NEW ORLEANS - An insurance company that made a bad bet on a Harris County personal injury lawsuit can't block the victorious plaintiffs from seeking the missing $2.2 million from a jury's verdict.
The U.S. Court of Appeals for the Fifth Circuit decided March 14 that Golden Bear Insurance Company was wrong to move to federal court to argue it isn't liable for that money, when a similar state court action is pending.
The case involves a bouncer at a Houston bar called Concrete Cowboy who allegedly assaulted two customers, one of whom is the son of Major League Baseball legend Roger Clemens, while the other is his godson.
Rather than pay the bar's policy limit of $1 million as a settlement, Golden Bear chose to fight the case.
But a jury awarded more than $3 million, and Golden Bear says it still is only obligated to pay the $1 million policy limit. A district court agreed, but the Fifth Circuit overturned.
"Golden Bear's complaint is a misuse of the Declaratory Judgment Act, such that the district court should have declined to exercise its discretionary jurisdiction in this context," the court ruled.
"Golden Bear's alleged misconduct - negligently refusing to settle the claim - is already complete; the original jury returned a verdict exceeding the policy limit. Golden Bear cannot invoke the Act to retroactively argue that it never had a duty to begin with because the demand letter was too vague."
Kacy Clemens and Conner Capel sued Concrete Cowboy in 2019 in Harris County District Court. Their lawsuit said a bouncer had told them to move and they did, "but apparently not to the liking of the Concrete Cowboy bouncer."
They said he began attacking both of them while trying to throw them out of the bar, leading others to join in on the assault. The two men hadn't even bought a drink yet, they said.
Pictures included in the complaint show Capel's bloodied face. The suit says another customer was assaulted the same night and that "the culture at Concrete Cowboy has a reputation."
Online reviews allege similar attacks by bouncers. Clemens and Capel's attorneys asserted damages between $200,000 and $1 million and sent a letter to Concrete Cowboy's lawyer Claire Parsons to settle the case without litigation.
The so-called Stowers letter asked for a "payment of all policy limits of any and all insurance contracts." Stowers letters place a duty on insurers to settle reasonable claims, and if they are unreasonable in not doing so, insurers can be liable for judgments exceeding policy limits.
Clemens won $960,000 at trial, and Capel won $2.28 million. Golden Bear paid its $1 million policy limit, leaving Concrete Cowboy and its owner on the hook for the remaining $2.24 million.
So the bar sued Golden Bear and its lawyer in Houston state court, claiming they were wrong to reject the settlement offer and should be obligated to pay the $2.24 million. Golden Bear went to federal court for a declaration it shouldn't have to.
The Fifth Circuit said Golden Bear is free to argue in the state court action that the Stowers letter was vague but can't use the federal courts to stop the case.
"Allowing the complaint to proceed here would 'enable a prospective negligence action defendant to obtain a declaration of non-liability,' which 'is not one of the purposes of the Declaratory Judgment Act," the court found.
Concrete Cowboy's state case, joined by Clemens and Capel, will now proceed. It had been stayed while the Fifth Circuit considered Golden Bear's request. Clemens and Capel were represented by Randall Sorrels of Abraham, Watkins, Nichols, Sorrels, Agosto & Aziz in the personal injury case.