### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-09-00705- CV

Cevia F lem ing, In divid ually an d on B ehalf of O ther P ersons Sim ilarly Situ ated, Appellant

v. Allstate Insurance Com pany, All state Ind em nity Com pany, an d Allstate P ropert y &

Casualty Insu rance C om pany, Ap pellees

F ROM TH E DISTRI CT COURT O F TRAVIS CO UNTY, 250 TH JUDICI AL DISTRICT NO. D-1 -GN-0 3-0 0387 9, H ONO RAB LE RHO NDA HURLEY , JUDGE P RESIDING

M E M O R A N D U M O P I N I O N

Cevia Fleming sued Allstate I nsuranc e Company , Allstate I ndemnity Company , and Allstate Property & Casualty I nsuranc e Company (collec tively , “Allstate” ) for anticipatory

brea ch of contra ct for Allstate’s alleg ed failure to comply with the terms of a Rule 11 Ag ree ment it enter ed into with Fleming and a putative class of simil arly situated individuals. See Tex. R. Civ. P. 11. The district court gra

nted s ummary judgme nt in fav o r o f All state. On appeal, Fleming arg ues t hat t he trial court err ed in g ranting Allstate’s motion for summary j u d gm en t and in deny ing her motion for summary

judgme nt r equesting specific perf ormanc e of the Rule 11 Ag ree ment. We a ffirm the judgme nt of the trial cour t.

BACK GR OUND Fleming and other

plaintiffs broug ht a

n action individually and on behalf of a class

o f s i milarly situated persons alleg ing that sever al insurers, including Allstate, had improperlycollecte d a $1 y ear l y fee authorized by the leg islature to fund the Automobile Theft Prevention

Authority (“the ATPA fee ”). See 28 Tex. Adm i n . C o d e § 5.205(a) (2010) (Tex. Dep’ t of I ns., Automobile T heft Prevention Authority Pass-Throug h Fe e). The plaintiffs challeng ed the manner in which the fee had been collecte d, alleg ing that the fee could not be rec ouped as a separ ate char g e but that it mus t be included in the insure rs’ rate filing s.

The action was ori gi n al l y filed as a single lawsuit in Hende rson County ag ainst Allstate, two Fa

rmers I nsuranc e companies, including Mid-Century I nsuranc e Co mpany , and

sever al L iberty Mutual I n s u ra n ce companies. All of t he named plaintiffs wer e represe nted by the

same counsel. Plaint i ff

s included Fleming , L inda McKe e, Shefqet Ademaj, and Be tty Gre ising. After suit was filed, the case was split into three differ ent case s, eac h g overne d by a separ ate Rule 11 Ag ree ment. The case ag ainst Allstate was transfe rre d to Travis County , as was the case ag ainst L iberty Mutual. The ca se ag ainst Fa rmers r emained in He nderson County

. The Rule 11 Ag ree ment g overning the case ag ainst Allstate specifie d that, once the

case was transfe rre d to Travis County , eac h side would file a motion for summary judgme nt seeking

a decla ratory judgme nt on the controlling issue of law in the case —whether the ATPA fee had been improperly collecte d. The Agr eeme n t stated t hat, wit hin 30 day s afte r t he dis trict court signed an order disposing of the cross-motions for summary judgme nt, ea ch l osing party would timely
prosec ute an appea l from the order

. Acc ording to para g raph seven of the Ag ree ment, “I f the appea l [concerning the controlling issue of law] is finally resolved in f

avor of Plaintiffs, the parties to the transfe rre d action will se ek the approva l of the Travis County District Court to settle all rema ining issues in the transfe rre d action pursuant to a formal settlement ag ree ment.” As part of the settlement

2ag ree ment, the plaintiffs wer e to file an unopposed motion to cer tify them as repr esenta tives of a mandatory

settlement class unde r Texas Rules of Civil P roce dure 42( b)(1) (A) a nd 42(b)( 2). After the case was t ra n s ferred, Fleming and Allstate filed cross-motions for
summary judgme nt on the controlling leg al issue, and the trial court ruled in favor of Fleming

. On
appea l, this Court aff

irmed the trial court’s judgme nt. See Allstate Ins. Co. v. Fleming ( Fleming I ), No. 03-04-00621- CV, 2005 Tex. App. L EXI S 5081 (Tex. App.—Austin J une 29, 2005) (mem. op.), pet. dism’d w.o.j. , 248 S.W .3d 166 (Tex. 2007).

