Austin Bldg. Co. v. National Union Fire Ins. Co.

• Decision Date: 24 July 1968
• Docket Number: No. B--713,B--713
• Citation: 432 S.W.2d 697
• Parties: AUSTIN BUILDING COMPANY, Petitioner, v. NATIONAL UNION FIRE INSURANCE COMPANY, Respondent.
• Court: Texas Supreme Court

Page 697

432 S.W.2d 697

AUSTIN BUILDING COMPANY, Petitioner, v. NATIONAL UNION FIRE INSURANCE COMPANY, Respondent.

No. B--713.

Supreme Court of Texas.

July 24, 1968.

Rehearing Denied Oct. 9, 1968.

Johnson, Guthrie, White & Stanfield, Robert Lee Guthrie, Dallas, for petitioner.

Thompson, Coe, Cousins & Irons, Larry L. Gollaher, Dallas, for respondent.

POPE, Justice.

Austin Building Company sued National Union Fire Insurance Company to recover the damages it sustained in a fire in Kansas. Austin says the damages were covered by a builder's risk insurance policy issued in its favor by the defendant. The trial court sustained Austin's motion for summary judgment and rendered judgment against National Union in the sum of $8,075.00 and interest. The court of civil appeals reversed the judgment of the trial court and remanded the case for trial. 422 S.W.2d 763. Austin presents two points for decision: (1) The court of civil appeals was in error in its holding that a statement of facts developed on a former trial of the case was incompetent summary judgment proof. (2) The court of civil appeals was in error in holding that there was a disputed question of fact whether the insured property was 'occupied' as that term was used in the policy. When the property under construction was occupied, the policy terminated according to National Union. National Union met the second point by its contention that the law of Kansas is controlling, the status of which presents at least a question of fact. National Union did not move for summary judgment and asks only that this court affirm the remand to the trial court to decide the fact question--the Kansas law. We affirm the judgment of the court of civil appeals upon that basis.

Austin and National Union agreed in the trial below that Austin's damages were in the amount stated. Austin, by way of establishing defendant's liability, presented its motion for summary judgment supported by the statement of facts and documentary evidence developed at a former trial of this same case. The parties agreed that the statement of facts was a correct record and it was so certified by the court reporter. The trial court considered those proofs in making its decision that the case presented no question of fact and that Austin was entitled to a judgment. The first trial of this case occurred in 1965. At the end of a jury trial, the trial court disregarded certain jury findings and rendered judgment that Austin take nothing. On appeal the court of civil appeals reversed the judgment of the trial court and remanded the case for another trial. 406 S.W.2d 499. This court refused National Union's application for writ of error with the notation, 'no reversible error.'

National Union answered Austin's motion for summary judgment and urged that it should be denied because the statement of facts and documentary evidence from the earlier trial of this case were incompetent summary judgment proofs under Rule 166--A of the Texas Rules of Civil Procedure. It further urged that it had filed a motion asking the court to take judicial notice of the law of Kansas, the place of the insurance contract, the construction, and the fire; thus presenting a new question of fact. It stated in the contest of the motion for summary judgment what it regarded to be the Kansas law.

The question raised by the first point stated above has not previously been directly presented to this court. Our decision must, of course, commence with Rule 166-A which rule relates to the summary judgment practice. The relevant portions of the rule are:

'* * * No oral testimony shall be received at the hearing. The judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'

National Union's argument is that the prior statement of facts is neither a pleading, deposition, affidavit nor admission. It says that the case after the original trial and general remand stood upon the docket as if it had never been tried and that the evidence given in the prior trial was no longer viable. Guerrero v. American-Hawaiian Steamship Co., 222 F.2d 238 (9th Cir. 1955). A number of decisions bearing upon this problem have discussed Rule 56 of the Federal Rules of Procedure, from which Texas obtained Rule 166--A. Movants for summary judgment in Federal cases have used statements of fact in prior trials and the practice has been generally approved. Fletcher v. Bryan, 175 F.2d 716 (4th Cir. 1949); Burnham Chemical Co. v. Borax Consolidated, 170 F.2d 569 (9th Cir. 1948), cert. denied, 336 U.S. 924, 69 S.Ct. 655, 93 L.Ed. 1086; Whitaker v. Coleman, 115 F.2d 305 (5th Cir. 1940); Gillum v. Skelly Oil Co., 149 F.Supp. 588 (W.D.Mo.1957). Cases have also held that the one resisting a motion for summary judgment may rely upon a statement of facts from a prior trial to prove the existence of disputed facts. United States v. Dollar, 196 F.2d 551 (9th Cir. 1952); Ramsouer v. Midland Valley R. Co., 135 F.2d 101 (8th Cir. 1943); see also 4 McDonald, Texas Civil Practice, § 17.26.4; McDonald, Summary Judgments, 30 Tex.L.Rev. 285, 302 (1951). We regard the practice illustrated by the Federal decisions to be more in keeping with the purpose and intent of Rule 166-A.

The court of civil appeals on this second appeal held, upon the authority of Richards v. Allen, 402 S.W.2d 158 (Tex.Sup.1966), that the trial court should not have considered the statement of facts as a part of the summary judgment proof. Richards v. Allen stands for the rule that witnesses should not, in a summary judgment proceeding, be called to testify. Whether the court should consider a statement of facts of the sworn testimony in a former trial was not the question in that case. We disapprove the dictum in Pollock v. Lowry, 345 S.W.2d 587 (Tex.Civ.App.1961, writ ref. n.r.e.), that such a statement of facts may not be considered in a summary judgment trial. Accord Willoughby v. Jones, 151 Tex. 435, 251 S.W.2d 508 (1952).

The court of civil appeals, however, correctly held that the judgment should be reversed and the cause remanded because there is a disputed fact issue which is still present in the case. We affirm that judgment. The main issue between the parties in this cause is whether the builder's risk policy terminated by reason of the owner's 'occupancy' of the building. Whether there was such an occupancy as worked a termination of the policy requires us initially to decide whether the law of Texas applies, as argued by Austin Building, or whether the law of Kansas applies, as urged by National Union. After the first remand of this case, National Union pleaded, pursuant to Rule 184a, Texas Rules of Civil Procedure, that the law of Kansas controls the decision in this case and then pleaded that law. National Union's contest of the motion for summary judgment also asserted that the Kansas law controls. It set forth its brief of that law, and urged that the Kansas law is a question of fact. National Union did not ask for a summary judgment, had neither points nor prayer in the court of civil appeals, and has none here which seek anything more than a remand. To pose the issue, it is necessary that we restate some factual background of this controversy. See also 403 S.W.2d 499.

On March 2, 1962, Austin, a Texas corporation, entered into a contract with Western Light & Telephone Company for the construction of an addition to its power station near Great Bend, Kansas. The purpose of the addition was to house a turbine and generator used in the production of electricity. Austin's original bid included an item of $11,750.00 to cover the cost of a builder's risk insurance policy in which Austin was to be the named insured. By agreement, that item was deleted and Western agreed to obtain builder's risk insurance for both parties. Western agreed to pay and did pay the premium for coverage on both parties.

Western obtained the policy through Meade Company, National Union's representative in Topeka, Kansas. National Union sent Austin a certificate showing both Western and Austin were the named insureds. The relevant portions of the policy are:

"2. This policy also covers temporary structures, materials, equipment and supplies of all kinds incident to the construction of said building or structure and, when not otherwise covered by insurance, builders' machinery, tools and equipment owned by the Insured or similar property of others for which the Insured is legally liable, all forming a part of or contained in...