Affirmed in Part and Dismissed in Part, and Majority and Concurring and Dissenting Opinions filed April 17, 2008.
In The
Fourteenth Court of Appeals
_______________
NO. 14-05-01090-CV
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ENVIRONMENTAL PROCEDURES, INC. and ADVANCED WIRECLOTH, INC., Appellants
V.
GEORGE E. GUIDRY, DWIGHT W. ANDRUS, III, DWIGHT W. ANDRUS INSURANCE, INC., and LEXINGTON INSURANCE CO., Appellees
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Cause No. 03-49520
M A J O R I T Y O P I N I O N
This multi-issue appeal arises out of a dispute between an insurance broker and his clients as a result of the placement of comprehensive general liability insurance. The insureds contend the trial court erred in granting partial summary judgment in favor of the insurance broker, the company that employed him, and the owner of that company on the insureds= claims arising out of alleged negligence, negligent misrepresentation, and violations of article 21.21 of the Texas Insurance Code. The insureds further assert that the trial court erred in directing a verdict on their breach-of-fiduciary-duty claims. In addition, the insureds argue that the trial court erred by not rendering judgment in their favor based on their claims under section 101.201 of the Texas Insurance Code. The insureds also argue that the trial court reversibly erred by excluding from evidence two issues of a trade publication. Finally, the insureds appeal the trial court=s order purporting to enjoin the insureds and their counsel from further use or disclosure of certain documents. We conclude that the insureds= appellate issues lack merit and affirm the trial court=s judgment. Additionally, we conclude that the trial court=s non-disclosure order was void from the moment it was signed, and so we dismiss as moot the insureds= appeal from this order.
I. Factual and Procedural Background
Appellant Environmental Procedures, Inc. d/b/a Sweco Oilfield Services (AEPI@) operated as a tool rental and oilfield service company; its subsidiary, appellant Advanced Wirecloth, Inc. (AWirecloth@) manufactured screens used in the oil industry. At the time of the events in question, the respective headquarters for EPI and Wirecloth (hereinafter collectively the AInsureds@) were located in Texas. The Insureds= insurance agent or broker was appellee George Guidry, who was employed by appellee Dwight W. Andrus Insurance, Inc. (the AAgency@) in Louisiana. Appellee Dwight W. Andrus, III was the owner of the Agency. Guidry presented insurance proposals and presentations to the Insureds in Texas and delivered the relevant policies or cover notes to the Insureds in Texas. Although Guidry sold surplus-lines insurance to the Insureds, he was not licensed to do so in Texas.
A. The Insurance Policies
In 1991, Guidry obtained insurance , effective October 1, 1991 through September 30, 1992, for the Insureds through British-American Insurance Group Ltd. (ABritish American@). The coverage consisted of a comprehensive general liability (ACGL@) policy with a limit of $1 million for any one accident or occurrence and an umbrella policy with a $3.5 million limit for any one accident or occurrence. The 1991 British American coverage for the CGL policy was apportioned among seven insurers, and the responsibility for the coverage limits under the umbrella policy was shared among 28 insurers. Guidry provided the Insureds with cover notes reflecting this coverage.
In November 1992, Guidry renewed the coverage on the British American CGL policy. He provided the Insureds with a cover note showing that this coverage was divided among three insurers. A few weeks later, British American sent cover notes to the Agency showing excess CGL coverage for the Insureds apportioned among eleven insurers and $5 million in umbrella coverage provided by Ocean Marine Indemnity Company Limited. These policies were effective from October 1, 1992 through September 30, 1993.
In 1993 and 1994, Guidry obtained the Insureds= CGL and umbrella insurance from Lexington Insurance Company. Under the terms of the Lexington policies, the limits of coverage were reduced by the costs of defense.
B. The Underlying Litigation
In the summer of 1994, Wirecloth notified Guidry that it had been sued by a competitor, Derrick Manufacturing Corporation, who had alleged various patent and trademark violations, as well as other violations of Texas common law and the Texas Business and Commerce Code. Guidry forwarded this information to British American. In the summer of 1995, the Insureds, among others, again were sued by this competitor for similar alleged violations of a second patent. These lawsuits were subsequently consolidated. The Insureds notified Guidry of the second suit, and Guidry forwarded the information to Lexington. Lexington appointed defense counsel under a reservation of rights in April 1996, but the Insureds continued to pay most of their own defense costs.
In September 2001, Varco, L.P., a subsidiary of National Oilwell Varco, a successor in interest to the Insureds,[1] paid approximately $15 million to settle the Derrick litigation. By this time, the Insureds and their successors-in-interest had incurred approximately $17 million in attorneys= fees. Lexington paid a fraction of the Insureds= defense costs, but did not contribute funds to settle the Derrick litigation.
Within a week of the settlement, Lexington filed a declaratory judgment action against the Insureds seeking a coverage determination (the ACoverage Suit@). Additional insurers were later added to the suit.[2] The Insureds and their successors reached a number of settlement agreements with British American and with many of the insurers. Regarding the coverage procured through British American, there were no settlements with the insurers securing the 1991B1992 CGL and umbrella policies, but the Insureds and their successors settled with all of the insurers providing coverage under the 1992B1993 CGL and umbrella policies. Between these two extremes, the Insureds reached settlement agreements with some, but not all, of the insurers securing the 1992B1993 excess CGL policy. The Insureds settled their claims with Lexington in the Coverage Suit at the same time as they settled the claims that they had asserted against Lexington in this suit.
C. This Suit
The Insureds filed the instant suit against Guidry, the Agency, and Andrus (hereinafter collectively the ABrokers@) on August 29, 2003 (the AFiling Date@), asserting claims against the Brokers for negligence, gross negligence, negligent misrepresentation, fraud, breach of fiduciary duty, and violations of article 21.21 of the Texas Insurance Code. The Insureds also asserted claims under section 101.201 of the Texas Insurance Code (hereinafter AUnauthorized Insurance Claims@), alleging that British American was an Aunauthorized insurer,@ that the Brokers assisted in the procurement of the British American policies, and that therefore the Brokers were liable for the unpaid amount of the claims due under the terms of the British American policies. In addition, the Insureds alleged that Andrus negligently supervised Guidry, that Andrus operated the Agency as a sham to perpetrate a fraud, and that the Agency was Andrus=s alter ego. The Insureds invoked the discovery rule and the doctrine of estoppel, alleging that they first learned of the misconduct when Guidry=s deposition was taken in the Coverage Suit.
Partial Summary Judgment
The Brokers filed a motion for partial summary judgment based on a limitations defense. In their motion, the Brokers asserted that the Insureds= claims for negligence,[3] negligent supervision,[4] negligent misrepresentation,[5] and violations of article 21.21 of the Texas Insurance Code were barred by the two-year statute of limitations.[6] The Insureds responded and filed special exceptions. The motion was set for submission without oral argument. Less than two weeks before the submission date, the Brokers filed a reply accompanied by additional evidence, and less than a week later, the Insureds filed a surreply, objections, and a motion to strike the additional evidence based on untimeliness. More than five weeks later, the trial court denied the Insureds= motion to strike and granted the Brokers= motion for partial summary judgment, without specifying the basis for its ruling.
Non-Disclosure Order
A few days before the trial court granted partial summary judgment, Lexington filed a AMotion to Enforce Confidentiality Agreement and for Entry of Protective Order.@ No evidentiary hearing was held, and the trial court signed an order granting the motion on April 5, 2005 (hereinafter the A Non-Disclosure Order@), barring the Insureds, their attorneys, and additional non-parties from using or disclosing, in this case or in any other proceeding, certain depositions and personnel files collected in the Coverage Suit. The Non-Disclosure Order was not severed from this case.
Trial and Judgment
About a month after entry of the Non-Disclosure Order, the case was tried to a jury. As a defense to the Unauthorized Insurance Claims, the Brokers asserted that the insurance in question had been independently procured. Before the case was submitted to the jury, the trial court granted the Brokers= motion for directed verdict as to the Insureds= breach-of-fiduciary-duty claims. The jury returned a verdict in favor of the Brokers as to the Insureds= claims of fraud by misrepresentation and fraud by nondisclosure. The jury also found that the 1991 and 1992 British American cover notes were independently procured. In the jury charge, the trial court had instructed the jury not to answer any more questions regarding the Insureds= Unauthorized Insurance Claims if the jury found that these cover notes were independently procured. Because the jury made these findings, the jury did not answer any other questions regarding the Insureds= Unauthorized Insurance Claims. The trial court rendered judgment on the verdict, denying the Insureds= motions for judgment notwithstanding the verdict and for new trial.
