Court Opinion

ID: 2865530
Source: CourtListenerOpinion
Date Created: 2015-09-06 00:55:57.133338+00
Date Added: 2024-06-11T15:14:24.090190
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                        NO. 03-01-00609-CV

            Hunt, Hopkins & Mitchell, Inc. d/b/a Hunt & Associates, Inc., Appellant

                                                     v.

         Facility Insurance Corporation and Texas Department of Insurance, Appellees

       FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
          NO. GN002693, HONORABLE WILLIAM E. BENDER, JUDGE PRESIDING

                Appellant Hunt, Hopkins & Mitchell, Inc. d/b/a Hunt & Associates, Inc. (AHunt@)

appeals two summary judgments granted May 9, 2001, and October 4, 2001, in favor of Facility

Insurance Corporation (Athe Facility@) and the Texas Department of Insurance (ATDI@), respectively.1

In three issues, Hunt contends that the district court erred by granting summary judgment because

(1) TDI=s Rules and Regulations Governing Pool and Servicing Companies of Assigned Risks (the

Rules and Regulations) do not bar Hunt from recovering additional commissions, (2) the Facility=s

Procedural Handbook (Athe Handbook@) is not binding on Hunt, and (3) Hunt=s cause of action is

not barred by limitations. 2 In its fourth issue, Hunt contends that the district court erred by denying

   1
     On March 5, 2002, Hunt filed an amended notice of appeal that included both the May 9 and
October 4 orders.
   2
      The Facility did not respond in its brief to Hunt=s limitations challenge and made no attempt to defend
the judgment on the basis that Hunt=s action was barred by limitations; at oral argument, counsel for the
Facility conceded the weakness of its limitations ground.
Hunt=s request for continuance of the Facility=s summary judgment hearing. We will affirm the

judgment of the district court.

                                          BACKGROUND

                Hunt was the agent of record for workers= compensation insurance policies issued by

the Facility to Mobley Industrial Painters, Inc. (AMIP@). All agents, including Hunt, were paid a

commission by the Facility based on a formula developed by the Governing Committee of the Texas

Workers= Compensation Assigned Risk Pool. MIP did not pay all of the premiums due under its

policies, and the Facility sued MIP to recover those unpaid premiums. The parties eventually reached

a settlement, and the Facility refused to pay Hunt commissions on the additional sums obtained as a

result of that settlement.3

                On September 11, 2000, Hunt filed suit against the Facility alleging breach of contract

for refusing to pay commissions on those premiums recovered through the Facility=s settlement with

MIP. On March 7, 2001, the Facility filed a motion for summary judgment. Among the bases stated

in its motion, the Facility contended that Hunt is bound by the Rules and Regulations adopted by

TDI, which Aprovide in pertinent part, that an agent is only entitled to an additional commission

upon final audit and only in the event that the premiums are not referred to the Facility for

collection,@ and that accordingly Hunt was not entitled to additional commissions. The Facility also

argued that there was no evidence to support Hunt=s breach of contract claim because (1) Hunt

   3
      It is undisputed that the Facility paid Hunt commissions on those premiums paid by MIP before being
referred for collection.

                                                   2
Acannot demonstrate that it performed under any contract,@ (2) AHunt has not, and cannot point to

any contract that was breached by the Facility,@ and (3) Athere is no evidence that Hunt sustained

any damages from an alleged contractual breach.@

               On March 21, 2001, Hunt filed its second amended original petition requesting

declaratory relief and adding TDI as a party to the suit. See Tex. Gov=t Code Ann. ' 2001.038(c)

(West 2000) (requiring state agency to be made party to declaratory judgment action requesting

determination of validity or applicability of rule). Specifically, Hunt requested declaratory judgment

that only the provisions of the Rules and Regulations were enforceable and not the Handbook

because its provisions did not apply to the agreement between Hunt and the Facility. Hunt also

requested declaratory judgment that the applicable provision of the Rules and Regulations Ameans

payment in full of all premiums determined to be due by either a court of competent jurisdiction or

pursuant to a settlement agreement between [the Facility] and one of its policyholders.@

               On March 22, 2001, Hunt filed its response to the Facility=s motion for summary

judgment, contending that (1) Aunder [the Rules and Regulations] Plaintiff should be paid

commissions on all additional premiums collected by Defendant,@ and (2) Aagents such as the Plaintiff

are not subject to the provisions of the [Handbook].@ On April 10, Hunt filed a supplemental

response to the Facility=s motion admitting that the Rules and Regulations were binding on Hunt, but

contending that the provisions of the Handbook applied only to servicing carriers and not to agents.

On April 18, Hunt filed a second supplemental response to the Facility=s motion for summary

judgment and presented as evidence the preamble to the Handbook, which states:

       The Procedural Handbook must be in conformity with the By-Laws and Rules and
       Regulations of the Texas Workers= Compensation Assigned Risk Pool. If any parts of

                                                  3
        this Handbook are in conflict with the By-Laws or the Rules and Regulations of this
        Pool, such By-Laws or such Rules and Regulations shall govern.

