U.S. DISTRICT COURT CLARIFIES PREVIOUS OPINION DISMISSING THIRD-PARTY PLAINTIFFS’ COVERAGE SUIT FOR LACK OF STANDING
On March 12, 2020, in Blakeley Turner et. al. v The Cincinatti Ins. Co., No. 6-19-CV-00642-ADA, 2020 WL 1216419 (W.D. Texas, March 12, 2020, mem. op.), the United States District Court for the Western District of Texas concluded that the Plaintiffs, who obtained a default judgment against an insured, had no standing to bring suit to enforce coverage against the insurer because they were not the recipients of a valid assignment and the judgment upon which they relied was not the result of a fully adversarial trial. In coming to this conclusion, the court stated that the opinion in Great American Ins. Co. v. Hamel, 525 S.W.3d 655 (Tex. 2017) “expressed that a claimant against an insurer obtains standing to litigate a coverage trial through either a judgment resulting from a fully adversarial trial or a valid assignment.” Because of the lack of standing, the court dismissed the Plaintiffs’ claims.
Subsequently, the Plaintiffs’ filed a motion to alter judgment, arguing that the Hamel case does not stand for the proposition that a claimant must have a judgment resulting from a fully adversarial trial or a valid assignment and, therefore, the Western District erred in its interpretation of Hamel.
Last week, in Blakeley Turner et. al. v The Cincinatti Ins. Co., No. 6-19-CV-00642-ADA, 2020 WL 2850231 (W.D. Texas, June 2, 2020, mem. op.), the Western District clarified its March 12, 2020 opinion, stating that although the requirement that a claimant must have a judgment resulting from a fully adversarial trial or a valid assignment does not have any direct textual support within the Hamel opinion, the requirement is implicit within the Hamel opinion and supported by the cases cited in Hamel. As such, the Western District upheld its previous decision dismissing the Third-Party Plaintiffs’ claims against the insurer because their judgment was the result of a default judgment, not a fully adversarial trial.