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Mccain v. Promise House Inc

Court of Appeals of Texas, Fifth District, Dallas

May 2, 2018

GLENN MCCAIN, INDIVIDUALLY AND AS NEXT FRIEND OF D.M., Appellant
v.
PROMISE HOUSE, INC. AND ARCH INSURANCE COMPANY, Appellees

          On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-14-13980

          Before Justices Bridges, Fillmore, and Stoddart.

          MEMORANDUM OPINION

          DAVID L. BRIDGES JUSTICE.

         Glenn McCain, individually and as next friend of D.M., appeals the trial court's summary judgment in favor of Promise House, Inc. and Arch Insurance Company. In two issues, McCain argues the trial court erred in granting summary judgment for Promise House and Arch and denying summary judgment in favor of McCain. We reverse the trial court's judgment, render judgment that McCain recover against both Promise House and Arch under the $400, 000 settlement agreement, and remand this case to the trial court so that the settlement agreement can be approved by the guardian ad litem and for further proceedings consistent with this opinion.

         In December 2014, McCain sued Promise House alleging claims of negligence, negligent hiring, negligent supervision, negligent training, negligence per se, and breach of fiduciary duty. McCain alleged his eleven-year-old son, D.M., was physically and sexually abused by an "older male individual" while D.M. was a resident of Promise House, a residential social services care facility.

         Prior to the McCain lawsuit, in January 2013, Promise House obtained a commercial general liability insurance policy from Arch. The policy contained a "sexual or physical abuse liability endorsement" providing the following:

[Arch] will pay those sums that [Promise House] becomes legally obligated to pay as "damages" because of "bodily injury" or "personal and advertising injury" to which this policy applies arising out of "sexual or physical abuse."
[Arch] will have the right and duty to defend [Promise House] against any "suit" seeking those "damages." However, [Arch] will have no duty to defend [Promise House] against any "suit" seeking "damages" for "bodily injury" or "personal and advertising injury" to which this insurance does not apply. [Arch] may, at our discretion, investigate any act of "sexual or physical abuse" and settle any claim or "suit" that may result.

         After McCain filed the underlying lawsuit, Promise House filed a claim under the policy requesting that Arch provide it with a defense. Arch retained counsel to represent Promise House, and counsel filed an answer on behalf of Promise House on December 15, 2014.

         On January 14, 2015, counsel for Promise House sent a letter to McCain's counsel pursuant to Rule 11 of the rules of civil procedure. The letter provided as follows:

Pursuant to discussions today, please allow this correspondence to serve as a Rule 11 Agreement wherein [McCain has] agreed to settle and release any and all claims, or potential claims, against [Promise House] for a total of Four Hundred Thousand and 00/100 Dollars ($400, 000). This is a full and final release of all claims which were brought or could have been brought related to the incident at issue. This settlement will be memorialized in a final settlement agreement. As previously discussed, the parties have further agreed they will file for the appointment of a guardian ad litem.
Please confirm this agreement by signing below. Thank you for your immediate attention to this matter.

         The Rule 11 agreement was already signed by counsel for Promise House, and McCain's counsel signed the agreement upon receipt and returned it. On January 29, 2015, another attorney at the firm representing Promise House informed a mediator involved in the case that the matter had "settled per a Rule 11 Agreement and we have a Court appointed ...


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