BMW of North America, LLC v. Candace Gunn, Adminstratrix of the Estate of Gary Don Gunn, Sr.

CourtCourt of Appeals of Texas
DecidedJuly 9, 2018
Docket05-17-00600-CV
StatusPublished

This text of BMW of North America, LLC v. Candace Gunn, Adminstratrix of the Estate of Gary Don Gunn, Sr. (BMW of North America, LLC v. Candace Gunn, Adminstratrix of the Estate of Gary Don Gunn, Sr.) 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
BMW of North America, LLC v. Candace Gunn, Adminstratrix of the Estate of Gary Don Gunn, Sr., (Tex. Ct. App. 2018).

Opinion

Reverse and Render; Opinion Filed July 9, 2018.

In The Court of Appeals Fifth District of Texas at Dallas No. 05-17-00600-CV

BMW OF NORTH AMERICA, LLC, Appellant V. CANDACE GUNN, ADMINSTRATRIX OF THE ESTATE OF GARY DON GUNN, SR., Appellee

On Appeal from the Probate Court No. 2 Dallas County, Texas Trial Court Cause No. PR-16-03004-2

MEMORANDUM OPINION Before Justices Bridges, Myers, and Boatright Opinion by Justice Myers In this permissive appeal from the denial of its motion for summary judgment, appellant

BMW of North America, LLC, asks us to review whether this lawsuit brought by appellee Candace

Gunn, administratrix of the estate of Gary Don Gunn, Sr., was an impermissible collateral attack

on a prior final judgment by a court of competent jurisdiction. In five issues, BMW argues (1)

Candace Gunn’s lawsuit should be dismissed as an impermissible collateral attack; (2) Gunn’s

claims are barred by res judicata; (3) Gunn’s claims are precluded by a prior settlement agreement

and contractual release; (4) Gunn is precluded from rescinding the prior settlement agreement and

release; and (5) Gunn is not entitled to a declaratory judgment as a matter of law. We reverse the

trial court’s judgment and render judgment dismissing all claims. BACKGROUND AND PROCEDURAL HISTORY

In October of 2004, appellee Candace Gunn, as next friend of her husband Gary Don Gunn,

Sr., an incapacitated adult, sued appellant BMW of North America (BMW) in the 68th Judicial

District Court of Dallas County. The suit alleged that the motorcycle Gary Gunn was riding when

he was seriously injured in an accident was unreasonably dangerous as designed, manufactured,

marketed and tested. When a settlement was proposed, the trial court appointed a former district

judge as a guardian ad litem to evaluate the terms of the settlement and determine whether the

amount of the settlement to Gary Gunn was “fair and reasonable, given all the facts and

circumstances of the case.”

In the “Confidential Settlement Agreement and Complete Release,” BMW paid a sum to

the trustee for Candace Gunn, as next friend of Gary Gunn, in exchange for a release from liability

for any claims made in connection with the motorcycle, the accident, and Gary Gunn’s injuries.

The agreement identified the releasors as follows:

The parties who are releasing and discharging claims, actions and causes of action are CANDACE GUNN, As Next Friend of GARY DON GUNN, SR., an Incapacitated Adult, in Gary Don Gunn, Sr.’s individual capacity, and his heirs, executors, administrators, agents, successors, representatives, attorneys, assigns, and anyone claiming by or through them.

The settlement agreement was signed on December 10, 2004, by Candace Gunn as next friend of

Gary Gunn, and was approved and payment acknowledged by the plaintiffs’ counsel and the

guardian ad litem. In a separate agreement signed that same day, Candace Gunn also released and

discharged her claims, actions, and causes of action against BMW, among other parties.

At a “[p]rove-up” hearing held on December 10, 2004, Candace Gunn testified that she

stood in Gary Gunn’s shoes such that her signatures were “the same as if Gary were in here with

us,” and that the settlement agreement was in Gary Gunn’s best interest. She understood that the

settlement “finally and forever forecloses any future claims, demands or payments from BMW”

–2– that she could make as Gary Gunn’s next friend “or in any other capacity.” She testified that her

attorneys had fully explained the settlement documents and that she understood their terms. She

testified that she knew the trial court would not approve the settlement unless it was what she

wanted. She also testified that as next friend of Gary Gunn, she believed the settlement agreement

was fair, just, equitable, and in the best interest of Gary Gunn. The guardian ad litem testified that

he approved the settlement as “fair and reasonable and in the best interest of Gary Gunn. . . .”

On December 10, 2004, the trial court signed an agreed judgment approving the settlement

and the releases. The judgment ordered, adjudged, and decreed that BMW was “fully discharged

from any liability under the provisions of this judgment and fully discharged from any liability

based on any claims, demands or causes of action arising out of the Accident and/or this Lawsuit.”

Candace Gunn approved the agreed judgment as to form and agreed to entry of the judgment, as

did the plaintiffs’ attorney and the guardian ad litem.

Almost eleven years later, in August of 2015, Candace Gunn, now serving as the

administrator of her late husband’s estate, brought an ancillary proceeding in a Dallas County

probate court against BMW of North America, among other parties, based on the same motorcycle

accident, factual allegations, alleged injuries, and legal theories as the previous action. This

ancillary claim was severed into a separate proceeding, which is the case that is now before us.

Gunn sought a declaration that the 68th Judicial District Court’s judgment was void, arguing Gary

Gunn suffered from a legal disability of mental incapacity after the accident, and that no guardian

was appointed by a court of competent jurisdiction. She argued that although the 68th Judicial

District Court purported to appoint a guardian ad litem on Gary Gunn’s behalf, the district court

had no authority to do so because Dallas County had dedicated probate courts that retained

exclusive jurisdiction over that subject matter. She further argued Gary Gunn had not received

due process as well as the process guaranteed to him under the laws of the State of Texas, and that

–3– the releases that were signed on his behalf were ineffective because they were not approved by a

duly appointed guardian for Gary Gunn.

BMW moved for traditional summary judgment on the grounds that the lawsuit was an

impermissible collateral attack and that it was barred by res judicata and the releases the plaintiff

signed, among other legal theories. In response, Candace Gunn argued that the 68th Judicial

District Court had no authority to accept the prior settlement because the claims in that case were

subject to the exclusive jurisdiction of a statutory probate court. She argued that the trial court

lacked personal jurisdiction over Gary Gunn because it denied him due process. She argued res

judicata did not apply because of a lack of privity, and that the bar of release was inapplicable

because the releases were not signed by Gary Gunn. She also argued that the prerequisites for

rescission did not apply. The trial court denied BMW’s motion for summary judgment but granted

BMW permission to bring this interlocutory appeal.

DISCUSSION

In its first issue, appellant contends Gunn’s probate court lawsuit must be dismissed

because it is an impermissible collateral attack on a final judgment of a court of competent

jurisdiction. Appellant argues that the 68th Judicial District Court had jurisdiction over Gary Gunn

and had the authority to recognize Candace Gunn as next friend of Gary Gunn and appoint a

guardian ad litem. Further, the 68th Judicial District Court issued a final judgment following a

settlement agreement and a release of all claims.

A judgment of a court of general jurisdiction is not subject to collateral attack in a court of

equal jurisdiction unless the judgment is void. Browning v. Placke,

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BMW of North America, LLC v. Candace Gunn, Adminstratrix of the Estate of Gary Don Gunn, Sr., Counsel Stack Legal Research, https://law.counselstack.com/opinion/bmw-of-north-america-llc-v-candace-gunn-adminstratrix-of-the-estate-of-texapp-2018.