A negotiator in an insurance policy agreement was not released from a lawsuit when an insurance company reached a settlement agreement in a claim against it.
On Dec. 31, the Court of Appeals for the First District of Texas reversed a ruling from the 268th District Court in Fort Bend, Texas, which dismissed White Lion Holdings, LLC and its manager Bernard J. Morello’s lawsuit against intermediary Insgroup, Inc. (d/b/a Agia Agricultural Ins. Agency). White Lions initially sued its insurance company, Scottsdale Insurance Company, claiming that it didn’t receive the coverage it was owed via the policy it purchased. White Lions also took legal action against the intermediaries that were involved when it bought the policy: Insgroup and U.S. Risk, but came to a settlement agreement with Scottsdale in 2008 and went to trial with Insgroup in 2018. (It previously reached a settlement agreement with U.S. Risk, leaving Insgroup as the only defendant)
The lower court ruled in favor of Insgroup, stating that it was released from the lawsuit thanks to White Lion’s settlement. But the appeals court disagreed and reversed that ruling.
While White Lion admitted that it signed a release concerning its dispute with Scottsdale, it insists that it didn’t release Insgroup from the lawsuit. Justice Sarah Beth Landau wrote in the opinion, “A nonsettling tortfeasor – like Insgroup—cannot claim the protection of a release unless ‘the release refers to him by name or with such descriptive particularity that his identity or his connection with the tortious event is not in doubt.’”
Chief Justice Sherry Radack and Justice Richard Hightower also concurred in the case.
Insgroup failed to prove that it was released from the lawsuit. Even though the company suggested that it was a legal agent for Scottsdale, the judges noted that Texas law does not secure Insgroup as an agent for Scottsdale
Ultimately, the judges stated that the lower court should not have ruled against White Lion, and it reversed and remanded the case.