Court Opinion

ID: 5081404
Source: CourtListenerOpinion
Date Created: 2021-10-01 12:34:04.485954+00
Date Added: 2024-06-11T14:21:38.010490
License: Public Domain

I respectfully dissent from the majority opinion. In reversing the trial court's summary judgment, the majority is rewarding appellant for his bad faith and devious actions, and it is penalizing the appellees for attempting to settle this matter in good faith. Paramount to a determination of this appeal is the fact that the appellant worked for two employers, each covered with worker's compensation insurance, and he has been diagnosed with acute bilateral carpal tunnel syndrome. Because this condition develops over a period of time, as opposed to a single identifiable injury, the appellant had been unable to show which employment caused his injury. Therefore, appellant has never been able to show which insurance carrier is responsible for the payment of benefits in connection with his injury.
The majority opinion has lost sight of the broad concept of estoppel, and the reasons for its existence. Since 1868, Texas courts have held that one cannot by his speech or conduct induce another to act in a particular way and then adopt a subsequent inconsistent position, attitude or course of conduct which causes a loss or injury to the other party.1 Said another way, one cannot by his language or conduct lead another to do something that he would not otherwise have done, and then cause loss or injury to the other by changing the position upon which the second party acted.2 The Compromise Settlement Agreement (CSA) executed by the appellant stated in clear and unambiguous language that "liability was indefinite, uncertain and incapable of being satisfactorily established." Appellant then entered into a settlement agreement in the district court for the exact benefits as expressed in the CSA, and acknowledged that this was a settlement of his claim against the appellees. Further, by deposition, appellant swore that he had read the CSA, discussed it with his attorney who had also read the CSA, agreed with the terms and conditions of the CSA, and swore that he executed it in order to receive the benefits flowing from the agreement. Likewise, the appellant accepted the benefits flowing from the settlement agreement in the district court. By his words and deeds, the appellant has clearly induced the appellees to enter into a settlement agreement and payment and he now wishes to take a contrary position: i.e.; by his subsequent lawsuit appellant is contending that the liability was not indefinite, uncertain and incapable of being satisfactorily established. This is a classic example of the need in law for estoppel.
Estoppel, by its very nature, is an equitable remedy and its purpose is to prohibit inconsistency and prevent fraud which will result in injustice. Kuehne v. Denson, 148 Tex. 54,219 S.W.2d 1006 (1949); Hubacek v. Manufacturer'sCasualty Ins. Co., 247 S.W.2d 173 (Tex.Civ.App. — Waco 1952, writ ref'd n.r.e.). Estoppel is a tool that is totally defensive in character and its design is to protect those who have been misled from suffering a loss due to the attempts of others to take positions which are inconsistent. In fact, the Doctrine of Equitable Estoppel is founded upon the principles of morality and fair dealing, and estoppel is intended to subserve the ends of justice. Smith v.Chipley, 24 S.W.2d 87 (Tex.Civ.App.-Amarillo 1928, no writ). Further, the proper function of equitable estoppel is the prevention of fraud, whether it be actual or constructive. Richey v. Miller, 142 Tex. 274, 177 S.W.2d 255
(1944). In applying the broad concept of estoppel to a judicial proceeding, the general principle is applied against the party who assumes and maintains a certain position in one judicial proceeding, and attempts to adopt a contrary position in a subsequent proceeding. Smith v.Chipley, 42 S.W.2d 645, (Tex.Civ.App.-Amarillo 1931, writ ref'd.).
Appellant is correct in stating that the CSA can not be enforced once the appeal is filed in a district court. However, that applies to the benefits to be awarded under the CSA. I know of no tool or procedure at law or in equity that would allow the appellant *Page 218 
to erase his acknowledgment that the liability of the appellees was "indefinite, uncertain and incapable of being satisfactorily established." In his deposition, which is part of the summary judgment proof, appellant acknowledges that both he and his attorney signed the CSA after discussing the agreement with his attorney. In Izaguirre, the worker's compensation claimant's signed releases contained the same language as the CSA agreement signed by the appellant, i.e. "I understand and agree that the liability of said insurance carrier is indefinite, uncertain, and incapable of being satisfactory established . . . " These claimants were precluded from subsequently claiming a breach of duty by the insurance carriers as a matter of law. Izaguirre v. TexasEmployers' Ins. Ass'n, 749 S.W.2d at 555. From an equitable standpoint, there should be no distinction made between the Izaguirre claimant's acknowledgment of certain facts, and the written statement and acknowledgment by this appellant in the CSA and deposition. The fact that appellant's written acknowledgment was not in a release should not make it any less binding upon him than the acknowledgment in the Izaguirre case.
