Seth Grimes v. Amber Dawn Dike--Appeal from 294th District Court of Van Zandt County

NO. 12-05-00386-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

 TYLER, TEXAS

SETH GRIMES, APPEAL FROM THE 294TH

APPELLANT

V. JUDICIAL DISTRICT COURT OF

AMBER DAWN DIKE,

APPELLEE VAN ZANDT COUNTY, TEXAS

MEMORANDUM OPINION

This is an appeal from a summary judgment granted Defendant-Appellee, Amber Dawn Dike. In two issues, Plaintiff-Appellant, Seth Grimes, asserts that the trial court erroneously interpreted a release of liability. We reverse and remand.

Background

Dike and Grimes were involved in an auto accident. Dike had two primary insurers who provided coverage for losses suffered in the accident, Southern Farm Bureau Casualty Insurance Company ( Southern ) and Metropolitan Casualty Insurance Company ( Metropolitan ). In May 2004, Grimes, in consideration of $25,000 paid by Southern, signed a form release releasing Amber Dike, Eddie Dike, Southern, and all its agents and employees from

[a]ny and all past, present or future claims, demands, obligations, actions, causes of action, wrongful death claims, rights, damages, costs, losses of services, loss of consortium, expenses and compensation of any nature whatsoever, whether based on a tort, contract or other theory of recovery, which the releasor now has, or which may hereafter accrue or otherwise be acquired, on account of, or in any way growing out of the accident described above. . . .

 

On the second page of the release, a typed paragraph was added, which reads as follows:

[T]he full release applies to Releasee individually and Company. Releasee and Company and Releasor do not intend by this agreement to preclude Releasor from seeking additional money from other insurance companies that have liability coverage incident to the accident in question.

Grimes contends that it was the intent of the parties that Southern be released entirely and that Dike be released from any personal liability, but that Grimes retain the right to obtain an additional recovery from Dike s other carrier, Metropolitan.

Because a third party may not ordinarily sue a tortfeasor s insurer, Grimes later sued Dike solely, he insists, to trigger Metropolitan s coverage. Dike pleaded the release as an affirmative defense.

Dike moved for both traditional and no evidence summary judgments. Grimes filed a response with affidavits. The trial court granted Dike s motion for summary judgment, but its order does not state the basis of its ruling.

Grant of Summary Judgment

In his first issue, Grimes contends the trial court erred in determining that the release unambiguously precluded suit against Dike and entering summary judgment, despite the typewritten provision of the release reserving to Grimes the right to seek additional money from other insurance companies that have liability coverage incident to the accident in question. In his second issue, Grimes maintains the trial court erred in ignoring the intention of the parties and the facts and circumstances attending the execution of the release as set forth in the affidavits of Grimes s counsel and of Southern s adjuster who negotiated the release.

Standard of Review

A summary judgment is reviewed de novo. ValenceOperating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2003). In the case of a traditional summary judgment, (1) the movant has the burden of showing that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law; (2) in deciding whether there is a material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; (3) every reasonable inference must be indulged in favor of the nonmovant; and (4) any doubts must also be resolved in favor of the nonmovant. D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002). Once the movant has established a right to summary judgment, the nonmovant must respond to the motion for summary judgment by presenting to the trial court any issues that would defeat the movant s right to summary judgment. Failing to do so, the nonmovant may not later assign them as error on appeal. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979). A motion for summary judgment must present the grounds upon which it is made, and it must stand or fall on these grounds alone. See Tex. R. Civ. P. 166a(c). Issues not expressly presented to the trial court by written motion or response to the motion for summary judgment cannot be considered by an appellate court as grounds for reversal. Clear Creek Basin Auth., 589 S.W.2d at 674-75; see also Tex. R. Civ. P. 166a(c). When the motion for summary judgment is based on several grounds, and the trial court does not state the basis for granting the motion, the summary judgment must be affirmed if any of the theories urged by the movant are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2001).

