Cuellar v. Crown Life Ins. Co., Civ.A. M-00-068.
| Decision Date | 21 September 2000 |
| Docket Number | No. Civ.A. M-00-068.,Nos. M-00-098 to M-00-100.,Civ.A. M-00-068.,s. M-00-098 to M-00-100. |
| Citation | 116 F.Supp.2d 821 |
| Parties | Romeo CUELLAR, Leo Perez, Roberto Garcia, and Evelyn Dohrenburg, Plaintiffs, v. CROWN LIFE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Michael Stuart Lee, Michael Stuart Lee and Associates, Corpus Christi, TX, Gary F DeShazo, Gary F DeShazo & Associates, Austin, TX, for Romeo Cuellar, Leo Perez, Roberto Garcia, Evelyn Dohrenburg, plaintiffs.
Gregory F Burch, Liddell Sapp Zivley Hill & Laboon, Houston, TX, Edwin R DeYoung, Locke Liddell et al, Dallas, TX, Roger Brian Cowie, Locke Liddell et al, Dallas, TX, Carl Christopher Scherz, Locke Liddell et al, Dallas, TX, David G Cabrales, Locke Liddell et al, Dallas, TX, for The Crown Life Insurance Company, defendant.
Pending before the court are Plaintiffs' Amended Motion to Remand (Docket Entry No. 16 in C.A. No. M-00-068) and Defendant Crown Life Insurance Company's Motion to Consolidate (Docket Entry No. 14 in C.A. No. M-00-068). For the reasons set forth below both motions will be granted.
The four plaintiffs in these actions, Romeo Cuellar, Leo Perez, Roberto Garcia, and Evelyn Dohrenburg, were at one time insurance agents of Crown Life Insurance Company ("Crown Life") who were involved in the sale of "vanishing premium" life insurance policies issued by Crown Life. Numerous lawsuits were filed by holders of vanishing premium policies issued by Crown Life. In five of those lawsuits the four plaintiffs were named as defendants and filed cross-claims against Crown Life:
(1) Irma De Zertuche, et al. v. Crown Life Insurance Company, et al., Cause No. C-2315-95-E, in the 275th Judicial District Court of Texas, Hidalgo County ("De Zertuche"). In De Zertuche, Cuellar, Perez, and Dohrenburg filed cross-claims against Crown Life;
(2) Susana De la Macorra, et al. v. Crown Life Insurance Company, et al., Cause No. C-3428-95-E, in the 275th Judicial District Court of Texas, Hidalgo County ("De la Macorra"). In De la Macorra, Cuellar and Dohrenburg filed cross-claims against Crown Life. Although Garcia filed answers to the claims against him (Exhibits 17 and 18 to Crown Life's [indexed] De la Macorra papers in its Notice of Removal), he did not file a cross-claim against Crown Life;
(3) Ramos, et al. v. The Crown Life Insurance Company, et al., Cause No. C-2354-95-B, in the District Court of Hidalgo County, Texas ("Ramos"). In Ramos, Dohrenburg and Garcia filed cross-claims against Crown Life;
(4) Guzman, et al. v. The Crown Life Insurance Company, et al., Cause No. C-2648-95-B, in the District Court of Hidalgo County, Texas ("Guzman"). In Guzman, Cuellar filed a cross-claim against Crown Life; and
(5) Del Puerto, et al. v. The Crown Life Insurance Company, et al., Cause No. C-2653-95-G, in the District Court of Hidalgo County, Texas ("Del Puerto"). In Del Puerto, Cuellar filed a cross-claim against Crown Life.
On October 24, 1995, the majority of Crown Life's outstanding shares of stock became owned by an entity that was itself owned by the Canadian province of Saskatchewan. As a result of this change in ownership, Crown Life alleged that it was a "foreign state" and removed a number of pending state court actions to this court, including the five actions referred to above. By orders entered on October 1, 1996 (Docket Entry Nos. 23 and 24 in MDL-1096), these five actions and others were remanded to the state courts in which they were originally filed.
Over the years since then Crown Life settled with the policyholder plaintiffs in the five cases, leaving to be resolved the cross-claims of the four Crown Life agents who are now denominated as plaintiffs in these removed actions. Because in each of the five cases, one or more, but not all, of the four plaintiffs were cross-claimants, plaintiffs and Crown Life agreed to consolidate two cases and to dismiss the other three. This was accomplished by a two-step process. On January 6, 1998, Crown Life prepared and filed in De la Macorra a Joint Motion of Plaintiffs and Crown Life for Severance and Dismissal (Exhibit 49 to Crown Life's [indexed] De la Macorra papers in its Notice of Removal in M-00-068). The first paragraph of the motion states:
The parties have settled all claims and counterclaims in this action except for the crossclaims existing between Romeo Cuellar, Evelyn Dohrenburg, and Roberto Garcia, on the one hand, and Crown Life, on the other hand. Pursuant to the terms of the settlement, the parties jointly request that the unsettled crossclaims be severed into a separate action and that the remaining claims in this action be dismissed with prejudice pursuant to the parties' settlement. (Emphasis added.)
