Opinion issued June 28, 2012

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-11-01065-CV

———————————

ALLSTATE INSURANCE COMPANY, Appellant

V.

ANNE (“AMY”) AND MICHAEL SPELLINGS, MASON’S MILL AND 

LUMBER CO., INC., JESSE LEON, MACKENZIE PATRICK DAVIS, 

MASON SPELLINGS, ROBERT GRANT CLAY, AND ESCALANTE’S 

MEXICAN GRILLE, Appellees

On Appeal from the 281st District Court

Harris County, Texas

Trial Court Case No. 2010-51824-A

O P I N I O N

Appellant, Allstate Insurance Company, challenges the trial court’s rendition 

of summary judgment in favor of appellees, Anne (“Amy”) and Michael Spellings, 
2

Mason’s Mill and Lumber Co., Inc., Jesse Leon, Mackenzie Patrick Davis, Mason 

Spellings, Robert Grant Clay, and Escalante’s Mexican Grille, in Allstate’s suit 

against appellees for equitable subrogation. In its sole issue, Allstate contends that 

the trial court erred in granting summary judgment in favor of appellees on its 

equitable-subrogation claim.

We affirm. 

Background

On June 30, 2009, Amber Jeffrey, who was seventeen years of age, lost 

control of the car that she was driving, struck another car, occupied by Helen and 

Jim Haywood, and died as a result of injuries she sustained in the collision. An 

autopsy performed on Amber’s body revealed that she was legally intoxicated at 

the time of the collision. 

Allstate, the liability insurer for Amber and her father, Scott Jeffrey, paid the 

Haywoods $1,350,973 in damages for the severe injuries they sustained in the 

collision. The Haywoods then signed releases in favor of Allstate and the 

Jeffreys.

1

 

1

Specifically, the Haywoods expressly released Allstate, the Jeffreys, and “all other 

persons, firms or corporations liable or, who might be claimed to be liable” from 

claims “which have resulted or may in the future develop from” the collision. We 

do not address the enforceability of the releases as to appellees.
3

On August 19, 2010, Scott Jeffrey filed a wrongful-death suit against 

appellees and others related to the death of Amber.

2

 In his petition, Scott alleged 

that on the night of the collision, Michael and Amy Spellings, who were the 

parents of Amber’s best friend Sara Spellings, had allowed Amber to be provided

with alcoholic beverages at a warehouse of a company owned by the Spellings. 

Scott also alleged that Amy Spellings had “introduced Amber to alcohol” and the 

Spellings had “cultivated a safe haven” for minors “to consume and abuse 

alcohol.” Scott brought suit against appellees for, among other things, violations 

of the Texas Alcohol Beverage Code,3 wrongful death, negligence, negligence per 

se, and attractive nuisance. He sought recovery of actual damages, pain and 

suffering damages, medical expenses, mental anguish damages, and exemplary 

damages.

Allstate filed a plea in intervention in Scott’s wrongful-death suit, alleging 

that it had provided automobile and liability insurance coverage to the Jeffreys, 

which was in effect on the date of the collision. It argued that it had a justiciable 

interest in the litigation because it had “made medical, bodily injury, property 

damage and collision payments to or for the benefit of Jim and Helen Haywood 

 

2

Scott filed his suit after Allstate had settled Helen Haywood’s claim but before 

Allstate settled Jim Haywood’s claim. However, the timing of the Haywoods’ 

settlements is not material to our analysis of whether Allstate is entitled to pursue 

equitable subrogation in the instant proceedings. 

3

See TEX. ALCOHOL BEV. CODE ANN. § 2.02(b), (c) (Vernon Supp. 2011). 
4

and Scott Jeffrey and/or the Estate of Amber Jeffrey.” In its petition, Allstate 

sought to “adopt and incorporate” Scott’s allegations against appellees for

“negligence and liability,” and it asserted a claim for equitable subrogation. 

Allstate contended that it is entitled to “recover the amounts paid to the Haywoods 

in auto liability coverage, umbrella coverage, and property damage coverage.” 

