Sewell v. Zurich American Insurance Co.: On Contingent Fee Contract Remedies

       Suing former clients to recover a contingent fee is never ideal. But neither is working for free. Like any other contract for services, when an attorney enters into a contingent fee agreement with a client, the attorney expects she will be paid for her services if her client recovers.

       What if the attorney, though, has worked on her client’s case for some time and the client terminates the attorney-client relationship before the client recovers? And, what if the client hires another attorney and the new attorney helps the client settle the case? Does the former attorney have a remedy against the client’s new counsel or the third-party with whom the former client settled?

       Suits to recover on contingent fee contracts often include the former client and the third-party (often the insurance carrier paying the settlement on behalf of the actual third-party) with whom the client settled. Most of the time, terminated counsel will send a letter or email to the third-party, informing the third-party that terminated counsel holds an assignment interest in the cause of action and/or in the former client’s recovery, if any. The letter or email often includes language suggesting that the third-party owes a duty to protect terminated counsel’s “assignment interest.”

       The Beaumont Court of Appeals recently issued an opinion which touches on the questions and issues raised above. In Effrem D. Sewell v. Zurich American Insurance Company, Case Number 09-16-00079-CV, the court of appeals affirmed the trial court’s summary judgment in favor of Zurich as to Sewell’s breach of contract and quantum meriut causes of action. Zurich insured a vehicle operated by an employee of Diakon Logistics. The employee was involved in a vehicular accident with a motorcycle operated by Joseph Guillory, II. Guillory hired Sewell as an attorney to represent him in pursuing claims against Diakon Logistics for injuries Guillory sustained as a result of the accident. The representation agreement between Sewell and Guillory contained a standard contingent fee agreement. Sewell immediately sent a letter to Zurich, advising Zurich that he represented Guillory in his claim against Diakon Logistics and informing Zurich that he had been assigned an undivided interest in Guillory’s claims and causes of action.
       About eight months after the representation agreement was signed, Guillory terminated Sewell. Guillory secured new counsel. Seventeen months later, Guillory entered into a settlement agreement, acknowledged and approved by his new counsel. Zurich paid the agreed-to settlement value to Guillory and his new counsel.
       Sewell brought suit against his former client (Guillory) and against Zurich for breach of contract and in quantum meruit. Sewell did not sue Diakon Logistics. Zurich filed a traditional motion for summary judgment, arguing that Zurich owed no duty to Sewell, that Zurich had no contractual relationship with Sewell, and that Sewell’s remedy, if any, would be an action against his former client. The trial court granted Zurich’s motion.
       In its opinion affirming the trial court’s summary judgment in favor of Zurich, the Beaumont Court of Appeals reaffirmed the general rule that terminated counsel may not seek to recover his contingency fee against the opposing party or its insurer. See e.g., Dow Chemical Co. v. Benton, 357 S.W.2d 565, 568 (Tex. 1962) (reasoning that a “lawyer’s rights, based on the contingent fee contract, are wholly derivative from those of his client[]” and that an attorney working on a contingent fee “elects to litigate his interest simultaneously with his client’s interest [and] in his client’s name); Honeycutt v. Billingsley, 992 S.W.2d 570, 584 (Tex. App.—Houston [1st Dist.] 1999, no pet.). The court noted an exception to the general rule—when the discharged attorney pleads and proves that his former client and the opposing party conspired to vitiate terminated counsel’s contractual rights. Sewell, however, did not plead or argue that Guillory conspired with Zurich to deprive Sewell of any rights under the contingent fee agreement.
       The Sewell opinion should bring some clarity and consistency to contingent fee recovery practice. A discharged attorney hired on a contingent-fee basis can seek recovery of his fee against his former client in a breach of contract action or in quantum meruit—the Mandell remedies. See Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969). If terminated counsel wishes to pursue his contingent fee against the opposing party or its insurance carrier, terminated counsel will need to plead and prove an exception to the general rule which limits terminated counsel to the Mandell remedies solely against his former client.

Sewell v. Zurich opinion

Entangled by Establishment Clause Tests - American Humanist Association, et al. v. Maryland-National Capital Park and Planning Commission

Flanked by an American Flag, and surrounded by blighted commercial buildings and utility poles which slowly littered around Blandensburg Road, Baltimore Avenue, and Annopolis Road over the course of nearly a century, amidst a cacophony of street traffic, honking horns, and consumer and tourist chatter, stands the forty feet tall Peace Cross that commemorates Blandensburg’s World War I casualties. Any passerby seeking peace, repose, or even meaning amidst a cluttered and distracted backdrop may briefly escape the embattled noise of the streets and distracted urban-consumerism to reflect on civic virtues—Valor, Courage, Endurance, and Devotion—that motivated a past-generation to fight in the first, world-wide industrialized war.

Though the Peace Cross is listed on the National Register of Historic Places, which identifies sites and objects worth preservation, this beacon which stood so long to commemorate the sacrifice of past generations, and which stands still for civic virtues necessary to sustain any free society, faces removal by the arbitrary dictates of a handful of judges. In American Humanist Association, et al. v. Maryland-National Capital Park and Planning Commission, Cause No. 15-2597 (the “Peace Cross Case”), United States Court of Appeals for the Fourth Circuit held that “the purported war memorial breaches the ‘wall of separation between Church and State’” and must, as a result, be removed.

