Insurance Co. of North America v. Security Ins. Co.
| Decision Date | 24 May 1990 |
| Docket Number | No. 01-88-01141-CV,01-88-01141-CV |
| Citation | 790 S.W.2d 407 |
| Parties | INSURANCE COMPANY OF NORTH AMERICA (Assignee of Stainless, Inc. & Using its Name), Appellant, v. SECURITY INSURANCE COMPANY, Appellee. (1st Dist.) |
| Court | Texas Court of Appeals |
Kenneth R. Wynne, Craig L. Stahl, Houston, for appellant.
John A. Mackintosh, Jr., Dallas, Laurie Kratky Dore', Austin, for appellant.
Before SAM BASS, DUGGAN and HUGHES, JJ.
Insurance Company of North America ("INA") appeals from a summary judgment that denied it the right to pursue an assigned claim against appellee, Security Insurance Company ("Security"). INA characterizes its claim against Security as a "classic" Stowers 1 action. Security describes the claim as a veiled attempt by a settling tortfeasor's insurer to obtain reimbursement from its insured's nonsettling joint tortfeasor. In a single point of error, INA asserts the trial court erred in granting summary judgment as a matter of law. We affirm.
In 1982, Stainless, Inc. ("Stainless") contracted with Channel 20 Enterprises, Inc. to fabricate portions of a 2,000-foot television tower to be erected in Fort Bend County, Texas. On December 7, 1982, five workmen were killed when the tower collapsed. Two groups, the wrongful death claimants and the survival action claimants, sued Stainless in federal court (the "Channel 20 Litigation"). 2
After a jury verdict, the federal court awarded the wrongful death claimants a $16,000,000 judgment against Stainless. The court also granted the survival action claimants a new trial, severing the survival action under a new cause number. The combined limits of Stainless' liability insurance coverage, provided by Security, Covenant Mutual Insurance Company ("Covenant"), and Integrity Insurance Company ("Integrity"), were $6,433,000.
During the Channel 20 Litigation, the plaintiffs offered to settle the case for Stainless' combined liability insurance policy limits of $6,433,000. Stainless' counsel, including the law firm of Crain, Caton, James & Womble ("Crain, Caton"), declined the offer. Stainless subsequently suffered the $16,000,000 excess judgment, giving rise to Stainless' Stowers claims against its three insurers, including Security, and a legal malpractice claim against Crain, Caton.
After entry of judgment in the Channel 20 Litigation, Stainless and its three liability carriers (Security, Covenant, and Integrity) entered into a written settlement agreement (the "Channel 20 Settlement Agreement") with the wrongful death claimants (the "Judgment Creditors") and the survival action claimants, who had been granted a new trial.
The Channel 20 Settlement Agreement provided: The survival action claimants released Stainless in exchange for $6,433,000--the limit of Stainless' liability coverage. Stainless assigned the Judgment Creditors all causes of action which it might have against any insurance carrier arising out of the Channel 20 Litigation, and agreed to sue Crain, Caton for malpractice and assign the suit to the Judgment Creditors. In turn, the Judgment Creditors agreed (1) not to execute the $16,000,000 judgment against Stainless until resolution of the malpractice suit against Crain, Caton; and (2) to allow any proceeds recovered from the assigned malpractice suit to discharge Stainless from further liability on the judgment. Finally, although the Channel 20 Settlement Agreement is unclear and inconsistent on this issue, the Judgment Creditors purportedly covenanted not to sue Security, Integrity, and Covenant on any of Stainless' assigned claims arising out of the Channel 20 Litigation.
On June 28, 1985, pursuant to the Channel 20 Settlement Agreement, Stainless sued Crain, Caton in state district court ("the Crain, Caton malpractice suit"). 3 Cigna Insurance Company ("Cigna"), which provided Crain, Caton's liability insurance coverage, retained legal counsel to defend Crain, Caton in the malpractice suit.
Following its answer, on October 10, 1985, Crain, Caton petitioned for a declaratory judgment, and filed counterclaims and third-party actions in the malpractice suit. Crain, Caton named Stainless' three liability insurance carriers (Integrity, Covenant, and Security) as third-party defendants, and claimed that it was entitled to indemnity or contribution from them if it was held liable for all or any part of the Channel 20 Litigation judgment.
On October 10, 1985, pursuant to the Channel 20 Settlement Agreement, Stainless assigned the Judgment Creditors its right, title, and interest in the claims asserted against Crain, Caton.
In early 1986, the Crain, Caton malpractice suit was settled ("the Crain, Caton Settlement"). Parties to this settlement were: (1) Stainless and two of its liability insurers, Covenant and Integrity; (2) the Channel 20 Judgment Creditors, as Stainless' assignees under the Channel 20 Settlement Agreement, and the survival action claimants; (3) Crain, Caton; and (4) of particular importance to the present suit, appellant, INA, on behalf of Crain, Caton's insurer, Cigna. Appellee, Security, was not a party to the Crain, Caton settlement. INA, not Cigna, executed the Crain, Caton Settlement on Crain, Caton's behalf. At all times relevant to these actions, Cigna and INA were affiliated companies, each being a wholly owned subsidiary of INA Financial Group.
Cigna paid a significant sum of money 4 in the Crain, Caton Settlement on behalf of its insured, Crain, Caton, to obtain the insured's full and final release from the Judgment Creditors, the survival action claimants, and Stainless from all liability arising from the Channel 20 Litigation and its aftermath. Although Cigna made the payment, INA executed the settlement agreement and release on Crain, Caton's behalf. In turn, the Judgment Creditors, the survival action claimants, 5 and Stainless 6 assigned INA all causes of action they may have had against Security related to the Channel 20 Litigation.
With the Channel 20 Litigation and the Crain, Caton Settlement as background, INA sued Security in Stainless' name in April 1987. After answering Security's requests for admissions and acknowledging that it was the only real party in interest, INA amended its complaint to style itself "Assignee of Stainless, Inc. and using its name." INA alleged that it was entitled to assert Stainless' Stowers action against Security because the Judgment Creditors had assigned the action to INA in March 1986, pursuant to the Crain, Caton Settlement.
On August 25, 1988, Security moved for summary judgment against INA on nine grounds. The trial court granted the motion in favor of Security but did not specify a particular ground. This appeal follows.
Where a trial court enters a summary judgment order that does not specify the particular ground on which it is based, the party appealing must show that each independent argument alleged in the motion for summary judgment is insufficient to support the trial court's order. Tilotta v. Goodall, 752 S.W.2d 160, 161 (Tex.App.--Houston [1st Dist.] 1988, writ denied); McCrea v. Cubilla Condominium Corp., 685 S.W.2d 755, 757 (Tex.App.--Houston [1st Dist.] 1985, writ ref'd n.r.e.). When the trial court's order does not specify the grounds relied on for its ruling, summary judgment will be affirmed if any of the theories advanced are meritorious. See Borg-Warner Acceptance Corp. v. C.I.T. Corp., 679 S.W.2d 140, 142 (Tex.App.--Amarillo 1984, writ ref'd n.r.e.).
As its first ground for summary judgment, Security asserts that the case is governed by the "doctrine of nonreimbursement," the rule that a settling tortfeasor has no right to recover contribution from a nonsettling joint tortfeasor.
The Texas Supreme Court has held that when a co-defendant settles with a plaintiff, the settlement extinguishes the settling defendant's right of contribution from a nonsettling joint tortfeasor. Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 22 (Tex.1987); see also Bonniwell v. Beech...
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