# Nautilus Ins. Co. v. HOF Partners LLC

Supreme Court of Texas, No. 23-0408

**Nautilus Ins. Co. v. HOF Partners LLC, No. 23-0408, is before the Supreme Court of Texas. Key issue: The Court denied rehearing of its earlier denial of the petition for review in Nautilus Insurance Co. v. HOF Partners, a dispute over whether an insured's payment of premiums to its retail broker counted as payment to a surplus-lines insurer, and Justices Young and Sullivan issued a statement saying they would grant rehearing and the petition.**

Practice areas: insurance

## Key issues

- The Court denied rehearing of its earlier denial of the petition for review in Nautilus Insurance Co. v. HOF Partners, a dispute over whether an insured's payment of premiums to its retail broker counted as payment to a surplus-lines insurer, and Justices Young and Sullivan issued a statement saying they would grant rehearing and the petition.
- The statement said the question is which entities may accept premium payments for a surplus-lines policy under the Insurance Code, that amici warned of disruption to the Texas surplus-lines market, and that the denial expresses no view on the merits and leaves the questions open for other courts and future cases.

## Factual History
HOF Partners paid premiums for a surplus-lines policy from Nautilus Insurance to its retail broker, Summit, which never sent them to the surplus-lines agent, Breckenridge, or to Nautilus, and Nautilus canceled the policy under its terms. HOF argued that Summit acted as Nautilus's agent under a payment plan in the application because it collected premiums, while Nautilus argued that only a licensed surplus-lines agent can accept premium payments on behalf of the insurer under Insurance Code § 981.007 (Brief on the Merits (Petitioner), PDF pp. 15, 33-34; Brief on the Merits (Respondent), PDF pp. 12, 40).

## Procedural History
The Fort Worth Second Court of Appeals held that Chapter 4001's agency provisions apply and that there was a fact issue whether Summit accepted premiums on Nautilus's behalf (2023 WL 3114309). The Court requested merits briefing and denied the petition for review on November 15, 2024, with Justices Lehrmann and Devine not participating; it denied Nautilus's motion for rehearing on June 27, 2025, after four amicus briefs urged rehearing.

## Issues Presented
Whether only a registered surplus-lines agent can accept premium payments for a surplus-lines policy under Chapter 981 of the Insurance Code, or whether Chapter 4001's general provisions make any person who collects premiums the insurer's agent (Brief on the Merits (Petitioner), PDF p. 15; Statement, PDF p. 2).

## Legal Arguments
**Nautilus (Petitioner):** Chapter 4001 applies only to insurers regulated by the Department of Insurance, surplus-lines insurers are not, and the specific surplus-lines provisions of Chapter 981 control. **HOF Partners (Respondent):** surplus-lines insurers are regulated, Chapter 4001 applies, and there is a genuine fact issue whether Summit had authority to collect premiums (Brief on the Merits (Petitioner), PDF pp. 33-34; Brief on the Merits (Respondent), PDF pp. 12, 40).

## Stated Reasons the Court Should Take the Case
Not applicable—the petition was denied.

## Practice Area Tags
insurance

## Procedural Posture/Vehicle
Petition for review from the Second Court of Appeals; petition denied November 15, 2024, and rehearing denied June 27, 2025 (Docket).

## Amicus Involvement
None noted

## Court's Reasoning
The statement said the motion and amicus briefs persuasively showed that the legal questions warrant full consideration, that denial expresses no view of the merits under Loram Maintenance of Way v. Ianni, that other courts should exercise independent judgment on similar questions, and that if amici's predicted market disruption occurs the Court will have further opportunities, likely sooner rather than later (Statement, PDF pp. 1-3).

## Disposition
Motion for rehearing denied; Justices Lehrmann and Devine did not participate (Docket).

## Vote Breakdown
Justice Young, joined by Justice Sullivan, issued a statement saying they would grant rehearing and the petition (Statement, PDF pp. 1-3).

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Source: The SCOTX Report, https://scotxreport.com/cases/23-0408. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.