Court Opinion

ID: 3123351
Source: CourtListenerOpinion
Date Created: 2015-10-16 14:37:46.636295+00
Date Added: 2024-06-11T11:45:34.851496
License: Public Domain

Fourth Court of Appeals
                                     San Antonio, Texas

                                MEMORANDUM OPINION
                                        No. 04-11-00776-CV

                                          Steven M. DOSS,
                                              Appellant

                                                 v.

                  WARRANTY UNDERWRITERS INSURANCE COMPANY,
                                  Appellee

                     From the 57th Judicial District Court, Bexar County, Texas
                                  Trial Court No. 2010-CI-09415
                           Honorable Antonia Arteaga, Judge Presiding

Opinion by:      Steven C. Hilbig, Justice

Sitting:         Phylis J. Speedlin, Justice
                 Rebecca Simmons, Justice
                 Steven C. Hilbig, Justice

Delivered and Filed: November 21, 2012

AFFIRMED

           Steven M. Doss (“Doss”) obtained a judgment against Warranty Underwriters Insurance

Company (“WUIC”) that was paid in full.           Asserting that payment of the judgment was

untimely, Doss filed suit against WUIC alleging claims under the prompt payment of claims and

unfair settlement practices provisions of the Insurance Code. Both parties moved for summary

judgment.      The trial court denied Doss’s motion, granted WUIC’s, and rendered summary

judgment in favor of WUIC. We affirm.
                                                                                   04-11-00776-CV

                                         BACKGROUND

       Doss previously sued WUIC on his home warranty insurance policy issued by WUIC.

That suit was arbitrated and Doss was awarded the costs of repairing the property damage,

attorneys’ fees, pre-judgment interest, and arbitration costs. The trial court rendered a final

judgment confirming the arbitration award and adding post-judgment interest. On July 8, 2008,

sixty-seven days after the final judgment was rendered, Doss accepted WUIC’s payment in

satisfaction of the judgment.

       Almost two years later, Doss filed this suit against WUIC. Doss alleged WUIC is liable

under the prompt payment of claims and unfair settlement practices provisions of the Insurance

Code because WUIC did not attempt to settle when it was adjudged liable and its liability was

reasonably clear and it did not timely pay the final judgment.        See TEX. INS. CODE ANN.

§§ 541.060(a)(2); 542.057–.058 (West 2009 & Supp. 2012). Doss sought to recover as damages

18% interest per year on the amount recovered in the prior lawsuit, statutory treble damages,

post-judgment interest, and attorney’s fees. Id. §§ 541.152(b), 542.060 (West 2009 & Supp.

2012). Both parties moved for summary judgment. WUIC asserted that Doss’s claims based on

conduct that occurred prior to the earlier judgment are barred by collateral estoppel and res

judicata and that the Insurance Code provisions Doss relies on do not apply to the payment of

judgments.   The trial court granted WUIC’s motion and rendered a take-nothing summary

judgment. Doss appeals.

                                     STANDARD OF REVIEW

       When both parties move for summary judgment, each party bears the burden of

establishing that it is entitled to judgment as a matter of law. City of Garland v. Dallas Morning

News, 22 S.W.3d 351, 356 (Tex. 2000). When the trial court grants one motion for summary

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                                                                                                  04-11-00776-CV

judgment and denies the other, the reviewing court must consider the evidence presented by both

parties, determine all questions presented to the trial court, and render the judgment that the trial

court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872

(Tex. 2000).

                                                  DISCUSSION

        On appeal, Doss asserts the conduct about which he complains occurred after entry of the

final judgment in the earlier case. He argues WUIC committed independent violations of the

Insurance Code after entry of the final judgment in the earlier case because WUIC did not

promptly and timely pay the judgment. We hold the reasoning of Mid-Century Insurance Co. v.

Boyte, 80 S.W.3d 546 (Tex. 2002) (per curiam) is dispositive of this case.

