Page 61 - Reservation of Rights - Special Edition

TEXAS
Texas Supreme Court Abrogates the Wilkinson Rule
Before 2008, Texas courts recognized the well-estab-
lished Wilkinson rule, which provided that if an insurer assumes the insured›s defense without obtaining a reservation of rights or a non-waiver agreement and with knowledge of the facts indicating noncoverage, all policy defenses, including those of noncoverage, are waived, or the insurer may be estopped from raising them. Farmers Tex. CountyMut. Ins. Co. v. Wilkinson, 601 S.W.2d 520, 521-522 (Tex. Civ. App.—Austin 1980, writ ref’d n.r.e.),abrogated
by Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773 (Tex. 2008). Under the Wilkinson rule, a reservation of rights letter is essential to protect an insurer against claims not covered
under the policy. Without a reservation of rights letter, there is a risk that the doctrine of waiver can be used to create insurance coverage for the insured where none exists by the terms of the policy.
In 2008, the Texas Supreme Court abrogated the Wilkin- son rule. In Ulico, the Court held that “the doctrines of waiver and estoppel cannot be used to re-write the contract of insurance and provide contractual coverage for risks not insured.”Ulico, 262 S.W.3d at 775. The Court expressly dis- agreed with Wilkinson’s statement that noncoverage of a risk is the type of right an insurer can waive and thereby effect coverage for a risk not contractually assumed. Id. at 781.
Based on the Court’s decision in Ulico, although an insurer may still be estopped from denying benefits that would be
2018 ReseRvation of Rights - special edition
TEXAS– Houston
Doyen Sebesta was founded as a litigation firm and our commercial trial lawyers understand the complex issues involved in business related disputes.
We take great pride in developing personal relationships with our clients. We work diligently to understand all the pertinent aspects of our clients’ business so that we can effectively represent them in their business related matters. We maintain that the effective handling of a client’s business related dispute requires a collaborative effort between us and our clients.
Doyen Sebesta’s subrogation practice is a focal point of the firm. Our attorneys have successfully handled subrogation claims for a variety of insurers, both international and domestic. These cases are won by the early identification of the legal and factual issues, the proper preservation of the critical evidence, and the retention of properly qualified experts.
At Doyen Sebesta, your business becomes our business. We represent local, regional, national, and international clients in a variety of commercial and business related matters and litigation. We are dedicated to providing each client with experienced, focused representation which emphasizes that client’s business objectives and offers cost-effective solutions.
Practice Areas: Subrogation & Recovery; First Party Defense/Bad Faith; Insurance Coverage; Third Party Defense; Construction; Creditor Rights; Employment Law; Premises Liability; Product Liability; Real Estate; Transportation Liability; Real Estate Transactions; Mergers & Acquisitions; Entity Formation & Organization; Employment; Corporate Representation/Commercial Transactions; Banking & Lender Representation.
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