Specifically, Allstate asserted that “it was caused to make payments on the 

insurance coverage afforded to Scott Jeffrey and/or Amber Jeffrey” and, as a 

result, it incurred as its damages liability payments in the amount of $500,000 and 

umbrella liability payments in the amount of $850,973.4

Appellees filed answers to Allstate’s plea, contending that Allstate had no 

contribution or subrogation rights in Scott’s wrongful-death suit. Appellees then 

filed summary-judgment motions, arguing that Allstate is precluded from seeking 

reimbursement for payments it had made to the Haywoods “under any legal theory 

or type of subrogation” because “Allstate stands in the shoes of its insured(s) for 

subrogation purposes” and a “settling tortfeasor” like Allstate “has no right to 

contribution.” Appellees noted that the Haywoods had made claims only against 

the Jeffreys and Allstate for the severe injuries that they sustained in the collision, 

Allstate had conducted an “extensive investigation” of the collision, and Allstate 

 

4 Allstate also alleged that it had incurred damages as a result of making propertydamage payments, but a claim for those amounts was not disposed of by the 

challenged summary judgment and it is not at issue in this appeal. 
5

had concluded that Amber was the “sole cause” of the collision. Appellees 

attached to their summary-judgment motions Allstate claim documents and the 

releases that the Haywoods had executed. 

In its summary-judgment response, Allstate contended that it was entitled to 

“step into the shoes” of the Haywoods to “pursue reimbursement for the monies 

paid out for medical, bodily injury, property damage and collision claims.” 

Allstate argued that it “takes on the claims and defenses of the Haywoods because 

it paid for the Haywoods’ damages” and it should be allowed to proceed on its 

claims against appellees because they were “primarily responsible for the 

accident.”5 Allstate attached to its summary-judgment response evidence that the 

Spellings had provided alcohol to minors, including Amber, and the Spellings and 

appellees had engaged in other negligent conduct. 

The trial court granted appellees summary judgment on Allstate’s claims 

“seeking a recovery based upon payments made to the Haywoods.” The trial court 

 

5 Alternatively, Allstate contended that it was entitled to “step into the shoes” of 

Scott or Amber’s Estate. As explained below, on appeal, Allstate contends only

that it is entitled to pursue equitable subrogation by standing “in the injured 

parties’ shoes,” i.e., the Haywoods. 
6

then severed Allstate’s equitable-subrogation claim in which it sought recovery of 

payments made to the Haywoods.

6

 

Standard of Review

To prevail on a summary-judgment motion, a movant has the burden of 

proving that he is entitled to judgment as a matter of law and there is no genuine 

issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 

341 (Tex. 1995). When a defendant moves for summary judgment, he must either 

(1) disprove at least one essential element of the plaintiff’s cause of action or (2) 

plead and conclusively establish each essential element of his affirmative defense, 

thereby defeating the plaintiff’s cause of action. Cathey, 900 S.W.2d at 341; 

Yazdchi v. Bank One, Tex., N.A., 177 S.W.3d 399, 404 (Tex. App.—Houston [1st 

Dist.] 2005, pet. denied). When deciding whether there is a disputed, material fact 

issue precluding summary judgment, evidence favorable to the non-movant will be 

taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.

1985). Every reasonable inference must be indulged in favor of the non-movant 

and any doubts must be resolved in his favor. Id. at 549.

 

6

Scott’s wrongful-death suit against appellees and Allstate’s petition in intervention 

seeking recovery of property damage payments made to Scott remained pending in 

the trial court following the severance.
7

Equitable Subrogation

In its sole issue, Allstate argues that the trial court erred in granting 

summary judgment in favor of appellees on its equitable-subrogation claim

because summary-judgment evidence demonstrated that it involuntarily paid a 

third party debt in circumstances that favor equitable relief. Allstate emphasizes 

that its equitable-subrogation claim “is not based on its standing” in the shoes of its 

insureds, i.e., the Jeffreys, but rather “is based on its standing in the Haywoods’

shoes.” 

First, we note that Allstate is not arguing in this appeal that the trial court 

erred in granting summary judgment because it is entitled to recover, through 

contractual or equitable subrogation, amounts that it paid directly to the Jeffreys. 

Those claims are not before us. Second, we note that Allstate is not asserting that, 

as a settling tortfeasor, it is entitled to stand in the shoes of the Jeffreys and recover 

damages from appellees for amounts that it “overpaid” in settling the Haywoods’ 

claims. Allstate does not dispute that Texas law prohibits a settling tortfeasor that 

paid more than its proportionate share of liability from seeking contribution from 

other tortfeasors. See Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 22 (Tex.

