Case Brief

202 S.W.3d 811

Court of Appeals of Texas,

San Antonio.

PROGRESSIVE COUNTY MUTUAL INSURANCE

COMPANY, Appellant,

v.

Hector Raul TREVINO and Mario Moyeda,

Appellees.

No. 04–05–00113–CV.

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June 28, 2006.

|

Rehearing Overruled July 31, 2006.

*Edited by Justin Blount

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02 S.W.

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d 8

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1
Court of Appeals of Texas,
San Antonio.
PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Appellant,
v.
Hector Raul TREVINO and Mario Moyeda, Appellees.
No. 0

4

–0

5

–00113–CV.
|
June 28, 200

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.
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Rehearing Overruled July 31, 2006.
Synopsis
Background: Insured’s judgment creditors brought action against automobile liability insurer to collect on default judgment against insured. The 365th Judicial District Court, Maverick County,

Amado J. Abascal, III

, J., entered judgment in favor of creditors. Insurer appealed.
 
Holdings: The Court of Appeals,

Karen Angelini

, J., held that:
 

[1]

cooperation clause stated condition precedent to coverage;
 

[2]

insured’s failure to cooperate prejudiced insurer as a matter of law; and
 

[3]

the cooperation clause was valid.
 
Reversed and rendered.
 

Sandee Bryan Marion

, J., dissented and filed opinion.
OPINION
Opinion by

KAREN ANGELINI

, Justice.
In this appeal, we are presented with the issue of whether the cooperation clause of an automobile insurance policy, which requires an insured to cooperate with his defense, is a condition precedent to coverage under the policy. Because we hold that the cooperation clause is a condition precedent, we reverse and render.
 
BACKGROUND
This appeal concerns a personal injury lawsuit brought in Maverick County by Hector Raul Trevino and Mario Moyeda against Alejandro Alvarado, a driver covered by automobile insurance issued by Progressive County Mutual Insurance Company (“Progressive”). In this Maverick County lawsuit, Trevino and Moyeda obtained a post-answer default judgment against Alvarado. Although Alvarado had timely notified Progressive that he had been served with a negligence suit brought by Trevino and Moyeda, according to Progressive, he later refused to cooperate with his defense. Because Alvarado refused to cooperate, on October 16, 2003, the lawyers hired by Progressive to represent Alvarado withdrew from their representation of Alvarado. However, before withdrawing, the lawyers filed a motion to continue the trial set for October 20, 2003. On October 20th, the district court called the case, and Trevino and Moyeda announced ready. Alvarado, however, did not appear for trial. The district court proceeded to hear evidence and argument from Trevino and Moyeda. It later entered a judgment awarding $45,000 to Trevino and $25,000 to Moyeda.
 
After obtaining the default judgment against Alvarado, Trevino and Moyeda filed this action against Progressive, arguing that by virtue of the judgment against Alvarado, they had become judgment creditors of Alvarado and thus, had standing to bring a claim directly against Progressive as third-party beneficiaries of the insurance policy. In their petition, Trevino and Moyeda pled that all conditions precedent to bringing the suit had been satisfied. Progressive, however, in its answer, denied that all conditions precedent had been satisfied: “Alejandro Alvarado and Plaintiffs, as judgment creditors, have failed to comply with the cooperation clause contained in the policy of insurance.”
 
. . . Progressive argued that because the cooperation clause is a condition precedent, Trevino and Moyeda had the burden to show that Alvarado complied with the cooperation clause, and that by failing to present any evidence on the issue of cooperation, they had failed to prove the satisfaction of that condition. Trevino and Moyeda responded by arguing that the cooperation clause was not a condition precedent, but a covenant and that as a covenant, Progressive had the burden of proving that Alvarado did not fulfill the covenant and that Progressive was prejudiced as a result. The trial court denied Progressive’s motion. Progressive then presented its evidence, and at the close of its evidence, again moved for judgment. The trial court again denied the motion and rendered judgment for Trevino and Moyeda.
 
