National Casualty Co. v. Lane Express

• Decision Date: 16 April 1999
• Docket Number: No. 05-96-00444-CV,05-96-00444-CV
• Parties: (Tex.App.-Dallas 1999) NATIONAL CASUALTY COMPANY, Appellant V. LANE EXPRESS, INC., N/K/A LONGHORN AGGREGATE HAULERS, INC., JAMES MOON, AND HAROLD CHESTER, JR., Appellees
• Court: Texas Court of Appeals

Page 256

998 S.W.2d 256 (Tex.App.-Dallas 1999)

NATIONAL CASUALTY COMPANY, Appellant

V.

LANE EXPRESS, INC., N/K/A LONGHORN AGGREGATE HAULERS, INC., JAMES MOON, AND HAROLD CHESTER, JR., Appellees

No. 05-96-00444-CV

In The Court of Appeals Fifth District of Texas at Dallas

April 16, 1999

On Appeal from the 191st Judicial District Court Dallas County, Texas, Trial Court Cause No. 93-07266-J

Before Justices Ovard, Whittington, and Wright

O P I N I O N

JOHN OVARD, Justice.

National Casualty Company (National) appeals from a summary judgment granted for appellees. In three points of error, with multiple subpoints, National generally contends the trial court erred in (1) failing to grant National's motion for summary judgment, (2) granting summary judgment for appellees because material issues of fact exist, and (3) granting summary judgment for appellees because their summary judgment evidence was "incompetent, manipulated or perjured." We reverse the trial court's judgment as to Lane Express, Inc. (Lane) and render judgment that National is entitled to reimbursement from Lane. We remand this cause to the trial court solely for consideration of National's claim for attorney's fees and prejudgment interest. In all other respects, we affirm the trial court's judgment.

FACTS

James Moon leased one of his trucks to Lane. Moon also hired Harold Chester, Jr. to drive the truck for Lane. Chester drove the truck while intoxicated and caused a serious traffic accident. As a result of the accident, Richard Bourland and Margaret Jenkins were killed, and Patrick Jenkins was injured. Survivors and representatives of the Bourland and Jenkins families (collectively "Jenkins") filed suit against Lane and Chester.

Lane scheduled the leased truck on two liability insurance policies which provided primary coverage: a Landmark America Insurance Company (Landmark) policy for $100,000 and a National County Mutual Fire Insurance Company (NCM) policy for $500,000. In addition, Lane insured the truck with an excess carrier, Acceptance Insurance Company (Acceptance), for coverage in excess of the available primary coverage. Lane also maintained a liability policy with National, but Lane did not list the truck on the National policy or make any premium payments to National to insure the truck. Lane, however, did register the truck with the State under its motor carrier permit.

To obtain a motor carrier permit to operate in the state of Texas, Lane was required to maintain liability coverage on all its trucks and file proof of coverage, at a minimum of $500,000, with the Texas Railroad Commission (TRC). Lane used its policy with National to satisfy the TRC certification requirement. As required by law, the National policy was amended by an endorsement (Form F) to provide "insurance for automobile bodily injury and property damage liability in accordance with the provisions of . . . [Texas] law or regulations to the extent of the coverage and limits of liability required thereby[.]" The endorsement further provides that the insured shall reimburse the insurer for any payment the insurer makes which it would not have been obligated to make except as required by TRC regulations.

Demand was made on each of Lane's insurers to participate in settling the Jenkins claim. Landmark and NCM, however, ultimately did not participate. Landmark claimed that its policy had been canceled, and NCM was placed into receivership. When Lane's insurance coverage with its primary insurers failed, the Form F endorsement of the National policy obligated National to provide coverage up to $500,000 even though the truck was never scheduled on its insurance policy.

The Jenkins lawsuit settled for $650,000, and an agreed judgment was entered dismissing the case with prejudice. The parties' settlement agreement provided that Scottsdale Insurance Company (Scottsdale), National's sister company, would pay $500,000 and Acceptance, Lane's excess carrier, would pay the remaining $150,000. The settlement agreement also contains the following language:

[a]ll parties . . . to this Compromise Settlement Agreement and Release of All Claims do mutually release all other parties, individually and in any and all representative capacities, from all claims and causes of action owned by the parties now or which claims and causes of action may accrue in the future.

