Hudson Insurance Company et al v. Protective Insurance Company

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
H UDSON I NSURANCE COMPANY, ET AL., 	§
Plaintiffs, 	§
§
v. 	§ 	C IVIL A CTION N O. 4:25-CV-2504
§
PROTECTIVE I NSURANCE COMPANY, 	§
Defendant. 	§
MEMORANDUM AND RECOMMENDATION
Before the Court is Defendant Protective Insurance Company’s (“Protective”)
Renewed Motion to Dismiss.1 ECF 24. 	Defendant seeks dismissal of Plaintiffs’
claims for lack of subject matter jurisdiction. Id. For the reasons discussed below,
the Court RECOMMENDS that Defendant’s Motion be GRANTED and Plaintiffs’
claims be DISMISSED WITHOUT PREJUDICE.
I. 	Factual and Procedural Background.
Plaintiff Gulf Winds International, Inc. (“Gulf Winds”) is a commercial
trucking company. ECF 9 ¶ 8. Plaintiff Hudson Insurance Company (“Hudson”) is
one of Gulf Wind’s insurers. Id. ¶ 11-12. Defendant Protective Insurance Company
(“Protective”) issued Gulf Winds an excess liability contract. Id. In January 2022, a
Gulf Winds tractor trailer was involved in an accident that injured non-party Joshua
1 The District Judge referred this case to the undersigned Magistrate Judge pursuant to 28 U.S.C.
§ 636(b)(1)(A) and (B), the Cost and Delay Reduction Plan under the Civil Justice Reform Act,
and Federal Rule of Civil Procedure 72. ECF 13.
United States District Court
Southern District of Texas
ENTERED
July 23, 2026
Nathan Ochsner, Clerk
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Weimar. 	Id. ¶ 13. 	Weimar sued Gulf Winds in Texas state court in June 2023
(Weimar lawsuit). Id. ¶ 14; ECF 9-1. See also Weimar v. Gulf Winds Int’l, Inc., No.
2023-38909 (113th Dist. Ct., Harris County, Texas, June 23, 2023).
Gulf Winds alleges that at the time of the accident, the Protective Excess
Contract provided coverage, with certain exceptions, for its commercial trucking
liability, and the Hudson Policy provided coverage for “[a]ny ‘auto’ used in
connection with [Gulf Winds’] business.” ECF 9 ¶¶ 9, 28-31. Plaintiffs allege they
later reformed the Hudson Policy to limit coverage to passenger vehicles, as opposed
to commercial trucks, which excludes coverage for the Weimar lawsuit. 	Id. ¶¶ 32,
38. Plaintiffs claim whether the Hudson Policy provides coverage for and a duty to
defend the Weimar lawsuit controls whether the Protective Excess Contract applies
to cover potential loss from the Weimar lawsuit. See, e.g., id. ¶¶ 43-45.
Plaintiffs’ 	Amended 	Complaint 	brings 	claims 	against 	Protective 	for
declaratory judgment and anticipatory breach of contract. 	ECF 9 ¶¶ 38, 51-55.
Plaintiffs specifically seek declarations that: the Hudson policy as reformed is the
applicable policy; as reformed, the Hudson policy neither obligates Hudson to
provide indemnity to or defend Gulf Winds for the Weimar lawsuit; 	Protective is
bound by the reformed Hudson Policy; as reformed the Hudson Policy does not
constitute other insurance that offsets indemnification under the Protective Excess
Contract; the money Gulf Winds has paid and will pay to defend the Weimar lawsuit
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applies to the Excess Contract’s self retention amount ($350,000); and Protective is
obligated to indemnify Gulf Winds for all costs incurred in the Weimar lawsuit after
the self retention amount is reached. Id. at 17-18.
Defendant Protective filed a Renewed Motion to Dismiss for lack of subject
matter jurisdiction under Rule 12(b)(1). ECF 24. 	Defendant’s Motion challenges
only the justiciability of Plaintiff’s claims and does not dispute the existence of
diversity jurisdiction. 	Id. at 2. 	Plaintiffs filed a Response (ECF 25), to which
Defendant replied. ECF 26. The Motion is ripe for adjudication.
