Clay Campbell, Claire Campbell and Charles Campbell, Individually and as Executors and Beneficiaries of the Charles K. Campbell Trust v. the Automobile Insurance Company of Hartford Connecticut and S. Craig Gideon
NO. 07-06-0158-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL B
MAY 9, 2007
______________________________
CLAY CAMPBELL, CLAIRE CAMPBELL AND CHARLES CAMPBELL
INDIVIDUALLY AND AS EXECUTORS AND BENEFICIARIES
OF THE CHARLES K. CAMPBELL TRUST, APPELLANTS
V.
THE AUTOMOBILE INSURANCE COMPANY 0F HARTFORD
CONNECTICUT AND S. CRAIG GIDEON, APPELLEES
_________________________________
FROM THE 250TH DISTRICT COURT OF TRAVIS COUNTY;
NO. GN301441; HONORABLE MARGARET A. COOPER, JUDGE
_______________________________
Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
MEMORANDUM OPINION
Appellants Clay Campbell, Claire Campbell and Charles Campbell,1 acting
“Individually and as Executors and Beneficiaries of the Charles K. Campbell Trust” sued
The Automobile Insurance Company of Hartford, Connecticut and S. Craig Gideon
1
Charles J. Campbell and not Charles K. Campbell is the person who is a party to
the lawsuit.
(collectively referred to as “AIC”). Appellants appeal the trial court’s grant of a take-nothing
summary judgment in favor of AIC. We will vacate the judgment and dismiss the suit.
AIC issued a renewal dwelling fire policy insuring a lake house in Austin, Texas.
The named insureds in the policy were Charles K. Campbell and the Charles K. Campbell
Trust. Charles K. Campbell, who was appellants’ father, died on a date not reflected in the
summary judgment record. Appellants had used the house as a vacation home for several
years.
Appellants sold the house in March of 2002. The summary judgment record
contains a 2001 sales contract listing the seller of the property as “Frank G. Jones, Trustee
of the Charles K. Campbell Trust.” A 2002 amendment to the sales contract states, “The
name of the Seller is changed from Frank G. Jones, Trustee of the Charles K. Campbell
Trust dated 6/30/71 to Charles Joseph Campbell, Claire Roberts Campbell and Clayton
Kenneth Campbell, as successors to the Charles K. Campbell Trust dated 6/30/71 by
reason of the trust’s distribution of the subject property by the Distributio[n] Deed dated to
be effective June 30, 2001 and recorded in the Real Property Records of Travis County,
Texas.”
In October of 2001, before the house sold in 2002, appellants filed a claim with AIC
for mold damage to the home’s interior. After investigating the claim, AIC denied coverage
for the mold damage. Appellants filed suit in May of 2003 against AIC, alleging breach of
contract, violations of Articles 21.21 and 21.55 of the Texas Insurance Code, violations of
2
the Deceptive Trade Practices Act, and breach of the duty of good faith and fair dealing.2
As noted, appellants sued in their individual capacities and as “executors and beneficiaries
of the Charles K. Campbell Trust.” The trustee of the trust did not participate in the suit.
Appellants’ petition said the trust had “expired.”
AIC’s motion for summary judgment, filed pursuant both to Rules of Civil Procedure
166a(c) and 166a(i), asserted several grounds, beginning with the assertion that AIC was
entitled to summary judgment because appellants were “strangers to the insurance policy”
on which the suit was based and lacked standing to sue.
Following a hearing on AIC’s motion for summary judgment, the trial court sent
counsel a letter stating the court was granting the motion on the basis that the plaintiffs
lacked standing to sue. The court later signed a take-nothing judgment that does not state
the grounds on which it was granted. This appeal ensued.
Appellants raise eight issues on appeal. By their first issue they challenge the trial
court’s summary judgment determination that they lacked standing to sue. We overrule
the issue.
The issue of standing focuses on whether a party has a sufficient relationship with
the lawsuit so as to have a “justiciable interest” in its outcome. Austin Nursing Center, Inc.
v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005). The standing doctrine requires that there be
2
S. Craig Gideon was AIC’s claim representative who investigated the mold claim.
Appellants asserted no claims against Gideon apart from their claims against AIC.
3
a real controversy between the parties that will be actually determined by the judicial
declaration sought. Id. (quoting Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d
440, 443-44 (Tex. 1993)). Absence of standing deprives a court of subject matter
jurisdiction, thus standing may be raised at any time. Id.
