Opinion
No. 08-20-00207-CV
06-14-2022
Felicia DONIAS, Appellant, v. OLD AMERICAN COUNTY MUTUAL FIRE INSURANCE COMPANY, Empower Managing General Agency, Inc. d/b/a Empower Insurance Group, and Treniece Michelle Taliaferro, Appellees.
ATTORNEYS FOR APPELLANT: Steven Samples, Samples Law Group, PLLC, 2605 Airport Freeway, Suite 100, Fort Worth, TX 76111, James Ames III, Samples Ames PLLC, 2605 Airport Freeway, Suite 500, Fort Worth, TX 76111. ATTORNEY FOR APPELLEE: Michael A. Hummert, Ekvall & Byrne, L.L.P., 4450 Sigma Road, Suite 100, Dallas, TX 75244.
ATTORNEYS FOR APPELLANT: Steven Samples, Samples Law Group, PLLC, 2605 Airport Freeway, Suite 100, Fort Worth, TX 76111, James Ames III, Samples Ames PLLC, 2605 Airport Freeway, Suite 500, Fort Worth, TX 76111.
ATTORNEY FOR APPELLEE: Michael A. Hummert, Ekvall & Byrne, L.L.P., 4450 Sigma Road, Suite 100, Dallas, TX 75244.
Before Rodriguez, C.J., Palafox, and Alley, JJ.
OPINION
JEFF ALLEY, Justice
Appellant Felicia Donias appeals a judgment declaring that she is not covered by an automobile insurance policy issued by Appellee Old American County Mutual Fire Insurance Company. Felicia Donias caused an automobile accident that led to a lawuit filed against her. Old American declined to defend that lawsuit because its insurance policy contained a named driver exclusion for "Felicia Godoy." At the trial below, the court found Appellant is not covered under the Old American policy because she is a named-excluded driver. Stated otherwise, "Felicia Donias" and "Felicia Godoy" are one in the same person, meaning that the named driver exclusion applied. The only issue before us is whether Old American was required to plead reformation of its contract to have the trial court reach that conclusion. We conclude that trial court did not err, and affirm the judgment below.
I. BACKGROUND
The appeal arises from a case filed in Dallas County and was appealed to the Fifth Court of Appeals, but transferred to this Court under the Texas Supreme Court's docket equalization efforts. We apply the precedents of the Fifth Court of Appeals to the extent that they might conflict with our own. Tex.R.App.P. 41.3.
A. Factual Background
1. The Insurance Policy
In 2014, Leticia Godoy (Leticia) went to her independent insurance broker to buy automobile insurance. She purchased a policy issued by Old American that included coverage for several vehicles, including a Honda Accord owned by her adult son, Michael Godoy (Michael). The Old American policy contained a "Covered Person Endorsement" that limited coverage for family members living in Leticia's household to those listed on the policy's declaration page. As a result, Leticia had to provide information about family members residing in her home as part of the application process; she listed Michael as her married son.
The Old American policy also contained an "Exclusion of Named Driver" endorsement that nullifies all coverage under the policy for damages caused by a listed excluded driver. The application for insurance that Leticia electronically signed lists "Felicia Godoy" as a named-excluded driver. Two weeks later, Old American's underwriters asked Leticia for clarification regarding who Michael was married to. In response, Leticia executed an "Endorsement Change Form" adding "Felicia Godoy 25FM" as a named-excluded driver. She also listed Felicia Godoy's birthday as "5/2/1988."
2. The Accident and Old American's Investigation
Appellant was driving Michael's Honda Accord when she caused an accident with Audrey Gilbert on August 6, 2014, a time period covered by the Old American policy. The law-enforcement crash report identifies Appellant as Felicia Donias, a twenty-six-year-old female with a date of birth of May 2, 1988. Old American contacted Leticia the day after Appellant's accident. Leticia told Old American that Appellant was driving the car when the accident happened, that Appellant's last name was "Donia or Donish," and that Appellant was her "daughter-in-law." Leticia also acknowledged knowing that "Felicia is not on her policy." The next day, Old American issued a letter denying coverage for Appellant's accident because she is not a covered person under the policy.
In a 2016 lawsuit, Gilbert sought damages from Appellant for the August 6, 2014, accident. Appellant tendered the lawsuit to Old American, requesting a defense and indemnification, which Old American declined. The trial court in that case issued a final judgment against Appellant, awarding Gilbert $25,384.01 in damages.
