Central Mut. Ins. Co. v. Dunker, A14-89-307-CV

• Decision Date: 04 October 1990
• Docket Number: No. A14-89-307-CV,A14-89-307-CV
• Citation: 799 S.W.2d 334
• Parties: CENTRAL MUTUAL INSURANCE COMPANY, Appellant, v. Gregory Charles DUNKER, Individually and As Next Friend for Craig Dunker, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 334

799 S.W.2d 334

CENTRAL MUTUAL INSURANCE COMPANY, Appellant, v. Gregory Charles DUNKER, Individually and As Next Friend for Craig Dunker, Appellees.

No. A14-89-307-CV.

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

Oct. 4, 1990.

Rehearing Denied Nov. 1, 1990.

Otto D. Hewitt, III, James D. Bashline, Evelyn T. Ailts, Kenneth J. Bower, Galveston, for appellant.

Alton C. Todd, Alvin, Charles Daughtry, Fred D. Raschke, Galveston, Carl R. Mace, Houston, for appellees.

Before J. CURTISS BROWN, C.J., and JUNELL and MURPHY, JJ.

OPINION

JUNELL, Justice.

This is an appeal from a final judgment of more than $1 Million favoring the plaintiffs in a personal injury lawsuit. Appellant brings two points alleging trial court error: (1) in entering judgment where all claims had been settled prior to trial; and (2) in abusing its discretion by denial of appellant's motion to set aside judgment where plaintiffs had compromised and settled all claims against defendant prior to trial. Appellees (plaintiffs below) bring a cross point asserting the appeal was taken for delay and without sufficient cause. Appellees seek a 10% addition to damages awarded at trial. We dismiss the appeal.

Appellees represent a minor who was injured while participating in a summer recreational program sponsored by the City of La Marque. The thirteen-year-old boy was struck in the head by a discus while he was being instructed in discus hurling. Permanent brain damage resulted. Appellees sued three parties: La Marque Independent School District; the city; and Iverson Godfrey, Jr., a volunteer program instructor ("Godfrey"). The school district was released by summary judgment prior to a bench trial held to resolve issues among the other parties. The city had a liability insurance policy (with limits of $500,000) under which Godfrey was an additional insured. The insurance carrier of that policy provided legal counsel for both the city and Godfrey. Appellant is the carrier under Godfrey's homeowner's policy which has limits of $300,000. Godfrey's carrier did not take part in the suit but attended trial and pre-trial proceedings as an observer.

Judgment was rendered for appellees against Godfrey in the amount of $1,045,841.28 for damages and pre-judgment interest, and fault was apportioned 80% to Godfrey and 20% to the city which previously had reached a settlement with appellees. That settlement, approved by the court, involved payment by the city to appellee of $300,000 in cash with an additional $50,000 guaranteed, subject to the outcome of any judgment against Godfrey. Appellant moved to intervene twenty-five days after the final judgment was signed. ¹ Appeal bond was filed with the clerk of this court eighty-eight days after the signing of final judgment. Appellees have filed a motion to dismiss this appeal for want of jurisdiction. That motion has been taken with the case.

The gist of appellant's argument on appeal is that prior to trial appellees' counsel contacted counsel for appellant and made a written settlement demand for $350,000, proposing appellant pay approximately 3/8ths of that sum on behalf of Godfrey for his release from liability, with city's insurance carrier to pay the other 5/8ths. The demand was left open for five days until November 15, 1988. Appellant claims its acceptance of the "offer" by telephone on November 15, 1988, to appellees' counsel, confirmed by a letter sent the next day.

The proposed settlement for appellant to pay 3/8ths of $350,000 was never concluded. Appellees made the court-approved alternate settlement with Godfrey and the city for $350,000. That alternate settlement provided for the city to be released, Godfrey to assign his claims against his homeowner's policy to appellees, and appellees to sign a covenant not to execute any forthcoming trial judgment against Godfrey. Also, Godfrey and the insurance company for the city each retained interests in the policy claims assigned by Godfrey to appellees. ²

Appellant claims there was a "sham trial" below which merely laid groundwork for a subsequent lawsuit for recovery under Godfrey's homeowner's policy, alleging that counsel for Godfrey's carrier witnessed defendant Godfrey align himself with the plaintiff and put on no real defense at trial. She spoke up at trial as a stranger, an interested party, and a friend of the court. She spoke only in objection to the lack of a defense and did not alert the court to any possibility that any settlement had been reached by the parties or on their behalf. She moved for continuance to help prepare a defense for Godfrey, but her motion was denied. Appellant later filed a written motion to intervene. Appellees filed no written motion to strike appellant's written motion to intervene. The trial court docket sheet shows appellees did make an oral motion to strike intervention which was denied pending the evidentiary hearing on appellant's motions to intervene, to set aside judgment, and to enforce the settlement agreement allegedly made prior to trial between counsel for appellees and appellant's counsel. The evidentiary hearing was held sixty-eight days after final judgment was signed. Appellees moved at the beginning of the hearing and again at its ending to strike the intervention, but the court did not rule on either of those motions. The only ruling of the court below at the evidentiary hearing was a denial of appellant's motion to set aside the final judgment.

