Christensen v. Integrity Ins. Co.
| Decision Date | 29 October 1986 |
| Docket Number | No. C-5318,C-5318 |
| Parties | C. Diane CHRISTENSEN et al., Petitioners, v. INTEGRITY INSURANCE COMPANY, Respondent. |
| Court | Texas Supreme Court |
Richard A. Schwartz, and Fred Wahrlich (Thelen, Marrin, Johnson & Bridges), Houston, for petitioners.
William J. Eggleston and Thomas B. Taylor (Taylor, Eggleston & Godwin), Houston, for respondent.
This case requires us to decide whether the trial court abused its discretion when it temporarily enjoined C. Diane Christensen and the other petitioners from proceeding with a California lawsuit. The Harris County District Court granted Integrity Insurance Company a temporary injunction prohibiting Christensen, Manzanita Management Corporation, and Allen D. Christensen, as Trustee of the Allen D. Christensen Family Trust, from pursuing a lawsuit against Integrity and numerous other defendants in the California Superior Court. The court of appeals, with one justice dissenting, held that the trial court did not abuse its discretion. 709 S.W.2d 724. Because of the dissent, we have jurisdiction over this cause. Gannon v. Payne, 706 S.W.2d 304, 305 (Tex.1986). We hold that the trial court did abuse its discretion and reverse the judgment of the court of appeals and order the injunction dissolved.
This litigation arose out of the settlement of Christensen's insurance claim against Integrity for damages to the Townlake Village Apartments, located in Baytown, Texas. The apartments sustained extensive damage in August 1983 when Hurricane Alicia struck the Texas coast. The apartments were owned by Christensen, a California resident; managed by Manzanita Management Corporation, a California corporation; 1 and insured under an "all-risks" policy by Integrity, a New Jersey corporation. M.T.S., a California partnership and Integrity's managing agent, issued the policy in California. The policy was delivered to Christensen through Sherwood Insurance Service and Thompkins & Company, California insurance brokers and agents.
After receiving notice of the loss, M.T.S. retained GAB, a California corporation, to adjust the claim. GAB sent W.L. Mercer, a California resident, to Baytown, Texas to adjust the loss. Mercer hired Harrison Construction & Lumber Company, a Texas corporation, to estimate the cost of repairing the complex. Harrison Construction sent W.W. Trammell to prepare the estimate. The adjuster, Mercer, reduced Trammell's estimate in several respects, and then recommended that Christensen honor the estimate. Later, Mercer met in California with Manzanita's president, William Benevento, and representatives of Sherwood and Thompkins & Company to discuss settlement of the claim. After the meeting, Mercer authorized Manzanita to begin repairing the property. In November, Christensen contracted with Harrison Construction & Lumber Company to do the repairs. As of January 31, 1984, Integrity had paid Christensen over $3.5 million on the hurricane claim.
Meanwhile, in December 1983, the apartments sustained new damage as the result of a severe freeze. Integrity again engaged GAB to adjust the claim and GAB again dispatched Mercer to Texas to handle the adjustment. Integrity and Christensen engaged in settlement discussions concerning both the freeze claim and the hurricane claim that continued into the spring of 1984. In March, representatives of Integrity and M.T.S. met to consider their course of action on the claims, and on April 12, 1984, Integrity filed suit in Texas. Integrity continued, however, to engage in the California settlement discussions until Christensen learned of the Texas lawsuit on April 17. Integrity's Texas lawsuit named as defendants the Allen D. Christensen Family Trust; Christensen, d/b/a/ Manzanita Management Corporation; Manzanita; Benevento; GAB; Mercer; Harrison Construction and its president, Ray T. Harrison; Starnes Group, Inc.; and Thomas H. Stovall. 2 Integrity asserted that the defendants had caused it to substantially overpay Christensen's hurricane claim. Integrity sought declaratory relief and alleged causes of action for (1) breach of fiduciary duty, due to negligent and intentional misrepresentation, (2) breach of warranty for failure to protect the premises, (3) fraud and conspiracy to commit fraud and (4) negligent adjustment and estimation.
On April 18, 1984 Christensen and Manzanita filed suit in California. Their lawsuit named as defendants Integrity, M.T.S., GAB, Sherwood, John J. Bado, Nancy A. Cooper, John Matukas, Ernest Teleford, Gerald J. Sullivan, Jean Osborne, Olga Peters, W.L. Mercer, and John Does 1 through 45. 3 The California suit asked for declaratory relief and alleged causes of action for breach of contract, fraud, negligent misrepresentation, unfair claims settlement practices, and breach of a covenant of good faith and fair dealing. On May 18, 1984, Integrity and M.T.S. filed a motion in the California court to dismiss or stay the proceedings on the grounds of forum non conveniens. The California court overruled the motion in September 1984, and the California Court of Appeals affirmed the trial court's ruling.
In early February 1985, GAB and Integrity each applied to the Harris County District Court for a temporary restraining order and injunction...
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