Court of Appeals of Texas, Fourth District, San Antonio
the 73rd Judicial District Court, Bexar County, Texas Trial
Court No. 2014-CI-11445 Honorable Cathleen M. Stryker, Judge
Sitting: Sandee Bryan Marion, Chief Justice Karen Angelini,
Justice Patricia O. Alvarez, Justice
PATRICIA O. ALVAREZ, JUSTICE
appeal presents the novel issue of whether an automobile
insurance policy which covers "damages for bodily
injury" requires Farmers Texas County Mutual Insurance
Company to pay punitive damages awarded in a lawsuit against
its insured. The trial court granted summary judgment in
favor of the appellees concluding the policy required Farmers
to pay the punitive damages. Farmers appeals asserting the
trial court erred in its interpretation of the policy.
Farmers also appeals an order entered by a Harris County
district court granting a motion to transfer venue of the
underlying cause to Bexar County. We affirm the order
transferring venue but reverse the order granting summary
Zuniga sued Christopher Medina for negligence and gross
negligence to recover damages she sustained when the vehicle
Medina was driving struck Zuniga from behind as she was
walking. A jury awarded Zuniga $93,244.91 in actual damages
and, finding the harm to Zuniga resulted from gross
negligence, also awarded Zuniga $75,000 in punitive damages.
The trial court signed a judgment based on the jury's
verdict on March 3, 2014.
vehicle Medina was driving was insured by Farmers, and Medina
was a "covered person" as that term is used in the
insurance policy. On May 30, 2014, Farmers filed a petition
for declaratory relief against Medina and Zuniga in Harris
County seeking a declaration that the punitive damages were
not covered by the policy or, alternatively, if the punitive
damages are covered by the policy, Texas public policy
prohibits coverage for the punitive damages.
30, 2014, Zuniga filed a motion to transfer venue of the
cause from Harris County to Bexar County. One of the grounds
on which Zuniga sought to transfer venue was for the
convenience of the parties under section 15.002(b) of the
Texas Civil Practice and Remedies Code. The Harris County
court signed an order on March 7, 2016, granting the motion
and transferring the case to Bexar County.
22, 2014, Zuniga filed an original petition in Bexar County
seeking to recover the punitive damages from Farmers. In
addition, Zuniga was assigned all of Medina's rights
against Farmers as a result of a turnover order, and she
asserted additional claims against Farmers based on that
assignment. On April 14, 2016, Zuniga filed a motion to
consolidate her lawsuit, which was pending in the 73rd
Judicial District Court of Bexar County, with the case
transferred from Harris County, which was pending in the
166th Judicial District Court of Bexar County. The trial
court granted the motion, and the cases were consolidated.
April 27, 2016, Farmers filed a first amended motion for
summary judgment. On June 30, 2016, the trial court signed an
order denying Farmers's motion. Although Farmers
initially filed a motion seeking the trial court's
permission to file an interlocutory appeal of its order, the
parties entered into a Rule 11 agreement to cancel the
hearing on Farmers's motion conditioned upon the
plaintiffs filing a motion for summary judgment within a
August 2, 2016, Zuniga and Janet Northrup, the trustee for
Medina's bankruptcy estate, filed a motion for summary
judgment seeking a declaration that the punitive damages
awarded to Zuniga were covered by the Farmers policy. Farmers
filed a response to the motion. After a hearing, the trial
court signed an order granting the motion "insofar that
it seeks a determination that the punitive damages …
are covered under the automobile policy in question" and
severing all other claims into a separate cause. Farmers
second issue, Farmers challenges the order transferring venue
of its lawsuit from Harris County to Bexar County. As
previously noted, however, Zuniga asserted convenience of the
parties as one of the grounds for transferring venue. Section
15.002(c) of the Texas Civil Practice and Remedies Code
provides that a decision to transfer venue for the
convenience of the parties is not grounds for appeal and is
not reversible error. Tex. Civ. Prac. & Rem. Code Ann.
§ 15.002(c) (West 2017). Accordingly, we do not further
address Farmers's second issue.
the Policy Cover Punitive Damages?
first issue, Farmers contends the trial court erred in
concluding the policy covered punitive damages. Farmers
asserts either the policy did not provide such coverage or
Texas public policy prohibits such coverage.
whether exemplary damages for gross negligence are insurable
requires a two-step analysis." Fairfield Ins. Co. v.
Stephens Martin Paving, LP, 246 S.W.3d 653, 655 (Tex.
2008). "First, we decide whether the plain language of
the policy covers the exemplary damages sought in the
underlying suit against the insured." Id.
"Second, if we conclude that the policy provides
coverage, we determine whether the public policy of Texas
allows or prohibits coverage in the circumstances of the
underlying suit." Id. ...