LMFIC initially defended Copart under five consecutive general liability policies, though it reserved its rights. Together with LIC—backing Copart under three umbrella policies—the insurers filed a 2019 declaratory action in Texas federal court seeking clarity on their duty to defend or indemnify.
The court sided with the insurers, prompting them to withdraw their defense. Copart appealed and later reached a May 2022 settlement with the property owners. By July 2023, the Fifth Circuit upheld that the insurers had no duty to defend but reversed and remanded the indemnification issue.
Copart Strikes Back
In July of this year, Copart launched the present action, alleging breach of policy and violations of the Texas Insurance Code. The Liberty Mutual units argue Copart is ignoring the unresolved indemnification question, warning that its settlement blended both covered and excluded losses without allocation—a flaw they say is fatal to the claim.
“The absence of allocation is fatal to Copart’s claim, and dismissal is therefore required,” the insurers stressed in their filing.
Legal Counsel in Play
- Copart is represented by Amy Elizabeth Stewart and Melinda K. Bradley of Amy Stewart PC.
- Liberty Mutual is represented by Catherine L. Hanna, Jeffrey C. Glass, and Samantha L. McCoy of Hanna & Plaut LLP.