The majority opinion takes the position that his acknowledgment of the operable facts is not enforceable against the appellant because it was not sworn to by appellant. However, the written acknowledgment was not only signed by the appellant, but in deposition testimony in subsequent proceedings he acknowledged that he had signed it and had agreed with it. I cannot follow the majority's reasoning that estoppel does not apply in this situation simply because the statement was not made under oath. The fact that it was a written acknowledgment of a fact, signed by the appellant, and subsequently testified to and acknowledged by the appellant in sworn deposition testimony, should be sufficient to evoke the protections afforded by estoppel. This is a classic example of a person, making a statement in order to receive benefits from another, receiving benefits based upon those statements and then attempting to take a contrary position in a subsequent law suit. This clearly fits the classic concept of estoppel as being an equitable tool to prevent a person who has induced another to act in a particular manner from adopting an inconsistent position in subsequent litigation.
I find nothing in the majority opinion or in Texas case law that will prevent the affirmance of the trial court's summary judgment based upon equitable estoppel. The distinction between judicial estoppel and equitable estoppel is that equitable estoppel requires reliance and injury. Also, equitable estoppel applies only in favor of the parties who are in privity with them, where judicial estoppel may be evoked by a stranger to the former proceeding. Swilley v.McCain, 374 S.W.2d 871 (Tex. 1964), rev'd on other grounds. The majority opinion also seems to take the position that the appellees did not specifically plead equitable estoppel. However, it has long been held that if a matter constituting the estoppel is apparent on the face of the pleadings, estoppel need not be specifically plead. Shawv. Borchers, 46 S.W.2d 967 (Tex.Comm'n App. 1932). This record is very clear and uncontroverted on the operative facts.
It is well settled in Texas law that pleadings in other actions which contain statements inconsistent with the parties present position are receivable as admissions. St. PaulFire Marine Ins. Co. v. Murphree, 163 Tex. 534, 357 S.W.2d 744,747 (1962). Also, a judicial admission not only relieves the adverse party from making proof of the fact admitted, but it bars the person who made it from disputing it.Gevinson v. Manhattan Constr. Co. of Oklahoma, 449 S.W.2d 458,466 (Tex. 1969). A proceeding before the IAB is a judicial proceeding. Washburn v. Associated Indem.Corp., 721 S.W.2d 928, 933 (Tex.App.-Dallas 1986),writ ref'd n.r.e., 735 S.W.2d 243 (Tex. 1987). Therefore, a position taken before the IAB that is inconsistent with the position taken in a subsequent judicial proceeding subjects the party to judicial estoppel. Washburn, 721 S.W.2d at 933.
A plaintiff who takes one position before the IAB in order to receive benefits is precluded from taking an inconsistent position *Page 219 
in a subsequent law suit. Moore v. Means, 549 S.W.2d 417
(Tex.Civ.App.-Beaumont 1977, writ ref'd n.r.e.). Moore took the position before the IAB that his injuries were caused by a fellow worker in the course of employment and at the work site of the employer. Moore later filed a law suit against the fellow worker alleging the assault was not in the course of employment. The trial court granted the defendant worker summary judgment. The court of appeals affirmed without going into the subtle distinctions of the various forms of estoppel or whether it was under oath. The court simply held: "where one takes one position in a judicial proceeding, he cannot later take a plainly inconsistent position in another proceeding." Id. at 419.
When the owners of a residence destroyed by fire sued one insurance company under the fire insurance policy, and sued a mortgage management firm for negligence in failing to provide insurance, they were estopped from making the second, inconsistent claim. The Texas Supreme Court held:
 If one having a right to pursue one of several inconsistent remedies makes his election, institutes suit, and prosecutes to a final judgment, or receives anything of value under the claim thus asserted, or if the other party has been affected adversely, such election constitutes an estoppel thereafter to pursue another and inconsistent remedy.
Lomas Nettleton Co. v. Huckabee, 558 S.W.2d 863
(Tex. 1977) (quoting Seamans Oil Co. v. Guy, 115 Tex. 93,276 S.W. 424 (1925).
