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White Lion Holdings, L.L.C. v. Insgroup, Inc.

Court of Appeals of Texas, First District

December 31, 2019


          On Appeal from the 268th District Court Fort Bend County, Texas Trial Court Case No. 06-DCV-148721

          Panel consists of Chief Justice Radack and Justices Landau and Hightower.


          Sarah Beth Landau Justice.

         White Lion Holdings, L.L.C. purchased an insurance policy from Scottsdale Insurance Company. There were two intermediaries involved in the transaction: U.S. Risk and Insgroup, Inc.[1] White Lion did not receive the coverage it believed was contractually due, and it, along with its sole member and manager, Bernard J. Morello, (collectively referred to as White Lion) sued all three entities. U.S. Risk settled with White Lion. Scottsdale also settled with White Lion. Scottsdale and White Lion executed a settlement release in 2008. White Lion went to trial against the only remaining defendant, Insgroup, in 2018.

         After White Lion rested, Insgroup moved for a directed verdict, arguing that it was included in the release White Lion executed 10 years earlier. The trial court granted the motion, dismissed the jury, and entered judgment in Insgroup's favor. White Lion appeals, arguing that the trial court erred in concluding that the release with Scottsdale also released White Lion's claims against Insgroup.

         We reverse.

         Standard of Review

         A trial court may direct a verdict for a defendant when a plaintiff fails to present evidence raising a fact issue essential to its right of recovery or when the evidence conclusively proves a fact that establishes the defendant-movant's right to judgment as a matter of law. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). In reviewing the grant of a directed verdict, we follow the standard of review for assessing legal sufficiency of the evidence. S.V. v. R.V., 933 S.W.2d 1, 8 (Tex. 1996); see generally City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005). We consider the evidence in the light most favorable to the non-movant. Tex. Emp'rs Ins. Ass'n v. Page, 553 S.W.2d 98, 102 (Tex. 1977); Mikob Props., Inc. v. Joachim, 468 S.W.3d 587, 594 (Tex. App.-Dallas 2015, pet. denied). We can consider any reason why the directed verdict should have been granted, even if not stated in the party's motion. Gomer v. Davis, 419 S.W.3d 470, 476 (Tex. App.-Houston [1st Dist.] 2013, no pet.).

         The Release and Directed Verdict

         After White Lion presented its evidence and rested, Insgroup orally moved for a directed verdict, relying on the release White Lion executed in connection with its settlement with Scottsdale a decade earlier. The Scottsdale release states that, in consideration of the settlement amount, White Lion releases, acquits and forever discharges

Scottsdale Insurance Company, its officers, directors, shareholders, agents, attorneys, and employees, heirs, assigns, and members; their affiliated, related, successor, subsidiary and parent companies and corporations, and their officers, directors, shareholders, agents, attorneys and employees; and all their insurers, hereinafter known collectively as the Released Parties, from any and all claims, demands and causes of action of whatsoever nature, whether in contract or in tort, and for all other losses and damages of every kind or character which have accrued, or may ever accrue, by reason of the matters or transactions made the basis of this litigation, including, but not limited to, any and all claims or causes of action arising out of, or in any way related to, the damages allegedly sustained by Plaintiffs, White Lion Holdings, L.L.C. and Bernard Morello, as the result of contractors removing equipment pursuant to the bankruptcy sale of the former Vision Metals steel plant . . . .

         Stated more succinctly, White Lion released Scottsdale and its "agents" from all claims related to damage caused by contractors removing equipment from White Lion's Fort Bend property.

         Insgroup made three arguments in support of its motion for directed verdict. First, it argued that the broad language of the release resulted in the release of all claims White Lion may have in connection with the Scottsdale insurance policy. Second, it argued that, by statute, and as a matter of law, Insgroup is an agent of Scottsdale, citing to Section 4001.051 of the Texas Insurance Code and, therefore, Insgroup was one of the "Released Parties," which was defined in the release to include Scottsdale and its "agents." Third, it argued that the directed verdict was mandatory in that Insgroup had pleaded release as an affirmative defense and White Lion had not amended its pleading to assert a defense to that affirmative defense, relying on Ellis v. Woods, 453 S.W.2d 509 (Tex. App.-El Paso 1970, no writ).

         White Lion made two arguments in response. First, it argued that Insgroup waived its affirmative defense by litigating the case for 10 years without arguing the release insulated it from liability, not providing any context or argument in its pleadings that raised release as an affirmative defense, and seeking relief, including attorney's fees, although the release-if Insgroup actually was a party to it-would have prevented ...

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