Robert Schorovsky v. Texas Property and Casualty Insurance Guaranty Association--Appeal from 201st District Court of Travis County

Schor. v. Tx Guar TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-95-00374-CV
Robert Schorovsky, Appellant
v.
Texas Property and Casualty Insurance Guaranty Association, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
NO. 92-17309A, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING

Appellant Robert Schorovsky ("Schorovsky") sued SIR Lloyds Insurance Company ("SIR Lloyds") and Standard Financial Indemnity Corporation ("SFIC"), both in liquidation and receivership, seeking to recover damages stemming from their failure to timely pay certain workers' compensation benefits. Appellee, Texas Property Casualty and Guaranty Association (the "Guaranty Association"), appeared on behalf of the impaired insurers. (1) Appellant contends the trial court erred in granting summary judgment in favor of the Guaranty Association. We will affirm the trial court's judgment.

 
BACKGROUND

On January 2, 1991, Schorovsky, while employed by TMBR/Sharp Drilling, Inc. ("TMBR"), (2) was injured in an on-the-job accident. Schorovsky filed a workers' compensation claim with TMBR, and on January 3, 1991, TMBR's workers' compensation carrier, SFIC, began paying Schorovsky temporary weekly income benefits. On September 10, 1991, SFIC was placed into temporary receivership. Pursuant to the temporary restraining order and order appointing a temporary receiver, the Statutory Liquidator for the Texas Department of Insurance, as the Temporary Receiver, suspended payment of benefits to all SFIC claimants, including appellant. Payments were resumed on October 9, 1991, and Schorovsky received all of the benefits which had accrued during the suspension.

On March 12, 1992, SFIC was placed in permanent receivership. The Commissioner of Insurance, as the Permanent Receiver, appointed Arnold Reyes as Special Deputy Receiver, and all covered claims were subsequently paid by the Guaranty Association. On July 30, 1992, the Receiver terminated benefits to Schorovsky, alleging that he was engaged in activities inconsistent with the alleged injuries for which he was receiving workers' compensation benefits. In response, Schorovsky initiated a proceeding with the Texas Workers' Compensation Commission, which in turn convened a Benefit Review Conference on March 16, 1993. Schorovsky and SFIC, while in receivership, settled the dispute, agreeing that temporary income benefits for the eight-week period ending September 23, 1992, would be paid to Schorovsky.

In addition to initiating the proceeding before the Texas Workers' Compensation Commission, Schorovsky filed suit against SIR Lloyds and SFIC. SIR Lloyds was jointly owned and operated with SFIC, but the companies were separate entities and were placed in separate receivership estates. Although not named as a defendant, the Guaranty Association was served with process and made a general appearance by answering the petition. Schorovsky subsequently amended his petition to add Arnold Reyes, Special Deputy Receiver for SFIC, as a defendant. Reyes was served and answered. The Guaranty Association, SIR Lloyds and SFIC filed separate motions for summary judgment which the trial court granted on February 24, 1995. Following rendition of summary judgment, the Guaranty Association filed a motion for severance which was also granted. (3)

 
DISCUSSION

The standards for reviewing summary judgment are well established: (1) the movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The purpose of summary judgment is to eliminate patently unmeritorious claims and defenses, not to deprive litigants of their right to a full hearing on the merits of any real issue of fact. Gulbenkian v. Penn, 252 S.W.2d 929, 931 (Tex. 1952). When a trial court does not specify the grounds on which it granted summary judgment, summary judgment will be affirmed on any meritorious theory asserted in the motion. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

In his sole point of error, Schorovsky contends that the trial court erred in granting the Guaranty Association's motion for summary judgment because article 21.28, section 4(f) of the Texas Insurance Code (the "Code"), as applied to him, violates article I, section 13 of the Texas Constitution (the Open Courts Doctrine). (4) A careful review of the record before us reveals that Schorovsky has failed to preserve his complaint for appeal.

The general rules of summary judgment pleading provide that the motion for summary judgment must itself state the specific reasons entitling the movant to summary judgment. Tex. R. Civ. P. 166a(c). Any issues the non-movant urges to avoid the movant's entitlement to summary judgment must be expressly presented by written answer to the motion or by other written response to the motion and are not expressly presented by mere reference to summary judgment evidence. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993); see City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). Failure to provide such a response has the effect of limiting the non-movant's appeal to the sufficiency of the grounds presented by the movant. McConnell, 858 S.W.2d at 343; Clear Creek, 589 S.W.2d at 678. Moreover, even constitutional challenges that were not presented in the trial court cannot be the grounds for reversal of summary judgment on appeal. See Riojas v. Phillips Properties, Inc., 828 S.W.2d 18, 22 (Tex. App.--Corpus Christi 1991, writ denied); Amroso v. Aldine Indep. Sch. Dist., 808 S.W.2d 118, 122 (Tex. App.-- Houston [1st Dist.] 1991, writ denied).

