*2 ROBERTSON, Before SEARS and ELLIS, JJ.
SEARS, Justice.
This
Contemporary
is the second time
(“CHM”)
ap
Inc.
has
pealed
the trial court’s taxation of
Previously,
ad litem fees
judgment
Court reversed the
trial court because it failed
state
taxing
for
CHM. Con
temporary
Inc.
Palacios,
slip op. at
No. A14-89-00073-CV
5-6,
Maria permanent Palacios sustained following damage surgery brain at Medical husband, Arts Her Alfredo Pa- Hospital. lacios, malpractice filed a medical suit indi- vidually, representative of es- as his wife’s tate, and as next friend of four minor CHM, (2) (1) children. Defendants included (3) (4) physicians, hospital, four Inc., Enterprises, National Medical NME Hospitals, Hospitals, NME Manage- Hospital D/B/A National Medical “NME”). (collectively ment hospital management company had ac- quired prior injury. Before plaintiffs guaranteed NME mil- $6 if payment lion and of medical liens Houston, Jeffery Mundy, appellant. plaintiffs failed to recover at least Evans, Sheehy, Richard A. Janet Nick C. amount the other defendants. Houston, Nichols, plaintiffs A. they Samual Robert J. recovered Swift, Livingston, David A. John H. Bos- more share than would well, Houston, recovery of their appellees. with NME above addition, guaranteed amount. the trial cause” for of these costs approved court settlement negli- CHM. Because of the zero whereby hospi- the defendant gence doctors and finding against “appeared” tal million. $2.6 CHM was successful and this *3 necessary Court held that it was for During three former directors of good to state cause on the CHM, (Ranger its excess insurer against record for Company), Ranger’s reinsur- er, Employers hearing Reinsurance On the trial court held a (“ERC”) 21, May became dissatisfied with actions on 1991 and denied CHM’s motion primary insurer, of CHM’s Fire for hearing. U.S. & continuance of the (“USF Casualty Company C”),& in defend- wanted call testify, to its trial to Consequently, however, CHM’sinterests. on the they were in in trial Dallas. The verdict, eve of the CHM’sformer hearing commenced but was terminated Ranger, and ERC entered into a “Covenant when CHM’s cross-examination of Not to Execute and of Claims” guardian litem, regarding ad Mary Car- plaintiffs. By with agree- terms of this ter plain- between NME and the (1) plaintiffs ment: right reserved the tiffs, objected opposing par- proceed judgment against CHM but judge ties. The hearing concluded the promised not to execute any by stating his reasons for CHM; (2) against rendered ERC good and he included those pay plaintiffs policy limit amount of findings cause in Judg- the Amended Final million; and, (3) the former directors ment and his of fact and conclu- agreed to file “bad faith settlement” claims sions of law. counsel, USF & C and its trial with error, points its first two these causes of action assigned to be one- contends the trial court abused its discre plaintiffs half to and one-half to ERC. Af- denying tion in CHM’s motion for continu ter hearing all the testimony, parties ance of 21May hearing, and violated jury believed the going to return a process by to due allowing not monstrous verdict CHM. The trial procure testimony it to to rebut approved court any, good submission, cause. At coun The case was not withdrawn from the sel appellant argued that CHM was subsequent because the bad faith entitled evidentiary hearing to a full on the hinged claim returning large good issue of cause. disagree. We verdict required any court was not to hold made following findings re- hearing. explained As this Court in its garding percentage negligence at- prior opinion, authorizes a Tex.R.Civ.P. tributable to each defendant: appoint guardian trial court to ad litem (a) Contemporary him a “allow reasonable fee for his Management, Inc. 0% services to be taxed as a of the costs.” (b) Stanley Dr. Hoover 15% requires Rule 131 (c) Dr. Esteban Martinez 5% to a suit recover such fee from the adverse (d) Dr. Manuel Ramirez party, (e) good unless the trial court finds Hospital Medical Arts National Medical (f) Enterpris- adjudge cause to the costs otherwise and es, Inc. record, states its reasons on pursuant The trial court then assessed in Rogers Stores, to Rule 141. v. Walmart ad litem fees (Tex.1985); and allocated liabili- 686 S.W.2d State ty among for these fees all defendants. B Landfill, v. & L appeal, On Court found the evidence 300 [1st Dist.] support writ); sufficient to the amount of the no Tex.R.Civ.P. trial court’s award of ad litem the Texas Rules of Civil Procedure do not fees, but remanded the require case to the trial the trial court to conduct an eviden court due hearing to the court’s failure to tiary prior stating “state its liability and held Moreover, from future remanded this Court
