Berkel v. Texas Property & Casualty Insurance Guaranty Ass'n

92 S.W.3d 584, 2002 WL 31476881
CourtCourt of Appeals of Texas
DecidedDecember 5, 2002
Docket03-01-00084-CV
StatusPublished
Cited by6 cases

This text of 92 S.W.3d 584 (Berkel v. Texas Property & Casualty Insurance Guaranty Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Berkel v. Texas Property & Casualty Insurance Guaranty Ass'n, 92 S.W.3d 584, 2002 WL 31476881 (Tex. Ct. App. 2002).

Opinion

*586 JOHN E. POWERS, Justice (Retired).

John W. Berkel, P.C. (“Berkel”) sued the Texas Property and Casualty Insurance Guaranty Association (“Association”) and Stephen S. Durish (“Receiver”) in his capacity as receiver for National County Mutual Fire Insurance Company (“National”). 1 On competing motions for summary judgment, the trial court awarded Berkel judgment against the association in the amount of $6,306 on Berkel’s cause of action to enforce a contract. 2 The judgment denied, however, Berkel’s related claims for statutory attorney’s fees, statutory postjudgment interest, and prejudgment interest.

The Association appeals from that part of the judgment awarding Berkel a recovery of $6,306. We will affirm that part of the judgment. Berkel appeals from that part of the judgment denying its claims for attorney’s fees, prejudgment interest, and postjudgment interest. We will reverse that part of the judgment, sever it from the remainder, and remand to the trial court the part reversed.

THE CONTROVERSY

Leonard Jiminez purchased from National a policy of automobile-liability insurance. In 1986, during the policy term, Jane T. Winnow sued Jiminez in Harris County to recover for personal injuries she allegedly sustained in an automobile collision with Jiminez. National engaged Berkel to defend Jiminez. Following a jury trial in March 1989, the trial court ordered that Winnow take nothing by her suit against Jiminez.

In Cause Number 453,041, the 201st Judicial District Court of Travis County, by an order dated October 24, 1988, placed National in receivership. The receivership proceeding was governed by article 21.28 of the Texas Insurance Code. See Tex. Ins.Code Ann. art. 21.28 (West Supp.2002). On February 9, 1989, the Commissioner of Insurance designated National an “impaired insurer” as defined in article 21.28-C of the code. See Tex. Ins.Code Ann. art. 21.28-C, § 5(9) (West Supp.2002). Berkel thereafter filed in Cause Number 453,041 an updated proof of claim for services provided and expenses incurred in defending Jiminez.

In a letter dated November 14, 1989, the Receiver notified Berkel as follows:

[Your claim] has been approved as a covered claim in the amount of $6,306.00 under the provisions of Article[s] 21.28 and 21.28-C of the Texas Insurance Code. A check in the amount of $6,306.00 will be forwarded to you when *587 we receive a properly executed release. Please execute the enclosed release and have it properly notarized [sic] before a notary public before returning it to us.

(Emphasis added.) Berkel signed the sworn release before a notary public on November 28, 1989, and returned it to the Receiver. Thereafter the Receiver gave Berkel a bank check in the amount of $6,306 dated January 4, 1990. It was, however, made payable to Berkel and Jim-inez jointly. Berkel was unable to locate Jiminez to obtain his endorsement. As a result, Berkel could not negotiate the check for payment. The Receiver refused to issue a check payable solely to Berkel. Berkel’s written demand for payment was unsuccessful.

While the receivership remained pending in Cause Number 453,041, Berkel filed in the same court a petition initiating Cause Number 479,513, the litigation now before us on appeal. The original petition, afterward amended, fairly set forth alternative causes of action, namely: (1) an action to enforce an express contract allegedly evidenced by Berkel’s proof of claim, the Receiver’s letter of November 14,1989, Berkel’s execution and delivery of the release, and the $6,306 bank check; (2) an action for breach of that alleged contract; and, (3) an action on sworn account. Because we conclude the summary judgment record established as a matter of law Berkel’s right to recover on the first cause of action, we need not discuss the others.

The cause now before us remained unad-judicated when the judge in the receivership proceeding signed on August 5, 1994, an “Agreed Order in Connection with Guaranty Association’s Election.” Among other provisions, the agreed order directed the Receiver to notify “all persons and entities with pending unresolved ‘covered claims’ in this receivership” that the Association had elected to assume the payment of “covered claims” under articles 21.28 and 21.28-C. Under the heading “Findings,” the receivership court determined as follows in the agreed order: (1) the Association is the receiver’s “statutory successor ... with respect to the obligation to handle and pay all ‘covered claims’ on policies issued by National County”; (2) the Association, in electing to assume payment of covered claims “does not succeed to or assume any liabilities ... which have been asserted against the Receiver ... which are not ‘covered claims’ as defined in Tex. Ins.Code Ann. art. 21.28-C”; and, (3) the Association “has no obligations in connection with any other claims except those that are ‘covered claims.’ ”

In a verified answer filed in the present cause after the date of the agreed order, the Association interposed against Berkel’s actions the following: (1) a general denial and a denial of the particulars of Berkel’s sworn account; (2) a denial that the Association was a party to any contract alleged by Berkel as a basis for a contract action; and, (3) a denial that Berkel’s claim was a “covered claim,” the only kind of claim for which the Association is liable under the Code. The Association alleged Berkel’s claim was not a covered claim under the Code because Berkel’s proof of claim was defective; and, moreover, neither the Receiver nor the Association was obliged to defend Jiminez for whom Berkel conducted a defense. Construing this last-named allegation most favorably to the Association, we interpret it to be an allegation that Berkel’s claim was not a covered claim because it did not arise out of the Jiminez policy and was not within its coverage, a matter we will explain below.

The parties filed competing motions for summary judgment consistent with their theories of action and defense. Without stating a basis therefor, the trial court awarded Berkel summary judgment for *588 $6,306 but denied Berkel’s related claims for statutory attorney’s fees, prejudgment interest, and postjudgment interest. These appeals ensued.

THE STATUTES

The material facts are undisputed. The appeals depend upon the construction and application of articles 21.28 and 21.28-C of the Texas Insurance Code, as those statutes existed at the relevant times. The two statutes govern receivership proceedings applicable to certain kinds of insurance companies. We believe it will be convenient and useful to summarize the relevant statutory provisions before turning to the parties’ respective assignments of error. In our summary, unless otherwise indicated, citations refer to the Texas Insurance Code as it existed in 1999. 3

Article 21.28

Article 21.28, insofar as it applies here, establishes procedures that govern the receivership of insurers domiciled in Texas.

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92 S.W.3d 584, 2002 WL 31476881, Counsel Stack Legal Research, https://law.counselstack.com/opinion/berkel-v-texas-property-casualty-insurance-guaranty-assn-texapp-2002.