Opinion filed July 19, 2018




                                      In The


        Eleventh Court of Appeals
                                   __________

                              No. 11-16-00183-CV
                                  __________

                       RANDY DURHAM, Appellant
                                 V.
                     HALLMARK COUNTY MUTUAL
                     INSURANCE COMPANY, Appellee

                     On Appeal from the 358th District Court
                              Ector County, Texas
                       Trial Court Cause No. D-137,194-A


                      MEMORANDUM OPINION
       This is an appeal from a judgment in which the trial court granted Appellee’s
combined motion to dismiss for lack of jurisdiction and motion for summary
judgment. We affirm.
       Appellant originally sued Bobby Burl Straley; L&L Trucking; and Larry
Eilers, individually and d/b/a L&L Trucking, after Appellant was injured in a vehicle
accident. It was alleged that Straley was the driver of the truck that was involved in
the accident; that L&L Trucking owned the truck; and that Eilers, individually and
d/b/a L&L Trucking, was the owner of the trucking company. In his first amended
petition, Appellant added Hallmark County Mutual Insurance Company, the
company that insured “Larry Eilers DBA L&L Trucking Co.,” as a party to the suit.
Appellant sought a declaratory judgment that Appellee owed its insured a duty to
defend. Appellant also sought a declaratory judgment that the incident was “covered
by the policy [written by Appellee] and not subject to any exclusions.”
      Appellee filed an answer in which it denied that Appellant was an insured or
third-party beneficiary under the policy or was a judgment creditor of the insured.
Appellee then filed a single motion denominated as “Motion for Summary Judgment
and Motion to Dismiss for Lack of Jurisdiction.” This motion rested on several
grounds: first, that Appellant was not a named or additional insured; second, that
Appellant was not an intended third-party beneficiary; and third, that Texas is not a
“direct action” state and, therefore, that Appellant could not sue Appellee until he
procured a judgment against the Appellee’s insured. The trial court granted both
parts of the motion for summary judgment and the plea to the jurisdiction; it severed
and dismissed Appellee from the primary suit, and Appellant’s claims against
Appellee became final and appealable.
      Whether a court has subject-matter jurisdiction is a question of law and is
reviewed de novo. Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849,
855 (Tex. 2002). We note that a review of a plea to the jurisdiction challenging the
existence of jurisdictional facts mirrors that of a motion for summary judgment. Tex.
Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex. 2002).
      In his first issue, Appellant contends that the trial court erred when it granted
summary judgment in favor of Appellee, because there existed a question of material
fact as to whether Appellee had a duty to defend its insured. Appellant’s first issue
requires that this court first decide a preliminary issue: whether the trial court could


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issue a declaratory judgment regarding Appellee’s duty to defend before the insured
was found liable as a result of the accident.
      Appellee argues that Appellant cannot sue it unless Appellant first obtains a
judgment that reflects the tortfeasor’s liability. We agree. Texas is not a direct
action state; rather, “the general rule . . . is that an injured party cannot sue the
tortfeasor’s insurer directly until the tortfeasor’s liability has been finally determined
by agreement or judgment.” Angus Chem. Co. v. IMC Fertilizer, Inc., 939 S.W.2d
138, 138 (Tex. 1997) (citing Great Am. Ins. Co. v. Murray, 437 S.W.2d 264, 265
(Tex. 1969)). With limited exceptions, not applicable here, this rule applies equally
in instances where a plaintiff seeks a declaratory judgment and where a plaintiff
seeks money damages. See In re Essex Ins. Co., 450 S.W.3d 524, 526 (Tex. 2014).
      Appellant argues that the Texas Supreme Court has recognized a third-party
claimant’s ability to participate in a declaratory judgment action. See Farmers Tex.
Cty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex. 1997) (explaining that an
insurer must “either accept coverage or make a good faith effort to resolve coverage
before adjudication of the plaintiff’s claim” and stating that “the plaintiff may wish
to participate in that litigation”); see also State Farm Fire & Cas. Co. v. Gandy, 925
S.W.2d 696, 714 (Tex. 1996) (“A plaintiff who thinks a defendant should be covered
by insurance may be willing to . . . assist in obtaining an adjudication of the insurer’s
responsibility.”).
      In Griffin, an automobile insurer brought a declaratory judgment suit in which
it asked the trial court to determine that it had no duty to defend or indemnify its
insured. 955 S.W.2d at 82. The insured had invoked the insurer’s duty to defend
him. Id. The court held that, under the facts in that case, the insurer’s duty to
indemnify was properly justiciable by declaratory judgment, even before the trial
court rendered a judgment in the underlying suit. Id. at 83–84.


