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Click here for the full text of this decision FACTS:The issue in this case is whether the phrase “paid on behalf of” as it is used in Article 21.28-C, 11(b) of the Insurance Code requires the Texas Property and Casualty Insurance Guaranty Association to apportion responsibility among multiple insureds covered under a single insurance policy prior to seeking recoupment from a net-worth insured. The association demanded payment of $300,000 from Global Santa Fe Corp. based on a contribution the association made to settle a suit filed against Global after its insurance provider became impaired. When Global refused to pay, the association filed suit. The trial court granted the association’s motion for partial summary judgment and ordered Global to pay the association. On appeal, Global contends that the trial court misconstrued the statute, as there was no evidence of how much contribution was paid solely on behalf of Global because the association failed to properly apportion its contribution among the multiple insureds. HOLDING:Affirmed. The phrase “paid on behalf of” in the net -worth-recoupment statute is a term of art employed by the legislature to refer to a third-party claim. A third-party claim is one in which the insurer, as a representative of an insured, pays a third-party rather than paying the insured directly as it would do in a first-party claim. Acting on behalf of a person is acting as “a representative of or proxy for” that person. Thus, when an insurer pays a third-party claim, it does so on behalf of the insured. The phrase “paid on behalf of” does not refer to the amount of economic benefit an insured receives from the association’s contribution; it refers to the fact that the association has paid a covered claim to satisfy the liability of an insured to a third party claimant. Such a claim would have been paid by the insurer if it had remained solvent. Therefore, if the association pays a covered claim that was filed against multiple insureds covered under a single policy, then it does so on behalf of all the insureds. If the Legislature intended the phrase to refer to the exact amount of economic benefit an individual insured received as a result of the association’s contribution, it could have used the language “paid on behalf of that person exclusively.” It did not. The court holds that the plain meaning of the phrase “paid on behalf of,” when used in the context of the insurance industry, does not indicate that the association must apportion a contribution made to settle a single claim among multiple insureds before seeking recoupment from a net worth insured. In this case, there is one covered claim that involves multiple insureds covered under a single policy. The association paid $300,000 to Shane Hancock on behalf of all of the insureds to assist in settling the underlying litigation. However, only Global qualifies as a net-worth insured from whom the association could seek recoupment. Furthermore, Global was statutorily required to reimburse any amount paid by the association on Global’s behalf, despite the fact that other, less wealthy insureds also benefitted from the association’s contribution. The association properly demonstrated to the trial court that no issue of material fact existed with regard to the meaning of the phrase “paid on behalf of” and that it was therefore entitled to judgment as a matter of law on its declaratory and statutory entitlement claims. OPINION:Smith, J.; Law, C.J., Smith and Pemberton, JJ.

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