        In Boyte, the insured obtained a judgment against his insurance carrier for benefits due

under the uninsured motorist provision of his policy. Boyte, 80 S.W.3d at 547. That judgment

was affirmed on appeal. Id. Boyte filed a new suit against his insurer alleging among other

claims common-law bad faith and violations of article 21.21 of the Insurance Code 1 based on the

insurer’s failure to pay the full amount of the judgment while the case was on appeal. Id. Boyte

was awarded damages for common law and statutory bad faith, and the judgment was affirmed

by the court of appeals. Id. The supreme court reversed, holding that a money judgment

terminates an insurer’s “duty of good faith because ‘the only legal relationship between the

parties following entry of judgment was that of judgment creditor and judgment debtor.’” Id. at

549 (quoting Stewart Title Guaranty Co. v. Aiello, 941 S.W.2d 68, 69 (Tex. 1997)). The

1
  Article 21.21 § 4(10)(a)(ii) of the Insurance Code was the predecessor of the current section 541.060(a)(2)(A) of
the Insurance Code. See Act of May 19, 1995, 74th Leg., R.S., ch. 414, § 11, 1995 Tex. Gen. Laws 2988, 2999,
repealed by Act of May 22, 2003, 78th Leg., R.S., ch. 1274, § 26(a)(1), sec. 561.060, 2003 Tex. Gen. Laws 3611,
3662, 4138 (effective April 1, 2005) (recodified without substantive amendment at TEX. INS. CODE ANN. § 541.060
(West 2009)). The statutory standard in former article 21.21 § 4(10)(a)(ii) was identical to the common-law bad
faith standard. Boyte, 80 S.W.3d at 549.

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                                                                                   04-11-00776-CV

supreme court reasoned that the concern giving rise to the duty of good faith is the disparity of

bargaining power inherent in the insurer-insured relationship, a concern which simply does not

arise in the judgment creditor-judgment debtor context. Id. at 548. The court stated that bad

faith causes of action are unnecessary to compel payment of money judgments by insurers

because the insured can employ traditional mechanisms to enforce a judgment. Id. It concluded

that because the parties no longer stood as insurer-insured after judgment, article 21.21, section

4(10)(a)(ii) of the Insurance Code and common law bad faith claims no longer applied. See id. at

548–49.

        The unfair settlement practices provision of the Insurance Code states it is a violation

“with respect to a claim by an insured” to fail to attempt to effectuate a settlement of “a claim

with respect to which the insurer’s liability has become reasonably clear.” TEX. INS. CODE ANN.

§ 541.060(a)(2)(A). (emphasis added). The prompt payment provisions of the Insurance Code

likewise pertain to the rights and obligations of insureds and insurers. See TEX. INS. CODE ANN.

§§ 542.051, .056, .057, .058, .060. Because these Code provisions apply only to the insurer-

insured relationship, Boyte’s reasoning applies with equal force to the causes of action Doss

asserts in this case.

        Furthermore, both the unfair settlement and prompt payment provisions of the Code

apply only to “claims.” See TEX. INS. CODE ANN. §§ 541.060, 542.051, .056S.058. When a

claim is reduced to a final judgment, it is no longer a “claim.” See Boyte, 80 S.W.3d 549. By

their plain language, these Code provisions apply to “claims” and are inapplicable to the

payment of final judgments. See id.; DeLaGarza v. State Farm Mut. Auto. Ins. Co., 175 S.W.3d
29, 33 (Tex. App.—Dallas 2005, pet. denied) (refusing to extend predecessor of § 542.057 to

“litigation process”).

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                                                                                  04-11-00776-CV

       After judgment was rendered in the underlying suit, Doss no longer had a “claim” against

WUIC, he had a judgment. The legal relationship between the parties as to the claims in that suit

was no longer one of insurer–insured but rather one of judgment debtor and creditor. See Boyte,

80 S.W.3d 548S49.      Neither the prompt payment of claims requirements nor the unfair

settlement practices provisions of the Insurance Code apply to WUIC’s payment of the

judgment. See id. We therefore affirm the trial court’s judgment.

                                                Steven C. Hilbig, Justice

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