Munster Steel Co., Inc. v. Travelers Indem. Co.
| Decision Date | 15 July 1981 |
| Docket Number | No. 20691,20691 |
| Citation | 620 S.W.2d 771 |
| Parties | MUNSTER STEEL COMPANY, INC., Appellant, v. The TRAVELERS INDEMNITY COMPANY, Appellee. |
| Court | Texas Court of Appeals |
Timothy M. Fults, Shank, Irwin, Conant, Williamson & Grevelle, Dallas, for appellant.
Michael L. Parham, Gerald R. Powell, Vial, Hamilton, Koch, Tubb, Knox & Stradley, Dallas, for appellee.
Before AKIN, STOREY and CARVER, JJ.
This is an appeal from a summary judgment granted to defendant, Travelers Indemnity Company, upon a cause of action seeking indemnity from Travelers by plaintiff, Munster Steel Company, under the terms of an insurance policy. Travelers' summary judgment motion asserted noncompliance with a condition precedent to its liability. Summary judgment was granted and Munster appeals. We hold that Travelers established noncompliance with a condition precedent, as a matter of law, and that Munster failed to raise an issue of fact in its response with respect to waiver by Travelers of the condition precedent. Accordingly, we affirm.
This controversy arose out of a contract between Munster Steel Company and Texas Projects and Systems, Inc. in which Munster Steel agreed to provide structural steel for a building construction project. Texas Projects found the steel as provided unsatisfactory, withheld payment, and when Munster Steel filed suit on the account, counterclaimed for costs incurred in bringing the steel within contractual specifications and for expenses resulting from delays in completing the project. Travelers was Munster Steel's insurance carrier and had a duty to defend the suit if the damage asserted in the counterclaim was covered by the policy. Travelers employed a law firm to monitor the suit, tendering a defense with reservation of rights, while Munster Steel's law firm was counsel of record. The two law firms cooperated throughout the course of litigation, freely providing relevant information concerning the case. Munster Steel reached a settlement with Texas Projects and so notified Travelers' counsel who made no response. In accordance with the settlement, the suit was dismissed with prejudice. Munster Steel then sued Travelers for costs incurred in defending the suit, brought by Texas Projects.
The relevant policy provision is the "no action" clause, which provides:
No action shall lie against the Travelers under any section of this policy unless, as a condition precedent thereto, there shall have been full compliance with all provisions of this policy applicable to such section, subject to the following:
....
b. Sections II and III such action shall not commence until the amount of the Insured's obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the Claimant and the Travelers. (Emphasis added.)
Compliance with this provision is a condition precedent to Travelers'...
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