Christensen v. Integrity Ins. Co., A14-85-337-CV

CourtCourt of Appeals of Texas
Citation709 S.W.2d 724
Docket NumberNo. A14-85-337-CV,A14-85-337-CV
PartiesC. Diane CHRISTENSEN, Manzanita Management Corporation, and Allen D. Christensen, Trustee of the Allen D. Christensen Family Trust, Appellants, v. INTEGRITY INSURANCE COMPANY, Appellee. (14th Dist.)
Decision Date03 April 1986

Richard A. Schwartz, Andrew W. Miller, Fred Wahrlick, Houston, for appellants.

William J. Eggleston, Houston, for appellee.



ELLIS, Justice.

The opinion of January 16, 1986, is withdrawn and the following opinion substituted.

This is an accelerated appeal from a temporary injunction restraining appellants from further prosecuting a California action against appellee and others until a final judgment is entered in a concurrent Texas suit. We affirm the trial court's order.

Both lawsuits involve disputes concerning the insurance adjustment of damage to the Town Lake Village Apartments. This damage was caused by Hurricane Alicia in August 1983 and subsequent freezing weather in December of that year.

Appellants C. Diane Christensen (Christensen), Allen D. Christensen, trustee, and Manzanita Management Corporation (Manzanita) are California residents. Christensen owns the Town Lake Village Apartments. Manzanita is her authorized representative for managing the premises.

Appellee Integrity Insurance Company (Integrity), a New Jersey corporation, insured the apartments under an "all risks" property damage policy issued in California by M.T.S. Insurance Services (M.T.S.). M.T.S., as Integrity's managing agent, had the policy delivered through intermediary brokers to Christensen.

M.T.S. received notice of the property loss in August of 1983. Integrity secured GAB Business Services (GAB) of Los Angeles to adjust the hurricane damage claim. GAB sent its employee W.L. Mercer (Mercer), a California resident, to Texas to inspect and adjust the loss.

Mercer selected Harrison Construction & Lumber Co. (Harrison Construction), a Texas corporation, to prepare a repair estimate of the premises. In October of 1983, Harrison Construction and Christensen signed a repair contract and Harrison began work.

In December of 1983, the premises suffered freeze damage, and M.T.S. received notice of this claim in California. Integrity again secured GAB's services and Mercer was sent to Texas in January of 1984 to adjust this claim. Integrity subsequently replaced Mercer with Rob-Nel Construction Company for appraisal of the freeze damage claim.

Appellants contend that settlement negotiations in California between Christensen and Integrity continued until appellants unexpectedly learned that Integrity had filed suit against them in Harris County on April 12, 1984.

Integrity's amended petition named as defendants the appellants here, GAB and Mercer, Harrison Construction, its president Ray Harrison (Harrison) and its estimator Doug Trammel (Trammel), William Benevento (Benevento) of Manzanita, Thomas Stovall, architect, and Stovall's employer, the Starnes Group.

Integrity alleged that these defendants caused it to substantially overpay the insurance loss. Integrity based its cause of action on fraud, conspiracy to commit fraud, breach of fiduciary duty due to negligence and intentional misrepresentation, negligence and gross negligence in adjusting and estimating the losses, breach of warranty for failure to take protective safeguards against further losses, and requested declaratory relief.

Appellants filed their suit on April 18, 1984, in California, four days after Integrity had filed its suit in Texas. Appellants' amended complaint named Integrity, GAB, Mercer, M.T.S. and its three individual owners and its claims manager, and others as defendants.

Appellants alleged breach of the insurance contract, breach of a covenant of good faith and fair dealing, conspiracy to violate and violations of the California Insurance Code and the California Unfair Insurance Practices Act, fraud, conspiracy to commit fraud, and negligent misrepresentation. They requested declaratory relief and benefits due under the policy, damages, punitive damages and attorney's fees.

Integrity responded to appellants' California suit by filing a motion to dismiss based upon forum non conveniens. This motion was denied by the California Superior Court.

On February 7, 1985, Integrity countered this denial of its motion by filing an application for a temporary restraining order and injunctive relief in Texas to enjoin appellants from further prosecuting their California action. Integrity's application was granted and Christensen filed motions to dissolve the temporary restraining orders, which the District Court denied.

Christensen filed special exceptions to appellee's First Application and its Second Amended Application contending that the parties in the two suits were different, that several issues presented and various relief requested in California could not be disposed of by the Texas court. These exceptions were denied. The Texas court entered a temporary injunction order on April 15, 1985.