II. Issues and Analysis
On appeal, the Insureds present six compound issues in which they challenge the partial summary judgment as well as the trial court=s rulings on the admissibility of two issues of a trade publication and the Brokers= motion for directed verdict. The Insureds also challenge the Non-Disclosure Order and the trial court=s failure to render judgment against the Brokers as to liability on the Unauthorized Insurance Claims.
A. Did the trial court err in granting the Brokers= motion for partial summary judgment?
In a traditional motion for summary judgment, if the movant=s motion and summary-judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). In our de novo review of a trial court=s summary judgment, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). When, as in this case, the order granting summary judgment does not specify the grounds upon which the trial court relied, we must affirm the summary judgment if any of the independent summary-judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
Challenged Claims
At the time the Brokers moved for partial summary judgment, the Insureds= live pleading contained claims of negligence based on the following allegations:
(a) The Brokers failed to promptly notify insurers of the Derrick suit.
(b) The Brokers placed coverage with financially unsound insurers and insurers with unsound management.
(c) The Brokers placed coverage with insurers that were non-existent, corrupt, or engaged in criminal misconduct.
(d) The Brokers failed to disclose their knowledge of the insurers= insolvency and corruption.
(e) The Brokers sold insurance to the Insureds without a Texas license.
(f) The Brokers sold surplus-lines insurance without the required surplus-lines insurance license and without complying with governing laws.
(g) The Brokers failed to understand the defects in the insuring contracts and insuring entities or sold the policies without disclosing these defects.
(h) The Brokers negligently failed to secure better, available insurance.
The Insureds also claimed the Brokers negligently and falsely represented that they were obtaining the best possible insurance at the lowest possible price, falsely represented terms and conditions of the insurance they procured, and failed to disclose material terms of the insurance coverage. All of the foregoing claims were asserted under both the common law and article 21.21 of the Texas Insurance Code.[7]
Appellate Arguments
In their first issue, the Insureds challenge the partial summary judgment on the grounds that (a) in their motion for partial summary judgment based on statute of limitations, the Brokers did not address the 1991 and 1992 placements; (b) limitations on the claims regarding the 1993 and 1994 placements did not begin to run until the Insureds suffered a legal injury, which they claim did not occur until Lexington denied coverage or until the Insureds became liable to pay a settlement in excess of policy limits, both of which occurred within two years before this lawsuit was filed; and (c) the Brokers did not offer any summary-judgment evidence establishing that the Insureds knew or should have known of the Brokers= violations of article 21.21 of the Insurance Code more than two years before they filed suit.
Scope of Summary Judgment
In their first sub-issue, the Insureds argue that the Brokers asserted only one ground in the motionCthat the statute of limitations had run as to the Insureds= claims involving placement of the Lexington policies in 1993 and 1994. In their motion, the Brokers asserted that the two-year statute of limitations bars the Insureds= claims for negligence, negligent supervision, negligent misrepresentation, and alleged violations of article 21.21 of the Insurance Code. The Brokers did not limit their summary-judgment ground to the Insureds= claims involving placement of the Lexington policies. Therefore, the Insureds= first sub-issue lacks merit.
Evidence Attached to the Brokers= Summary Judgment Reply
The Insureds assert on appeal that this court cannot consider the summary-judgment evidence attached to the Brokers= summary-judgment reply because (1) this evidence was allegedly untimely and (2) the trial court never granted the Brokers leave to file this evidence late. Although the trial court never granted leave to file the evidence late, the record reveals that no leave was necessary because the Brokers filed the evidence more than 21 days before the March 18, 2005 submission date.
The record reflects the following chronology regarding the Brokers= summary-judgment motion:
! November 10, 2004 C The Brokers file the motion for summary judgment.
! The motion is set for hearing on December 13, 2004.
! The motion is re-set, to be submitted to the court without oral argument on February 7, 2005.[8]
! January 26, 2005 C The Brokers file their reply with attached evidence.
! January 31, 2005 C The Insureds file a motion to strike the evidence attached to the reply as untimely because it was not filed 21 days before the submission date. The Insureds also file a motion to strike the Brokers= summary-judgment motions because they had been set for submission after the deadline in the docket control order.
! February 9, 2005 C The trial court denies the Insureds= motion to strike the Brokers= summary-judgment motions.
! At some point between February 9, 2005 and March 18, 2005, the trial court re-sets the motion for submission on March 18, 2005, without oral argument.
! March 18, 2005 C During a status conference in open court, the trial judge announces that she has denied a group of motions, and this group includes the Insureds= motion to strike as untimely the evidence attached to the Brokers= reply.[9] The trial judge further states that she had set the Brokers= summary-judgment motion for submission on March 18, 2005, and that counsel knew about this setting. No party challenges this statement, states that the court did not re-set the submission date, or expresses surprise or lack of awareness that the trial court had set the motion for submission on that date.[10] The trial court also announces that it is granting the motion. The Insureds= counsel complains that the evidence attached to the reply had been on file for less than ten days before the submission date for the motion. The trial court responds by noting that the court set the motion for submission on March 18, 2005, which is more than 21 days after the reply was filed.
Except on leave of court, a movant is required to file and serve summary-judgment evidence at least 21 days before the time specified for the motion to be submitted to the trial court for decision. See Tex. R. Civ. P. 166a(c); Martin v. Martin, Martin & Richards, Inc., 989 S.W.2d 357, 359 (Tex. 1998). Though the trial court did not grant the Brokers leave to file the evidence attached to the reply, it did not need to do so because the trial court took an action that made the evidence in question timely filedCit specified March 18, 2005 as the submission date for the motion. See Dalehite v. Nauta, 79 S.W.3d 243, 245 (Tex. App.CHouston [14th Dist.] 2002, pet. denied) (holding that evidence filed less than 21 days before original summary-judgment hearing was timely, even though trial court never granted leave to file late evidence, because the summary-judgment hearing was re-set to a date more than 21 days after the evidence was filed); Thomas v. Medical Arts Hosp. of Texarkana, 920 S.W.2d 815, 818 (Tex. App.CTexarkana 1996, pet denied) (holding that trial court=s re-setting of hearing date for motion for summary judgment made timely summary-judgment evidence that had been untimely based on hearing date in effect when the evidence was filed and served). Thus, the timeliness of the evidence was no longer an issue.
The Insureds assert that at the hearing on their motion to reconsider the partial summary judgment, the trial court stated it had not considered the evidence in the reply. However, at this hearing the trial court actually stated, AI=m not going to consider the statute of limitations arguments that were in your reply.@[11] This statement was simply an acknowledgment by the trial judge that the trial court could not grant summary judgment based on the grounds stated in the reply, because grounds must be stated in the motion. See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993). The trial court did not make this statement on March 18, 2005, when the Insureds reminded the trial court that the reply evidence had not been on file for 21 days before February 7, 2005; rather, the trial court made this statement at a hearing on the Insureds= motion to reconsider the summary judgment, a motion the trial court denied.[12] The trial court did not state that it had not considered the evidence attached to the reply.[13]
If, as in this case, the trial court exercises its discretion to re-set the submission date for a motion for summary judgment, the movants= summary-judgment evidence must be on file and served at least 21 days before the new submission date. See Dalehite, 79 S.W.3d at 245; Thomas, 920 S.W.2d at 818. Because the Brokers filed and served the evidence attached to their summary-judgment reply more than 21 days before March 18, 2005, that evidence was timely.[14] See Dalehite, 79 S.W.3d at 245; Thomas, 920 S.W.2d at 818. And because this evidence was timely, no presumption arose that the trial court did not consider the evidence. Thus, it was unnecessary for the Brokers to obtain leave of court to file evidence late.[15]
The Insureds did not controvert the evidence attached to the Brokers= reply, which showed, among other things, the following:
! On July 20, 1993, the Insureds submitted to the Andrus Defendants a listing of attorneys= fees for which they were seeking reimbursement under the CGL policies brokered by British American. The Insureds were seeking reimbursement of attorneys= fees incurred in connection with the Derrick claim.
! On or about July 15, 1994, Derrick filed a patent infringement suit arising out of the 421 patent against Wirecloth. The suit involves patent and trademark infringement activities by Wirecloth which allegedly began in 1993.
! The Andrus Defendants submitted a bid for the renewal of the Insureds= coverage for the 1994B1995 period. The Insureds accepted the bid which included another written proposal submitted by the Agency. That proposal stated that defense costs were within limits.