We find both a lack of standing for appellant to bring this appeal and jurisdiction of this court to hear the appeal. Appellant was neither a party of record at trial nor an intervening party thereafter.

Appellant insists that in the absence of being "stricken out" by the court, it has established itself as a proper intervenor under TEX.R.CIV.P. 60. Appellant argues that, as an intervenor, it becomes a party for all purposes including the right of appeal, citing and relying primarily upon Hughes v. Hughes, 473 S.W.2d 304, 306-7 (Tex.App.--Beaumont 1971), rev'd in part on other grounds, sub nom. Swilley v. Hughes, 488 S.W.2d 64 (Tex.1972). Appellant also insists that this appeal was timely filed under TEX.R.CIV.P. 329b(g), given appellant's motion to set aside the judgment (and grant a take nothing judgment) being in the nature of a "motion to modify, correct or reform a judgment" under Rule 329b. Appellant asserts its filing of the motion to set aside judgment extends its allowed time for appeal to ninety days after signing of final judgment instead of the usual thirty days.

Appellant's case is distinguishable from Hughes v. Hughes, wherein the intervenor became a party before judgment was rendered. The law is clear. Where final judgment has been rendered, a plea in intervention comes too late and may not be considered unless and until the trial court first sets aside its final judgment. Citizens State Bank of Sealy v. Caney Investments, 746 S.W.2d 477 (Tex.1988); First Alief Bank v. White, 682 S.W.2d 251 (Tex.1984); Comal County Rural High School District No. 705 v. Nelson, 158 Tex. 564, 314 S.W.2d 956 (1958); Express-News Corp. v. Spears, 766 S.W.2d 885 (Tex.App.--San Antonio 1989, no writ).

The general rule is that a remedy by appeal is available only to parties of record. Gunn v. Cavanaugh, 391 S.W.2d 723 (Tex.1965). In the case before us the appellant never became a party of record.

Appellee's motion to dismiss is sustained.

This appeal is dismissed without prejudice to any defense appellant Central Mutual Insurance Company may have in any other litigation concerning the matter of Iverson Godfrey, Jr. and appellee Gregory Charles Dunker, individually, and/or as next friend of Craig Dunker.

MURPHY, Justice, dissenting.

The majority dismisses the instant appeal by concluding that appellant, who had filed a post-judgment plea in intervention and motion to set aside the judgment, had no standing to appeal and that this court had no jurisdiction to hear the appeal. Because I believe appellant had standing to appeal the judgment and that the trial court abused its discretion in denying the motion to set aside judgment, I respectfully dissent.

The majority justifies its dismissal by citing the general rule that, after entry of judgment, a plea in intervention comes too late for consideration unless the trial court sets aside its final judgment. See Citizens State Bank v. Caney Inv., 746 S.W.2d 477, 478 (Tex.1988); First Alief Bank v. White, 682 S.W.2d 251, 252 (Tex.1984); Comal County Rural High School Dist. No. 705 v. Nelson, 158 Tex. 564, 314 S.W.2d 956, 957 (Tex.1958); Express-News Corp. v. Spears, 766 S.W.2d 885, 888 (Tex.App.--San Antonio 1989, no writ). Because appellant filed its plea after entry of judgment, the majority concludes that appellant, having never become a party of record, was not entitled to the remedy of appeal. Although the general rule is that only parties of record may appeal a judgment, Gunn v. Cavanaugh, 391 S.W.2d 723, 725 (Tex.1965), an exception to this rule is applicable here. Under this exception, involving the "doctrine of representation," one may be deemed a party if "the 'represented' individual is bound by a judgment rendered in a case to which he is not a party." American Physicians Ins. Exch. v. Cardenas, 717 S.W.2d 707, 708 (Tex.App.--San Antonio 1986, writ ref'd n.r.e.) (quoting Grohn v. Marquardt, 487 S.W.2d 214, 217 (Tex.Civ.App.--San Antonio 1972, writ ref'd n.r.e.).

In Cardenas, appellant was the insurer of a defendant but had not participated in the suit because it claimed the alleged negligent acts occurred prior to the time of its coverage. Id. at 708. After the trial court entered judgment adverse to appellant's insured, finding that the negligent acts occurred during the time of coverage, appellant sought to appeal by writ of error. Id. The appellate court found the exception involving the doctrine of virtual representation applicable because the insurer could be bound by the...