Although the Huckabee opinion has been criticized in subsequent opinions,3 the criticism is against an over-broad application of the principle, and the consensus is that estoppel should not apply unless the positions taken or admissions made are truly inconsistent with a later position, or the party knowingly made an election. In the case at hand, appellant and his attorney very clearly and knowingly admitted the uncertainty of the liability of the insurance carriers in order to get them to settle the case and pay the claims. This is truly inconsistent with a claim of bad faith, and was not necessary for a successful prosecution of his claim for benefits. Even while criticizing, Huckabee for improper application of estoppel, the Supreme Court held:
 Even though the inconsistent position may not fit the mold of a better defined principle, an election will bar recovery when the inconsistency in the assertion of a remedy, right, or state of facts is so unconscionable, dishonest, contrary to fair dealing, or so stultifies the legal process or trifles with justice or the courts as to be manifestly unjust. (emphasis added)
Bocanegra, 605 S.W.2d at 851. In situations such as this, equitable estoppel serves as a tool to "frustrate skullduggery." Id.
Therefore, the election doctrine bars subsequent litigation when: 1) one successfully exercises an informed choice; 2) between two or more remedies, rights or states offacts; 3) which are so inconsistent as to; 4) constitute manifest injustice. See Custom Leasing, Inc. v. Texas Bank Trust Co. of Dallas, 491 S.W.2d 869, 871 (Tex. 1973). The summary judgment proof shows that appellant and his attorney signed the CSA acknowledging a certain state offacts, i.e.: that the liability of appellees was "indefinite, uncertain and incapable of being satisfactorily established." Further, appellee testified that he signed the CSA after consulting with his attorney; therefore, the choice was informed. Appellant received benefits by inducing the appellee in the district court lawsuit to agree to pay and to pay the exact amounts set out by the CSA, based on appellant's acknowledgment of the state of the facts. A bad faith claim against an insurer must allege that the insurer denied the underlying claim or delayed payment when it had no reasonable basis for doing so, or without determining whether it had a reasonable basis for the denial or delay. Arnoldv. National County Mut. Fire Ins. Co., 725 S.W.2d 165, *Page 220 
167 (Tex. 1987). When appellant executed documents and affirmed the fact that appellees' liability was not capable of determination, with the intent to later sue for bad faith and claim appellees had no reasonable basis for denying or delaying a claim, his positions are so inconsistent as to constitute manifest injustice. Therefore, we should hold as a matter of law that appellant is barred and estopped from claiming bad faith against appellees'.
By way of supplemental letter, appellant cites this court toMroz v. United States Fire Ins. Co., 826 S.W.2d 729
(Tex.App.-Houston [14th Dist.] 1992). Mroz collected workmen's compensation benefits for a job related injury pursuant to a settlement agreement between the parties. He then filed a suit against the carriers for the breach of duty of good faith and fair dealing. This court citedMarino4 which held that res judicata did not bar subsequent litigation for a cause of action that didn't exist at the time of the first litigation. Neither Mroz or Marino had the central issue found in this appeal: estoppel based on admissions of fact which precludes subsequent litigation requiring an inconsistent fact. However, Mroz in dicta, without citing any authority, also held that "collateral estoppel, judicial admissions and judicial estoppel do not bar appellant's bad faith claim. . . ." I find a clear distinction between res judicata and judicial estoppel or estoppel based on judicial admissions. Each serves an entirely different purpose and has different required elements. Because the language in the opinion was dicta, and not based on any authority or even relevant to the facts of the case, I do not find it controlling.
When Aranda signed the CSA for the proceeding before the IAB, and acknowledged for purposes of receiving benefits that the "liability was indefinite, uncertain and incapable of being satisfactorily established," he is estopped from taking a contrary position in the underlying lawsuit. Therefore, summary judgment was proper and the judgment of the trial court should be affirmed.
1 Portis v. Hill, 30 Tex. 529 (1868).
2 Booty v. O'Connor, 287 S.W. 282 (Tex.Civ.App. — Galveston 1926, writ ref'd).
3 Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848,855 (Tex. 1980) (Campbell, J. concurring); Plate Platter, Inc. v. Wolf, 780 S.W.2d 453, 456 (Tex.App. — Dallas 1989, writ denied); Metroflight v. Shaffer, 581 S.W.2d 704,707 (Tex.Civ.App.-Dallas 1979, writ ref'd n.r.e.).
4 Marino v. State Farm Fire Casualty Ins. Co.,787 S.W.2d 948, 950 (Tex. 1990).