Bard v. Charles R. Myers Ins. Agency, Inc.

• Decision Date: 12 June 1991
• Docket Number: No. 04-89-00565-CV,04-89-00565-CV
• Citation: 811 S.W.2d 251
• Parties: David T. BARD, Commissioner of Banking & Insurance of the State of Vermont, Appellant, v. CHARLES R. MYERS INSURANCE AGENCY, INC. & Charles R. Myers, Individually, and as President of Charles R. Myers Insurance Agency, Inc., Appellees.
• Court: Texas Court of Appeals

Page 251

811 S.W.2d 251

David T. BARD, Commissioner of Banking & Insurance of the State of Vermont, Appellant, v. CHARLES R. MYERS INSURANCE AGENCY, INC. & Charles R. Myers Individually, and as President of Charles R. Myers Insurance Agency, Inc., Appellees.

No. 04-89-00565-CV.

Court of Appeals of Texas San Antonio.

June 12, 1991.

Camile Glasscock DuBose, Robert M. Smith, Beckmann, Quirk & Fulton, San Antonio Richard Whitney, Jones, Day, Reavis & Pogue, Cleveland, Ohio, for appellant.

G. Thomas Coghlan, Laura Cavaretta, Lang, Ladon, Green, Coghlan & Fisher, P.C., San Antonio, for appellees.

Before REEVES, C.J., and CHAPA and CARR, JJ.

ON APPELLANT'S MOTION FOR REHEARING

CHAPA, Justice.

The opinion of this Court issued April 10, 1991 is withdrawn and the following opinion is substituted.

Appellant, David T. Bard, Commissioner of Banking and Insurance of the State of Vermont, as Receiver for Ambassador Insurance Company, instituted suit in Texas against appellee, Charles R. Myers, individually, and as President of Charles R. Myers Insurance Agency, Inc. for the collection of insurance premiums allegedly owed to Ambassador Insurance Company (hereinafter "Ambassador"). A compulsory counterclaim for violations of the Texas Insurance Code, fraud, tortious interference with a contract, breach of a contract, DTPA and unfair competition was filed on behalf of the appellee. At the conclusion of the trial, the jury answered all questions in favor of the appellee and against the appellant. An amended judgment was entered providing that the appellant take nothing and that the appellee recover compensatory and exemplary damages, interest and attorneys' fees from the appellant.

The record reflects that Ambassador was a specialized company, chartered in the state of Vermont in 1965, which wrote excess lines insurance for amusement parks, hospitals, and exotic products manufacturing. Charles R. Myers, through the Charles R. Myers Insurance Agency, Inc., wrote and sold Ambassador's policies to his customers. However, in order to obtain the right to sell the policies, Charles R. Myers and later, Charles R. Myers Insurance Agency, Inc. entered into a correspondent's agreement with Ambassador which outlined each party's rights and obligations.

In November of 1983, Ambassador was placed into receivership in Vermont. In July of 1985, David T. Bard, as receiver for Ambassador, instituted this suit in Texas against Charles R. Myers, individually, as well as Charles R. Myers Insurance Agency, Inc. (hereinafter "Myers") for collection of amounts allegedly due under the correspondent's agreement. On May 8, 1986, Myers filed a compulsory counterclaim against Ambassador in Texas. The Superior Court of Washington County, Vermont entered a Liquidation Order on March 10, 1987, converting the receivership to liquidation and charging Bard and his successors with marshalling Ambassador's assets and paying claims.

The appellant sought to recover, in its Texas lawsuit, $190,774.56 in premiums allegedly owed by the appellee. ¹ Myers' counterclaim, however, alleged that Ambassador had breached its contract with the appellee; that Ambassador's actions constituted violations of § 15.05 of the Texas Business and Commerce Code, article 21.21, §§ 3 and 16 of the Texas Insurance Code; that Ambassador breached its duty of good faith and fair dealing; that Ambassador engaged in fraud and misrepresentation; that Ambassador tortiously interfered with Myers' prospective contracts; and, that Ambassador's fraudulent concealment estopped its assertion of limitations as a defense to said claims.

At trial, the evidence established that Frank B. Hall was an insurance agency in San Antonio, Texas which also placed risks with Ambassador. It was alleged that Frank B. Hall was a fierce competitor of the Charles R. Myers Insurance Agency, Inc. Moreover, it was alleged that in order to deprive the appellee of contractual opportunities, when the appellee would contact Ambassador to obtain rate information for prospective insureds, Ambassador would give the appellee a high quote. The company would then, allegedly, contact Frank B. Hall, notify it of the name and needs of the potential insured, and give Frank B. Hall a lower price quote on the exact same insurance policy inquired about by the appellee. Frank B. Hall would then, allegedly, contact the prospective insured, relay the lower price quote and write the Ambassador policy for the insured. Although the appellee suspected a conspiracy, he claimed he had no actual knowledge of its existence until 1985. As a result of this conspiracy, it was alleged that the Charles R. Myers Insurance Agency, Inc. lost business and suffered damages in the sum of $279,665.00.

