Nautilus Insurance Company v. Hof Partners LLC

Supreme Court of Texas
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No. 23-0408
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Nautilus Insurance Company,
Petitioner,

v.

HOF Partners LLC,
Respondent

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On Petition for Review from the
Court of Appeals for the Second District of Texas
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Statement of JUSTICE YOUNG and JUSTICE SULLIVAN respecting the
denial of the motion for rehearing.

We would grant the motion for rehearing and the petition for
review. The motion and the amicus briefs persuasively assert that the
underlying legal questions warrant this Court’s full consideration. As
always, the Court’s decision to deny the petition expresses no view of the
underlying merits. See, e.g., Loram Maint. of Way, Inc. v. Ianni, 210
S.W.3d 593, 596 (Tex. 2006). Denial of the petition prevents immediate
resolution of the legal issues, but it does not prevent their further
consideration in other cases—and potentially even in a later stage of this
case. Other Texas courts considering similar questions should bring their
independent judgment to bear, which will assist this Court should our
eventual review become necessary.
The question presented here concerns the kinds of entities that
can accept premium payments for a surplus-lines policy under the Texas
Insurance Code. Relying on a provision in Chapter 981 that applies
specifically in the surplus-lines context, Nautilus argues that only a
registered surplus-lines agent can accept such a premium payment. But
the court of appeals applied a general provision found in a different
chapter of the Code and held that there was a fact issue as to whether
the insured’s retail agent had accepted a premium payment on behalf of
a surplus-lines insurer. No. 02-22-00175-CV, 2023 WL 3114309, at *4–
10 (Tex. App.—Fort Worth Apr. 27, 2023). This Court denied Nautilus’s
petition for review.
After Nautilus filed a motion for rehearing, four amicus briefs
(encompassing eight separate entities—one of which alone purports to
represent 1,200 individual companies) were filed, each urging the Court
to grant the motion, grant the petition, and reverse the judgment below.
Amici warn that the court of appeals’ decision “creates an exigent risk
of disruption in the Texas insurance market.” According to amici, the
decision below “may have a significant impact on the appeal of Texas as
a market to surplus lines insurers.”
If the court of appeals’ decision in fact generates the consequences
predicted by amici, including a lack of predictability and concomitant
costliness imposed by the decision below but not required by the law,
this Court will certainly have further opportunities to address the

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serious legal questions that Nautilus presents—most likely sooner rather
than later.

Evan A. Young
Justice

James P. Sullivan
Justice

STATEMENT FILED: June 27, 2025

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