     Case: 16-10537   Document: 00514469492    Page: 1   Date Filed: 05/11/2018




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT    United States Court of Appeals
                                                   Fifth Circuit

                                                                      FILED
                                                                    May 11, 2018
                                No. 16-10537
                                                                   Lyle W. Cayce
                                                                        Clerk
CHARLA ALDOUS; CHARLA G. ALDOUS, P.C., doing business as Aldous
Law Firm,

             Plaintiffs - Appellants Cross-Appellees

v.

DARWIN NATIONAL ASSURANCE COMPANY,

             Defendant - Appellee Cross-Appellant




                Appeals from the United States District Court
                     for the Northern District of Texas


                      ON PETITION FOR REHEARING
Before REAVLEY, ELROD, and GRAVES, Circuit Judges.
REAVLEY, Circuit Judge:
      In her appeal to this court, Charla Aldous asked that we “reverse”
Parkans International LLC v. Zurich Insurance Co., 299 F.3d 514 (5th Cir.
2002). We observed our lack of authority to do so and applied the case. See
Aldous v. Darwin Nat’l Assurance Co., 851 F.3d 473, 485 (5th Cir. 2017) (“We
are not at liberty to second-guess this ruling.”).     Under Parkans and its
so-called “independent injury” rule, Aldous’s claims under the Texas Insurance
Code Chapter 541 (and those Insurance Code claims brought derivatively
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                                       No. 16-10537
under the Deceptive Trade Practices Act 1) were barred because she did not
claim damages beyond the loss of policy benefits. See Parkans, 299 F.3d at 519
(“There can be no recovery for extra-contractual damages for mishandling
claims unless the complained of actions or omissions caused injury
independent of those that would have resulted from a wrongful denial of policy
benefits.”).
       The Supreme Court of Texas has since handed down USAA Texas Lloyds
Co. v. Menchaca, No. 14-0721, 2018 WL 1866041, at *10 (Tex. Apr. 13, 2018),
in which the Court cleared up some lingering confusion created by its past
caselaw. 2 Relevant here, Menchaca repudiated the independent-injury rule,
clarifying instead that “an insured who establishes a right to receive benefits
under an insurance policy can recover those benefits as ‘actual damages’ under
the statute if the insurer’s statutory violation causes the loss of benefits.” Id.
Put simply, Parkans’s categorical bar does not hold up in the face of Menchaca.
       Aldous seizes upon Menchaca in her petition for rehearing, but because
Menchaca issued beyond our 14-day timeline, Aldous’s petition was untimely.
FED. R. APP. P. 40(a)(1). Yet, because we retain jurisdiction over the appeal
until we issue the mandate, and because Aldous had good cause for her late
filing (indeed, a petition for rehearing before Menchaca would have been
baseless in light of Parkans), we granted Aldous’s motion for leave to file her
petition out of time. See FED. R. APP. P. 26(b).



       1 Aldous brought additional claims under the Deceptive Trade Practices Act (for
misrepresentation and unconscionable conduct). The district court dismissed those claims on
grounds independent from Parkans, and Aldous never challenged that dismissal. See Charla
G. Aldous PC v. Lugo, No. 3:13–CV–3310–L, 2014 WL 5879216, at *6–8 & n.7 (N.D. Tex. Nov.
12, 2014). We did not (and need not now) address those claims.
       2 After a lengthy post-decision review, the Supreme Court of Texas withdrew its
original opinion and substituted it with an opinion that unanimously reaffirmed the legal
principles relevant to our case. We waited for the decision to become final before issuing this
order.
                                              2
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                                 No. 16-10537
      Darwin    does    not   contest   that    Menchaca     casts   aside    the
independent-injury rule (the very basis for both the district court’s decision
and our own). Rather, Darwin offers a multitude of alternative grounds upon
which we can nevertheless affirm the denial of Aldous’s extra-contractual
claims (no compensable loss, no actionable misrepresentations, no falsity, etc.).
Ultimately, in our discretion, we find that these alternative arguments are best
addressed by the district court for the first time on remand. See E.E.O.C. v.
Simbaki, Ltd., 767 F.3d 475, 485 n.16 (5th Cir. 2014).
      Aldous’s petition for panel rehearing is GRANTED, and we now
VACATE the district court’s dismissal of Aldous’s claims under Chapter 541 of
the Insurance Code (and those derivate Insurance Code claims brought under
the Deceptive Trade Practices Act). The district court shall reconsider those
claims on remand. Our prior opinion is revised to rescind Part III.B.4, but in
all other respects, as supplemented here, it is reaffirmed and reinstated.
      Darwin’s petition for panel rehearing, on the other hand, is DENIED.




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