Allstate filed a petition for re v iew with the Texas Supreme Court, as did L iberty Mutual and Fa

rmers, who had also lost on the controlling issue of law in the trial court and

on appea l. The supreme court g rante d the petitions of Allstate and Fa rmers; the L iberty Mutual case

was h el d p en d i n g t he outcome of the other case s. The supreme court reve rsed on the controlling leg al issue in the Fa

rmers case , holding that the ATPA fee had b ee n proper ly collecte d, in a case sty led Mid-Century Insurance Co. v. Ademaj , 243 S.W .3d 618 (Tex. 2007). Howeve r, it dismiss ed the petit ions filed by

Allstate and L iberty

Mutual for wa

nt of jurisdiction, indicating that it lacke d conflict jurisdiction to decide the case s. S ee L i b ert y Mut. Ins. Co. v. Greising , 251 S.W .3d 471, 472 (Tex. 2007); Allstate Ins. Co. v. Fleming ( Fleming II

), 248 S.W .3d 166, 166 (Tex. 2007). I n

eac h case , howeve r, the court specific ally noted that the controlling issue in eac h of the other case s

was the same as in Ademaj

. I n t h e o rd er dismiss ing Fleming ’s petition, the court beg an, “I n [ Ademaj ], we deter

mined that Mid-Century I nsuranc e Co. and others had proper ly char g ed insureds

a Texas Automobile Theft Prevention Authority fee

. Cevia Fleming and other raised the same issue in a suit ag ainst All s t at e I n s uranc e Company and sever al of its aff iliates

. . . .” Fleming II , 248 S.W .3d at 166. 3Following the dismiss al of its appea l in the supreme court, Allstate filed a motion for

re h ear ing in this Court and mandamus actions in this Court and the supreme court att em p t i n g t o preve nt this Court f

rom issuing its manda

te. The actions wer e unsucce ssful, and this Court issued its mandate aff

irming the judgme nt of the district court on the controlling issue of law. Be fore this Court’s mandate issued, howeve r, Fleming amende d her petition in the district court to remove her claim t h at Al l s t at e had im proper ly collecte d the ATP A fee. I nstead, she asser ted a new claim for anticipatory brea ch, arg uing that Allstate had brea ched the Rule 11 Ag ree ment by declining to enter into the settlement ag ree ment contemplated by the Ag ree ment, wh ich was to take eff ect if the
appea l was “fina lly resolved in favor of Plaintiffs.” Fleming soug ht to rec over damag es or specific perf ormanc e of the Rule 11 Ag ree ment.

The case was returne d to the district court. All state m oved for summary judgme nt

on Fleming ’s claim for anticipatory brea ch, and Fleming filed a cross motion reque sting specific perf ormanc e of the Rule 11 Ag ree ment. The trial co u rt g rante d Allstate’s motion, and this
appea l followed.

STANDARD OF REVIEW

We revie w summary judgme nts de novo. Valence Operating Co. v. Dorsett , 164 S.W .3d 656, 661 (Tex. 2005). A def endant who move s for tra ditional summ ary judgme nt on the plaintiff’s claims must conclusively disprove at least one element of eac h of the plaintiff’s cause s of ac tion. Litt le v. Tex as Dep’t of Criminal Justice , 148 S.W .3d 374, 381 (Tex. 2004).

4DISCUSSIO N This case curr ently revolve s around enforc ement of the Rule 11 Ag ree ment signe d by the parties. Rule 11 ag ree ments are contra cts rela ting to litigation, subject, there fore , to g ener al rules of contra ct construction. Trudy’s Tex. Star, Inc. v. Cit y o f A u s t i n , 307 S.W .3d 894, 914 (Tex. App.—Aust in 2010, no pet.). Our primary objective in construing a written contra ct is to

asce rtain and g ive eff

ect to the intentions the parties have objectively mani fe s t ed i n the written instrumen t

. F

r o s t Nat’l Bank v. L & F Distribs., Ltd. , 165 S.W .3d 310, 311-12 (Tex. 2005). Contract ter

ms are give n their pl ain, ordinary , and gene rally acc epted meaning s, and contra cts are
to be construed as a whole in an eff ort to harmonize and g ive eff ect to all provisions of the contra ct. Valence Operating Co. , 164 S.W .3d at 662. I f a contra ct can be g iven a cer tai n or definite leg al meaning or interpre tation, it is not ambig uous and is construed as a matter of law. Coker v. Coker , 650 S.W .2d 391, 393 (Tex. 1983).

