Tommy Bovee v. Liberty Mutual Fire Insurance Company--Appeal from 170th District Court of McLennan County

IN THE

TENTH COURT OF APPEALS

No. 10-91-117-CV

TOMMY BOVEE,

Appellant

v.

LIBERTY MUTUAL FIRE INSURANCE

COMPANY,

Appellee

From the 170th District Court

McLennan County, Texas

Trial Court # 90-2049-4

O P I N I O N

In 1988, Tommy Bovee settled his worker's compensation suit against Liberty Mutual Fire Insurance Company by an agreed judgment in which he received $12,000 cash and two years of future medical coverage. He instituted this proceeding against Liberty Mutual in June 1990 to set aside the agreed judgment by a bill of review. The court, however, granted a summary judgment in Liberty Mutual's favor, and Bovee appeals. We affirm in part and reverse and remand in part.

Bovee alleged five grounds for the bill of review: extrinsic fraud, mistake, newly discovered evidence, duress, and undue influence. Liberty Mutual moved for a summary judgment only on the ground that extrinsic fraud was not established as a matter of law. Yet, the court granted the summary judgment denying the bill of review on all grounds.

A summary judgment can be granted only on the grounds specifically alleged in the motion. Tex. R. Civ. P. 166a(c); City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1979). Bovee's second point, that the court erred when it granted the summary judgment on grounds not alleged in the motion, is sustained.

A judgment in a bill-of-review proceeding should either deny all relief to the petitioner or set aside the final judgment and substitute in its place a new judgment adjudicating the entire controversy between the parties. See Hubbard v. Tallal, 127 Tex. 242, 92 S.W.2d 1022, 1023 (1936). Here, the court improvidently denied Bovee relief on all grounds asserted for the bill of review. He alleges in point three that the court thus erred when it summarily denied him any recovery on three causes of action alleged against Liberty Mutual in the bill of review: breach of the duty of good faith and fair dealing, violation of article 21.21 of the Texas Insurance Code, and violation of the Deceptive Trade Practices Act. He conditioned these grounds of recovery on the agreed judgment being vacated.

Because the court erred when it denied all relief on the bill of review, it likewise erred when it denied any recovery on the causes of action asserted in the bill of review and conditioned on the agreed judgment being set aside. Point three is sustained.

PARTIAL REVERSAL AND REMAND

We reverse the summary judgment to the extent it denies the bill of review on the grounds of mistake, newly discovered evidence, duress, and undue influence, and remand these issues for a trial. Likewise, we reverse the summary judgment to the extent it denies Bovee recovery on the three causes of action alleged in the bill of review and conditioned on the agreed judgment being set aside.

EXTRINSIC FRAUD

Bovee attempts to construct extrinsic fraud out of the following facts. He contends his physicians erroneously determined that he would not need surgery; that his physicians misrepresented his true medical condition in their reports; that he and Liberty Mutual relied on the misrepresentations in the medical reports in settling the compensation suit by the agreed judgment; that he learned he needed surgery only after the agreed judgment became final; that he had two unsuccessful surgical procedures that did not correct his disability; and that he would not have settled the claim and agreed to the judgment if he had known his true medical condition. Relying on Rodriguez v. American Home Assur. Co., 735 S.W.2d 241, 242 (Tex. 1987), he argues that his physicians became Liberty Mutual's agents when the company relied on their reports to settle the claim and enter the agreed judgment. Bovee contends that Liberty Mutual was guilty of extrinsic fraud because it obtained the agreed judgment by using its own agents' misrepresentations of his medical condition.

Fraud that will support a bill of review must be extrinsic to matters that were actually tried or potentially in issue in the trial. Montgomery v. Kennedy, 669 S.W.2d 309, 312 (Tex. 1984). Extrinsic fraud relates to the way the final judgment was obtained, not to what was determined in the judgment. Id. It is wrongful conduct practiced extraneous to the trial. See Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996, 1001-002 (1950).

The extent of Bovee's disability and his entitlement to compensation benefits were the core issues before the court and finally determined by the agreed judgment. Assuming that his allegations of fraud were true and that those acts were attributable to Liberty Mutual, the fraud was intrinsic as a matter of law because it related to the issues tried. See id.; Jordan v. New Amsterdam Casualty Company, 378 S.W.2d 890, 892 (Tex. Civ. App. Houston 1964, writ ref'd n.r.e.). We are not holding, however, that any fraud was practiced by or attributable to Liberty Mutual. Accordingly, the court properly entered the summary judgment on the ground that the evidence conclusively established that any fraud was not extrinsic but intrinsic. Point one is overruled.

PARTIAL AFFIRMANCE

We affirm the summary judgment to the extent it denies the bill of review on the ground of extrinsic fraud.

BOB L. THOMAS

Chief Justice

Before Chief Justice Thomas,

Justice Cummings and

Justice Vance

Affirmed in part and reversed

and remanded in part

Opinion delivered and filed April 8, 1992

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