POWERS, Justice.
Nationwide Mutual Insurance Company appeals from a summary judgment recovered by Henry Patterson. We will affirm the judgment.
THE CONTROVERSY
Patterson drove an automobile involved in a collision with William Presley Brown, Jr., an uninsured motorist. Patterson’s automobile was covered by a policy of insurance written and issued by Nationwide in North Carolina. The policy included uninsured-motorist coverage in the amount of $50,000. Patterson and two passengers sustained injuries in the collision.1
After Nationwide refused to pay Patterson under his uninsured-motorist coverage, he [715]*715sued Brown and Nationwide in an original petition alleging against Brown a cause of action for negligence and against Nationwide a cause of action on the policy or contract and a cause of action for breach of a duty of good faith and fair dealing. Nationwide, after service of citation, appeared and answered by a general denial then moved immediately for severance of Patterson’s cause of action for breach of a duty of good faith and fair dealing. The trial court ordered the severance a week later. The present appeal invokes only Patterson’s contract action.
Brown, the uninsured motorist, failed ti appear or answer after service and return of citation. Approximately eleven months after filing suit, Patterson obtained against Brown an interlocutory default judgment for $50,000 after proving compensatory damages in that amount. After obtaining the default judgment, Patterson in a second amended original petition alleged again against Nationwide his contract cause of action under the uninsured-motorist provision of the policy. In a fourth amended original answer, Nationwide interposed a general denial and a plea that Patterson’s injuries were proximately caused, in whole or in part, by his own negligence, and prayed that Patterson take nothing by his claim. In this state of the pleadings, Patterson recovered a final summary judgment against Nationwide and Brown, jointly and severally, in the amount of $50,000. Nationwide appeals from the judgment.
DISCUSSION AND HOLDINGS
In point of error two, Nationwide complains Patterson was not entitled to judgment as a matter of law, on his contract claim, because he failed to comply with the following policy provision: “Any judgment for damages arising out of a suit is not binding on us unless we have been served with a copy of the summons, complaint, or other process against the uninsured motorist.” The purpose of the provision is to effectuate North Carolina law that secures certain elections and protections for the uninsured-motorist carrier.2
From the record it appears Nationwide was served with a citation to which was attached a copy of Patterson’s original petition alleging a cause of action against Brown for negligence and causes of action against Nationwide on the insurance contract and for breach of a duty of good faith and fair dealing. The citation instrument describes the lawsuit by its style: “Henry Patterson Et A1 Plaintiff, VS. Nationwide Mutual Ins. Co. Et A1 Defendant.” The citation instrument does not name Brown as a defendant sued by Patterson, save indirectly by the Latin abbreviation “et al” indicating another defendant. From this failure to designate Brown in the citation, by name, Nationwide argues “[i]t necessarily follows ... that Nationwide was served with a lawsuit [sic] against Nationwide, which it duly answered; Nationwide was not served with a lawsuit against the uninsured motorist, and therefore, it is not bound to the default judgment under the policy” (emphasis in original).
Although Nationwide does not mention the matter, Rule 99 required that the [716]*716citation “show names of parties.” Tex.R. Civ. P. 99. Any defect of form in the citation as process was waived, however, by Nationwide’s voluntary general appearance resulting from its filing a general denial. Tex.R. Civ. P. 121. The defect in the citation claimed by Nationwide as a policy defense — a failure to serve Nationwide with a copy of the citation served Brown — was waived by Nationwide’s filing an unconditional general denial of coverage and liability and an amended petition that repeated the general denial and added an affirmative plea that denied coverage because Patterson’s injuries resulted from his own negligence in whole or in part. See Ford v. State Farm Mut. Auto. Ins. Co., 660 S.W.2d 663, 666 (Tex.1977) (insurer’s unconditional denial of liability under uninsured-motorist provisions of policy constituted waiver of policy provision requiring insurer’s consent before insured settled with third party). We overrule point of error two.
In point of error one, Nationwide complains the trial court erred in granting summary judgment because, under Texas law, Nationwide was not permitted to defend the uninsured motorist (Brown) and prevent a default judgment being taken against him. We disagree with Nationwide’s statement of Texas law. As a presumption, it is true, the existence of conflicting interests and fiduciary duties precludes an insurer from defending an uninsured motorist against the company’s own insured.3 See Allstate Ins. Co. v. Hunt, 450 S.W.2d 668 (Tex.Civ.App.—Houston [14th Dist.] 1970), aff'd, 469 S.W.2d 161 (Tex.1971). The prohibition, however, is not absolute. As indicated by the supreme court in Hunt:
Our conclusion is that it should be left to the discretion of the trial court to pass upon the disqualification or conflict of interest, with the burden being upon the insurance company to show no substantial conflict of interest. We hold that the trial court did not abuse its discretion in this case.