II. 	Legal Standards.
When subject matter jurisdiction is challenged, the court “is free to weigh the
evidence and resolve factual disputes in order to satisfy itself that it has power to
hear the case.” Montez v. Dep’t of the Navy, 392 F.3d 147, 149 (5th Cir. 2004); Krim
v. Pcorder.com, 402 F.3d 489, 494 (5th Cir. 2005). The Court may consider any of
the following in resolving a Rule 12(b)(1) motion: (1) the complaint alone; (2) the
complaint supplemented by the undisputed facts evidenced in the record; or (3) the
complaint supplemented by undisputed facts plus the court’s resolution of disputed
facts. Hopkins v. Wayside Schs., No. 23-50600, 2024 WL 3738478, at *4 (5th Cir.
Aug. 9, 2024); Schaeffler v. United States, 889 F.3d 238, 242 (5th Cir. 2018). When
a Defendant files a motion under Rule 12(b)(1), the plaintiff bears the burden of
establishing subject matter jurisdiction. Exelon Wind 1, L.L.C. v. Nelson, 766 F.3d
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380, 388 (5th Cir. 2014). If the plaintiff fails to meet his burden, the case must be
dismissed. Id.
III. 	Analysis.
“Article III, § 2, of the Constitution limits the jurisdiction of federal courts to
Cases and Controversies, which restricts the authority of federal courts to resolving
the legal rights of litigants in actual controversies.” Genesis Healthcare Corp. v.
Symczyk, 569 U.S. 66, 71 (cleaned up). The justiciability doctrines of ripeness and
standing originate from Article III’s case and controversy language. Choice Inc. of
Texas v. Greenstein, 691 F.3d 710, 715 (5th Cir. 2012).
“[A] declaratory action must be ripe in order to be justiciable, and is ripe only
where an ‘actual controversy’ exists.” Shields v. Norton, 289 F.3d 832, 835 (5th Cir.
2002). An actual controversy exists where “‘a substantial controversy of sufficient
immediacy and reality exists between parties having adverse legal interests.’” Id.
(quoting Orix Credit All., Inc. v. Wolfe, 212 F.3d 891, 896 (5th Cir. 2000)). “Whether
particular facts are sufficiently immediate to establish an actual controversy is
answered on a case-by-case basis.” Orix Credit All., Inc., 212 F.3d at 896 (citations
omitted). The key considerations of ripeness are “the fitness of the issues for judicial
decision and the hardship to the parties of withholding court consideration.” Triyar
Companies, LLC v. Lexington Ins. Co., No. 3:12-CV-294, 2013 WL 3280033, at *2
(S.D. Tex. June 27, 2013) (cleaned up). The “fitness” consideration examines
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“whether the issues at stake are purely legal or whether further factual development
is necessary to resolve the case,” while the “hardship” consideration examines “the
difficulty the parties will face if a judicial decision is denied.” Id.
As to standing, the “irreducible constitutional minimum” requirements are:
(1) an injury in fact which is (a) concrete and particularized and (b) actual or
imminent and not conjectural or hypothetical; (2) a causal connection between the
injury and the defendant's conduct; and (3) the injury likely will be redressed by a
favorable decision. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992).
A. The Parties do not dispute that Protective owes no duty to defend
Gulf Winds.
Plaintiffs neither allege nor seek a declaration stating that Protective owes a
duty to defend the Weimar lawsuit. The copy of the Excess Contract attached to the
Amended Complaint states that the duty to “investigate, settle, or defend all claims
and . . . conduct the defense and appeal in all actions, suits and proceedings” falls to
Gulf Winds. ECF 90-5 at 15. Protective has the right to assume the administration
or defense of a claim under certain circumstances, but Plaintiffs do not allege
Protective exercised this right. Id.
B. Whether Protective has a duty to indemnify Gulf Winds is not yet
ripe.
Defendant argues that all of Plaintiffs’ requests for declaratory relief rely on
a determination that Protective has a duty to indemnify Gulf Winds’ liability, if any,
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resulting from the outcome of the Weimar lawsuit. ECF 24 at 3. Defendant further
argues the issue of whether Protective owes a duty of indemnity to Gulf Winds is
not ripe and therefore, not justiciable. Id. at 3-5. Plaintiffs, on the other hand, argue
that policy coverage and a duty to defend present a justiciable controversy before
there has been a finding of liability or a settlement in the underlying lawsuit. ECF
25 at 8-9. It is undisputed that any determination of liability in the Weimar lawsuit
remains pending and the case has not been settled. ECF 24 at 2; ECF 25 at 3.