A no evidence motion must specifically set forth the elements of the adverse party s claim or defense for which there is no evidence. Tex. R. Civ. P. 166a(i). Upon the filing of the motion, the burden shifts to the nonmovant, who must present more than a scintilla of probative evidence to raise a genuine issue of material fact. Jacksonv. Fiesta Mart, Inc., 979 S.W.2d 68, 70-71 (Tex. App. Austin 1998, no pet.). If the nonmovant fails to provide evidence raising a genuine issue of material fact, the trial court must grant the motion. Tex. R. Civ. P. 166a(i). A no evidence summary judgment is essentially a pretrial directed verdict, and the same legal sufficiency standard is applied by appellate courts. Texas Capital Sec. Mgmt., Inc. v. Sandefer, 80 S.W.3d 260, 264 (Tex. App. Texarkana 2002, no pet.).

Applicable Law

A release is a contract and is subject to the same rules of construction as a contract. Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). If [a contract] is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and the court will construe the contract as a matter of law. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). A contract, however, is ambiguous when its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning. Id. Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in the light of the circumstances present when the contract was entered. Id. at 394. When a contract contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue. Id. In construing a written contract, the primary concern of the court is to ascertain the true intention of the parties as expressed in the instrument. Id.at 393. Courts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Id.;see also J. M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument. Coker, 650 S.W.2d at 393.

If typewritten provisions of a contract conflict with printed provisions, the typewritten provisions must be given effect over the printed provisions. McCreary v. Bay Area Bank & Trust, 68 S.W.3d 727, 732 (Tex. App. Houston [14th Dist.] 2001, pet. dism d).

Where a release is ambiguous, parol evidence may be offered to explain its ambiguities. Punch v. Gerlach, 267 S.W.2d 182, 185 (Tex. Civ. App. Beaumont 1954, writ ref d n.r.e.); Ditto v. Piper, 244 S.W.2d 547, 549 (Tex. Civ. App. Fort Worth 1951, writ ref d n.r.e.). Parol evidence is admissible to explain both latent and patent ambiguities. Roberts v. Short, 1 Tex. 373, 380-81 (1846); Mercantile Nat l Bank at Dallas v. Nat l Cancer Research Found., 488 S.W.2d 605, 610 (Tex. Civ. App. Dallas 1972, writ ref d n.r.e.). A release is to be construed in the light of the facts and circumstances surrounding its execution. Boales v. Brighton Builders, Inc., 29 S.W.3d 159, 167 (Tex. App. Houston [14th Dist.] 2000, pet. denied). The court in Mutual Fire & Auto Ins. Co. v. Green, 235 S.W.2d 739 (Tex. Civ. App. Fort Worth 1950, no writ), held that parol evidence may be considered to interpret a release wherein a broad general release is recited in the first paragraph, but later language appears to limit the broad release. Id.at 742.

Discussion

Grimes argues the trial court ignored three controlling rules of contract construction: (1) construe the entire instrument not giving any single provision controlling effect; (2) construe the instrument so that no provision is rendered meaningless; and (3) construe typed provisions as controlling.

Grimes further maintains that it well recognized under Texas law that a third party cannot sue an alleged tortfeasor s insurer directly before judgment. He insists that under the law, which the contracting parties are presumed to have known, the only mechanism available for him to pursue Metropolitan s coverage incident to the accident was to sue Dike directly in order to have her liability determined and thereby reach the coverage provided by the nonsettling carrier. Grimes explains that this is the only way for him to exercise the right expressly reserved to him in the release. He argues that if the entire release is considered, giving effect to all its provisions so that none will be rendered meaningless, the typed provision must mean something. He urges that the only thing it can mean under Texas law is that the parties [to the release] limited the release to preclude personal liability but allow suit [against Dike] to trigger insurance coverage. According to Grimes, [a]ny other interpretation renders the provision meaningless, and contradicts the undisputed actual intent of the parties, which was to allow exactly this suit to recover insurance proceeds against Metropolitan.

Dike concedes that considering the written language of the document, the parties intended for Grimes to preserve his ability to pursue additional insurance coverage, but not his ability to pursue her. She argues that the release demonstrates the parties intent to completely release her. Dike contends that [t]he fact that [Grimes] preserved a contractual right that Texas law does not allow him to exercise does not change the intent of the parties as expressed in the release. If the parties intended to preserve the ability of Grimes to sue her, Dike argues, they could have written the release that way.

