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Thursday, November 14, 2019

Appeals court reverses judgment against insurance company in case involving drunk driver

State Court

By Charmaine Little | Jul 29, 2019

Justicelloyd
Justice Russell Lloyd

HOUSTON -- The Texas First District Court of Appeals determined July 16 a lower court didn’t have subject matter jurisdiction in ruling against an insurance company in a negligence case.

Ultimately, the appeals court determined that Madaleno Villegas didn’t have standing to sue Old American County Mutual Fire Insurance Company. Since Villegas lacked standing, the appeals court said the Travis County District Court did not have subject matter jurisdiction in the case, and reversed its ruling that favored Villegas and was against Old American County.

Villegas sued after he was in an accident with Jorge Arellano, who was insured by Old American County.  Arellano was also drunk at the time of the accident, the suit alleges. The car was owned by Maria D. Martinez. Villegas alleged Martinez was negligent when she let Arellano use her car.

Villegas first launched a lawsuit against Arellano, after Old American County denied Villegas’s claim because Arellano hadn’t been sued. Arellano didn’t respond to the lawsuit and Villegas was awarded $254,838.44, which included $150,000 in exemplary damages.

Old American County also denied coverage in the lawsuit and refused to defend Arellano. The trial court then ruled in favor of Villegas. Villegas, in turn, sued Old American stating that it breached its responsibilities to Arellano, and the court ruled for Villegas. Old American responded with the current appeal. The insurance company mainly took issue with the lower court granting Villegas’ application for turnover relief after the lower court entered a default judgment.

The appeals court first ruled that the default judgment was interlocutory. It pointed out that Villegas’s first lawsuit alleged negligence on Arellano’s part. The default judgment was four months after Villegas’ lawsuit, “made no mention of the negligent entrustment claim against Martinez. It did not ‘clearly and unequivocally’ state that it finally disposed of all claims and parties. To the contrary, it stated that it did ‘not dispose of all claims and all parties,’ and it was ‘not appealable.’” Considering this, the default judgment didn’t fit the requirements of Lehmann v. Har-Con Corp., which means it was interlocutory.

The appeals court then determined the turnover was completely void considering it was based on the default judgment, that has now been ruled as interlocutory. Most important, the appeals panel ruled the lower court didn’t have subject matter jurisdiction since Villegas failed to prove standing to even bring the lawsuit against Old American.

Justice Peter Kelly wrote the opinion. Justices Russell Lloyd and Richard Hightower concurred.

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