Black letter Texas law provides that a dispute regarding an insurer’s duty to
indemnify its insured is not ripe prior to a determination of the insured’s liability in
the underlying action. 	Until a judgment has been rendered against an insured, no
justiciable controversy exists regarding the insurer’s duty to indemnify the insured.
Firemen’s 	Insurance Co. v. Burch, 	442 S.W.2d 	331 	(Tex.1968). 	“Thus, a
declaratory judgment to determine whether the insurer had a duty [to indemnify the
insured is] premature [before a judgment has been rendered against an insured].”
Farmers Texas Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 83 (Tex. 1997); see
also McGinnis v. Union Pac. R. Co., No. CIV.A. 3:07-CV-32, 2009 WL 2900277,
at *3 (S.D. Tex. Sept. 8, 2009) (stating that under Texas law,2 the “‘duty to
indemnify only arises after an insured has been adjudicated, whether by judgment or
2 In diversity cases, state law that defines the parties’ substantive rights plays a role in determining
whether a case or controversy exists. 	Cincinnati Specialty Underwriters Ins. Co. v. US Polyco,
Inc., No. 3:19-CV-00421-X, 2020 WL 2114820, at *2 (N.D. Tex. May 4, 2020).
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settlement, to be legally responsible for damages in a lawsuit.’” (quoting Collier v.
Allstate County Mut. Ins. Co., 64 S.W.3d 54, 62 (Tex. App.—Fort Worth 2001) (no
writ)). 	Gulf Winds’ liability has not been determined in the Weimar suit, so any
controversy over Protective’s duty to indemnify Gulf Winds is not yet ripe.
Texas law provides one exception to the general bar on duty-to-indemnify
controversies being decided prior to the underlying suit: “the duty to indemnify is
justiciable before the insured’s liability is determined in the liability lawsuit when
the insurer has no duty to defend and the same reasons that negate the duty to defend
likewise negate any possibility the insurer will ever have a duty to indemnify.”
Griffin, 955 S.W.2d at 84 (emphasis in original). 	See also Northfield Ins. Co. v.
Loving Home Care, Inc., 363 F.3d 523, 536–37 (5th Cir. 2004) (explaining the
application of Griffin). 	The Griffin exception applies only when the Court can
decide the rights of the parties without the rendering of liability or factual
determinations in the underlying action. 	Griffin, 955 S.W.2d at 84. 	See Century
Sur. Co. v. RTI Servs., LLC, No. MO:24-CV-00074-DC-RCG, 2025 WL 750558, at
*4 (W.D. Tex. Jan. 13, 2025) (explaining that Griffin applies where “regardless of
the result in the underlying suit, the insurer’s duty to defend fell completely outside
any conceivable realm of possibility under the policy”), report and recommendation
adopted in part, No. MO:24-CV-00074-DC, 2025 WL 588341 (W.D. Tex. Feb. 24,
2025), aff'd, No. 25-50242, 2025 WL 2851874 (5th Cir. Oct. 8, 2025). In Griffin, the
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insurer sought a declaration that a personal automobile liability policy imposed
neither a duty to defend nor a duty to indemnify an underlying personal injury
lawsuit brought by a drive-by shooting victim against the insured, the driver in the
drive-by shooting. Griffin, 955 S.W.2d at 81-82.
The Griffin exception does not apply here because no controversy exists
regarding Protective’s lack of a duty to defend. 3 	See RTI Servs., LLC, 2025 WL
750558, at *4 (finding claim for declaratory judgment regarding duty to indemnify
not ripe where plaintiff failed to contend there was no duty to defend); ECF 9-5 at
15. Even if a controversy existed regarding the duty to defend, the Griffin exception
still would not apply because different justifications negate the duty to defend—
express language in the Excess Contract negates a duty to defend (ECF 9-5 at 15),
and the duty to indemnify—the effect of the Hudson Policy reformation potentially
negates the duty to indemnify. 	This is not a case in which the duty to indemnify
can be decided absent a liability finding because according to the terms of
3 Of the other cases Plaintiffs cite in support of finding a Griffin exception or actual controversy,
all but one involved an insurer suing the insured for a declaration on both its duty to defend and
indemnify. See Maryland Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 271-272 (1941) (holding
there is an actual controversy where insurer sought declaration on both its duties because the
vehicle involved in the accident was owned by the insured’s employee rather than “hired by the
insured”); AXA Re Prop. & Cas. Ins. Co. v. Day, 162 F. App’x 316, 318 (5th Cir. 2006) (finding a
live controversy where insurer sought declaration on both duties); Hardware Mut. Cas. Co. v.