We agree that, with the benefit of hindsight, the parties could have easily drawn the release to more clearly express the purpose Grimes maintains was intended. And it is not apparent that the language used in the typewritten paragraph is adequate, unaided by other evidence, to accomplish the avowed end of releasing Dike from all personal liability, while still permitting Grimes to file suit against her for the sole purpose of recovering insurance proceeds from Metropolitan.

The interpretation urged by Dike, however, ignores the cardinal rule of contract construction, that when construing a contract, courts must examine and consider the entire writing in an effort to harmonize and give effect to all [its provisions] so that none will be rendered meaningless. J.M. Davidson, 128 S.W.3d at 229. Dike s interpretation gives effect only to the provisions of the printed form release and renders the typewritten provision meaningless. When there is a conflict between printed and typewritten clauses in a document, the typewritten provisions must be given effect over the printed provisions. McCreary, 68 S.W.3d at 732.

The parties included in the release two seemingly inconsistent statements regarding its scope. We have considered the entire release in the light of the circumstances surrounding its execution. We conclude that the instrument is ambiguous because it is susceptible to more than one interpretation and that extrinsic evidence will be required to resolve the ambiguity. A fact issue exists as to its legal effect. Therefore, summary judgment was not appropriate.

Disposition

The judgment is reversed and the cause remanded to the trial court for further proceedings.

BILL BASS

Justice

Opinion delivered July 12, 2006.

Panel consisted of Worthen, C.J., Griffith, J. and Bass, Retired Justice, Twelfth Court of Appeals, Tyler, sitting by assignment.

(PUBLISH)

 

[1]

 

COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

JULY 12, 2006

NO. 12-05-00386-CV

SETH GRIMES,

Appellant

V.

AMBER DAWN DIKE,

Appellee

 

Appeal from the 294th Judicial District Court

of Van Zandt County, Texas. (Tr.Ct.No. 05-00343)

 

THIS CAUSE came to be heard on the appellate record and briefs filed herein, and the same being inspected, because it is the opinion of this Court that there was error in the judgment of the court below, it is ORDERED, ADJUDGED and DECREED by this Court that the judgment be Reversed and the cause Remanded to the trial court For Further Proceedings in accordance with the opinion of this Court; and that this decision be certified to the court below for observance.

Bill Bass, Justice.

Panel consisted of Worthen, C.J., Griffith, J., and Bass, Retired Justice,

Twelfth Court of Appeals, Tyler, sitting by assignment.

 

THE STATE OF TEXAS

M A N D A T E

*********************************************

TO THE 294TH DISTRICT COURT of VAN ZANDT COUNTY, GREETING:

Before our Court of Appeals for the 12th Court of Appeals District of Texas, on the 12th day of July, 2006, the cause upon appeal to revise or reverse your judgment between

SETH GRIMES, Appellant

NO. 12-05-00386-CV; Trial Court No. 05-00343

Opinion by Bill Bass, Justice.

AMBER DAWN DIKE, Appellee

was determined; and therein our said Court made its order in these words:

THIS CAUSE came to be heard on the appellate record and briefs filed herein, and the same being inspected, because it is the opinion of this Court that there was error in the judgment of the court below, it is ORDERED, ADJUDGED and DECREED by this Court that the judgment be Reversed and the cause Remanded to the trial court For Further Proceedings in accordance with the opinion of this Court; and that this decision be certified to the court below for observance.

WHEREAS, WE COMMAND YOU to observe the order of our said Court of Appeals for the Twelfth Court of Appeals District of Texas in this behalf, and in all things have it duly recognized, obeyed, and executed.

WITNESS, THE HONORABLE JAMES T. WORTHEN, Chief Justice of our Court of Appeals for the Twelfth Court of Appeals District, with the Seal thereof affixed, at the City of Tyler, this the ______ day of __________________, 200____.

 

CATHY S. LUSK, CLERK

By:_______________________________

Deputy Clerk

[1]J.33 REVERSE & REMAND FOR FURTHER PROCEEDINGS - CRIMINAL