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Texas Ass'n of Counties Gov't Risk Management Pool v. Matagorda County

An insurer may not seek reimbursement from its insured for settlement funds paid under a reservation of rights upon an adjudication of noncoverage, where there was no implied consent to reimburse and no equitable remedy supporting a right of reimbursement under the circumstances.

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The full case caption appears at the end of this opinion.

In this case, we decide whether the Texas Association of Counties County Government Risk Management Pool (TAC) mayobtain reimbursement from its insured, Matagorda County, for an amount that TAC paid to settle a claim that was laterdetermined to be excluded from coverage. The trial court ruled that TAC was entitled to reimbursement, but the court ofappeals reversed. 975 S.W.2d 782. Because TAC established neither an implied-in-fact nor an implied-in-law right toreimbursement, we affirm the court of appeals’ judgment.

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Since the late 1980s, TAC has provided law-enforcement-liability insurance to Matagorda County. [FOOTNOTE 1] Because MatagordaCounty’s jail fell out of compliance with the minimum requirements of the Texas Commission on Jail Standards, in 1991 TACbegan including an endorsement to its policy excluding coverage for any claim “arising out of jail.”

 
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