Landmark Am. Ins. Co. v. Eagle Supply & Mfg. L.P.

Citation530 S.W.3d 761
Decision Date25 August 2017
Docket NumberNo. 11-14-00262-CV,11-14-00262-CV
Parties LANDMARK AMERICAN INSURANCE CO. and Seneca Specialty Insurance Co., Appellants v. EAGLE SUPPLY & MANUFACTURING L.P. f/k/a Eagle Construction & Environmental Services, L.P., and Metex Demolition, LLC, Appellees
CourtCourt of Appeals of Texas

Michael A. Yanof, Dallas, Linda Szuhy, J. Richard Harmon, Cassie J. Dallas, Cathlynn H. Cannon, Dallas, for Appellants.

Randal L. Dean, Misty Michelle Pratt, Fort Worth, for Appellees.

Panel consists of: Wright, C.J., Willson, J., and Bailey, J.

JOHN M. BAILEY, JUSTICE

This is a permissive appeal brought from the denial of two motions for summary judgment filed by liability insurers. See TEX. CIV. PRAC. & REM. CODE ANN . § 51.014(d) (West Supp. 2016); TEX. R. APP. P . 28.3. The insurers contend that, as a matter of law, the trial court does not have subject-matter jurisdiction to adjudicate claims brought directly against them by an injured party to access liability insurance coverage. We reverse and render in part and remand in part.

Background Facts

Eagle Supply & Manufacturing L.P. f/k/a Eagle Construction & Environmental Services, L.P. owns three power plants in Texas. In the summer of 2011, Eagle contracted with Metex Demolition, LLC for the sale of personal property from the power plants. The contracts also required Metex to perform various demolition, cleanup, and remediation services at the power plants. The contracts required Metex to obtain liability insurance for the demolition work. Landmark American Insurance Co. issued a pollution liability policy to Metex, and Seneca Specialty Insurance Co. issued a general commercial liability insurance policy to Metex.

This appeal arises from Eagle's contention that Metex damaged its property while performing services under the contracts and that Landmark and Seneca are contractually liable for these property damages under the liability insurance policies. Eagle also asserted that Metex breached payment obligations under the contracts. Eagle's claims for breach of contract against Metex are not covered by Landmark's and Seneca's insurance policies.

Metex filed a Chapter 11 bankruptcy proceeding on March 30, 2012. Ten days later, Eagle filed the underlying suit in state court. Eagle originally filed the suit against an affiliate and principals1 of Metex, asserting claims against them for breach of contract and fraud.

Eagle subsequently asserted claims for property damage and breach of contract against Metex in the bankruptcy court by filing a proof of claim in Metex's bankruptcy proceeding on July 26, 2012. Eagle asserted a liquidated claim under various contracts totaling $2,309,830.01. Eagle also asserted an unliquidated claim for property damages in its proof of claim. Eagle did not list an amount that it claimed in unliquidated damages for property damages in its proof of claim.

While the bankruptcy proceeding was pending, Eagle added Landmark and Seneca as parties to the underlying action on November 9, 2012. Eagle initially asserted that Landmark and Seneca owed contractual obligations to Eagle under the policies to remedy the property damages caused by Metex. Accordingly, Eagle asserted that it had a "direct cause of action" against Landmark and Seneca for breach of contract. Landmark and Seneca each filed a plea to the jurisdiction in their initial pleadings asserting that the trial court lacked subject-matter jurisdiction because Eagle did not have standing to bring a direct cause of action against them.

On March 31, 2013, a settlement agreement was filed in the bankruptcy proceeding. A recital at the beginning of the settlement agreement listed the parties to it as being Eagle and the "Eastland County Affiliated Parties." However, the settlement agreement contained language binding Metex to the terms of the agreement. For example, one provision of the settlement agreement provided that "Metex and the Eastland County Affiliated Parties agree that Metex may be named as a defendant in the Eastland County Litigation." Additionally, Metex was a signatory to the agreement because someone signed the agreement on behalf of Metex.

The settlement agreement referenced the underlying proceeding as "the Eastland County Litigation." In the agreement, the parties agreed "to enter into a full and complete compromise and settlement of the claims asserted in the Eastland County Litigation (except as specifically excluded from this Agreement)." The parties additionally agreed "that Eagle will proceed in the Eastland County Litigation and may name Metex as a defendant with the Eastland County Affiliated Parties in order to access insurance coverage and policy proceeds." The settlement agreement further provided that Metex damaged Eagle's property and that "Metex and the Eastland County Affiliated Parties will, upon confirmation of the Plan [of reorganization], take such actions as are necessary to assert, diligently pursue, and effectuate a claim (or claims), to and against each of the insurance carriers that provide insurance coverage for the damages."