B. Procedural History
In 2018, Appellant filed this lawsuit against Old American, one of its insurance adjusters, Treniece Taliaferro, and a related insurance agency, Empower Insurance Group. In her petition, Appellant seeks a declaratory judgment that Old American owed her a duty to defend the Gilbert lawsuit under the insurance policy it issued to Leticia. She also sought damages for breach of contract, breach of the duty of good faith and fair dealing, negligence, fraud, and violation of the Texas Insurance Code. Appellant later dismissed all causes of action against Old American's adjuster before trial.
The case was tried to the bench. Appellant testified at trial that she married Michael on November 16, 2017, and changed her name to "Felicia Godoy." She also admitted driving Michael's car and causing the August 6, 2014, accident with Gilbert.
Appellant objected to the trial court hearing any evidence to support a reformation of the insurance policy based on mutual mistake. Specifically, she claimed that on the date of the crash with Gilbert, her name was "Felicia Donias." But Leticia's insurance policy lists "Felicia Godoy" as a named-excluded driver. As a result, according to Appellant, while the policy excluded Felicia Godoy , there was no provision of the policy excluding coverage for Felicia Donias. And Appellant further argued that Old American was now estopped from seeking reformation of the policy because it did not ask the court for that relief in its pleadings. In response, the trial court stated that its understanding was that Old American was not seeking "a legal determination on mutual mistake" but was proceeding on the theory that both contracting parties (Leticia and Old American) intended that Appellant be excluded from coverage under the policy. Old American's counsel agreed with the trial court's assessment of its position.
After hearing the evidence, the trial court rendered judgment in favor of Old American. The trial court entered findings of fact, including that Felicia Donias—now known as Felicia Godoy—was the driver of the vehicle that caused the 2014 accident. The trial court also found that Felicia Godoy was an excluded driver under the Old American policy. The court then concluded that Appellant "is not entitled to her requested relief against Defendants Old American and Empower because she is listed on the Insurance Policy as a ‘Named Excluded Driver,’ and therefore, she did not qualify as an ‘insured person’ under the Terms of the Insurance Policy."
Appellant challenges the judgment below, presenting one issue on appeal: Did the trial court err when it reformed the Old American insurance policy to replace "Felicia Godoy" with "Felicia Donias" as a named-excluded driver without a pleading requesting such relief?
II. STANDARD OF REVIEW
We review declaratory judgments under the same standards as other judgments and look to the procedure used to resolve the issue in the trial court to determine the standard of review on appeal. TEX.CIV.PRAC. & REM.CODE ANN. § 37.010 ; Berryman's S. Fork, Inc. v. J. Baxter Brinkmann Int'l Corp. , 418 S.W.3d 172, 196 (Tex.App.--Dallas 2013, pet. denied).
The trial court's resolution of this case implicates two relevant standards of review. First, it made findings of fact. The standard of review of a court's findings of fact after a bench trial is the same as the standard of review of a jury's verdict. State Farm Mut. Auto Ins. Co. v. Cobos , 901 S.W.2d 585, 587 (Tex.App.--El Paso 1995, no pet.). As the trier of fact, the trial court is the sole judge of the credibility of the witnesses and the weight to give their testimony. Boerschig v. Southwestern Holdings, Inc. , 322 S.W.3d 752, 764 (Tex.App.--El Paso 2010, no pet.). We consider the evidence in the light most favorable to the trial court's findings and indulge every reasonable inference that would support them. Id. We review conclusions of law de novo. Cobos , 901 S.W.2d at 588.
Second, the trial court applied the facts to the parties’ insurance contract. "An insurance policy is a contract, generally governed by the same rules of construction as all other contracts." RSUI Indem. Co. v. The Lynd Co. , 466 S.W.3d 113, 118 (Tex. 2015). As such, a court's primary focus is to ascertain the intentions of the parties as expressed in the insurance agreement. Id. ; see also Amedisys, Inc. v. Kingwood Home Health Care, LLC , 437 S.W.3d 507, 514 (Tex. 2014). The contract's language is the best representation of what the parties mutually intended. Gilbert Texas Constr., L.P. v. Underwriters at Lloyd's London , 327 S.W.3d 118, 126 (Tex. 2010). Nonetheless, "[w]ritten contracts will be construed according to the intention of the parties, notwithstanding errors and omissions." Hasty v. Keller HCP Partners, L.P. , 260 S.W.3d 666, 670 (Tex.App.--Dallas 2008, no pet.), quoting Am. 10–Minute Oil Change, Inc. v. Metro. Nat'l Bank-Farmers Branch , 783 S.W.2d 598, 600 (Tex.App.--Dallas 1989, no writ).
