Torchia v. Aetna Cas. and Sur. Co.

• Decision Date: 30 January 1991
• Docket Number: No. 08-90-00085-CV,08-90-00085-CV
• Citation: 804 S.W.2d 219
• Parties: Patrick A. TORCHIA and Twyla Scott, Appellants, v. The AETNA CASUALTY AND SURETY COMPANY and Wanda Oldham, Appellees.
• Court: Texas Court of Appeals

Page 219

804 S.W.2d 219

Patrick A. TORCHIA and Twyla Scott, Appellants, v. The AETNA CASUALTY AND SURETY COMPANY and Wanda Oldham, Appellees.

No. 08-90-00085-CV.

Court of Appeals of Texas El Paso.

Jan. 30, 1991.

Rehearing Overruled Feb. 27, 1991.

William E. Ryan, Houston, for appellants.

Charles W. Hurd, Ben Taylor, Fulbright & Jaworski, Houston, for appellees.

Before OSBORN, C.J., and FULLER and KOEHLER, JJ.

OPINION

KOEHLER, Justice.

The opinion issued in this case on December 5, 1990 is withdrawn and the following is substituted in its place.

In a suit for breach of the duty of good faith in the handling and settlement of a workers' compensation claim, the trial court granted the defendants' motion for summary judgment. Plaintiffs have appealed claiming eight errors by the court. We affirm.

Patrick A. Torchia ("Torchia"), married to Twyla Scott ("Scott"), was allegedly struck by a truck on June 4, 1985 while working for Texas Brokers. The Aetna Casualty and Surety Company ("Aetna") provided workers' compensation insurance for the employer. Wanda Oldham ("Oldham") is an agent of Aetna. Following a final award by the Industrial Accident Board, Aetna filed suit to set aside the award. The parties agreed on a settlement of all claims culminating in a final judgment, which was signed by the judge on May 19, 1987 and which provided for the payment by Aetna to Torchia of $32,500.00 cash and for the payment of past medical expense not to exceed $35,500.00.

On October 21, 1988, Torchia and Scott filed the present suit, alleging that Aetna (and Oldham) breached its duty to deal fairly and in good faith by its handling and settling of Torchia's compensation claim, including not only the settlement and release of the compensation claim but also any claims Torchia might have then had, or in the future have, against Aetna. Torchia also alleged that his release was void for lack of consideration, was signed by him as a result of a unilateral mistake, and was procured by Aetna's breach of its good faith duty. Torchia and Scott, the latter having alleged a loss of consortium resulting from the negligence of Aetna and Oldham in handling and settling her husband's compensation claims, pled for actual and exemplary damages.

Aetna answered with the affirmative defense of release and subsequently filed its motion for summary judgment based primarily on the same ground. After filing a response to that motion claiming inter alia a breach of the good faith duty by acts that occurred at or after the signing of the settlement papers and denying that there was any judicial admission made by Torchia in signing such papers, Torchia and Scott filed their own motion for a partial summary judgment declaring the release to be void for want of consideration, attaching thereto Torchia's second affidavit repudiating the affidavit he had given in support of the earlier settlement. Aetna, in reply to Torchia's response to its motion for summary judgment and in response to Torchia's motion, reiterated its position that the release was supported by adequate consideration and invoked the doctrine of judicial estoppel against the efficacy of Torchia's second affidavit. Following a hearing, the court granted Aetna's motion but made no disposition of Torchia's motion for partial summary judgment in its final judgment. The parties agree that the partial motion was effectively overruled by the judgment entered in the case. We agree since by the granting of Aetna's motion, the judgment is final in the sense that it disposes of all parties and claims. North East Independent School District v. Aldridge, 400 S.W.2d 893, 895 (Tex.1966).

In reviewing a summary judgment appeal, the normal rule is that this Court must determine whether the successful movant in the trial court carried its burden of showing that there is no genuine issue of a material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Company, Inc., 690 S.W.2d 546, 548 (Tex.1985). In deciding whether or not there is a disputed fact issue precluding summary judgment, evidence favorable to the non-movant is to be taken as true, and in that connection, every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in his favor. Nixon, 690 S.W.2d at 548-49. Where a defendant, as in this case, has moved for a summary judgment based on the affirmative defense of release, its burden is to prove conclusively all the elements of that defense as a matter of law to the extent that there is no genuine issue of material fact. Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984).

