*1 Book, as Advanced Civil Trial Course fact, puts MM at 11. Dean Yudof HOPKINS, Appellant, § Milton Charles duty in prop- common-law
Scharrenbeck perspective: er duty perform The Scharrenbeck [to HIGHLANDS INSURANCE COMPANY care, skill, expedience reasonable and Goodman-Watson Insurance thing agreed faithfulness the to be done] Inc., Agency, Appellees. important only is in a contract case No. 08-91-00303-CV. party engaged where a allegedly has allegedly misfeasance or some substand- Texas, Appeals Court performance, ard speci- and the contract El Paso. fies either no quite standard of care or a minimal standard.... Scharrenbeck Sept. 1992. us, determining then purposes tells Rehearing Overruled Nov. 1992. occurred, whether a breach has standard, implied minimum contractual law, performance a matter of is one of care, skill,
“with expedience reasonable agreed thing faithfulness the be
done.”
Id. MM 13-14. the common-law §
duty recognized Scharrenbeck, of care implied contracts,
which is law in all legally mandated minimum standard performance.
contract Id. MM at 14. It § Therefore,
is not a duty. common-lawtort
violation of this common-law of mini- performance
mum results in a breach of distinctly
contract but not the breach aof
imposed duty. tort Id.
Accordingly, I Express’ believe Federal point
second should be sustained on the
ground court erred it denied when company an instructed verdict based company
conclusive evidence that the
not liable Dutschmann exemplary
damages theory. on a contract De See
Lanney, 494; S.W.2d at Neuhaus
Kain, 136 (Tex.Civ.App.
-Corpus n.r.e.). Christi writ ref 'd
Although majority avoided the issue
by using analysis, a contract I would also point,
sustain the fourth which asserts that granted
the court should Ex- have Federal
press an instructed verdict on the tort theo-
ry faith and fair See
Neuhaus,
I
form the
damages and then affirm it. *2 resulting from in-
cover losses accidents volving operated trucks owned and Magnolia. became ef- 1, 1988, February fective on was for a *3 thereafter, year. Shortly term one Hopkins Highlands from elected to exclude 10, policy coverage effective March 1988. coverage, As a his result of exclusion from 25, Magnolia Hopkins on 1988. fired March appeal, Highlands On asserts deci- Hopkins sion to on his exclude was based record, driving reports as reflected on re- Department from the Texas of Mo- ceived (MVR). Further, tor Vehicle Records Highlands contends the decision to exclude protect made in an to effort legal Highlands its and financial interests. additionally Department cites United States (DOT) of Transportation regulations to sup- port its to decision exclude from coverage. Hopkins Highlands asserts both different, applied Agency and Watson Acosta, Malcolm McGregor, Valli El stringent, and more standard him in Paso, appellant. determining him exclude from Grambling, Grambling/Damell, John A. Further, Hopkins alleges under L.L.P, L. Hughes, Steven Mounce & Galat- Agency and Watson failed zan, Paso, appellees. El possessed other terminate drivers who driving just records that as bad or C.J., OSBORN, BARAJAS, J., Before worse than his own. PRESSLAR, (Retired), Sitting by C.J. Assignment.