Partly at issue in the Peace Cross Case was the question whether the test articulated by the United States Supreme Court in Lemon v. Kurtzman, 403 U.S. 602 (1971), controlled the Establishment Clause analysis or whether Van Orden v. Perry, 545 U.S. 677 (2005) controlled. The Lemon Court articulated a three-prong test to withstand an Establishment Clause attack: “First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster ‘an excessive government entanglement with religion.’” A plurality in Van Orden called into question the continuing validity of the Lemon test, opting into an Establishment Clause analysis which is “driven both by the nature of the monument and by our Nation’s history,” a history, as the Van Orden Court recognized, informed by a religious heritage.

The court in the Peace Cross case determined that the Lemon test applied “with due consideration given to the factors in Van Orden, mindful that a violation of even one prong of Lemon results in a violation of the Establishment Clause.” The court easily determined that the Peace Cross served a secular purpose—maintenance of safety near a busy intersection and to honor World War I soldiers. But the court found that the Peace Cross advanced or endorsed Christianity because the Latin cross is the preeminent symbol of Christianity and, despite the Peace Cross being adorned with some secular symbols, these symbols paled in conspicuousness to the Peace Cross itself, which stood four stories tall. The court also found that government display of the Peace Cross created an excessive entanglement between government and religion because the Commission owned and maintained the Peace Cross and had spent nearly $117,000 to maintain the Peace Cross and set additional funds aside to restore the Peace Cross.

 The Supreme Court in Van Orden aptly captured the problem with the Lemon test:

Our institutions presuppose a Supreme Being, yet these institutions must not press religious observance upon their citizens. One face looks to the past in acknowledgment of our Nation’s heritage, while the other looks to the present in demanding a separation between church and state. Reconciling these two faces requires that we neither abdicate our responsibility to maintain a division between church and state nor evince a hostility to religion by disabling the government from in some ways recognizing our religious heritage.  

Van Orden, 545 U.S. at 683-84. The plurality in Van Orden recognized, as have many legal scholars, the conceptual problems that inhere in the Lemon test. One of the most important problems is the “entanglement” element. The Lemon test itself requires a certain amount of government entanglement with religion simply by engaging in the analysis.

The Peace Cross case provides a prime example of the entanglement problem. The Fourth Circuit delved seriously into the importance and religious salience of the Latin Cross to Christianity generally. The Fourth Circuit also injected itself into a religious controversy raised by the Appellant, American Humanist Association (“AHA”). The AHA’s mission is “to bring about a progressive society where being good without a god is an accepted and respected way to live a life.” The group states its mission as “[a]dvocating progressive values and equality for humanists, atheists, and freethinkers.” What most courts, including the Fourth Circuit here, gloss over is the fact that these suits by activist atheists or non-theists organizations are really theistic debates, which center not only on the place of any god in civil society, but on the necessary abandonment of the concept of God to advance civil society. These suits entangle government, primarily the court system, in religious controversy.

            As this Country continues to debate the place past statutes and monuments should presently share in public spaces, attending to a shared past colored by liberty and oppression, hatred and love, segregation and equality, no person should lose sight of the fact that we are still pressing forward in this grand experiment. Justice Kennedy famously wrote, “[a]t the heart of liberty is the right to define one’s existence, of meaning, of the universe, and of the mystery of human life.” See Planned Parenthood of Southeastern Pa. v. Casey, 505 U.S. 833, 851 (1992). We naturally need and seek out others with whom to make meaning and to share that meaning. This intellectual sharing has been the springboard of progress. Disagree as we may on the existence of God, the meaning of life, or the possibility or scope of morality, we retard progress by erasing our shared past based on trivial disagreements.

            The Establishment Clause has a central place in our national history as well. The Framers knew all too well the dangers which arise when government and religion become deeply entangled. We are mindful today of those dangers. Remaining vigilant to avoid dangerous entanglement is a civic duty. But it is impossible to absolutely separate religious sentiment and belief from government, not only because this Nation’s history is based heavily on religious traditions, but also because human beings are the one’s governing and some of those human beings’ whole lives have meaning attributable to a God and that meaning is inseparable from who they are.

Whatever the virtue of the Separation of Church and State as a principle, it is an empty promise if we are separated by efforts to promote it. We gain as much meaning by separation as we do unity, and we lose as much meaning by separation as we do understanding. 

Lack of Ripeness Does Not Mean "No Basis In Fact or Law": Limiting Texas Rule of Civil Procedure 91a

Is a Motion to Dismiss pursuant to Texas Rule of Civil Procedure 91a the proper vehicle through which to challenge a court’s subject matter jurisdiction based on lack of ripeness? Normally, a Plea to the Jurisdiction is the appropriate procedure to challenge a court’s subject matter jurisdiction. See Hosner v. Young, 1 Tex. 765, 769 (Tex. 1846); Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-226 (Tex. 2004). Yet, lack of ripeness has served as a ground for dismissal under Rule 91a in Texas courts. See In re Essex Ins. Co., 450 S.W.3d 524, 525-28 (Tex. 2014); Auzenne v. Great Lakes Reinsurance, PLC, 497 S.W.3d 35, 38 (Tex. App.—Houston [14th Dist.] 2016, no pet.) (lack of ripeness).