! On or about October 5, 1994, the law firm of Maginnis & Picou, on behalf of the London Underwriters for the primary CGL coverage for the 1992B1993 policy, wrote a letter to Wirecloth, stating that the underwriters were investigating the 1994 Derrick lawsuit to determine if they had any duty to defend and indemnify as to this lawsuit. The underwriters stated that they would not pay any amount of costs or attorneys= fees until they determined their obligation, if any, to indemnify Wirecloth regarding this matter.
! On or about August 11, 1995, Robert Holman of Technical Risks, Inc. conducted an insurance review for the Insureds. In reviewing the existing CGL coverage, he noted: AThe second area of concern is that defense costs are part of the limit. Not only does this reduce your >per occurrence= limit; it also reduces your aggregate.@
! On or about November 13, 1995, Cynthia Fountain of Lexington Insurance Company wrote the Insureds advising that Lexington denied coverage and would not defend or indemnify the Insureds regarding Derrick=s 1995 lawsuit against the Insureds.
! On or about February 27, 1996, the Insureds forwarded to Guidry a summary of invoices for attorneys= fees broken down by claims. Guidry forwarded the summary to the various insurers. The Insureds had forwarded invoices for Derrick defense costs and attorneys= fees to the insurers in September of 1995, seeking reimbursement for the Insureds= payment of these invoices. However, no payment was forthcoming as of the end of February 1996.
! On or about March 8, 1996, attorney Steve Borgman of Vinson & Elkins sent the Insureds an insurance coverage analysis he had prepared. The Insureds invoked privilege and refused to produce this document in discovery.
! On or about March 12, 1996, Borgman (Vinson & Elkins) wrote to Fountain (Lexington) regarding a potential $6 million settlement of the two Derrick lawsuits that could occur between the Insureds and Derrick. Borgman also noted that to this point Lexington had denied coverage and had refused to provide a defense. Borgman argued that Derrick=s claims were covered by the Lexington policies. In their petition, the Insureds allege that the failure to settle the case at this point was proximately caused by the Brokers= tortious conduct.
! On or about April 29, 1996, Lexington wrote the Insureds stating that Lexington would now provide defense counsel for the Insureds in the consolidated Derrick lawsuits under a complete reservation of rights.
! On March 11, 1997, Anglo American Insurance Company went into a Scheme of Arrangement (the English equivalent of bankruptcy). Anglo American was responsible for 75% of the $100,000 primary CGL insurance for the 1992B1993 policy period.
! On or about March 17, 1997, Lexington issued another reservation-of-rights letter.
! On or about May 28, 1998, James Cornell, an attorney with Haynes & Boone who was representing the Insureds, wrote to Fountain (Lexington). Cornell stated that Lexington=s reservation of rights created a conflict of interest and entitled the Insureds to select their own defense counsel. Cornell stated that the Insureds have continued to pay Vinson & Elkins to defend them in the Derrick litigation, and that the Insureds were seeking reimbursement for their legal expenses in defending against Derrick=s claims.
! On June 12, 1998, an attorney for some of the underwriters advised Cornell (Haynes & Boone) of Anglo American=s Scheme of Arrangement (bankruptcy proceeding) in England. As of June 12, 1998, the London Underwriters for the primary CGL coverage for the 1992B1993 policy still had not stated their position in writing to Cornell regarding their defense and indemnity obligations.
! On May 12, 1999, Chester Makowski, an attorney with Royston Rayzor, Vickery & Williams wrote to Cornell (Haynes & Boone) and advised that Lexington would pay only two-thirds of defense costs based on the time of the risk and tendered a check for $181,079.12. Cornell was reminded that defense costs reduced the limits under the primary policies issued by Lexington. As of May 1999, a substantial amount of attorneys= fees and expenses had not been paid.
! On August 23, 1999, Lexington, through Fountain, issued another reservation-of-rights letter to the Insureds, noting that defense costs reduced the applicable limits of insurance under both Lexington primary CGL policies.
! In the Insureds= answer in the Coverage Suit, they stated that they had incurred more than $17 million in attorneys= fees and expenses defending the Derrick litigation and that through November 19, 2001, Lexington had reimbursed the Insureds less than $330,000, in payments made in 1999. The Insureds stated that the underwriters on the 1991 and 1992 policies had reimbursed the Insureds less than $365,000 of the more than $17 million in attorneys= fees and expenses.
Limitations as a Bar to the Insureds= Claims: Did the Insureds suffer a legal injury more than two years before they filed suit?
In their second sub-issue, the Insureds assert that limitations on the claims regarding the 1993 and 1994 placements did not begin to run until the Insureds suffered a legal injury, which the Insureds assert did not occur until Lexington denied coverage or until the Insureds became liable to pay a settlement in excess of policy limits.
The Insureds alleged, in part, that the Brokers engaged in the following Atortious conduct@:
! failing to promptly notify insurers of Derrick=s claim in the early summer of 1994;
! placing coverage with financially unsound insurers and insurers whose management was unsound;
! placing coverage with non-existent insurers, insurers who had ceased doing business, or insurers who were corrupt and engaged in criminal misconduct;
! failing to disclose to the Insureds the Brokers= knowledge of the insolvency and corruption of the insurers with whom the coverage had been placed;
! selling insurance to Texans without a Texas license;
! selling surplus-lines insurance without a surplus-lines license and without compliance with the surplus-lines laws;
! failing to understand the defects in the insuring contracts and insuring entities, or, alternatively, knowing of the defects, and selling the policies without disclosure;
! negligently failing to secure better, available insurance;
! falsely representing that ASovereign@ had insured the Insureds when it had not;
! falsely representing that they were obtaining the best possible insurance at the lowest possible price, when in fact they were not; and
! falsely representing terms and conditions of insurance and failing to disclose material terms of the insurance prior to binding the insurance.[16]
The statute of limitations does not begin to run until a claim accrues. S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). Generally, a claim accrues when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred. Id.; Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990) (stating that Aa cause of action can generally be said to accrue when the wrongful act effects an injury@). When a claim accrues is a question of law for the court. Loyd v. ECO Resources, Inc., 956 S.W.2d 110, 126 (Tex. App.CHouston [14th Dist.] 1997, no pet.).
The Insureds argue that this court=s precedent in Mauskar v. Hardgrove does not apply to this case. See No. 14-02-00756-CV, 2003 WL 21403464, at *2B3 (Tex. App.CHouston [14th Dist.] June 19, 2003, no pet.) (mem. op.) (holding claims for negligent procurement of insurance accrued on date the insured purchased the insurance policies). At a minimum, Mauskar applies to the Insureds= claims for negligence and negligent misrepresentation regarding the terms and conditions of the insurance policies, including the term under which defense costs would reduce the applicable limits of insurance as to the 1993 and 1994 policies. See Mauskar, 2003 WL 21403464, at *2B3. Therefore, the summary-judgment evidence conclusively proved these claims were time-barred by the two-year statute of limitations when the Insureds filed suit in 2003.
As to the other claims regarding the 1993 and 1994 placements, the Insureds argue in their second sub-issue that the claims did not accrue until the Insureds suffered a legal injury, which they claim did not occur until Lexington filed its declaratory-judgment against the Insureds or until the Insureds settled the Derrick suit. In support of this contention, the Insureds cite a case decided by the First Court of Appeals. See All-Tex Roofing, Inc. v. Greenwood Ins. Group, Inc., 73 S.W.3d 412, 414B17 (Tex. App.CHouston [1st Dist.] 2002, pet. denied). However, in that case there was no allegation that the insured was damaged by a failure to provide a defense or to pay defense costs. See id. The insured only alleged damage based on a failure to indemnify against a judgment. See id. In this case, the Brokers submitted undisputed summary-judgment evidence conclusively proving that on or about November 13, 1995, Lexington denied coverage, both as to defense and indemnity. More than five months later, on or about April 29, 1996, Lexington wrote the Insureds stating that Lexington would provide defense counsel for the Insureds in the consolidated Derrick lawsuits under a complete reservation of rights. However, even after April 29, 1996, the Insureds continued to pay their retained defense counsel, and they did not accept the services of the counsel that Lexington offered to provide at Lexington=s expense. Under the Insureds= allegations and the uncontroverted summary-judgment evidence, the Insureds paid their own defense counsel millions of dollars in attorneys= fees prior to August 29, 2001, two years before the Filing Date. Despite the Insureds= requests for reimbursement, Lexington reimbursed the Insureds less than $330,000 of their defense costs, and did not make any reimbursement payments until 1999.
