Fidelity & Cas. Co. of New York v. Gaedcke Equipment Co., 01-85-0962-CV

• Decision Date: 22 May 1986
• Docket Number: No. 01-85-0962-CV,01-85-0962-CV
• Citation: 716 S.W.2d 542
• Parties: The FIDELITY & CASUALTY COMPANY OF NEW YORK and the Continental Insurance Company, Appellants, v. GAEDCKE EQUIPMENT COMPANY, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 542

716 S.W.2d 542

The FIDELITY & CASUALTY COMPANY OF NEW YORK and the

Continental Insurance Company, Appellants, v. GAEDCKE EQUIPMENT COMPANY, Appellee.

No. 01-85-0962-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

May 22, 1986.

Rehearing Denied Aug. 14, 1986.

Phillip S. Gordon, Gustafson & Venzke, Houston, for appellants.

John Somyak, Stovall & Somyak, Houston, for appellee.

Before EVANS, C.J., and WARREN and JACK SMITH, JJ.

OPINION

EVANS, Chief Justice.

The defendants, Fidelity & Casualty Company of New York and Continental Insurance Company, appeal from an order of the trial court granting a summary judgment in favor of the plaintiff and denying their motion for summary judgment.

Both sides agree that the central issue is one of law, i.e., whether the defendants had a duty to defend the plaintiff in a prior wrongful discharge suit filed by one of the plaintiff's former employees. By its summary judgment ruling, the trial court determined, as a matter of law, that the defendants did have the duty to defend, and it awarded the plaintiff $45,380.48 plus attorney's fees in the amount of $6,992. We conclude that the trial court erred in that determination.

The summary judgment record reflects that at some point after the plaintiff's employee had suffered an employment related injury and was paid compensation under the Workers' Compensation Act, the plaintiff discharged the worker from its employ. The employee subsequently brought a wrongful discharge action against the plaintiff under Tex.Rev.Civ.Stat.Ann. art. 8307c (Vernon Supp.1986). The plaintiff notified the defendants of the pending lawsuit and requested that the defendants, pursuant to the insurance contract, defend the lawsuit on behalf of the plaintiff. The defendants refused to defend, contending that the wrongful discharge action did not fall within the coverage terms of the insurance contract. Eventually, the cause of action asserted by the former employee was denied, and the plaintiff then instituted this suit against the defendants to recover its attorney's fees and expenses incurred in defending the lawsuit.

Under the insurance contract, the defendant insurance companies were obligated "to pay promptly when due all compensation and other benefits required of the insured by the Workers' Compensation Law." The contract further obligated the defendants to pay on behalf of the insured "all sums which the insured shall become legally obligated to pay as damages because of bodily injury by accident or disease, including death at any time resulting therefrom...."

For a claim coming within the provisions of the insurance contract, the defendants were also obligated to "defend any proceeding against the insured seeking such benefits and any suit against the insured alleging such injury and seeking damages on account thereof...."

The plaintiffs argue that article 8307c is part of the Workers' Compensation Act, title 130, and therefore, that any "benefits" received by a claimant under article 8307c must be deemed to have been included in...