*1 166a(c). days required by Rule notice One, Ltd., v.
Verkin Southwest Ctr. [1st — Houston denied). inAnd consider Dist.] writ trial court can requests, continuance plaintiff investigated has presume that filing. McAllister v. prior his own case Samuels, (Tex.App.— writ).
Houston [14th Dist.] record, we reviewing note White, below, received more plaintiff twenty-one days
than notice of the sum- Furthermore, mary judgment hearing. any deposition did file notices and she Compel failed to file a Motion to Dis- she covery until filed second Motion she her Additionally, for Continuance. she did not in her clarify the trial court Motion why the of the depositions Continuance corporate representatives imperative were summary judgment. to defend reasonably And the could de- court have poli- the PMI discovery termined that unnecessary irrelevant to the cies was legal issues in this determination that the trial court did not case. We hold it denied abuse discretion when White’s Accordingly, Motion for Continuance. we overrule two. issue trial
We affirm the court. INTERNATIONAL, INC.,
ROCOR f/k/a Carriers, Inc., Appellant, Donco UNION FIRE INSUR- NATIONAL PITTS- ANCE COMPANY OF BURGH, PA, Appellee.
No. 04-96-00536-CV. Texas, Appeals of Court of San Antonio. May *2 Kincaid, Horton, L Jay
Mark Kincaid & Austin, Harvey, Harvey, Winckler & appellant. McFarlen, P.C., Brin, Brin
Gerald D. & Antonio, Nye, San Thomas F. Linda C. Breck, Brin, P.C., Christi, Corpus Brin & appellee. HARDBERGER, Sitting: PHIL Chief Justice, RICKHOFF, Justice, TOM LÓPEZ, Justice, ALMA L. CATHERINE STONE, Justice, GREEN, M. PAUL W. Justice, DUNCAN, Justice, SARAH B. ANGELINI, Justice, KAREN En Banc. Opinion on Motion for Reconsideration
En Banc
Opinion by: Chief PHIL Justice HARDBERGER, joined by Justice LÓPEZ and Justice STONE. by This case has been reheard result, court en banc. As a this court’s opinion 14, 1998, judgment January are opinion by withdrawn. The authored Hardberger Chief Justice concludes that legal Rocor has a cause of action carrier, Union, its excess under (1) two failure in good theories: to settle faith under section 21.21 of In the Texas (2) Code; surance negli common law gence. original consistent panel opinion decision. The authored agrees Justice Duncan that Rocor has a legal cause of action under common law disagrees but there is a cause of action under section 21.21 of the dissenting good faith claim Insurance Code. The ure act to settle a Texas 2) clear; con- opinion reasonably authored Justice Green once became legal cludes that Rocor does not have trial that National evidence at showed Un- theory. cause of action either Rocor; misrepresentations ion had made signed by Duncan is Justice negligent had been and National Union *3 a upon vote that Rocor has based the a failing promptly negotiate to settle- law negligence of action for common cause ment. three cross- brings (Chief López, Hardberger, Justice Justice 1) improperly that trial court points: the Stone, Duncan, Justice and Justice Justice general question negli- a on submitted Rickhoff) and not the vote that Rocor does 2) the trial gence jury; court 21.21 have cause action under article a erred, granting judgment in its order Code, and, there- Texas Insurance the n.o.v., by interpreting jury’s the verdict on (Jus- fore, attorney’s to not entitled fees 3) evidence, damages; no and that there is Rickhoff, Green, tice Dun- Justice Justice evidence, support the or insufficient to can, Angelini). and Justice jury’s attorney’s fees. assessment of driving from a drunk This suit arises judgment the n.o.v. We would reverse a truck em- accident. driver entirety. in its jury’s and affirm the verdict Rocor, struck and ployed by appellant, Early highway patrol two officers. killed OF FACTS SUMMARY incident, it be- of the investigation the May trucking company. Rocor is a apparent came that the Rocor driver 1989, a left a Antonio bar Rocor driver San the drunk at wheel. The families or consuming after four five scotch and suit Rocor. brought officers later, the A few hours driver waters. liability, put pri- its Recognizing its Rocor highway patrol offi- struck and killed two mary and