Lancer Insurance Company v. Oscarperez, No. 04-08-00839-CV (Tex. App. 11/4/2009)
| Decision Date | 04 November 2009 |
| Docket Number | No. 04-08-00839-CV.,04-08-00839-CV. |
| Parties | LANCER INSURANCE COMPANY, Appellant, v. OSCARPEREZ, II, DANIEL CALHOUN, ADRIANA RIOJAS, JUAN GABRIEL GONZALEZ, MARISOL SALAZAR, RAUL GUERRA, JR., MARIA E. GUERRA, AND JOHN A. VELA, JR., Appellees. |
| Court | Texas Court of Appeals |
Appeal from the 79th Judicial District Court, Jim Wells County, Texas, Trial Court No. 06-08-44850-CV, Honorable Richard C. Terrell, Judge Presiding.
REVERSED AND REMANDED IN PART; REVERSED AND RENDERED IN PART.
Sitting: Catherine STONE, Chief Justice, Phylis J. SPEEDLIN, Justice, Steven C. HILBIG, Justice.
This appeal involves a dispute over coverage under a business automobile insurance policy issued by Lancer Insurance Company. Two summary judgment motions were granted against Lancer in favor of coverage. Because we conclude material issues of fact exist as to one summary judgment, we reverse and remand in part; in addition, we reverse and render in part due to the remaining movant's lack of standing.
On April 30, 2004, members of the Alice High School band went on an overnight field trip to Six Flags Fiesta Texas in San Antonio, Texas. The Alice Independent School District contracted with Garcia Holiday Tours to transport the students on one of its buses. The bus driver was Raul Garcia, an employee of Garcia Holiday Tours. Unknown to Raul Garcia, he was infected with active tuberculosis. During the trip, several students observed Raul Garcia coughing on the bus. After the trip, Raul Garcia was diagnosed with active tuberculosis and all the passengers were subsequently tested. While some of the passengers' tests were negative, several of the passengers tested positive for latent tuberculosis. The passengers who tested positive brought suit against Raul Garcia and Garcia Holiday Tours, asserting they were negligently exposed to the tuberculosis while on the trip and contracted it as a result of being in the closed environment of the bus. There were two main groups of plaintiffs, the Perez plaintiffs and the Salazar plaintiffs, in the underlying tort case styled Oscar Perez, II, et al. v. Raul Garcia, et al., Cause No. 05-03-43200, in the 79th District Court of Jim Wells County, Texas (referred to herein as the "Passengers' Suit"). Another passenger who tested positive, John A. Vela, Jr., did not join in the Passengers' Suit, but later brought his own separate suit styled John A. Vela, Jr. v. Raul Garcia and Garcia Holiday Tours, L.C., Cause No. 08-02-46693, in the 79th District Court of Jim Wells County, Texas (referred to herein as the "Vela Suit"), which remains pending.
Upon being sued by the passengers, Garcia Holiday Tours made a written demand on Lancer for it to defend pursuant to the business automobile insurance policy Lancer had issued covering the bus. Lancer denied it had a duty to defend, and the Passengers' Suit proceeded to trial. The jury found in favor of the passengers, and they were awarded a judgment for $5.25 million in total damages against Raul Garcia and Garcia Holiday Tours.
After judgment was rendered in the underlying tort action, Raul Garcia and Garcia Holiday Tours proceeded to seek recovery against Lancer on contractual and extra-contractual1 claims in Cause No. 06-08-44850. In their declaratory judgment suit, Raul Garcia and Garcia Holiday Tours asserted Lancer had a duty to defend and has a duty to indemnify them for the full amount of the $5.25 million judgment rendered in the Passengers' Suit. The passengers and Vela intervened in the declaratory judgment coverage action. During the course of the coverage action, several motions for summary judgment were filed. The passengers2 filed a traditional motion for a partial summary judgment requesting a declaratory judgment that Lancer has an obligation to indemnify Raul Garcia and Garcia Holiday Tours and pay the passengers for the $5.25 million judgment. Vela filed his own traditional motion for summary judgment seeking to establish that Lancer has a duty to defend and indemnify Raul Garcia and Garcia Holiday Tours in his pending lawsuit. Lancer also affirmatively sought summary judgment denying any duty to defend or indemnify Raul Garcia and Garcia Holiday Tours under its business automobile policy. The only party who did not seek summary judgment was Raul Garcia/Garcia Holiday Tours.