I n Texas, in order to preva il on a claim for anticipatory brea ch of contra ct, a plaintiff

m ust establish eac h of the following elements: (1) an absolute repudia tion of the obliga tion; (2) a lack of a just excuse for the repudia tion; and (3) damag e to the non-re pudiating party

. Gonzalez

v. Denning , 394 F.3d 388, 394 (5th Cir. 2004) (citing Ta yl o r P u b l’g Co. v. Systems Mktg. Co. , 686 S.W .2d 213, 217 (Tex. App.—Dallas 1984, wr it ref’ d n.r.e.) ).

Allstate arg ues numerous g rounds in its motion f o r s u mm a r y judg ment and on appea l. First, Allstate arg ues that the Rule 11 Ag ree ment cannot be en fo rc ed b ecause a condition
prec edent—“ final” resolution in favor of the plaintiffs of Fleming ’s appea l on the controlling issue of law—has not occur

red. Al l s t at e also maintains that the Rule 11 Ag ree ment can no longe r be

5enfor ced, in part beca use the class contemplated b y the Ag ree ment can no longe r be cer tified. Fur ther, Allstate arg

ues that the Rule 11 Ag ree men t i s u n en forc eable as a mandatory class action beca use it lacks a provision for decla ratory or injunctive relief , and that Fleming made judicial review an d approval of the Rule 11 Ag ree ment impossibl e by abandoning her claims for decla ratory ju d gm en t

. Fleming contends that all conditions prec edent for enfor ceme nt of the 1 Rule 11 Ag ree ment have occur red, and that the Ag ree ment can still be enfor ced an d the class

cer tified. Fl em i n g also filed a cross-motion for summary judgme nt seeking specific perf ormanc e of the Rule 11 Ag ree ment.

Condi tion Precedent

Under the Ag ree ment, para g raph seven—w hich addre sses settlement of claims and

cer tification of and pay

ment to the class—only become s opera tive “[ i ]f the appea l descr ibed in
para g raph 6 is finally resolved in favor o f P l ai n t i ffs.” Parag raph six descr ibes the appea l taken following the t rial c o u rt ’s resolution of competing summ ary judgme nt motions on the controlli ng issue of law in the ca s e, n am el y , the propriety of the collection of the ATPA fee by Allstate. As noted above, wi t h re gard to the controlling issue of law, the trial court found in favor of Fleming and this Court aff

irmed. See Fleming I

, 2005 Tex. App. L EXIS 5 0 8 1 , at *3-4. The case was appea led to the s u p re m e co u rt, which dismiss ed the petition for want of jurisdiction. Howeve r, the court prominently noted in its order that the leg al issue was the same as that in Ademaj , in which

A four t h g round was included in Allstate’s motion for summary judgme nt but was not 1 arg ued on appe al. 6the supreme court reve rsed the lower court and held that the ATPA fee s had been proper ly collecte d.

Fleming II

, 248 S.W .3d at 166. After the supreme court dismiss ed the petition, this Court issued its mandate. I n the instant appeal , Fleming arg ues that, since this Court issued its mandate aff irming the judgme nt of the trial court in her favor , the appea l was “fina lly resolved i n fa v or of Plaintiffs.” Allstate, howeve r, notes that under the law of the case doctrine, this Court is not bound by its prior decision. Under the doctrine, a court of appea ls is normally bound by its initial decision

on a question of law if there is a subsequent appea l in the same case . Texas Parks & W ildlif e Dep’ t

v. Dearing , 240 S.W .3d 330, 348 (Tex. App.—Austin 2007, p et

. d en i ed ) (citing Briscoe

v. Goodmark Corp. , 102 S.W .3d 714, 716 (Tex. 2003)). However , a longsta nding exception to the law of the case doctrine is wher e the ap p el late court conclude s, on the second appea l, that its orig inal d ec ision was “cle arly err oneous.” Id. (citing Hudson v. W akefield , 711 S.W .2d 628, 630 (Tex. 1986) ). Allstate contends that, since any rec onsideration of our decision in Fleming I would result in abandonme nt of our prior holding in li gh t o f A dem aj , the appea l has not been “fina lly resolved in f

avor of Plaintiffs.” We ag ree . Whil e Fleming has attempted to avoid rec onsideration of the controlling issue of law by removing her claims fo r d ec l ara tory relief from her pleading s, she cannot esca pe the fac t that this Court would be forc ed to disavow its holding in Fleming I wer e the issue involving
t h e ATPA fee to come befor e this court anew . See Hudson , 711 S.W .2d at 630 (“I t would b e unthinkable [for the court] afte r having

. . . arr ived at the conclusion that the opinion on the former
appea l was clea

rly err oneous, to hold that it is bound by considerations of consistency to perpe tuate

7that err or.”)