excess insurers on notice drunk stopped cers had another driv- who the early anticipated settlement Both officers er the side of the road. carrier, appellee claims. Rocor’s excess killed, were and their families filed suit Union, ne- took over settlement against Rocor. gotiations, a settlement was but 1991, nearly until March two reached attorney, Terrence experienced Rocor’s Rocor years after the accident occurred. Martin, investigation an initial conducted it in- expenses sued National Union for liability. the to possible case determine during trial the preparing curred a defense an interview investigation included claiming that Na- negotiations, driver, he who claimed that with the truck engaged in insur- tional unfair Union had the the truck when driving had not been under article 21.21 of practices else that someone accident occurred but and under the Tex- Texas Insurance Code the wheel while gotten had behind (DTPA), Deceptive Trade Practices Act The in the back. driver asleep driver was misrepresentations made and had material memory person might had of who After regarding to settlement. Rocor been, was ever person have and no such granted the trial court National Union’s flee- apprehended The driver was located. on for a directed verdict the DTPA motion from the scene of the accident. foot claim, that National Union jury found his this interview and On the basis of negligently, had in bad faith and settled story, $123,000 damages, Mar- Rocor to confirm the driver’s inability it awarded concluded, fees. The trial plus attorney’s interest and a of the acci- tin within month mo- granted National Union’s dent, court then and that that Rocor was liable verdicto, non obstante judgment tion for a dollars, to millions of amount could n.o.v. trial. go were to to especially if case Arzaga, president, Angel Rocor’s vice claiming points in three appeals, Rocor he Martin contact agreed, and directed standing under of error that Rocor had plaintiffs begin immediate settle- fail- Insurance Code sue Texas for. negotiations. By ment Martin on what parties essentially agreed did so. were January, the case was set for mediation. attorneys the case should settle for. The trial, go estimated that were case to approached negotiations with however, liability, including possi- Rocor’s protection: three sources of insurance punitive damages, ble could be assessed at itself; deductible it carried on $l-million up year million. Almost another $20 primary policy, under which Ro- $l-million pass would before the case settled. right cor retained the to defend itself at trial; policy and an excess $8-million plaintiffs’ attorney testified at trial Union. This did not in- beginning he believed almost from the a duty part clude on National Union’s to that the suit could be settled in the $6- defend Rocor in the of a event lawsuit. range. acknowledged million He ” *4 Before mediation begin, could spring, sometime that he sent a “Stowers Union liability likely advised would letter, demanding that the case be settled reach layer the excess took coverage, limits, for the or million. policy $10 over all negotiations settlement direct- that, letter if put National Union on notice ed that mediation efforts be halted and occurred, no settlement National Union plaintiffs. no offer be made to the liable, law, could be under Texas for attorney, Stanley National Union’s Ren- judgment against excess failing Rocor for neker, authority assumed for resolution of policy. to settle within the limits of the and Martin relegated was to act- See G.A. Stowers Furniture Co. v. Ameri ing at Renneker’s direction. (Tex. can Indem. In April National Union made its App.1929, holding approved) Comm’n first offer plaintiffs: million. $2.8 (holding insurer to in good settle This offer did not represent any National limits). policy faith claims made within Instead, Union funds. it reflected Rocor’s According to trial testimony, parties deductible, the $l-million Na- $l-million import understood the of this letter and Guaranty tional policy, and the insurance plaintiffs’ attorney understood that policies of two other parties, the bar that willing would be for settle less than $10 driver, had served the and a “bobtail” poli- million. with no in cy that covered the driver when he was Martin, sight, attorney, Rocor’s had no driving rig scope outside the of his option other than continue prepare for employment.2 short, Union, in trial. charge negotiations, offered everyone’s 11, 1990, May letter, In a put Martin money but its own. National Union on notice that it should attorney The for the officers’ families settle the case assume Rocor’s costs for rejected million, the offer of in $2.8 letter, preparing a trial defense. In this May plaintiffs’ attorney made pointed Martin out that the driver’s ver- that, demand for a settlement including sion of events had not been substantiated offer to settle the children’s sepa- estates and that Rocor if faced serious rately, amounted to fig- million. This $6.3 case went to trial. National made ure was harmonious with amounts Rocor no additional settlement offers. and National Union independently had ar- In September Martin learned rived at in evaluating May the case. On about the offer to settle the children’s there agreement Martin between plaintiffs’ attorney claims. The had made and Renneker that the value of the case earlier, this offer five months in April, was between for million. $6 The $6.5 $400,000 upper end plaintiffs per plus attorney’s was more than the child fees. on, were demanding, point so from that all Arzaga Martin and they testified that had end, In the neither the bar's insurance nor of the claims. the bobtail was used toward settlement knowledge of it September. before The its motion for based directly settlement was to come from Ro- judgment grounds. n.o.v. on nine Al- primary cor’s deductible and its $l-million though National Union claims that Rocor’s that, Trial coverage. evidence shows fol- three fail to each of points of error address offer, lowing discovery Martin’s grounds, they these we find that accurate- children’s case settled October. ly encompass n.o.v. motion. in The entire case settled March 1991. appeal, presented The issues on here for year This was more than a after National clarity different order from Rocor’s responsibility Union assumed settle- 1) brief, are: does Rocor have a cause of million, ment. case settled for $6.4 action under the Texas Insurance Code nearly exactly what both Martin and Ren- practices unfair based on failure business neker estimated it should have settled for 2) faith; in good to settle does Rocor have May brought 1990. Rocor to recov- suit cause of action Na- expenses preparing er used a trial had sufficient, Union; tional and was there 1,1990. defense after June misrepresentations evidence of material National Union that resulted STANDARD OF REVIEW damages to Rocor?3 judg- This case comes before on a us *5 for moving judgment, ment n.o.v. FAITH BAD SETTLEMENT deficiency
National Union raised both
of
PRACTICES
proof claims and claims that
no
Rocor had
legal cause of action. Because the trial
alleged
pleadings
Rocor
in its
that Na-
judge
upon
did not indicate
which of these
article 21.21 of
tional Union had violated
motion,
granted the
Rocor
claims she
must
by
attempt-
the Texas Insurance Code
address and refute each of them. Fort
a fair settle-
good faith to effectuate
Sbrusch,
County Drainage
Bend
Dist. v.
reasonably
ment
clear.
liability
once
(Tex.1991).
818 S.W.2d
(Vernon
ANN. art. 21.21
See Tex.Rev.Stat.
A judgment
deficiency
n.o.v. based on
of 1981)
Insur-
(listing
practices
unfair
under
proof
appropriate only
is
when there is no
Code).
argues that
upon
jury
evidence
which the
could have Rocor
of
under
private
has no
cause
action
findings. Dowling
made its
v. N.A.D.W.
disagree.
article 21.21. We
(Tex.
Inc.,
Marketing,
631 S.W.2d
21.21
the Texas
Article
Insurance
1982). In reviewing
judgment,
such a
we
practices
unfair
Code enumerates
must view all facts and draw all inferences
consequences
and the
of those
Code
nonmovant,
in light
a
most favorable to the
acts.
of article 21.21 creates
Id. Section 16
ignore
and
all evidence and inferences to
any person
contrary. Bray
McNeely,
privaté
682 a
cause of action
injured by
engag-
[1st
another’s
who has been
— Houston
writ).
A judgment
n.o.v.
