Gamma Group, Inc. v. Home State County Mutual Insurance Co.
342 S.W.3d 762
| Tex. App. | 2011Background
- 1995 agency agreement: Gamma Group acted as Home State's agent to bind policies, collect premiums, and adjust claims; Gamma paid commissions and remitted amounts to Home State and TRC.
- Termination of the agency on January 1, 1999 ended Gamma's ability to write new business, but Gamma remained responsible for run-off claims.
- In 2002 Home State terminated Gamma's servicing of run-off claims and engaged Marshall Contract Adjustors; Home State and TRC paid over $4 million on run-off claims.
- In the underlying suit, Home State and TRC alleged Gamma breached the agency agreement by failing to pay settlements adjusted by Marshall from Gamma- collected premiums; Gamma retained the premiums.
- Gamma counterclaimed under paragraph 6.2 seeking indemnity from Home State for losses and loss adjustment expenses incurred in directing Marshall, arguing Home State was responsible for those amounts.
- The trial court granted summary judgment on res judicata grounds; the appellate court affirmed, leading to this appeal by Gamma.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is Gamma's indemnity claim under section 13.2 barred by res judicata? | Gamma argues the claim is not matured and was not compulsory in the prior suit. | Home State contends the claim arose from the same subject matter and should have been raised. | Yes, barred by res judicata. |
| Was Gamma's counterclaim in the prior suit compulsory or permissive for res judicata purposes? | Gamma contends the counterclaim was permissive and not required to be raised. | Home State contends it was compulsory as it pertained to the same contract and subject matter. | Permissive; nonetheless, all related claims must have been brought in the same action, so the later claim is barred. |
| Do the claims here arise from the same subject matter as in the underlying action? | Gamma; seeks indemnity for Marshall-related losses arising from Home State's direction. | Home State; argues the claims are within the same transaction/subject matter. | Yes, same subject matter; res judicata applies. |
Key Cases Cited
- Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794 (Tex. 1992) (indemnity claims must be brought in same action; contingent claims may be permissive but must be joined for res judicata purposes)
- Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203 (Tex.1999) (indemnity claims may be permissive; if brought, all related claims must be litigated together)
- Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex.1992) (restatement-based transactional approach to res judicata)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex.1996) (defining same subject matter for res judicata purposes)