. . . Progressive brought this appeal.
 
COOPERATION CLAUSE
We must first consider whether the cooperation clause of an automobile insurance policy, which requires an insured to cooperate with his defense, is a condition precedent to coverage under the policy.
According to Progressive, the cooperation clause of the policy is a condition precedent. In contrast, Trevino and Moyeda argue that the clause is a covenant. In interpreting whether the cooperation clause is a condition precedent or a covenant, we look to general principles of contract interpretation. . . . “Conditions precedent to an obligation to perform are those acts or events, which occur subsequently to the making of a contract, that must occur before there is a right to immediate performance and before there is a breach of contractual duty.” Although no words in particular are necessary for the existence of a condition, “such terms as ‘if’, ‘provided that’, ‘on condition that’, or some other phrase that conditions performance, usually connote an intent for a condition rather than a promise.” “In the absence of such a limiting clause, whether a certain contractual provision is a condition, rather than a promise, must be gathered from the contract as a whole and from the intent of the parties.” “However, where the intent of the parties is doubtful or where a condition would impose an absurd or impossible result then the agreement will be interpreted as creating a covenant rather than a condition.”
 
In Harwell v. State Farm Mutual Automobile Insurance Co., the supreme court reiterated that “[c]ompliance with the notice of suit provision is a ‘condition precedent to the insurer’s liability on the policy.’ ” In that case, the notice of suit provision provided the following:
We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses. If we show that your failure to provide notice prejudices our defense, there is no liability coverage under the policy. A person seeking coverage must:
1. Cooperate with us in the investigation, settlement or defense of any claim or suit.
2. Promptly send us copies of any notices or legal papers received in connection with the accident or loss.
In Harwell, the supreme court held that the notice of suit provision contained within subpart (2) was a condition precedent. It would, therefore, follow that under Harwell, the cooperation clause contained within subpart (1) would also be a condition precedent.
 
Here, the cooperation clause of the policy issued by Progressive is almost the same:
 
PART E—DUTIES AFTER AN ACCIDENT OR LOSS
GENERAL DUTIES
A. We must be notified promptly of how, when and where the accident or loss happened. Notice should also include the names and addresses of any injured persons and of any witnesses. If we show that your failure to provide notice prejudices our defense, there is no liability coverage under the policy.
B. A person seeking any coverage must:
1. Cooperate with us in the investigation, settlement, or defense of any claim or suit.
2. Promptly send us copies of any notices or legal papers received in connection with the accident or loss.
3. Submit, as often as we reasonably require, to physical exams by physicians we select. We will pay for these exams.
4. Authorize us to obtain:
a. medical reports which are reasonably related to the injury or damages asserted; and
b. other pertinent records.
5. When required by us:
a. submit a sworn proof of loss.
b. submit to an examination under oath.
(emphasis added). Other than its formatting, the language in Progressive’s policy is identical to that in Harwell. Therefore, applying Harwell, we hold that the cooperation clause is a condition precedent.
Because the cooperation clause is a condition precedent to coverage under the policy, Trevino and Moyeda had the burden of showing satisfaction of that condition. (noting that insurer’s obligation depends upon proof that all conditions precedent have been performed); (explaining that a “party seeking to recover under a contract bears the burden of proving that all conditions precedent have been satisfied”); (requiring a plaintiff to plead that all conditions precedent have been performed and “to prove only such of them as are specifically denied by the opposite party”).1 At trial, however, Trevino and Moyeda did not present any evidence that Alvarado had complied with the cooperation clause.
. . .  
Given Alvarado’s lack of cooperation with his defense, his filing of a pro se answer and frivolous counterclaim despite having counsel hired by Progressive to represent him, his adamancy about Progressive not paying on the claim, and his guardian’s telephone message indicating that Alvarado did not intend “to be involved in this at all”, the attorney hired by Progressive was simply not permitted to appear on Alvarado’s behalf in court. . . . Because the lawyer hired by Progressive to represent Alvarado was not permitted to appear on Alvarado’s behalf, the lawyer was prevented from mounting a defense to limit Alvarado’s liability and damages and from stopping the entry of the default judgment. . . . As such, we hold that Progressive was prejudiced as a matter of law.
 