Because Lexington denied coverage and the Insureds allegedly incurred millions of dollars in damages, sufficient facts existed for the Insureds to seek a judicial remedy based on their claims for negligence and negligent-misrepresentation and their claims for violations of article 21.212 of the Texas Insurance Code. See Abe=s Colony Club, Inc. v. C & W Underwriters, Inc., 852 S.W.2d 86, 90B91 (Tex. App.CFort Worth 1993, writ denied) (holding that cases in which only issue was liability above the policy limits were not on point in case in which insured sought damages for expenses it incurred in defending third-party claims, and that such damages constitute legal injury resulting in accrual of claim and starting of limitations). Therefore, the Insureds= second sub-issue lacks merit.
Did the evidence conclusively prove that the statute of limitations bars the Texas Insurance Code claims?
In their third sub-issue, the Insureds assert that the summary-judgment evidence does not conclusively prove that the statute of limitations bars their claims for violations of the Insurance Code. The Insureds allege that the Brokers violated subsections (2),[17] (5),[18] and (11)[19] of section 4 of former article 21.21 of the Texas Insurance Code. In summary, the Insureds allege that they sustained actual damages caused by the Brokers= alleged (a) untrue, deceptive, or misleading statements with respect to the business of insurance or with respect to any person in the conduct of his insurance business, (b) false statements of financial condition of an insurer made with intent to deceive, and (c) misrepresentation regarding insurance policies. The following is a summary of the Insureds= allegations regarding this conduct:
! The Brokers falsely represented their competence and efforts.
! The Brokers concealed the true state of affairs about Lexington, British American, and other underwriters to continue getting the Insureds= business and avoid getting sued.
! The Brokers failed to disclose to the Insureds the Brokers= knowledge of the insolvency and corruption of the insurers with whom the coverage had been placed.
! The Brokers failed to understand the defects in the insuring contracts and insuring entities, or, alternatively, knew of the defects, and sold the policies without disclosure.
! The Brokers falsely represented that ASovereign@ had insured the Insureds when it had not.
! The Brokers falsely represented that they were obtaining the best possible insurance at the lowest possible price, when, in fact, they were not.
! The Brokers falsely represented terms and conditions of insurance and failed to disclose material terms of the insurance prior to binding the insurance.
! As regards the Amiddle note@ sold in October 1992, the Brokers falsely represented the identity of certain insurers and represented that certain insurers were bound when they were not.
! The Brokers failed to disclose that the notes sold through British American were not protected by the guaranty funds of either Louisiana or Texas.
Suit on such claims must be commenced Awithin two years after the date on which the . . . unfair or deceptive act or practice occurred or within two years after the person bringing the action discovered or, in the exercise of reasonable diligence, should have discovered the occurrence of the . . . unfair or deceptive act or practice.@ Tex. Ins. Code Ann. art. 21.21, ' 16(d). The evidence shows that the Insureds were defendants in major patent and trademark litigation in federal court starting in 1994. As of August 29, 2001, the Insureds had been involved in this litigation for more than seven years. Despite the Insureds= payment of insurance premiums on various policies for the 1991 to 1994 period, their insurers had not provided them with a defense in the litigation, had not admitted that the policies provided any coverage, and had reimbursed the Insureds for only a small percentage of the millions of dollars that the Insureds had spent in defense costs. The Insureds had received an insurance review report from Technical Risks, Inc. discussing various weaknesses in their insurance coverages, including the policy feature under which the defense costs reduced the applicable limits of insurance. The Insureds also had received an insurance coverage analysis from Vinson & Elkins. Additionally, the Insureds had been advised that Anglo American was in the English equivalent of bankruptcy. The summary-judgment evidence conclusively proves that the Brokers= acts and practices alleged to be unfair or deceptive occurred before August 29, 2001, and that the Insureds, in the exercise of reasonable diligence, should have discovered the occurrence of the alleged unfair or deceptive acts or practices more than two years before the Filing Date. See Mausker, 2003 WL 21403464, at *4 (affirming summary judgment dismissing article 21.21 claims against agent relating to procurement of insurance policies based on statute of limitations and holding that plaintiff should have discovered that the terms of the policies were not as stated by the agent by reading the policies or descriptions of the policies). Therefore, the Insureds= third sub-issue lacks merit. Because all of the sub-issues lack merit, we overrule the Insureds= first issue and affirm the trial court=s partial summary judgment.
B. Did the trial court err in granting the Brokers= motion for directed verdict as to the Insureds= breach-of-fiduciary-duty claims?
In their second issue, the Insureds argue that the trial court erred in granting the Brokers a directed verdict as to the Insureds= claims for breach of fiduciary duty because the Insureds raised fact issues regarding the existence of a formal or an informal fiduciary relationship. In a subsidiary argument, the Insureds contend that, because a fiduciary relationship exists, it is presumed that their injury was inherently undiscoverable and that the statute of limitations was tolled.
Standard of Review
Judgment without or against a jury verdict is proper at any course of the proceedings only when the law does not allow reasonable jurors to decide otherwise. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). Accordingly, the test for legal sufficiency is the same for summary judgments, directed verdicts, judgments notwithstanding the verdict, and appellate no-evidence review. Id. When reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable to the Insureds and indulge every reasonable inference that would support it. Id. We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. See id. at 827. We must determine whether the evidence at trial would enable reasonable and fair-minded people to find the facts at issue. See id. The factfinder is the only judge of witness credibility and the weight to give to testimony. See id. at 819.
Formal Fiduciary Relationship
The Insureds first argue that a determination of whether a broker is an agent of the insured is a question of fact.[20] According to the Insureds, they raised a fact issue concerning whether the Brokers had a formal fiduciary relationship with the Insureds. The Insureds rely on case law in which courts note that an insurance agent Aacts for the insured in making the application for insurance and processing the policy@[21] and on non-insurance cases addressing the duties generally owed by an agent to his principal.[22]
Although the existence of facts giving rise to a fiduciary duty is a question for the factfinder=s determination, the issue of whether those facts give rise to a formal fiduciary relationship is a question of law. See Brewer & Pritchard, P.C. v. Johnson, 7 S.W.3d 862,
867 (Tex. App.CHouston [1st Dist.] 1999), aff=d, 73 S.W.3d 193 (2002); Fuqua v. Taylor, 683 S.W.2d 735, 737B38 (Tex. App.CDallas 1984, writ ref=d n.r.e.). A>[N]ot every relationship involving a high degree of trust and confidence rises to the stature of a fiduciary relationship.=@ Meyer v. Cathey, 167 S.W.3d 327, 330 (Tex. 2005) (quoting Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 176B77 (Tex. 1997)). The Insureds cite no case recognizing a formal fiduciary relationship between an insured and its insurance broker, or the agency employing the broker, or the owner of the agency.[23]
Significantly, in their case-in-chief, the Insureds did not bring forward any evidence that a fiduciary relationship existed between the parties. On appeal, the Insureds argue generally that A[t]he trial record speaks for itself and contains ample evidence of Defendants= fraud, breach of fiduciary duty[,] and statutory violations. Plaintiffs cannot replicate herein the extensive documents and days of testimony admitted to the jury.@ The Insureds contend that a formal fiduciary relationship existed because the Brokers (a) Aselected and recommended insurers and coverage@ to the Insureds, (b) Aprepared and processed@ the Insureds= applications for insurance, and (c) procured the policies and delivered them to the Insureds in Texas.[24]
After reviewing the evidence, we conclude that reasonable and fair-minded people would not be able to find that a formal fiduciary relationship existed between the Brokers and the Insureds. See Pickens v. Tex. Farm Bureau Ins. Cos., 836 S.W.2d 803, 805 (Tex. App.CAmarillo 1992, no writ) (stating that an insurance agent has no duty to procure additional coverage for a customer Amerely because the agent has knowledge of the need for additional insurance of that customer, especially in the absence of evidence of prior dealings where the agent customarily has taken care of his customer=s needs without consulting him@) (emphasis added). A formal fiduciary relationship is one created by law or by the nature of the contract between the parties. Peckham v. Johnson, 98 S.W.2d 408, 416 (Tex. Civ. App.CFort Worth 1936), aff=d, 132 Tex. 148, 120 S.W.2d 786 (1938). The Texas Supreme Court has recognized that certain relationships constitute formal fiduciary relationships as a matter of law. See, e.g., Johnson v. Peckham, 132 Tex. 148, 152, 120 S.W.2d 786, 788 (1938) (partners). The existence of a formal fiduciary relationship is determined by the relationship between the parties, and if such a relationship is established, questions of whether one party relied on or confided in the other are immaterial. Johnson, 132 Tex. at 151B52, 120 S.W.2d at 788.[25] In this case, however, the Insureds cite no binding precedent recognizing a formal fiduciary relationship under facts similar to those presented in this case, and our own research has revealed none.
