Aig Life Ins. Co. v. Federated Mut. Ins.

• Decision Date: 16 August 2006
• Docket Number: No. 05-05-00877-CV.,05-05-00877-CV.
• Citation: 200 S.W.3d 280
• Parties: AIG LIFE INSURANCE COMPANY, Appellant v. FEDERATED MUTUAL INSURANCE COMPANY, Knox Oil of Texas, Inc., and Carol Chapman Kondos, Appellees.
• Court: Texas Court of Appeals

200 S.W.3d 280

AIG LIFE INSURANCE COMPANY, Appellant v. FEDERATED MUTUAL INSURANCE COMPANY, Knox Oil of Texas, Inc., and Carol Chapman Kondos, Appellees.

No. 05-05-00877-CV.

Court of Appeals of Texas, Dallas.

August 16, 2006.

COPYRIGHT MATERIAL OMITTED

Loren R. Smith, Kelly, Smith & Murrah, P.C., Houston, for appellant.

Anjel Kerrigan Avant, Kondos & Kondos Law Office, Richardson, for appellee.

Before Justices WHITTINGTON, BRIDGES, and RICHTER.

OPINION

Opinion by Justice RICHTER.

AIG Life Insurance Company (AIG) appeals the summary judgment entered in favor of Federated Mutual Insurance Company (FMIC), Knox Oil of Texas, Inc. (Knox), and Carol Chapman Kondos, contending in fifteen issues that (1) the trial court erred in considering the motions for summary judgment to be no-evidence motions for summary judgment; (2) AIG pleaded viable causes of action for conversion, reimbursement, breach of fiduciary duty, conspiracy, money had and received, and unjust enrichment as well as a claim for exemplary damages; and (3) there was a material issue of fact on all causes of actions that precluded summary judgment. We affirm in part, reverse in part, and remand this case to the trial court for further proceedings.

Factual and Procedural Background

David Overturf was a truck driver for Conway Truck Load. AIG provided Conway with occupational accident insurance. On June 25, 2000, Overturf's truck was struck from behind by a truck owned by Knox. Overturf received medical treatments for back pain following the accident and missed a substantial amount of work. AIG paid benefits to Overturf under the insurance policy.

Overturf hired the law firm of Kondos & Kondos to pursue a personal injury claim against Knox and its driver, claiming $38,911.65 in past medical expenses, lost wages of $80,402.30, and future medical expenses, physical pain, mental anguish, and physical impairment in unspecified amounts. After Overturf filed the lawsuit, AIG corresponded with both FMIC, Knox's insurance carrier, and Kondos & Kondos regarding AIG's claimed subrogation lien on any funds received by Overturf, but never intervened in the lawsuit.

During his deposition in the underlying lawsuit, Overturf denied any back pain prior to the accident and denied previously seeking medical treatment for back pain. However, during the deposition of Overturf's treating physician, Knox's attorney presented the physician with Overturf's prior medical records demonstrating Overturf had a lengthy history of chronic, degenerative back problems. Overturf's physician testified Overturf had not disclosed the prior back problems, Overturf did not have a herniated disc, and the condition found during Overturf's surgery was degenerative in nature. Due to concerns about Overturf's credibility and the difficulty in attributing Overturf's medical condition to the accident, Overturf's attorney settled the claim against Knox for $55,000. AIG was not included as a payee on the settlement check, and none of the settlement funds were disbursed to AIG.

AIG sued Overturf, Daniel Kondos, Knox, FMIC, and Kondos, seeking to recover the benefits AIG had paid to Overturf on theories of reimbursement, conversion, breach of fiduciary duty, conspiracy, breach of contract, money had and received, and unjust enrichment.¹ AIG also sought exemplary damages and attorney's fees.² Kondos, Knox, and FMIC filed virtually identical motions for summary judgment. On May 20, 2005, the trial court granted the motions and entered a final judgment that AIG take nothing.

Nature of Motions

In its fifteenth issue, AIG contends the trial court erred to the extent it granted a no-evidence motion for summary judgment. Kondos filed her motion for summary judgment on February 24, 2005. FMIC and Knox filed a joint motion, almost identical to Kondos's motion, on April 15, 2005. The motions do not include a standard of review and do not clearly delineate whether they are traditional motions for summary judgment under Texas Rule of Civil Procedure 166a(c) or no-evidence motions for summary judgment under Texas Rule of Civil Procedure 166a(i). Attached to each motion was a substantial amount of summary judgment evidence, indicating the motions sought a traditional summary judgment. See City of Keller v. Wilson, 168 S.W.3d 802, 825 (Tex.2005) (evidence supporting motion not allowed under rule 166a(i)).

On appeal, appellees argue they filed hybrid motions which raised both traditional and no-evidence grounds. They claim the motions were traditional by establishing as a matter of law that Overturf was not made whole by the settlement, barring AIG's claims for reimbursement, conversion, money had and received, unjust enrichment, and conspiracy. However, the motions also allegedly were no-evidence motions by virtue of "challanging [AIG] to produce evidence in suppport of each element of every claim."

