Transportation Insurance Co. v. Franco

821 S.W.2d 751, 1992 WL 11109
CourtCourt of Appeals of Texas
DecidedFebruary 14, 1992
Docket07-91-0086-CV
StatusPublished
Cited by19 cases

This text of 821 S.W.2d 751 (Transportation Insurance Co. v. Franco) 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
Transportation Insurance Co. v. Franco, 821 S.W.2d 751, 1992 WL 11109 (Tex. Ct. App. 1992).

Opinion

BOYD, Justice.

Appellant Transportation Insurance Company (Transportation) appeals from a summary judgment voiding a compromise settlement agreement between Transportation and appellee Guillermo Franco (Franco), and awarding attorneys’ fees to Franco’s counsel. For the reasons expressed below, we affirm the judgment of the trial court.

The underlying facts are not disputed. While employed with Tri-State Feed Yards, Franco was injured and he retained an attorney to process the ensuing workers’ compensation claim. In the course of doing so, the attorney presented Franco with a settlement proposal from Transportation, Tri-State’s insurance carrier. Franco verbally refused the settlement. The attorney then told Franco he must sign papers re- *753 fleeting his refusal. Franco, who is incapable of reading or writing in either Spanish or English, signed papers he believed refused the settlement.

Distrusting his first attorney, Franco hired another attorney to represent his interests before the Industrial Accident Board (IAB). Under Franco’s signature, that attorney drafted a letter to the first attorney requesting the return of the file and sent a copy of the letter to the IAB.

The papers Franco signed did not reject, but accepted the settlement. The first attorney presented the executed compromise settlement agreement to the IAB and, despite its prior receipt of Franco’s letter, the IAB approved the compromise settlement agreement.

Believing Franco agreed to the settlement, and in view of the IAB’s action, Transportation acted on the agreemént by issuing a check. Franco was not aware that the papers he signed agreed to the settlement until his first attorney informed him that the check had been received. Franco refused to endorse the check or accept the settlement. Franco’s name was forged, apparently by the first lawyer, endorsing the check, but he has received no proceeds from the settlement.

After Franco’s second attorney ceased to represent him, his present counsel filed this action seeking a declaratory judgment canceling the agreement on the basis of the extrinsic fraud perpetuated by his first attorney, coupled with the factual mistake of the IAB in approving the agreement presented by that attorney after it received notice that he was no longer authorized to represent Franco.

Transportation contends in three points of error that the summary judgment setting aside the compromise agreement was in error because (1) Franco has neither alleged, nor offered any proof of a cause of action against Transportation, (2) the trial court had no jurisdiction to render judgment under the Declaratory Judgment Act 1 and, (3) the action is barred by the two-year statute of limitations. Finally, Transportation contends that the award of attorneys’ fees to Franco’s present counsel was erroneous, and grounds the contention on favorable rulings by this court on points of error one and two, as well as the fact that it was improper to award attorneys’ fees directly to the attorney. We will address those points seriatim.

In its first point of error, Transportation contends that the setting aside of the agreement was erroneous because Franco did not allege a cause of action against it, but based the suit for cancellation solely on his first attorney’s actions. Transportation has misconstrued the basis for the declaratory judgment action and confused it with a separate cause of action against Franco’s first attorney.

Franco may have a cause of action against his first attorney based upon his handling of the workers’ compensation claim. Although such an action would be supported by the same factual events as the present suit, his remedy against his first attorney is separate and distinct from that sought here because the invasion is of a different right, thereby creating separate causes of action. The statute is to be construed liberally and the existence of another adequate remedy at law does not bar a suit under the Act. Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 713 (1945). Indeed, a declaratory judgment action is an additional remedy, not supplanting any other remedy, but is intended for the determination of the rights of the parties when a real controversy has arisen and even before the wrong has actually been committed. Id.

Recitations of fact in a cancellation suit such as this are incidental to the relief sought. Texas Employers’ Insurance Association v. Maynard, 345 S.W.2d 447, 448 (Tex.Civ.App.—Texarkana 1961, no writ). Consequently, that the facts supporting the cancellation give rise to a separate cause of action against a third party is incidental to *754 the validity of the agreement. The facts were recited as support for the cancellation, not to establish a cause of action against Transportation.

It is not necessary that Franco state a cause of action against Transportation before he can seek a declaration from the court that the agreement is invalid. Garwood Irr. Co. v. Lundquist, 252 S.W.2d 759, 760 (Tex.Civ.App.—Galveston 1952, writ ref’d). The justiciable controversy essential to the maintenance of a declaratory judgment action can be shown by the imminence of litigation between the parties, unless the contractual differences between them are judicially declared. Reuter v. Cordes-Hendreks Coiffures, Inc., 422 S.W.2d 193, 196 (Tex.Civ.App.—Houston [14th Dist.] 1967, no writ). A suit under the Act is not confined to cases in which the parties have a cause of action apart from the Act itself. An actual right of action in one party against another in which consequential relief might be granted need not exist before one is entitled to file a suit for declaratory relief. Garwood Irr. Co. v. Lundquist, supra.

The statute provides that relief is available to:

(a) A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder. [and]
(b) A contract may be construed either before or after there has been a breach.

Tex.Civ.Prac. & Rem.Code Ann. sec. 37.004 (Vernon 1986).

The record clearly reflects that Franco, a person interested in and affected by the written agreement, sought to have the court determine its validity, as provided in the language of the statute. Franco’s summary judgment evidence established a controversy sufficient to bring suit under the Act. Transportation's first point of error is overruled.

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Bluebook (online)
821 S.W.2d 751, 1992 WL 11109, Counsel Stack Legal Research, https://law.counselstack.com/opinion/transportation-insurance-co-v-franco-texapp-1992.