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Rodruquez v. Texas Farmers Insurace Company7/31/1995
PANEL D
JULY 31, 1995
Texas Farmers Insurance Company secured declarations, via summary judgment, that it had no duty to defend Orlando Rodriquez and Lydia Rodriquez under its insurance policy issued to them, or to indemnify or pay on their behalf any sums they were obligated to pay David A. Ortega and Rita Ortega for claims resulting in a default judgment against the Rodriquezes. The Rodriquezes and the Ortegas contend, with five points of error, that questions of fact exist to vitiate the summary judgment. Based upon the rationale and authorities expressed, we will affirm the judgment.
The events underlying this appeal began on 5 May 1990, when the Rodriquezes' dog, Bozo, bit mailman David Ortega on the arm. Complicated procedural maneuvering followed when, after unsuccessful settlement negotiations, attorney Mark Fitzgerald filed, on 4 May 1992, in the 47th District Court of Potter County, a lawsuit on behalf of the Ortegas, seeking to recover from the Rodriquezes for David's injuries and Rita's loss of consortium (the Potter suit). Reciting the Rodriquezes' failure to appear and answer despite having been "duly and legally cited to appear and answer," the court entered a 4 June 1992 default judgement against them, awarding David $1,500,000 and Rita $150,000, with both awards bearing preand post-judgment interest at 10% per annum.
The Rodriquezes had a homeowners policy of insurance with Farmers (the policy), designed to indemnify them up to $100,000 from liability for, among other things, injuries resulting from Bozo's penchant for biting. Previously, Farmers had indemnified the Rodriquezes pursuant to the policy provisions for several other incidents involving Bozo's proclivity to bite mailmen and others, and Farmers, through its adjustor Henry Honea, had conducted settlement negotiations with Fitzgerald regarding the Ortegas' claims.
The policy provided that if a lawsuit, such as the Potter suit, was filed against the Rodriquezes, Farmers would provide an attorney to defend them against the claims, conditioned upon its receipt of proper notice of the lawsuit. However, in this instance, Farmers maintained that it did not receive proper notice of the Potter suit, and thus it failed to provide the Rodriquezes a defense before the default judgment was taken against them.
Upon learning of the default judgment, Farmers hired attorney Patrick Mosley to prepare an answer to the Potter suit, and a motion for new trial to have the default judgement set aside upon the assertion of defective service of citation on the Rodriquezes. Mosley filed an answer on 9 June 1992, but refused to file a motion for new trial, stating that it would not be in the Rodriquezes' best interest to do so.
Mosley believed this to be so because, on 18 June 1992, the Rodriquezes and the Ortegas executed an agreement, filed as part of the record in the Potter suit, whereby the Ortegas agreed not to execute the default judgement against the Rodriquezes in exchange for 90% of all sums owed to, and claims held by, the Rodriquezes pursuant to their policy of insurance with "Fire Insurance Exchange or any of the Farmers Insurance Group of Companies." Based upon this agreement, Mosley opined the Rodriquezes were protected from personal liability beyond the limits of the policy, and filing a motion for new trial would expose them to the possibility of personal liability if a new judgement were entered for an amount in excess of the policy limits.
At Farmers's request, Wyatt Brooks entered his appearance as attorney for the Rodriquezes and filed a motion for new trial, purportedly on their behalf, based upon assertions that the failure to answer w
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