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At a Glance:
Angus Chemical Co. v. IMC Fertilizer, Inc.
March 21, 1997
939 S.W.2d 138
Published Opinion

Angus Chemical Co. v. IMC Fertilizer, Inc.

Supreme Court of Texas.



IMC Fertilizer Group, Inc., Respondents.

No. 96–0743.


Jan. 10, 1997.


Rehearing Overruled March 21, 1997.

Attorneys & Firms

*138 Stephen Novack, Chicago, IL, for Petitioner.

William A. Brewer, III, Michael J. Collins, Dallas, for Respondents.



In Texas, the general rule (with exceptions not relevant here) is that an injured party cannot sue the tortfeasor’s insurer directly until the tortfeasor’s liability has been finally determined by agreement or judgment. 925 S.W.2d 355. We agree with the district court.

A nitroparaffin plant owned by Angus Chemical Company and managed by IMC Fertilizer Group, Inc. exploded, killing eight people, injuring many others, and destroying the plant. Although the plant was located in Louisiana, many of the injured people sued Angus, IMC, and others in Houston. Angus cross-claimed against IMC to recover property damages and reimbursement of claims paid to third parties. After the plaintiffs settled, Angus and IMC settled, agreeing to a $220 million judgment for Angus against IMC, which IMC could satisfy by paying Angus $180 million over three years. In turn, Angus released IMC from all claims arising out of the explosion except, among others, indemnity and contribution for third party claims against Angus in Louisiana and elsewhere. The release did not name IMC’s insurers as parties being released.

Three weeks after the release was signed and the day before the agreed judgment was rendered, Angus sued IMC’s insurers in Louisiana for damages not reimbursed by IMC in the settlement. IMC then filed this action against Angus for a declaration that Angus’ release of IMC also released IMC’s insurers. Angus counterclaimed for recovery of damages relating to the third-party claims that had been carved out of the settlement. Angus and IMC each moved for summary judgment on the effect of the release. The district court granted Angus’ motion, denied IMC’s motion, and severed its ruling from the remainder of the case, thereby making them final. The court of appeals reversed. 925 S.W.2d 355.

In this State, “[u]nless a party is named in a release, he is not released.” Illinois National Insurance Company v. Perez, 794 S.W.2d 373 (Tex.App.—Corpus Christi 1990, writ denied), the court held that the release of an employer for liability for the wrongful death of an employee did not release the employer’s workers’ compensation carrier not named in the release. In the case before us, IMC’s insurers were not named in the release. Under McMillen, IMC’s insurers were not released.

Angus cannot sue IMC’s insurers in Texas for liability for which IMC has been released, but only because the release precludes the prerequisite determination of IMC’s liability, not because IMC’s insurers have themselves been released. In a jurisdiction where a determination of the insured’s liability is not a prerequisite to an action against the insurer, and release of the insured is not an impediment to such action, Texas law does not preclude Angus from suing IMC’s insurers. Like the district court, we intimate no view on whether Angus can maintain suit against IMC’s insurers in Louisiana, where suit has been filed, or what law should govern that action, or whether it should succeed.

Accordingly, the Court grants Angus’ application for writ of error and without hearing argument reverses the judgment of the court of appeals and remands the case to the district court for rendition of judgment for Angus consistent with this opinion. TEX.R.APP. P. 170.

End of Document