Trinity Universal Insurance v. Bleeker

SEERDEN, Chief Justice,

dissenting.

I respectfully dissent. I would hold that Bleeker’s uncontroverted satisfaction with the representation he received from Trinity left no viable Stowers claim to be turned over to the plaintiffs.

Bleeker testified by deposition that he wanted the insurance company to obtain a release from all claimants, that he relied on the advice of his counsel at the time, who told him that he was trying to get all of the claimants together for settlement, and that he did not have any reason to believe that his counsel was not acting in his best interest or that Trinity was acting unconscionably.

The duty to settle lawsuits under Stowers is an essentially personal duty owed by the insurance company to its insured. See Charles v. Tamez, 878 S.W.2d 201, 208 (Tex.App. — Corpus Christi 1994, writ denied). We recognize that an insured’s right to sue for failure to settle is subject to both equitable subrogation and assignment. See American Centennial Ins. Co. v. Canal Ins. Co., 843 S.W.2d 480, 482-84 (Tex.1992); Tamez, 878 S.W.2d at 208.1

However, the underlying claim to be transferred must be viable. The assignment or turnover of a claim that is lacking in any essential element transfers nothing. Stowers is based on the proposition that the insurer was negligent in responding to a settlement demand within policy limits. G. A Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544, 547 (Tex.Comm’n App.1929, holding approved). The insurer could not be held negligent with regard to its insured, however, unless the insured was himself dissatisfied with some aspect of the manner in which the insurer handled the claims being made against him.

In the present case, Bleeker made no complaint about the manner in which Trinity handled the present claims, and Bleeker agreed with the decision not to settle less than all of the claims against him for policy limits. Trinity never refused to pay the amount of the policy, but merely refused to settle with less than all of the claimants, including those holding hospital liens. Bleeker indicated his approval of Trinity’s conduct and, absent any complaint, could not have raised a Stowers cause of action against Trinity. Because Bleeker had no Stowers claim to be turned over, the real parties in interest cannot be allowed to create a claim on his behalf for their personal interest.

*683Accordingly, I would reverse and render judgment for Trinity.

. In Tamez, we held that public policy bars the turnover of an unasserted, denied Stowers cause of action against an insurer, or against the attorney for legal malpractice, for failure to settle a lawsuit. Tamez, 878 S.W.2d at 208; see also Dauter-Clouse v. Robinson, 936 S.W.2d 329, 332 (Tex.App. — Houston [14th Dist.] n.w.h.) (bankrupt debtor in Texas does not have an interest subject to inclusion in his estate, in an unassert-ed, denied legal malpractice claim). We reasoned that allowing a party to force a Stowers lawsuit on behalf of a satisfied opponent does not promote the specific purpose of the turnover statute or the overall purpose of the Texas legal system. Tamez, 878 S.W.2d at 208.