Burns Motors, Inc. v. Gulf Ins. Co.

• Decision Date: 03 September 1998
• Docket Number: No. 13-97-557-CV,13-97-557-CV
• Citation: 975 S.W.2d 810
• Parties: BURNS MOTORS, INC., Assignee of Leroy Nash, Individually and d/b/a Nash and Associates, Appellant, v. GULF INSURANCE COMPANY and Select Insurance Company, Appellees.
• Court: Texas Court of Appeals

Page 810

975 S.W.2d 810

BURNS MOTORS, INC., Assignee of Leroy Nash, Individually and d/b/a Nash and Associates, Appellant, v. GULF INSURANCE COMPANY and Select Insurance Company, Appellees.

No. 13-97-557-CV.

Court of Appeals of Texas Corpus Christi.

Sept. 3, 1998.

Rehearing Overruled Oct. 8, 1998.

Rex N. Leach, Atlas & Hall, McAllen, for Appellant.

Robert J. Sigler, Clay E. Coalson, Carlos A. Mattioli, Meredith, Donnell & Abernethy, Corpus Christi, Cesar Ricardo Perez, McAllen, for Appellees.

Before SEERDEN, C.J., and YANEZ and RODRIGUEZ, JJ.

OPINION

SEERDEN, Chief Justice.

Burns Motors, Inc., as assignee of Leroy Nash, appeals from a summary judgment denying its claim against Gulf Insurance Company and Select Insurance Company to recover indemnity for the amount of an underlying judgment that Burns had been awarded against Nash. We reverse and remand.

Burns purchased liability insurance on its automobile dealership from Gulf and Select through their insurance agent, Leroy Nash. In the original lawsuit, Burns sued Nash for misrepresenting the nature of that insurance coverage and the losses that resulted from uncovered claims against Burns, and the trial court in that lawsuit granted judgment for Burns. Nash then assigned to Burns any rights he may have to reimbursement from Gulf and Select under their agency agreement. By the present lawsuit, Burns, as Nash's assignee, sought to recover indemnity from Gulf and Select on the amounts that Nash must pay to Burns under the first judgment. Gulf and Select moved for summary judgment and the trial court rendered a take-nothing summary judgment in their favor.

By its first point of error, Burns complains that the trial court erred in granting summary judgment without a hearing and twenty-one days' notice.

Texas Rule of Civil Procedure 166a(c) requires that the summary judgment motion and supporting affidavits be filed and served at least twenty-one days before the hearing. Because summary judgment is a harsh remedy, we strictly construe the twenty-one day time limit. Luna v. Estate of Rodriguez, 906 S.W.2d 576, 582 (Tex.App.--Austin 1995, no writ); Wavell v. Caller-Times Pub. Co., 809 S.W.2d 633, 637 (Tex.App.--Corpus Christi 1991, writ denied).

Select and Gulf first moved for summary judgment on April 8, 1996, on the grounds that Burns was not entitled to contribution, that the agency agreement did not provide for indemnity and that no common law right to indemnity existed. The trial court heard and denied that motion on June 6, 1996. On January 6, 1997, Gulf and Select moved the trial court to rehear their motion for summary judgment, and the trial court signed a February 13th order granting a rehearing on the motion for summary judgment, which was then heard on March 21st.

As the trial court has inherent authority to change or modify any interlocutory order, it may properly grant summary judgment after having previously denied it. H.S.M. Acquisitions, Inc. v. West, 917 S.W.2d 872, 876-77 (Tex.App.--Corpus Christi 1996, writ denied); R.I.O. Systems, Inc. v. Union Carbide Corp., 780 S.W.2d 489, 492 (Tex.App.--Corpus Christi 1989, writ denied). In the present case, however, the trial court did not immediately grant summary judgment in favor of Gulf and Select after the rehearing.

Gulf and Select afterward filed on May 15th a "Motion for Final Judgment" by which they argued that final summary judgment should be entered for the additional reasons that the original judgment against Nash could not be used as evidence, and that the assignment of Nash's claims to Burns violated public policy. Burns complains that the May 15th motion was then decided without a hearing or proper notice.

