Opinion issued March 29, 2007
In The
Court of Appeals
For The
First District of Texas
NO. 01-06-00237-CV
MARYLAND CASUALTY COMPANY, Appellant
V.
AMERICAN HOME ASSURANCE COMPANY AND ILLINOIS NATIONAL INSURANCE COMPANY, AS SUBROGEES OF NATIONAL EQUIPMENT SERVICES, Appellees
On Appeal from the 113th District Court
Harris County, Texas
Trial Court Cause No. 2003-04805
MEMORANDUM OPINION
Maryland Casualty Company (“Maryland”) challenges the trial court’s rendition of summary judgment in favor of appellees, American Home Assurance Company and Illinois National Insurance Company, as subrogees of National Equipment Services (collectively “NES”). Maryland contends (1) the trial court’s summary judgment orders are final and appealable, even though they do not contain finality language and do not dispose of all parties, and even though the trial court granted NES’s motion to retain jurisdiction; (2) the trial court erred in granting summary judgment for NES because the indemnity clause under which it sued is inconspicuous and therefore unenforceable as a matter of law, and NES alternatively failed to prove that it is an additional insured under Maryland’s insurance policy or that it complied with all conditions precedent; and (3) in the alternative, the trial court erred in awarding damages exceeding Maryland’s policy limits. We conclude that the summary judgment orders from which Maryland appeals are interlocutory rather than final, and therefore dismiss the appeal for want of jurisdiction.
Background
Maryland issued a commercial general liability policy to Laser Construction (“Laser”) in September 2000. The following month, Laser began constructing an Office Depot store in Richmond, Texas. Laser leased a trench box from NES so that it could dig a trench for the store’s underground sewer system. Pursuant to the parties’ lease agreement, Laser agreed to indemnify NES from any claims for personal injury or death arising out of Laser’s use or possession of the trench box. A few days later, the trench caved in, killing three construction workers.
The decedents’ families sued NES in Fort Bend County for negligence, gross negligence, and strict liability (“the Vasquez lawsuit”). NES subsequently filed a responsible third-party action against Laser. Pursuant to a Rule 11 agreement[1] between NES and Laser, Laser did not answer the third-party petition, and NES agreed to re-file the petition in Harris County. NES settled with the decedents’ families in the summer of 2002.
A few months later, NES brought an indemnification suit against Laser; Maryland; Tom Davies and Jim Thurmon, “both individually and as each is d/b/a Laser Construction”; and Thurmon-Davies, L.L.C. NES alleged that, pursuant to the lease agreement for the trench box, it was entitled to indemnity for all sums it had paid to settle the Vasquez lawsuit. NES also alleged that it was entitled to coverage as an additional insured under Laser’s insurance policy with Maryland.[2]
Laser moved for summary judgment on the ground that the indemnity clause contained in the parties’ lease agreement was unenforceable because it was inconspicuous and thus did not satisfy the fair notice requirements of Texas law. The trial court granted Laser’s motion and dismissed all of NES’s claims against Laser with prejudice.
Maryland also moved for summary judgment on the ground that the indemnity clause was unenforceable because it was inconspicuous. In the alternative, Maryland argued that NES did not qualify as an additional insured under its insurance policy with Laser, and, in any event, recovery should be barred because NES failed to comply with certain conditions precedent in the policy. NES filed a cross-motion for summary judgment, asserting that it was entitled to coverage as an additional insured under the policy. In separate orders, the trial court denied summary judgment for Maryland and granted summary judgment for NES, awarding it $2.25 million in damages and over $100,000 in attorney’s fees. Maryland appeals from these orders.
After Maryland filed its notice of appeal, NES filed a verified motion to retain, asking the trial court to retain jurisdiction “so that the Plaintiffs can obtain a default judgment and/or attempt service on Tom Davies, Jim Thurmon, and/or Thurmon-Davies, LLC.” The trial court granted NES’s motion, thereby retaining the case on its docket.
Finality
“[T]he general rule, with a few mostly statutory exceptions, is that an appeal may be taken only from a final judgment.”[3] Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2000). “Although a judgment following a trial on the merits is presumed to be final, there is no such presumption of finality following a summary judgment . . . .” In re Burlington Coat Factory Warehouse of McAllen, Inc., 167 S.W.3d 827, 829 (Tex. 2005) (citing Lehmann, 39 S.W.3d at 199–200).
[W]hen there has not been a conventional trial on the merits, an order or judgment is not final for purposes of appeal unless it actually disposes of every pending claim and party or unless it clearly and unequivocally states that it finally disposes of all claims and all parties. . . . An order that disposes of claims by only one of multiple plaintiffs or against one of multiple defendants does not adjudicate claims by or against other parties. An order does not dispose of all claims and all parties merely because it is entitled “final”, or because the word “final” appears elsewhere in the order, or even because it awards costs. . . . Rather, there must be some other clear indication that the trial court intended the order to completely dispose of the entire case.
To determine whether an order disposes of all pending claims and parties, it may . . . be necessary for the appellate court to look to the record in the case. . . . [I]f the record reveals the existence of parties or claims not mentioned in the order, the order is not final.