. . .
CONCLUSION
Because Trevino and Moyeda failed to present any evidence of cooperation and because Progressive was prejudiced as a matter of law, Trevino and Moyeda cannot recover from Progressive. We, therefore, reverse the judgment of the trial court and render a take-nothing judgment in favor of Progressive.
 
Footnotes

1

In its answer, Progressive denied that Alvarado and “Plaintiffs, as judgment creditors” complied with the cooperation clause contained in the policy.

2

Trevino and Moyeda’s attorney reasoned that because Trevino and Moyeda’s vehicle was stopped at the time of the accident, Trevino and Moyeda could not possibly be at fault.

3

All of the evidence discussed here was admitted at trial and can be considered by us on appeal. We note, however, that we cannot consider other evidence not admitted at trial. At the hearing, Progressive offered numerous exhibits into evidence for the purpose of proving Alvarado’s lack of cooperation and the resulting prejudice suffered by Progressive. Progressive, however, in the face of hearsay objections, made it clear to the court that the exhibits were not offered for the truth of the matters contained therein, but instead were offered only to show what information was contained in Progressive’s files. We, therefore, are unable to consider the various matters contained therein for the purpose of proving whether Alvarado, in fact, cooperated with Progressive and/or whether Progressive was prejudiced by Alvarado’s actions.

4

See Act of June 19, 1975, 64th Leg., R.S., ch. 347, § 1 et seq., 1975 Tex. Gen. Laws 931; Act of June 15, 1971, 62d Leg., R.S., ch. 944, § 1 et seq., 1971 Tex. Gen. Laws 2866; Act of June 8, 1971, 62d Leg., R.S., ch. 744, § 1 et seq., 1971 Tex. Gen. Laws 2389; Act of June 4, 1969, 61st Leg., R.S., ch. 433, § 1 et seq., 1969 Tex. Gen. Laws 1467; Act of June 18, 1965, 59th Leg., R.S., ch. 703, § 1 et seq., 1965 Tex. Gen. Laws 1636; Act of May 6, 1965, 59th Leg., R.S., ch. 131, § 1 et seq., 1965 Tex. Gen. laws 298; Act of June 11, 1963, 58th Leg., R.S., ch. 506, § 1 et seq., 1963 Tex. Gen. Laws 1320.

5

See Act of June 17, 1993, 73d Leg., R.S., ch. 685, § 14.01, 1993 Tex. Gen. Laws 2559, 2671; Act of August 30, 1991, 72d Leg., 2d C.S., ch. 12, § 15.01, 1991 Tex. Spec. Laws 252, 334–36; Act of June 16, 1991, 72d Leg., R.S., ch. 806, § 1 et seq., 1991 Tex. Gen. Laws 2821; Act of June 14, 1989, 71st Leg., R.S., ch. 449, § 1 et seq., 1989 Tex. Gen. Laws 1610; Act of June 18, 1987, 70th Leg., R.S., ch. 580, § 1 et seq., 1987 Tex. Gen. Laws 2284; Act of June 11, 1987, 70th Leg., R.S., ch. 289, § 1 et seq., 1987 Tex. Gen. Laws 1649; Act of May 18, 1987, 70th Leg., R.S., ch. 104, § 4, 1987 Tex. Gen. Laws 248; Act of June 3, 1985, 69th Leg., R.S., ch. 239, § 17, 1985 Tex. Gen. Laws 1181; Act of June 19, 1983, 68th Leg., R.S., ch. 797, § 1 et seq., 1983 Tex. Gen. Laws 3122; Act of June 17, 1983, 68th Leg., R.S., ch. 436, § 1 et seq., 1983 Tex. Gen. Laws 2496.