II. STANDARD OF REVIEW OPINION reviewing In of a entry sum mary judgment, this Court must determine BARAJAS, Justice. whether the successful movant in the trial appeal This is an from a summary judg- court showing carried burden of granted High- ment in of Appellees favor genuine there was no issue of material fact Co., lands Insurance and Goodman-Watson summary and that judg it was entitled to Agency, alleg- Insurance Inc. on an action as ment a matter of law. v. Gibbs General ing Deceptive violations Trade Prac- 827, (Tex. 450 Corp., Motors S.W.2d Act, tices tortious interference with a con- 1970); Property Manage Nixon Mr. relationship tractual breach Inc., Co., (Tex. ment S.W.2d faith and fair We reverse 1985). summary judgment A disposes part part. in affirm if, proper only of the entire case is law, matter of the non-movant could not I. THE SUMMARY OF EVIDENCE upon any pleaded. succeed of the theories Appellant, Hopkins, Charles Milton Service, Building Houston Inc. Ameri employed Magno- as truck driver for the Co., can General Fire & Cas. Bottling (Magno- Company lia Coca-Cola (Tex.App. [1st Dist.] — Houston lia). Magnolia previously liability secured denied). Co., from Insurance (Highlands) through deciding Goodman-Watson whether or not there is (Watson Agency, disputed Agency) preclude Inc. issue fact that would objections ruling on of his entry summary judgment, either of a evidence summary al- taken evidence. non-movant to be
favorable objected and, connection, though properly to al- every rea- true judg- leged Appellees’ summary indulged sonable inference must be fa- defects evidence, to secure a rul- re- ment his failure vor of the non-movant and doubts Nixon, effectively objections on waives solved in his favor. those Accordingly, 548-49; complaints appeal. his on City see also Houston v. Clear is overruled. Authority, 589 Point of Error No. One Creek Basin (Tex.1979). Two, Hopkins of Error No. Point in granting erred asserts the trial court III. MOTION FOR SUMMARY Appellees’ judgment based *4 JUDGMENT legal justifi of unplead affirmative defense One, Appellant In of Error No. Point fact point cation. that the Appellees is Gillespie the affidavit of Diana asserts legal justification defense of affirmative judgment be- proper summary not evidence Original Amended was raised in their First personal cause not on knowl- it is based Answer, days Hopkins’ after filed three edge. The affidavit recites that it is based judg response summary motion for to their personal knowledge; although, an on at plead ment. assert the Appellees further deposition, earlier the affiant stated she raise the affirmative adequate is many memory of of the same facts lacked defense. later swore to the affidavit. which she recently has Supreme The Texas Court readily The admitted her lack of affiant unpleaded held that affirmative an defense confusion, thyroid memory and but cited a summary a may the for serve as basis contributing problem to such lack of as in the motion judgment it is raised when re- and confusion. record memory time, judgment for the first summary objected Gillespie’s flects that party object does not opposing and the grounds. The first on on two affidavit pleading either its the lack of a Rule personal knowledge of of lack of basis the rendition of response written or before second was the affi- the affiant. The judgment. v. and Roark Stallworth Oil legal davit conclusions. contained Inc., 492, (Tex.1991). Gas, 813 S.W.2d context, summary judgment In a Appellant’s direct the trial court’s failure to clearly has Supreme Court stat Texas pleading of attention to the absence summary objections to a motion for ed that legal justifica- of defense affirmative writing and judgment must he before complaint raising any tion such for the bars permit appel in order trial court Roark, time at appeal. first on S.W.2d late decide whether “the issue court to Point of Appellant’s Error No. 495. by and presented to considered actually light disposi- of this is Two overruled. City Houston v. Clear judge.” trial Two, Error No. need of tion of Point of we 671, Authority, 589 Creek Basin Appel- the issue of whether the address ruling by the trial Additionally, 677. Original time- lees’ First Amended Answer by objecting court must be obtained the affirmative de- ly adequately raised appellate error party preserve legal justification. fense of 52. Tex.R.App.P. See Sem review. State, (Tex.App. OF RECOVERY IV. THEORIES — Fort n.w.h.); Pipeline Worth Utilities error, Hopkins of as- point In his third 719, 723 Petrofina, 760 S.W.2d American granting court erred sum- serts trial 1988, writ); no See also (Tex.App. Highlands’ — Dallas and mary judgment in Watson Corporation, Forest Lake Manoogian v. as issues of materi- Agency’s insofar favor (Tex.App. — Austin his theories of fact as to each qf al existed n.r.e.). 'd ref noted, Hopkins suit recovery. As filed Company and against Highlands Insurance find it the record and
