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Click here for the full text of this decision FACTS:In a three-judge panel decision, the 5th U.S. Circuit Court of Appeals ruled that Allstate Texas Lloyds Insurance Co. could intervene in an appeal to challenge an adverse liability judgment entered against its insured, Kent Mathews. The losing party in that ruling filed for a petition for rehearing en banc. Allstate initially defended Mathews under a full reservation of rights. Allstate denied coverage over Kent’s negligence on the basis of a line of cases from that held that the term “occurrence” in an insurance policy did not cover the insured’s negligence, when that negligence was premised on the intentional conduct of the insured’s servant. That argument was abandoned after the Texas Supreme Court’s decision in King v. Dallas Fire Ins. Co., 85 S.W.3d 185 (Tex. 2002). There, the Texas Supreme Court interpreted the term “occurrence” to include coverage for an insured’s negligence, even when premised on the intentional conduct of the insured’s servant. HOLDING:Petition denied. “Once Allstate accepted coverage over any negligence liability on the part of Kent Mathews, they had a direct interest in the liability lawsuit. Regardless of whether, in this case, Allstate’s interest was sufficient to intervene without the acceptance of coverage, the interest was sufficient with it.” OPINION:Higginbotham, J.; Higginbotham, Davis and Garza, J.J.

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