1987) (stating that “defendant can settle only his proportionate share of a common 

liability and cannot preserve contribution rights under either the common law or 

the comparative negligence statute by attempting to settle the plaintiff’s entire 
8

claim”). Third, Allstate does not contend that it obtained an assignment of the 

Haywoods’ potential causes of action against appellees, which, we note, would 

also be foreclosed under Texas law. See Int’l Proteins Corp. v. Ralston-Purina 

Co., 744 S.W.2d 932, 934 (Tex. 1988) (stating that “it is contrary to public policy 

to permit a joint tortfeasor the right to purchase a cause of action from a plaintiff to 

whose injury the tortfeasor contributed” and that joint tortfeasor “could settle only 

its proportionate share of liability and could not preserve a right to contribution by 

taking an assignment of” injured party’s cause of action). Instead, Allstate 

contends only that, by standing in the shoes of the Haywoods, it is allowed to 

“equitably subrogate against other responsible parties” in Scott’s wrongful-death 

suit.

Equitable subrogation “allows a party who would otherwise lack standing to 

step into the shoes of and pursue the claims belonging to a party with standing.” 

Frymire Eng’g Co., Inc. ex rel. Liberty Mut. Ins. Co. v. Jomar Int’l, Ltd., 259 

S.W.3d 140, 142 (Tex. 2008). Texas courts interpret the doctrine of equitable 

subrogation “liberally,” and the doctrine applies “in every instance in which one 

person, not acting voluntarily, has paid a debt for which another was primarily 

liable and which in equity should have been paid by the latter.” Id. In sum, “a 

party seeking equitable subrogation must show it involuntarily paid a debt 

primarily owed by another in a situation that favors equitable relief.” Id.; see also 
9

Mid-Continent Ins. Co. v. Liberty Mut. Ins. Co., 236 S.W.3d 765, 774 (Tex. 2007) 

(stating that “equitable (or legal) subrogation does not depend on contract but 

arises in every instance in which one person, not acting voluntarily, has paid a debt 

for which another was primarily liable and which in equity should have been paid 

by the latter”). When equitable subrogation applies, “the insurer stands in the 

shoes of the insured, obtaining only those rights held by the insured against a third 

party, subject to any defenses held by the third party against the insured.” Id.; see 

also Bennett Truck Transp., LLC v. Williams Bros. Const., 256 S.W.3d 730, 733 

(Tex. App.—Houston [14th Dist.] 2008, no pet.) (“When an insurer pays a loss, the 

insurer becomes equitably subrogated to its insured’s rights and stands in the 

insured’s shoes against the tortfeasor who caused the loss.”).

Allstate asserts that its equitable-subrogation claim has been “expressly 

approved” by the Texas Supreme Court in Frymire, in which a hotel owner hired a 

general contractor for a remodeling job, and the general contractor subcontracted 

the heating, ventilation, air conditioning, and sheet metal work to Frymire. 259 

S.W.3d at 141–42. The subcontract between Frymire and the general contractor 

required Frymire to pay for any damages caused to the general contractor or hotel 

owner by Frymire’s work and to obtain liability insurance to cover this indemnity 

obligation. Id. at 142. Frymire, in compliance with its contractual obligation, 

purchased a general liability policy from Liberty Mutual. Id. 
10

While Frymire was installing a valve on a water line, the water line ruptured

at the point where the valve was being installed, causing extensive water damage 

to the hotel. Id. The hotel owner sought indemnification from Frymire according 

to the terms of the subcontract, Liberty Mutual paid the hotel owner on Frymire’s 

behalf, and the parties signed an agreement releasing Frymire and Liberty Mutual 

from all claims stemming from the incident. Id. Subsequently, Frymire, “by and 

through Liberty Mutual,” sued the manufacturers of the valve to recoup the 

indemnification payment. Id. The trial court granted summary judgment in favor 

of the manufacturer, and the court of appeals affirmed, holding that Frymire lacked 

standing to assert its claims because it had failed to establish a right to equitable 

subrogation. Id.