6

The revisor’s note to

section 601.073

discusses the revisions to section 21(f). For example, section 21(f) stated that the policy may not be “canceled or annulled.”

Section 601.073

omitted the reference to “annulled” “because ‘annulled’ is included within the meaning of ‘canceled.’ ”

TEX. TRANSP. CODE ANN. § 601.073

revisor’s note (2) (Vernon 1999). Similarly, section 601.073 omitted the reference to “defeat.” While section 21(f) stated that a violation of the policy may not “defeat or void” the policy, section 601.073 omitted the reference to “defeat” “because ‘defeat’ is included within the meaning of ‘void.’ ” Id. revisor’s note (3).

End of Document

© 2018 Thomson Reuters. No claim to original U.S. Government Works.

Justin R. Blount

August 20, 2020

Case Brief

Yeagle v. Collegiate Times., 255 Va. 293 (1998)

Procedural Background:

Yeagle sued the Collegiate Times in the Circuit Court, Montgomery County, for common law defamation, defamation per se, and use of insulting words. The trial court dismissed all of Yeagle’s claims, holding that the statement at issue was “void of any literal meaning” and thus could not sustain her claims. Yeagle appealed to the Virginia Supreme Court.

Facts

Yeagle is the assistant to the Vice President of Student Affairs at Virginia Tech. As a part of her job she helped to oversee participation in the 1996 Governor’s Fellows Program. The Collegiate Times, Virginia Tech’s student newspaper, wrote an article about this program that quoted Yeagle. The article as a whole was complimentary of the program and said nothing negative about Yeagle. However, beneath the quote Yeagle’s name appeared with the phrase “Director of Butt Licking.”

Issue

Is the phrase “Director of Butt Licking” as used in this context incapable of being defamatory because it carries no factual meaning?

Rule

The First Amendment of the U.S. Constitution places limits on defamation claims such that “speech which does not contain a provably false connotation, or statements which cannot reasonably be interpreted as stating actual facts about a person, cannot form the basis of a common law defamation action.”

The U.S. Supreme Court has held that “insulting, offensive, or otherwise inappropriate language” cannot serve as a basis for a claim of defamation if “no reasonable inference could be drawn that the individual identified in the statements, as a matter of fact, engaged in the conduct described.”

When determining the meaning of words “inferences cannot extend the statements, by innuendo, beyond what would be the ordinary and common acceptance of the statement.”

Application

Yeagle advances two arguments for why the statement “Director of Butt Licking” is factual and defamatory. First, she asserts the phrase accuses her of a violation of the Virginia sodomy statute by alleging that she actually licks butts. Second, she asserts that the phrase implies that she does not perform her job with integrity, but rather tries to curry favor with superiors through “disingenuous behavior.”

The court rules that both of these arguments fail because of the context in which the phrase was made. The law requires that for a statement to be defamatory, it must carry some factual connotation that can be proven false. Additionally, the law requires that to make this determination, the words must be interpreted in their context in the way a normal, reasonable person would. In this case, the Collegiate Times’ article never mentions any sexual act whatsoever, and thus no reasonable reader would interpret the phrase “Director of Butt Licking” as accusing Yeagle of literally licking butts. With respect to the second argument, the article never accuses Yeagle of doing a poor job. Rather, the article is complimentary of the program she administered. Thus, no reasonable reader would interpret the phrase as accusing Yeagle of currying favor as she asserts.

The court states that in the context of this article, the statement “Director of Butt Licking” was nothing more than an offensive statement that was made in bad taste. No reasonable reader would interpret the statement as conveying any actual factual meaning about Yeagle, and thus the statements made about her are protected by the First Amendment and cannot serve as the basis for her defamation claim.

Conclusion

The court affirms the judgment of the trial court, holding that the statement at issue conveyed no factual information about Yeagle and thus could not serve as the basis for a defamation action.