Nationwide Property and Cas. Ins. Co. v. McFarland

Decision Date18 October 1994
Docket NumberNo. 05-93-01561-CV,05-93-01561-CV
Citation887 S.W.2d 487
PartiesNATIONWIDE PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant, v. Jimmy McFARLAND and Donald Mashewske, Appellees.
CourtTexas Court of Appeals

Michael W. Minton, Barbknecht & Tait, P.C., Dallas, for appellant.

Steven Aldous, Richard Sayles, Sayles & Lidji, Dallas, for appellees.

Before LAGARDE, BARBER and WHITTINGTON, JJ.

OPINION

WHITTINGTON, Justice.

In this appeal, we must decide whether Nationwide Property and Casualty Insurance Company (Nationwide) has a duty to defend Donald Mashewske under an automobile insurance policy issued to Jimmy McFarland. In the trial court, Nationwide sought a declaration that Mashewske was not a "covered person" under the policy. McFarland counterclaimed against Nationwide seeking the opposite declaration. Nationwide and McFarland both filed motions for summary judgment. After a hearing, the trial court granted McFarland's motion and denied Nationwide's. On appeal, Nationwide asserts two points of error (1) the trial court lacked subject-matter jurisdiction to grant McFarland's motion, and (2) the trial court erred in granting summary judgment for McFarland and denying Nationwide's motion because (a) Mashewske was not a "covered person" under the policy, and (b) the policy's "unauthorized use" exclusion deprived Mashewske of coverage under the policy. We conclude the trial court had subject-matter jurisdiction over McFarland's counterclaim. We further conclude that Mashewske was not a "covered person" under the policy. Thus, we reverse that portion of the trial court's order granting McFarland summary judgment on this point. We render judgment in favor of Nationwide on the coverage issue.

BACKGROUND

On March 16, 1991, McFarland was working underneath his 1987 Toyota Supra. The car was sitting up on jacks. While McFarland was underneath the car, Mashewske got in the car to see if it would start. When Mashewske shifted the car into neutral, it rolled backward, fell off the jacks, and landed on McFarland. McFarland sustained injuries from the accident.

At the time of the accident, McFarland was covered by an automobile insurance policy issued by Nationwide. The policy covered McFarland, as the named insured, and any other person "using" the covered auto. The policy identified McFarland's 1987 Toyota as the "covered auto." McFarland sued Mashewske for negligence. Mashewske tendered his defense to Nationwide, claiming he was entitled to coverage under McFarland's policy because he was "using" the covered auto at the time of the accident. Nationwide agreed to provide Mashewske's defense under a reservation of rights.

On December 17, 1992, Nationwide filed this suit against McFarland and Mashewske, seeking a declaration that it had no duty to defend Mashewske in McFarland's suit. Nationwide maintained that Mashewske was not a "covered person" under McFarland's policy because Mashewske was not "using" the automobile when he shifted the car into neutral. Nationwide maintained that Mashewske's actions constituted "maintenance" of the covered auto, not "use."

McFarland generally denied Nationwide's allegations and counterclaimed for a declaration that Nationwide had a duty to defend and indemnify Mashewske under McFarland's policy. Mashewske did the same. Shortly thereafter, Nationwide and McFarland filed cross-motions for summary judgment seeking a declaration of Nationwide's duties, if any, under the policy. Nationwide later filed a supplement to its original summary-judgment motion, alleging for the first time that the policy's "unauthorized use" exclusion deprived Mashewske of coverage.

After a hearing, the trial court denied Nationwide's motion and granted McFarland's. The court's order, as modified, stated:

IT IS FURTHER ORDERED, ADJUDGED AND DECREED as follows:

1. That Plaintiff Nationwide Property and Casualty Insurance Company take nothing against Defendants Jimmy McFarland and Donald Mashewske;

2. That Defendant Jimmy McFarland be granted judgment declaring that Donald Mashewske is a covered person under Nationwide Property and Casualty Insurance Company's Texas Personal Auto Policy, No. 7842-468284, issued to Jimmy McFarland; no exclusions contained within the policy are applicable to deprive Donald Mashewske of coverage under the policy; and Nationwide Property and Casualty Insurance Company is obligated to defend and indemnify Donald Mashewske.

(emphasis added). The court's order also awarded attorney's fees to McFarland. After Mashewske nonsuited his counterclaim, Nationwide appealed the trial court's order.