The same day, January 6, 1998, the 275th Judicial District Court of Hidalgo County, Texas, granted the Joint Motion and signed an Agreed Order of Severance and Dismissal With Prejudice in De la Macorra. The Agreed Order states:
(1) All crossclaims between Romeo Cuellar, Evelyn Dohrenburg, and Roberto Garcia, on the one hand, and Crown Life, on the other hand, are hereby severed into a separate action which shall proceed under Cause No. ______, with the caption Romeo Cuellar v. Crown Life Insurance Company. (Emphasis added.)
(2) All remaining claims and counterclaims of any party, including any pending motions for sanctions, are hereby dismissed with prejudice as settled.
(Exhibit 50 to Crown Life's [indexed] De la Macorra papers in its Notice of Removal in M-00-068).
In April of 1999 the severed portion of De la Macorra, now restyled as Romeo Cuellar v. Crown Life Insurance Company, was consolidated into De Zertuche, C-2315-95-E(1) (also apparently sometimes styled as Jose Fernandez Ramirez v. Crown Life Insurance Company), in the 275th Judicial District Court of Hidalgo County, Texas, and restyled as Romeo Cuellar, Leo Perez, Roberto Garcia and Evelyn Dohrenburg v. Crown Life Insurance Company. (April 6, 1999, Agreed Order of Consolidation of Actions in C-2315-95-E(1) [Exhibit 58 to Crown's [indexed] De Zertuche papers in its Notice of Removal])1 Consolidation was necessary because Perez was not a party in the De la Macorra case. The Agreed Order Granting Consolidation of Actions expressly identified the "Cross-Plaintiffs" as "Romeo Cuellar, Leo Perez, Roberto Garcia, and Evelyn Dohrenburg" and Crown Life as "Cross-Defendant" and was approved by Crown Life's counsel. Id. (emphasis added).
What was overlooked by all counsel when the January 6, 1998, Joint Motion and Agreed Order and the April 6, 1999, Agreed Order were prepared was that since Garcia had only filed a cross-claim in Ramos, but not in De Zertuche or De la Macorra, Garcia had no live pleading against Crown Life in the consolidated, Cuellar case, No. C-2315-95-E(1). The record is clear, however, that all parties treated Garcia as if he were a cross-plaintiff against Crown Life in the consolidated case. For example, in addition to preparing or agreeing to the papers described above in January of 1998 and April of 1999 that identified Garcia as a cross-plaintiff, Crown Life filed a Notice of Deposition Duces Tecum in the severed consolidated Cuellar case on February 7, 2000. The notice was addressed to "Plaintiffs" and noticed the depositions of the four plaintiffs, including Garcia. (Exhibit 7 to Plaintiffs' Amended Motion to Remand [Docket Entry No. 16 in M-00-068]).
During the March 2, 2000, deposition of Perez, counsel for Crown Life pointed out to plaintiffs' counsel that he could find no record that Roberto Garcia was actually a "party against Crown." (Transcript of March 2, 2000, deposition [Exhibit 5 to Defendant Crown Life Insurance Company's Response to Plaintiffs' Motion to Remand (Docket Entry No. 8 in M-00-068), at page 37]) Plaintiffs' counsel took the position that Garcia was a party by virtue of the motions and orders of the state courts. Id. at pages 37 through 39.
On March 29, 2000, Crown Life removed the consolidated Cuellar case, C-2315-95-E(1), taking the position that the statements made during the March 2, 2000, deposition for the first time made it ascertainable to Crown Life that Garcia was asserting a claim against Crown Life and that Crown Life was then entitled to remove the case under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1603(a). (Crown Life Insurance Company's Notice of Removal [Docket Entry No. 1 in M-00-068], at page 3) On March 30, 2000, the four plaintiffs filed in the state court their First Amended Petition Amending Plaintiffs' Original Cross-Claims After Consolidation of Severance in the severed Cuellar case, C-2315-95-E(1). (Exhibit 6 to Defendant Crown Life Insurance Company's Response to Plaintiffs' Motion to Remand [Docket Entry No. 8 in M-00-068]) Crown Life then filed an Amended Notice of Removal on March 31, 2000 (Docket Entry No. 4 in M-00-068).
In April of 1999, after the Agreed Order of Consolidation was entered, the four plaintiffs and Crown Life filed a Joint Notice of Nonsuit in the unconsolidated cases, Ramos, Guzman, and Del Puerto. (Exhibits 11, 12, and 13 to Defendant Crown Life Insurance Company's Response to Plaintiffs' Motion to Remand [Docket Entry No. 8 in M-00-068]) On March 31, 2000, however, after Crown Life removed the consolidated Cuellar case to this court, plaintiffs filed motions to withdraw their previous notices of nonsuit in an effort to revive the claims against Crown Life that they had previously dismissed. On April 28, 2000, Crown Life removed those three cases to this court. Although all three cases are now styled as Romeo Cuellar v. The Crown Life Insurance Company, each is a vestige of the earlier Ramos, Guzman, and Del Puerto cases. The three cases are now docketed in this court as
(1) Romeo Cuellar v. Crown, No. C-2354-95-B(2), docketed in this court under M-00-098, formerly known as Guzman;2
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