Dist.]
ing in:
legal argument
proper only
based on a
1) any
declared to be
practices
when the trial court can determine as a
21.21;
deceptive by
4 of
unfair or
Section
matter of law that the claim or defense is
regula-
in rules or
conduct defined
Bend,
not viable. See Fort
lawfully
by the Board un-
adopted
tions
(affirming judgment
n.o.v. where court
unfair
der article 21.21 as
methods
legal duty
found defendant owed no
acts
competition
deceptive
and unfair or
plaintiff).
ruling.
complain
motion
Rocor does not
of that
3. National Union also based its
on
original
Therefore,
grounds stemming
two
from Rocor’s
Un-
we do not address National
pleading that National Union had violated the
grounds
trial
and assume that the
ion’s DTPA
granted
Texas DTPA.
the trial court
judge disposed
the directed ver-
of them in
a
Union on the
directed verdict to National
dict.
and,
appeal,
we read Rocor’s
DTPAclaims
as
21.3(b).
insurance;
§
practices
deceptive.
or
the business of
28 Tex. Admin. Code
Vail,
Supreme
the Texas
Court deter-
3) any practice
by
mined that the failure to conduct reason-
defined
Section 17.46
Code,
of the Business & Commerce
as
negotiations
able settlement
was an unfair
amended, as an unlawful
practice.
Vail,
trade
practice.
trade or
Having determined that Rocor does addition, negligence Union.4 have a cause of action under the Insurance fairly was debated at trial. Evidence on Code, we also hold Rocor’s evidence fact, duty presented; was Renneker was prove sufficient to that National Un- conceded that National duty Union had a engaged ion in unfair practices. to Rocor. Whether was breached A cause of action for failure to settle through was debated evidence on what good faith is stated when it is alleged that Finally, constitutes conduct. whether Ro coverage should “reasonably have been damaged cor by con Union’s Giles, clear.” Universe Ins. v. Life through duct was debated witness testimo (Tex.1997). 54-6 Viewing, as ny. The issue of by was tried must, we light evidence most (when consent. See Civ. P. 67 Tex.R. Rocor, favorable to and ignoring all con- by pleadings by issues not raised are tried trary inferences, facts and we find that consent, express implied they shall be presented sufficient evidence to de- Sage treated as raised pleadings); feat a judgment n.o.v. Rocor demonstrated Street Assoc. v. Northdale Construction parties that all involved the settlement Co., (Tex.1993) (find understood that liability was obvious and issues had been tried consent where potential high damages *8 both positions sides advanced their at tri against award Rocor great. was Rocor al). that, presented testimony nearly year one There was sufficient evidence to show settlement, before National Union’s attor- that National Union has breached a com- ney had assessed at nearly exactly duty ordinary mon law of In care. the what it would eventually settle for. In prevent event that Head does from Rocor addition, Rocor offered evidence that all recovering damages against its own parties the involved had arrived at a simi- Code, insurer under the Insurance we hold figure lar at about the same time. Rocor claim, that a negligence duty based on the presented also evidence that National Un- Stowers, ion had been less than established in honest with Rocor is sufficient to during negotiations, even when National overrule the n.o.v. objected legal
4. National Union charge to the stan- but not to the itself. We discuss the negligence given charge. dard jury opinion. in the standard used later in this 812 and, in duty agent, their the assured ... as such
Insurers owe a to it ordinary sureds exercise care at ought degree to held to to be that care of Farm tempting to settle a claim. Texas diligence ordinarily pru- and which an Soriano, 312, Ins. v. ers Co. 881 S.W.2d person dent would exercise in the Stowers, (Tex.1994); 15 at 547. 314 S.W.2d management his own business. of establishing duty. the case this Stowers is added). (emphasis Id. Stowers, In the court held that an insurer recognize We that National Union to may negligently failing be liable for had no to the duty defend under policy limits claims made settle within of the express agreement terms between Stowers, against its insured. 