National Union Fire Insurance Co. of Pittsburgh v. John Zink Co.

972 S.W.2d 839, 1998 WL 271089
CourtCourt of Appeals of Texas
DecidedJune 18, 1998
Docket13-96-282-CV
StatusPublished
Cited by36 cases

This text of 972 S.W.2d 839 (National Union Fire Insurance Co. of Pittsburgh v. John Zink Co.) 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
National Union Fire Insurance Co. of Pittsburgh v. John Zink Co., 972 S.W.2d 839, 1998 WL 271089 (Tex. Ct. App. 1998).

Opinion

OPINION

FEDERICO G. HINOJOSA, Jr., Justice.

This is an appeal from a summary judgment in an insurance subrogation case. Appellants, National Union Fire Insurance Company of Pittsburgh, Pennsylvania and Industrial Risk Insurers (collectively, “Insurers”) brought subrogation claims against ap-pellees, John Zink Company, Puffer-Sweiven Corpus Christi, Inc., Puffer-Sweiven, Inc., Puffer-Sweiven Trading Corporation, Puffer-Sweiven Texas, Inc., Fisher Controls In-temational, Fisher Controls Installation & Service Company, Fisher Controls Company, Inc., and Valtek Company. 1 Appellees moved for and were granted summary judgment. 2 By ten points of error, the Insurers contend the trial court erred in denying their special exceptions and in granting appellees’ motions for summary judgment. We reverse and remand.

1. Factual BackgROünd

Valero 3 entered into a $500 million contract with Kellogg 4 to design, engineer, and construct an expansion to a refinery in Corpus Christi. The Insurers allege that on July 13, 1984, a vertical air pre-heater exploded and caused property damage to the refinery. They also allege that on May 27, 1985, a fire occurred in a citrate scrubber stack as a result of malfunctions in bypass valves, a computing controller card, and a housing cabinet. The refinery again sustained severe damages. Because the damages were covered by insurance policies issued by both National Union and Industrial Risk, claims for the property damages were paid by both Insurers. 5 The Insurers paid approximately $3.6 million to Valero ($1.6 million for the air pre-heater claim and $2 million for the citrate scrubber stack claim). The claims were paid before any subrogation suit was filed.

The contract between Valero and Kellogg imposed certain obligations on the parties, including that Kellogg and its subcontractors purchase liability insurance. The Insurers allege that each of the appellees in this ease were subcontractors of Kellogg who in some manner were responsible for the failed equipment. The Insurers specifically allege that: *842 (1) Zink manufactured the defective air pre-heater; (2) Fisher manufactured the defective computer-control system; and (3) the system was distributed by Puffer-Sweiven and Valtek.

The Insurers filed two suits against appel-lees seeking to recover the amounts they paid to Valero. These cases were consolidated with an action brought by Valero against appellees for recovery of uninsured losses arising from the same occurrences. Prior to consolidation, the Insurers intervened in Va-lero’s lawsuit. Subsequently, Kellogg and another defendant, Ingersoll-Rand Company, moved for and were granted summary judgment against Valero. The Insurers’ causes of action were severed into this case and abated pending Valero’s appeal of Kellogg’s and Ingersoll-Rand’s summary judgment. We affirmed the summary judgment in Valero Energy Corp. v. M.W. Kellogg Constr. Co., 866 S.W.2d 252 (Tex.App.—Corpus Christi 1993, writ denied) ("Valero 7”). 6 The trial court allowed this ease to proceed and subsequently granted the complained of summary judgment.

2. The Claims and GROUNDS FOR Summary Judgment

Each subrogation suit claimed products liability and negligence related to the manufacture and/or installation of a different product. The suits also alleged breach of contract and breach of an agreement to indemnify Valero through insurance obtained to cover losses such as those at issue. Related to their allegation that appellees failed to obtain insurance coverage, the Insurers also alleged breach of fiduciary duty, breach of the duty of good faith and fair dealing, violation of article 21.21 of the Texas Insurance Code, and breach of the Texas Deceptive Trade Practices — Consumer Protection Act (DTPA), to the extent the DTPA is incorporated into the Texas Insurance Code. The Insurers sought recovery from all applicable insurance policies available to appellees, and from the individual defendants, if they failed to obtain the requisite insurance coverage.

In their motions for summary judgment, appellees claimed that the Insurers’ wholly derivative claims had been eliminated when we found in Valero I that, under the terms of the contract, Valero had waived all of its claims against Kellogg and its subcontractors. In addition, appellees argued that under the law of the ease doctrine, the Insurers were bound by Valero I. Puffer-Sweiven and Zink also contended that summary judgment was proper because limitations and judicial estoppel barred the Insurers’ claims. Zink further argued that the express terms of the Kellogg/Zink contract precluded the Insurers’ claims.

The Insurers specially excepted and responded to appellees’ motions. The Insurers’ special exceptions were denied. By ten points of error, the Insurers contend the trial court erred in:

1) granting summary judgment;
2) granting summary judgment on the basis that Valero I barred the Insurers’ different claims in a separate case;
3) granting summary judgment on the basis of Valero I because Valero did not raise the Insurers’ claims in that claim;
4) denying the Insurers’ special exceptions to the “Background” portion of the motions which asserted that the Insurers had agreed to be bound by Valero I and then granting summary judgment on that basis;
5) denying special exceptions and granting summary judgment because the Insurers did not agree to be bound on issues not addressed in Valero I;
6) granting summary judgment based on the doctrine of the law of the case;
7) granting summary judgment based on the terms of the alleged agreement between Kellogg and Zink;
8) granting summary judgment based on any statute of limitations;
*843 9) denying special exceptions going to the absence of pleadings to support summary judgment based on judicial estop-pel; and
10) granting summary judgment based on judicial estoppel.

3. Standard of Review

The proper inquiry .on appeal is whether the defendant, in seeking summary judgment, fulfilled his initial burden (1) to establish as a matter of law that there remained no genuine issue of material fact as to one or more essential elements of the plaintiffs cause of action or (2) to establish his affirmative defense to the plaintiffs cause of action as a matter of law. Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989); Nixon v. Mr. Property Management Co.,

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Bluebook (online)
972 S.W.2d 839, 1998 WL 271089, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-fire-insurance-co-of-pittsburgh-v-john-zink-co-texapp-1998.