Henderson v. S. Farm Bureau Ins. Co.

• Decision Date: 21 September 2012
• Docket Number: No. 06–12–00014–CV.,06–12–00014–CV.
• Citation: 370 S.W.3d 1
• Parties: Jerry R. HENDERSON, Appellant, v. SOUTHERN FARM BUREAU INSURANCE COMPANY, et al., Appellees.
• Court: Texas Court of Appeals

370 S.W.3d 1

Jerry R. HENDERSON, Appellant,

v.SOUTHERN FARM BUREAU INSURANCE COMPANY, et al., Appellees.

No. 06–12–00014–CV.

Court of Appeals of Texas, Texarkana.

Submitted: May 21, 2012.

Decided: June 8, 2012.

Discretionary Review Denied Sept. 21, 2012.

Edward L. Merritt III, Jessica M. LaRue, Harbour, Smith, Harris & Merritt, PC, Longview, for appellant.

John D. Crisp Jr., J. David Crisp, Crisp & Freeze, Texarkana, for Maria De Los Angeles Guerrero.

Dick Davis, Howard & Davis, PC, Tyler, for Texas Farm Bureau Casualty Ins. Company.

Before MORRISS, C.J., CARTER and MOSELEY, JJ.

OPINION

Opinion by Justice CARTER.

Jerry R. Henderson alleges that his signature was forged in the settlement of one of his claims and, therefore, a purportedly agreed motion to dismiss was granted without his knowledge, consent, or participation. He appeals the dismissal with prejudice of the Estate of Melchor Guerrero and Texas Farm Bureau Casualty Insurance Company.¹ Henderson had sued the Estate, Texas Farm, Pilgrim's Pride Corporation, and Leonardo Campos Serafin for claims arising out of a multiple vehicle traffic accident. In February 2010, Henderson's attorney filed a joint motion to dismiss the Estate and Texas Farm pursuant to a settlement agreement. The trial court dismissed the claims against the Estate and Texas Farm with prejudice, leaving pending the claims against Pilgrim's Pride ² and Serafin. The dismissals were not severed from the pending claims. On August 30, 2011, Henderson filed a motion to set aside the orders of dismissal alleging that his attorney had failed to give him notice of the dismissal, that he had not consented to the settlement agreements or the dismissals, that his signature had been forged on the settlement agreement, and that he had not received any settlement proceeds or otherwise ratified the agreement. On October 14, 2011, the trial court denied the motion, finding it lacked jurisdiction to set aside the dismissal orders. On November 2, 2011, the trial court severed the dismissals from the pending claims against Pilgrim's Pride and Serafin.

Henderson has appealed, raising two issues.³ Henderson argues the trial court erred in concluding it lacked plenary jurisdiction over parties that were dismissed with prejudice when the dismissals were not severed from the unadjudicated causes of action. Second, Henderson argues the trial court erred in not setting aside the dismissals. Because the trial court had jurisdiction over the dismissals and the record has not been fully developed, we reverse and remand for further proceedings.

I. The Trial Court Had Jurisdiction to Vacate the Dismissals

Henderson argues the trial court erred in concluding it lacked jurisdiction over the dismissals. According to Henderson, because a final judgment had not been rendered, the trial court still had jurisdiction and could vacate or modify prior interlocutory orders. The Estate and Texas Farm argue the trial court lacked subject matter jurisdiction because the dismissals were final judgments, the trial court's plenary jurisdiction had expired, and any order setting aside the dismissals would be void.

The Estate and Texas Farm argue when a judgment becomes final for the purposes of appeal is not relevant. The Estate cites Street v. Honorable Second Court of Appeals for its discussion, noting “[t]he term ‘final judgment’ applies differently in different contexts.” 756 S.W.2d 299, 301 (Tex.1988). While the term “final judgment” may have different meanings in different contexts, the dispute in this case depends on when the judgment becomes final for purposes of appeal. A trial court retains plenary power over its judgment until that judgment becomes final for the purposes of appeal. Tex.R. Civ. P. 329b; Fruehauf Corp. v. Carrillo, 848 S.W.2d 83, 84 (Tex.1993); see Lehmann v. Har–Con Corp., 39 S.W.3d 191, 200 (Tex.2001). Because the expiration of the plenary power depends on when the judgment becomes final for purposes of appeal, a trial court's jurisdiction depends on whether a final judgment for purposes of appeal has been rendered. ⁴

A plaintiff may settle with one or more defendants and still retain a cause of action as to those remaining. McMillen v. Klingensmith, 467 S.W.2d 193, 196 (Tex.1971). A final judgment is one that disposes of all parties and all issues in a lawsuit.⁵Lehmann, 39 S.W.3d at 200;Schlipf v. Exxon Corp., 644 S.W.2d 453, 454 (Tex.1982) (per curiam). To be a final judgment, it must determine rights of the parties and dispose of all issues involved so that no future action by the court will be necessary in order to settle and determine the entire controversy. Holtzman v. Holtzman, 993 S.W.2d 729, 732 (Tex.App.-Texarkana 1999, pet. denied).

