Hartford Cas. Ins. Co. v. Walker County Agency, Inc.

• Decision Date: 25 April 1991
• Docket Number: No. 13-90-123-CV,13-90-123-CV
• Citation: 808 S.W.2d 681
• Parties: HARTFORD CASUALTY INSURANCE COMPANY, Appellant, v. WALKER COUNTY AGENCY, INC., Appellee.
• Court: Texas Court of Appeals

Page 681

808 S.W.2d 681

HARTFORD CASUALTY INSURANCE COMPANY, Appellant, v. WALKER COUNTY AGENCY, INC., Appellee.

No. 13-90-123-CV.

Court of Appeals of Texas Corpus Christi.

April 25, 1991.

Rehearing Overruled May 23, 1991.

Robert D. Green, Law Office of Robert D. Green, Houston, for appellant.

Jack W. Tucker, Jr., Carla Bennett, Tucker, Hendryx & Gascoyne, Houston, for appellee.

Before BENAVIDES, KENNEDY and SEERDEN, JJ.

OPINION

BENAVIDES, Justice.

Hartford Casualty Insurance Company appeals a summary judgment granted in favor of Walker County Agency, Inc., in Hartford's cross-action. By one point of error, Hartford contends that Walker County was not entitled to summary judgment as a matter of law. We affirm the trial court's judgment in part and reverse it in part.

Hartford and Walker County were both defendants in several personal injury and workers' compensation law suits brought by Roy Dean Jackson, an employee of L.B. and Alex Joseph (hereinafter "Josephs"). Hartford was the workers' compensation insurance carrier for Eleven Oaks, for whom the Josephs were a subcontractor, and Walker County was Hartford's agent for the purposes of issuing the workers' compensation insurance. Jackson was injured while he was working for the Josephs while they were subcontracted to Eleven Oaks. Jackson initially filed suit in Walker County against the Josephs, Walker County Agency, and Eleven Oaks; Hartford was not a party to this action. This suit settled with all causes of action being dismissed as to all defendants, with the exception of the Josephs. The Josephs defaulted and, in exchange for Jackson not executing the judgment, the Josephs assigned their causes of action against the other defendants to Jackson so that he could file suit against Hartford, Walker County and Eleven Oaks for any claims which the Josephs may have had against them.

Jackson filed a workers' compensation claim in Harris County; Hartford initially denied the claim. After the Industrial Accident Board found in favor of Jackson, Hartford appealed to the district court. At this time, Jackson also raised claims of breach of good faith and fair dealing and violations of the Deceptive Trade Practices Act. ¹ The workers' compensation claim was severed from the other causes of action. Walker County was not a party to this litigation. The workers' compensation claim was called to trial but all the causes of action were settled before a verdict was reached. Since the settlement involved a workers' compensation claim, the Harris County trial court specifically awarded a portion of the overall settlement as an award for the workers' compensation claim. The remainder of the settlement was for the breach of good faith and fair dealing claim.

Before the Harris County case settled, Jackson and the Josephs filed suit against Hartford and Walker County in Nueces County, pursuant to the rights assigned to Jackson from the Walker County lawsuit. The settlement in Harris County acknowledged the Nueces County suit because it specified that Hartford would continue in its action against Walker County.

Hartford filed a cross-action for contribution, indemnity, fraud and breach of fiduciary duty against Walker County in the Nueces County suit. Hartford's causes of action for fraud and breach of fiduciary duty were based on Walker County's act of providing a Hartford workers' compensation insurance binder in a manner prohibited by Hartford's agency agreement with Walker County. Hartford sought contribution for its settlement of the bad faith claim and sought indemnification of its settlement of both the bad faith and workers' compensation claims.

Walker County answered with a general denial. After Hartford and Jackson settled in Harris County, Walker County amended its answer, asserting in addition to its general denial, that the agreed settlement and judgment in the Harris County case did not provide a basis for Hartford's contribution claims and that Hartford was precluded from pursuing such an action.

Walker County then filed a motion for summary judgment. It challenged Hartford's causes of action for contribution, indemnity, fraud and breach of fiduciary duty, attacking the damage element of each cause of action. Walker County contended that because Hartford had settled and because they, Walker County and Hartford, were joint tortfeasors, Hartford was not eligible for contribution and indemnity. In support of its motion it cited Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19 (Tex.1987).

