Street v. Honorable Second Court of Appeals, C-7345

CourtSupreme Court of Texas
Citation756 S.W.2d 299
Docket NumberNo. C-7345,C-7345
PartiesThe Honorable John STREET, Judge, 352nd Judicial District Court, Relator, v. The HONORABLE SECOND COURT OF APPEALS, Respondent.
Decision Date06 July 1988

Page 299

756 S.W.2d 299
The Honorable John STREET, Judge, 352nd Judicial District
Court, Relator,
No. C-7345.
Supreme Court of Texas.
July 6, 1988.
Rehearing Denied Oct. 5, 1988.

Page 300

Wallace Craig, Wallace Craig & Associates, Bill Waltrip, Clint Oldham, Binion & Oldham, Fort Worth, for relator.

Lancaster Smith, Sr., Dallas, Harvey L. Davis, Austin, for respondent.


PHILLIPS, Chief Justice.

The question presented is when an underlying tort action becomes final so that a defendant may institute a Stowers action against its insurer. We hold that the trial court did not abuse its discretion in refusing to abate the insured's Stowers action, together with certain interventions, merely because the underlying tort action was still pending on appeal. Therefore, we conditionally order the court of appeals to vacate its conditional writ of mandamus directing the trial court to abate all causes of action against the insurer.

The underlying lawsuit arose out of a collision in 1984 between a gravel truck operated by Ben Howard and an automobile operated by Arthur Riley. Riley and his wife, Ramona, brought suit against Howard and his employer, Fincher Brothers, Inc. The Rileys settled with Fincher Brothers while the jury was deliberating, but no settlement was made with Howard. Based on the jury's verdict, the trial court, the Honorable John Street, judge presiding, rendered judgment for the Rileys against Howard for $3,582,499.78. Howard's appeal from this judgment is currently pending before the Second Court of Appeals.

Howard thereafter brought an action against National County Mutual Fire Insurance Company, his insurance carrier, under the doctrine established in G.A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex.Comm'n App.1929, holdings approved), for negligent failure to settle the insurance claim against him. National County Mutual filed a plea in abatement, alleging that a Stowers suit may not be maintained until all appeals have been concluded in the original tort action. Fincher Brothers subsequently intervened in the Stowers suit, alleging breach of duty by National County Mutual as its own insurer and seeking to enforce a hold harmless agreement allegedly executed by Howard in favor of Fincher Brothers. The Rileys also intervened in the second action as judgment creditors. National County Mutual filed pleas in abatement as to both these interventions as well. Judge Street, again presiding, denied all three pleas in abatement. The Second Court of Appeals conditionally granted National County Mutual's petition for writ of mandamus and prohibition, conditionally ordering Judge Street "to abate the underlying case pending the appeal of the original tort action."

In this action, Judge Street, as relator, seeks a writ of mandamus compelling the Second Court of Appeals to vacate its conditional writ. The real parties in interest are alleged to be Howard and his attorney, Bill Waltrip, Fincher Brothers and its attorney, Clint Oldham, and the Rileys and their attorney, Wallace Craig. The respondent is the Second Court of Appeals, with National County Mutual interested in upholding the conditional writ of mandamus.

A writ of mandamus will not issue except to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no adequate remedy by appeal. State v. Walker, 679 S.W.2d 484, 485 (Tex.1984). A court of appeals, therefore, abuses its discretion by granting mandamus when there is an adequate remedy by appeal of the incidental rulings of the trial judge. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985). To ascertain whether the court of appeals has abused its discretion, we must make our own "independent inquiry whether the trial court's order is so arbitrary, unreasonable, or based upon so gross and prejudicial an error of law as to establish abuse of discretion." Johnson, 700 S.W.2d at 918. Because the real parties in interest have different postures, it is necessary to review each affected party separately.

As to Fincher Brothers, it is readily apparent that the trial judge acted correctly in denying the plea in abatement. Having settled at trial, Fincher Brothers

Page 301

was not a party to any appeal as either an appellant or appellee. Whatever cause of action it may have against National County Mutual has already accrued.

As to Howard, the correct result is not so clear. This court has held that a Stowers cause of action does not accrue until the judgment in the underlying case becomes final. Hernandez v. Great American Ins. Co., 464 S.W.2d 91, 95 (Tex.1971); Linkenhoger v. American Fidelity & Casualty Co., 152 Tex. 534, 539, 260 S.W.2d 884, 887 (Tex.1953). But the term "final," as applied to judgments, has more than one meaning. As Chief Justice Tunks explained in McWilliams v. McWilliams, 531 S.W.2d 392, 393-94 (Tex.Civ.App.--Houston [14th Dist.] 1975, no writ):

The term 'final judgment' applies differently in different contexts. A judgment is 'final' for purposes of appellate jurisdiction if it disposes of all issues and parties in a case. [Citation omitted.] The term 'final judgment' is also used with reference to the time when trial or appellate court power to alter the judgment ends, or when the judgment...

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