The general rule is that an interlocutory judgment becomes final when it merges into the final judgment disposing of the entire case. See Webb v. Jorns, 488 S.W.2d 407, 409 (Tex.1972); see also Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex.1995) (per curiam) (partial summary judgment becomes final upon disposition of other issues in case); McLernon v. Dynegy, Inc., 347 S.W.3d 315, 322 (Tex.App.-Houston [14th Dist.] 2011, no pet.); Curry v. Bank of Am., N.A., 232 S.W.3d 345, 350 (Tex.App.-Dallas 2007, pet. denied); Douglas v. Am. Title Co., 196 S.W.3d 876, 877, 879 n. 6 (Tex.App.-Houston [1st Dist.] 2006, no pet.). The Texas Supreme Court has recently reaffirmed the continued validity of Webb.Roccaforte v. Jefferson County, 341 S.W.3d 919, 924 (Tex.2011). Until an interlocutory judgment becomes merged into a final judgment, it is not final and may be set aside by the trial court in its discretion.

The Estate and Texas Farm argue that none of the cases cited by Henderson involve a voluntary dismissal and claim this rule is restricted to summary judgments. They argue that a voluntary dismissal is a final judgment regardless of whether all parties and all claims are disposed of. The Estate and Texas Farm cite ample authority that a voluntary dismissal pursuant to a settlement agreement that has become final should be with prejudice and bar any subsequent litigation.⁶ The Estate and Texas Farm, though, fail to cite any authority that a voluntary dismissal is a final judgment regardless of pending claims against other parties.

As argued by the Estate, the Texas Supreme Court has recognized that a voluntary dismissal with prejudice is an appropriate procedural device to effectuate a settlement agreement. See Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 863 (Tex.2010). The estate cites Travelers for support of its argument that any conclusion other than that the dismissal with prejudice is final would “undercut ... decades of legal practice and the finality of perhaps tens of thousands of settlements and dismissals entered in multi-party lawsuits throughout this state.” In Travelers, the plaintiff had filed a nonsuit requesting dismissal without prejudice, but the trial court signed an order dismissing with prejudice. Id. The plaintiff failed to directly attack the dismissal and the judgment became final. Id. The Texas Supreme Court held that res judicata barred a collateral attack. Id. Travelers is distinguishable from this case because a final judgment had been rendered in that case. The Texas Supreme Court stated the contested issue is whether “prior final determination on the merits” occurred. Id. at 862. Further, in concluding the collateral attack was inappropriate, the Texas Supreme Court stated that “[h]ad the trial court set aside the judgment, either by timely motion for new trial or by bill of review, Joachim's underlying claim would no longer be barred by res judicata, as there would no longer be a final determination on the merits.” Id.Travelers, which concerned a voluntary dismissal that had become final, does not hold that a voluntary dismissal is always a final judgment.

The Texas Supreme Court has recognized that a voluntary dismissal can be an interlocutory order. The interlocutory order in Webb was a voluntary dismissal of a party. See Webb, 488 S.W.2d at 409 (amendment of pleadings). The Texas Supreme Court held that the voluntary dismissal was an interlocutory order that did not become final until it merged with the final judgment. Id. The court stated that “[s]ince the trial court did not sever the cause against the hospital from the rest of the case, the interlocutory judgment did not become a final judgment until it was merged into the final judgment....” Id. at 408–09. However, as noted by Texas Farm, the voluntary dismissal in Webb was not a voluntary dismissal with prejudice pursuant to a settlement agreement.

The Beaumont Court of Appeals, though, has held in dicta that the rule the Texas Supreme Court applied to voluntary dismissals without prejudice in Webb applies to voluntary dismissals with prejudice. Darden v. Kitz Corp., 997 S.W.2d 388, 392–93 (Tex.App.-Beaumont 1999, pet. denied). The Beaumont court noted a voluntary dismissal with prejudice “is binding and will support a plea in bar if the plaintiff seeks to revive his action against the dismissed defendant” and “effectively removes the dismissed party from the litigation.” Id. The court, however, noted:

Absent a severance, so long as any issues and parties remained in controversy, the order was interlocutory and could be withdrawn by the trial court. See Webb v. Jorns, 488 S.W.2d 407, 408–09 (Tex.1972) (defendant dismissed without prejudice could be re-joined in suit provided limitations had not run); Bell v. Moores, 832 S.W.2d 749, 754 (Tex.App.-Houston [14th Dist.] 1992, writ denied) (dismissal merged with decree to make judgment final); City of Houston v. Socony Mobil Oil Co., 421 S.W.2d 427, 430 (Tex.Civ.App.-Houston [1st Dist.] 1967, writ ref'd n.r.e.) (“Once an interlocutory summary judgment is entered, the issues decided cannot be further litigated unless the judgment is set aside by the trial court, or unless the summary judgment is reversed on...