Hunt presented the preamble as evidence that the Facility Ahas recognized that it may not create

procedures which are not in harmony with its bylaws or rules and regulations approved by [TDI].@

After a hearing on the motion on May 9, the district court signed an order granting the Facility=s

motion for summary judgment. The order does not specify the grounds for the summary judgment.

                On September 10, TDI filed a motion for summary judgment contending that because

the district court granted the Facility=s motion for summary judgment, there was no underlying case in

controversy requiring TDI to be joined as a party to the suit. On October 4, the district court granted

TDI=s motion for summary judgment.

                                     STANDARD OF REVIEW

                Because the propriety of a summary judgment is a question of law, we review the trial

court=s decision de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994); Texas Dep=t of

Ins. v. American Home Assurance Co., 998 S.W.2d 344, 347 (Tex. App.CAustin 1999, no pet.). The

standards for reviewing a traditional motion for summary judgment are well established: (1) the movant for

summary judgment has the burden of showing that no genuine issue of material fact exists and that it is

entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue

precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every

reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor.

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The summary judgment is

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affirmable on appeal if any ground asserted in the motion is a valid basis for rendering summary judgment.

Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).

                                            DISCUSSION

Summary Judgment

                In its first issue, Hunt contends that the district court erred by granting summary

judgment because the Rules and Regulations do not bar it from recovering additional commissions. It

is undisputed that the Rules and Regulations have been approved and adopted by TDI and are

binding on the parties. The controlling provision in this case is found in Section XI of the Rules and

Regulations: AAdditional commissions shall be paid only after each annual final audit and payment in

full of all premiums due the Pool.@4

                Hunt contends Section XI is unambiguous and should be given its plain meaning.

The Facility pursued collection of the premiums owed by MIP and eventually settled the dispute.

Hunt argues that the settlement agreement between the Facility and MIP constitutes an accord, and

that MIP=s payment according to the settlement terms constitutes a satisfaction. Therefore, Hunt

concludes that according to the plain language of Section XI, no premiums remain due, the Facility

was Apaid in full,@ and Hunt is entitled to commissions on the settlement proceeds.

                We first note that Hunt failed to raise the issue of accord and satisfaction in any of its

summary judgment responses; therefore, the issue is not preserved for appeal. See Tex. R. Civ. P.

   4
     The Facility succeeded the Pool on January 1, 1991. See Act of Dec. 11, 1989, 71st Leg., 2d C.S.,
ch. 1, ' 17.09, 1989 Tex. Gen. Laws 117.

                                                    5
166a(c) (AIssues not expressly presented to the trial court by written motion, answer or other response

shall not be considered on appeal as grounds for reversal.@). However, even if Hunt had preserved the

issue, it could not prevail because accord and satisfaction constitutes an affirmative defense. See Tex.

R. Civ. P. 94; Boland v. Mundaca Inv. Corp., 978 S.W.2d 146, 148 (Tex. App.CAustin 1998, no pet.)

(ATo prevail on a defense of accord and satisfaction, a party must prove the existence of a new

contract, express or implied, whereby the parties agree to discharge the existing obligation by payment

of a lesser amount.@).

               An accord is an agreement where one party agrees to give or perform something

different from what it is obligated to perform, and the other party agrees to accept the substituted

performance in satisfaction of the obligation. Stevens v. State Farm Fire & Cas. Co., 929 S.W.2d 665,

674 (Tex. App.CTexarkana 1996, no writ). A satisfaction is the performance of such an agreement.

Id. Hence, an accord and satisfaction occurs when parties make an agreement to discharge a disputed

obligation by a lesser or different payment that is tendered and accepted. Jenkins v. Henry C. Beck

Co., 449 S.W.2d 454, 455 (Tex. 1969). Assuming without deciding that the settlement agreement

between the Facility and MIP constitutes an accord and satisfaction as between them, Hunt was not a

party to that agreement and cannot assert the affirmative defense of accord and satisfaction

offensively.

               In effect, Hunt is attempting to assert a claim as a third party beneficiary of the alleged

accord and satisfaction between the Facility and MIP. In order to be a third party beneficiary of a

settlement agreement, the third party must establish the existence of the settlement and its right to

enforce the agreement. See Paragon Sales Co. v. New Hampshire Ins. Co., 774 S.W.2d 659, 660 (Tex.

1989). Because Hunt does not contend and the record does not reflect that it could enforce the

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settlement between the Facility and MIP, it is not a third party beneficiary. Even if it had raised the

issue of accord and satisfaction below, Hunt could not invoke that affirmative defense as a third party

beneficiary.

                 Without regard to the parties= dispute concerning the binding effect of the Handbook,

the Facility moved for summary judgment on the basis that Section XI requires paying commissions

only on premiums determined to be due upon final audit and paid in full. Hunt=s only challenge on

this issue is limited to its argument that it is entitled to be paid as a result of the accord and satisfaction

settlement between MIP and the Facility. We hold that the plain language of Section XI provides

that Hunt is not entitled to commissions on those funds obtained as a result of the settlement

agreement. Hunt=s first issue is overruled. Because the district court properly granted summary judgment

on this issue, we do not reach Hunt=s second and third issues. See Tex. R. App. P. 47.1.5

Motion for Continuance

                 In its fourth issue, Hunt contends that even if the district court properly granted

summary judgment, the court abused its discretion by denying Hunt=s request for a continuance of the

hearing on the Facility=s motion for summary judgment. In its March 22, 2001, response to the

   5
     Hunt claims in its brief and March 5, 2002, amended notice of appeal that it is appealing both the
summary judgment in favor of TDI as well as the one in favor of the Facility. However, none of its issues on
appeal addresses the summary judgment in favor of TDI. Further, because we hold that the district court
did not err by granting the Facility=s motion for summary judgment, TDI=s motion for summary judgment
was properly granted as well.

