Bartley v. Guillot, 14-98-00240-CV

• Decision Date: 15 April 1999
• Docket Number: No. 14-98-00240-CV,14-98-00240-CV
• Citation: 990 S.W.2d 481
• Parties: Ann M. BARTLEY a/k/a Anne Marie Tadlock, Appellant, v. Martell Rae GUILLOT, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 481

990 S.W.2d 481

Ann M. BARTLEY a/k/a Anne Marie Tadlock, Appellant, v. Martell Rae GUILLOT, Appellee.

No. 14-98-00240-CV.

Court of Appeals of Texas Houston (14th Dist.).

April 15, 1999.

Katherine D. Mackillop, Houston, for appellants.

Robert G. Lowman, Jr., Houston, for appellees.

Panel consists of Justices AMIDEI, EDELMAN and WITTIG.

O P I N I O N

DON WITTIG, Justice.

We are presented for the first time with an argument for offset and settlement credit against uninsured motorist coverage by a negligent third party. The dispute arose out of a multi-car accident. Guillot, appellee, originally sued Ward, Bustos (uninsured), and Bartley (insured), appellant. Before trial, Guillot settled with Allstate, her uninsured motorist carrier, for $20,000 for the injuries she sustained in the accident caused by Bustos. The settlement agreement limited Allstate's subrogation rights to any damages recovered from Bustos or any other uninsured motorist. Bustos was dismissed from the case before trial, and Ward nonsuited. Thus, Guillot proceeded against Bartley only and recovered $30,000. Bartley moved the court for a set-off in the amount of $20,000, the amount Guillot received from Allstate. The trial court refused, and Bartley perfected this appeal.

In two points of error, Bartley contends the trial court erred in refusing to apply the settlement as a credit. Specifically, she argues that the comparative responsibility scheme of the Texas Civil Practice and Remedies Code allows a credit and the common law prohibits double recovery. We disagree.

Comparative Responsibility

In her first point of error, Bartley contends the Civil Practice and Remedies Code mandates she be given a credit. As Bartley correctly points out:

If the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by a credit equal to one of the following. As elected in accordance with Section 33.014:

(1) the sum of the dollar amounts of all settlements;

TEX. CIV. PRAC. & REM.CODE ANN. § 33.012(b) (Vernon Supp.1995). ¹ However, the code defines a settling person for which a credit is required as a "person who at the time of submission has paid or promised to pay monetary value to a claimant at any time in consideration of potential liability pursuant to the provisions of Section 33.001...." TEX. CIV. PRAC. & REM.CODE ANN. § 33.011(5). Therefore, we must determine if Allstate paid the $20,000 to Guillot in consideration of its potential liability under Section 33.001.

A person is liable under Section 33.001 for an action in negligence, products liability grounded in negligence, or strict liability any of which resulted in personal injury, property damage, or death. See TEX. CIV. PRAC. & REM.CODE ANN. § 33.001. Neither Allstate nor any of its representatives were present the day of the multi-car accident. Allstate's only involvement with this accident arose out of a contract it entered into with Guillot. Allstate's payment of $20,000 could not have been in consideration for any potential liability Allstate possibly owed Guillot under Section 33.001, but only as a result of its contract with Guillot. Therefore, Allstate is not a settling person as defined in the comparative responsibility statute, and Bartley is not entitled to any credit for Allstate's payment. Accordingly, we overrule Bartley's first point or error. Additional statutory considerations are discussed below.

Common Law and Statutory Construction

In Bartley's second point of error, she asserts that the common law prohibits double recovery regarding an uninsured motorist policy. As the Texas Supreme Court recognized in First Title Co. v. Garrett a prevailing party is entitled to only "one satisfaction" for an injury. 860 S.W.2d 74, 78 (Tex.1993). "That is, when a plaintiff files suit alleging that multiple tortfeasors are responsible for the plaintiff's injury, any settlements are to be credited against the amount for which the liable parties as a whole are found responsible, but for which only the non-settling defendant remains." Id. (emphasis added). However, this rule is not absolute. See Dabney v. Home Ins. Co., 643 S.W.2d 386, 389 (Tex.1982) (holding tortfeasors are not entitled to set off payments made pursuant to PIP, personal injury protection, policy).

The issue before this court is whether a negligent driver is entitled to receive credit from an independent insurance policy procured by the injured party. This question likewise is one of first impression in Texas. ² The insurance company who pays under contract for a loss or injury for the wrong of another is subrogated to the rights of the creditor or injured person against the wrongdoer. See Finger v. Southern Refrigeration Servs., Inc., 881 S.W.2d 890, 894 (Tex.App.--Houston [1 st Dist.] 1994, writ denied). The insurer's right to subrogation derives from the rights of the insured. Id.