The jury found that Myers did not breach the correspondent's agreement; that Ambassador breached the contract and its duty of good faith and fair dealing to Myers; that Ambassador conspired with Frank B. Hall to restrain trade; that Ambassador tortiously interfered with Myers' relationship with prospective customers; and, that Ambassador's conduct was willful and knowing. Further, the jury found that Ambassador delivered a false statement of its financial condition with intent to deceive; that Ambassador agreed to commit, or took concerted actions to commit, an act of boycott in restraint of trade; and, that Ambassador knowingly represented to Myers that it had benefits or services which it did not have.

Additionally, the jury found that Ambassador misrepresented to Myers that it was financially sound; that it would honor its contractual obligations to Myers and the insureds; and, that it would manage business with Myers in a fair manner. The jury determined that Myers' actual damages were $382,447.91, that Myers' attorneys fees were $50,500.00 ² and, that Myers should be awarded $1,200,000.00 in punitive damages. Based upon these answers, judgment was entered in favor of Myers.

Appellant, Bard, initially raises fifteen multifarious points of error which we have narrowed down to the following:

1. the trial court erred in failing to give full faith and credit to the Vermont Receivership Order dated November 10, 1983, and the Vermont Liquidation Order dated March 10, 1987;

2. the trial court improperly commingled Ambassador Insurance Company and/or David T. Bard, Commissioner of Banking and Insurance of the State of Vermont, as Liquidator/Receiver for Ambassador Insurance Company, throughout the trial and the charge submitted to the jury, which resulted in an improper charge of the court being submitted;

3. the trial court erred in applying article 21.11 § 2 of the Texas Insurance Code, both in the charge of the court and throughout the case in question, resulting in appellant being awarded only $28,000.00 in earned premiums due the appellant;

4. the trial court erred in failing to properly state the correct definition of misrepresentation as pled by appellee in the charge to the jury, and failed to properly inquire of the jury as to the underlying elements for punitive damages based on misrepresentation;

5. the trial court erred in awarding actual and punitive damages as these damages are barred by various statutes of limitations; and,

6. the evidence was legally and factually insufficient to support the following findings by the trial court:

a). that appellee was entitled to out-of-pocket expenses and uncollected accounts receivable, as these damages are barred and are not recoverable pursuant to Texas statutory law, and that Ambassador, rather than the appellee, was liable for uncollected accounts receivable pursuant to the January 7, 1981 correspondent's agreement entered into between appellee and Ambassador;

b). that the appellee was entitled to punitive damages, as it was not established that the actions were committed knowingly or with malice, and further punitive damages in the amount of 1.2 million awarded to appellee are violative of public policy, the due process clause of the United States Constitution, and do not serve the punishment and deterrent purposes underlying punitive damages awards;

c). that appellee was entitled to attorneys' fees;

d). and lastly, that there was a conspiracy between Ambassador and Frank B. Hall, as the trial court failed to inquire of the jury as to the underlying elements of a conspiracy making recovery thereunder impossible and/or improper.

Appellant initially argues that the Vermont Order in issue specifically prohibits the assertion of any claim against Ambassador in liquidation, or the Commissioner as Receiver, by any means other than by presenting such a claim in the liquidation proceedings in Vermont. ³ Accordingly, appellant contends that appellee's counterclaim, filed on May 8, 1986, was enjoined by Order of the Vermont Superior Court under the doctrine of full faith and credit. U.S. Const. art. IV, § 1; see also Starzl v. Starzl, 686 S.W.2d 203, 205 (Tex.App.--Dallas 1984, no writ).

Article IV, § 1 requires that each state give full faith and credit to the public acts, records and judicial proceedings of every other state. Starzl, 686 S.W.2d at 205. A judgment rendered by a court of another state and properly proven is entitled to full recognition and the same credit in this state as it would receive in the state where rendered, provided, however, that it has been proven that the judgment is a valid, final and subsisting judgment. Id. Further, "[a] final judgment is one disposing of all issues and parties in the case." Baker v. Hansen, 679 S.W.2d 480, 481 (Tex.1984), citing Schlipf v. Exxon, 644 S.W.2d 453 (Tex.1982).

In the present case, the Order dated November 10, 1983 states that "[t]he court shall retain jurisdiction of this proceeding for the purpose of granting such other relief as may be necessary." Moreover, the liquidation Order, dated March 10, 1987 provides that:

When all assets that can be economically collected and distributed have been collected and distributed under this...