On March 31, 2013, Metex also filed a "Fourth Joint Plan of Reorganization" in the bankruptcy proceeding. This plan of reorganization referred to the settlement agreement as the "Eagle Claim CSA." The plan of reorganization recited that "without the Eagle Claim CSA, it is unlikely that the Plan could be confirmed." The plan of reorganization provided for an "Abatement Event" that "occurs when a settlement or judgment in the Eastland County Litigation with regard to all insured claims becomes final." The plan of reorganization provided that Eagle would receive an unsecured claim against Metex in the amount of $2,603,284.80 and that this amount would be reduced by up to $975,000 when the Abatement Event occurs.

The bankruptcy court entered an order confirming this plan of reorganization on April 5, 2013. The bankruptcy court also entered an order granting Eagle's unsecured claim in the amount of $2,603,284.80. Lastly, the bankruptcy court entered a "Consent Order of Dismissal with Prejudice" with respect to Eagle's claim that provided as follows: "This cause came on to be heard by and through the consent of the parties from all of which it appears to the Court that the matters and issues herein have been resolved and that this case may be, and the same is hereby, dismissed with prejudice."

Eagle subsequently added Metex as a party to the underlying action on April 23, 2013. Metex pleaded a general denial of Eagle's claim against it. Metex also asserted causes of action against Landmark and Seneca. Metex alleged in its pleadings that "Eagle incurred significant damages to its power plant properties" that "consisted of both environmental damages and physical property damages." Metex alleged that it put Landmark and Seneca on notice of Eagle's claims and that they "individually and collectively, failed to indemnify Metex, failed to provide coverage, and failed to provide a defense in the forum in which the claims were asserted against Metex." Metex asserted that Eagle's claims were vigorously contested in several bankruptcy proceedings and that the bankruptcy court ruled in favor of Eagle against Metex. Metex also alleged that it entered into the settlement agreement based upon the rulings of the bankruptcy court.

Eagle subsequently filed a motion for summary judgment against Metex in the underlying action. At the hearing on the motion, Eagle's counsel advised the trial court that Metex did not oppose the motion and that Metex did not file a response to the motion. In that regard, Metex responded to Eagle's requests for admissions by admitting to every request for admission made by Eagle, including requests pertaining to liability and damages for the property damage that is the subject of Eagle's claims against Landmark and Seneca. The trial court ultimately granted Eagle's motion for summary judgment against Metex.

After the trial court granted Eagle's motion for summary judgment against Metex, the parties filed a joint motion to consolidate claims and to realign the parties. The motion sought to consolidate Metex's claims against the insurers with Eagle's claims against the insurers. Eagle subsequently filed an amended petition alleging that its damage claims against Metex were litigated in the bankruptcy proceedings and that Landmark and Seneca "failed and refused to participate in the bankruptcy proceedings, failed to provide a defense to Metex, and wholly failed to provide the insurance coverage" that they agreed to provide. Eagle further alleged that it "diligently and properly pursued its underlying claims against Metex, and Metex vigorously defended the claims" in the bankruptcy court. Eagle asserted that it had obtained a "Final Non-appealable Order" against Metex, that Landmark was liable to Eagle in the amount of $523,360, and that Seneca was liable to Eagle in the amount of $577,703 under the terms of the bankruptcy court's orders. Eagle asserted claims against Landmark and Seneca for unfair settlement practices, breach of the duty of good faith and fair dealing, failure to comply with the prompt payment statute, violations of the DTPA, and breach of contract.

Landmark and Seneca subsequently filed motions for summary judgment. Landmark actually filed two motions for summary judgment. One motion sought summary judgment on Eagle's claims against Landmark, and the other motion sought summary judgment on Metex's claims against Landmark. Seneca only filed one motion for summary judgment. However, it only sought summary judgment on Eagle's claims against Seneca. With respect to Landmark, the record does not indicate that the trial court acted on Landmark's motion for summary judgment brought on Metex's claims against Landmark. Thus, the summary judgment orders giving rise to this permissive appeal only concerned Landmark's and Seneca's motions for summary judgment pertaining to Eagle's claims. However, Metex is an appellee in this...

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