Willard v. Davis

881 S.W.2d 907, 1994 Tex. App. LEXIS 1925, 1994 WL 398725
CourtCourt of Appeals of Texas
DecidedAugust 3, 1994
Docket2-94-131-CV
StatusPublished
Cited by22 cases

This text of 881 S.W.2d 907 (Willard v. Davis) 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
Willard v. Davis, 881 S.W.2d 907, 1994 Tex. App. LEXIS 1925, 1994 WL 398725 (Tex. Ct. App. 1994).

Opinion

OPINION

FARRAR, Justice.

Relator, H. Thomas Willard, D.O., seeks a writ of mandamus ordering the Honorable Fred Davis to rescind his order of June 9, 1994 and to stay all proceedings of the underlying lawsuit for six months in accordance

*909 with the Property and Casualty Insurance Guaranty Act. Tex.Ins.Code Ann. art. 21.28-C, § 17 (Vernon Supp.1994).

We conditionally grant relator’s petition for writ of mandamus.

This is a medical malpractice cause of action in which relator is one of several defendant health care providers. The parties were conducting discovery when relator’s liability insurer, Professional Medical Insurance Company (ProMed), was adjudged insolvent and placed in receivership by a Missouri court on April 7, 1994. On April 15, 1994, the State of Texas Insurance Commissioner designated ProMed as an “impaired insurer” under article 21.28-C, section 5 of the Texas Insurance Code. 1 The Texas Property Guaranty Association undertook to discharge ProMed’s policy obligations.

On May 23, 1994, relator filed a motion to take notice of stay, asking the trial court to stay the suit for six months as required by section 17 of article 21.28-C of the Texas Insurance Code. Tex.Ins.Code Ann. art. 21.-28-C, § 17 (Vernon Supp.1994).

In their response to relator’s motion, the real parties-in-interest alleged the statute is unconstitutional, claiming section 17 violates the “open courts” provision of the Texas constitution and impermissibly restricts the plaintiffs’ common-law causes of action against relator and the other defendants and deprives them of a jury trial. Tex. Const. art. I, §§ 13,15. The real parties-in-interest further asserted section 17 violates their right to equal process of the law and creates special privileges and immunities, each in violation of the federal and Texas constitutions, and is arbitrary and discriminatory, favoring the impaired insurer and its insured. U.S. Const, amend. XIV; Tex. Const, art. I, § 19. Finally, the real parties-in-interest contended section 17 violates the separation of powers doctrine of the federal and Texas constitutions and violates the rulemaking authority of the Texas Supreme Court under the Texas Constitution. Tex. Const, art. II, § 1.

On May 24, 1994, the trial court held a hearing on the motion to take notice of stay. At the hearing, relator testified that his insurer, ProMed, had defended him in the instant case up until the time he received a letter disclosing it had been declared insolvent. Relator tendered into evidence a copy of the insurance contract and certified copies of the Order of Liquidation and the Order of Impairment from the Texas Department of Insurance, dated May 5, 1994, declaring ProMed to be impaired. The real parties-in-interest produced no evidence to show why relator is not entitled to the stay and offered no authority in support of their position that section 17 is unconstitutional. However, the trial court found section 17 was unconstitutional and refused to stay the suit.

In his petition relator asks this court to order the trial court to rescind its order and to stay the suit for six months in accordance with the Property and Casualty Insurance Guaranty Act. Tex.Ins.Code Ann. art. 21.28-C, § 17 (Vernon Supp.1994). Relator asserts the trial court abused its discretion in declaring section 17 unconstitutional and in doing so without stating why the statute is unconstitutional. Relator argues the purpose of the Act is to provide a means of payment of covered claims and to avoid financial loss to claimants because of an insurer’s insolvency. See Tex.Ins.Code Ann. art. 21.28-C, § 2 (Vernon Supp.1994). Relator further contends the purpose of the stay is to ensure the Guaranty Association provides a proper defense for all pending causes of action against an impaired insurer. See Tex.Ins.Code Ann. art. 21.28-C, § 17 (Vernon Supp.1994). Further, relator asserts section 17 mandates an “automatic” six month stay and is nothing more than a procedural delay, much like the bankruptcy automatic stay. Relator further claim respondent is without jurisdiction to take any other action, including allowing discovery to proceed. Finally, relator argues he is entitled to mandamus relief because he has no adequate remedy at law.

*910 The real parties-in-interest assert in their response the trial court did not abuse its discretion in failing to recognize the stay and in ruling that the statute is unconstitutional, and the relator has an adequate remedy at law. In addition, the real parties-in-interest claim relator and the guaranty fund are not impaired by the denial of the stay, and the trial court’s ruling is not “void ab initio.” Real parties-in-interest now attempt to characterize their challenge and the trial court’s order as finding the statute unconstitutional “as applied.” We disagree with this characterization. The real parties’ motion and argument to the court was that section 17 was unconstitutional, and we construe 1 the trial court’s order to declare section 17 unconstitutional on its face.

On June 16, 1994, this court granted an emergency stay on all discovery proceedings and ordered the relator and real parties-in-interest to brief the following two issues:

a) Was the attorney general served with the pleading challenging the constitutionality of section 17 of article 21.28-C, and if not, was such service required?
b) If such service was required, did the trial court have jurisdiction to rule on the statute’s constitutionality?

See Tbx.Civ.PRAC. & Rem.Code Ann. § 37.-006(b) (Vernon 1986).

The real parties-in-interest challenge our authority to make this request, asserting that by ordering briefing on this point, we employed an incorrect standard of review and imposed on them the burden to disprove relator’s right to mandamus relief. See Walker v. Packer, 827 S.W.2d 833, 837 (Tex.1992) (orig. proceeding) (relator has the burden of providing a sufficient record to establish his right to mandamus relief). We disagree with the real parties’ contention. Each court of appeals may, on affidavit or otherwise, as the court may determine, ascertain matters of fact that are necessary to the proper exercise of its jurisdiction. Tex. Gov’t.Code Ann. § 22.220 (Vernon 1988). Where this court’s jurisdiction is unclear, we may require further facts and briefing. See Jones v. Griege, 803 S.W.2d 486, 488 (Tex. App.—Dallas 1991, no writ). Jurisdiction over indispensable parties to a suit is essential to the court’s right to proceed to judgment. Eddowes v. Oswald, 621 S.W.2d 843, 846 (Tex.App.—Fort Worth 1981, no writ). If the trial court proceeds to judgment without an indispensable party, it commits fundamental error. Id. Similarly, if jurisdiction had not been invoked in the trial court, this court would err if we were to address the merits of relator’s case.

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Bluebook (online)
881 S.W.2d 907, 1994 Tex. App. LEXIS 1925, 1994 WL 398725, Counsel Stack Legal Research, https://law.counselstack.com/opinion/willard-v-davis-texapp-1994.