Subject matter jurisdiction speaks to a court’s power to adjudicate a matter. Courts can raise subject matter jurisdiction concerns sua sponte, and are, in fact, instructed to do so. See Miranda, 133 S.W.3d at 225-26 (“The trial court must determine at its earliest opportunity whether it has the constitutional or statutory authority to decide the case before allowing the litigation to proceed.”). If a trial court determines that it lacks subject matter jurisdiction, it must dismiss the matter.

         Whereas subject matter jurisdiction speaks specifically to a court’s power to adjudicate a matter, Rule 91a speaks to whether a litigant alleged a claim with a basis in fact or law, that is, the Rule speaks to a claim’s plausibility. See e.g., Tex. R. Civ. P. 91a.1; City of Dallas v. Sanchez, 492 S.W.3d 722, 724 (Tex. 2016); Daniel R. Correa, A Reasonable Person Believes What Is Plausible: City of Dallas v. Sanchez and Rule 91a’s Factual Plausibility Standard, 49 Tex. Tech. L. Rev. 721 (2017). “A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded.” Id.

        Ripeness does not appear to fall neatly into either a no basis in law or fact category.  The ripeness doctrine aims to avoid premature litigation. “A case is not ripe when its resolution depends upon events that have not yet come to pass.” See Robinson v. Parker, 353 S.W.3d 753, 755 (Tex. 2011). When lack of ripeness is the issue, the problem is not whether a reasonable person could believe the facts pleaded, but with whether the facts pleaded and believed by a reasonable person state a non-speculative injury. Likewise, the problem raised by ripeness concerns is not whether the allegations entitle the claimant to the relief sought without qualification, but with whether the allegations plausibly entitle the claimant to the relief sought at this time. Rule 91a was meant to address matters that could never come to fruition in fact or existing law.

            Consider also that the Federal Rules of Civil Procedure distinguish between a litigant’s failure to state a claim upon which relief can be granted and lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1), (6). Federal Civil Procedure Rule 12(b)(6) directly compares to Texas Civil Procedure 91a. Under the federal rule, a motion to dismiss for failure to state a claim upon which relief may be granted attacks the merits of the claim; whereas, a motion to dismiss for lack of subject matter jurisdiction challenges the court’s power to hear the case. See Ramming v. United States, 281 F.3d 158, 161-62 (5th Cir. 2001). Under Rule 12(b)(6), “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” See Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

         Texas courts would do well to adhere to the federal model with respect to motions to dismiss. When a party wishes to move the court to dismiss a matter for failure to state a legally cognizable claim, Texas Civil Procedure Rule 91a is the appropriate vehicle. When a party wishes to move the court to dismiss a matter because the court lacks power to hear it, specifically, here, because the action is brought too soon, a Plea to the Jurisdiction is appropriate. Remember, subject matter jurisdiction concerns do not center on whether a litigant raised a legally cognizable claim, but on whether the litigant is the right party to bring the claim (standing), or whether the claim was brought too soon (ripeness), or whether the claim was brought to late (mootness), or whether the claim should be decided by another branch of government (political questions). Though this blog did not address standing, mootness, or political questions, the reasoning herein provides some guidance on how to think about the problem concerning Rule 91a as a vehicle to dismiss matters based on lack of subject matter jurisdiction. 

Government-Induced Attention Deficit and the First Amendment

            Many Americans feel fatigued by information. A seemingly unlimited amount of information is available at the scroll of a smartphone. Even when one does not seek information, information is impressed upon her by others who vie for her attention. But information overload may not be the central problem. Rather, “[o]ur true plight – in this world of overfilled inboxes, push notifications and digital billboards, [may be] an overload of attempted communication: a cacophony of efforts to stake a claim on our attention.” See Oliver Burkeman, Attentional Commons, in #17 New Philosopher, at 21-22 (Aug.-Oct. 2017).

            People do not normally view attention as a limited resource whose unwanted or unwelcomed depletion alters the way they make decisions or manage their day to day lives. A recent article by Oliver Burkeman calls attention to attention seeking and challenges readers to rethink the way they think about unwelcomed claims on their attention. Any unwelcomed claim on one’s attention constitutes “spam”—“any attempt to ‘exploit existing gatherings of attention.’” See id.

            Most unwelcomed claims on people’s attention go unnoticed or shrugged off, like birds singing, sirens blaring, babies crying, but even these require a (slight) dip in one’s attention account. Greater still are claims on one’s attention from unwelcomed emails, product placements in movies and television (including the news), and billboards, and “by experts at social media companies whose job is to deploy every psychological trick they can to extend your ‘time on site.’” See id.

