Court Opinion

ID: 3071139
Source: CourtListenerOpinion
Date Created: 2015-10-16 00:32:45.155762+00
Date Added: 2024-06-11T11:08:48.665852
License: Public Domain

IN THE
                          TENTH COURT OF APPEALS

                                 No. 10-13-00393-CV

JASON STUBBS,
                                                               Appellant
v.

JULIANNE STUBBS,
                                                               Appellee

                           From the 378th District Court
                               Ellis County, Texas
                             Trial Court No. 81106-D

                           MEMORANDUM OPINION

       Jason Stubbs appeals from a judgment that awarded his ex-spouse, Julianne

Stubbs, a judgment for damages pursuant to an indemnity clause in their divorce

decree. Stubbs complains that the evidence was legally insufficient to support the

judgment because the claim for indemnification did not accrue. Because we find no

reversible error, we affirm the judgment of the trial court.
Factual background

       Jason and Julianne's final decree of divorce awarded Jason the full interest in two

business entities, including all liabilities of those businesses. Jason was also ordered to

pay Julianne $100,000 in monthly installments for ten years for her interest in the

businesses which was secured by a lien against the stock and assets of the businesses.

The final decree also contained an indemnification provision.

       Three days after the entry of the final judgment, one of the business entities and

Julianne were sued by American Express for failure to pay an outstanding balance.

Julianne retained an attorney to defend her against the lawsuit, which was nonsuited

shortly after it was filed.    In between the lawsuit filing and nonsuit, Jason filed

bankruptcy for the two businesses.

       Julianne filed a motion to enforce the indemnification provision of the divorce

decree seeking a judgment for the attorney's fees she paid to defend the American

Express lawsuit as well as a judgment for the installments that had become due but

were unpaid by Jason for Julianne's interest in the business. After a hearing, the trial

court entered a judgment in favor of Julianne for the attorney's fees she had paid and

for the unpaid installments. Jason does not complain on appeal regarding the judgment

for the unpaid installments.

       In his sole issue Jason does complain that the trial court erred by granting

judgment for the attorney's fees paid by Julianne in defending the American Express

Stubbs v. Stubbs                                                                     Page 2
suit because there was no fixed liability determined in that lawsuit due to the nonsuit.

Because of that, Jason argues that the suit for indemnification had not yet accrued, and

the trial court erred by finding him liable to Julianne for the attorney's fees she paid in

defending the American Express suit.

Indemnification provision

       The indemnification provision in Jason and Julianne's divorce decree states:

       Each party represents and warrants that he or she has not incurred any
       outstanding debt, obligation, or other liability on which the other party is
       or may be liable, other than those described in this decree. Each party
       agrees and IT IS ORDERED that if any claim, action, or proceeding is
       hereafter initiated seeking to hold the party not assuming a debt, an
       obligation, a liability, an act, or an omission of the other party liable for
       such debt, obligation, liability, act or omission of the other party, that
       party will, at his or her sole expense, defend the party not assuming the
       debt, obligation, liability, act, or omission of the other party against any
       such claim or demand, whether or not well founded, and will indemnify
       the party not assuming the debt, obligation, liability, act, or omission of
       the other party and hold him or her harmless from all damages resulting
       from the claim or demand.

       Damages, as used in this provision, includes any reasonable loss, cost,
       expense, penalty, and other damage, including without limitation
       attorney's fees and other costs and expenses reasonably and necessarily
       incurred in enforcing this indemnity.

       IT IS ORDERED that the indemnifying party will reimburse the
       indemnified party, on demand, for any payment made by the indemnified
       party at any time after the entry of the divorce decree to satisfy any
       judgment of any court of competent jurisdiction or in accordance with a
       bona fide compromise or settlement of claims, demands, or actions for any
       damages to which this indemnity relates.

       The parties agree and IT IS ORDERED that each party will give the other
       party prompt written notice of any litigation threatened or instituted
Stubbs v. Stubbs                                                                       Page 3
       against either party that might constitute the basis of a claim for
       indemnity under this decree.

       The parties agree that the indemnification provision in question is an agreement

to indemnify against liability, rather than damages. See Ingersoll-Rand Co. v. Valero

Energy Corp., 997 S.W.3d 203, 207 (Tex. 1999). As such, "a claim under a liability

indemnification clause does not accrue, and thus is not mature, until the indemnitee's

liability to the party seeking damages becomes fixed and certain." Ingersoll-Rand Co. v.

Valero Energy Corp., 997 S.W.2d 203, 208 (Tex. 1999).

       Jason contends the claim for indemnification did not accrue upon the nonsuit

because in the absence of a judgment Julianne's liability to American Express did not

become fixed and certain. We note that a nonsuit "extinguishes a case or controversy

from 'the moment the motion is filed' or an oral motion is made in open court; the only

requirement is 'the mere filing of the motion with the clerk of the court.'" Univ. of Tex.

Med. Branch at Galveston v. Estate of Blackmon ex rel. Shultz, 195 S.W.3d 98, 100 (Tex. 2006)

(per curiam) (quoting Shadowbrook Apts. v. Abu-Ahmad, 783 S.W.2d 210, 211 (Tex. 1990)

(per curiam)). It renders the merits of the nonsuited case moot. Shultz, 195 S.W.3d at

101 ("Although [Rule 162] permits motions for costs, attorney's fees, and sanctions to

remain viable in the trial court, it does not forestall the nonsuit's effect of rendering the

merits of the case moot."). No court has squarely addressed the issue of whether an

indemnity claim accrues after a nonsuit. We do not believe that the accrual rule should

be interpreted so as to indefinitely deny a party the right to enforce an indemnity
Stubbs v. Stubbs                                                                       Page 4
agreement due to a nonsuit.

       The indemnification provision in Jason and Julianne's divorce decree provides

that if a claim or proceeding is brought against the person not assuming a debt, in this

case Julianne, the other party will indemnify her from all damages resulting from the

claim regardless of whether or not the claim was well-founded.                The filing of the

nonsuit terminated the claim against Julianne and at that time fixed her damages as a

result of the claim, which was the amount of the attorney's fees Julianne paid. We find

that based on the language of the indemnity provision the trial court did not err by

awarding Julianne the amount she had expended for attorney's fees as damages. We

overrule Jason's sole issue.

Conclusion

       Having found no reversible error, we affirm the judgment of the trial court.

                                             TOM GRAY
                                             Chief Justice

Before Chief Justice Gray,
       Justice Davis, and
       Judge Yelenosky1
Affirmed
Opinion delivered and filed August 14, 2014
[CV06]

1 The Honorable Stephen Yelenosky, Judge of the 345th District Court of Travis County, sitting by
assignment of the Chief Justice of the Supreme Court of Texas pursuant to section 74.003(h) of the
Government Code. See TEX. GOV’T CODE ANN. § 74.003(h) (West 2005).

Stubbs v. Stubbs                                                                           Page 5