Appellants allege in points of error one through five an abuse of discretion by the trial court in entering the temporary restraining order in appellee's favor. There is no appeal, however, from a temporary restraining order. Lord v. Clayton, 163 Tex. 62, 352 S.W.2d 718 (1961). Moreover, the temporary restraining order had expired by the time the trial court granted the temporary injunction, rendering any error concerning the restraining order moot. Arvol D. Hays Construction v. R & M Agency Group, 471 S.W.2d 628 (Tex.Civ.App.--Fort Worth 1971, writ ref'd n.r.e.). We overrule these points of error.

Appellants' sixth through eighth and thirteenth points of error are related and therefore will be addressed together. In the sixth point of error, appellants contend the trial court abused its discretion in granting the temporary injunction in appellee's favor. Appellants allege the abuse resulted from appellee's failure to demonstrate a clear equity in its favor which would support the injunction. Further, appellants contend that dissimilarity of parties and issues in both suits would preclude the Texas court from affording the parties complete relief.

Appellants' seventh point of error disputes the trial court's finding that the parties and issues are the same in both suits. In their eighth and thirteenth points of error, appellants allege the trial court erred in concluding Texas law was not so dissimilar as to deny appellants complete relief concerning causes of action asserted in their California suit. Appellants assert the Texas court cannot give them complete relief because it does not recognize certain actions recognized in California.

Although the parties in both suits are not identical, Texas law does not require complete identity of parties to enjoin a suit in another court based upon the same subject matter. See Dickerson v. Hopkins, 288 S.W. 1103 (Tex.Civ.App.--San Antonio 1926, no writ). In Dickerson, the court held that such an injunction would stand where it "did not purport to affect other causes of action than those involving the very subject matter of this suit...." Id. at 1106. It is undisputed that both the California and Texas suits involve the same insurance claim adjustments related to the Town Lake Village Apartments.

Regardless of the differences in parties, a district court may enjoin a party from prosecuting a suit in another court when necessary to prevent multiple suits concerning the same subject matter. University of Texas v. Morris, 162 Tex. 60, 344 S.W.2d 426 (1961). When suits involving the same subject are pursued in multiple jurisdictions, an injunction is an appropriate device to prevent inconsistent rulings and substantial inconvenience to parties and witnesses. Jacobsen v. Jacobsen, 695 S.W.2d 44 (Tex.App.--Corpus Christi 1985, no writ). The court may enjoin such a redundant suit to protect its jurisdiction and enable it to render complete and final justice between the parties. V.D. Anderson Co. v. Young, 128 Tex. 631, 101 S.W.2d 798 (1937).

A trial court has broad discretion to enter a temporary injunction. An injunction should stand unless a clear abuse of discretion exists. Texas Foundries, Inc. v. International Molders and Foundry Workers' Union, 151 Tex. 239, 248 S.W.2d 460 (1952); Karamchandani v. Ground Technology, 678 S.W.2d 580 (Tex.App.--Houston [14th Dist.] 1984, writ dism'd). Abuse of discretion is more than mere error; it amounts to arbitrary and unreasonable action. Parks v. U.S. Home Corp., 652 S.W.2d 479 (Tex.App.--Houston [1st Dist.] 1983, writ dism'd). The injunction must be sustained if the record reveals that appellee established a probable right of recovery and a probable harm in the interim. Sun Oil Co. v. Whitaker, 424 S.W.2d 216 (Tex.1968); City of Houston v. Southern Water Corp., 678 S.W.2d 570 (Tex.App.--Houston [14th Dist.] 1984, no writ).

When reviewing a temporary injunction order, this Court must indulge all legitimate inferences from the evidence in the light most favorable to the trial court's judgment. David v. Bache Halsey Stuart Shields, Inc., 630 S.W.2d 754 (Tex.App.--Houston [1st Dist.] 1982, no writ).

Since both suits involve the same subject matter, the trial court was well within its discretion to enjoin appellants from prosecuting their California action to avoid a multiplicity of suits. Appellants' points of error six and seven concerning the dissimilarity of parties in the California and Texas suits are overruled.

We return again to appellants' sixth through eighth and thirteenth points of error to address the question of dissimilarity of issues between the two suits.

Appellants assert that Texas courts refuse to recognize certain causes of action pursued by appellants in California, specifically: (1) a breach of the covenant of good faith and fair dealing, (2) unfair claim settlement...

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