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Facility=s motion for summary judgment, Hunt requested that the hearing on the motion be continued

until it had an opportunity to conduct further discovery. Specifically, Hunt argued that it was entitled

to a continuance (1) to obtain certain affidavits to support its response; (2) to depose Jeff Elder, whose

affidavit was filed with the Facility=s motion for summary judgment; and (3) because TDI had been

joined in the action. The district court denied Hunt=s motion for continuance in its order granting

the Facility=s motion for summary judgment.

                 The grant or denial of a motion for continuance is within the trial court=s sound

discretion. Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986). A trial court abuses its discretion

only when it acts unreasonably or arbitrarily, without reference to any guiding principles. Id.; Pape v.

Guadalupe-Blanco River Auth., 48 S.W.3d 908, 913 (Tex. App.CAustin 2001, pet. denied). Hunt=s

motion for continuance requested time for additional discovery on the following facts:

        (a) that the Defendant settled the lawsuit [with MIP].

        (b) that through the settlement, the Defendant collected additional premiums on policies
            for which Plaintiff was producer of record.

        (c) that all amounts due under the settlement were paid in full to the Defendant.

        (d) that the settlement amounts due were paid in full on or about June 24, 1998.

        (e) that the provisions of [the Handbook] relied upon by the Defendant to refuse to pay
            additional commissions to Plaintiff were never approved or adopted by the TDI as
            required by Article 5.76-2.

        (f)   that the provisions of [the Handbook] were not sent to Plaintiff.

        (g) that the Defendant never notified the Plaintiff that it would not receive additional
            commissions if unpaid premiums were paid only after resorting to collection efforts.

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        (h) why the proposed rules placing certain restrictions on commission payments were
            never proposed to the TDI or adopted thereby.

        (i)   the specific amount which Defendant claims was due and payable on the policies in
              question.

        (j) the basis for the Defendant=s assertion that not all premiums due were in fact paid on
            the policies in question.

                 Parts (a), (b), (c), and (d) were not in dispute at the time the district court granted the

Facility=s motion for summary judgment. Further, in light of our holding that summary judgment was proper

because the plain language of Section XI does not require payment of premiums on those commissions

recovered as a result of collection actions, parts (e), (f), (g), (h), and (i) are immaterial to Hunt=s ability to

respond to the Facility=s motion. Finally, part (j) is included in the Facility=s motion for summary judgment.

                 In its motion for continuance, Hunt complained that it requested the Facility to Aprovide it

with dates for depositions of various individuals identified by the Defendant as persons with relevant

knowledge. One of the individuals was Jeff Elder. The Defendant ignored Plaintiff=s request and filed its

motion for summary judgment and supports it with the affidavit of Jeff Elder.@ Hunt argued that it

needed a continuance because A[w]hen Plaintiff attempted to schedule a deposition of Mr. Elder (prior to its

response being due), the Defendant claimed unavailability and filed a motion to quash.@

                 In its motion to quash, the Facility asserted that APlaintiff unilaterally noticed the deposition

of Mr. Elder without reaching a mutually agreeable time and/or date for this deposition to be taken. Had

Plaintiff=s counsel bothered to confer with the undersigned, he would have discovered that the undersigned

currently has depositions scheduled on the same date.@ The motion further stated, AThe undersigned is

                                                        9
currently available for the deposition of Mr. Elder to be conducted during the week of April 9, 2001, save

and except April 13, 2001, which is Good Friday, and the week of April 16, 2001.@ Hunt does not

contend that it made further unsuccessful attempts to depose Elder. The dates suggested in the Facility=s

motion to quash were in advance of both the April 19, 2001 hearing and the May 9, 2001 order granting

the Facility=s motion for summary judgment.

                  The ten sets of facts set out in Hunt=s motion for continuance had no material bearing on its

ability to respond to the Facility=s motion, and the record does not reflect that Hunt was denied an adequate

opportunity to depose Elder in advance of the district court=s hearing or order granting summary judgment.

Further, Hunt failed to explain in its motion for continuance why the joining of TDI to the suit

impaired its ability to respond to the Facility=s motion for summary judgment. Because we cannot say

that the district court abused its discretion in denying Hunt=s motion for continuance, its fourth issue

is overruled.

                                             CONCLUSION

                  We overrule Hunt=s complaints on appeal. We therefore affirm the judgment of the

district court.

                                                   Marilyn Aboussie, Chief Justice

Before Chief Justice Aboussie, Justices B. A. Smith and Yeakel

Affirmed

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Filed: May 2, 2002

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