Hartford then responded to Walker County's motion for summary judgment, asserting that its causes of action against Walker County resulted from the contractual workers' compensation claim and essentially constituted an insurance company suing its agent for direct damage arising from the agent's violation of agency guidelines. Hartford contended that because part of its settlement was paid pursuant to a contractual and statutory cause of action, Beech did not apply and it was not barred from asserting a claim against Walker County. Hartford also contended that since Jackson's breach of good faith and fair dealing claim was based, in part, on the DTPA, it was entitled to statutory indemnity under § 17.555 of that statute.

Walker County amended its answer to Hartford's cross-action, adding its contention that because Hartford executed the release with Jackson and the Josephs in which Jackson and the Josephs agreed to abandon any claims against Hartford, that Texas case law prevented Hartford from pursuing its action for contribution against Walker County. Again, it cited Beech. It implied that it, Walker County, was a joint tortfeasor of Hartford for all of Hartford's causes of actions. Walker County also asserted that Hartford could not bring an action for statutory indemnity under § 17.555 the DTPA because it did not qualify as a consumer under that act.

Hartford amended its cross-action, alleging in addition to its causes of action for contribution, breach of fiduciary duty, breach of contract, and statutory indemnity pursuant to the DTPA, causes of action for negligence and misrepresentations. Hartford specifically alleged that, for the purposes of contribution, it and Walker County were joint tortfeasors. Hartford specified the acts which it alleged constituted a breach of fiduciary duty, a breach of contract, negligence and misrepresentations.

Walker County did not file an amended answer to Hartford's third amended cross-action. Instead, Walker County filed a supplemental motion for summary judgment. In this supplemental motion, it attacked Hartford's characterization of its cause of action as being contractual and asserted that, in any event, such a cause of action should have been brought as a separate action. As before, Walker County challenged Hartford's ability to assert its causes of action for indemnity and contribution. Walker County further challenged Hartford's ability to bring the causes of action for breach of contract and breach of fiduciary duty because they were essentially an attempt to collect indemnity and contribution. It also contended that Hartford's allegations of fraud and breach of fiduciary duty were unsupported and insupportable by facts in evidence and ultimately immaterial to Walker County's right to have the cross-action dismissed. Summarily, Walker County's argument was that the agreed judgment incorporating a workers' compensation settlement provided no basis for subsequent claims of contribution or indemnity.

Hartford filed a supplemental response, responding to Walker County's supplemental motion. Hartford reiterated that for the purposes of its breach of contract, breach of fiduciary duty, negligence, and misrepresentations claims, it is not a joint tortfeasor of Walker County; Jackson suit's against Hartford was statutory and contractual in nature and Hartford was seeking statutory indemnity and actual damages. Further, Hartford reasserted that its cross-action was for breach of contract and breach of fiduciary duty. Hartford countered Walker County's claim that these assertions were vague and unsubstantiated by attaching copies of three depositions and an affidavit; Hartford contended that this evidence raised a fact issue on the questions of breach of fiduciary duty and breach of contract. Hartford also attached a copy of the agency agreement between it and Walker County. Subsequently, Hartford filed a fourth amended cross-action which was the same as the third with the addition of a plea for attorney's fees.

At the hearing on the motion for summary judgment, Hartford asserted that its breach of contract, breach of fiduciary duty, misrepresentations and negligence causes of action arose from its contractual relationship with Walker County and Walker County wrongly obligating Hartford to provide workers' compensation insurance. Hartford repeatedly asserted that its damages under these causes of action arose not as a result of the settlement of the bad faith claim, but as a result of its statutory and contractual obligation to pay workers' compensation. Despite Hartford's arguments, the trial court granted Walker County's motion for summary judgment.

By its only point of error, Hartford contends that the trial court erred in granting the summary judgment. Hartford presents each of its arguments in this point of error as sub-points. Summary judgments are reviewed in accordance with the following standards:

1. The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

2. In deciding whether or not there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.

3. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). A defendant...