            Though Burkeman primarily focused on product placement advertisements, an underlying and unstated concern arises with the rise of government officials employing social media accounts to capture citizens’ attention: Is government-official-induced attention seeking encroaching on citizens’ freedom of thought and speech? It very well may be.

Government officials take to Twitter and Facebook, among other social medial venues, to capture citizens’ attention. Some tweets or messages might constitute legitimate attempts to create meaningful dialogue or relay important information to constituents. Still other tweets or messages might constitute attempts to distort or distract from the truth or discourage fact-finding. When the tweet or message comes from an elected official, the attention-demand placed on each constituent is high because the cost of opting out may be extremely costly. Not only might one forgo opportunities to advance local policies, or to hold an official accountable when one opts out, but he or she also risks emboldening government officials to do whatever they please.

Yet, the cost of opting-in is also high. Every second a person directs to unsolicited tweets, messages, or blurbs is a second undevoted to her own thoughts, personal development, family, friends, loved ones, hobbies, peace of mind. Even should one ignore the government-official tweet now, chances are likely that media conglomerates like CNN, MSNBC, or FOX, will bombard her with the tweet or message. No one can easily escape a government official tweet when the government official wishes to capture people’s attention.

And when one opts in, whether voluntarily or out of defeat, she becomes a conduit for misinformation, distorted information, information funneled through political spin, so much so that whatever might be true looks as distorted or spun as everything else. Hannah Arendt put it best:

If everybody always lies to you, the consequence is not that you believe the lies, but rather that nobody believes anything any longer. This is because lies, by their very nature, have to be changed, and a lying government has constantly to rewrite its own history. On the receiving end you get not only one lie – a lie which you could go on for the rest of your days – but you get a great number of lies, depending on how the political wind blows. And a people that no longer can believe anything cannot make up its mind. It is deprived not only of its capacity to act but also of its capacity to think and to judge. And with such a people you can do what you please.

            Government-induced attention deficit presses hard against citizens’ freedom of speech and thought, because it alters the way they perceive and think about truth, and shortens each citizens opportunity to focus on what he or she pleases. Freedom of speech and thought lie at the core of liberty.  Though many philosophers, statesmen, and legal practitioners have opined on the value of free speech and thought, Justice Louis Brandies captured best the value of free speech and thought in our constitutional scheme:

Those who won our independence believed that the final end of the state was to make [people] free to develop their faculties, and that in its government the deliberative forces should prevail over the arbitrary. . . They believed that freedom to think as you will and speak as you think are means indispensable to the discovery and spread of political truth; that without free speech and assembly discussion would be futile; that with them, discussion affords ordinarily adequate protection against the dissemination of noxious doctrine; that the greatest menace to freedom is an inert people; that public discussion is a political duty; and that this should be a fundamental principle of American government.

Whitney v. California, 274 U.S. 357, 375 (1927) (Brandeis, J., concurring).

The Pro-Indemnity – Anti Indemnity Statute? Construction Contracts Subject To Texas Insurance Code Ann. §§ 151.001-.151

What if that provision of the Insurance Code you thought was an anti-indemnity provision is really a pro-indemnity provision? The Texas Legislature added Chapter 151 to the Texas Insurance Code in 2011 to, in part, void risk-transferring provisions in commercial construction contracts. Many practitioners today view Chapter 151 as an across-the-board anti-indemnity and anti-additional insured statute—a statute that voids provisions in any construction contract that require a subcontractor to indemnify a general contractor or its agents for the sole negligence of the general contractor, or require a subcontractor to add a general contractor as an additional insured to the subcontractor’s insurance policy to provide the general contractor a defense, even for the sole negligence of the general contractor. But the often-overlooked statutory notes provide a revealing limitation to Chapter 151 that undermines the prevailing view.

            The statutory notes make clear that Chapter 151 applies (1) “only to a new or renewed consolidated insurance program for a construction project” and (2) only to “an original construction contract with an owner of an improvement or contemplated improvement that is entered into on or after the effective date of this Act.” Acts 2011, 82^nd Leg., ch. 1292 (H.B. 2093), §§ 3(a)-(b). The first of these limitations, if taken seriously, undermines the prevailing view that Chapter 151 applies to all construction contracts in which a general contractor requires a subcontractor to indemnify it for its sole negligence. Limited in this way, Chapter 151 would apply only in limited situations, thereby preserving freedom to contract in the majority of construction contracts.  

A.   Case Law Interpreting Chapter 151

Case law interpreting Chapter 151 remains scant. At least one court looked to the statutory notes for guidance as to the scope of the Act. In United States ex rel. EJ Smith Constr., Co., LLC v. Travelers Cas. & Sur. Co., 2016 U.S. Dist. LEXIS 31076 (W.D. Tex. March 10, 2016), the court held that Chapter 151’s anti-indemnity provision did not apply to an October 2012 subcontract agreement. The subcontract agreement pertained to a September 2010 prime construction contract between an owner and general contractor. The court looked to the statutory notes, which state:

The changes in law made by this Act apply only to an original construction contract with an owner of an improvement or contemplated improvement that is entered into on or after the effective date of this Act. . . If an original construction contract with an owner of an improvement or contemplated improvement is entered into before the effective date of this Act, that original construction contract and a related subcontract, purchase order contract, personal property lease agreement, and insurance policy are governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

United States ex rel. EJ Smith Constr., 2016 U.S. Dist. LEXIS 31076. *14-15 (quoting Acts 2011, 82^nd Leg., ch. 1292 (H.B. 2093), § 3(b)).

