Appeals

Skelton & Woody’s expertise in appellate law benefits our clients from the beginning. From the moment suit is filed, we make sure that our case strategy includes looking ahead to possible appeals by either side. Our appellate work includes significant experience in the Fifth Circuit Court of Appeals, the Texas Supreme Court, the United States Supreme Court, as well as Texas Courts of Appeal throughout the state. We also handle appeals in other states and concluded a large matter in the New Mexico Supreme Court. Our appellate lawyers are also involved in the preparation of amicus briefs and the filing of specialized appellate proceedings, such as applications for writs of mandamus.

Skelton & Woody PLLC has had a significant role in shaping insurance coverage law at the appellate level. For example, in Phillips Petroleum Co. v. St Paul Fire & Marine Ins. Co., 113 S.W.3d 37 (Tex. App.–Houston [1st Dist.] 2003, pet. denied), we upheld a summary judgment for the insurer on a novel issue involving the enforceability of limits on defense costs paid under “fronting” policies, a form of self-insurance increasingly common in large commercial insurance programs.

We have also had a major role in shaping coverage law under homeowners policies, affecting how millions of policies across the state are construed. In May 2014, for example, the firm won an appeal for State Farm that turned back a challenge to the flood exclusion and rejected a plaintiff’s ambiguity argument. The opinion in Matthew George v. State Farm Lloyds, __S.W.3d__ (Tex. App. — Amarillo, May 19, 2014) may be viewed at this link and is further described under “News.” Matthew George, Appellant v. State Farm Lloyds, Appellee. In March 2016, the firm won another appellate victory for State Farm, this time in the Austin Court of Appeals, in a bad faith case turning on summary judgment practice, failure to comply with scheduling order deadlines and discovery. A link to Davis v. State Farm Lloyds Texas may be viewed here.

In Martin Marietta v. St. Paul Fire and Marine Ins. Co., 2002 WL 261437 (5th Cir. 2002), St. Paul’s policyholder sought defense and indemnity in a suit against it by a downstream landowner who sued Martin Marietta for diverting the water of a stream. The case turned on whether Martin Marietta’s conduct could be construed as an “accident” and thus an “occurrence” under a St. Paul policy. Urging that the consequences of water diversion were inherently foreseeable and thus not accidental, we obtained summary judgment, which the Fifth Circuit upheld. The decision is significant in that it is the first opinion in Texas or the Fifth Circuit to analyze whether water diversion can be accidental and in that it also upheld the district court’s “no indemnity” conclusion before the underlying case was resolved because there was “no set of circumstances” under which Martin Marietta could call its conduct accidental.

Victory in Texas Supreme Court in May 2017

Skelton & Woody PLLC was hired by Liberty Mutual to appeal an adverse decision in trial court in a multi-million dollar subrogation matter arising out of a fire caused by a welder’s spark that destroyed an apartment complex. The welder’s policy had been canceled by a premium finance company, but its notice of cancellation was defective. After Skelton & Woody PLLC prevailed in the Austin Court of Appeals, obtaining a reversal, the premium finance company hired Vinson & Elkins to pursue a petition for review in the Texas Supreme Court. The Court granted the petition and Hamp Skelton argued the case to the full court in December 2016. On May 12, 2017, the Texas Supreme Court issued its opinion, rejecting the premium finance company’s “substantial compliance” argument and affirming the good results obtained in the court of appeals. The opinion, Bankdirect Capital Finance, LLC v. Plasma Fab, LLC., –SW3d–, 2017 WL 1068024 (Tex. 2017) may be viewed here.

Victory in Texas Supreme Court

On February 9, 2007, The Texas Supreme Court issued its opinion in State Farm Life Insurance Company v. Martinez, 216 S.W.3d 799 (Tex. 2007), reversing the Tenth Court of Appeals’ opinion that unfairly penalized State Farm for not choosing and apportioning among three competing claimants to the same $500,000 life insurance proceeds. Eva Ramos and Hamp Skelton split the oral argument, held in December 2006. The unanimous opinion vindicated our client’s decision to file an interpleader action, paying the policy proceeds into the registry of the court, in the face of conflicting claims by the deceased’s daughter, former wife (whose divorce decree made her “irrevocable beneficiary”) and widow whom the deceased had attempted to designate as sole beneficiary. The opinion clarified how the Texas prompt payment statute (the former Tex. Ins. Code Art. 21.55) applies when insurers who face rival claims for the same benefits interplead the funds.

Victory on Appeal

The Houston Court of Appeals [1st Dist.] affirmed summary judgment for OmniBank and its former officer in Robert H. Bishop v. Sadler, OmniBank and Hardaway, 2006 WL 1669022 (Tex. App.–Houston [1st Dist.], June 15, 2006). Bishop, who had guaranteed a loan to purchase a restaurant, sued the seller, the bank and the loan officer, alleging he was fraudulently induced by all into guaranteeing the loan. He first brought an adversary proceeding in bankruptcy court against the buyer whose loan he guaranteed, but lost in that proceeding. Omnibank obtained summary judgment on collateral estoppel grounds and the court of appeals affirmed.

