Muniz v. State Farm Lloyds
| Decision Date | 06 May 1998 |
| Docket Number | No. 04-96-00693-CV,04-96-00693-CV |
| Parties | Joe and Eralia MUNIZ, Appellant, v. STATE FARM LLOYDS and Haag Engineering Co., Appellees. |
| Court | Texas Court of Appeals |
Robert Roy Hamilton, Stephen W. Boyd, Law Offices of Stephen W. Boyd, L.C., San Antonio, for appellant.
Richard A. Sparr, Jr., Edward J. Batis, Jr., John C. Cave, Sparr & Associates, Inc,. San Antonio, Karl A. Vogeler, Roger D. Higgins, Beth D. Bradley, Wade C. Crosnoe, Thompson, Coe, Cousins & Irons, L.L.P., Dallas, David V. Jones, Lori M. Cliffe, Jones, Kurth & Andrews, P.C., San Antonio, for appellees.
Before RICKHOFF, LOPEZ and ANGELINI, JJ.
ON APPELLANTS' MOTION FOR REHEARING
We grant appellants' motion for rehearing, withdraw our opinion of February 18, 1998 and substitute this opinion affirming the judgments of the courts below.
Joe and Eralia Muniz ("the Munizes") appeal from a summary judgment on their extracontractual claims against their homeowner's insurance carrier, State Farm Lloyds ("State Farm") and Haag Engineering Co. ("Haag"), a firm hired by State Farm to investigate their insurance claim. The original dispute centered on whether damage to their home's foundation was covered under their policy. The Munizes' contract claim was tried to a jury; an earlier partial summary judgment in favor of State Farm and later summary judgments in favor of Haag and State Farm disposed of claims of negligence, gross negligence, breach of the duty of good faith and fair dealing and claims under the Texas Deceptive Trade Practices and Consumer Protection Act. In six points of error the Munizes contend the trial court erred in granting the second round of summary judgments; in one cross-point State Farm urges sanctions because the Munizes seek to revive claims disposed of in the first, unappealed summary judgment.
We affirm the judgment of the trial court.
The Munizes sued State Farm Lloyds for breach of contract, breach of the duty of good faith and fair dealing, negligence, gross negligence, fraud, civil conspiracy, violations of TEX. INS.CODE ANN. art. 21.21-2 (Vernon 1981 & Supp.1997) and art. 21.55 (Vernon Supp.1997), violations of 38 TEX. ADMIN. CODE 21.203 (West 1997), and violations of the Texas Deceptive Trade Practices Act, TEX. BUS. & COMM.CODE ANN. sections 17.46(b) and 17.50(a)(3) (Vernon 1987 & Supp.1997).
The original dispute centers on what caused the soil beneath the Munizes' house to shift. The Munizes contended water leaking from the house's plumbing caused the clay beneath the foundation to "swell" (which would be covered by the homeowner's policy). State Farm contended the shift was caused by the "inherent vice" of the neighborhood's soil (which would not be covered by the homeowner's policy). In support of this position, State Farm cited a report by Haag noting that its investigation showed the plumbing did not cause the shifting.
The heart of the Munizes' noncontractural causes of action center on duct tape discovered on one of the drainage lines from the bathroom. The Munizes contend that Haag put this tape on the line to "rig" the test to show no plumbing leaks, or show an insufficient leak to create the damage. They argue the resulting doctored report would allow State Farm to plausibly deny coverage. (Haag noted the duct tape in its report, and included a photograph of the pipe with duct tape around it.)
On February 28, 1995, after hearing State Farm's initial motions for summary judgment, the trial court by written order found State Farm had a reasonable basis for initially denying the Munizes' claim, and granted State Farm summary judgment on:
a) the Munizes' claim that State Farm breached its duty of good faith and fair dealing;
b) the Munizes' claim that State Farm's and Haag's investigation was negligent, or grossly negligent;
c) any claim based on failure to comply with the statutory timetables for communicating with the insured under article 21.55 of the Insurance Code;
d) the Munizes' claim that State Farm breached a statutory duty to handle claims in good faith when liability had become reasonably clear, under article 21.21--2 of the Insurance Code;
e) the Munizes' claim that State Farm breached a similar duty under Texas Department of Insurance regulations, 28 TEX. ADMIN. CODE sec. 21.203(4) (West 1997);
f) any claim that defendants attempted to influence settlement on one part of the policy by not dealing in good faith when liability is reasonably clear under another part, under 28 TEX. ADMIN. CODE sec. 21.203(8);
g) any claim based on failure to affirm or deny coverage within a reasonable time of proof of loss statements being completed, 28 TEX. ADMIN. CODE sec. 21.203(10);
h) and any claim based on refusal to pay claims without conducting a reasonable investigation based upon available information, 28 TEX. ADMIN. CODE sec. 21.203(15).
The Munizes' breach of contract claim, along with this partial summary judgment, were left pending under the original cause number. The contract claim was tried to a jury which found 75 percent of the damage to the Muniz home was caused by a plumbing leak. This judgment, entered on May 9, 1995, and its accompanying partial summary judgment were not appealed.
The Munizes' surviving non-contract claims were severed into a separate cause number. The Munizes then added Haag to the suit, charging that Haag had conspired with State Farm to defraud them or were negligent or grossly negligent in their investigation. The trial court later granted summary judgments for Haag (April 24, 1996) and State Farm (April 25, 1996) on these claims. The appeal of this summary judgment is the case before us today.