The settlement agreement is signed by the attorneys for Jenkins and the attorneys for Chester and Lane. Neither Scottsdale nor National signed the settlement agreement. National, however, paid $500,000 to Jenkins, and Acceptance paid the remainder.

Pursuant to Form F, National sought reimbursement from Lane, Chester, and Moon for recovery of its $500,000 payment. National claimed it made the payment solely pursuant to TRC regulations and is entitled to reimbursement under Form F of its policy. Appellees argued that National released its claims for reimbursement in the settlement agreement. In the alternative, appellees argued that in order to be entitled to reimbursement under Form F, the payment must have been made pursuant to a final judgment, not a voluntary settlement agreement.

National filed a motion for summary judgment against Lane and Chester based on deemed admissions. Lane and Chester sought relief from the deemed admissions and filed cross-motions for summary judgment. Moon also filed a motion for summary judgment, and National filed a cross-motion for summary judgment. Following the filing of various supplements, amendments, and responses to the pending motions for summary judgment, the trial court heard the summary judgment motions and granted summary judgment for appellees. Although the trial court sent the parties a letter explaining the rationale for its ruling, the summary judgment itself states no specific grounds for the decision. This appeal followed.

STANDARD OF REVIEW

The standards for reviewing a summary judgment are well established: (1) the movant for summary judgment has the burden of showing there is no genuine issue of material fact and it is entitled to summary judgment as a matter of law; (2) in deciding whether there is a disputed fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). A defendant who moves for summary judgment must show that the plaintiff has no cause of action. A defendant may meet this burden by either (1) disproving at least one essential element of each theory of recovery, or (2) conclusively proving all elements of an affirmative defense. Wornick Co. v. Casas, 856 S.W.2d. 732, 733 (Tex. 1993); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex.1990).

When, as in this case, both sides file motions for summary judgment and one is granted and one is denied, we review all questions presented. Nationwide Property & Cas. Ins. Co. v. McFarland, 887 S.W.2d 487, 490 (Tex. App.--Dallas 1994, writ denied). We review the summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Howard v. INA County Mut. Ins. Co., 933 S.W.2d 212, 216 (Tex. App.--Dallas 1996, writ denied).

When a summary judgment order does not specify the grounds upon which the motion was granted, the reviewing court will affirm the judgment if any one of the theories advanced in the motion is meritorious. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993). A letter cannot be considered on appeal as providing the reasons for the judgment. RRR Farms, Ltd. v. American Horse Protection Ass'n, 957 S.W.2d 121, 126 (Tex. App.--Houston [14th Dist.] 1997, writ denied). Thus, because the summary judgment here does not state the grounds relied upon in the judgment itself, we will affirm the judgment if any of the theories advanced by appellees in their motions are meritorious.

WITHDRAWAL OF DEEMED ADMISSIONS

In points of error 1(a), 2(a), and 2(b), National complains the trial court erred in failing to grant summary judgment for National and in granting summary judgment for appellees because the trial court erroneously allowed the withdrawal of deemed admissions and failed to consider them as summary judgment evidence. In its brief, National appears to challenge two separate instances regarding the withdrawal of deemed admissions: (1) the trial court's June 8, 1995 ruling allowing Lane and Chester to withdraw the deemed admissions, and (2) the trial court's "implied" decision to allow Lane and Chester to submit answers to the request for admissions after the June 15, 1995 deadline. We will discuss both instances.

Applicable Law

A trial court has broad discretion to permit or deny the withdrawal of deemed admissions. Employers Ins. of Wausau v. Halton, 792 S.W.2d 462, 464 (Tex. App.--Dallas 1990, writ denied). We set aside the trial court's ruling only if, after reviewing the entire record, it is clear that the trial court abused its discretion. Burden v. John Watson Landscape Illumination, Inc., 896 S.W.2d 253, 255 (Tex. App.--Eastland 1995, writ denied). An abuse of discretion occurs when a court acts without reference to guiding rules or principles, or acts arbitrarily or unreasonably. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985).

Rule 169(2)¹ of the Texas Rules of Civil Procedure provides that a court may permit the withdrawal or amendment of deemed admissions upon a showing of good cause if the court finds that the parties relying upon deemed admissions will not be unduly prejudiced and that the presentation of the merits of the action will be subserved by the withdrawal or amendment of the responses. Tex. R. Civ. P. 169(2) (former rule). A party can establish "good cause" by demonstrating that the failure to respond is accidental or the result of a mistake, rather than...