Summary Judgment for Bank Client

In June 2006, Skelton & Woody PLLC obtained a summary judgment for OmniBank in a lender liability case brought by a land developer. The plaintiff, JBTB, Inc., had borrowed money from the bank to develop raw land into residential lots for sale to a large national homebuilder. JBTB underbudgeted by approximately $900,000 and went back to the bank for an additional loan, which the bank made. Disputes arose over the terms and conditions of the new loan, the timing of the funding and certain draw requests. JBTB sued alleging oral misrepresentations and breach of contract. OmniBank moved for summary judgment and the Travis County District Court granted the motion.

Victory on Appeal

In Jennings v. State Farm Lloyds, 2006 WL 66408 (Tex. App.–Austin, January 12, 2006), the Austin Court of Appeals affirmed a case that clarified the scope of coverage afforded under homeowners’ policies. The policyholders, who had been sued by the buyers of their house for failures to disclose defects, sought what amounted to “seller’s errors and omissions” coverage under their homeowner’s policy. The Jennings opinion clarified the difference between property damage covered by homeowner’s insurance and “economic damages” flowing from failures to disclose or failure to live up to promises to the buyers.

Victory on Appeal

In State Farm Lloyds v. Blacklock, 2005 WL 2155635 (Tex. App.–Waco, September 7, 2005, pet. denied), the Waco Court of Appeals agreed with State Farm’s Daubert/Robinson challenges to all three of Plaintiffs’ expert witnesses, reversed the trial court’s judgment and rendered judgment for State Farm. This was an important win for State Farm in that these three experts had appeared in scores of cases against the company. Skelton & Woody PLLC won a similar “reverse and render” against the same plaintiffs’ lawyer in State Farm Lloyds v. Mireles, 63S.W.3d 491 (Tex. App.–San Antonio 2001), also prevailing on a Daubert/Robinson argument that the trial court abused its discretion in permitting an engineering expert’s testimony.

Appellate Victory in the Fifth Circuit

In Meyers v. State of Texas, 410 F.3d 236 (5th Cir. 2005), the Fifth Circuit reversed the district court’s dismissal of this class action filed by disabled individuals on behalf of all purchasers of parking placards for the disabled in Texas. Skelton & Woody PLLC served as co-counsel with attorneys from Florida in this case. The decision frees the class plaintiffs to pursue their claim that the state violated the Americans with Disabilities Act by charging disabled persons a fee for disabled parking placards.

Other Recent Results

Travelers Personal Security Ins. Co. v. McClelland, 189 S.W.3d 846 (Tex. App – Houston [1st Dist.] 2006).

The firm handled the appeal of this case tried by another firm. The appellate court held that evidence of a bona fide dispute, in this case a simple disagreement between engineers as to causation, could not give rise to bad faith liability or liability under the Texas Insurance Code. The court thus found that the evidence was legally insufficient to support a jury finding of additional damages.

State Farm Lloyds v. Mireles, 63 S.W.3d 491 (Tex. App.–San Antonio 2001, no pet.)

We obtained a reversal of an adverse judgment following a jury trial. Mireles is the first reported decision on application of the Daubert “junk science” rule to causation opinions in insurance coverage litigation. Finding the policyholder’s engineering expert to have given “irrelevant and unreliable” opinions, the Court of Appeals reversed and rendered judgment. The opinion is important not only in the coverage field, but establishes clear rules for application of the trial court’s “gatekeeper” functions over expert opinions in a broader context. It makes clear that even where strict application of the Daubert factors is not appropriate, the trial court must nonetheless assure the “fit” between the expert’s opinion and the facts, and assure that there is not an “analytical gap” in the expert’s opinions.

Closner v. State Farm Lloyds, 64 S.W.3d 51 (Tex. App.–San Antonio 2001, no pet.)

We prevailed in the jury trial of this case, convincing the Bexar County District Court to disqualify Plaintiff’s engineering expert. The jury also found that Plaintiff’s loss started before the inception of our client’s policy. The San Antonio Court of Appeals upheld the judgment in our client’s favor. The opinion is important to Texas insurance law because:

(a) It is the first published Texas decision to pull together the various threads that made clear that policyholders bear the burden of proving first manifestation of a loss during the policy period, and

(b) Closner is the first published decision to apply the “loss in progress” doctrine to a foundation coverage case.

Hamp Skelton was asked by more than fifty insurance companies to argue an appeal involving dispute over a $200 million surplus generated by an assigned risk pool. Hamp Skelton argued the appeal before the Austin Court of Appeals in September 1999. On October 7, 1999, the court issued the opinion, Butler Weldments, et al. v. Liberty Mutual Ins. Co., et al., 3 S.W.3d 654 (Tex. App.–Austin 1999, no writ) affirming dismissal of Plaintiffs claims against the insurers.

Performance Improvement v. State Farm Lloyds , 974 S.W.2d 135 (Tex. App.–San Antonio 1998)

In Performance Improvement v. State Farm Lloyds, 974 S.W.2d 135 (Tex. App.–San Antonio 1998), we reversed a $4 million judgment and established that the “professional services” exclusion in standard commercial general liability policies unambiguously excluded coverage for business-related activities undertaken by the insured. The court of appeals rendered judgment for our client.

Sharp v. State Farm Lloyds , 115 F.3d 1258 (5th Cir. 1997)

Likewise, in Sharp v. State Farm Lloyds, 115 F.3d 1258 (5th Cir. 1997), we upheld a summary judgment and obtained a Fifth Circuit ruling declaring the foundation exclusion in the standard homeowners policy to be unambiguous.