Privity of contract provides a party with standing to maintain a suit on the contract.
Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 618 (Tex. 2004); Redmon
v. Griffith, 202 S.W.3d 225, 239 (Tex.App.–Tyler 2006, pet. denied); see also Republic
National Bank of Dallas v. National Bankers Life Ins. Co., 427 S.W.2d 76, 79
(Tex.Civ.App.–Dallas 1968, writ ref’d n.r.e.) (“privity of contract is an essential element of
recovery in an action based on contractual theory”).3 With respect to property insurance
policies, Texas law has long held that a party who is a complete stranger to the contract
is not in a legal position to recover any interest in the policy proceeds. See Travelers Fire
Ins. Co. v. Steinmann, 276 S.W.2d 849, 851 (Tex.Civ.App.–Dallas 1955, writ ref’d n.r.e.)
(stating general rule); see also Durren v. U.S. Fire Ins. Co., 579 S.W.2d 32, 36
(Tex.Civ.App.–Tyler 1979, no pet.) (also stating rule). The law presumes that a written
agreement correctly embodies the parties’ intentions and is an accurate expression of the
agreement between the parties. Estes v. Republic National Bank of Dallas, 462 S.W.2d
273, 275 (Tex. 1970); St. Paul Lloyd’s Ins. v. Fong Chun Huang, 808 S.W.2d 524, 527
(Tex.App.–Houston [14th Dist.] 1991, writ denied). Thus, proof of the insurance policy
3
Cf. Haug v. Carter, 2004 WL 1685619, *7 (Tex.App.–Austin July 29, 2004, pet.
denied) (mem. op.) (holding the person claiming to be a third-party beneficiary must
establish the existence of a contract and standing as a third-party beneficiary).
4
provisions allowing the plaintiff to recover is sufficient to confer standing to sue. Paragon
Sales Co., Inc. v. New Hampshire Ins. Co., 774 S.W.2d 659, 661 (Tex. 1989).
In their response to AIC’s motion for summary judgment, appellants took the
position their status as the children and beneficiaries of Charles K. Campbell and the
“expired” Charles K. Campbell Trust gave them standing to maintain the action. The policy
contains language addressing the effect of the death of the named insured, but the
language does not support a contention that appellants, as his children, automatically
stepped into his shoes on his death.
Appellants have advanced two arguments regarding their status as beneficiaries of
the trust bearing their father’s name. The trust instrument is not in the summary judgment
record, but the 2002 sales contract amendment provides evidence appellants were
beneficiaries of the trust. They have contended their status as beneficiaries makes them
third-party beneficiaries of the insurance policy. They cite Paragon Sales, 774 S.W.2d at
661, for that proposition. There, the court found documentation provided some evidence
to confer standing on a shipper of goods, as a third-party beneficiary, to enforce a policy
of insurance issued to the bankrupt motor carrier who had lost the goods. But the court
there noted that the policy endorsement and notice in evidence “expressly provide for
recovery by parties shipping goods . . . .” Id. at 660. Appellants can point to no similar
language in the policy at issue here, evidencing an intention to benefit third parties in their
position.
5
Appellants also cite section 282 of the Restatement of the Law (Second) of Trusts
in support of a contention they should be permitted to pursue the claim against AIC
because the trust has terminated.4 AIC does not dispute appellants’ assertion the trust
“expired” at a time before this suit was filed, but the Texas Trust Code expressly provides
that the trustee of a terminated trust may continue to exercise the powers of trustee for the
reasonable period of time required to wind up the affairs of the trust. TEX . TRUST CODE
ANN . § 11.052 (Vernon 2007); see Cogdell v. Fort Worth National Bank, 544 S.W.2d 825,
829 (Tex.Civ.App.–Eastland 1976, writ ref’d n.r.e.) (applying similar Texas Trust Act
provision). The evidence that the trustee of the Charles K. Campbell Trust was available
to execute the deed to appellants referred to in the 2002 sales contract amendment
demonstrates his availability. Even if the provisions of the Restatement appellants cite
comport with Texas law, a question we do not decide, there is no evidence the trustee here
neglected or refused to participate in this suit.
4
Section 282 of the Restatement of the Law (Second) of Trusts states as follows:
(1) Where the trustee could maintain an action at law or suit in equity or other
proceeding against a third person if the trustee held the property free of trust, the
beneficiary cannot maintain a suit in equity against the third person, except as
stated in Subsections (2) and (3).