There may be other instances where the insured motorist is clearly at fault and the insurance company has not, in fact, obtained confidential information from its insured [as it did in Hunt]. The lack of substantial conflict of interest, and the right of the insurance company to protect itself, would weigh on the side of allowing it to participate in the trial on the side of the uninsured motorist.
469 S.W.2d at 153. Hunt thus creates a presumption that a conflict of interest precludes the insurer from acting against its insured’s interest, but allows the insurer to do so on a proper showing.
Patterson obtained in November 1995 an interlocutory default judgment against Brown following a hearing at which Nationwide appeared pursuant to notice. In April 1997 Patterson moved for summary judgment on his contract claim against Nationwide. Nationwide filed in the same month a response to Patterson’s motion contending the trial court should overrule the motion because the company could not defend Brown under Texas law and “should not now be penalized by being bound to a judgment that it could not defend against.”
Nothing in the summary judgment record indicates that Nationwide invoked, at any time, the trial judge’s discretion to allow Nationwide to defend against Patterson’s claim because circumstances, such as those suggested in Hunt, resulted in an attenuation of the conflict of interests that ordinarily precludes an insurer’s defending against an insured’s claim.
Free access — add to your briefcase to read the full text and ask questions with AI
POWERS, Justice.
Nationwide Mutual Insurance Company appeals from a summary judgment recovered by Henry Patterson. We will affirm the judgment.
THE CONTROVERSY
Patterson drove an automobile involved in a collision with William Presley Brown, Jr., an uninsured motorist. Patterson’s automobile was covered by a policy of insurance written and issued by Nationwide in North Carolina. The policy included uninsured-motorist coverage in the amount of $50,000. Patterson and two passengers sustained injuries in the collision.1
After Nationwide refused to pay Patterson under his uninsured-motorist coverage, he [715]*715sued Brown and Nationwide in an original petition alleging against Brown a cause of action for negligence and against Nationwide a cause of action on the policy or contract and a cause of action for breach of a duty of good faith and fair dealing. Nationwide, after service of citation, appeared and answered by a general denial then moved immediately for severance of Patterson’s cause of action for breach of a duty of good faith and fair dealing. The trial court ordered the severance a week later. The present appeal invokes only Patterson’s contract action.
Brown, the uninsured motorist, failed ti appear or answer after service and return of citation. Approximately eleven months after filing suit, Patterson obtained against Brown an interlocutory default judgment for $50,000 after proving compensatory damages in that amount. After obtaining the default judgment, Patterson in a second amended original petition alleged again against Nationwide his contract cause of action under the uninsured-motorist provision of the policy. In a fourth amended original answer, Nationwide interposed a general denial and a plea that Patterson’s injuries were proximately caused, in whole or in part, by his own negligence, and prayed that Patterson take nothing by his claim. In this state of the pleadings, Patterson recovered a final summary judgment against Nationwide and Brown, jointly and severally, in the amount of $50,000. Nationwide appeals from the judgment.
DISCUSSION AND HOLDINGS
In point of error two, Nationwide complains Patterson was not entitled to judgment as a matter of law, on his contract claim, because he failed to comply with the following policy provision: “Any judgment for damages arising out of a suit is not binding on us unless we have been served with a copy of the summons, complaint, or other process against the uninsured motorist.” The purpose of the provision is to effectuate North Carolina law that secures certain elections and protections for the uninsured-motorist carrier.2
From the record it appears Nationwide was served with a citation to which was attached a copy of Patterson’s original petition alleging a cause of action against Brown for negligence and causes of action against Nationwide on the insurance contract and for breach of a duty of good faith and fair dealing. The citation instrument describes the lawsuit by its style: “Henry Patterson Et A1 Plaintiff, VS. Nationwide Mutual Ins. Co. Et A1 Defendant.” The citation instrument does not name Brown as a defendant sued by Patterson, save indirectly by the Latin abbreviation “et al” indicating another defendant. From this failure to designate Brown in the citation, by name, Nationwide argues “[i]t necessarily follows ... that Nationwide was served with a lawsuit [sic] against Nationwide, which it duly answered; Nationwide was not served with a lawsuit against the uninsured motorist, and therefore, it is not bound to the default judgment under the policy” (emphasis in original).