Courts do not create fiduciary relationships lightly. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 177 (Tex. 1997). We decline to extend the set of formal fiduciary relationships to encompass the relationship between clients and their insurance agents, insurance agencies, and insurance brokers. See T.F.W. Mgmt., Inc. v. Westwood Shores Prop., 79 S.W.3d 713, 720 (Tex. App.CHouston [14th Dist.] 2002, pet. denied) (declining to create a fiduciary duty requiring the owner of a country club to provide an accounting to a property owners= association of fees the association provided to the club).
Informal Fiduciary Relationship
The Insureds also contend that the trial court erred in granting a directed verdict regarding the Insureds= breach-of-fiduciary-duty claims because the evidence raised questions of fact regarding whether an informal fiduciary relationship existed between the parties. When a business transaction is involved, Athe special relationship of trust and confidence must exist prior to, and apart from, the agreement made the basis of the suit.@ Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 288 (Tex. 1998). After reviewing the record under the applicable standard of review, we conclude that the evidence would not enable reasonable and fair-minded people to find that such a confidential relationship existed between the Insureds and the Brokers prior to the transactions that are the subject of the Insureds= claims.
We overrule the Insureds= second issue and do not reach their argument that when a fiduciary relationship exists, it is presumed that the injury caused by a breach of fiduciary duty is inherently undiscoverable, which thereby tolls the statute of limitations.
C. Did the Insureds preserve error as to their third issue?
The Insureds contend in their third issue that the trial court erred in failing to grant their motion for judgment notwithstanding the verdict concerning their Unauthorized Insurance Claims because the evidence conclusively established that the only exception to liability invoked by the Brokers did not apply.
The trial court charged the jury on the Insureds= Unauthorized Insurance Claims. Question 9 of the court=s charge was the first question concerning these claims. In it, the jury was asked whether the British American policies were independently procured, which is an affirmative defense that the Brokers asserted at trial. Because of instructions contained in questions 10, 11, and 12, the jury was not to answer any liability or damages questions regarding the Unauthorized Insurance Claims unless the jury found in question 9 that one of the policies was not independently procured. The Insureds objected at the charge conference that there was no evidence to support the submission of question 9. The Insureds did not object to the instructions in questions 10, 11, and 12 that would result in the jury not answering the liability and damages questions if the jury found that both policies were independently procured.[26]
In answer to question 9, the jury found that both policies were independently procured. The jury obeyed the court=s instructions in questions 10, 11, and 12 and did not answer the liability and damages questions regarding the Unauthorized Insurance Claims. The Insureds filed a motion for judgment notwithstanding the verdict and a supporting brief. In that motion, the Insureds asserted that the trial court should disregard the jury=s answer to question 9 because there was no evidence to support it. The Insureds further asserted that the evidence at trial conclusively established liability and damages for the Unauthorized Insurance Claims, so that the trial court should render judgment on these claims without the need for any jury findings. The trial court denied the Insureds= motion for judgment notwithstanding the verdict. Under their third appellate issue, the Insureds now assert the trial court erred by not rendering judgment in favor of the Insureds based on the Unauthorized Insurance Claims, and the Insureds assert this court should render judgment that the Brokers are liable under those claims and remand for a new trial on damages under these claims. There are several problems with the Insureds= argument.
First, the Insureds never asked the trial court to render judgment that the Brokers are liable on the Unauthorized Insurance Claims and to order a new trial as to the damages under these claims. Therefore, the Insureds did not preserve error as to their third issue. See Tex. R. App. P. 33.1(a); Weinberger v. Longer, 222 S.W.3d 557, 567 (Tex. App.CHouston [14th Dist.] 2007, pet. denied) (holding that appellant failed to preserve error because it did not present appellate complaint to trial court).
Second, even if the Insureds were asserting on appeal that the trial court erred in denying their motion for judgment notwithstanding the verdict, the Insureds have not briefed this argument. Presuming for the sake of argument that the Insureds are correct that the evidence is legally insufficient to support the jury=s answer to Question 9, this insufficiency would only indicate that question 9 should be disregarded; it would not provide a basis for judgment as a matter of law or for a new trial on the Unauthorized Insurance Claims. In accordance with this reality, the Insureds argued in their motion for judgment notwithstanding the verdict that the trial court should render judgment in their favor on the Unauthorized Insurance Claims in the amount of $10,875,000 plus attorneys= fees because the trial evidence conclusively proved that the Brokers were liable for these damages under the Unauthorized Insurance Claims, obviating the need for jury findings. However, on appeal, the Insureds have provided no argument, citations to the record or to authorities, and no analysis showing that the trial evidence conclusively proved liability and damages as to the Unauthorized Insurance Claims. Therefore, even if the Insureds had assigned error as to the trial court=s denial of the motion for judgment notwithstanding the verdict, they would have waived this issue by failing to brief it.[27]
Third, for the Insureds to be entitled to a new trial based on the jury=s failure to answer the questions 10-12 because the jury followed the instructions in these questions, the Insureds would have to have preserved error by objecting to the instructions in questions 10-12 that caused the jury not to answer these questions. See Little Rock Furniture Mfg. Co. v. Dunn, 222 S.W.2d 985, 989B90 (Tex. 1949) (holding party that failed to object to instruction that jury not answer a question based on its answer to prior question waived that party=s right to have the jury make findings as to the subsequent question), modified on other grounds by Bradford v. Arhelger, 340 S.W.2d 772 (Tex. 1960); Texas Employers= Ins. Ass=n v. Ray, 68 S.W.2d 290, 295 (Tex. Civ. App.CFort Worth 1933, writ ref=d) (holding appellant could not complain of jury=s failure to answer question because the charge instructed the jury not to do so based on its answer to a prior question and because appellant did not object to this instruction); Hunter v. Carter, 475 S.W.2d 41, 46 (Tex. Civ. App.CHouston [14th Dist.] 1972, writ ref=d n.r.e.) (concluding that, in case in which jury followed instructions not to answer certain questions based on its answer to a prior question, party waived jury findings as to unanswered questions by not objecting to the conditional submission of those questions); Whiteside v. Tackett, 229 S.W.2d 908, 912 (Tex. Civ. App.CAustin 1950, writ dismissed) (same as Hunter); Bankers Standard Life Ins. Co. v. Atwood, 205 S.W.2d 74, 77 (Tex. Civ. App.CAustin 1950, no writ) (same as Hunter); Spears Dairy v. Davis, 125 S.W.2d 382, 383 (Tex. Civ. App.CBeaumont 1939, no writ) (same as Hunter and stating that party is required to object to the conditioning instruction and to anticipate that jury may answer initial question in such a way that it fails to answer subsequent questions that are improperly conditioned on the jury=s answer to the initial question). Having failed to object to these instructions, the Insureds have waived their right to a new trial to allow the jury to answer the unanswered questions that were conditioned on the jury not finding independent procurement in question 9.[28] Accordingly, we overrule the Insureds= third issue.
D. Did the trial court err by excluding from evidence two issues of a trade publication?
In their fourth issue, the Insureds argue that the trial court committed reversible error by excluding as hearsay two issues of Surplus Lines Reporter & Insurance News, an industry trade publication. We review a trial courts=s evidentiary rulings for an abuse of discretion. In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005) (per curiam). The trial court abuses its discretion if it acts without reference to guiding rules or principles, or in an arbitrary or unreasonable manner. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241B42 (Tex. 1985). To reverse a judgment based on a claimed error in admitting or excluding evidence, a party must show that the error probably resulted in an improper judgment. Tex. R. App. P. 44.1(a); Interstate Northborough P=ship v. State, 66 S.W.3d 213, 220 (Tex. 2001). To assess whether the excluded evidence caused such harm, we review the entire record. Interstate Northborough P=ship, 66 S.W.3d at 220. We must uphold the trial court=s evidentiary ruling if there is any legitimate basis for it. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
The Insureds argue that the two issues of the trade publication were not offered for the truth of the matters reported, but were nonetheless essential to prove the Insureds= fraud claims. According to the Insureds, the November 1992 and October 1993 issues Areport[ed] on the criminal investigation of Dieter Hugel[29] and the financial instability of Ocean Marine@ and were offered Ato show that the Brokers were aware of those problems as early as November 1992, prior to their December 1992 Placement.@ The Insureds= attorney argued to the trial court, A[The publications are offered] not for the truth of the matter stated, but [for] knowledge and the relevant time period of that knowledge. . . . [T]his is not hearsay. It is an operative fact that was known to these people.@ The Insureds= attorney elaborated that the materials were offered to Ashow knowledge and awareness by the agency.@
The trial court excluded the two exhibits as hearsay, and explained that the Insureds seemed to be offering them for Athe truth of what the article says, that on such-and-such a day, it was published and that there=s something untrustworthy about this person that=s in the article.@ The Insureds= attorney responded, ANo, Your Honor. I=m saying that this would have been information that would have incited inquiry to have made inquiry [sic] into this person, for one thing, and that that was not done.@ We conclude the trial court did not abuse its discretion in excluding the material.