15 S.W.2d as parties. National Union the. Stoivers, supreme 547. Since the court has fairly to duty sumed the settle the claims duty held an to its that of insurer against negotia Rocor when it took over “investigation, prepara includes insured tions, involving including negotiations lawsuit, tion for defense of the trial of funds that it did not control. National attempts and reasonable to settle.” ways: may have it Union not it both Ex Physicians American Insurance Garcia, handling not take exclusive control change 849 v. 876 S.W.2d (Tex.1994); against claims its insured American Centennial Insur and then Co., v. Canal Insurance Co. claim in that it be held hable court cannot (Tex.1992). S.W.2d it mishandling those claims because duty had no contractual to defend. The principle National Union raises two ob- right negoti to assumption of exclusive 1) jections it claim: that gave a to thé “special ate rise 2) Rocor; duty owed no that defend duty relationship” upon which Stowers duty no is owed to insureds excess duty Keightley Republic carriers who have no to defend. We v. Ins. rests. Cf. reject arguments. each of these (Tex.App. 946 S.W.2d — Austin duty (finding reinsurer had of ordi duty question of law. Whether exists is where, nary care to insured absent con Transp. Phillips, Greater Houston Co. v. duty, tractual took over insurer’s reinsurer (Tex.1990). Stow- handling), joint claims motion in ers, rev’d on that Supreme Court of Texas held “duty an settlement. Union has insurer has exercise view National ordinary degree person care testimony that a assumed con refuted prudence care and would exercise fact, admitted at trial trol. Renneker circumstances, or similar and a same recognized it owed prudence failure exercise such care duty, especially Rocor a when National Stowers, negligence.” would be Rocor’s mon negotiating Union was at 547. princi The Court based broad ey. nearly con ple the insurer’s exclusive states there is against trol of the suit its insured: relationship insured Stowers between indemnity right company [T]he had the carrier and its excess carrier where the complete and exclusive control take Citing insured. has no to defend the assured, of the suit Group, Ins. Mfg., Emscor Inc. Alliance prohibited from absolutely assured — Houston settlement, his making except at denied), 1994, writ [14th Dist] any ne- expense, own or to interfere in *9 carrier, let that excess argues Union no gotiations legal pro- for settlement or duty to an with no alone excess carrier ceeding without the consent defend, special relationship giving has a in- Certainly, an company.... where to a its Emscor does duty rise to insured. makes such a con- company surance Emscor, In the position. support not this tract; it, by the terms the con- very require the insured never met contractual tract, act responsibility the assumed its trigger coverage from agent as of ments needed to the exclusive and absolute delays court appellate excess carrier. What the available for settlement. See reaffirmed, then, Arnold, that, was that the limits of the (stating at 167 primary policy action, insurance must be exhaust insurers without such cause of primary right the ed before carrier “has delay arbitrarily deny coverage can require to” the excess carrier to contribute payment penalty of a claim with no more (citing to a settlement. Id. at 903 owed). than interest on the amount Indem. Ins. York v. Co. New Certain appeals A Texas court of decision recent Lloyd’s, at F.Supp. Underwriters duty has declined to extend the Stowers (S.D.Tex.1985) added)). (emphasis beyond duty protect insureds from While the Emscor court did note that it liability coverage. in excess of Dear v. had apply never been asked to a Stowers Scottsdale Ins. 947 S.W.2d before, duty to an excess carrier it went on denied). writ To — Dallas Furthermore, to address the issue. we do an in suggests the extent that Dear not hold here that all excess carriers with may damages sured not recover for an duty to defend have settlement duties. negligent practices, insurer’s settlement negligence holding Our is based Nation However, disagree we with this holding. al assumption negotiations. Union’s we do not believe the decision Dear As a result of the decision in necessarily conflicts with our decision Stowers, Texas, a rule of law in appropri Dear, here. the insured sued his in Doctrine, ately called the Stowers has de settling brought against surer for claims veloped. This rule an holds when him defending rather than them court. offer to policy settle within limits made that, The court held under the contract insurer, to an duty the insurer has a parties, between the the insurer had an if ordinary person settle an would do so. right absolute to settle the case without Guin, Ranger County See Mut. Ins. Co. v. consulting insured. The court (Tex.1987) (defining explained policy reasons behind Doctrine). duties under Stowers If the expanding Stowers did militate insurer breaches duty, the insured doctrine under these circumstances: liability sue for excess it incurs as duty Courts fashioned the Stowers the result of trial. avoid effects a conflict of interest