Schantz, 178 F.2d 779, 780 (5th Cir. 1949) (finding an actual controversy where insurer sought
declaratory judgment on both duties); State Farm Fire & Cas. Co. v. Gandy, 925 S.W.2d 696, 704
(Tex. 1996) (involving a duty to defend and indemnify). The one case outside this pattern is easily
distinguishable because the insurer in that action sought a declaratory judgment on indemnification
after the underlying personal injury lawsuit was resolved. Everest Nat’l Ins. Co. v. Garcia, No.
4:23-CV-01917, 2024 WL 5274652, at *1 (S.D. Tex. Mar. 5, 2024).
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Protective’s Excess Contract, the duty to indemnify depends on the total loss from
the Weimar suit and the costs incurred by Gulf Winds that qualify to satisfy its self
retention obligation. 	See 	ECF 9 ¶¶ 21-26, 33-36 (explaining the indemnity
procedure in the Excess Contract).
C. Protective, a non-party to the Hudson Policy, is not bound by a
decision regarding the reformation of the Hudson Policy.
Whether the policy between Hudson and Gulf Winds was reformed fails to
present a ripe controversy between those Plaintiffs and Protective. Plaintiffs argue
a justiciable controversy exists based on Protective’s alleged refusal to acknowledge
the Hudson Policy reformation and its effect on Hudson’s duty to defend the Weimar
lawsuit. ECF 25 at 9. Plaintiffs also argue judicial estoppel prevents Protective from
arguing that a dispute over a duty to indemnify is not justiciable prior to resolution
of the underlying lawsuit. 	Id. at 15-16. 	However, the Court cannot consider the
judicial estoppel argument because Plaintiffs’ claims against Protective are not ripe.4
4 Judicial estoppel requires that: “(1) the party against whom judicial estoppel is sought has
asserted a legal position which is plainly inconsistent with a prior position; (2) a court accepted
the prior position; and (3) the party did not act inadvertently.” Reed v. City of Arlington, 650 F.3d
571, 574 (5th Cir. 2011). But “[j]udicial estoppel, as an equitable remedy, must be consistent with
the law.” Id. Even if Defendant had not raised the issue of ripeness, the Court would be required
to do so sua sponte because it implicates subject matter jurisdiction. 	See Horton v. City of
Smithville, 117 F. App’x 345, 346–47 (5th Cir. 2004) (explaining ripeness must be raised sua
sponte as part of the jurisdictional inquiry). 	Therefore, the Court cannot consider the estoppel
argument.
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To the extent the requests for declaratory relief5 concern Plaintiffs’ obligations
under the Hudson Policy, Hudson and Gulf Winds agree the reformed Hudson Policy
does not provide any coverage for the accident which is the subject of the Weimar
lawsuit. 	Id. ¶¶ 16-20, 28-32. 	Thus, no live controversy exists between Plaintiffs.
To the extent Plaintiffs seek to enforce the terms of the reformed Hudson Policy
against Defendant, Protective, a non-party to the Hudson Policy, has no standing to
bring a claim under the Hudson Policy. 	See Kona Tech. Corp. v. S. Pac. Transp.
Co., 225 F.3d 595, 602 (5th Cir. 2000). 	A controversy between Plaintiffs and
Protective regarding the effect of the Hudson Policy reformation can only arise in
the context of Protective’s duty to indemnify Gulf Winds for liability incurred in the
Weimar suit. As explained above, Protective’s duty to indemnify Gulf Winds is not
ripe until Gulf Winds either settles or incurs liability in the Weimar lawsuit.