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         However, in 2014, the Texas Supreme Court declined to extend its holding in
Griffin to those instances in which a plaintiff in the underlying lawsuit seeks to
ensure that the insureds’ coverage dispute is resolved prior to the adjudication of the
insureds’ negligence. Essex, 450 S.W.3d at 527. In Essex, the plaintiff in the
underlying lawsuit sued Essex’s insured for personal injuries, then added a
declaratory judgment claim against Essex in which that plaintiff sought a declaration
that the insurer must indemnify its insured. Id. at 525. The plaintiff argued that he
“merely [sought] a declaration that the . . . policy cover[ed] the [insured’s] liability
to [the plaintiff], as opposed to a money judgment” and, therefore, that the
declaratory judgment constituted an exception to the “no direct action” rule. Id. at
526. The court explained that allowing the plaintiff to pursue claims simultaneously
against the insured—for liability—and the insurer—for coverage of that liability—
would “prejudice” both parties because it would create a conflict of interest for the
insurer and would require the admission of evidence of liability insurance in
violation of Rule 411 of the Texas Rules of Evidence. Id. at 526–27. Therefore, the
policy of the “no direct action” rule applied. Id.
         We find no facts in the procedural history of, or allegations in, this case that
distinguish it from Essex. Because a third-party claimant’s claims regarding an
insurer’s coverage are not ripe for adjudication until a judgment is obtained
establishing the insured’s liability, the trial court did not err when it granted
Appellee’s motion for summary judgment.1 See id. We overrule Appellant’s first
issue.


         1
          Appellant argues that the trial court’s judgment, which granted both the motion to dismiss for lack
of jurisdiction and the motion for summary judgment, was erroneous because it was “paradoxical.”
However, matters concerning subject-matter jurisdiction, such as ripeness and standing, may be raised by
a plea to the jurisdiction, as well as by other procedural vehicles such as a motion for summary judgment.
Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553–54 (Tex. 2000).


                                                     4
        In his second issue, Appellant argues that the trial court erred in dismissing
the case for want of jurisdiction because he is an intended third-party beneficiary as
to the issue of duty to defend. In other words, Appellant argues that he had standing,
as a third-party beneficiary, to bring the declaratory judgment suit.
        The “no direct action” rule pertains to standing because there is no justiciable
controversy until the liability of the insured has been established. See Farmers Ins.
Exch. v. Rodriguez, 366 S.W.3d 216, 223 (Tex. App.—Houston [14th Dist.] 2012,
pet. denied). “But the need for a determination of liability before bringing a direct
action against an insurer, while often referred to as a standing issue, is more
appropriately characterized and analyzed as ripeness.” Auzenne v. Great Lakes
Reinsurance, PLC, 497 S.W.3d 35, 37–38 (Tex. App.—Houston [14th Dist.] 2016,
no pet.). We refer to our holding that Appellant’s declaratory judgment was not ripe
until the insured was finally determined to be liable to Appellee. Furthermore, if
Appellee owed a duty to defend, that particular duty was owed to its insured, not to
Appellant, a nonparty to the insurance contract. In any event, under the “no direct
action” rule, a plaintiff in an underlying lawsuit cannot maintain a lawsuit against an
alleged tortfeasor’s insurer until that party has been found to be liable for damages
that resulted from the activity sued upon.                      See Essex, 450 S.W.3d at 527.
Accordingly, we overrule Appellant’s second issue.
        We affirm the judgment of the trial court.




July 19, 2018                                                      JIM R. WRIGHT
Panel consists of: Willson, J.,                                    SENIOR CHIEF JUSTICE
Bailey, J., and Wright, S.C.J.2
        2
          Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland,
sitting by assignment.


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