Texas Appellate Lawyer & Attorney : D. Todd Smith Law Firm : Appeals, Sanctions, Summary Judgment : Austin, Texas

The Texas Supreme Court issued four new decisions and one substituted opinion with today's regular orders.

In General Electric Co. v. Moritz (No. 0871), the Court reaffirmed that a landowner owes an independent contractor’s employees no duty to warn of obvious hazards they already know about, rejecting the plaintiff's argument that his knowledge of the hazard was simply a factor for the jury to consider in assessing comparative negligence.  Justice Green (joined by Chief Justice Jefferson and Justice Johnson) dissented.

In Frymire Engineering Co. v. Jomar International, Ltd. (No. 06-0755), the Court held that the subrogation doctrine applies to a subcontractor seeking to recover contractual payments from alleged third-party tortfeasors, provided the doctrine's traditional requirements are satisfied. 

In Leland v. Brandal (No. 06-1028), a health-care liability case, the Court determined that a plaintiff may receive a 30-day extension to cure a deficient expert report after a ruling that the report is adequate has been reversed on appeal.  Justice Brister dissented. 

In Kao Holdings, L.P. v. Young (No. 07-0197) (per curiam), a restricted appeal, the Court reversed a default judgment granted against an individual who was not named as party to the suit, modified the judgment, and affirmed as modified.

In Evanston Insurance Co. v. ATOFINA Petrochemicals, Inc. (No. 03-0647), the Court denied the motions for rehearing, withdrew its February 15, 2008 opinion and judgment (which were themselves issued on rehearing), and issued a substitute opinion reaching mostly the same result.  Rather than render a complete judgment, however, the Court remanded the case to the trial court for further proceedings on some of the insured's claims for attorney's fees and its prejudgment interest claim.

• Print
• Comments
• Trackbacks

In Osborne v. Jauregui, Inc., a dispute over a defectively built home,a divided panel of the Third Court of Appeals has reversed and remanded the trial court's judgment declining to award the plaintiffs attorney's fees and denying an intervening insurer's subrogation claim.

Plaintiffs sued the architect/builder and several subcontractors, alleging DTPA violations and other causes of action.  Their homeowners insurer (State Farm) intervened to assert subrogation rights for benefits previously paid.  Plaintiffs settled with all defendants except the builder, against whom they proceeded to trial and obtained an $835,158 jury verdict.  After applying a dollar-for-dollar credit for the $1,260,500 in settlement proceeds, the trial court refused to award attorney's fees under the DTPA, denied State Farm's subrogation claim, and rendered a take-nothing judgment. Plaintiffs and State Farm appealed.

The appellate court first concluded that plaintiffs were "prevailing parties" entitled to attorney's fees under the DTPA, even though the settlement credit negated the jury's damage award.  Noting a split of authority on this issue, the court distinguished this case on the basis that it did not involve prior payments by the same defendant against whom plaintiffs had gone to trial.  Because plaintiffs prevailed against the lone remaining defendant, who had not contributed to the settlement, they were entitled to fees.  The court remanded for calculation of the appropriate amount.

Addressing State' Farm's issues, the court of appeals acknowledged the Texas Supreme Court's recent decision in Fortis Benefits v. Cantu, which held that contract-based subrogation rights trump equitable considerations.  Although the court of appeals criticized the positions State Farm took in the litigation and noted that State Farm did not allocate the settlement proceeds to losses covered by insurance payments, it nevertheless reversed and remanded the subrogation issue so that the trial court could review the contractual subrogation language under Fortis Benefits and determine whether the policy or equitable principles control.

Justice Puryear dissented, citing his belief that plaintiffs were not prevailing parties in light of the one-satisfaction rule and thus are not entitled to attorney's fees.  Applying Fortis Benefits, Justice Puryear further concluded that the insurance contract governed the subrogation issue and that State Farm was entitled to subrogation against the settlement funds.

This is a very interesting case.  When the dust settles, I expect the supreme court will give it a close look.

• Print
• Comments (1)
• Trackbacks