We reviewed have Inc. Agency, Goodman-Watson obtained silent as to whether alleging Agen- Deceptive by violations of the Trade made either or Watson Act, cy. Practices tortious interference with relationship
contractual and breach of the testimony repre- Hopkins’ admitting no faith fair conclusively him sentations were made to negation
established the an essential of his of action for violation element cause Deceptive A. Trade Practices Act Deceptive Trade Practices Act mentioned, Hopkins previously As Agency. Brad- Watson See Deceptive asserted violation of the Trade Accordingly, 34. ley, 659 S.W.2d at Specifically, Hopkins Practices Act. con summary alleged judgment as to the De- Appellees tended violated Section 21.- ceptive af- Trade Practices Act violation is 21(4)(1) Texas Insurance Code and discussion, light firmed. above that such violation serves as the basis this need issue Court does not address the the Deceptive Trade Practices Act claim whether a consumer under per Tex.Bus. & Com.Code Ann. 17.- § Deceptive Trade Practices Act. 50(a)(4) (Vernon 1987). Appellees sought obtained B. Tortious with a Interference alleged Deceptive Trade violations *5 Relationship Contractual by Hop Practices Act which were asserted Hopkins bases his claim of inter- tortious particular, Appellees kins. In contended relationship ference with his contractual Hopkins that that representa admitted no Magnolia with on his exclusion from tions made by Appellees, were to him insurance was It that exclusion further, Hopkins that was not a “consum by that led his termination law, er” as matter of a as defined in Sec Magnolia. tion of the Deceptive 17.45 Trade Practices contention, accepting Appellees’ Act. In elements tortious interfer we Appellees successfully find that have (1) relationship ence with a contractual are: disproved at least one of Hopkins’ element (2) the existence a contract or willful thus, and, cause action summary judg (3) act intentional of interference that was proper. ment Bradley v. Quality Ser (4) proximate damages a cause of actu Lines, 33, (Tex. vice Tank 34 damage al or loss occurred. Plains Mid 1983); Rayos Chrysler Corp., v. Credit Industries, Reeves Farmland 768 546, (Tex.App.—El S.W.2d Paso (Tex.App.—El Paso 1985, writ). no denied); Mora, Armendariz v. (Tex.Civ.App.—El Paso brought pursuant In an action to Texas n.r.e.). writ ref’d 21.21(4)(1), Insurance Code art. plaintiff must that show the insurer made or false outset, At we note the trial misleading representations of policy found Agency court that Watson did not contract. Consequently, making any “make determination as to what driv representation is an of a essential element ers or would should be excluded under the 21.21(4)(1). violation Article Moreover, policy Magnolia.” issued to supports Agen record the fact that Watson case, In the instant trial court found cy merely a messenger relay served as representations that no oral were made to Highlands’ insured, decisions to its Hopkins, Hopkins nor did ever discuss Magnolia. policy employees insurance with of either Highlands or Agency. supports Watson The trial as Insofar the evidence the trial findings amply supported by finding court’s Agency are court’s did not Watson Hopkins’ deposition of, readily he ad- complained they where commit acts cannot (cid:127) Highlands mitted neither tortiously interfering nor be for Watson liable with Agency representations any relationship ever made Hopkins contractual en- Further, Hop- him. joyed Magnolia. the court found that with kins any representation aware of Agency to Watson for the attempting to contract. In es-
claim of interference
a contractual
with
legal jus-
defense of
tablish its affirmative
relationship is affirmed.
tification,
Highlands
did
asserts
hand,
does
On the other
the record
risk; thus,
accepted guidelines for
not meet
made all decisions
reveal
excluding him
they
justified in
from
pertaining
Highlands,
howev
liability policy. Ac-
coverage under the
er,
meet
not assert
failed to
did
of the insurance
cordingly, a brief review
any
requisite
to establish
elements
by Highlands
Mag-
in favor of
policy issued
claim; rather,
solely
his
on the
relies
nolia,
as pertinent
as well
administrative
legal justification
defense of
affirmative
by Highlands
regulations allegedly used
liability
for interference
absolve itself
policy’s
terminate
from the
cover-
relationship. Highlands,
with a contractual
age
in order.
Corp.
