer . Co. v. Blevins, 741 S.W.2d 604, 606 (Tex. Group, Inc., 946 F.Supp. & REM. 1991), affd in part, 961 F.2d 213 (5th Cir. Sec. Under this rule, the insurers defense obligations are determined by the allegations of the pleadings and the language of the insurance policy, without regard to the actual facts. If any facts within the scope of coverage are determined, however, an insurer is required to defend. 466, 473, 80 L.Ed. & Liab. The Texas Supreme Court concluded that 38.006 allowed recovery of attorneys fees for breach of contract unless attorneys fees are otherwise available. The controversy must necessarily be of a justiciable nature, thus excluding an advisory decree upon a hypothetical state of facts. Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 325, 56 S.Ct. 2d 719, 725 (D. Minn. 2005) (applying Texas law); Forum Ins. 1983). Similarly, courts have held that an insurance company has no right to intervene in the liability action against the insured to seek a coverage determination. The Fifth Circuit overruled prior case law to conform with the Supreme Courts ruling. Co., 975 S.W.2d 329, 332 (Tex. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir. 1995); but cf. (A) A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract or franchise and obtain a declaration of rights, status, or other legal relations there under.