Since the prime contract was the original contract and was entered into prior to January 1, 2012, the court held the anti-indemnity provision did not apply, notwithstanding the fact that the subcontract agreement was dated after the Act’s effective date. United States ex rel. EJ Smith Constr., 2016 U.S. Dist. LEXIS 31076. *15-16. The court noted that the statutory notes were part of the final, enrolled version, as signed by the governor, and reasoned that uncodified session law is binding law. Id. at *16-17 (citing Hawkins v. State, 2005 Tex. App. LEXIS 7444, * 3-4 (Tex. App.–Eastland September 8, 2005, no pet.)); see also In the Interest of W.G.S., 107 S.W3d 624, 628 (Tex. App.–Corpus Christi 2002, no pet.) (looking to the session law to determine whether a provision in the Texas Family Code applied to the case); Tijerina v. Tijerina, 1997 Tex. App. LEXIS 6370, *3-5 & n.1 (Tex. App.–Houston [1st Dist.] Dec. 11, 1997 (same); Ring Energy v. Trey Res. Inc., 2017 Tex. App. LEXIS 371, *19-23 (Tex. App.–El Paso Jan. 18, 2017, no pet.) (interpreting Natural Resource Code).  

The court also dismissed an argument that another district judge in the same court previously held that the Act applied, stating that the record did not show that that judge considered the scope of the Act. The related cases are United States ex rel. Ej Smith Constr. Co. v. Travelers Cas. & Sur. Co., 2015 U.S. Dist. LEXIS 183731 (W.D. Tex. June 25, 2015), and United States ex rel. Liberty Steel Erectors, Inc. v. Balfour Beatty Constr., 2015 U.S. Dist. LEXIS 182679 (W.D. Tex. May 15, 2015).  

There are no cases interpreting the scope of the act with respect to the “consolidated insurance program” limitation. See Acts 2011, 82^nd Leg., ch. 1292 (H.B. 2093), § 3(a).

The statutory language itself does not clearly limit the anti-indemnity provision to construction projects in which the owner mandates a consolidated insurance program (like an Owner Controlled Insurance Program (OCIP)) for a construction project. Section 151.102 of the Act states:

Except as provided by Section 151.103, a provision in a construction contract, or in an agreement collateral to or affecting a construction contract, is void and unenforceable as against public policy to the extent it requires an indemnitor to indemnify, hold harmless, or defend a party, including a third-party, against a claim caused by the negligence or fault, the breach or violation of a statute, ordinance, or governmental regulation, standard, or rule, or the breach of contract of the indemnitee, its agent or employee, or any third party under the control, or supervision of the indemnitee, other than the indemnitor or its agent, employee, or subcontractor of any tier.

            Trial courts have treated the anti-indemnity provision as generally applicable to all construction contracts, not as limited to projects on which an owner controlled insurance program is in place. If one were to press the express limitation, it is not clear how a trial court would respond. There is scant legislative history with respect to Chapter 151 and even less case law interpreting the provision.

B.   The Limited Reading And Some Counter-Arguments

Considering that the Act was designed, in part, to protect insurance companies from covering risks they did not agree to underwrite and to protect subcontractors who are forced, due to inferior bargaining power, to accept all risks associated with the construction project, one might argue that the Act should not be read as limited to only projects on which there is a consolidated insurance program. See Taylor R. Beaver, Recent Development: The Texas Anti-Indemnity Act, 45 St. Mary’s L. J. 535, 538 (2014).

A competing view would be to read the statute in a limiting way to preserve freedom to contract. Under this lens, the Act does not allow an owner and general contractor to force a subcontractor to pay for two policies covering the project—pay a premium for the OCIP and pay the subcontractor’s personal insurance premium. The OCIP underwrites the risks associated with the project and the subcontractor may voluntarily purchase its own liability coverage for risks that attend the project, but the general contractor and owner cannot rely on their subcontractors’ policies to cover their own liabilities. In all other contexts, the Act would not apply, thus preserving freedom to contract in most construction contracts.

One might argue a limited reading of the anti-indemnity statute here is unwarranted because the statutory language states, “this subchapter applies to a construction contract for a construction project for which an indemnitor is provided or procures insurance subject to: (1) this chapter; or Title 10.” Tex. Ins. Code Ann. §151.101(a)(1)-(2). Chapter 151 is entitled, “Consolidated Insurance Programs,” which falls under Title II, Subtitle C, “Programs Affecting Multiple Lines of Insurance.” Title 10 regulates property and casualty insurance, including commercial liability and workers’ compensation, and is generally applicable, so Chapter 151, too, is generally applicable to all construction contracts, not simply those under which a consolidated insurance program exists.