analysis. judge harmless. for the trial state the case took, action he existing for the 6) exists because Good cause justify him to find Inc.’s excess rary evidentiary Because an previous action. Company, Ranger Insurance necessary, the trial court hearing was not settlement, release for con- denying the motion did not err and covenant refusing to hear tinuance and extinguished and potential liability was Therefore, overrule evidence. we released from all future it was error one and two. 7) *4 there CHM also contends Management, Inc.’s rein- rary Health that: law ment), the trial court ver Elevator Co. whether In its proper court’s discretion. nale for was no 3) 4) rary Health settlement, of the thereby a. CHM’s execute (incorporated into the amended Good Good 368 great findings jft standard for evidence, established the trial court (Tex.App. and this against Contemporary cause is Rogers, and valuable in that: support the trial court’s extinguished; [*] release and covenant exists for the of fact and liability for - Dallas Inc. Court finding is to determine [*] 686 ad Servellon, 812 S.W.2d in the record of this specifically set forth insufficient factually against CHM. litem fees and court stated, reviewing clearly abused its hereby finds that benefit [*] conclusions damages was taxing of Inc. received at inter [*] no 601; a not to writ). judg ratio alia, [*] Do of the amount mately matter how this this Court has under upon against a agreement entered into CHM’s At the outset it should in number not be of 8) fact and conclusions its various insurance total settlement of $22.6 rary Health achieve from all execute in that settlement, surance Good the rule of liability, it clear extinguished and it was merits, Company, benefitted party that had eight of the trial the cause exists because 131 is to be based the that CHM would the above described benefits of future carrier, Employers Reinsur- held that “a successful abuse plaintiffs. release approximately Management, the could not have altered jury answered as of discretion to award judgment. upon damages,” no and covenant not of evident, as stated carriers, paid $20 law, ad Because of the court’s the actually have upon success pay approxi- Inc. litem costs parties, that it can- Contempo- million from the Although released through liability of the the from all liabili- was released b. CHM were re- cause of action “merits” of the ty- million receiving by plaintiffs solved There- through its carriers. from CHM 5) exists because fore, moot as to the the answer was for- Management, Inc.’s rary Health par- damages of the liability and Jones, Stanley issues of directors, James H. mer fact, only pur- In Dwarshus, Jr., ties this lawsuit. Craig and Albert G. M. provide a finding was to of the pose release from faith of for bad for a cause action in that the basis covenant not to USF & C. effectively released were directors n.r.e.). Packers, writ ref'd [14th Dist.] Div. Baker Int'l A v. Baker Perez of Corp., - Houston judgment. misinter- tions to the We sustain CHM contends modify judg- preted point Not to Execute and of error and “Covenant fourth $25,- of as a lia- of Claims” release fee of ment to exclude bility, erring “good in its find- thus cause” agreement
ings extinguished judgment of the court is af- liabili- liability and released it from modified. firmed as previous opinion, provid- noted expressly that the ROBERTSON, Justice, concurring and ed that it constitute did not an admission dissenting. CHM or its former specif- directors. the absence of disposition appel- I in the of the concur language releasing ic CHM from and in the lant’s first two of error prevent securing did not CHM disposi- I point last of error. dissent to practical benefit that it desired: the effect point. third tion of the plaintiffs’ promise to not execute NME, acquired by After any judgment against CHM that it assured During tri- corporate dissolved its status. pay any plaintiffs’ would not have to al, directors its ex- three former in the event the found excess carri- cess insurance and the *5 damages in liable for excess of million. $20 with the er’s reinsurer became dissatisfied expressed actually agreement CHM in the primary carrier, action of the U.S. Fire and huge jury that anticipated it a adverse Casualty and its Company Insurance law- judgment. agreement merely was yers defending CHM’s interests. Conse- acknowledge vehicle for CHM to “mer- the directors, quently, three former lawsuit, million, its” of the and $20 (CHM’s Ranger Company excess Further, stop bleeding. the it is clear insurer), liability Employees and Reinsur- CHM express did not desire an release of reinsurer) (Ranger’s entered liability, expected as it intended use the into a “Covenant Not to Execute and As- against judgment excess it grounds as signment By of plaintiffs. Claims” with against recover in a and lawsuit USF & C agreement, plaintiffs the of this re- terms the damages “for ruinous judgment proceed served the by imposition will be the an ex- caused of against promised but CHM judgment.” cess that it was believed CHM, if judgment against on a one were going exposed liability to be in excess of by rendered the trial court. The reinsurer coverage, gam- its insurance therefore it liability for CHM’sexcess insurance carrier bled and lost. agreed pay plaintiffs policy limit the We also hold that the was trial court $20,000,000. return, amount of correct in number five of the of to file three former directors suit fact and of conclusions law. The fact that based “bad faith claims on settlement” CHM’s three former