. Acc ording ly , under the peculiar posture of this case , we conclude that t h e appea l

has not been “fina lly resolved” in favor of Fleming and the other plaintiffs. There fore , a condition
prec edent to the Rule 11 Ag ree ment has not occur red. We conseque ntly hold that the trial court did not err in g ranting summary judgme nt in favor of

Allstate.

Class C ertification E v en i f the appea l in Fleming I had been “fina lly resolved in favor of Plaintiffs,”

no damag es would result from an ticipatory brea ch of the Rule 11 Ag ree ment. I n the alterna tive, Allstate ar gu es t h at t he putative class cannot be cer tified under the terms of the Ag ree ment, and there fore no damag es re sult from its breac h. The Ag ree ment states,

I f the appea l [on the controlling issue of law] is finally resolved in favor of Plaintiffs, the parties to the transfe rre d action will seek the approva l of the Travis County Di s t ri ct C ourt to settle all rema ining issues in the transfe rre d action pursuant to a formal se ttlement ag ree ment, which would include the following terms:

a. Plaintiffs will file an unopposed motion under T ex . R. Civ. P. 42(b)( 1)(A) & 42(b)( 2) for an order cer

tify ing them as repr esenta ti v es of a mandatory settlement class consisting of: Every person, entity , and/or org anization who paid an Auto Theft Prevention Authority fee to Allstate . . . .

The Ag ree ment then g oes on to detail notice and pay ment of the settlement to members of the class. Allstate ar g ues that, since the claims for decla ratory relief wer e remove d from the pleading s, the class can no longe r be cer tified under Tex. R. Civ. P. 42(b)( 2). Under Rule 42(b)( 2), an action may be certified as a class action if “the party opposing the class has acte d or refused to act on g rounds g ener ally

applicable to the class, ther eby making appropr iate fina l injunctive relief

8or corr esponding decla ratory relief with respe ct to the class as a whole.” I n d etermining whether subsection (b)( 2) is satisfied, courts “conside r wh et h er d eclaratory relief , to the exclusion of damag es, i s appropr iate.” Compaq Computer Corp. v. L apray , 135 S.W .3d 657, 669 (Tex. 2004) (citing McM

anus v. Fleetwood Enters. , 320 F.3d 545 (5th Cir. 20 0 3 )). Fleming contends that, as the district court’s order decla ring collection of the ATPA fee improper was aff irmed by this Court, the trial court can cer

tify the class based on the decla ratory relief g rante d in its prior order

. Howeve r, the claim for improper collection of the ATPA fee underly ing the court’s order gra n t i ng decla ratory relief has bee n re m o v ed fr o m the pleading s in the case . As this relief is no longe r reque sted by the plaintiffs—or proper under the law following Ademaj —we ag ree with Allstate that the class can no longe r be cer tified as a mandatory (b)( 2) class for decla ratory relief

. See McM

anus , 2 320 F. 3 d at 553 (holding that trial court abused its discretion by cer tify ing (b)( 2) class wher e, as here , ordinary relief for lawsuit would be money damag es). Acc ording ly , as cer tification of the class is a p re d i cate for awa

rding pay ments to the class under the Rule 11 Ag ree ment, and as the putative class cannot be cer tified in acc ordanc e wi th the Ag ree ment, no damag es result from any anticipatory

brea ch of the Ag ree ment by Allstate. 3
Fleming also arg ues that, under Lapray , the class can be ce rt i fied as a (b)( 2) class even 2 without a cl ai m for decla ratory relief

. Fleming points to lang uag e in Lapray that indicates that a (b)( 2) class seeking damag es can be cer tified if the trial court order s notice and opt-out to protec t the rig hts of the class members. Compaq Computer Corp. v. Lapray , 135 S.W .3d 657, 670 (Tex. 2004). Notice and opt-out, howeve r, would not be appropr iate in this case

— t he Rule 11 Ag ree ment specific ally

calls for a “ma ndatory ” cla ss, prec luding the possibility of opt-out. We need not addre ss other arg uments raised by the parties on summary judgme nt. Where, 3 as here , the trial co u rt ’s order does not specify the g rounds for its summary judgme nt, we must aff irm the summary judgme nt if any of the theories prese nted to the trial court and prese rved for appellate revie w are meritorious. Provident Life & Acc ident Ins. Co. v. Knott , 128 S.W .3d 211, 216 (Tex. 2003). 9CONCLUSION We affir m the judgme nt of the trial cour t.

__________________________________________ Diane M. H enson, Jus tice Be fore J ustices Patterson, Pury ear and He nson Affir med Filed: Oc tober 22, 2010

10