Rocor’s claim neatly does not fall between the insurer and its insured. into the paradigm. Stowers National Un conflict arises because the insurer settle, ion did and there is no excess lia settlement, has sole control of limit- but bility charged against Rocor. liability. ed When the insured faces ex- under the broad negligence principle out posure policy’s near or above the liabili- elsewhere, lined in Stowers and limits, ty exposure remains limited Union owed duty Rocor a to handle claims policy terms. way it in such a as to minimize Id. at 915. We find that these same con- Rocor’s and damage to its fi here, play cerns are at where National nances. supreme court recog has exposure Union’s was limited to the nized that in settling claims and, duty limits it had no to de- because necessarily does not have to fall within fend, drag it could out settlement for as Garcia, Stowers to be actionable. long pleased as while Rocor continued to stated, expanded court court has “[T]he pay essentially unnecessary what were an insurer’s to include acting preparation fees for a trial ordinarily prudent person in business everyone knew place. would never take the Stowers —whether Rocor has offered evidence that making doctrine or not—to include unrea Garcia, duty by National Union breached its mis attempts sonable to settle.” negotiations. do supreme handling 863. The court We has *10 recognized damages might also that peri- be not hold that there is an “ideal” time od in which settlements be competition must reached. insurers and so between is inapplicable. We realize that whether because of recalci- See Civ. Stat. Ann. art. Tex. 4(1)(2) 21.21, issues, § plaintiffs complexity (defining trance of or prac as unfair some longer misrepresentations cases take than others to tices and false adver circumstances, tising listing array practices apply settle. year Under some a ing directly to advertising). insurance be a reasonable settlement period. Section 21.4 of the here, Administrative Code But Rocor’s evidence shows that set- application, has broader prohibiting untrue tlement possible was June fact, statements of material omission of around million. original defen- $6.3 facts, misleading material information on dants agreed among themselves that this facts, material material misstatements of Yet, a figure. was reasonable a settlement law; and failure to any disclose matter was not reached year. for almost a Ro- required by law to be disclosed. Tex. Ad cor’s evidence further that shows § 21.4. Even if we were to find Union, through min. Code attorney, responsi- its was provision applicable this is to National delay delay ble for this and that this statements, grant Union’s we could not caused Rocor to incur damages. theory, relief under this because Rocor has Thus, Rocor negligence has sustained a any not demonstrated damages based on action, point and we affirm error. these misrep statements. To recover for resentation, a plaintiff must show MISREPRESENTATIONS a misrepresentation producing was cause error, In point its second injury. of its See State Farm Fire & Cas. challenges judgment n.o.v. because evi Miller, Co. v. 700 (Tex.App. supported jury dence at trial a finding that n.r.e.). —Dallas writ ref d Rocor’s at National Union had made misrepresenta torney expressly stated at trial that during tions to Rocor pro the settlement misrepresentations about settlement did cess. These misrepresentations include: preparation. not affect his continued trial May Renneker’s statement in 1990 that he addition, out, points as National Union believed the case would settle the end Rocor testified that it had no control over month, of the which he did not then follow negotiations. Any the settlement mis up with an plaintiffs; offer to the Rennek statement made to Rocor could not have er’s failure to disclose the offer he received process. affected the Full dis April May 1990 to settle the chil closure of the offer to settle children’s claims; dren’s and Renneker’s statement claims would not affected the have adults’ in December 1990 that the case had been claims, and Rocor would have had to thus settled for million. We overrule this $3.8 expenses preparing continue incurring point of error. trial. point We overrule this of error. 21.21 Article of the Insurance Code NATIONAL UNION’S CROSS POINTS
