Take notice.

Rhymes sued Maria Hernandez for injuries arising from a car accident. Hernandez ultimately defaulted. During the course of the proceedings, “Rhymes’ attorney was also communicating with [United Automobile Insurance Services, a claims-handling service] about the accident and attempting to settle his personal injury claim . . . . UAIS made several unsuccessful attempts to contact [the insured parties] about the matter before the default judgment was signed.” As to notice, “[t]he evidence established that [Hernandez] never gave notice of suit to or requested a defense from UAIS or Old American [Insurance Company].”

Rhymes then sued to collect on Hernandez’s policy. The Fifth Court reversed a summary judgment in his favor and rendered judgment for the defendants, finding that notice was a condition precedent to coverage under the policy, and rejecting two arguments made by Rhymes about the practicalities of the situation:

• “Rhymes also argues that the notice of suit provision was actually satisfied here because his attorney sent appellants copies of the petition in the underlying suit and confirmation of service on Maria. . . . Notice given by a third party does not trigger the insurer’s duty to defend and does not estop the insurer from asserting the insured’s breach as a bar to liability.”
• And as to prejudice, while the defendants’ “claim file relating to the accident showed that appellants viewed coverage as ‘clear’ and liability as ‘accepted,'” the default judgment established prejudice as a matter of law, as it “not only deprived appellants of the opportunity to litigate the claim’s merits but also imposed ‘a new burden of proof on new issues’ in order to set the default judgment aside.”

United Automobile Insurance Services v. Rhymes, 05-16-01125-CV (May 4, 2018) (mem. op.)