First, there is no evidence that the Brokers read these two issues of the trade publication; thus, they are not probative of the Brokers= knowledge as the Insureds suggest.[30] Moreover, although the Insureds contend that the material was not offered for the truth of the matters asserted therein, it appears that they offered these two issues to show that the Brokers should have known of the truth of statements made in this material, and should have had such knowledge at the time these issues were published. But A[t]he hearsay rules cannot be avoided by this kind of circular reasoning.@ Nissan Motor Co. Ltd. v. Amrstrong, 145 S.W.3d 131, 141B42 (Tex. 2004).[31] In fact, the Insureds do not merely contend that the Brokers should have known of the matters alleged in the excluded evidence, but contend that, based on information in these issues of the trade publication, the Brokers should have concluded that Ocean Marine was financially unsound or should have conducted an independent investigation of Hugel and Ocean Marine. As in Nissan, the Insureds= argument for admission rests on the unsupported supposition that Awhere there=s smoke, there=s fire.@[32] Under these circumstances, we conclude the trial court did not abuse its discretion in excluding this evidence, and we overrule the Insureds= fourth issue.
E. Should this court address attorneys= fees?
In their fifth issue, the Insureds contend that because the jury=s liability findings must be reversed and remanded, the attorneys= fees findings also must be reversed and remanded. We disagree. Because this court affirms the trial court=s take-nothing judgment, there is no basis to reverse and remand as to the attorneys= fees request. Accordingly, we overrule the Insureds= fifth issue.
F. Is the appeal from the trial court=s Non-Disclosure Order moot?
The sixth and last issue concerns the trial court=s Non-Disclosure Order granting Lexington=s AMotion to Enforce Confidentiality Agreement.@[33] The Insureds argue that the trial court=s order prohibiting the Insureds and their attorneys from using documents that Lexington considers confidential is an injunction that expired upon entry of final judgment, or alternatively, is void due to procedural defects. Lexington has moved to dismiss the appeal of this issue and to designate certain items in the record for in camera review.
The Insureds ask this court to declare that the trial court=s Non-Disclosure Order was dissolved upon the trial court=s rendition of final judgment and to dismiss as moot the appeal from this order because, they argue, the order is no longer in effect. We conclude that the Non-Disclosure Order was void from the moment it was signed and therefore the Insureds= appeal from this order is moot.
The Insureds named Lexington as a defendant in this case. The Insureds later settled their claims against Lexington as well as the claims between the Insureds and Lexington in the Coverage Suit. To effect this settlement, Lexington and the Insureds entered into a Rule 11 agreement and a AGeneral, Full, and Final Release of All Claims and Indemnity Agreement@ (hereinafter ASettlement Agreement@). As part of this settlement, the trial court signed an order dismissing Lexington from this suit at a time when Lexington had not asserted a counterclaim or otherwise sought relief from the court. Thereafter, the Insureds amended their petition without naming Lexington as a defendant, thereby eliminating Lexington as a party in this case. From that point forward, the Insureds did not assert any claims against Lexington, and Lexington was no longer a party in this case. See Webb v. Jorns, 488 S.W.2d 407, 409 (Tex. 1972).
Sometime later, Lexington, no longer a party in the case, filed a AMotion to Enforce Confidentiality Agreement and For Entry of Protective Order.@ In this motion, nonparty Lexington alleged that Varco International, Inc, the parent company of the Insureds and a nonparty to this case, had breached various agreements with Lexington, including the Settlement Agreement, by filing several documents with the Texas Supreme Court in an amicus brief. To remedy this situation, nonparty Lexington asked the trial court to enjoin nonparty Varco, as well as the Insureds and their counsel from further use or disclosure, in this case or in any other proceeding, of any documents designated by Lexington as AConfidential Information.@ After a hearing, the trial court granted this injunctive relief in its Non-Disclosure Order. The trial court did not refer to this order in its final judgment. If a trial court still has jurisdiction over the parties and the case, and if one of the parties to a settlement agreement amends its pleadings to assert a claim based on breach of
the settlement agreement, the trial court, by normal rules of pleading and proof, can enforce the settlement agreement in the same cause number as the case that was the subject of the settlement agreement. See Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658 (Tex. 1996). However, when Lexington filed its motion to enforce, the Insureds already had nonsuited their claims against Lexington, and Lexington was no longer a party. Furthermore, the main target of the motion was Varco, which may have been a party to the Settlement Agreement but was not a party to this case. Lexington=s involvement cannot fairly be deemed an intervention, nor can Lexington be deemed an intervenor. The motion Lexington filed was not a plea in intervention either in form or in substance, and the trial court did not treat it as such. Lexington was not a party at the time the trial court signed the Non-Disclosure Order.
The trial court lacked the power to grant relief in favor of a company that was no longer a party in the case; the proper means for Lexington to have sought enforcement of the Settlement Agreement would have been by an independent suit. See id. The Rule 11 agreement relating to the settlement was not filed with the trial court and was not incorporated into any judgment or decree of the trial court. In sum, at the time of the Non-Disclosure Order, Lexington was not a party, and the claims that had been settled were no longer a Asuit pending@ before the trial court. See Tex. R. Civ. P. 11 (stating that A[u]nless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record@). For Lexington to enforce the Settlement Agreement=s confidentiality provisions through injunctive relief, it was incumbent upon Lexington to file an independent lawsuit against Varco and the Insureds seeking this relief.[34] See Mantas, 925 S.W.2d at 658. Therefore, the trial court=s Non-Disclosure Order was void from the moment it was signed, and the Insureds= appeal from that order and their sixth issue are moot.[35] Accordingly, we dismiss the appeal of this order as moot. Given that we have dismissed the appeal on other grounds, we also dismiss as moot Lexington=s motion to dismiss the Insureds= appeal from this order.[36]
G. Should this court designate items for in camera review?
Lexington also has filed on appeal a AMotion To Designate Items for In Camera Review@ (hereinafter AMotion to Seal@). Lexington asks this court to issue an order limiting inspection of certain documents contained in our appellate record to in camera review. Although Lexington never states that it seeks to seal part of this court=s record, that is effectively the relief it seeks. Lexington does not allege, and our record does not reflect, that the trial court sealed these documents in the trial court=s record. On its face, Texas Rule of Civil Procedure 76a, entitled ASealing Court Records,@ does not give appellate courts the authority to find the necessary facts and to determine motions to seal on appeal, and the Insureds have not cited any statute, rule, or case stating that appellate courts have this authority. See Tex. R. Civ. P. 76a.