In October 2008, the trial court signed three summary judgment orders that: (1) granted the passengers' summary judgment motion, and held Lancer has a duty to indemnify Raul Garcia and Garcia Holiday Tours for the judgment in the Passengers' Suit; (2) granted Vela's summary judgment motion, and held Lancer has a duty to defend and indemnify Raul Garcia and Garcia Holiday Tours in the pending Vela Suit; and (3) denied Lancer's summary judgment motion. Both the passengers' and Vela's claims against Lancer were severed out from Raul Garcia and Garcia Holiday Tours' suit against Lancer, and the summary judgments in favor of the passengers and Vela became final for purposes of appeal. Lancer now appeals.3
On appeal, Lancer challenges the trial court's summary judgment in favor of the passengers on the grounds that: (1) the order declaring Lancer has a duty to indemnify Raul Garcia and Garcia Holiday Tours for the passengers' judgment is defective because it does not include a duty to defend finding, and the passengers' pleadings do not support a duty to defend finding; and (2) the passengers' summary judgment evidence failed to establish as a matter of law that Lancer has a duty to indemnify Raul Garcia and Garcia Holiday Tours for the passengers' judgment.4 In addition, Lancer challenges the summary judgment in favor of Vela on the grounds that: (1) Vela does not have standing in this coverage action; and (2) the court's finding of a duty to defend is not supported by Vela's pleadings, and its finding of a duty to indemnify is premature because Vela's suit is pending. Lancer asserts that we should reverse the summary judgments in favor of the passengers and Vela, and render judgment in Lancer's favor pursuant to its summary judgment motion. Alternatively, Lancer asserts that we should reverse and remand for a trial on the material fact issue of whether the tuberculosis was caused by the "use" of the bus as required under the Lancer insurance policy.
When both parties move for summary judgment, and the trial court grants one motion and denies the other, the appellate court considers the summary judgment evidence presented by both sides, determines all questions presented, and, if it determines the trial court erred, renders the judgment the trial court should have rendered. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). We review the trial court's ruling on a motion for summary judgment de novo. Provident Life and Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant's favor. Id. A party moving for a traditional summary judgment must show that no genuine issue of material fact exists and that it is entitled to summary judgment as a matter of law. Id. at 215-16; Tex. R. Civ. P. 166a(c). When the trial court's order does not specify the grounds for granting summary judgment, the appellate court must affirm if any of the theories presented in the motion have merit. Knott, 128 S.W.3d at 216; Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).
We begin by noting that it is well established that an insurer's duty to indemnify is a "distinct and separate" duty from the duty to defend. Utica Nat'l Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198, 203 (Tex. 2004); Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 821-22 (Tex. 1997). Whether a duty to defend exists is determined under the "eight-corners rule," by examining the claims alleged within the four corners of the plaintiff's petition and the coverage provided in the insurance policy. Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 279 S.W.3d 650, 654 (Tex. 2009). "If a petition does not allege facts within the scope of coverage, an insurer is not legally required to defend a suit against its insured." Id. ). In determining whether an insurer has a duty to indemnify, we similarly look to the policy language, but compare that language with the actual facts proven in the underlying suit that establish liability. Pine Oak Builders, 279 S.W.3d at 655-56; GuideOne Elite Ins. Co. v. Fielder Road Baptist Church, 197 S.W.3d 305, 310 (Tex. 2006). In interpreting the applicable provisions of the insurance policy, we apply standard contract interpretation principles and seek to construe the parties' intent from the policy as a whole based on the plain written language. Utica, 141 S.W.3d at 202; Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994). When terms are defined in an insurance policy, the definition controls. Cowan, 945 S.W.2d at 823.
Even if an insurer has a duty to defend, and breaches it, the party seeking indemnification still bears the burden of establishing a duty to indemnify if the insurer contests coverage. Utica, 141 S.W.3d at 203; see Tex. Farmers Ins. Co. v. McGuire, 744 S.W.2d 601, 602-03 (Tex. 1988) (). If the questions of coverage and indemnity turn on the resolution of disputed fact questions, summary...
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