Therefore, Plaintiffs’ claims for declaratory relief6 addressing whether and to what
extent Protective is obligated to indemnify Gulf Winds are not ripe for adjudication.
5 These include requests for a declaration that: the reformed Hudson policy is valid and binding
upon Gulf Winds, Hudson, and Protective (ECF 9 ¶¶ 38-39); that Hudson has no duty to defend
Gulf Winds under the reformed policy (id. ¶¶ 40-42); and that Hudson has no duty to indemnify
Gulf Winds in the Weimar lawsuit (id. ¶¶ 49-50).
6 These include requests for a declaration that: the Hudson Policy does not constitute other
insurance that would limit Protective’s duty to indemnify under the Excess Contract (ECF 9 ¶¶ 43-
45); Gulf Winds’ expenses paid to defend the Weimar lawsuit apply towards the Excess Contract’s
self-retention amount, the amount Gulf Winds must spend before a duty to indemnify begins (id.
¶¶ 46-47); and Protective has a duty to indemnify Gulf Winds for loss attributable to the Weimar
lawsuit (id. ¶ 48).
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D. Plaintiffs’ 	anticipatory 	breach 	of 	contract 	claims 	are 	not
justiciable.
1. The anticipatory breach of contract claim is not ripe.
Under Texas law, a breach of contract claim based on denial of insurance
coverage is not ripe until the insurer actually denies the claim. Lopez v. State Farm
Lloyds, 780 F. Supp. 3d 663, 675 (W.D. Tex. 2025) (collecting cases). 	Plaintiffs
argue 	Protective 	anticipatorily 	breached 	the 	Excess 	Contract 	by 	refusing 	to
recognize the validity of the Hudson Policy reformation and continuing to assert that
the Weimar lawsuit is covered by the Hudson Policy, effectively denying that
Protective’s Excess Contract provides coverage for the Weimar lawsuit. ECF 9 ¶¶
51-55. 	However, Plaintiffs have completely failed to allege that Gulf Winds
submitted a claim to Protective and that Protective denied the claim or said it would
deny the claim. 	Most importantly, the Excess Contract provides that Gulf Winds
may request indemnification only after total loss from the Weimar accident has been
determined. ECF 9-5 at 13. No factual allegations support a claim that Protective
anticipatorily breached the Excess Contract and the language of the contract itself
demonstrates that Gulf Winds’ anticipatory breach claim is not ripe.
2. Plaintiff Hudson lacks standing to bring an anticipatory breach
of contract claim against Defendant.
Under Texas law, parties are presumed to contract only for themselves and
not for third party beneficiaries. Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069,
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1075 (5th Cir.), opinion supplemented on denial of reh’g, 303 F.3d 570 (5th Cir.
2002). To overcome this presumption, the parties to the contract must have intended
to secure a benefit to a third party and entered into the contract directly for the third
party’s benefit. Newman v. Plains All Am. Pipeline, L.P., 23 F.4th 393, 401 (5th Cir.
2022). 	Hudson is not a party to the Excess Contract between Gulf Winds and
Protective. There is no indication that Gulf Winds and Protective intended to secure
a benefit for Hudson or entered into the Excess Contract with that specific purpose.
Therefore, Hudson lacks standing to bring a claim under the Excess Contract and its
anticipatory breach claim is not justiciable.
IV. 	Conclusion and Recommendation.
For the reasons stated above, the Court RECOMMENDS that Defendant’s
Motion (ECF 24) be GRANTED and Plaintiffs’ claims be DISMISSED WITHOUT
PREJUDICE. The Court further RECOMMENDS that Plaintiffs’ Motion for Partial
Summary Judgment (ECF 28) be TERMINATED as moot.
The 	Clerk 	of 	the 	Court 	shall 	send 	copies 	of 	the 	memorandum 	and
recommendation to the respective parties, who will then have fourteen days to file
written objections, pursuant to 28 U.S.C. § 636(b)(1)(C). 	Failure to file written
objections within the time period provided will bar an aggrieved party from attacking
the factual findings and legal conclusions on appeal. Douglass v. United Servs. Auto.
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Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc), superseded by statute on
other grounds.
Christina A. Bryan
United States Magistrate Judge
Signed on July 23, 2026, at Houston, Texas.
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