Court Opinion

ID: 41006
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:57:46+00
Date Added: 2024-06-11T17:16:37.689871
License: Public Domain

United States Court of Appeals
                                                                Fifth Circuit
                                                             F I L E D
               IN THE UNITED STATES COURT OF APPEALS
                                                              March 1, 2006
                       FOR THE FIFTH CIRCUIT
                                                         Charles R. Fulbruge III
                                                                 Clerk

                           No. 05-10154

BRUCE BURNEY, as Assignee of Tom Stevenson and Stevenson & Son’s
Pest Control, doing business as “Bugs” Burney Pest Control

                Plaintiff - Appellant

     v.

ODYSSEY Re (LONDON) LIMITED; SPHERE DRAKE INSURANCE COMPANY;
SPHERE DRAKE INSURANCE LIMITED; SPHERE DRAKE INSURANCE COMPANY
PLC

                Defendants - Appellees

          Appeal from the United States District Court
           for the Northern District of Texas, Amarillo
                          No. 2:04-CV-32

Before KING, BARKSDALE, and PRADO, Circuit Judges.

PER CURIAM:*

     Plaintiff-appellant Bruce Burney appeals the district

court’s order granting summary judgment in favor of the

defendants-appellees Odyssey Re (London) Limited and Sphere Drake

Insurance (collectively, “Odyssey”).     This litigation began in

     *
        Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.

                                -1-
Texas state court when Burney sued Tom Stevenson and Stevenson &

Son’s Pest Control.    The judgment entered by the state district

court in favor of Burney on November 26, 2001 was vacated when

the state court judge granted Stevenson’s motion for a new trial

on February 6, 2002.    See Long John Silver’s Inc. v. Martinez,

850 S.W.2d 773, 777 (Tex. App. 1993) (stating that “[t]he legal

effect of the order granting the new trial was to vacate the

original judgment and return the case to the trial court as if no

previous trial or hearing had been had”).

     In a letter dated August 19, 2002, the state court judge

attempted to amend his order to grant a new trial for the damages

issues alone.   This subsequent letter, which was outside of the

seventy-five day period for granting a new trial prescribed by

TEX. R. CIV. P. 329b(c), was ineffective, but it did evidence the

judge’s concern with the damages assessed by the jury in the

underlying judgment.    See TEX. R. CIV. P. 329b(c) (“In the event

an original or amended motion for new trial or a motion to

modify, correct or reform a judgment is not determined by written

order signed within seventy-five days after the judgment was

signed, it shall be considered overruled by operation of law on

expiration of that period.”); see also Taack v. McFall, 661
S.W.2d 923, 923-24 (Tex. 1983) (“An order granting a motion for

new trial is not effective unless signed within seventy-five days

after the judgment is signed.”).

     On December 14, 2002, over one year after the original

                                 -2-
judgment was entered, the state court attempted to amend the

August 19 letter order to include a new trial as to both the

liability and the damages issues.      Because the court’s plenary

power had long since passed, this December 14 order was overruled

by operation of law.    See TEX. R. CIV. P. 329b(c); see also Taack,
661 S.W.2d at 923-24.

     On August 25, 2003, after the new trial had begun, Burney

and Stevenson entered into a settlement agreement.      The parties’

agreement reinstated the November 26, 2001 final judgment and

withdrew the court’s order granting the motion for a new trial.

The agreement also assigned to Burney all of Stevenson’s rights

under his insurance policies with Odyssey, including his

indemnification rights against Odyssey.      On August 27, 2003, the

state court approved the settlement and entered an “agreed order”

withdrawing the prior order granting the motion for a new trial

and confirming the finality of the original judgment entered on

November 26, 2001.   This litigation ended up in federal district

court after Burney sued Odyssey to recover the judgment rendered

against Stevenson through the state court settlement agreement.

     We agree with the federal district court that there has been

no full and fair adjudication, as contemplated by the Texas

Supreme Court in State Farm Fire & Casualty Co. v. Gandy, 925
S.W.2d 696 (Tex. 1996).    In Gandy, the plaintiff and the insured-

defendant settled the underlying lawsuit by agreeing to a

judgment in the plaintiff’s favor and assigning to the plaintiff

                                 -3-
all of the insured’s claims against his insurer.   Id. at 698,

701-02.   In refusing to enforce this kind of settlement

agreement, the Texas Supreme Court concluded that “[i]n no event

. . . is a judgment for plaintiff against defendant, rendered

without a fully adversarial trial, binding on defendant’s insurer

or admissible as evidence of damages in an action against

defendant’s insurer by plaintiff as defendant’s assignee.”   Id.

at 714 (emphasis added).

     Here, whenever Burney and Stevenson attempted to withdraw

the order granting the new trial and reinstate the November 26,

2001 original judgment, they confected the kind of sweetheart

deal that Gandy prohibits.   Given that the February 6, 2002 order

vacated the original judgment and there has since been no “fully

adversarial trial” as contemplated by Gandy, Burney cannot

enforce against Odyssey his agreed-upon judgment with Stevenson.

See id.   Accordingly, the district court’s order is AFFIRMED.

                                -4-