USA – TEXAS Trends and Developments Contributed by: Stephen Melendi, Aaron Mitchell, Lisa Songy and Matt Rigney, Tollefson Bradley Mitchell & Melendi, LLP
Tollefson Bradley Mitchell & Melendi, LLP 2811 McKinney Ave, Suite 250 Dallas Texas 75204 USA
Tel: +1 214 665 0100 Fax: +1 214 665 0199 Email: SheriO@tbmmlaw.com Web: www.tbmmlaw.com
Texas State and Federal Courts Continue Trend of Denying Declaratory Relief to Insurers Based on Non-Justiciability Grounds Under Texas law, whether an insurer is under a duty to defend its insured in pending litigation is universally held a present controversy that is ripe and justiciable when the liability lawsuit against the insured is filed. More often than not, however, whether an insurer must indemnify its insured in connection with claims assert- ed against it by a third party is a question that cannot be resolved until the liability lawsuit is concluded by judgment or settlement. An exception to this rule of non-justiciability of the indemnity obligation is when the same reasons an insurer has no duty to defend the insured also mean that there is no coverage under a liability policy. In these instances, a court can decide that an insurer has no duty to defend or to indemnify the insured even before the pending litigation is over ( Farmers Tex. Cnty. Mut. Ins. Co. v Griffin , 955 S.W.2d 81, 84 (Tex. 1997)) (the “ Griffin exception ”). Inapplicability of the Griffin exception used to deny relief – even to excess insurers In recent years, however, both state and federal courts have cited the inapplicability of the Griffin exception as a basis for denying declaratory relief to insurers in situations where a declaration of the parties’ rights and responsibilities under a liability policy prior to the conclusion of the pending underlying litigation would serve a useful purpose by resolving uncertainty and clarifying the parties’ positions. This trend suggests that it will be more difficult in the future for insurers with fact scenarios that do not match up with Griffin
to get clarification and guidance from courts applying Texas law. Such insurers will be faced with having to respond to settlement demands under circumstances where uncertainty reigns and where guessing wrong may present excess exposure. The most recent example of a court citing the inappli- cability of the Griffin exception as a basis for denying declaratory relief is Century Sur. Co. v RTI Services, LLC , 2020 WL 2851874 (5th Cir. Oct. 8, 2025), in which the Fifth Circuit Court of Appeals, in a brief per curiam opinion, held that the issue of whether an excess car- rier owed a duty to indemnify an insured that did not give prompt notice of an underlying lawsuit was not justiciable. The insured was being defended in the underlying litigation by the primary carrier. The excess insurer’s policy had a provision requiring the insured to furnish the excess carrier with notice of a suit within 14 days after notifying the underlying insurer. The excess insurer brought a declaratory judgment action seek- ing a determination that it had no duty to indemnify the insured because the 14-day notice requirement was a pre-condition to coverage under the terms of the policy. The Fifth Circuit affirmed the district court’s decision and noted that the underlying liability lawsuit was still pending with no judgment entered, and the excess insurer had no duty to pay until the underlying insur- ance was exhausted. Accordingly, the trial court’s conclusion that the matter was not ripe for adjudica- tion was correct. However, the court also cited the Griffin exception, and stated that the only way the
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