Torchia/Scott's first point of error is the general one that the trial court erred in granting Aetna's motion for summary judgment. Unsupported by argument, and in view of our disposition of the other points of error which are specific, the first point is overruled.

In their third through eighth points of error, Torchia/Scott contend that the court erred in granting the summary judgment for various reasons: the existence of material fact issues as to the lack of consideration to support the release of his bad faith claims (third and fourth points); no judicial admission that the liability of Aetna on the compensation claim was uncertain (fifth point); the existence of material fact issues as to whether Aetna breached its good faith duty by its acts after the release was signed (sixth point); the existence of material fact issues as to whether Torchia's release should be rescinded because of Torchia's unilateral mistake of fact in signing the release (seventh point) and Aetna breached its good faith duty in procuring the release (eighth point).

With respect to the contention that a fact issue exists as to whether or not there was a lack of consideration to support the release of Torchia's bad faith claims, the judgment after reciting that Aetna would pay to Torchia $32,500.00 in settlement of all of his workers' compensation claim, provided as follows:

The parties further expressly agreed that their settlement extends to all claims, demands, and causes of action, which cross-plaintiff [Torchia] may have now or in the future, arising out of the manner in which cross-defendant [Aetna], and its counsel, handled, settled, or defended any of the cross-plaintiff's claims under the Texas Workers' Compensation Act. [Emphasis added].

After this agreement was made known to the Court, the Court heard evidence concerning the reasonableness of the settlement, including evidence of the injuries suffered by the cross-plaintiff, the extent of the cross-plaintiff's resulting disability, the compensation rate of the cross-plaintiff, and all other evidence deemed by the Court necessary to a determination of the fairness of the proposed settlement. The Court then decided that the liability of the cross-defendant is uncertain, that the proposed compromise settlement is fair, and that the settlement should be approved. The Court now approves the settlement. [Emphasis added].

The judgment was approved and agreed to by Torchia and his attorney. In his settlement affidavit executed by him nearly two weeks before the judgment was signed, Torchia acknowledged "that if the Court approves the settlement, I shall not be able to collect any further monies or sums as a result of the injury made the basis of this suit or as a result of the manner in which cross-defendant and its agents and counsel, and my employer, have handled, defended, and settled my claim. " [Emphasis added]. In another paragraph setting forth the background of his claim and Aetna's defense, Torchia acknowledges that he is "aware that the liability of the cross-defendant is uncertain."

Although Torchia admits initially that he received the $32,500.00 consideration, he contends first, that this sum applied only to the compensation claim and not to the bad faith claim since the release of multiple claims requires separate consideration for each claim, citing Hallmark v. United Fidelity Life Insurance Company, 155 Tex. 291, 286 S.W.2d 133 (1956) in support of that proposition. Hallmark is not in point since it involved claims for two liquidated amounts (the face amount of a life insurance policy and double indemnity if death was accidental). That the death may have been accidental was not known or available to the beneficiary when she signed a general release from all liability under the policy upon receipt of the face amount. In this case, by the very nature of the suit to set aside the IAB award because of questionable liability, by the finding of the court in its agreed judgment after hearing evidence that the liability of Aetna was uncertain, and by Torchia's awareness in his sworn affidavit to the same effect after acknowledging that there were two witnesses who could conceivably defeat his compensation claim, that claim was unliquidated. Therefore, at the time he signed the releases, both of Torchia's claims were unliquidated and the operative facts which could conceivably give rise to the bad faith claim were available to him and his attorney. In addition, the releases specifically recite both compensation and bad faith claims.

Torchia's claim in his second affidavit of no consideration to support the release of his bad faith claim is a mere conclusion and does not raise a fact issue. Buddy "L", Inc. v. General Trailer Company, Inc., 672 S.W.2d 541, 547 (Tex.App.--Dallas 1984, writ ref'd n.r.e.). Although a release must be supported by valid consideration, any consideration, however slight in amount, is sufficient if accepted by the person giving the release. Texarkana Nat. Bank v. Hubbard, 114 S.W.2d 389, 392 (Tex.Civ.App.--Beaumont 1938, writ dism'd). Mere inadequacy of consideration is not a sufficient ground to set aside a release. McClellan v. Boehmer, 700 S.W.2d 687, 694 (Tex.App.--Corpus Christi 1985, no writ). Torchia's release extended to all claims arising out of the injury...