STANDARD OF REVIEW

The standard for reviewing a summary judgment is 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 judgment as a matter of law.

2. In deciding whether there is a disputed material fact issue precluding summary judgment, we take the evidence favorable to the nonmovant as true.

3. We indulge every reasonable inference in favor of the nonmovant and resolve any doubts in its favor.

See Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).

To prevail on summary judgment, a plaintiff (or in this case a cross-plaintiff) must conclusively prove all elements of its cause of action as a matter of law. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); TEX.R.CIV.P. 166a(c). A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence. Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982). When, as in this case, both parties file motions for summary judgment and one is granted and one is denied, we review all questions presented. See Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396, 400 (1958). If we conclude the trial court committed reversible error, we render the judgment the trial court should have rendered. See id.

The purpose of the summary-judgment rule is not to provide a trial by deposition or affidavit. Rather, the purpose of the rule is to provide a method of summarily ending a case that involves only a question of law or no genuine issue of fact. Gaines v. Hamman, 163 Tex. 618, 358 S.W.2d 557, 563 (1962); Port Distrib. Corp. v. Fritz Chem. Co., 775 S.W.2d 669, 670 (Tex.App.--Dallas 1989, writ dism'd by agr.). The rule is not intended to deprive litigants of their right to a full hearing on the merits of any real fact issue. See Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931 (1952).

STANDING

In its first point of error, Nationwide contends the trial court lacked subject-matter jurisdiction to grant McFarland's summary judgment motion. Specifically, Nationwide argues that McFarland lacked standing to assert Mashewske's rights under McFarland's policy. Nationwide did not raise the issue of McFarland's standing in the trial court. Citing Texas Ass'n of Business v. Texas Air Control Board, 852 S.W.2d 440, 445-46 (Tex.1993), Nationwide contends that standing is a component of subject-matter jurisdiction and that it may therefore be raised for the first time on appeal. We agree that the issue of subject-matter jurisdiction may be raised for the first time on appeal. Nevertheless, we reject Nationwide's claim that McFarland's "lack of standing" in this case deprived the trial court of subject-matter jurisdiction.

Standing concerns a party's ability to invoke the court's subject-matter jurisdiction. Texas Ass'n of Business, 852 S.W.2d at 441 n. 1. To establish standing in Texas, a party must show (1) a real controversy exists between the parties, and (2) the controversy will be actually determined by the judicial declaration sought. Id. at 446. In this case, Nationwide's action for declaratory judgment against McFarland and Mashewske presented a real controversy between the parties (i.e., whether coverage existed under McFarland's policy) that would actually be determined by the judicial declaration sought. Nationwide does not contest this point and, in fact, asserts in its petition that both McFarland and Mashewske were "interested and necessary" parties to the suit. Because Nationwide's action presented a real controversy between the parties that would actually be determined by the judicial declaration sought, the trial court had subject-matter jurisdiction over the case.

The question presented is whether McFarland's "lack of standing" to assert Mashewske's rights under the policy affected the trial court's subject-matter jurisdiction over the suit. We conclude that it did not. In Texas Ass'n of Business, the Texas Supreme Court noted that, once a trial court's subject-matter jurisdiction over a case is properly invoked by a plaintiff, the court's jurisdiction will not be affected by the status of defendants or intervenors aligned with defendants. Id. at 441 n. 1. In that case, as in this, the trial court granted the relief sought by the defendants on their counterclaim for declaratory relief. The supreme court refused to question the defendant-intervenors' standing to pursue their counterclaim. In so doing, the court noted that a court's subject-matter jurisdiction, once properly invoked, cannot be affected by the status of other parties to the suit. Id. This is precisely the situation presented here.

Nationwide seeks to deny the trial court subject-matter jurisdiction over McFarland's counterclaim solely on the basis of McFarland's "lack of standing." As noted above, McFarland's status as a defendant in Nationwide's suit cannot affect the trial court's proper exercise of subject-matter jurisdiction over the parties' action. Accordingly, we conclude that regardless of McFarland's standing to assert Mashewske's rights under the policy, the trial court had subject-matter jurisdiction over the suit. See Texas Ass'n of Business, 852 S.W.2d at 441 n. 1. We overrule this portion of Nationwide's first point of error. 1

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