The problem with this counter-argument is that it ignores the fact that Chapter 151 would have absolutely no bite if it did not also apply to the generally applicable property and casualty insurance under Title 10. Consolidated insurance programs are designed to cover property and casualty risks, commercial liability, and workers’ compensation. This counter-argument also ignores the statutory note provision that limits the subchapter to new or renewed consolidated insurance programs for a construction project. Section 151.101 simply expresses how the Act applies; the statutory notes express how the Act is limited. Read this way, the Act applies to a construction contract for a construction project for which an indemnitor is provided or procures insurance subject to Chapter 151 or Title 10, but is limited to new or renewed consolidated insurance programs for such construction project.

The limited reading of Chapter 151 is buttressed by considering Chapter 151 for what it is: a pro-consolidated insurance program Act, not an anti-indemnity Act—in fact, the anti-indemnity section was not originally a part of Chapter 151. Chapter 151 is designed to make sure consolidated insurance programs work to cover risks associated with a construction project without spreading the cost of that risk to other insurers. The anti-indemnity provision and anti-additional insured provisions limit the costs associated with risks on a construction project covered by a consolidated insurance program by placing the cost solely on the contractors to the project, not on outside carriers who cover individual contractors.

The anti-additional insured provision ensures that consolidated insurance programs work overall by excepting from the anti-additional insured provision “an insurance policy, or an endorsement to an insurance policy, issued under a consolidated insurance program to the extent that the provision or endorsement lists, adds, or deletes named insureds to the policy.” Tex. Ins. Code § 151.104(a)-(b). To understand this exception, consider that a consolidated insurance policy is a contract that relates to a construction contract and itself clearly falls under the Act if all other conditions obtain. A consolidated insurance program is designed to cover all subcontractors on the project, so the policy must necessarily add insureds. But the anti-additional insured provision not only prohibits a construction contract from mandating the purchase of additional insured coverage, it also prohibits an insurance policy from providing additional insured coverage. The exception for consolidated insurance policies was necessary to allow a consolidated insurance policy to work, i.e., to add additional subcontractors as insureds on the construction project(s).

Had the legislature wished to create an across-the-board anti-indemnity provision, it should have done so by adding another anti-indemnity provision in the Texas Civil Practice & Remedies Code.  

Feeding Public School Students Is A Small, Good Thing

In “A Small Good Thing,” Raymond Carver tells the story of Ann Weiss, who ordered a birthday cake decorated with a rocket ship and launch pad and laced with her son’s name, Scotty. The baker took her order as a matter of course. She was just another customer to him. When the time to pick up the birthday cake passed, the baker repeatedly called Ann’s phone, leaving voicemails exclaiming, “have you forgotten about Scotty!” He did not know, nor could he, that Scotty was struck by a car the morning of his birthday and later died.

Grief-stricken and enraged, Ann and her husband, Howard, raced to confront the baker for his call, mistakenly interpreting the baker’s message as a taunt or some other evil motive. When they arrived at the bakery, Ann immediately chastised the baker, fist clinched, her face worn with grief and anger: “My son’s dead. . . . He’s dead, you bastard!” The baker immediately felt the pangs of her grief and realized the part his error played in the present moment. He undid his apron, sat Ann and Howard down, cleared a table, and apologized. He served them rolls straight from the oven, and consoled them: “You have to eat and keep going. Eating is a small, good thing in a time like this. . . .” He continued his apology, explaining that he had no children, that he has lived a lonely life, living vicariously through other people’s celebrations through his food, but never directly participating in those celebrations. Food has a survival utility—everyone needs it to live. But, the baker focused on its social utility—food brings people together; it creates an opportunity for sociability, which may not be necessary to survival, but it is necessary to living.

         Governor Abbott signed into law Senate Bill 1566, a bill that creates a grace-period for public school students who run out of money in their lunch accounts to continue eating lunch . . . with other students. The bill was designed to curb “lunch shaming”—a label designed to capture the indignity a student feels when, in front of her peers, she is turned away by the cashier for lack of sufficient funds. The grace period is a small thing under the circumstances, and, given the current policies that govern feeding public school students, it is good. Students need food to survive as well as to develop, physically and mentally. Though the grace-period sought to cure two evils, kids going hungry and suffering indignity, it is a short-term solution—at some point the grace-period will end. 

         In the fight to combat hunger and indignity, let us not forget the social utility served in the lunch setting. Eating is a small, good thing that brings students together. We run the risk, like the baker in Raymond Carver’s story, of numbing ourselves to the importance of this small, good thing in students’ lives when we view ourselves merely as facilitators and not participators. 

Don't Beg For An Answer To A Question Someone Else Raised

For some reason, it has become commonplace to misuse "begs the question." A very recent example, in addition to a commercial I cringed over in my car, was found in an online article about how to help loved ones who have been diagnosed with HIV: "There are more than 1.2 million people in the U.S. living with HIV, and 1 in 8 doesn’t know it. Though rates have steadily declined in the last decade, there were around 40,000 people newly diagnosed in 2015. Which begs the question: When a loved one tests positive for HIV and decides to tell you about it, what’s next?"