The trial court signed a final summary judgment on June 10, 1997, reciting as follows:

On this day, came to be heard, Defendants Gulf Insurance Company and Select Insurance Company's Motion for Final Summary Judgment.

After considering the Motion, and previous rulings of the Court, this Court renders Final Summary Judgment that Burns Motors, Inc., as assignee of Leroy Nash, individually and d/b/a Nash & Associates, take nothing on all claims and causes of action which it has brought in this case.

Court costs to be borne by Plaintiffs.

All relief not expressly granted herein is denied.

Accordingly, although the court purported to hear the May 15th motion on the day it rendered judgment, the trial court also based its final summary judgment on consideration of "previous rulings of the Court," which included the reheard original motion for summary judgment.

While we acknowledge that a substituted or amended motion for summary judgment supersedes and supplants the previous motion, which may no longer be considered, see State v. Seventeen Thousand and No/100 Dollars U.S. Currency, 809 S.W.2d 637, 639 (Tex.App.--Corpus Christi 1991, no writ), in the present case, it is clear that the subsequent Motion for Final Judgment was intended to supplement, rather than replace, the original motion for summary judgment with additional reasons for summary judgment.

Therefore, the original motion for summary judgment remained before the trial court on rehearing and, if there are any grounds in the original motion that support summary judgment for Gulf and Select, then we assume that the trial court correctly granted summary judgment on those grounds. See Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex.1989); H.S.M., 917 S.W.2d at 878.

Because there are grounds in the original motion for summary judgment on which the trial court may have granted summary judgment in favor of Gulf and Select and which were presently pending determination by the trial court after rehearing of the original motion, we conclude that it was not error for the trial court to have granted summary judgment by its June 10 th order, regardless of whether the May 15 th Motion for Final Judgment was properly heard as well on that date. We overrule Burns' first point of error.

Burns' remaining points of error contend that there are material fact issues which preclude summary judgment. A party moving for summary judgment has the burden of establishing that no genuine issue of material fact exists and that he is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). In deciding whether disputed material fact issues preclude summary judgment, evidence favorable to the nonmovant is taken as true; every reasonable inference is indulged in favor of the nonmovant and any doubt is resolved in his favor. Nixon, 690 S.W.2d at 548-49. However, a defendant is entitled to summary judgment if the summary judgment evidence establishes, as a matter of law, that at least one element of a plaintiff's cause of action cannot be established. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex.1995); Rodriguez v. Klein, 960 S.W.2d 179, 182 (Tex.App.--Corpus Christi 1997, no writ).

By its fourth point of error, Burns contends that a material question of fact exists as to whether it, as assignee of Nash, may be entitled to indemnity under Nash's agency agreement.

That Agency-Company Agreement provides, in pertinent part, for indemnification by Gulf/Select under the following conditions:

A. Company shall indemnify and hold harmless Agent against any claims or liabilities Agent may become obligated to pay to or in behalf of any insured based on actual or alleged error of Company in its processing or handling Direct Billed or any other business placed by Agent with Company, except to the extent Agent has caused, contributed to or compounded such error.

The agreement also contains indemnification provisions for violations of the federal Fair Credit Reporting Act and for reasonable expenses incurred in connection with the investigation and defense of liability for indemnification generally.

By its Plaintiff's Original Petition, Burns alleged that Nash became obligated to pay the amount of the initial judgment as a result of Gulf and Select's "errors in the handling and processing of claims filed by Burns." Accordingly, Burns sued Gulf and Select for some $250,000 awarded against Nash in the judgment.

A review of the judgment attached to the petition shows that Nash was found liable to Burns for his prior misrepresentations concerning the coverage of liability insurance policies to be purchased from Gulf and Select. In addition, the judgment also represents, and Nash's affidavit states, that he made those misrepresentations to Burns based on Gulf and Select's representations to him that the policies in question would cover such claims. Therefore, Burns claims that Gulf and Select's alleged misrepresentation of coverage to Nash is a processing or handling error under the indemnity clause. However, Gulf and Select argue that liability ultimately caused by Nash's own misrepresentations cannot reasonably be interpreted as a processing or handling error by them under the agreement.

Whether a contract is ambiguous is a question of law...