Dept.
citing Deauville
Federated
case,
instant
the insurance
Stores, Inc.,
(5th
756 F.2d
Cir.
those
“insured” to include
truck
defines
1985),
that one
recover for
asserted
cannot
employed Magnolia. The
drivers
truck
re
tortious interference with a contractual
and, thus,
individually
are listed
drivers
lationship when
taken are those
actions
bodily
injury
have individual
protect
one’s
which are based
efforts
by the
property damage
caused
individ-
regard,
legitimate
own
interests.
driver;
defending
expenses
ual
court found
had estab
trial
claims; by an
mo-
uninsured/underinsured
legal justification.
the defense of
lished
endorsement; by
personal injury
torist
Interference
contractual
(including
protection endorsement
loss
from
privileged
relations is
where it results
driver);
for the
and by
income
individual
rights
party’s
exercise of
own
expense
medical and funeral
endorsement.
party possessed
equal
an
or su
where
*6
coverage for
policy provided
The insurance
perior
plaintiff
to that of
interest
until such
each of the individual drivers
Pipe Line
subject matter. Black Lake
specifi-
driver was
time that
individual
Compa
Company v. Union Construction
Although
Gillespie
Diana
cally excluded.
(Tex.1976);
Inc.,
ny,
538 S.W.2d
Hopkins
not a named in-
stated that
Caballero,
Maynard
sured, there is evidence that the names of
denied).
Paso
(Tex.App.
— El
Highlands
to
all drivers were submitted
held,
fac
this Court
that the
Maynard,
along
application
with the
for insurance.
determining
consider
whether
tors to
liability
Consequently,
poli-
at
the time
improper
is
include the follow
interference
issued,
were
cy was
all drivers
covered.
ing:
then
Highlands
determined which drivers
conduct;
(a)
nature of the actor’s
coverage pursuant
from
to its
to exclude
motive;
(b) the actor’s
Highlands
guidelines.
respect,
as-
coverage
Hopkins
excluded
from
(c)
of the other
which serts it
the interests
interferes;
interest.
protect
conduct
own financial
the actor’s
(d)
sought
interests
to be advanced
guidelines
by High-
The internal
utilized
actor;
by the
summary judgment
sup-
evidence
lands as
(in
(e)
party’s
social interests
one
he was
port Hopkins’ assertion that
exclud-
contract);
and the
actions
others
policy under
from
of the
more
ed
fellow
stringent
standards than other
co-
(f)
proximity or remoteness
interference;
guidelines provide
Those
as fol-
conduct
workers.
actor’s
lows:
parties.
relations
(g) the
between
If Motor Vehicle Record shows that a
721, citing Re-
has
driver
752 S.W.2d at
Maynard,
Torts,
(1979).
(Second) of
(3)
statement
(1)
moving
§
More than three
viola-
(3) years;
past
in the
three
or
tions
case,
issue is
central
In the instant
(2)
(2)
than
where
More
two
accidents
established
or
whether
fault; or
or she was
rights under the
he
of its
bona fide exercise
(3)
(re-
Any
Transportation regulations, Hopkins
combination
accidents
fault)
truck
gardless
moving
disqualified
operating
from
driv-
viola-
(3),
of em-
greater
er. While the notice of termination
tions that total
than three
Hopkins
given
ployment that was
that driver should be considered for
regu-
Magnolia did cite to violation of those
coverage.
for
exclusion
lations, Highlands
present
failed to
sum-
If the
Motor Vehicle Record shows that
mary judgment
evidence that violations
driver has been convicted of:
regulations
by them
those
were considered
(1) Driving under
the influence of
in the determination of whether
exclude
drugs;
Further,
liability
Hopkins
from
(2) Driving under the influence of alco-
Hop-
judgment
the trial court states
hol;
liability policy
kins was excluded from the
(3)
driving;
Reckless
Highlands’
guidelines.
pursuant
internal
(4)
operator’s
If the
license
current-
purported
any
is silent as to
ly suspended, that driver should be
Department
Transpor-
violations of the
from
excluded
regulations.
tation
[Emphasis added].
Further, assuming that
the referenced
Department
The records from the Texas
Department
Transportation regulations
of Motor Vehicles on which
re-
fact used to determine whether or
lied to exclude
from
list-
Hopkins,
question
not to
exclude
material
violations,
only
moving
ed
three
each for
of fact
The regulations
then exists.
re-
such,
speeding.
