Opinion issued July 1, 2004
In The
Court of Appeals
For The
First District of Texas
NO. 01-02-00895-CV
____________
WAUSAU UNDERWRITERS INSURANCE COMPANY, Appellant
V.
GENERAL ELECTRIC COMPANY, Appellee
On Appeal from the 190th District Court
Harris County, Texas
Trial Court Cause No. 01-25399
MEMORANDUM OPINION
Appellant, Wausau Underwriters Insurance Company (Wausau), challenges the trial court’s rendition of summary judgment in favor of appellee, General Electric Company (GE), in Wausau’s subrogation suit to recover $5 million that Wausau paid in settlement of a products liability suit against its insured. GE was not a party to the products liability suit. In two issues, Wausau contends that the trial court erred in granting GE’s motion for summary judgment because (1) Wausau may legally assert its indemnity/subrogation claim regardless of whether GE was a party to the underlying products liability action and (2) any recovery by Wausau from GE would not constitute “double recovery.” We affirm.
Background
Charles and Sherry Horn’s grandson was visiting when their home caught on fire. Their grandson suffered severe and permanent injuries as a result of the fire. The Horns sued several extension cord manufacturers and Wal-Mart, alleging that the fire was caused by defects in an extension cord that they purchased from Wal-Mart. Wal-Mart filed a cross-claim seeking indemnity from the manufacturer of the cord. The Horns nonsuited most of the manufacturers and settled with the remaining manufacturer, Woods Industries, Inc., and Wal-Mart. Wausau insured Woods, and Wal-Mart–the seller–was listed as an “also insured” on Woods’s policy with Wausau. Wausau paid $15 million in settlement—$10 million on behalf of Woods and $5 million on behalf of Wal-Mart. Three lawsuits followed the settlement with Woods and Wal-Mart.
First, the Horns’ grandson, Clifton Hall, now the age of majority, filed a products liability suit against GE alleging that GE, and not Woods, manufactured the defective extension cord. Hall and Wausau entered into a “reimbursement agreement,” wherein Wausau agreed to pay Hall’s expenses for his suit, and, in return, Hall agreed to share part of any recovery from GE with Wausau. The trial court dismissed the suit and found that Hall was judicially estopped from alleging that GE was the manufacturer after he had so vigorously asserted in the prior proceeding that Woods manufactured the defective extension cord. Further, the trial court found that, because Hall argued in the underlying suit that Woods was the only manufacturer of the cord, he “effectively disavowed any claims that he might have made against GE in that litigation.” Hall appealed the dismissal, and the United States Court of Appeals for the Fifth Circuit affirmed the trial court’s dismissal.
Second, Wausau and Woods jointly brought a legal malpractice action against Woods’s lead counsel of record, Jay D. Hirsch. The suit against Hirsch is currently pending in Harris County.
The third suit filed after the settlement is the case before this Court. Wausau, “as real party in interest for Wal-Mart,” brought this subrogation action against GE alleging that GE, not Woods, manufactured the defective extension cord. Wausau, relying on section 82.002 of the Civil Practice and Remedies Code, asserted that Wal-Mart was entitled to indemnity from GE for the $5 million paid in the settlement of the Horn suit. GE sought a traditional summary judgment on the grounds that (1) Wausau could not seek indemnity from a manufacturer whose product was not alleged to be defective, (2) Wausau could not recover indemnity because its claim was derivative of Clifton Hall’s right to recover, and (3) Wal-Mart cannot seek a double recovery after obtaining complete indemnity from another manufacturer. The trial court granted GE’s motion for summary judgment without stating the basis for its order.
Standard of Review
A party moving for traditional summary judgment has the burden of proving that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt., 690 S.W.2d 546, 548 (Tex. 1985); Farah v. Mafrige & Kormanik, P.C., 927 S.W.2d 663, 670 (Tex. App.—Houston [1st Dist.] 1996, no writ). When deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true. Nixon, 690 S.W.2d. at 548-49. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Id. When, as happened here, a trial court does not state the basis for its decision in its summary judgment order, as in this case, we must uphold the order if any of the theories advanced in the motion is meritorious. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996); Cigna Ins. Co. v. Rubalcada, 960 S.W.2d 408, 412 (Tex. App.—Houston [1st Dist.] 1998, no pet.).
Double Recovery
In its second issue, Wausau contends that the trial court erred in granting GE’s motion for summary judgment because any recovery by Wausau from GE would not constitute “double recovery.”
Wausau sued GE in subrogation. “Subrogation” is the right of one who has paid an obligation that another should have paid to be indemnified by the other. Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106 S.W.3d 118, 133 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). The object of such subrogation is to prevent the insured from receiving a double recovery. Id. An insurer’s right to subrogation derives from the rights of the insured and is limited to those rights. Id. Rights conferred by subrogation are entirely derivative of the subrogor’s interests, to which the subrogee merely succeeds. Guillot v. Hix, 838 S.W.2d 230, 232 (Tex. 1992). Because a subrogation action is derivative, the defendant in such an action may ordinarily assert any defense he would have had in a suit by the subrogor. Id.
As the name implies, subrogation occurs only if it is equitable. Thus, it is used to prevent the unjust enrichment of a debtor whose debt has been paid. First Nat’l Bank of Kerrville v. O’Dell, 856 S.W.2d 410, 415 (Tex. 1993) (holding doctrine did not apply when creditor paid off other creditors’ liens, without benefit to debtor). GE argues that, even if Wausau was entitled to bring a subrogation claim, such claim must fail because Wal-Mart could not recover the full amount of its damages from two different manufacturers. We agree.
In 1935, the Commission of Appeals of Texas was confronted with the question, “What right has [the plaintiff], who has been fully compensated for his injuries, to recover further damages? The only answer which accords with justice and the authorities is that he has none.” Bradshaw v. Baylor Univ., 84 S.W.2d 703, 705 (Tex. 1935). The court noted that, “[t]here being but one injury, there can, in justice, be but one satisfaction for that injury.” Id.
A double recovery exists when a plaintiff obtains more than one recovery for the same injury. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex. 1991). A party is not entitled to a double recovery. Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182, 184 (Tex. 1998).
Assuming, without deciding, that Wausau is Wal-Mart’s subrogor in this case, Wausau “stands in the shoes” of Wal-Mart and may only proceed against GE to the same extent that Wal-Mart could do so. See Tesoro, 106 S.W.3d at 133. Wal-Mart, however, has already been fully indemnified by Woods, and thus “compensated” for its exposure in the underlying suit. Accordingly, Wal-Mart has already been made whole. Therefore, allowing Wausau, standing in Wal-Mart’s shoes, to pursue its claim against GE would result in manifest injustice. We hold that the trial court did not err in granting summary judgment to GE on the ground that Wal-Mart could not seek a double recovery after obtaining complete indemnity from Woods through Wausau.
We overrule Wausau’s second issue.
Conclusion
Having held that the trial court did not err in granting summary judgment in favor of GE on the ground that Wal-Mart could not seek double recovery, we need not address Wausau’s first issue. We affirm the judgment of the trial court.
George C. Hanks, Jr.
Justice
Panel consists of Justices Taft, Jennings, and Hanks.