prohibits misrepresentations by insurers advantages about the benefits or brings three cross prohibits making any statement 1) points: the trial court erred respect to business of insurance submitting general question negligence untrue, deceptive, or misleading. 2) jury; trial court erred that the 21.21, § Ann. art. including advisory opin- Tex. Civ. Stat. addition, the Texas Administrative Code damages; ion on that there was no provision against misrepresen- contains a sup- evidence or insufficient evidence to § tation. See 28 21.3 port jury’s question answer to a on Tex. Admin. Code (prohibiting misrepresentations); id. at attorney’s fees. § 21.4 (defining misrepresentation). charges in its first cross provisions pro- that,
We do not believe these point because Rocor’s Stowers, grounds vide for relief here. Article 21.21 seems to be based Stowers Garcia, clearly applies advertising charge required. Citing and unfair *11 Perry Equip. Corp., v. S.W.2d at National Union claims dersen & Co. (Tex.1997). However, charge require jury the to de- this would S.W.2d 818-19 whether National behaved finality judicial termine Union decisions would be the rather ordinarily prudent as an insurer if were al seriously litigants undermined than, jury an charged, as the here was as unpreserved appeal error on lowed to raise Garcia, ordinarily prudent person. how- Therefore, law. on the basis of new case ever, question did not address the cross we will not consider National Union’s than appropriate whether insurer is more points. fact, person. quot- the court in Garcia Stowers, and, person, in CONCLUSION
ed
which uses
paragraph,
phrase
same
used the
“ordi-
Rocor,
in-
first-party
We hold
insurer,”
narily prudent
with no comment
sured,
against
had a
cause of action
legal
Garcia,
on which
appropriate.
was more
carrier,
Union,
its excess
National
at 848. Since Stowers remains
First, Rocor had
either of two theories.
law,
good
we find no error and overrule
standing
good
to sue for failure to settle
point.
this
the Texas Insurance
faith under
Code
21.21,
by
Supreme
§
explained
point
In its second
on
Na-
cross-appeal,
Second,
had a com-
Court Vail.
complains
judge
tional Union
that the trial
erroneously
against
mon law
cause of action
gave
“advisory opinion” in
Union,
judgment
by
his
n.o.v.
based on the
Nation-
calculating the
award amount Rocor would have received
al Union assumed when it took over settle-
jury
if the
negotiations
third-party
verdict had been allowed to ment
in the
claim
stand.
agree
do not
with Na-
Rocor. We
tional
that both causes of action are
point,
In its third
National Union claims
Rocor; otherwise,
closed to
insureds
jury’s
assessment
that National
condition, attempting
Rocor’s financial
pay attorney’s
Union should
fees
a rate
settlements,
effect fair and efficient
could
of 40 percent
sup-
of the award was not
their insur-
damages
never recover
when
or,
ported by legally
alternatively, factual-
contrary to
goals.
ers act
those
ly sufficient evidence. Rocor claims that
complaints
waived these
presented
also hold that Rocor
suffi-
We
by
objection,
accepting,
judg-
without
cient evidence on these claims to defeat a
ment n.o.v. and
objecting
judgment
motion for
n.o.v.
we
jury’s findings.
point
overrule Rocor’s
of error based on
misrepresentations.
National Union’s
We
agree
Although
We
with Rocor.
overrule National
cross
also
Union’s
procedure
appellee
rules of civil
allow an
points.
who
judgment
has secured a
n.o.v. at trial
objections
to raise
points
ap
cross
by:
Concurring Opinion
Justice SARAH
peal, this rule does not eliminate the basic
DUNCAN, joined by
B.
Justice
requirement
given
that a trial court be
RICKHOFF.
opportunity
to cure
ap
error before
peal
sought.
Tex.R. Civ. P.
see
324(c);
by:
Dissenting Opinion
Justice PAUL
Tex.R.App.
38(a) (requiring timely
also
P.
GREEN, joined by Justice
W.
objection
preserve
or motion to
most er ANGELINI.
ror); Western Const. Co. v. Valero Trans
DUNCAN, Justice,
SARAH B.
(Tex.
mission
concurring.
writ).
App. Corpus Christi
We
—
jury’s negligence findings
I agree the
supporting
are aware that a case
judgment should
must be reinstated and
point
Union’s third cross
was issued after
theory
rendered in Rocor’s favor on this
making
thus
be
preservation
liability.1 But I
not believe Rocor
impossible. See Arthur An-
do
Garcia,
(Tex. 1994) (ex-
Cf., e.g.,
Physicians
American
Ins. Exch.
