FACTS: Zuniga, a pedestrian walking on the sidewalk, was struck from behind by a car driven by Medina. The case went to trial and Medina was found liable for negligence and gross negligence. The jury awarded $93,244.91 in actual damages and $75,000 in punitive damages against Medina, plus interest and costs. Medina was insured by Farmers Texas County Mutual Ins. Co., which paid all but the punitive damage award. Farmers disputed whether its policy covered the punitive damage award. A number of legal actions followed, initiated by Zuniga, seeking to enforce the judgment as Medina’s assignee, and Farmers, which sought a declaration that it did not have an obligation to pay punitive damages under the policy.