(2) If the trustee improperly refuses or neglects to bring an action against the third
person, the beneficiary can maintain a suit in equity against the trustee and the third
person.
(3) If the trustee cannot be subjected to the jurisdiction of the court or if there is no
trustee, the beneficiary can maintain a suit in equity against the third person, if such
suit is necessary to protect the interest of the beneficiary.
6
As noted, the policy at issue lists Charles K. Campbell and the Charles K. Campbell
Trust as the only named insureds under the policy. We find the summary judgment
evidence demonstrates there is no genuine issue of fact regarding appellants’ privity of
contract with AIC, and that, as a matter of law, appellants are strangers to the insurance
contract, not in a legal position to recover any interest in the policy proceeds. Durren, 579
S.W.2d at 36. Appellants lack standing to sue AIC on the policy.5 Austin Nursing Center,
171 S.W.3d at 848; Interstate Contracting, 135 S.W.3d at 618. We overrule their first issue
on appeal.
Because appellants lack standing, we need not reach most of their other issues on
appeal. We must, however, address their eighth issue, by which appellants contend the
trial court erred by denying them permission to file additional summary judgment evidence
submitted after the hearing on the motion for summary judgment but before the trial court
signed its judgment. Civil Procedure Rule 166a(c) provides that, except on leave of court,
the non-movant’s summary judgment response is to be filed not later than seven days
before the day of the hearing on the motion for summary judgment. The rule further
provides that the trial court shall render judgment if the summary judgment evidence “on
file at the time of the hearing, or filed thereafter and before judgment with permission of the
court” shows summary judgment is appropriate. TEX . R. CIV . P. 166a(c). Summary
judgment evidence may be filed late, but only with leave of court. Benchmark Bank v.
Crowder, 919 S.W.2d 657, 663 (Tex. 1996). As appellants’ brief points out, the trial court
5
Appellants do not contend on appeal that they have standing to assert their other
causes of action even if they lack standing to sue on the policy.
7
has discretion to allow late filing of opposing summary judgment evidence. See, e.g., Diaz
v. Rankin, 777 S.W.2d 496, 500 (Tex.App.–Corpus Christi 1989, no writ) (stating rule).
Accordingly, we review the trial court’s denial of leave to file summary judgment evidence
late for abuse of discretion. Fowlkes v. Del Rio Bank and Trust Co., 747 S.W.2d 443, 444
(Tex.App.–San Antonio 1988, no writ); see also Carpenter v. Cimarron Hydrocarbons
Corp., 98 S.W.3d 682, 686-87 (Tex. 2002) (late-filed summary judgment response).
AIC’s motion for summary judgment was filed July 21, 2005. On September 15,
2005, appellants filed a motion for a continuance of the summary judgment hearing, based
on counsel’s conflicting trial settings. According to that motion, the summary judgment
hearing was set for September 29. Apparently, the motion for continuance was granted
because the summary judgment hearing was held October 26, 2005. Appellants’ response
to the summary judgment motion was served on October 18. On November 8, the trial
court sent counsel a letter stating AIC’s motion for summary judgment was granted.
Appellants filed a motion for leave to file a “supplemental” affidavit of Clay Campbell,
together with the affidavit, on December 8. The motion also requested leave to file an
amended petition. Appellants’ motion was set for hearing on December 15, 2005, at the
same time the court heard AIC’s motion for judgment. At the hearing, the trial court denied
appellants’ motion and signed AIC’s proposed judgment.
The supplemental affidavit appellants tendered provided additional information in
support of their contention they had standing to pursue the lawsuit. On appeal, appellants
contend AIC could not have been prejudiced by the grant of leave to file the supplemental
8
affidavit. They do not contend their motion for leave to file the supplemental affidavit was
supported by good cause. See Cimarron Hydrocarbons Corp., 98 S.W.3d at 687-88. Nor
is there a contention that the circumstances described in Rule of Civil Procedure 166a(g)
were present. We find the trial court did not abuse its discretion by denying appellants’
motion for leave to file the supplemental affidavit, and overrule their eighth issue.
Because we agree with the trial court that appellants lacked standing to bring this
suit, we conclude the trial court had no jurisdiction to consider it. Accordingly, we vacate
the judgment of the trial court and dismiss the suit. TEX . R. APP . P. 43.2.
James T. Campbell
Justice
9