We must first decide whether the February, 1995 partial summary judgment is to be accorded preclusive effect. If so, we must then determine which of the Munizes' claims are foreclosed.
The Munizes argue that the February, 1995 partial summary judgment has no preclusive effect, citing Mower v. Boyer, 811 S.W.2d 560 (Tex.1991). Their trust is misplaced.
Mower was a suit on a note by Boyer, the creditor, against two Mowers, a father and son. Boyer won partial summary judgment on some claims while others were reserved for trial. Id. at 562. When the elder Mower died, Boyer tried to enforce the claim against his estate in probate court; the probate court found the note had been satisfied and found for the estate. Id. The younger Mower then sought to overturn the partial summary judgment, using the probate court judgment to assert collateral estoppel. The Texas Supreme Court held that he could, because while the partial summary judgment was interlocutory and had no preclusive effect, the probate court judgment was a final judgment "entitled to preclusive effect in the district court." Id. at 563.
The Munizes argue that the partial summary judgment in our case, like the partial summary judgment in Mower, is not entitled to preclusive effect. We disagree, because there is no partial summary judgment involved in our case. A partial summary judgment becomes final upon disposition of the other issues in the case. Chase Manhattan Bank, N.A. v. Lindsay, 787 S.W.2d 51, 53 (Tex.1990). When judgment was entered on the jury verdict in May, 1995, and that cause was not appealed, the partial summary judgment merged into the final judgment. As a final judgment, it is entitled to preclusive effect. Mower, 811 S.W.2d at 563. We have identity of the parties and of the subject matter; it is the strongest flavor of issue preclusion. See RESTATEMENT (SECOND) OF JUDGMENTS § 27.
Not only claims, but facts necessary to support an earlier judgment can be precluded. Relitigation of an issue will be barred if the facts sought to be litigated in the first action were fully and fairly litigated in the prior action; if those facts were essential to the judgment in the first action; and if the parties were cast as adversaries in the first action. Eagle Properties v. Scharbauer, 807 S.W.2d 714, 721 (Tex.1991); Mower, 811 S.W.2d at 563.
Therefore, the Munizes are barred from asserting any claim that was decided in the prior action or relitigating any facts necessary to support the judgment in the prior action. Now we must untangle the Gordian knot which is the Munizes' appeal to determine which strands survive the previous summary judgment.
Because the February, 1995 judgment explicitly adjudicates any claim that State Farm was negligent or grossly negligent in its handling of the Munizes' claim, the Munizes are now precluded from again asserting these claims. Mower, 811 S.W.2d at 563. Moreover, this court has recognized that the only tort claims an insured may assert against his carrier arising from the carrier's handling of insurance claims arise from breach of the duty of good faith and fair dealing and the duty to exercise ordinary The Munizes' first four points of error are overruled.
care and prudence in considering an offer to settle within policy limits. United Services Auto. Ass 'n v. Pennington, 810 S.W.2d 777, 783-784 (Tex.App.--San Antonio 1991, writ denied). Therefore summary judgment on these claims as to State Farm was proper.
The Munizes argue that some of their claims for breach of the duty of good faith and fair dealing survive the February, 1995 summary judgment because the common law duty of good faith and fair dealing does not wholly encompass the elements of TEX. INS.CODE ANN. art. 21.21-2, § 2(b)(4) (Vernon Supp.1997) 1. They advance no argument or citation of authority.
We note first that if State Farm had a reasonable basis for denying the claim, by definition liability could not have been "reasonably clear" as required by the statute. We next note that the trial court's finding in the earlier judgment that State Farm had a reasonable basis for denying the claim is...
To continue reading
Request your trial
-
Tapatio Springs Builders v. Maryland Cas. Ins. Co.
...claims for breach of contract and bad faith denial also negates extra-contractual insurance code and DTPA claims); Muñiz v. State Farm Lloyds, 974 S.W.2d 229, 233 (Tex.App. — San Antonio 1998, no pet.) (finding that insurer had reasonable basis for denying claim served as res judicata to al......
-
S. Texas Wildhorse Desert Invs. v. Texas Commerce
...judgment."). Only then is a partial summary judgment entitled to preclusive effect in other proceedings. See, e.g., Muniz v. State Farm Lloyds, 974 S.W.2d 229, 232 (Tex.App. — San Antonio 1998, no pet.) (noting that, once all issues are disposed of, a "partial summary judgment merge[s] into......
-
Esteban v. State Farm Lloyds & Aaron A. Galvan, Civil Action No. 3:13–CV–3501–B.
...2007, no pet.); Dagley v. Haag Engineering Co., 18 S.W.3d 787, 792 (Tex.App.-Houston (14th Dist.) 2000, no pet.); Muniz v. State Farm Lloyds, 974 S.W.2d 229, 237 (Tex.App.-San Antonio, no pet.).2 None of these cases directly addressed the interplay of Garrison and the language of the statut......
-
Esteban v. State Farm Lloyds
...no pet.) ; Dagley v. Haag Engineering Co., 18 S.W.3d 787, 792 (Tex.App.-Houston (14th Dist.) 2000, no pet.); Muniz v. State Farm Lloyds, 974 S.W.2d 229, 237 (Tex.App.-San Antonio, no pet.).2 None of these cases directly addressed the interplay of Garrison and the language of the statute, wh......