In the record before us, the Guaranty Association based its entitlement to summary judgment as a matter of law upon the assertion that its authority to pay claims against insolvent insurance companies is limited by the provisions of the Texas Insurance Code. See Code art. 21.28-C (West Supp. 1996). (5)

A review of appellant's response reveals that Schorovsky failed to challenge the Guaranty Association's entitlement to summary judgment on the asserted basis, nor did he raise any affirmative defenses. As a result, the scope of his appeal is now limited to challenging the grounds asserted by the Guaranty Association. See McConnell, 858 S.W.2d at 343.

Schorovsky does not challenge the legal sufficiency of the basis for summary judgment against him, but instead asserts an alleged violation of the Open Courts Doctrine for the first time on appeal. Schorovsky failed to make his constitutional challenge to the trial court in his response to the Guaranty Association's motion for summary judgment and therefore such a challenge cannot be the basis for reversal of summary judgment on appeal. See Riojas, 828 S.W.2d at 22; Amroso, 808 S.W.2d at 122.

Appellant could have made a general assignment that the trial court erred in granting summary judgment; he did not. Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970). Because the judgment was based on a ground not specifically challenged by appellant and since there was no general assignment that the trial court erred in granting summary judgment, we must conclude that the judgment of the trial court must stand. Consequently, appellant's sole point of error is overruled.

 
CONCLUSION

The judgment of the trial court is affirmed.

 

Marilyn Aboussie, Justice

Before Justices Powers, Aboussie and Kidd

Affirmed

Filed: June 12, 1996

Do Not Publish

1. 1 The Guaranty Association is a non-profit, unincorporated legal entity created pursuant to the Texas Insurance Code, Article 21.28-C, 6. The primary purpose of such an insurance guaranty association is to recover certain claims that cannot be paid out of limited assets of the receivership estate. Durish v. Channelview Bank, 809 S.W.2d 273, 275 (Tex. App.--Austin 1991, writ denied). The Guaranty Association is responsible for the payment of "covered claims" against SFIC as defined by article 21.28-C, 5(8), of the code.

2. 2 SIR Lloyds was TMBR's workers' compensation carrier before SFIC.

3. 3 In a separate appeal decided today by this Court, in cause no. 03-95-00464, we consider the trial court's order granting summary judgment in favor of SFIC and SIR Lloyds.

4. 4 Article 21-28 section (4)(f) of the Code provides as follows:

 

Pending Lawsuits. No judgment or order rendered by any court of this State or of any other jurisdiction in any action pending by or against the delinquent insurer after the commencement of delinquency proceedings shall be binding upon the receiver unless the receiver shall have been made a party to such suit.

 

Tex. Ins. Code Ann. art. 21-28, 4(f) (West Supp. 1996).

5. 5 Article 21.28-C of the Code specifically grants the Guaranty Association the authority to pay only "covered claims" of claimants. The term "covered claim" is defined as

 

[A]n unpaid claim of an insured or third-party liability claimant that arises out of and is within the coverage and not in excess of the applicable limits of an insurance policy to which this Act applies, issued or assumed (whereby an assumption certificate is issued to the insured) by an insurer licensed to do business in this state, if that insurer becomes an impaired insurer and the third-party claimant or liability claimant or insured is a resident of this state at the time of the insured event, or the claim is a first-party claim for damage to property that is permanently located in this state . . . .

Tex. Ins. Code Ann. art. 21.28-C, 5(8) (West Supp. 1996). In the instant case, Schorovsky alleges that "[t]he basis of his lawsuit is that worker's compensation was paid, but not on consistent days and times." Further, it is on this basis that Schorovsky alleges breach of contract, breach of fiduciary duty, tortious interference with business, and negligence. Article 21.28-C, section 5(8) specifically prohibits the Guaranty Association from paying the types of claims asserted by Schorovsky by excluding them from the definition of a "covered claim." Section 5(8) provides the following:

 

. . . "Covered claim" shall not include any claim for recovery of punitive, exemplary, extracontractual, or bad-faith damages, whether sought as a recovery against the insured, insurer, guaranty association, receiver, special deputy receiver, or commissioner, awarded in a court judgment against an insured or insurer.

 

Tex. Ins. Code. Ann. art. 21-28-C, 5(8) (West Supp. 1996).