Here, Allstate, the insurer, paid Guillot, the insured, pursuant to Guillot's uninsured motorist policy for the multi-car collision. This entitled Allstate to stand in the shoes of Guillot and assert any claims that Guillot was entitled to assert against the uninsured motorist, Bustos. See TEX. INS.CODE ANN. art. 5.06-1(6) (Vernon Supp.1999); Simpson v. GEICO General Ins. Co., 907 S.W.2d 942, 947 (Tex.App.--Houston [1 st Dist] 1995, no writ). The Uninsured Motorist statute is silent regarding Allstate's rights of subrogation against an insured party, such as Bartley in the present case. However, Allstate's settlement contract does address its rights against insured parties and strictly prohibits them by limiting Allstate's subrogation rights to any monies recovered from "Emiliano Bustos or any other uninsured person."

Allstate decided not to exercise its subrogation right by joining Bustos in this suit. Guillot proceeded solely against Bartley and recovered $30,000 for the damages Bartley caused. Thus, Allstate allows Guillot to receive more money than the damages awarded by the jury because it did not attempt to collect from Bustos. ³

What Bartley really seeks is reimbursement or contribution from Bustos via Allstate's payment to Guillot under her uninsured motorist policy. However, Allstate stands in the shoes of Guillot not the shoe's of the joint tortfeasor. See Allstate Ins. Co. v. Clarke, 471 S.W.2d 901, 907 (Tex.Civ.App.--Houston [1 st Dist.] 1971, writ ref'd n.r.e.). Bustos, the uninsured alleged joint tortfeasor, was not a party to this suit. To prevent what has occurred, Bartley could have joined Bustos in a cross action as a third party defendant creating an opportunity for the jury to adjudicate Bustos's liability, if any. This would have allowed Bartley to seek contribution or reimbursement from Bustos for any damages attributable to Bustos. To offset the $30,000 Bartley owed as damages by Allstate's $20,000 settlement, would allow Bartley to receive contribution from the plaintiff and not a codefendant. Allstate's liability arises from the fault, if any, of the uninsured motorist Bustos, not that of the insured driver, Bartley. See Franco v. Allstate Ins. Co., 505 S.W.2d 789, 791-92 (Tex.1974).

Bartley cites two cases for the proposition that double recovery is strictly prohibited and that she is entitled to a set-off for the money already received. See First Title Co. v. Garrett, 860 S.W.2d 74, 78 (Tex.1993); Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1 (Tex.1991). In First Title, both the title company and the seller made the same misrepresentations that the land was free of restrictive covenants. 860 S.W.2d at 75-76. Although not joined together in one action, the court recognized the seller's settlement agreement covered the same injury for which the title companies were found liable: a parcel of land worth less than it was represented to be worth. Id. at 79. The court held that an off-set was proper because the title companies and the sellers caused the same injury and the compensation received in the settlement and in the present lawsuit compensated an indivisible injury. Id.

In Sterling, the same issue arose in a land transaction involving a misrepresentation by the seller, the title company, and the seller's attorney. 822 S.W.2d at 3. Specifically, all three assured Sterling that certain lots would be included in the transaction. Id. at 3. Before the trial, the seller and his attorney settled, and the trial proceeded against the seller. Id. at 4. The seller asserted that it was entitled to set-off the amount of the settlement against the damages it owed. Id. at 7-8. The court held that the seller was entitled to the set-off because all the defendants were joint tortfeasors, and caused the same damage.

Both of these authorities are distinguishable not only because all the above parties involved made tortious misrepresentations, but also because of statutory constraints, infra. The torts committed by these joint tortfeasors all resulted in indivisible injuries. Here, unlike First Title or Sterling, Allstate committed no tort because Allstate was not involved in the accident in any way. Guillot was struck by three individuals, and these three individuals are the joint tortfeasors, not Allstate. Proof is lacking that the damages caused an indivisible injury. We recognize that in First Title and Sterling the relationship between the title companies were based in part on contract; however, in both cases, the parties made misrepresentations, causing in fact the complained of torts. Allstate's relationship with Guillot is strictly based on their contract. Therefore, any set-off Bartley may be entitled to receive must come from another joint tortfeasor, not Allstate, a party involved merely by contract.

Bartley, as the defendant has the burden of proof to establish she is entitled to settlement credit. First Title Co. v. Garrett, 860 S.W.2d at 78-79 (recognizing that record must reflect...