Presuming, without deciding, that this court has such authority, we conclude that Lexington has waived its right to ask this court to seal the record as to these documents. The record reflects that on March 29, 2006, counsel for the Insureds filed a written request with the clerk of the trial court, asking that the filings to which these documents are attached be included in a supplemental clerk=s record to be filed in this court. The written request indicates that counsel for Lexington was informed of the request by facsimile. The district clerk filed an unsealed supplemental clerk=s record containing the documents in question with this court on June 21, 2006. Lexington did not ask this court to seal the record until November 10, 2006, when it filed the Motion to Seal.[37] By then, the Insureds, Lexington, and the Brokers had filed their appellate briefs, more than seven months had passed since the Insureds asked the district clerk to file these unsealed court records with this court, and these unsealed documents had been on file with this court for more than four months. There is no indication in the record that Lexington has ever filed a motion to seal the trial court=s record as to these documents, and the documents continue to be available to the public in the trial court. On this record, we conclude that Lexington waived any right it had to obtain an order sealing this part of the appellate record.[38]
III. Conclusion
The trial court did not err in granting the Brokers= motion for partial summary judgment that the two-year statute of limitations bars the Insureds= claims for negligence, negligent supervision, negligent misrepresentation, and alleged violations of article 21.21 of the Insurance Code. The trial court did not err in granting the Brokers= motion for directed verdict as to the Insureds= claims for breach of fiduciary duty. The Insureds did not preserve error as to their third issue regarding the Unauthorized Insurance Claims. The trial court did not abuse its discretion by excluding from evidence two issues of a trade publication the Insureds offered at trial. The Insureds= appeal from the Non-Disclosure Order is moot because the order is void. On this record, we conclude that Lexington waived any right it had to obtain the relief sought in its Motion to Seal. Accordingly, we affirm the trial court=s judgment, dismiss as moot the Insureds= appeal of the trial court=s Non-Disclosure Order, dismiss as moot Lexington=s motion to dismiss, and deny Lexington=s Motion to Seal.
/s/ Kem Thompson Frost
Justice
Judgment rendered and Majority Opinion and Concurring and Dissenting Opinion filed April 17, 2008.
Panel consists of Justices Frost, Seymore, and Guzman. (Guzman, J., concurring and dissenting).
[1] In 1995, Drexel Holdings bought the Insureds. In April 1996, Tuboscope bought Drexel. National Oilwell Varco later acquired Tuboscope. The record concerning the identities of the Insureds= successors in interest is less than clear, and we refer to the Insureds and any such successors by the Insureds= names, as the parties have done.
[2] The Insureds= successors in interest were also parties.
[3] Tex. Civ. Prac. & Rem. Code Ann. ' 16.003(a) (Vernon Supp. 2006); Rice v. Louis A. Williams & Assocs., Inc., 86 S.W.3d 329, 333 (Tex. App.CTexarkana 2002, pet. denied); Hoover v. Gregory, 835 S.W.2d 668, 676 (Tex. App.CDallas 1992, writ denied).
[4] Sibley v. Kaiser Found. Health Plan, 998 S.W.2d 399 (Tex. App.CTexarkana 1999, no pet.) (negligent supervision claim is based on employer=s direct negligence).
[5] Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 n.9 (Tex. 2003).
[6] Article 21.21, section 16(d); Provident Life, 128 S.W.3d at 221.
[7] Recodified as Tex. Ins. Code Ann. '' 541.051B162.
[8] In their AMotion to Strike Defendants= Motions for Summary Judgment,@ filed on January 31, 2005, the Insureds state that the motion was originally set for submission without oral argument on December 13, 2004, and then re-set for submission on February 7, 2005. Although our appellate record does not contain any notices of submission for the motion, it does contain a notice that the motion was set for oral argument on January 31, 2005. There is a handwritten notation on this notice indicating that the motion will be re-set to February 7, 2005, but the notation does not reflect whether this setting was to be by submission or oral hearing. Our record does contain a notice setting the motion for oral hearing on February 7, 2005, but the record reflects that this notice was not filed with the trial court until August 17, 2006, more than eighteen months after February 7, 2005 and at a point in time after the trial court signed its final judgment. The trial court and the parties discussed a number of pending motions at a February 9, 2005 status conference. It is clear from this colloquy that no oral hearing on the motion had occurred on February 7, 2005, and that the motion had been set for submission without oral argument on that date.
[9] The trial judge stated that she had denied all pending motions based on the untimeliness of documents that have been filed for more than thirty days. The Insureds= motion to strike the evidence attached to the Brokers= reply was a motion pending on March 18, 20005 that was based on the alleged untimeliness of documents that had been on file for thirty days. Therefore, the trial court denied the Insureds= motion to strike the evidence attached to the Brokers= reply.
[10] Our concurring and dissenting colleague states that the record is unclear as to whether the Brokers= motion for summary judgment was submitted on March 18, 2005. See post at p. 2. However, on that date, the trial court unambiguously stated that, on its own motion, it had set the summary-judgment motion for submission on March 18, 2005. We take the trial court at its word that it re-set the motion so that it would be submitted to the court on March 18, 2005, for determination without oral argument.
[11] Emphasis added.
[12] In the final judgment, the trial court states that it denied the Insureds= motion to reconsider.
[13] At one point in their appellate brief, the Brokers assert that the trial court stated it had not considered the evidence attached to the reply. The Brokers do not affirmatively state that the trial court did not consider the reply evidence. The Brokers= statement is not so unequivocal as to constitute a judicial admission. The Brokers argue in their brief that the Insureds= claims are time-barred, that the reply evidence was timely, and that the trial court noted, on the day it granted the motion, that the reply evidence was timely because it was filed more than 21 days before the March 18 submission date. One inaccurate statement made in passing in the argument section of the Brokers= appellate brief does not change this court=s analysis. Our concurring and dissenting colleague concludes that, in this sentence, the Brokers Aaffirmatively state . . . that the trial court did not consider the evidence attached to their reply.@ Post at p. 2. A judicial admission must be clear, deliberate, and unequivocal. See Regency Advantage Ltd. P=ship v. Bingo Idea-Watauga, Inc., 936 S.W.2d 275, 278 (Tex. 1996). The Brokers do not clearly, deliberately, and unequivocally admit that the trial court stated that it did not consider the reply evidence, and they certainly do not admit that the trial court did not consider the reply evidence. See OAIC Comm. Assets, L.L.C. v. Stonegate Village, L.P., 234 S.W.3d 726, 742B43 (Tex. App.CDallas 2007, pet. filed) (holding that appellate briefing did not contain unequivocal and deliberate admission in light of all the arguments and statements made in the briefing). In the Insureds= opening brief, the Insureds did not include a statement of fact that the trial court did not consider the evidence filed by the Brokers on January 26, 2005. The Insureds incorrectly stated in their statement-of-facts section that, in its March 18, 2005 order, the trial court said its order was based solely on the summary-judgment motion and response. The Insureds argued in the next sentence, AThus, the court did not consider the Brokers= late-filed evidence, and that evidence is not part of the summary judgment record in this appeal.@ This sentence is a deductive legal argument based on the purported text of the order; it contains legal conclusions regarding whether the evidence was late, whether the trial court considered it, and whether it is part of the summary-judgment record on appeal. The Insureds did not supply a record citation in support of this assertion. We conclude that this sentence is not a statement of fact governed by Rule 38.1(f). See Tex. R. App. P. 38.1(f) (stating that, in civil cases, appellate courts will accept as true facts stated in statement-of-facts section of appellant=s brief unless another party contradicts them). Even if this sentence were a statement of fact, we still would conclude the Brokers contradicted it by noting in their appellate brief that the trial court denied the Insureds= motion to strike the evidence and that the trial court commented that the evidence in question was filed more than 21 days before March 18, 2005.
[14] More than thirty days after the trial court signed its final judgment, the Brokers filed a motion to modify the final judgment to include a statement that the trial court considered their summary-judgment reply. This motion was untimely. See Tex. R. App. P. 329b(a), (g). Furthermore, the Brokers never set this motion for hearing, and our record does not reflect that the trial court ever considered it.
[15] The trial court indicated in open court on March 18, 2005, that the evidence attached to the reply was timely because it was filed more than 21 days before the March 18 submission date. Nonetheless, the Insureds argue on appeal that the trial court recognized that the evidence attached to the reply was not timely and that the trial court did not consider this evidence, a fact the Insureds claim is reflected by the language of the March 18, 2005 order granting the motion. Though courts can and sometimes do affirmatively state in summary-judgment orders that they did not consider certain evidence, they are not required to do so, and the trial court did not do so in this case. The recital language in the trial court=s order does not refer to the evidence attached to the motion, to the response, or to the reply. We conclude that, in its March 18, 2005 order, the trial court did not specify the summary-judgment evidence upon which its ruling was based. We presume the trial court considered all timely filed summary-judgment evidence.
[16] The Insureds also assert that (1) as for the Amiddle note@ sold in October 1992, the Brokers falsely represented the identity of certain insurers and represented that certain insurers were bound when they were not and that (2) the Brokers failed to disclose that the notes sold through British American were not protected by the guaranty funds of either Louisiana or Texas. However, these allegations do not apply to the 1993 and 1994 placements that are the subject of this sub-issue.
