Burney v. Odyssey Re (London) Ltd.

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
March 1, 2006
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 05-10154
BRUCE BURNEY, as Assignee of Tom Stevenson and Stevenson & Son’s
Pest Control, doing business as “Bugs” Burney Pest Control
Plaintiff - Appellant
v.
ODYSSEY Re (LONDON) LIMITED; SPHERE DRAKE INSURANCE COMPANY;
SPHERE DRAKE INSURANCE LIMITED; SPHERE DRAKE INSURANCE COMPANY
PLC
Defendants - Appellees
Appeal from the United States District Court
for the Northern District of Texas, Amarillo
No. 2:04-CV-32
Before KING, BARKSDALE, and PRADO, Circuit Judges.
PER CURIAM:*
Plaintiff-appellant Bruce Burney appeals the district
court’s order granting summary judgment in favor of the
defendants-appellees Odyssey Re (London) Limited and Sphere Drake
Insurance (collectively, “Odyssey”). This litigation began in
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
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Texas state court when Burney sued Tom Stevenson and Stevenson &
Son’s Pest Control. The judgment entered by the state district
court in favor of Burney on November 26, 2001 was vacated when
the state court judge granted Stevenson’s motion for a new trial
on February 6, 2002. See Long John Silver’s Inc. v. Martinez,
850 S.W.2d 773, 777 (Tex. App. 1993) (stating that “[t]he legal
effect of the order granting the new trial was to vacate the
original judgment and return the case to the trial court as if no
previous trial or hearing had been had”).
In a letter dated August 19, 2002, the state court judge
attempted to amend his order to grant a new trial for the damages
issues alone. This subsequent letter, which was outside of the
seventy-five day period for granting a new trial prescribed by
TEX. R. CIV. P. 329b(c), was ineffective, but it did evidence the
judge’s concern with the damages assessed by the jury in the
underlying judgment. See TEX. R. CIV. P. 329b(c) (“In the event
an original or amended motion for new trial or a motion to
modify, correct or reform a judgment is not determined by written
order signed within seventy-five days after the judgment was
signed, it shall be considered overruled by operation of law on
expiration of that period.”); see also Taack v. McFall, 661
S.W.2d 923, 923-24 (Tex. 1983) (“An order granting a motion for
new trial is not effective unless signed within seventy-five days
after the judgment is signed.”).
On December 14, 2002, over one year after the original
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judgment was entered, the state court attempted to amend the
August 19 letter order to include a new trial as to both the
liability and the damages issues. Because the court’s plenary
power had long since passed, this December 14 order was overruled
by operation of law. See TEX. R. CIV. P. 329b(c); see also Taack,
661 S.W.2d at 923-24.
On August 25, 2003, after the new trial had begun, Burney
and Stevenson entered into a settlement agreement. The parties’
agreement reinstated the November 26, 2001 final judgment and
withdrew the court’s order granting the motion for a new trial.
The agreement also assigned to Burney all of Stevenson’s rights
under his insurance policies with Odyssey, including his
indemnification rights against Odyssey. On August 27, 2003, the
state court approved the settlement and entered an “agreed order”
withdrawing the prior order granting the motion for a new trial
and confirming the finality of the original judgment entered on
November 26, 2001. This litigation ended up in federal district
court after Burney sued Odyssey to recover the judgment rendered
against Stevenson through the state court settlement agreement.
We agree with the federal district court that there has been
no full and fair adjudication, as contemplated by the Texas
Supreme Court in State Farm Fire & Casualty Co. v. Gandy, 925
S.W.2d 696 (Tex. 1996). In Gandy, the plaintiff and the insured-
defendant settled the underlying lawsuit by agreeing to a
judgment in the plaintiff’s favor and assigning to the plaintiff
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all of the insured’s claims against his insurer. Id. at 698,
701-02. In refusing to enforce this kind of settlement
agreement, the Texas Supreme Court concluded that “[i]n no event
. . . is a judgment for plaintiff against defendant, rendered
without a fully adversarial trial, binding on defendant’s insurer
or admissible as evidence of damages in an action against
defendant’s insurer by plaintiff as defendant’s assignee.” Id.
at 714 (emphasis added).
Here, whenever Burney and Stevenson attempted to withdraw
the order granting the new trial and reinstate the November 26,
2001 original judgment, they confected the kind of sweetheart
deal that Gandy prohibits. Given that the February 6, 2002 order
vacated the original judgment and there has since been no “fully
adversarial trial” as contemplated by Gandy, Burney cannot
enforce against Odyssey his agreed-upon judgment with Stevenson.
See id. Accordingly, the district court’s order is AFFIRMED.
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