Although Nationwide does not mention the matter, Rule 99 required that the [716]*716citation “show names of parties.” Tex.R. Civ. P. 99. Any defect of form in the citation as process was waived, however, by Nationwide’s voluntary general appearance resulting from its filing a general denial. Tex.R. Civ. P. 121. The defect in the citation claimed by Nationwide as a policy defense — a failure to serve Nationwide with a copy of the citation served Brown — was waived by Nationwide’s filing an unconditional general denial of coverage and liability and an amended petition that repeated the general denial and added an affirmative plea that denied coverage because Patterson’s injuries resulted from his own negligence in whole or in part. See Ford v. State Farm Mut. Auto. Ins. Co., 660 S.W.2d 663, 666 (Tex.1977) (insurer’s unconditional denial of liability under uninsured-motorist provisions of policy constituted waiver of policy provision requiring insurer’s consent before insured settled with third party). We overrule point of error two.
In point of error one, Nationwide complains the trial court erred in granting summary judgment because, under Texas law, Nationwide was not permitted to defend the uninsured motorist (Brown) and prevent a default judgment being taken against him. We disagree with Nationwide’s statement of Texas law. As a presumption, it is true, the existence of conflicting interests and fiduciary duties precludes an insurer from defending an uninsured motorist against the company’s own insured.3 See Allstate Ins. Co. v. Hunt, 450 S.W.2d 668 (Tex.Civ.App.—Houston [14th Dist.] 1970), aff'd, 469 S.W.2d 161 (Tex.1971). The prohibition, however, is not absolute. As indicated by the supreme court in Hunt:
Our conclusion is that it should be left to the discretion of the trial court to pass upon the disqualification or conflict of interest, with the burden being upon the insurance company to show no substantial conflict of interest. We hold that the trial court did not abuse its discretion in this case.
There may be other instances where the insured motorist is clearly at fault and the insurance company has not, in fact, obtained confidential information from its insured [as it did in Hunt]. The lack of substantial conflict of interest, and the right of the insurance company to protect itself, would weigh on the side of allowing it to participate in the trial on the side of the uninsured motorist.
469 S.W.2d at 153. Hunt thus creates a presumption that a conflict of interest precludes the insurer from acting against its insured’s interest, but allows the insurer to do so on a proper showing.
Patterson obtained in November 1995 an interlocutory default judgment against Brown following a hearing at which Nationwide appeared pursuant to notice. In April 1997 Patterson moved for summary judgment on his contract claim against Nationwide. Nationwide filed in the same month a response to Patterson’s motion contending the trial court should overrule the motion because the company could not defend Brown under Texas law and “should not now be penalized by being bound to a judgment that it could not defend against.”
Nothing in the summary judgment record indicates that Nationwide invoked, at any time, the trial judge’s discretion to allow Nationwide to defend against Patterson’s claim because circumstances, such as those suggested in Hunt, resulted in an attenuation of the conflict of interests that ordinarily precludes an insurer’s defending against an insured’s claim. Instead, as indicated by Nationwide’s response to Patterson’s motion for summary judgment, the company simply assumed Nationwide could not defend against Patterson’s claim under any circumstances and could not, therefore, prove the company’s allegations that Patterson’s negligence was a proximate cause, in whole or in part, of his injuries. In this state of the summary-judgment record, the trial court was bound [717]*717by the Hunt presumption and did not err in sustaining Patterson’s motion for summary judgment. We hold accordingly and overrule point of error two.
In point of error three, Nationwide contends it “should not be bound by the default judgment against” Brown because Texas law governed the case under choice-of-law principles and precluded Nationwide’s defense against Patterson’s claims. The parties agree that Texas law governed the case.4 As stated above, Hunt did not establish an absolute rule that an insurer may not defend against its own insured; Hunt placed the matter in the trial judge’s discretion, to be exercised according to the circumstances under a presumption that the insurer was not entitled to defend against its insured. Nationwide never invoked that discretion and the trial judge was therefore bound by the presumption.5 We overrule the point of error.
Finding no error, we affirm the trial-court judgment.