Superior Insurance Co. v. Kelliher , 343 S.W.2d 278 ( 1961 )

BOYD, Justice.

Hollis G. Thom shot and seriously wounded E. J. Kelliher, and then drove his pickup truck twice over Kelliher’s body. Kelliher sued Thom in the 153rd District Court for damages sustained by him on account of the shooting and his being run over by the truck. The amount sued for was $265,000. Later Kelliher filed an amended petition cutting down the requested recovery to $10,000, and asked for damages sustained only by reason of his being run over by the truck.

Superior Insurance Company had issued to Thom a policy of public liability insurance covering the truck, which policy purported not to cover assault and battery, and Thom called upon Superior to defend the suit and to pay any judgment which might be recovered against him. Superior then filed in the same court for a declaratory judgment, seeking a determination as to whether the occurrence was covered by the policy, and whether Superior was obligated to defend the suit filed by Kelli-her, and to pay any judgment which Kel-liher might recover against Thom within the policy limits. Kelliher and Thom were made defendants in the declaratory suit.

Kelliher filed a cross-action in the declaratory suit against Thom and Superior, asking for judgment up to the limits of the policy. Superior filed a motion to sever, excepted to the cross-action which claimed damages against it, and asked that the issues raised by the cross-action be severed and tried separately from the issues in the declaratory suit. The exceptions, motion to sever, and for separate trial were overruled.

Kelliher then filed a motion to consolidate his suit against Thom with the declaratory suit, and the motion was granted over Superior’s objections.

The case was submitted to a jury which found that Thom was not guilty of an assault and battery upon Kelliher by reason of running over him with the truck; that Thom failed to keep a proper lookout, which failure was a proximate cause of Kelliher’s being injured by the truck; and that Kelliher sustained damages in the amount of $5,000, which amount was the policy limit. The court decreed that the policy covered the occurrence, and judgment against Thom and Superior for $5,-000. Superior has appealed.

The policy contained the following provision: “No action shall lie against the company * * * until the amount of the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.” There was no such agreement, and the amount of the insured’s obligation to pay had not been previously determined on a trial.

We think the court erred in permitting Kelliher to proceed against appellant in this suit. Kuntz v. Spence, Tex.Com.App., 67 S.W.2d 254; Ray v. Moxon, Tex.Civ. App., 56 S.W.2d 469; Cueller v. Moore, Tex.Civ.App., 55 S.W.2d 244; Bluth v. Neeson, 127 Tex. 462, 94 S.W.2d 407. In the first cited case the court said [67 S.W.2d 255] : “When the policy is read in the light of the ‘no action clause,’ contained therein, and as fully preserved throughout the contract, it does not bind the casualty company as for primary liability to an injured party so that it can be sued alone prior to a judgment against the insured, or sued with the insured before such judgment against him is obtained. On the other hand, it fully guards against such suit. * * * Furthermore, it is certain■ly very important to the insurance company that it be not sued with the insured. In this respect we judicially know that juries are much more apt to return a verdict for the injured party, and for a larger amount, if they know the loss is to ultimately fall on an insurance company.”

By Rules 38(c), 51(b), and 97(f), Texas Rules of Civil Procedure, which provide for bringing in third parties, joinder of claims and remedies, and counter-claims and cross-actions, the joinder of a liability or indemnity company is expressly prohibited, unless such company is by contract or statute liable to the person injured or damaged.

We think that in this case Kelliher was permitted to do indirectly what he could not do directly, and that the court erred in not severing and trying separately the issues raised by the cross-action from those .raised by the declaratory suit.

In his brief Kelliher contends that Rules 97(a), 174(a) and 174(b) authorize the procedure taken in this case. We cannot agree. Rule 97(a) provides that a counter-claim must be filed when not the subject of a pending action, which at the time of its filing the pleader has against the opposing party, if it arises out of the occurrence which is the subject matter of the opposing party’s claim. We understood Kelliher’s counsel to say in oral argument that he was not sure that the filing of his counter-claim was compulsory. At the time of filing, we think he had no claim against Superior.

Neither do we think that Rules 174(a) and 174(b) are applicable. They provide for joint hearing of suits involving a common question o« law and fact, or for the consolidation of such actions; and in order to avoid prejudice the court may order a separate trial of any cross-claim or counter-claim. In our opinion, these Rules do not apply to a suit for declaratory judgment, such as this, and a counter-claim against a plaintiff where no cause of action has arisen against him.

The judgment is reversed and the cause remanded.

RENFRO, J., concurs and dissents. MASSEY, C. J., dissents and concurs.