Rule 166a(i) allows a party to move for summary judgment on the ground there is no evidence of one or more essential elements of a claim on which an adverse party would have the burden of proof at trial. TEX.R. CIV. P. 166a(i). However, the motion must specify the elements as to which there are no evidence. Id.; Patino v. Complete Tire, Inc., 158 S.W.3d 655, 659-60 (Tex.App.-Dallas 2005, pet. denied). Here, the motions did not clearly delineate those elements of AIG's causes of action on which appellees claimed there was no evidence.

Appellees admit their motions were brought, at least in part, on traditional summary judgment grounds. In the context of this case, simply stating in the body of the motions that AIG cannot show or produce evidence, without clearly setting out that appellees were seeking summary judgment on a particular element of a specific cause of action on no-evidence grounds, is insufficient to allow us to construe the motion as seeking a no-evidence summary judgment. See Methodist Hosps. of Dallas v. Mid-Century Ins. Co. of Tex., 195 S.W.3d 844, 846 (Tex.App.-Dallas 2006, no pet. hist.). Because the two motions for summary judgment did not provide AIG with adequate notice appellees were seeking a no-evidence motion for summary judgment, we presume that appellees sought a traditional summary judgment. Id.; Kadhum v. Homecomings Fin. Network, Inc., No. 01-05-00705-CV, 2006 WL 1125240, at *4, ___ S.W.3d ___, ___ (Tex.App.-Houston [1st Dist.] April 27, 2006, no pet. hist.); Adams v. Reynolds Tile & Flooring, Inc., 120 S.W.3d 417, 420 (Tex.App.-Houston [14th Dist.] 2003, no pet.).

Accordingly, we sustain AIG's fifteenth issue and will evaluate the motions for summary judgment under the standards applicable to traditional summary judgments.

Standard of Review

We review a traditional summary judgment de novo to determine whether the party's right to prevail was established as a matter of law. TEX.R. CIV. P. 166a(c); W. Invs., Inc. v. Urena, 162 S.W.3d 547, 550 (Tex.2005); First Union Nat'l Bank v. Richmont Capital Partners I, L.P., 168 S.W.3d 917, 923 (Tex.App.-Dallas 2005, no pet.). The party moving for summary judgment has the burden of establishing that no material fact issue exists and it is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); Urena, 162 S.W.3d at 550. When reviewing a motion for summary judgment, we take the nonmovant's evidence as true, indulge every reasonable inference in favor of the nonmovant, and resolve all doubts in favor of the nonmovant. Urena, 162 S.W.3d at 550; First Union, 168 S.W.3d at 923. When the trial court's order does not specify the ground on which summary judgment was granted, we must affirm the summary judgment on any ground supported by the evidence and the pleadings. Urena, 162 S.W.3d at 550; Cox v. NextiraOne, 169 S.W.3d 778, 780 (Tex.App.-Dallas 2005, no pet.).

Right To Subrogation

In its first issue, AIG contends the trial court erred in granting summary judgment because there is a genuine issue of material fact regarding whether AIG was precluded from recovering on its subrogation lien because Overturf had not been made whole. "An insurer is not entitled to subrogation if the insured's loss is in excess of the amounts recovered from the insurer and the third party causing the loss." Ortiz v. Great So. Fire & Cas. Ins. Co., 597 S.W.2d 342, 343 (Tex.1980). Appellees moved for summary judgment on AIG's reimbursement, money had and received, and unjust enrichment claims on the ground that Overturf's damages exceeded the settlement amount and, because Overturf had not been made whole, AIG had no right to recover any of the settlement proceeds.

To be entitled to summary judgment on the ground Overturf was not made whole by the settlement, appellees were required to prove as a matter of law Overturf's damages from the accident exceeded the settlement amount. Appellees take the position that because Overturf received less in settlement than his medical expenses and lost wages, he was not made whole and AIG has no right to subrogation as a matter of law. However, appellees' own summary judgment evidence establishes Overturf had a long history of back problems prior to the accident and the condition was chronic and degenerative. Appellees failed to establish as a matter of law that Overturf's losses from the accident exceeded the settlement amount. See Ortiz, 597 S.W.2d at 343 (no right to subrogation unless insured recovered sum in excess of the amounts recovered from the insurer and the third party causing the loss); Esparza v. Scott & White Health Plan, 909 S.W.2d 548, 552 (Tex.App.-Austin 1995, writ denied). We sustain AIG's first issue.

Because the only ground for summary judgment raised in appellees' motions on AIG's reimbursement, money had and received, and unjust enrichment claims were that Overturf had not been made whole, the trial court erred in granting summary judgment on those causes of action. We sustain issues five and eleven. Because of our disposition of these issues, we do not need to address issues two, six, and...