During the recent election cycle there was some dialogue about the Texas Supreme Court and their bias towards insurance companies. This perceived bias is supported by the Court’s rulings that favor insurance companies almost 90% of the time. This is even more alarming when you consider that in the vast majority of the cases reviewed the injured party prevailed in the trial court and also prevailed in the court of appeals; however, with some regularity the Texas Supreme Court reverses the findings of a jury of citizens as well as a panel of appellate judges and ruled in favor of the insurance company or corporate defendant. When an insurance company or large corporate defendant appeals a judgment to the Texas Supreme Court it is likely going to win.
The Texas Supreme Court acts in many instances as a monolithic block, voting in favor of defendants, and often reversing decades of legal precedents. Some have even gone as far as to suggest that the Court, which is comprised of 9 Republican Justices, rules in favor of many of the companies that donate substantial contributions to their campaigns. The vast majority of the money raised by the Texas Supreme Court comes from insurance companies, medical entities, and large law firms with cases before the Court.
In a recent case the Texas Supreme Court ruled against Texas homeowners who had defective synthetic stucco installed on their homes. Don’s Building Supply, Inc. vs. OneBeacon Insurance Co., 51 Tex. Sup. Ct. J. 1367 (Feb. 7, 2008) In the OneBeacon case, the Court overruled decades of Texas jurisprudence in a decision that favored the insurance company. Because of the Court’s ruling, thousands of Texas homeowners will not be able to recover for damages to their homes. In a nutshell the Court ruled that the homeowners were too late in bringing their lawsuit, even though it was without dispute that the homeowners did not know about the damage being done to their homes – because the damage was hidden by the defective stucco. Prior case law in Texas would have allowed the lawsuit to proceed based upon the “discovery rule.” The discovery rule was a common law theory that allowed a lawsuit to proceed past the typical cutoff date if the injury or harm was not discoverable by the person harmed, even with the exercise of due diligence. Citing the language contained in the insurance policy – language created by and placed into the policy by the insurance company – the Court ruled that the discovery rule did not apply to this circumstance.