Edinburg Consol. Independent School Dist. v. St. Paul Ins. Co., 13-88-318-CV

Decision Date26 October 1989
Docket NumberNo. 13-88-318-CV,13-88-318-CV
Parties58 Ed. Law Rep. 1052 EDINBURG CONSOLIDATED INDEPENDENT SCHOOL DISTRICT, Appellant, v. The ST. PAUL INSURANCE COMPANY, Appellee.
CourtTexas Court of Appeals

Alfonso Ibanez, William J. Quackenbush, Pena, McDonald, Prestia & Ibanez, Edinburg, for appellant.

Jack Hebdon, Thomas H. Crofts, Jr., Groce, Lock & Hebdon, San Antonio, for appellee.

Before NYE, C.J., and KENNEDY and BENAVIDES, JJ.

OPINION

KENNEDY, Justice.

Edinburg Consolidated School District appeals both the granting of a summary judgment against it and the refusal of the trial court to grant its summary judgment in a lawsuit filed against The St. Paul Insurance Company. The issue before the trial court was whether the District was covered by a policy issued by St. Paul. The trial court held that the District was not covered. We agree and affirm the trial court's judgment.

The genesis of the litigation before us arose from a suit filed in 1979 by Jose B. Flores, individually and as next friend of David Flores, against the District and one of its teachers. Apparently, David Flores received a hand injury while attending a high school shop class. The teacher and the District received a summary judgment based upon the theory of governmental immunity. The Floreses' appeal to this Court was dismissed for want of jurisdiction. David Flores then filed a similar action in federal court against the District and the teacher in September 1980. The petition was amended in 1982, after David committed suicide. The amended complaint added new causes of action and pled the school board members or trustees as defendants. At trial, the Flores family dismissed their suit against the trustees but continued the suit against the District. After the plaintiffs dismissed the trustees as parties, Gaines Griffin, attorney for the trustees provided by St. Paul, immediately withdrew his defense. The Floreses received a favorable judgment against the School District, which was reversed on appeal. 1

In 1985, the District filed suit against St. Paul alleging that the insurance company wrongfully withdrew from the defense of its case in violation of Tex.Ins.Code Ann. art. 21.21 and the Texas Deceptive Trade Practices--Consumer Protection Act. The District also alleged negligence and breach of fiduciary duty causes of action.

St. Paul's answer stated that it had neither agreed to defend the district nor had it filed an answer on the District's behalf. The answer asserts that the policy in effect covered the trustees and not the District itself.

Thereafter, the District filed a motion for summary judgment, arguing that a suit against the trustees in their official capacities is equivalent to a suit against the District. They relied upon the United States Supreme Court cases of Brandon v. Holt, 469 U.S. 464, 105 S.Ct. 873, 83 L.Ed.2d 878 (1985) and Monell v. Department of Social Services of the City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978) as authority. Both of those cases held, in essence, that a suit against a public servant in an official capacity imposes liability on the entity which that individual represents.

St. Paul also sought a summary judgment on the ground that no claim was made and no suit was filed against any of the named insureds for which a loss is payable during the policy term. The insurance company also complained that it never furnished a defense to the District rather, it only defended the District's trustees.

The summary judgment evidence filed by St. Paul included two affidavits and a copy of the subject insurance policy. Gaines Griffin, attorney for St. Paul, stated in his affidavit that St. Paul hired him to represent the trustees in the Floreses' suit. He claimed the District was being represented by its own attorney at the time he was hired to defend the trustees. This was after the Floreses had amended their suit to include the trustees as parties. Griffin averred that he appeared only for the trustees and continued to represent them until they were dismissed from the suit. Upon dismissal, he swore that he had no clients left in the case.

In the second affidavit, Jack A. Larsen, St. Paul's claims manager, stated that St. Paul issued an insurance policy to the District on June 9, 1976. This policy remained in effect until June 9, 1981. On that date, the policy was cancelled. He averred that the policy was a claims made policy. According to Larsen, St. Paul did not receive notice of the claim until November 2, 1982. He also stated that no claim was made and no suit was brought during the policy period or during the ninety day period after the policy was cancelled. According to Larsen, St. Paul assigned Griffin to defend the suit under a reservation of rights.

