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Farmers Texas County Mutual Insurance Co. v. Zuniga

Court of Appeals of Texas, Fourth District, San Antonio

November 15, 2017

Jennifer L. ZUNIGA and Janet Northrup as Trustee for the Bankruptcy Estate of Christopher J. Medina, Appellees

         From the 73rd Judicial District Court, Bexar County, Texas Trial Court No. 2014-CI-11445 Honorable Cathleen M. Stryker, Judge Presiding

          Sandee Bryan Marion, Chief Justice Karen Angelini, Justice Patricia O. Alvarez, Justice


          Patricia O. Alvarez, Justice


         On September 13, 2017, we issued an opinion and judgment in this appeal. Thereafter, Appellant Farmers Texas County Mutual Insurance Company and Appellees Jennifer L. Zuniga and Janet S. Northrup, as trustee for the bankruptcy estate of Christopher J. Medina, filed motions for rehearing.[1] Having considered the motions, we deny both, but we withdraw our September 13, 2017 opinion and judgment and substitute this opinion and judgment in their stead to clarify the reasons for our decision.

         In this automobile-pedestrian accident case, after all other issues and claims were severed, the parties narrowed their dispute in this cause to a single issue: whether the insurance policy that promises to "pay damages for bodily injury or property damage" covers punitive damages assessed against Farmers's insured. The trial court concluded it did; we disagree. We hold the policy's plain language does not cover punitive damages, and we remand the cause to the trial court.


         As Jennifer Zuniga was walking on the sidewalk near O'Connor High School, the vehicle Christopher J. Medina was driving struck Zuniga from behind and injured her. Zuniga sued Medina for negligence and gross negligence, and the jury found Medina negligent and grossly negligent. It awarded Zuniga $93, 244.91 in actual damages, $75, 000.00 in punitive damages, pre-and post-judgment interest, and costs of court; the trial court rendered judgment on the verdict.

         The vehicle Medina was driving was insured by Farmers, and Medina was a "covered person" under the insurance policy. Farmers paid Zuniga all the amounts awarded in the judgment except for the punitive damages. Farmers filed a petition for declaratory relief against Medina and Zuniga in Harris County seeking a declaration that the punitive damages are not covered by the policy or, alternatively, Texas public policy prohibits coverage for the punitive damages.

         Zuniga moved to transfer venue from Harris County to Bexar County, and the Harris County trial court granted Zuniga's motion and transferred the case to Bexar County. In Bexar County, Zuniga filed an original petition seeking to recover the punitive damages from Farmers. Under a turnover order, Zuniga was assigned all of Medina's rights against Farmers, and based on those assignments, she asserted additional claims against Farmers. 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 to the 166th Judicial District Court of Bexar County. The trial court granted the motion, and the cases were consolidated.

         Farmers sought a declaration that the insurance policy does not cover punitive damages, Farmers "has no further duty to defend or indemnify Medina; that Zuniga is not entitled to recover or collect any additional monies from Farmers; and, that Farmers has no further duty with respect to the Final Judgment" in Zuniga's suit against Medina. Farmers moved for traditional summary judgment, but the trial court denied Farmers's motion. Later, Zuniga and Northrup sought a declaration that the policy covers punitive damages, and they moved for summary judgment. Farmers filed a response, incorporated its earlier summary judgment evidence by reference, requested some declaratory relief, but prayed only that Zuniga and Northrup's motion be denied. The trial court granted Zuniga and Northrup's motion "insofar that it seeks a determination that the punitive damages . . . are covered under the automobile policy in question, " denied all of Farmers's requested declaratory relief, and severed all other issues and claims into a separate cause. In the original cause, Farmers appeals complaining that the policy did not cover punitive damages, the motion to transfer venue should have been denied, and on rehearing, that this court should render rather than remand. We begin with the issue of venue.


         Farmers challenges the order granting Zuniga and Northrup's motion to transfer venue of Farmers's lawsuit from Harris County to Bexar County. In her motion, Zuniga [2] asserted convenience of the parties as a ground for transferring venue. "A court's ruling or decision to grant or deny a transfer [for the convenience of the parties] is not grounds for appeal or mandamus and is not reversible error." Tex. Civ. Prac. & Rem. Code Ann. § 15.002(c) (West 2017); accord Garza v. Garcia, 137 S.W.3d 36, 39 (Tex. 2004). We overrule Farmers's second issue.

         Coverage for Punitive Damages

         In its first issue, Farmers argues that its agreement under the policy to "pay damages for bodily injury" does not cover punitive damages, and even if it did, public policy bars the policy from covering punitive damages. Zuniga, on the other hand, contends that "damages for bodily injury" includes punitive damages because other courts have concluded that the average insured would interpret damages to include punitive damages. Before we address the parties' arguments, we briefly recite the standard of review and the applicable law.

         A. Standard of Review

         We review a summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009) (citing Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)). To prevail on a traditional motion, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." Tex.R.Civ.P. 166a(c); accord Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). If there are no disputed material facts, we decide the question of law presented. See Tex. R. Civ. P. 166a(c); Havlen v. McDougall, 22 S.W.3d 343, 345 (Tex. 2000) ("Because the parties do not dispute the relevant facts, this is a proper case for summary judgment.").

         "[B]efore a court of appeals may reverse summary judgment for one party and render judgment for the other party, both parties must ordinarily have sought final judgment relief in their cross motions for summary judgment." CU Lloyd's of Tex. v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998); accord Bowman v. Lumberton Indep. Sch. Dist., 801 S.W.2d 883, 889 (Tex. 1990) ("For an appellate court to reverse summary judgment for one set of parties and render judgment for the others, the filing of cross-motions for summary judgment would ordinarily require all parties to seek final judgment relief by their motions."); Morales v. Morales, 195 S.W.3d 188, 192 (Tex. App.-San Antonio 2006, pet. denied) (citing Feldman) ("In general, this court is only entitled to render judgment in favor of the losing party in a summary judgment context if both parties move for summary judgment.").

         B. Policy Construction

         1. Plain Language

         "We interpret insurance policies under the well-established rules of contract construction." Great Am. Ins. Co. v. Primo, 512 S.W.3d 890, 892 (Tex. 2017); accord Gilbert Tex. Const., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126 (Tex. 2010). Our goal in construing the contract "is to ascertain the parties' true intent as expressed by the plain language they used." See Primo, 512 S.W.3d at 893; accord Gilbert, 327 S.W.3d at 126. We construe the contract as a whole; we read all its terms and provisions in context and "in accordance with the plain meaning of its terms." See Primo, 512 S.W.3d at 892; RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015) ("[W]e give words and phrases their ordinary and generally accepted meaning, reading them in context and in light of the rules of grammar and common usage."); Gilbert, 327 S.W.3d at 126 ("We examine the entire agreement and seek to harmonize and give effect to all provisions so that none will be meaningless."). "[W]e look at the language of the policy because we presume parties intend what the words of their contract say." Gilbert, 327 S.W.3d at 126; accord Primo, 512 S.W.3d at 893. "[The] contract's plain language controls, not 'what one side or the other alleges they intended to say but did not.'" Primo, 512 S.W.3d at 893 (quoting Gilbert, 327 S.W.3d at 127). Our responsibility is "to honor the parties' agreement and not remake their contract by reading additional provisions into it." See Gilbert, 327 S.W.3d at 126. For example, the "[a]bsence of an exclusion cannot confer coverage." Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 160 (Tex. 2003); accord Howard v. Burlington Ins. Co., 347 S.W.3d 783, 793 (Tex. App.-Dallas 2011, no pet.).

         2. ...

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