III. DISCUSSION
First, two comments on what is not at issue here. Though the trial court heard evidence about matters outside the "eight corners" of the insurance contract and the Gilbert's petition, neither party objected to the trial court doing so. Cf. Loya Ins. Co. v. Avalos , 610 S.W.3d 878, 881 (Tex. 2020) (only two documents are ordinarily relevant to the insurer's duty to defend its insured: the insurance policy and the pleadings of the third-party plaintiff). Consequently, whether the court could receive extrinsic evidence that Felicia Godoy and Felicia Donias are one in the same person for the duty to defend inquiry is not at issue. See Monroe Guaranty Insurance Company v. BITCO General Insurance Corp. , 640 S.W.3d 195 (Tex. 2022) (explaining scope of exception to the eight corner rule in duty to defend cases).
The duty to indemnify, which was also raised below, is independent of the duty to defend under a liability insurance policy. Burlington N. & Santa Fe Ry. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA , 334 S.W.3d 217, 219 (Tex. 2011) (per curiam). Resolution of the duty to indemnify is generally determined based on the facts actually established in the underlying litigation. Id.
Second, Appellant does not challenge the sufficiency of the evidence to support the trial court's factual findings on appeal. As a result, the trial court's finding that Appellant is the Felicia Godoy in the policy is binding on the parties and this court. See Carrasco v. Stewart , 224 S.W.3d 363, 367 (Tex.App.--El Paso 2006, no pet.) ("If the appellant does not challenge the trial court's findings of fact, these facts are binding upon both the party and the appellate court.").
Moreover, Appellant agrees on appeal that the Old American insurance policy excluded coverage if "Felicia Godoy" was the at-fault driver. But Appellant urges that it was "Felicia Donias" that caused the underlying accident, and her name was not on the excluded driver endorsement. As a result, Appellant claims that by declaring the Old American policy did not cover her, the trial court must have reformed the contract "to remove the express words ‘Felicia Godoy’ and replace them with ‘Felicia Donias.’ " Appellant's Brief at 11. This is an error, according to Appellant, because Old American did not plead for reformation. Conversely, Old American claims the issue before the trial court was not reformation of the policy but whether Felicia Donias and Felicia Godoy were one and the same person.
Reformation of a contract is a proper remedy when the parties reach a definite agreement, understood in the same sense by both, but through mutual mistake the written contract fails to express the parties’ true intent. Champlin Oil & Refining Co. v. Chastain , 403 S.W.2d 376, 382 (Tex. 1965). The party seeking reformation must plead mutual mistake before being entitled to reformation. See generally Stoner v. Thompson , 578 S.W.2d 679, 682-83 (Tex. 1979) (holding that judgment must be based upon pleadings); Orix Cap. Markets, LLC v. La Villita Motor Inns, J.V. , 329 S.W.3d 30, 46 (Tex.App.--San Antonio 2010, pet. denied) (holding that pleading mutual, or unilateral mistake coupled with fraud, is required before a party is entitled to reformation). The moving party also carries the burden of proving the parties’ actual agreement is not expressed in the written instrument because of mutual mistake. Nat'l Resort Communities v. Cain , 526 S.W.2d 510, 513-14 (Tex. 1975).
Yet, we agree with Old American that nothing in the record supports Appellant's assertion that the trial court reformed the Old American policy. Old American, which would have had the burden of proving mutual mistake at trial, disavowed the doctrine's applicability. Further, the trial court stated on the record that Old American was not asking it to make "a legal determination on mutual mistake." And nothing in the trial court's final judgment or its findings of fact and conclusions of law indicate that it reformed the policy. It simply found that Appellant Felicia Donias—whose legal name was Felicia Godoy at the time of trial—was the Felicia Godoy named in the policy's "Exclusion of Named Driver" endorsement. The court therefore enforced the intent of the contracting parties by finding that Appellant was not an insured person under the Old American insurance policy. See Wausau Underwriters Ins. Co. v. Wedel , 557 S.W.3d 554, 557 (Tex. 2018) ("When construing an insurance policy, we ordinarily ‘ascertain and give effect to the parties’ intent as expressed by the words they chose to effectuate their agreement.’ "), quoting In re Deepwater Horizon , 470 S.W.3d 452, 464 (Tex. 2015) ; see also Int'l Serv. Ins. Co. v. Boll , 392 S.W.2d 158, 161 (Tex.App.--Houston 1965, writ ref'd n.r.e.) (insurance carrier did not owe defense when third-party suit only referred to vehicle being driven by named insured's "son" and the named insured's only son, Roy Hamilton Boll, was an excluded driver under the policy). VI. CONCLUSION
We affirm the trial court's judgment finding that Old American does not owe automobile coverage to Appellant.