Justice Randy Wilson
Justice Brad Hart
Over a dissent, the Houston [14th] Court of Appeals has held that two insurers of a long dissolved Texas corporation facing an asbestos-related wrongful death suit in South Carolina have standing to appeal the company’s receiver’s suit to domesticate the South Carolina judgment in Harris County district court.
National Union Fire Insurance Company of Pittsburgh, PA and Travelers Casualty and Surety Company v. Payne & Keller Company, by and through its duly-appointed receiver, Peter D. Protopapas (No. 14-23-00899-CV; February 3, 2026) arose initially from a 2021 wrongful death claim against several defendants, including Payne & Killer Company, a Texas corporation voluntarily dissolved in 1986 and never revived. Plaintiff filed suit in a South Carolina court, alleging that the decedent’s death was caused by exposure to asbestos. At Plaintiff’s request, Protopapas was appointed to serve as receiver for Payne & Killer. The trial court instructed Protopapas to “investigate the existence of all insurance coverages potentially available to Payne & Keller.” Subsequently, Protopapas filed a separate lawsuit asserting claims against Payne & Keller’s insurers, National Fire and Travelers, seeking to establish coverage. In December 2021 the coverage case was removed to federal district court. Protopapas filed a motion to remand to state court, but while the motion was pending, Protopapas asserted third-party claims in the first lawsuit against the insurers.
The insurers moved to dismiss Protopapas’s third-party claims against them and to dissolve the Payne & Keller receivership. They argued that Protopapas lacked standing to assert claims against them because “the Receiver has no greater rights than Payne & Keller and under Texas law Payne & Keller cannot sue or be sued with respect to any claim more than three years after its dissolution in 1986.” The insurers further asserted that South Carolina law doesn’t permit receiverships involving property located outside South Carolina. Protopapas responded that the Payne & Keller receivership should be revoked under § 11.153, Business Organizations Code, because it resulted from constructive fraud. The trial denied the insurers’ motion and found that Protopapas had presented sufficient evidence of fraud to support his motion to revoke. The insurers appealed that ruling. Plaintiff in the wrongful death claim then filed a motion asking the trial court to revoke the dissolution as well. The insurers opposed the motion, arguing that the same issue was already on appeal and the trial court thus didn’t have jurisdiction. After a hearing, the trial court decided to hold off on ruling on Plaintiff’s motion to revoke until the South Carolina court of appeals decided whether it had jurisdiction to do so. But that court didn’t stay the action, so the trial court moved ahead, granted Plaintiff’s motion, and revoked Payne & Keller’s termination. The insurers moved to vacate or reconsider, but as of the date of this opinion had not ruled on the motion.
Protopapas provided a copy of the revocation order to the Texas SOS, who rejected it because it had not been domesticated in Texas. Protopapas proceeded to file a notice of domestication of a foreign order in Harris County district court under Chapter 35, CPRC. When the insurers, who weren’t served with notice of the Texas suit, figured it out, they filed pleas in intervention and motions to vacate the revocation order because it wasn’t final in South Carolina and that only a Texas court could order the reversal of a dissolution of a Texas corporation. Protopapas responded that the insurers did not have standing to challenge the revocation order by post-judgment motions because they weren’t parties. The Texas trial court ruled that the insurers had timely intervened, they were parties in the South Carolina lawsuit, they timely filed their motions to vacate, they were proper parties in the domestication proceeding, and Protopapas’s omission of the insuers doesn’t deprive the Texas trial court of jurisdiction to consider the merits of the insurers’ motion. Protopapas appealed.
In an opinion by Justice Wilson, a split court of appeals ruled that the insurers had standing in the Texas court to challenge the revocation order and dismissed the receiver’s appeal for lack of jurisdiction. Protopapas argued that they didn’t have standing because the trial court didn’t first set aside the judgment in the South Carolina case. Ordinarily, third parties couldn’t intervene until the trial court did that, but in this case, the Foreign Judgments Act changed the rules. Here a trial court “may only set aside a foreign judgment based on one of the grounds for refusing to give full faith and credit: (1) the foreign judgment is interlocutory; (2) the foreign judgment is subject to modification under the law of the rendering state; (3) the rendering state lacked jurisdiction; (4) the foreign judgment was procured by extrinsic fraud; or (5) the period for enforcing the foreign judgment has expired.” But in order to argue that a foreign judgment is not entitled to full faith and credit, a non-party “must intervene in the proceeding” but “in this proceeding the trial court may not address the merits of the foreign judgment.”
Both parties agreed that the insurers are third-party defendants as to coverage claims in Plaintiff’s wrongful death case. The revocation order was served on them in South Carolina, and they opposed the motion. The court of appeals thus held that the insurers are parties to the revocation order. The insurers were prejudiced by the revocation order because “the relief granted, if upheld, would deprive the Insurers of their defense that Payne & Keller may not sue or be sued for any claims filed more than three years after Payne & Keller’s dissolution date in 1986.” That made the insurers judgment debtors under the Foreign Judgment Act and thus entitled them to intervene. On the date it was filed with the SOS, the revocation order became a Texas order, and the trial court clerk had to treat it in the same manner as a Texas order issued by the trial court. The Foreign Judgments Act requires the judgment creditor or its attorney to file with the clerk an affidavit showing the name and last known address of the judgment debtor. It further requires the judgment creditor to promptly mail notice of filing of the foreign judgment to the judgment debtor and to file proof of mailing. None of this happened in the Texas case. “Allowing a judgment creditor to preclude a party to the filed judgment from being a party in the chapter 35 proceeding,” the court wrote, “and thus from having standing to appearl merely by omitting that party from the affidavit would not be reasonable and would invite mischief and gamesmanship.”
Having decided that the insurers were parties to the domestication proceeding, the court examined whether there was an appealable order from which the insurers could appeal. Only final judgments may be domesticated, and a filing of a foreign order that is not final on its face “does not create a final Texas judgment subject to enforcement; instead, it creates an interlocutory Texas order that may not be enforced.” Applying South Carolina law, the court ruled that the revocation order “does not appear, on its face, to be a final judgment.” It didn’t dispose of the whole subject matter of the South Carolina lawsuit or terminate the action, “leaving nothing to be done but to enforce by execution what has been determined.” The order was thus interlocutory and was “never created a final Texas judgment.” Consequently, the insurers’ motions to vacate were not overruled by operation of law and were still pending in the trial court, which still had plenary power and may rule on them. The court thus dismissed the appeal for lack of appellate jurisdiction.
Justice Hart dissented. He would hold that the insurers lacked standing because the trial court did not set aside the South Carolina judgment, thus under Texas law barring the post-judgment intervenors, the insurers, from appealing. In other words, they weren’t parties to the Texas judgment, nor were they judgment debtors or “ordered to do any act by the domesticated judgment.” And under South Carolina law, Justice Hart pointed out, “[a]s third-party coverage defendants in South Carolina, where there is no direct action by a tort plaintiff against an insurer, appellants are strangers to the judgment.” Texas law, too, “prohibits direct suit between an injured party and a defendant’s insurer until the defendant’s liability has been determined by agreement or judgment. . . . Where the insurers could not be parties in Texas to the tort plaintiff’s claims and associated motions against P&K, I do not see an avenue allowing the insurers to leapfrog that prohibition to become parties to appeals about such claims and orders. As non-parties, they do not have the automatic right to appeal a judgment entered against their insured.”