*12
settle,
though
duty
promptly
er’s failure to
even
a
of action for
of a
has
cause
breach
coverage
I
excludes
dealing.2
policy specifically
faith and
Nor do
good
of
fair
It
expenses.
that National Union waived
for such
is
the latter
believe either
entitled
cross-points3
holding
respectfully
or that Rocor is
that I
dissent.
its
attorney’s
to an award of
fees.4
policy
The insurance
between Rocor and
indemnity
was an excess
National Union
GREEN, Justice, dissenting.
up to
limit
policy
promised
pay
11,
February
1998
My dissent
any judgment
primary
excess of the
panel
is withdrawn and the follow-
decision
coverage.
fully
insurance
ing is substituted.
obligations
policy,
under the
performed its
any duty to
specifically
which
excluded
question presented
is whether
notwithstanding,
That
five mem-
defend.
liability insurance
insured under an excess
permit
the court would
Rocor to
bers of
faith cause
policy
has a
and bad
from National
recover
its defense costs
against
of action
its insurer
to recover
holding
apparently
based
Union.
damages
by the
failure to
caused
insurer’s
duty
“fairly
settle”
on an insurer’s
third-party
claimant
promptly settle with
its insured when
takes
claims
reasonably clear.
after
has become
negotiations.
control of the settlement
court, including
Four members of the
However,
that an insurer
recognizing
even
author,
faith claim exists
hold
no bad
duties to its
may owe extra-contractual
five mem-
these facts.
relation-
arising
agency
out of the
insured
bers of the court hold that an insurer
in its conduct
defend-
ship
develops
caused to
negligent
be
when an insured is
settling claims on behalf of
ing
incur
as a result of the insur-
and
defense costs
range of the
plaining
duty
duty “extends to the full
that Stowers
arises out of con
ers
indemnify
obligations
poli-
to defend and
agency relationship
expressed
tractual
in the
as
de
insured and its control over insured’s
fense);
cy,”
apply when insurer has “no
but does not
(declining to address
id. at 847 n. 11
investigate, negotiate or defend
duty
[in-
requirement of
“the difference between the
'good
policy
excess
under the terms of the
sured]
‘attempting’
faith’ in
settlement under
law,
responsi-
undertook those
and never
21.21-2,
2(b)(4),
§
art.
and
Tex. Ins.Code Ann.
own.”).
bilities on its
ordinary
care
the common law standard
concerning
liablity
third-party
insurer's at
Coating
Maryland
Indus.
&
Ins. Co. v. Head
2.
lawsuit”);
tempts
id. at
to settle a covered
27,
Servs., Inc.,
(Tex.1996)
S.W.2d
28
938
(explaining
liability may ex
849
that Stowers
("[W]e
recognizes
law
now hold that Texas
beyond liability
excess
after
tend
duty
third-party
only
insur
[the
one tort
limits);
negligent
failure to settle within
context,
being
duly
stated
claim]
Co. v. Canal Ins.
Centennial Ins.
American
Co. v. American Indem.
in Stowers Furniture
Co.,
(Tex.1992) (Stowers duty
1987), those duties do not exist where duty to there is no defend. Un ion did not owe Rocor a defense under its
policy, and neither did National Union as
sume extra-contractual duties to Rocor negotiations when conducted settlement third-party claimant. with Once deductible, together tendered its primary liability policy, limits of the policy National Union was entitled negotiations to conduct settlement inde pendent of Rocor. Rocor not enti is thus recovery negligence.
tled to a based on The trial court’s was correct and it should have been affirmed. TOOL,
ROSENBOOM MACHINE & INC., Computed Imaging Service, Inc., Dynamics Corporation Of Amer- Watts, Appellants,
ica Ellis & d/b/a Josephine MACHALA, Appellee.
No. 01-97-00916-CV. Texas, Appeals Court of (1st Dist.). Houston June 1999. Rehearing Aug. Overruled