As
failed to meet
quire
suspension of
truck driver who
the criteria
automatic exclusion from may have
or more
three
convictions for
coverage under the terms of the second
speeding” on their
“excessive
record within
paragraph
point, Hop-
More
above.
period.
year
a three
49 C.F.R.
383.-
§
kins’ driving
Department
record from the
51(c)(2)(ii)(1989). However, at the time
of Motor
failed to
Vehicles
rise to the level Highlands
excluded
from cover-
where he “should be
considered
exclu-
age,
regulations
contained no definition
paragraph,
sion” under the first
as those
speeding”.1
A
“excessive
material fact
guidelines clearly specify that
takes
Appellees
issue exists insofar as
failed to
moving
“more than
three"
violations
present summary judgment evidence which
reach that level.
*7
Hop-
would serve to establish that each of
Highlands
We find that
failed to follow kins’ traffic offenses constituted “exces-
guidelines
own
determining
its
internal
speeding”
sive
as a matter of law.
Hopkins
whether or not to exclude
from
find
We
that
affirmative defense of
coverage. Moreover, we
that High-
find
legal justification
proven
has not been
as a
applied
stringent
lands
a more
to
standard
guidelines
matter of
since
law
consult-
Hopkins
guidelines permitted.
than its own
by Highlands
determining
ed
whether to
we
Accordingly,
Highlands
find that
was
Hopkins
support
exclude
does not
the can-
not,
law, justified
as a
of
matter
exclud-
policy
Hopkins.
cellation of the
as to
We
ing Hopkins
from
High-
While
Depart-
further find that
United States
coverage
lands can exclude from
those indi-
Transportation regulations,
of
ment
to the
risk,
pose high
they may
viduals who
a
not
may
regulations
extent
that
those
have
arbitrarily
those
exclude
individuals whom formed a basis for the decision
exclude
to
insure,
they already
contrary to their own
question
Hopkins
coverage,
from
created a
guidelines.
internal
of material fact as to
constitutes “ex-
what
Highlands additionally alleged
pur-
speed”
by
cessive
which is best
a
resolved
of
Department
Accordingly,
suant to the United
summary
States
fact finder.
1989,
3,
subsequent
m.p.h.
speed
posted
1. We note
in excess
October
of 15
over the
case,
Hopkins being
policy,
Hopkins’
a
to
excluded from the
limit.
In the instant
each of
speeding
published
speeding
traveling
definition for
over
excessive
was
tickets
for
54,
Register,
m.p.h.
speed
speed
in the Federal
Volume
No. 190.
of 65
but under the
of 68
traveling
m.p.h
speeding
m.p.h.
Excessive
is now defined as
in a
zone.
55
“three-party
judgment
alleged
agree-
as to the
tortious inter-
insurance involves
relationship
Aranda,
ference
a contractual
at 212.
with
ment.”
748 S.W.2d
is reversed.
compensation
“the
car-
contract between
the same
employee
type
rier and an
creates
Duty
C. Breach
Good
of
of
special relationship
under other insur-
and Fair Dealing.
Faith
employed
ance
The Court
contracts.” Id.
again
analysis
Once
we note that the record es-
determine
three-party
that the
Agency
Watson
not com-
reality purchased
tablishes that
did
for
insurance was in
thus,
complained
and,
mit
the acts
can-
The
employee.
benefit of
arena of
tortiously interfering
held
for
be
liable
compensation insurance
analo-
worker’s
relationship
with the contractual
which gous
to the
in the
truck fleet
case
Likewise,
Magnolia.
enjoyed with
on review.
Agen-
evidence establishes
Watson
case,
analogous
In another
St. Paul
cy
responsible
acts
was not
of the
Luker,
Co. v.
Guardian Insurance
which
claims amounted to a
614,
(Tex.App.
