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Nationwide Mutual Insurance Co. v. Chaney

United States District Court, N.D. Texas, Dallas Division

September 30, 2002

NATIONWIDE MUTUAL INSURANCE COMPANY, Plaintiff,
v.
JUDY MAE CHANEY, Defendant.

          MEMORANDUM OPINION AND ORDER

          Sam A. Lindsay, United States District Judge.

         Before the court is Plaintiff and Counter Defendant's Brief as to Court's Granting it Summary Judgment and the Dispositive Effect on Defendant and Counter Plaintiffs Counterclaims, filed December 26, 2001, and Defendant's Motion and Brief Regarding the Effect of the Court's December 4, 2001 Order, [1] filed December 21, 2001. After careful consideration of the parties' briefs, the summary judgment record, and the applicable law, the court denies Defendant's Motion to Reconsider and with respect to the court's request that the parties submit briefs addressing whether its ruling of December 4, 2001 would defeat Defendant's counterclaims, the court also grants summary judgment in favor of Plaintiff on Defendant's counterclaims.

         I. Procedural Background[2]

         On December 4, 2001, the court issued an order granting Plaintiffs Motion for Summary Judgment and declaring that Plaintiff Nationwide Mutual Insurance Company ("Nationwide") had fully satisfied its obligations under David Haffley's automobile insurance policy as to the judgment entered in favor of Defendant Judy Mae Chaney ("Chaney") against David Haffley ("Haffley") in the case styled, Judy Chaney and Ray Chaney v. David Haffley, Cause Number 96-2192-B, the 124th District Court of Gregg County, Texas, and that it therefore had no duty to indemnify or pay Chaney. Because it appeared Nationwide contended that a judgment in its favor would defeat Chaney's counterclaims against Nationwide for conspiracy, tortious interference with prospective business relations, fraudulent transfer, and turnover, the court sua sponte raised the issue of whether summary judgment was appropriate with respect to Chaney's counterclaims and requested that the parties submit briefs addressing this issue by no later than December 26, 2001.

         II. Summary Judgment Standard

         Summary judgment shall be rendered when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to view all inferences drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Ragas, 136 F.3d at 458.

         Once the moving party has made an initial showing that there is no evidence to support the nonmoving party's case, the party opposing the motion must come forward with competent summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere conclusory allegations are not competent summary judgment evidence, and thus are insufficient to defeat a motion for summary judgment. Eason v. Thaler, 73 F.3d 1322, 1325 (5th Cir. 1996). Unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Forsyth v. Barr, 19 F.3d 1527, 1533 (5th Cir.), cert, denied, 513 U.S. 871 (1994). The party opposing summary judgment is required to identify specific evidence in the record and to articulate the precise manner in which that evidence supports his claim. Ragas, 136 F.3d at 458. Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to support the nonmovant's opposition to the motion for summary judgment. Id.; see also Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915-16 & n.7 (5th Cir.), cert, denied, 506 U.S. 832 (1992). "Only disputes over facts that might affect the outcome of the suit under the governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact issues which are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

         III. Analysis

         Chaney contends that none of the relief Nationwide sought in its motion for summary judgment disposed of her counterclaims, because the release entered into by Haffley and Nationwide served as the basis of her claims. Chaney therefore maintains that the court must conclude that the release is not a fraudulent transfer as a matter of law in order to dispose of her claims. If the court concludes the contrary, that the release is invalid, Chaney contends she is entitled to a turnover of Haffley's Stowers[3] cause of action. The court disagrees.

         After judgment was entered in the Chaney suit, Nationwide tendered to Chaney $32, 000, the amount remaining under Haffley's insurance policy, along with postjudgment interest due on the judgment as of the date of tender. In its motion for summary judgment, Nationwide argued that its obligation to pay on the judgment in the Chaney suit was limited to the terms of the policy ($32, 000), which was satisfied when it paid Chaney this amount. It therefore contended it had no further liability and moved for summary judgment on the following grounds: (1) Nationwide has no liability under the Stowers doctrine, because Chaney's settlement offer did not include a full release of claims against Haffley; and (2) even if there was a Stowers claim against Nationwide for its handling or defense of Chaney's claims against Haffley, "Haffley released Nationwide from any and all claims (including, but not limited to those arising under the Stowers doctrine)." In her response, Chaney argued that there remained material issues of fact that precluded summary judgment with respect to: (1) whether the release entered into between Nationwide and Haffley was a fraudulent transfer as to a judgment creditor under section 24.005 of the Texas Business and Commerce Code; and (2) whether Nationwide violated the Stowers doctrine. The court concluded that Chaney's arguments were erroneous, because they were based on the assumption that she was entitled to a claim that belonged exclusively to Haffley and that absent assignment of the claim, of which there was none here, she had no standing to assert the claim. The court further determined that Chaney's argument regarding her prejudgment demands constituting an implied release of all claims against Haffley were irrelevant because she did not have a right to pursue a Stowers claims against Nationwide. Having further considered the issues raised in the parties' briefs, the summary judgment record, and the applicable law, the court clarifies its previous order by holding that Nationwide never had a Stowers duty to settle with Chaney. Thus, Haffley had no Stowers claim he could assert against Nationwide or assign to Chaney, voluntarily or involuntarily by way of a turnover order.

         To impose a Stowers duty on an insurer, a settlement demand must propose to release the insured fully in exchange for a stated sum of money. American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 848-49 (Tex. 1994); Trinity Universal Ins. Co. v. Bleeker, 966 S.W.2d489, 491 (Tex. 1998). When a hospital lien exists, a release is not valid unless it complies with section 55.007(a) of the Texas Property Code. Id.; Tex. Prop. Code Ann. § 55.007(a) (Vernon 1995). Chaney presented the following summary judgment evidence in response to Nationwide's contention she had not satisfied the release requirement:

1. On January 6, 1996, Chaney's counsel sent a letter of protection[4] to Laird Memorial Hospital, which contractually obligated Chaney and her attorney to pay and forward to Laird Memorial Hospital "any amount owing to [Laird Memorial Hospital] for services rendered to [Chaney] to the extent that a sufficient judgment or settlement is obtained and collected regarding this matter.'"
2. On January 25, 1996, Laird Memorial Hospital filed a lien against Haffley to secure the payment of Chaney's medical expenses.
3. On June 14, 1996, Chaney sent Nationwide a letter offering to settle for $32, 000. Chaney renewed this offer on October 9, 1996. In response, Nationwide limited its offer to $15, 000, reasoning that "the information [Nationwide has] regarding Mrs. Chaney is incomplete and somewhat conflicting as to the extent ...

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