Dallas Gerstle Snelson, LLP Austin

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Extrinsic Evidence not Allowed to Determine Duty to Defend

In the ongoing interpretation of the Monroe factors that allow, under limited circumstances,  extrinsic evidence to be introduced in determining whether an insurer owes a duty to defend, yet another court has determined that such evidence was inadmissible under the specific facts of the case. In Hudson Excess Insurance Company v. Flipp Oilfield Services, LLC and Joshua Galatas, the United States District Court for the Southern District of Texas held that extrinsic evidence was not admissible in determining whether an insurer owed a duty to defend its insured in a lawsuit brought by the insure
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U.S. Corporate Transparency Act on Pause

Under the Corporate Transparency Act (CTA), which went into effect on January 1, 2024, many U.S. business owners are required to file corporate transparency reports with beneficial ownership information. But the CTA is currently on hold. Why and what impact does the pause have on you? The CTA, enacted by Congress in 2021, requires many companies formed or operating in the United States to report information about their beneficial owners to Treasury’s Financial Crimes Enforcement Network (FinCEN), which will store this sensitive information in a secure, confidential database. The Department
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$22 Million Award under Prompt Pay Act Reversed

Does the Texas Prompt Pay Act (PPA), requiring prompt payment of contractors involved in construction projects, apply to construction of a natural gas facility intended to extract propane, butane and other natural gas liquids (NGLs) in a midstream capture process? The Houston Court of Appeals, First District, in Arrow Field Services, LLC v. Linde Engineering North America, Inc, recently held, no. Arrow Field Services, LLC (Arrow) is a midstream company located in North Dakota which acquires and processes natural gas to extract NGLs. Linde Engineering North America, Inc. (Linde) provides constr
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$1.3 Billion Lawsuits Dismissed due to Waiver of Subrogation Clause

In November, 2024, a U.S. Bankruptcy Judge in Houston dismissed two lawsuits filed by several insurance companies against Zachry Holdings Inc. and its joint venture partners, ruling that the waiver of subrogation clause in the construction contract barred the lawsuits, robbing the insurers of standing to sue. Shortly after Zachry filed bankruptcy in May 2024, the insurers filed the lawsuits arising out of a June 2022 explosion at the LNG Freeport liquified natural gas facility located on the Gulf of Mexico. According to a report issued by the U.S. Pipeline and Hazardous Materials Safety Admini
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Developer Does Not Owe Duty to Prevent Flooding from Hurricane

Does a land developer owe a duty to set minimum slab elevations to prevent flooding during a foreseeable weather event? In Jason Alexander, et al. v. The Woodlands Land Developer Company L.P., The Howard Hughes Corporation, LJA Engineering, Inc. F/K/A LJA Engineering & Surveying, Inc., and James R. Bowles, the Houston Court of Appeals (First District) answered this question, no. In August of 2017, the Gulf Coast of Texas was decimated by the Category 4 storm, Hurricane Harvey, marking one of the most devastating natural disasters in U.S. history. The Houston area was one of the several cit
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Duty to Defend Against Design Defects under CGL Policy

Does an insurer of a commercial general liability policy owe a duty to defend an architect in a malpractice lawsuit? The US Court of Appeals for the Seventh Circuit recently held, yes. We provide a roadmap for the Court’s controversial decision. In Cornice & Rose International, LLC v. Acuity, Cornice, an architectural firm based in Illinois, was retained to design and oversee construction of a building in Iowa. According to the contract between Cornice and the building’s owner, Cornice agreed to, among other services, prepare drawings and specifications detailing the quality levels of
Texas State Capitol Building in Austin, 3/4 view

2025 Texas Legislative Preview

In anticipation of the upcoming 2025 Texas Legislative Session, bills are starting to be filed.  Just because a bill is pre-filed does not mean that it might ultimately be passed or even considered.  According to the Texas Construction Association, the following are some of the areas on which bills will be filed. Securing Reserved Funds/Retainage.   Increase security for reserved funds by amending the Construction Trust Fund Act to statutorily classify reserved funds as trust funds. Documents Incorporated by Reference into Construction Contract.  Amend the Business & Commerce Code to