Fifth Circuit Refuses To Predict Texas Will Adopt a Sophisticated Insured Exception to Contra Proferentem

Texas has yet to address whether it recognizes a sophisticated insured exception to the doctrine of contra proferentem, and the state’s federal Court of Appeals declined an opportunity to make a prediction about that question in mid-August of this year in Certain Underwriters at Lloyds London v. Perraud, 2015 WL 4747318, 2015 U.S. App. LEXIS 14349 (5thCir., Aug. 12, 2015).  The judges split 2-1 on whether the contract of insurance was ambiguous in nature, but all three were unwilling to reach the sophisticated insured issue.  The case involved a director’s and officer’s (D&O) liability policy, but the issue implicates first-party coverage as well.  It also contains a useful survey of the approaches that courts have taken to this exception from…