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Hoel v. Old American County Mutual Fire Insurance Co.

Court of Appeals of Texas, First District

September 7, 2017

MELANIE HOEL, INDIVIDUALLY AND AS NEXT FRIEND OF HER MINOR CHILDREN Z.H. AND J.H., Appellant
v.
OLD AMERICAN COUNTY MUTUAL FIRE INSURANCE CO. AND AMWINS SPECIALTY AUTO, INC. D/B/A STATEWIDE CLAIMS SERVICE, Appellees

         On Appeal from the 269th District Court Harris County, Texas Trial Court Case No. 2015-58515

          Panel consists of Chief Justice Radack and Justices Keyes and Massengale.

          MEMORANDUM OPINION

          Michael Massengale Justice.

         Appellant Melanie Hoel appeals from a final take-nothing summary judgment entered in favor of appellees Old American County Mutual Fire Insurance Co. and AMWINS Specialty Auto, Inc. d/b/a Statewide Claims Service. Hoel filed the lawsuit to recover the amount of a default judgment entered in her favor against a driver insured by Old American. Because Old American and Statewide were prejudiced as a matter of law by the insured's failure to comply with the notice provisions of his insurance policy, we affirm.

         Background

         Melanie Hoel and her two minor children were involved in a car accident with Manuel Martinez Salinas. At the time of the accident, Salinas was listed as an insured driver on an automobile insurance policy issued by Old American. Old American had contracted with Statewide "to handle claims made under insurance policies" it issued.

         Hoel, individually and as next friend for her children, sued Salinas seeking damages for injuries sustained as a result of the accident. Salinas did not answer the suit. The trial court entered a default judgment against him in the amount of $39, 443.15.

         After Hoel obtained the default judgment, she filed this suit against Old American and Statewide as an "intended beneficiary" of Salinas's auto insurance policy. Hoel asserted breach of contract by Old American and Statewide because they refused to pay the amount of the judgment in the underlying lawsuit against Salinas.

         After answering the suit, Old American and Statewide moved for traditional summary judgment, raising three arguments why they should not be held liable under the insurance policy. They asserted that they were not liable as a matter of law because: (1) they were prejudiced by Salinas's failure to comply with the notice and cooperation provisions of his insurance policy; (2) under the policy, an actual trial, rather than a default judgment, is necessary for them to be liable; and (3) Statewide was not named as an insurer under Salinas's policy. Old American and Statewide attached evidence to their motion including a copy of the insurance policy and an affidavit from a Statewide litigation adjuster who handled the claim. In the affidavit, the adjuster described his attempts to contact Salinas about the underlying lawsuit. The adjuster averred that at no time did Salinas "ever contact . . . Statewide about the claim or underlying lawsuit, " "forward a copy of the suit papers for the underlying suit to Statewide, " "request a defense in the underlying lawsuit, " or "cooperate in the defense of the underlying lawsuit."

         Hoel filed a response to the motion for summary judgment. She argued that Old American and Statewide were not prejudiced by Salinas's failure to notify them of the underlying lawsuit or the default judgment. Hoel attached numerous exhibits to her response including several letters between Statewide and her counsel. In these letters, Hoel's counsel informed Old American and Statewide that he was representing her and her children with respect to the accident. The letters demonstrated settlement negotiations that took place between Statewide and Hoel prior to her filing suit against Salinas. In addition, Hoel attached copies of faxes she sent to Statewide before and during the underlying lawsuit, notifying it that she had filed suit and intended to seek a default judgment against Salinas. These faxes included copies of the petition, motion for default judgment, and the final judgment against Salinas. Hoel also attached a letter she received from Statewide which indicated that it was denying coverage to Salinas because he had failed to notify it of the lawsuit.

         Without specifying the grounds upon which it relied, the trial court granted Old American and Statewide's motion for summary judgment. Hoel appealed.

         Analysis

         On appeal, Hoel argues that the trial court erred by granting summary judgment because Old American and Statewide could not establish that they were prejudiced as a matter of law based on Salinas's failure to comply with the notice provisions of his insurance policy. Hoel does not dispute that Salinas failed to give the required notice or cooperate with Old American and Statewide during the underlying suit.

         To prevail on a traditional Rule 166a(c) summary-judgment motion, a movant must prove that there is no genuine issue regarding any material fact and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Little v.Tex. Dep't of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004). A defendant may prevail by traditional summary judgment if it conclusively negates at least one essential element of a plaintiff's cause of action. IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004). A movant seeking traditional summary judgment on an affirmative defense has the initial burden of establishing entitlement to judgment as a matter of law by conclusively establishing each element of its affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. ...


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