directors benefited against & C and its after USF trial counsel agreement in that “ef- they were entry judgment of Addition- fectively” released from future ally, provided assign- the liability harmless supported and held fifty percent ment of of these causes of the evidence. the fifty percent action to pri- point We overrule of error three. excess carrier. Counsel for CHM’s number in the ne- mary participate carrier did not Finally, complains trial the gotiation approval of awarding court abused its discretion in and, ad litem in addi was submitted to the fees case agree. pointed opinion, tion out previous majority award. We as solely any negligence The case remanded CHM of was for the absolved judgment found in good taxing judge court to state cause for the trial Defendant, against CHM, was “the was for the Con- therefore verdict Inc.” The jurisdiction temporary without to make other modifica- however, approximately judge, assessed mil- fee the total settlement of $22.6 ad litem’s lion[.] prior appeal, held that On the we “[b]e- party on the prevailing CHM was given by trial court for The reasons case, trial court erred in merits of the taxing costs of the costs CHM with- begin To simply good do not state cause. stating good on the record.” out reasons, with, the trial in the first four signed an Following the trial court liability court finds cause because and, cause, amended its excess its former found: carrier and its reinsurance carri insurance specifically Good cause is set forth and they were “extinguished” er and/or was in the record of this established liability” by the “released from future hereby finds that Execute and “Covenant Not to guard- exists for the of CHM of Claims.” ian ad litem fees and court costs to Con- “extin primary and its insurer was not temporary Health guished” until the re and “released” following grounds: negligence. Al turned its verdict of no 1. Good cause exists because judge’s findings repeatedly though the trial rary Management, Inc. benefit- “release,” refer to the covenant as a release and ted from the it did not surrender a not a release because not to execute in that: covenant discharge cause of action and did not liabili Foods, Inc., Knutson v. Morton a. CHM’s (Tex.1980) (Denton, J., thereby extinguished; and con Motor (citations omitted); Gillette curring) was released from all liabili- b. CHM *6 90, 93 Whitfield, Trans. Co. 186 S.W.2d (Tex.Civ.App. writ ref’d Worth Contempo- - Fort Trammell, 98 Tex. w.o.m.); Robertson v. Management, rary Health Inc.’s for- (1904). contrary, To 83 S.W. Jones, Stanley mer James H. to create liability: sought Dwarshus, Jr., Craig M. and Albert G. steps to parties took ensure settlement, release from the benefitted in order conflict with CHM was settled to execute in that the and covenant not pri spawn lawsuits CHM’s new effectively directors were released mary insurer and its trial counsel. Second potential liability and held from future “release,” was a ly, even the covenant harmless. any cause, or else this could not be Contempo- 3. Good cause exists because any liability, compromise or limitation of Management, excess rary Health Inc.’s settlement, any provide good case would carrier, Company, Ranger against a successful settlement, from the release benefitted do intend party. Definitely, the Rules its not to execute and covenant compro result: when the law favors such a potential liability extinguished settlement, inconsist it would be mise and liability. from all future it was released prevails on the punish ent to who exists because 4. Good cause having attempted to limit its merits for Inc.’s rein- rary Health liability. carrier, Employers Reinsur- surance Company, does recited the court The fifth reason not to release and covenant totally in that dis- not state in that its the suc- regards the fact that CHM was released extinguished and it was sub- party. When the cessful jury, from all future liability to the question mitted the negli- was not jury found that CHM 5. Good cause exists because insurer excess gent. The fact CHM’s rary Health carriers, excess carrier’s reinsurer and the through various insurance its million in the settlement of has
nothing to do with whether
guardian ad litem’s fee should be borne
CHM, party, the successful who was primary Appellant states insurer. best
it in its brief: Exe-
The terms of the “Covenant Not to Plaintiffs, blatantly
cute” show that excess insurer and the excess aggressively try-
carrier’s reinsurer were to create primary not release liabil- endeavor,
ity. now Failing in this paid by the gain
seek to costs to be though they
primary carrier even obtaining
could not succeed in a ver- paid by primary be carrier.
dict to
(emphasis supplied). “good agree
While I cause” is an “elu- concept” Stores, (Rogers
sive v. Walmart (Tex.1985)),it defy logic.
not so as to elusive clearly
The trial court abused its discre- finding any
tion in of these five reasons to cause for party. Because the otherwise,
majority determines I dissent. *7 Shirley BELL and
Wanda
Fisher, Appellants, MOORES, al., Appellees. et
John J.
No. B14-91-00875-CV. Texas, Appeals (14th Dist.).
Houston
June
Rehearing July Denied