— Texarkana
Agen-
good
breach of
faith because Watson
1990, writ),
no
a homeowner’s
cy merely
messenger
relay-
served
plaintiff
of the
issued
the father
insured,
Highlands’ decisions
coverage against fire loss for the home and
Magnolia. Accordingly,
Although
the father
contents.
owned
of the duty
good
for breach
home,
plaintiff
resided there. Af
dealing
Agency
faith and fair
as to Watson
fire,
ter a
the father filed a claim for the
is affirmed.
house,
plaintiff
value of the
filed a
duty
good
The
faith and fair
contents.
claim for the
of the
The
value
special relationship
of a
dealing is a “result
company
insurance
denied
governed
parties
by
between the
or created
plaintiff,
plaintiff
alleging
sued
and the
Co.,
a contract.”
H.
&
William McGee
duty
good
faith and fair
breach
Schick,
(Tex.
Inc.
792 S.W.2d
dealing.
company
insurance
asserted
App.
granted), citing
— Eastland
duty
persons
that no
not named
is owed
County
v. National
Fire
Arnold
Mutual
reject
in the
The court
Id. at 618.
Co.,
(Tex.
Insurance
determined
ed this contention and
1987);
Security
also
National
See
Viles
person purchases
insurance for the
where
Company,
another,
contracting
benefit
both
(Tex.1990).
argues
that since
party are owed the
party
duty
and the third
contract,
pur
the insurance
which was
Specifi
good
faith
fair
Id.
Magnolia,
purchased
for its
chased
cally, the
held “that when an insurer
court
own
there is no
protection,
contract
agrees
party
beneficiary
insure a third
from
faith
which
contract,
under the
terms of an
*8
flows,
disagree.
required.
as
We
good faith
duty
owes the same
of
and fair
policy specifically
The insurance
defines
dealing
party
third
as
does to the
the
include those truck
“insured” to
drivers
purchaser
the insurance.” St. Paul
of
by
employed Magnolia, of
which have been
Co., 801
Guardian
S.W.2d at
Insurance
In
one.
Aranda v.
which
was
618-19.
America,
Company
North
Insurance
of
above,
From the cases cited
we conclude
(Tex.1988),
Supreme
the
duty
good
a
of
that
is indeed owed
good
duty of
faith and
Court extended the
dealing by Highlands,
faith and fair
as he
injured
in
dealing
fair
to flow to the
worker
beneficiary
under the
third-party
is a
situation,
compensation
even
worker’s
Sale,
Kennedy v.
trarily deny coverage_
premiums
or violation
place
duty upon
some
the assured.
Likewise,
duty, which
165 at 167.
without such a
arbitrarily
can
cancel
insurers
v. Ameri
G.A. Stowers Furniture Co.
Co.,
(Tex.
Indemnity
can
Comm.App.1929, holding approved) duty concluded that the carrier had a
Court standpoint from the of the as
as “viewed if to decide a case should be settled.
sured”
Although
at
ted to cancel with TEXAS, Casualty State Farm Fire & duty being owed to its assured. Co., Farm Automobile In State Mutual Co., Benavides, Jr., Appel Raul surance Corporation Superior Unocal lees. Corpora Harbor Court and tion, Cal.Rptr. Cal.App.3d No. 04-91-00152-CV. Dist.1988), (2nd the court noted Texas, Appeals Court right companies to cancel San Antonio. is not that cancella policies absolute and provisions policy tion an insurance are Sept. 1992. good subject to the covenant of faith Rehearing 1992. Denied Oct. dealing. That fair decision followed holding Spindle In earlier v. Travelers Companies, Cal.App.3d
surance (2nd Dist.1977) Cal.Rptr. 404 where
court said: logical any are unable
We to discern an in- distinguishing
basis between made settling conduct a claim
surer’s involved
pursuant and that policy if bad- cancelling
in an insurer’s is the basis for the cancellation.
faith Cal.Rptr. 404 at 408. hold is no
I would there coverage that a carrier
initially provide reject for insur- accept request
may might choose. any standard it
ance may
But, coverage provided, once indiscriminately cancel policy is policy period. Once a
during a
issued, duty it must exercise a regard dealing and fair
faith it makes terminate
decision coverage automatically expires.
before abso- regard, recognize I an
In this would *10 non-payment of right to cancel for
lute