Case: 13-20298      Document: 00512553512         Page: 1    Date Filed: 03/07/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                       United States Court of Appeals
                                                                                Fifth Circuit
                                    No. 13-20298                              FILED
                                  Summary Calendar                        March 7, 2014
                                                                         Lyle W. Cayce
                                                                              Clerk
NAUTILUS INSURANCE COMPANY,

                                                 Plaintiff-Appellee
v.

BLANCA LILA VILLALTA, Individually and as next friend (surviving
mother); ODIS ARMANDO VILLALTA, Individually and as next friend
(surviving father) to Odis Steven Villalta,
                                            Defendants-Appellants




                   Appeal from the United States District Court
                        for the Southern District of Texas
                              USDC No. 4:13-CV-229


Before REAVLEY, JONES and PRADO, Circuit Judges.
PER CURIAM:*
       Blanca Lila Villalta and Odis Armando Villalta, each individually and as
the surviving parents of Odis Steven Villalta (the “Villaltas”), appeal the
district court’s sua sponte grant of summary judgment for Nautilus Insurance
Company (“Nautilus”). For the following reasons, we VACATE and REMAND
with direction to ABATE or DISMISS the judgment for Nautilus.



       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
    Case: 13-20298     Document: 00512553512      Page: 2   Date Filed: 03/07/2014



                                  No. 13-20298
      Odis Villalta was shot to death by a security officer employed by Bellaire
Security Patrol, Inc. (“Bellaire”). The Villaltas filed a lawsuit in Texas district
court against Bellaire and others (the “Villalta case”).       Nautilus provides
general liability insurance to Bellaire and filed suit in federal district court
against the Villaltas, seeking a declaration that the policy issued to Bellaire
provides no coverage for damages sought in the Villalta case. The federal
district court, sua sponte, issued summary judgment for Nautilus, holding that
Nautilus had no duty to defend Bellaire as a matter of law because the “all
assault or battery” policy exclusion clearly applied. On appeal, the Villaltas
raise two primary issues: (1) whether the district court erred in granting
summary judgment concerning Nautilus’s duty to defend; and (2) whether
ruling on Nautilus’s duty to indemnify is premature based on the underlying
Villalta case, which remains pending in state court.
      We need not address the policy’s coverage because the Villaltas do not
have a justiciable interest in the coverage dispute between Bellaire and
Nautilus. The Villaltas and Bellaire entered into an agreement whereby:
Bellaire agreed to the entry of a $2 million judgment against it in the
underlying state case and agreed not to appeal, the Villaltas agreed not to
execute on this judgment, and in exchange, Bellaire assigned any rights
against Nautilus it may have under the Nautilus policy. This assignment is
invalid as to Nautilus as a matter of law. See State Farm Fire & Cas. Co. v.
Gandy, 

(Tex. 1996). Without a judgment or agreement that
Bellaire has a legal obligation to pay damages to the Villaltas, the Villaltas
cannot enforce the policy directly against Nautilus. State Farm Cnty. Mut. Ins.
Co. v. Ollis, 

, 723 (Tex. 1989) (per curiam).
      The district court’s judgment is VACATED and REMANDED with
direction to ABATE or DISMISS the judgment for Nautilus.


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