In reviewing the propriety of the trial court’s summary judgment, the 

supreme court first considered whether Frymire’s indemnity payment had

extinguished a tort debt primarily owed by another. Id. at 142–43. The court 

concluded that Frymire had presented summary-judgment evidence demonstrating 

that a design defect in the manufacturer’s valve “primarily caused the rupture,”

and, thus, the manufacturer was “primarily responsible” for the water damage. Id. 

at 144. Next, the supreme court considered whether the indemnity payment made 

by Frymire had been “involuntary.” Id. at 144–45. The supreme court stated that a 

“payment is voluntary when the payor acts without any assignment or agreement 
11

for subrogation, without being under any legal obligation to make payment, and 

without being compelled to do so for the preservation of any rights or property.” 

Id. at 145 (citation omitted). Noting that Frymire had paid the hotel owner “to 

satisfy contractual indemnity obligations” that it owed to the general contractor, 

the supreme court concluded that Frymire had “acted to satisfy a legal obligation 

and to protect its interests under the contract” and, thus, it had “involuntarily 

extinguished a debt primarily owed by [the manufacturer] to the hotel owner.” Id.

at 146. Finally, the supreme court considered whether the circumstances favored 

equitable relief. Id. Noting that the hotel owner had elected not to pursue tort 

claims against the manufacturer, the court concluded that, in light of the 

evidentiary presumption that the manufacturer’s faulty product “primarily” caused 

the water damage, the manufacturer would be unjustly enriched if Frymire was not 

permitted to pursue its claims. Id.

In comparing the instant case to Frymire, Allstate asserts that the “summaryjudgment evidence shows” that the Spellings and other appellees “provided alcohol 

to minors” and engaged in “drag racing” and “other negligent conduct.” Allstate 

asserts that the evidence raises a fact issue on whether the debt it paid was 

“primarily owed by another,” and it characterizes “the basis” of Scott’s underlying 

wrongful-death suit as determining “who is primarily liable for this accident.” 

Allstate further asserts that it involuntarily paid the Haywoods based upon a 
12

“contractual/legal obligation for the protection” of the Jeffreys. Finally, Allstate 

argues that because its settlement payment “adequately compensated” the 

Haywoods, who did not file suit against appellees, appellees would be unjustly 

enriched if Allstate is not permitted to pursue its equitable-subrogation claim

against them.

7

The Frymire case is substantively distinguishable, and Allstate’s attempt to 

bring an equitable-subrogation claim on the instant facts stretches any such claim 

beyond the boundaries previously recognized by Texas courts. As noted above, 

the supreme court has explained that an insurer bringing an equitable-subrogation 

claim “stands in the shoes” of its insured and obtains “only those rights held by the 

insured against a third party, subject to any defenses held by the third party against 

the insured.” Mid-Continent Ins. Co., 236 S.W.3d at 774. Allstate concedes that it 

is not attempting to stand in the shoes of its insureds to recover from appellees 

amounts that it paid to its insureds. Rather, Allstate is seeking to stand in the shoes 

of the Haywoods and recover from appellees amounts that it paid to the Haywoods 

as the liability insurer of the Jeffreys. 

 

7 Allstate’s arguments assume that its settlement payments, made expressly on 

behalf of it and the Jeffreys, made the Haywoods whole. Although it appears 

undisputed that the Haywoods did not file suit against appellees, this fact does not 

demonstrate that the Haywoods were made whole or were “adequately 

compensated.” 
13

The Texas Supreme Court’s opinion in Frymire does not support Allstate’s 

efforts to bring an equitable-subrogation claim against appellees in these 

circumstances. The supreme court in Frymire expressly noted that Liberty Mutual, 

the insurer, was bringing suit “through” Frymire, its insured, who had purchased 

the Liberty Mutual policy to fulfill an express contractual indemnity obligation.

8

 

259 S.W.3d at 142. Frymire owed both the general contractor and the hotel owner 

an indemnity obligation for the water damage, and there was no dispute that 

Liberty Mutual’s policy applied to the damage. Id. The supreme court expressly 

noted that Frymire’s “situation” was not “much different” than that of a typical

“property insurer” and stated, “[I]nsurance policies are contracts, too, and if the 

hotel’s property insurer had paid the hotel for the cost of repairs pursuant to a 

policy agreement, it would certainly be able to assert an equitable subrogation 

claim against [the valve manufacturer].” Id. at 145; see also Bennett Truck 

Transp., LLC, 256 S.W.3d at 733 (allowing “common carrier” that had paid 

property owner for damage sustained during transport to pursue equitable-

 

8 Allstate notes that, on remand, the Dallas Court of Appeals stated that Frymire 

stood “in the shoes of the injured party.” Frymire Eng’g Co., Inc. v. Jomar, No. 