No question has been begged, as if the reader is sitting down, crying out inside, "please ask what we can do next!" Nor has any answer been begged. But the data does raise a question about what, if anything, can or should be done.

To beg the question is a logical fallacy where the proponent of an argument assumes as true the thing to be proved. Here is an example: "The Executive branch of government is charged with executing the laws and cannot do so unless the President has unrestricted power to issue Executive Orders." If this were the complete argument, it would beg the question. The conclusion is that the Executive must have unrestricted power to issue Executive orders. The premise is that the executive is charged with executing the laws. In order for the conclusion to follow from the premise, one must assume that unrestricted power to issue executive orders is necessary to execute the laws in accordance with Article II of the United States Constitution. This is a dangerous assumption.

Being able to identify assumptions like these in an argument can prove a powerful tool for rebuttal or refutation. Many questions may be raised in the process, but never feel that you must beg for an answer to a question you did not raise.

Mid-Year Call to Civility

We are a little past mid-way through another year marked by fear and distrust. From race to terror, sexual liberty to religious liberty, mass shootings to gun rights, this Country and this state—Texas—continuously appear divided. And yet, neither the Country nor the state of Texas has fallen apart or devolved into complete anarchy (much to some libertarians’ dissatisfaction). Why?

The answer remains unchanged by time. Disagreement is natural, especially in a heterogeneous society, among heterogeneous people with different backgrounds, beliefs, ideas, expectations, goals and desires. Most of us are committed, nonetheless, to some basic principles: That every person is to be afforded the greatest liberty compatible with the liberty of any other person, and that every person receive equal treatment under law and equal concern by those who govern. We may continue to disagree on so many issues (including the scope and contour of liberty and equality), but we always return to these core political principles.

Our core political principles infuse a desire to cooperate toward and strive for something better for all, namely a peaceable and sustainable society wherein people are afforded the greatest liberty and treated equally under law. We may disagree on how to achieve our common ends, and we may disagree from time to time over the content that informs our common ends (i.e., what is meant or entailed by “liberty” and “equality”), but we continue to try to work together despite disagreement, despite fear and distrust. We constantly look for ways to trust each other and dispel fear because we value civil society and find it worthwhile to preserve.

This year the Texas Legislature passed some very controversial legislation. And, with a special legislative session starting, the Texas Legislature may pass some more controversial legislation within the next thirty days. Proponents and opponents alike should zealously advocate for their positions, with a proviso: That in promoting one view over another you do not diminish the dignity of any other person. This proviso may often be met simply by lending civility to your position, that is, advocating your position in respectful disagreement with another and a view to seeking common ground.

Three Observations of Pidgeon, et al. v. Turner, et al. "Consistent With," "In Light of" or "Considering" Independence Day

The Texas Supreme Court remanded Jack Pidgeon and Larry Hick’s action against Mayor Sylvester Turner and the City of Houston in an action wherein Pidgeon and Hick’s wish to prevent the City from providing spousal employee benefits to same-sex couples. In a twenty-four-page opinion, with no concurrences or dissents, the Court reasoned that the United States Supreme Court’s opinion in Obergefell v. Hodges, 135 S. Ct. 2484 (2015) held only “that the Constitution requires states to license and recognize same-sex marriages to the same extent that they license and recognize opposite-sex marriages, but it did not hold that states must provide the same publicly funded benefits to all married persons, and . . . it did not hold that the Texas DOMAs are unconstitutional.”

The Pidgeon opinion, delivered by Justice Boyd, concluded that the scope of same-sex marriage couples’ constitutional rights must funnel through the court system, piecemeal: “Pidgeon and the Mayor, like many other litigants throughout the country, must now assist the courts in fully exploring Obergefell’s reach and ramifications, and are entitled to the opportunity to do so.”

Pidgeon deserves greater analysis than this blog will provide. But, since it is Independence Day, and most people’s attention will be turned to relaxing, this blog will provide three brief observations of the Pidgeon opinion.

Justice Boyd’s Janus-Jurisprudence

First, Justice Boyd performed a jurisprudential U-turn from his concurrence in Pagayon, et al. v. Exxon Mobile Corporation, which was issued the week prior to the Pidgeon opinion. In Pagayon Justice Boyd criticized the majority for opting into “Solomon-like solutions” over “Moses-like methods.” This position recognizes that the judicial system disserves the public when, rather than providing clearly prescribed, ex ante rules that facilitate predictability and prospectivity, courts narrowly tailor rules to very specific circumstances. 

