TEXAS COURT UPHOLDS FORUM SELECTION CLAUSE IN INSURANCE POLICY: THIS MORNING, in a case of first impression, the Texas Supreme Court upheld an insurance company’s right to select the forum to resolve coverage disputes. The policy at issue contained a clause that all coverage litigation must be brought in New York and that New York law applied. The insured brought suit in Hidalgo County, Texas, alleging that the insurance company owed it a duty to defend. The insurance company moved to dismiss arguing that pursuant to the insurance policy the coverage suit could only be maintained in New York. The lower courts sided with the insured, but the Texas Supreme Court reversed and upheld the forum selection clause. The court said mere inconvenience or extra expense would not invalidate the clause. Forum selection clauses will be upheld unless the insured can show that enforcement of the clause would essentially deprive it of its “day in court.” The court said the insured failed to discharge this “heavy burden.” In re AIU Ins. Co, (Tex.2004).
TEXAS COURT UPHOLDS CONTRACT WHICH WAIVES TRIAL BY JURY: Also this morning, the Texas Supreme Court upheld a provision in a lease that stated the parties agreed to waive trial by jury and try their case only before a judge in the event of litigation between them. The lower courts refused to enforce this provision. The Supremes reversed, holding that the waiver of a jury trial was not nearly as onerous as arbitration. The court reasoned that it had historically enforced arbitration clauses which are more onerous than this clause because in arbitration the parties not only waive a trial by jury but also waive their right to appeal. In re Prudential Ins Co (Tex 2004).
TEXAS “LAWYERS” BILL FOR SLEEPING ON THE JOB: LAST WEEK, a Texas appellate court chastised six Texas “lawyers” who served as court appointed guardians ad litem for minor children in a personal injury suit and reversed the trial court’s judgment which awarded them a total of $397,000 in attorneys’ fees. In a legal maneuver that would shock even Kobe Bryant, the six had charged fees for such as things as billing for sleeping during an overnight trip, billing more than 50 hours in a single day, billing nine hours for making travel arrangements and billing 50 hours for reviewing deposition notices. When one of these “lawyers” was asked why she billed for sleeping, the sleeping lawyer testified that the overnight trip prevented her from tucking her children in bed that night. [By the way, we are not making this up.] A concurring judge lambasted the “lawyers” even further and called for the court to report this six pack of “lawyers” to the State Bar Grievance Committee for discipline. AMEN! Goodyear v. Gamez (Tex. 2004).
WE WON’T BE SLEEPING AT OUR WIDE-AWAKE FULL DAY NINTH ANNUAL ULTIMATE CLAIMS HANDLING SEMINAR ON OCTOBER 8 IN DALLAS, TEXAS. Lunch and a cocktail reception are provided. Registration materials are available on our website at www.chmc-law.com.