Texas Supreme Court to Hear Landmark Case on Insurer’s Duty to Defend in Injury Settlements

The Texas Supreme Court has agreed to hear a case involving Houston-based Patterson UTI Energy Inc. and a subsidiary of Liberty Mutual Insurance Companies. Central to the dispute is whether the insurer was at fault for refusing to pay defense costs in a lawsuit. The Fourteenth Court of Appeals upheld a Harris County trial court’s dismissal of the case in favor of Patterson UTI Energy. The court of appeals had previously concluded that the excess policy in question did not unambiguously exclude defense costs for the insured, which is a crucial point in the determination of an insurer’s duty to defend in personal injury settlements. The outcome of this case could substantially impact the interpretation of defense cost exclusions in insurance policies in Texas.