United States Fire Insurance Co. v. Moseley

551 S.W.2d 429, 1976 Tex. App. LEXIS 3348
CourtCourt of Appeals of Texas
DecidedNovember 17, 1976
DocketNo. 15531
StatusPublished
Cited by1 cases

This text of 551 S.W.2d 429 (United States Fire Insurance Co. v. Moseley) 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
United States Fire Insurance Co. v. Moseley, 551 S.W.2d 429, 1976 Tex. App. LEXIS 3348 (Tex. Ct. App. 1976).

Opinion

CADENA, Justice.

This is a plea of privilege case. Defendants, United States Fire Insurance Company, General Adjustment Bureau, Inc., and Highlands Insurance Company, appeal from an order of a district court of Bexar County overruling their pleas of privilege. The suit was filed by plaintiff, H. C. Moseley, in his capacity as operating receiver, appointed by a United States District Court in arrangement proceedings under Chapter XI of the Federal Bankruptcy Act (11 U.S.C. §§ 701-708), of American Grain and Cattle, Inc., an agricultural cooperative organized under the laws of the State of Texas.

In this opinion the following designations will be used: United States Fire Insurance Company will be identified as “U. S. Fire”; General Adjustment Bureau will be identified as “General”; Highlands Insurance Company will be identified as “Highlands”; H. C. Moseley will be identified as “Receiver”; and American Grain and Cattle, Inc. will be identified as “Debtor.” Defendants, U. S. Fire, General, and Highlands will sometimes be referred to collectively as “appellants.”

The Receiver was appointed on January 30, 1975. On February 5, 1975, Debtor, without joining Receiver and without seeking approval of the court in which the arrangement proceedings were pending, filed suit against appellants and two other defendants in a district court of Bexar County. The purpose of this suit was to recover actual and exemplary damages because of the refusal of appellants, in pursuance of what Debtor described as a conspiracy between appellants and the other two defendants, to pay to Debtor moneys allegedly due Debtor following the destruction by fire and explosion of buildings and their contents, owned by Debtor and insured against such loss.

Each appellant timely filed its plea of privilege on March 3, 1975. Debtor failed to file controverting affidavits in response to these pleas.

On March 4, 1975, Great American Life Insurance Company, one of the other defendants named in Debtor’s suit, filed its motion to dismiss the suit, alleging that Debtor lacked capacity to prosecute such suit in its own name because, prior to the institution of such suit, H. C. Moseley had been appointed operating Receiver for Debtor in the Chapter XI arrangement proceedings. Apparently, the trial court has never ruled on this motion.

On March 21, 1975, the United States District Court, in which the Chapter XI proceedings are pending, entered an order on application of Debtor and Receiver. This order (1) authorized, nunc pro tunc, the retention of counsel for the purpose of instituting the proceedings described in the application of Debtor and Receiver, that is, the suit which had been previously filed by Debtor in Bexar County; (2) authorized, nunc pro tunc, the institution of such proceedings; and (3) authorized Debtor and Receiver to join as parties plaintiff in such Bexar County proceedings.

On March 24,1975, appellants filed in the pending Bexar County litigation motions to transfer the case to Dallas County, where U. S. Fire and General maintain their principal offices, or to Harris County, the location of the principal office of Highlands. Appellants alleged they were entitled to such transfer because of Debtor’s failure to controvert their pleas of privilege within the time prescribed by law.

On March 25, 1975, Debtor dismissed its suit against appellants. At the time of such dismissal, the trial court had taken no action on appellants’ pleas of privilege nor on their motions to transfer the case. At the time the voluntary nonsuit was taken, Receiver had not been made a party to the proceedings, nor had he intervened or sought to intervene in such suit.

There can be no doubt that the venue issue must be considered to have been conclusively adjudicated adversely to Debt- or as a result of his voluntary dismissal of [431]*431his suit while the plea of privilege was pending. Tempelmeyer v. Blackburn, 141 Tex. 600, 175 S.W.2d 222 (1943); Heifer v. Texas Employers’ Insurance Association, 467 S.W.2d 687 (Tex.Civ.App. — San Antonio 1971, no writ); 1 MacDonald, Texas Civil Practice §§ 4.48, 4.62, pp. 592, 628 (1965 rev.). As between appellants and Debtor, then, the venue issue is deemed to have been conclusively decided in favor of appellants as a result of the prior proceedings. This rule has been described in terms of an application of the doctrine of res judicata.

The first question to be determined is whether appellants may, in this action, assert as against Receiver, the prior proceedings as conclusively determinative of the venue issue.

The parties agree that a question of law or issue of fact which has once been litigated and adjudicated in a court of competent jurisdiction cannot be relitigated in a subsequent suit between the same parties or those in privity with them. Swilley v. McCain, 374 S.W.2d 871, 874 (Tex.1964). However, there is disagreement as to whether the required identity of parties is present in this case in order to preclude the relitigation of the venue issue in this case by Receiver.

Receiver is a successor of the Debtor for many purposes. With certain exceptions not believed relevant here, clauses 5 and 6 of § 70 of the Federal Bankruptcy Act (11 U.S.C. § 110(a)(5, 6)) vest the Receiver with title to (1) contract actions to which the Debtor had title on the date the bankruptcy proceedings were filed and (2) all rights of action to which the bankrupt had title on the date the bankruptcy petition was filed and which the bankrupt could have transferred or creditors could have seized prior to such filing. These clauses undoubtedly gave Receiver title to Debtor’s claims against the insurers for the amounts the insurers contracted to pay as indemnity. The clauses also vest in Receiver title to actions for those consequential damages that Debtor would have suffered if the insurers’ failure to pay had not forced him into insolvency. But it appears that Receiver did not succeed to the Debtor’s cause of action for damages resulting from the fact that Debtor was forced into bankruptcy. Although such damages may have stemmed from a wrong perpetrated before bankruptcy, such damages are not suffered until the bankruptcy petition is filed. Reichert v. General Insurance Company of America, 59 Cal.Rptr. 724, 428 P.2d 860, 867-68 (Cal.1967).

The petition in the suit filed by Debtor seeks to recover damages, allegedly flowing from the insurers’ refusal to pay indemnity for lost profits, loss of members, loss of ability to buy grain, loss of ability to repair Debtor’s property in time for the grain season, and losses resulting from the fact that Debtor was unable to handle its grain automatically and being forced to handle the grain manually. No mention is made of the fact of Debtor’s bankruptcy, nor is it alleged that the bankruptcy itself had resulted in damage to Debtor.

Receiver’s petition in this case seeks recovery for the same items of damage enumerated in Debtor’s prior suit, with no mention being made of damages flowing from the fact that Debtor became bankrupt.

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Bluebook (online)
551 S.W.2d 429, 1976 Tex. App. LEXIS 3348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fire-insurance-co-v-moseley-texapp-1976.