05-04-01717-CV, 2008 WL 4838414, at *1 (Tex. App.—Dallas Nov. 10, 2008, no 

pet.). However, the supreme court in Frymire emphasized that the indemnity 

obligation owed by Frymire to the hotel owner was not “much different” than that 

of a typical “property insurer.” Frymire Eng’g Co., Inc. ex rel. Liberty Mut. Ins. 

Co. v. Jomar, 259 S.W.3d 140, 145 (Tex. 2008). Thus, we conclude that the 

Dallas Court of Appeals’ statement, made upon remand, does not provide a basis 

on which Allstate is entitled to stand in the shoes of the Haywoods and pursue 

recovery of its insurance payments by intervening in Scott’s wrongful-death suit 

against appellees. 
14

subrogation claim against negligent third party after noting that “common carriers 

are generally liable as insurers for any loss or injury to the property occurring 

during transport”). Thus, Frymire had a legal duty to satisfy its contractual 

indemnity obligation by paying the hotel owner for the water damage, and, in 

doing so, it involuntarily extinguished a debt primarily owned by another. 259 

S.W.3d at 145; see also Bennett Truck Transp., LLC, 256 S.W.3d at 734

(concluding that common carrier that had paid owner for property damage had not 

“voluntarily pa[id] the owner’s entire damages” but instead had been “required to 

do so because of its status as a common carrier” and insurer of property). 

Here, attempting to fit its claim into the Frymire framework, Allstate asserts

that the Jeffreys had “voluntarily contracted for insurance with Allstate to cover 

any damages caused in an automobile accident, as well as a policy for excess 

coverage.” (Emphasis added). But Allstate does not dispute that the terms of its

liability policy provided for liability payments to the Haywoods based only upon 

the fault of its insured.

9

To the extent that Allstate made any payments exceeding

the amounts owed in proportion to the fault of its insured, such payments would 

have been voluntary. Thus, we conclude that Allstate is not entitled to recoup the

payments it made to the Haywoods by intervening in Scott’s wrongful-death suit 

 

9

This is not to say that, in making the settlement payments, Allstate or the Jeffreys 

admitted fault.
15

and bringing an equitable-subrogation claim against appellees.

10 Accordingly, we 

hold that the trial court did not err in granting appellees summary judgment.

We overrule Allstate’s sole issue.

Conclusion

We affirm the judgment of the trial court.

Terry Jennings

Justice 

Panel consists of Chief Justice Radack and Justices Jennings and Keyes.

 

10 In regard to the voluntariness element of an equitable-subrogation claim, the Texas 

Supreme Court has explained that an “insurer who pays a third-party claim against 

its insured is not a volunteer if the payment is made in good faith and under a 

reasonable belief that the payment is necessary to its protection.” Keck, Mahin & 

Cate v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 20 S.W.3d 692, 702 (Tex. 

2000). In Keck, the supreme court was addressing claims brought by an excess 

liability insurer alleging that it had been “forced to settle a third party claim for too 

much because the attorneys and primary carrier had mishandled the defense.” Id. 

at 695. In support of its holding, the supreme court cited a case from the United 

States Court of Appeals for the Fifth Circuit and a case from the Corpus Christi 

Court of Appeals involving similar fact patterns, i.e., claims brought by an excess 

insurer against either its insured or a primary insurer seeking reimbursement of 

amounts owed under a primary policy. Id. (citing Arkwright–Boston Mfrs. Mut. 

Ins. Co. v. Aries Marine Corp., 932 F.2d 442, 447 (5th Cir. 1991) and Argonaut

Ins. Co. v. Allstate Ins. Co., 869 S.W.2d 537, 542 (Tex. App.—Corpus Christi 

1993, writ denied)). The circumstances surrounding the subrogation claims in 

those cases were materially different than those present in the instant case. 

Allstate has not cited any cases that would support an insurer bringing an 

equitable-subrogation claim on facts similar to those presented here.