Lehmann, 39 S.W.3d at 205–06.
Here, although the orders from which Maryland appeals are entitled “Order Denying Final Summary Judgment” and “Order Granting Final Summary Judgment,” they do not contain the type of “clear and unequivocal” finality language that the Texas Supreme Court approved in Lehmann. See id. (noting that judgment is not final merely because it is entitled “final”; rather, judgment must contain “clear and unequivocal” finality language). The Lehmann court “provided an example of unequivocal language that would clearly indicate finality, noting that ‘a statement like, “This judgment finally disposes of all parties and all claims and is appealable”, would leave no doubt about the court’s intention.’” Burlington, 167 S.W.3d at 830 (quoting Lehmann, 39 S.W.3d at 206). The orders at issue here lack such an unequivocal expression of finality. We therefore must determine whether, based on the record, the orders dispose of all parties and all claims. See Lehmann, 39 S.W.3d at 195.
NES’s petition asserts claims against five defendants: (1) Maryland, (2) Laser, (3) Tom Davies, (4) Jim Thurmon, and (5) Thurmon-Davies, L.L.C. The record reflects that the trial court disposed of all claims against Laser by granting its motion for summary judgment. The record also reflects that the trial court disposed of all claims against Maryland by granting summary judgment for NES. There is nothing in the record, however, to indicate that the trial court disposed of NES’s claims against Davies, Thurmon, and Thurmon-Davies, L.L.C.
Maryland acknowledges this, but asserts that the summary judgment orders are nonetheless final because NES did not serve the remaining parties. In M.O. Dental Lab v. Rape, the Texas Supreme Court reaffirmed the principle that a judgment may be final, even though it does not dispose of all parties named in the petition, if the remaining party was never served with citation and did not file an answer, and nothing in the record indicates that the plaintiff ever expected to obtain service upon the remaining party. 139 S.W.3d 671, 674–75 (Tex. 2004) (approving of Youngstown Sheet & Tube Co. v. Penn, 363 S.W.2d 230 (Tex. 1962)). In such a situation, “‘the case stands as if there had been a discontinuance as to [the unserved parties], and the judgment is to be regarded as final for the purposes of appeal.’” Id. at 674 (quoting Penn, 363 S.W.2d at 232).
Here, unlike in Rape and Penn, the record indicates that NES does expect to obtain service upon the remaining parties. Cf. Rape, 193 S.W.3d at 674 (noting that Rape “did not indicate in either the trial court or the court of appeals that she expected to serve Smith”); Penn, 363 S.W.2d at 232 (observing that nothing in record indicated that plaintiff ever expected to obtain service upon remaining party). Specifically, in its post-summary judgment motion to retain, NES asked the trial court to “retain this matter on its docket so that the Plaintiffs can obtain a default judgment and/or attempt service on Tom Davies, Jim Thurmon, and/or Thurmon-Davies, LLC.” The trial court granted NES’s motion, thereby retaining the case on its docket and indicating that it does not view the summary judgment orders as final. Given these circumstances, we conclude that the summary judgment orders are interlocutory rather than final. See Wanzer v. Mendoza, No. 04-05-00505-CV, 2005 WL 2368007, at *1 (Tex. App.—San Antonio Sept. 28, 2005, no pet.) (mem. op.) (holding that dismissal orders were interlocutory rather than final, even though only parties not disposed of in orders had not answered or appeared, because plaintiff filed “Advisory to the Court” reflecting that he expected to obtain service on remaining parties); see also Cordova v. Harkins, No. 01-05-00495-CV, 2006 WL 1428857, at *2 (Tex. App.—Houston [1st Dist.] May 25, 2006, no pet.) (mem. op.) (holding that order granting nonsuit was not final, even though it was entitled “final judgment,” because it mentioned only one defendant and not other); Joseph v. Mirror Finishes & Collision of Houston, Inc., No. 01-03-00317-CV, 2004 WL 2966311, at *2 (Tex. App.—Houston [1st Dist.] Dec. 23, 2004, no pet.) (mem. op.) (holding that summary judgment orders were interlocutory rather than final because they did not contain unequivocal finality language and did not dispose of plaintiff’s claims against six remaining defendants). Because the case lacks finality, we lack jurisdiction to hear any direct appeal. Lehmann, 39 S.W.3d at 195.
Conclusion
Based on the language of the summary judgment orders and the record presented, we hold that the summary judgments at issue in this appeal are neither final nor appealable. We therefore dismiss the appeal for want of jurisdiction.
Jane Bland
Justice
Panel consists of Chief Justice Radack and Justices Jennings and Bland.
[1] See Tex. R. Civ. P. 11.
[2] The insurance policy provides that, along with Laser,
Each of the following is also an insured:
. . . .
i. Any person or organization who is the lessor of leased equipment leased to you[, Laser], but only with respect to their liability arising out of the maintenance, operation or use by you of such equipment subject to the following additional exclusions:
This insurance does not apply to:
(1) Any “occurrence” that takes place after the equipment lease expires; or
(2) “Bodily injury” or “property damage” arising out of the sole negligence of that person or organization.
[3] None of the statutory exceptions is applicable here.