But Justice Boyd does not heed his own criticism in Pidgeon. The first paragraph of the conclusion opts into a piecemeal approach to same-sex issues that may arise. Justice Boyd points out in a footnote that same-sex issues are still funneling through the courts, such as the issue whether a cake shop owner can be held liable in damages for refusing to bake a cake for a same-sex couple. Of course, the major difference between the cake-maker case and same-sex marriage, is that the cake-maker case primarily deals with relationships between citizens, whereas the same-sex issue cases deal with citizens' relationship to the state. It is not clear why Justice Boyd opts into “Solomon-like solutions” over “Moses-like methods” when it comes to the scope of constitutional rights. Granted, the Pidgeon opinion latches on to the historically contingent nature of same-sex rights as an apparent basis to let the issue continue to be fought in courts, but the historically contingent nature of rights generally does not overcome the purpose of Constitutional rights, which is to protect certain rights from historical whims.  Nor do historical contingencies justify turning courts into places people go to find out retrospectively what rights they possess and duties they owe.

(Ill)-Advisory Opinion?

Second, the Pidgeon opinion at times reads as an advisory opinion. Specifically, the opinion should have ended at section II, “Our Jurisdiction.” Jurisdiction, according to the Court, hinged on the difference between “consistent with” and “in light of” or “considering.” Since the court of appeals had remanded the case to the trial court, instructing the trial court to proceed “consistent with Obergefell and De Leon,” Pidgeon argued that the trial court might mistakenly apply De Leon as if it were binding authority. De Leon is a U.S. Fifth Circuit case, which, the Court noted, is not binding on Texas Courts. The Court reasoned that, since the court of appeals did not instruct the trial court to proceed “in light of” or “considering” De Leon, this gave rise to uncertainty in the law and unfairness to the litigants, giving the Court jurisdiction to hear this interlocutory appeal.

Even accepting the Court’s opinion as reasonable or true, the Court could have simply instructed the trial court to proceed “in light of” or “considering” De Leon, which itself is not binding but persuasive authority. The problem for the Court, of course, is that, as it notes, U.S. Supreme Court decisions are binding on Texas Courts, including the Texas Supreme Court. So, the Court would also have to instruct the trial court to proceed “consistent with Obergefell.” Now here’s the kicker, De Leon held Texas’ Defense of Marriage Act (DOMA) unconstitutional based on the Obergefell opinion, which itself held five other state DOMAs unconstitutional.  To state the obvious, the Court’s distinction between “consistent with” and “in light of” and “considering” is trivial at best.

Here was an opportunity for Justice Boyd to heed another criticism he lodged in Pagayon: "When it is not necessary to decide more, it is necessary not to decide more." 

Tip-Toe Through the Trivials

Third, the Pidgeon opinion is riddled with trivialities. Some examples have been provided above. I’ll add just a couple more here. The Court notes that Obergefell held “that the Constitution requires states to license and recognize same-sex marriages to the same extent that they license and recognize opposite-sex marriages, but it did not hold that states must provide the same publicly funded benefits to all married persons.” If the Texas Supreme Court ever gets to hear Pidgeon or a Pidgeon-like case in the future, it will be interesting to see how the Court would justify finding that the state can offer same-sex couples and opposite-sex couples disparate benefits and still “recognize same-sex marriages to the same extent that they license and recognize opposite-sex marriages.”

The Court also entertains Pidgeon and Hicks argument that Obergefell only held a “‘fundamental right to same sex marriage’” but not “a fundamental right ‘to spousal employee benefits.’” If that is really an issue, it is a trivial one at best. There is no argument here. Even denying a fundamental right to government benefits of any sort, the issue would remain whether a state, specifically Texas, may provide more benefits to opposite-sex couples than it does to same-sex couples when both types of couples possess a fundamental right to marry. Simply put, this is an equal protection case, invoking the Fourteenth Amendment.

Independence Day Note

State Sovereignty does not justify or legitimate disparate treatment of particular groups or persons. In fact, the legitimacy of any state is premised on equal treatment and concern for every citizen. The Texas Constitution makes this point clear: “All political power is inherent in the people, and all free governments are founded on their authority, and instituted for their benefit.” Art. 1, sec. 2. Notice that this clause does not say that political power is inherent in only SOME people, or that government is founded on the authority of a SELECT GROUP of people, or instituted for the benefit of ONE GROUP over another.

No doubt, in a society compiled of people with different and often incompatible beliefs, ideas, religions, and visions of the good life, the opportunities for disagreement will far exceed the opportunities for sustainable consensus. There will never be easy resolutions to social issues, especially when government is viewed as the vehicle through which to promote one vision over another. The Texas Constitution, like the United States Constitution, was designed to take away from government the power to dictate any one moral, political, or social vision over all others.

This Nation was founded on great principles. Our Declaration of Independence records the self-evident truths that all persons are created equal and endowed with inalienable rights, among them the right to life, liberty, and the pursuit of happiness. Why “self-evident?” Because we do not need to explain or justify equality among and between people; we do not need to explain or justify that each person’s life is his or her own; we do not need to explain or justify that, with this one life that he or she has, he or she can seek out his or her own vision of the good life.

I proudly celebrate this Nation’s birth! I am proud to be an American, a United States Citizen, and I am proud to have served this Country and no other. Pride in one’s country is important, for it forges our destinies, knits us into a common history, and makes us complicit in this Nation’s past and responsible for its future. We share common political space and common political principles; that is our core. We differ in personal opinions and beliefs; that is our strength.

The eyes of freedom are upon you, Texas.