Green v. Helmcamp Ins. Agency

• Citation: 499 S.W.2d 730
• Decision Date: 06 September 1973
• Docket Number: No. 16112,16112
• Parties: Cleo L. GREEN et ux., Appellants, v. HELMCAMP INSURANCE AGENCY et al., Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 730

499 S.W.2d 730

Cleo L. GREEN et ux., Appellants, v. HELMCAMP INSURANCE AGENCY et al., Appellees.

No. 16112.

Court of Civil Appeals of Texas,

Houston (1st Dist.).

Sept. 6, 1973.

Rehearing Denied Oct. 4, 1973.

Jamail & Gano, Don M. Barnett, Houston, for appellant.

Boswell, O'Toole, Davis & Pickering, Mark T. Price, Houston, for appellees.

PEDEN, Justice.

Suit for damages for failure to provide insurance coverage. Appellants Mr. and Mrs. Green had obtained a default judgment against a Mr. Prudhomme for personal injuries in the amount of $8,250 arising from a vehicular collision. After the collision Prudhomme was advised that he had no insurance coverage. Prudhomme assigned to the Greens, his judgment creditors, any cause of action he had against his former insurance agent, Helmcamp, and the Greens' suit against Helmcamp is the subject of this appeal. After the case was tried on the merits and the jury had returned a verdict on special issues, the trial court entered judgment for Helmcamp on the two year statute of limitations.

Appellee Helmcamp asserts that under the evidence the pertinent events occurred on these dates:

1. April 17, 1966--Prudhomme's insurance policy expired.

2. May 3, 1966--collision occurred (Greens and Prudhomme).

3. May 5 or 6, 1966--Prudhomme was told he had no insurance coverage.

4. February 7, 1967--citation served on Prudhomme in Greens' suit; suit papers were taken to Prudhomme's lawyer within a few days.

5. March 6, 1967--Greens could have taken a default judgment.

6. September 30, 1968--Greens obtained default judgment against Prudhomme.

7. August 21, 1970--Greens filed this suit against Helmcamp.

Helmcamp was sued by the Greens under the assignment from Prudhomme more than four years after the collision but less than two years after the judgment was entered against Prudhomme.

The Greens' suit against Prudhomme sought damages of $35,000 for their personal injuries; proof of the extent of their damages was required even though Prudhomme defaulted. The default judgment the Greens obtained against Prudhomme recites that it was based on 'good and sufficient evidence.'

Appellants' first three points of error are:

1. It was error for the trial court to sustain appellee's motion for instructed verdict and enter final judgment in favor of appellee in that appellants' cause of action was not barred by the statute of limitations.

2. Appellants' cause of action, not having accrued until after September 30, 1968 it was error for the trial court to grant appellee's motion for instructed verdict and enter judgment in favor of appellee.

3. There being no damages giving rise to appellants' cause of action until after September 30, 1968 the statute of limitations would not commence running until such time, and it was error for the court to grant appellee's motion for instructed verdict and enter judgment in favor of appellee.

Plaintiffs' petition contained allegations, made in the alternative, that their damages were a direct and proximate result of Helmcamp's negligence and/or misrepresentations.

In response to special issues the jury found, among other things, that 1) prior to expiration of Prudhomme's insurance policy on April 17, 1966, Helmcamp represented to him that his truck would be covered by liability insurance through May 13, 1966, 2) Prudhomme relied on such representation and 3) therefore did not obtain liability coverage on his truck from another source, 4) Prudhomme was not negligent in concluding from Helmcamp's conduct that he (Prudhomme) needed to take no further action in renewing his policy and 5) such conclusion was a proximate cause for Prudhomme's not having liability coverage on his truck on May 13, 1966.

Appellees do not contend that the evidence does not support these findings. The jury did not find from a preponderance of the evidence, in response to Special Issue No. 9, that Prudhomme failed to request a renewal of his insurance policy which expired on April 17, 1966.

The Texas Supreme Court, in Atkins v. Crosland, 417 S.W.2d 150 (1967), stated that the general rule is that a cause of action sounding in tort accrues, in the absence of a statute to the contrary or fraudulent concealment, when the tort is committed, even though the damages, or their extent, are not ascertainable until a later date. A legal injury must be sustained before a cause of action arises, the court added, quoting from 54 C.J.S. Limitations of Actions § 168, pp. 122--123, in what it termed a helpful and often quoted test for determining when the cause of action accrues:

"The test to determine when the statute of limitations begins to run against an action sounding in tort is whether the act causing the damage does or does not of itself constitute a legal injury, that is, an injury giving rise to a cause of action because it is an invasion of some right of plaintiff. If the act is of itself not unlawful in this sense, and plaintiff sues to recover damages subsequently accruing from, and consequent on, the act, the cause of action accrues, and the statute begins to run, when, and only when, the damages are sustained; and this is true although at the time the act is done it is apparent that injury will inevitably result.

"If, however, the act of which the injury is the natural sequence is of itself a legal injury to plaintiff, a completed wrong, the cause of action accrues and the statute begins to run from the time the act is committed, even where little, if any, actual damage occurs immediately on commission of the tort * * *.' See Tennessee Gas Transmission Co. v. Fromme, 153 Tex. 352, 269 S.W.2d 336 (1954).'

In that case Atkins had brought a cause of action against Crosland, his accountant, for allegedly using improper accounting methods that caused Internal Revenue to assess a tax deficiency against Atkins. Our Supreme Court held that the Plaintiff's cause of action did not arise until the tax deficiency was assessed because the assessment was the factor essential to consummate the wrong; only then was the tort complained of completed. 'If a deficiency had never been assessed, the plaintiff would not have been harmed and therefore would have had no cause of action . . . In short, in the absence of assessment, injury would not have inevitably resulted.'

The Supreme Court cited its 1953 opinion in Linkenhoger v. American Fidelity & Casualty Co., 152 Tex. 534, 260 S.W.2d 884, a suit brought by an insured under the Stowers Doctrine. The defendant...