[17] This subsection defines as unfair and deceptive acts or practices in the business of insurance A[m]aking, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, which is untrue, deceptive or misleading.@ See Act of May 10, 2001, 77th Leg., R.S., ch. 290, ' 1, 2001 Tex. Gen. Laws 548, 548-51 (repealed and recodified 2003) (current version at Tex. Ins. Code Ann. '' 541.051B.061 (Vernon Supp. 2005)).
[18] This subsection defines as unfair and deceptive acts or practices in the business of insurance A[f]iling with any supervisory or other public official, or making, publishing, disseminating, circulating or delivering to any person, or placing before the public, or causing directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false statement of financial condition of an insurer with intent to deceive.@ See Act of May 10, 2001, 77th Leg., R.S., ch. 290, ' 1, 2001 Tex. Gen. Laws 548, 548-51 (repealed and recodified 2003) (current version at Tex. Ins. Code Ann. '' 541.051B.061 (Vernon Supp. 2005)).
[19] This subsection defines as unfair and deceptive acts or practices in the business of insurance A[m]isrepresenting an insurance policy by: (a) making an untrue statement of material fact; (b) failing to state a material fact that is necessary to make other statements made not misleading, considering the circumstances under which the statements were made; (c) making a statement in such manner as to mislead a reasonably prudent person to a false conclusion of a material fact; (d) making a material misstatement of law; or (e) failing to disclose any matter required by law to be disclosed, including a failure to make disclosure in accordance with another provision of this code.@ See Act of May 10, 2001, 77th Leg., R.S., ch. 290, ' 1, 2001 Tex. Gen. Laws 548, 548-51 (repealed and recodified 2003) (current version at Tex. Ins. Code Ann. '' 541.051B.061 (Vernon Supp. 2005)).
[20] In support of this contention, the Insureds cite Don Chapman Motor Sales, Inc. v. National Savings Insurance Co., 626 S.W.2d 592, 597 (Tex. App.CAustin 1981, writ ref=d n.r.e.).
[21] Guthrie v. Republican National Life Ins. Co., 682 S.W.2d 634, 637 (Tex. App.CHouston [1st Dist.] 1984, writ ref=d n.r.e.).
[22] Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 200 (Tex. 2002) (holding that an agent owes a fiduciary duty to his principal).
[23] In contrast, the Brokers support their argument that they did not owe any fiduciary duties to the Insureds with Choucroun v. Sol L. Wisenberg Insurance Agency-Life & Health Division, Inc. and the cases cited therein. See No. 01-03-00637-CV, 2004 WL 2823147, at *4 (Tex. App.CHouston [1st Dist.] Dec. 9, 2004, no pet.) (mem. op.) (holding that an insurance agent Aowed no duty to explain the terms of the insurance policy to [the insured] or to advise him on other, alternative policy coverages@) (citing Critchfield v. Smith, 151 S.W.3d 225 (Tex. App.CTyler 2004, pet. denied); Moore v. Whitney-Vaky Ins. Agency, 966 S.W.2d 690, 692 (Tex. App.CSan Antonio 1998, no pet.); and Pickens v. Tex. Farm Bureau Ins. Cos., 836 S.W.2d 803, 805 (Tex. App.CAmarillo 1992, no writ)).
[24] In support of these contentions, the Insureds primarily rely on testimony from Mary Wallace, the Insureds= employee who testified that her Amain responsibilities@ were to handle Ahuman resources/benefits,@ but that she also Awas more or less just the liaison between Environmental Procedures and the Dwight Andrus insurance agency [and] George Guidry[.]@ But Wallace was not Athe decision-maker regarding insurance@ for the Insureds. Wallace testified, AWe looked towards George Guidry as our trusted advisor. It was his expertise in the insurance industry. That was his business. We looked for him on what we needed to do to have insurance for our business.@ Wallace stated that Guidry Aselected the [insurance] companies[,]@ and she described the insurance application process as follows:
The preliminary preparation was normally done in Andrus=s office. . . . Then it was brought to Houston, along with the presentation, and then the balance of itCit was reviewed. If there was [sic] any changes to be made, any additions to be made to it, then it was changed, and then ultimately, it was signed by . . . the secretary/treasurer of the [appellant] corporation[s].
[25] However, evidence of trust and reliance predating the business relationship is material in determining whether an informal fiduciary relationship exists.
[26] In fact, the Insureds did not voice any objections at all to questions 10, 11, and 12.
[27] See Tex. R. App. P. 38.1(h); Halim v. Ramchandani, 203 S.W.3d 482, 487 n.7 (Tex. App.CHouston [14th Dist.] 2006, no pet.). Even if the Insureds had briefed this argument, the record reflects that the trial evidence did not prove liability and damages as to the Unauthorized Insurance Claims as a matter of law. Therefore, the trial court did not err in denying the motion for judgment notwithstanding the verdict.
[28] The Insureds rely on Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154 (Tex. 1994); however, Spencer is not on point because it did not involve a conditional submission and because an objection was made to the defect in the jury charge. See supra at p. 26; Spencer, 876 S.W.2d at 157 (holding that trial court erred in rendering take-nothing judgment notwithstanding jury=s verdict in favor of plaintiff based on defendant=s properly preserved charge error and concluding that proper remedy was for trial court to grant new trial based on the charge error).
[29] Hugel testified by videotaped deposition that he was the founder of AGulf Coast Marine,@which owns all of the stock in AOcean Marine.@ He further testified, AThe insurance company was Ocean Marine Indemnity Company. The managing general agency was Gulf Coast Marine.@ Ocean Marine Indemnity Company Limited was the only insurer listed on Cover Note 92BA236, dated December 29, 1992, which provided $5 million of umbrella coverage in policy year October 1, 1992 through September 30, 1993.
[30] Andrus testified that he saw a Surplus Lines Reporter & Insurance News in November 1992, but he did not state what issue he saw.
[31] In Nissan, the trial court admitted a database of complaints Nissan received regarding unintended acceleration in one of its models. Nissan Motor Co. Ltd., 145 S.W.3d at 140. The database did not contain evidence that the complaints catalogued were the same as the complaints asserted by the appellee. Likewise, the exhibits at issue here describe complaints against Ocean Marine and Hugel that are different from those asserted by the Insureds.
[32] The November 1992 issue reports that Louisiana ACommissioner of Insurance Jim Brown has filed suit against players associated with failed Alliance Casualty and Reinsurance Co.,@ alleging that the defendantsCincluding Hugel and Ocean Marine Indemnity Co., the errors and omissions carrier for Alliance=s holding companyCoverstated Alliance=s assets, which allegedly caused Alliance to become insolvent. But this article simply repeats allegations, and even the allegations differ from those made by the Insureds. Moreover, the October 1993 issue was published nearly a year after the date on which the Insureds contend the Brokers should have been aware of Ocean Marine=s financial difficulties and Hugel=s admitted crime. Consequently, this issue is not probative of the Insureds= contention that the Brokers should have been aware of Hugel=s criminal activity or Ocean Marine=s financial difficulties before the coverage was placed in 1992.
[33] Lexington moved to enforce the agreement after the Insureds= attorneys filed material obtained in discovery in the Coverage Suit as exhibits supporting an amicus brief filed in Lexington Insurance Co. v. Strayhorn, 209 S.W.3d 83 (Tex. 2006).
[34] In their response in opposition to Lexington=s motion in the trial court, the Insureds noted that Lexington and Varco were not parties in this case and that the proper avenue for Lexington to seek this relief is by an independent lawsuit.
[35] A nonparty may seek relief from a trial court regarding discovery sought from the nonparty by parties in a case pending in the trial court. See, e.g., Tex. R. Civ. P. 192.6. In fact, Lexington sought, in the alternative, a protective order under Texas Rule of Civil Procedure 192. The trial court did not grant this relief, which was appropriate because Lexington did not assert that any discovery was being sought from it in this litigation. See id.
[36] Even were we to address Lexington=s motion to dismiss, we would conclude that the arguments asserted therein lack merit.
[37] Lexington filed its motion to dismiss on March 7, 2006. In this motion Lexington referred to 20 exhibits that it described as Afiled for the Court=s in camera inspection or alternatively under seal.@ The record does not reflect that the trial court sealed its record as to these documents, and, in its motion to dismiss, Lexington did not ask this court to seal its record as to these documents.
[38] See In re R.D., 955 S.W.2d 364, 366 (Tex. App.CSan Antonio 1997, pet. denied) (holding parties waived any right they had to ask that appellate record be sealed). To the extent Lexington asserts the Insureds= alleged violations of the Non-Disclosure Order as a basis for this motion, we already have concluded that this order is void.