The policy was also included as part of the summary judgment evidence. Under the "insuring agreements" portion of the policy, it states that it shall, subject to its terms, conditions and limitations, pay on behalf of:

The school district named in Item 1 of the Declarations for any amount it is required or permitted to pay as indemnity to any person insured under the applicable Coverage Plan designated in Insuring Agreement 11A for "Loss" as defined in Insuring Agreement 11B because of claims made against such Insured caused by any negligent act, any error, any omission or any breach of duty while acting in their capacity as such or any matter claimed against them solely by reason of holding such designated positions. (Emphasis ours)

The "Conditions" portion of the policy states that the insureds agree that the School District shall act on their behalf with respect to notice of claims or cancellation, the payment of premiums and receipt of any return premiums which may be due under the policy.

A movant for summary judgment bears the burden of showing that no genuine issue of material fact exists and that movant is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985). In deciding whether or not a disputed material fact issue exists to preclude summary judgment, evidence favorable to the non-movant will be accepted as true. Every reasonable inference will be indulged in the non-movant's favor and any doubts resolved in its favor.

Where both parties move for summary judgment, all the evidence accompanying both motions should be considered in deciding whether or not to grant either party's motion. Villarreal v. Laredo National Bank, 677 S.W.2d 600, 605 (Tex.App.--San Antonio 1984, writ ref'd n.r.e.). Furthermore, when two or more parties file motions for summary judgment and at least one is granted and the other is overruled, we determine all questions presented, including the propriety of the order overruling the losing party's motion. Crystal City Independent School District v. Crawford, 612 S.W.2d 73, 74 (Tex.Civ.App.--San Antonio 1980, writ ref'd n.r.e.).

By its first point of error, the District claims that the trial court erred in granting summary judgment for St. Paul because it claims that once St. Paul began defending the trustees, it had a duty to continue that defense provided that (1) the insurance policy insured the school district, or (2) the primary lawsuit against the school district was, in law, a suit against the insured school board trustees in their official capacity. We hold that the insurance policy did not cover the District and the trial court properly granted St. Paul's summary judgment.

The District argues that a suit against a school district is equivalent to a suit against the trustees. They cite Tex.Educ.Code Ann. § 23.26(a) (Vernon 1987) as explicit authority for that point. It states:

The trustees shall constitute a body corporate and in the name of the school district may sue and be sued.

Some cases discussed under this section of the Education Code hold that trustees and agents of a school district, while acting in an official capacity, enjoy the same governmental immunity as a school district. See e.g. Russell v. Edgewood Independent School District, 406 S.W.2d 249, 252 (Tex.Civ.App.--San Antonio 1966, writ ref'd n.r.e.). However, it does not follow that an insurance policy, undisputedly insuring only the trustees, necessarily covers the District simply because by statute the trustees have been given the power to manage and govern the District.

To accept the District's theory, we would be required to hold that the wording of the statute makes the insurance contract which the parties made of no effect. However, we find nothing in the statute that requires us to view the trustees and District as one. The policy covers only the trustees. Any discussion of the District in the policy clearly shows that it was not the intended insured.

Here, the Floreses brought suit against the District and others and later amended their petition to include the trustees in their official capacities. St. Paul's attorneys answered the suit as attorneys for the trustee defendants. Gaines Griffin, St. Paul's attorney, averred that his firm became involved in the case only when the appellants' petition was amended to include the trustees in their official capacities. He said that he continued to represent them until they were dismissed from the lawsuit in their individual and official capacities. It is clear that St. Paul's position in this case is supported not only by the unambiguous contract provisions but also by the ensuing facts as averred by Griffin and uncontroverted by the District.

The District's position that the District and the trustees are one and the same for purposes of coverage under this policy is untenable because undisputedly this case existed before the trustees were ever named as parties and continued to exist after they were dismissed from the suit. Appellant's points of error are overruled. The trial court's judgment is AFFIRMED.

NYE, C.J., files a dissenting opinion.

NYE...

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