Great American Insurance Company of New York v. Nationwide Mutual Insurance Company

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00293-CV
__________________
GREAT AMERICAN INSURANCE COMPANY OF NEW YORK,
Appellant
V.
NATIONWIDE MUTUAL INSURANCE COMPANY, Appellee
__________________________________________________________________
On Appeal from the 284th District Court
Montgomery County, Texas
Trial Cause No. 20-02-02039-CV
__________________________________________________________________
OPINION
At issue in this appeal is whether the Uniform Condominium Act
makes an agreement to settle a subrogation claim, which the Act requires
to be waived, enforceable. 1 On cross-motion for summary judgment, the
1Tex. Prop. Code Ann. § 82.111(d) (requiring the insurer to waive
its right to subrogation under the policy against a unit owner); id. §
82.004 (prohibiting persons from varying the requirements of Chapter 82
by agreement “[e]xcept as expressly provided by this chapter”[]).
1
trial court refused to enforce the agreement and rendered a take-nothing
judgment against the plaintiff who sued the defendant to enforce a
settlement agreement of an insurance subrogation claim the Act required
the insurance company that brought the suit to waive.
Finding no error, we affirm.
Background
The Fire
Dana and Donna Evans own a unit at The Shore, a high-rise
condominium in Austin, Texas. In May 2019, an accidental fire, which
investigators determined originated in the Evanses’ unit, damaged
property in several units and in the common areas on several floors of
The Shore. 2
The duties of the entity responsible for managing The Shore, duties
that include obtaining insurance against risks of loss like fires, are
2In general, the Declaration filed of record for The Shore created a
separate ownership interest for the property that each unit owner kept
inside the walls of the owner’s unit. That said, the owner of a unit also
owns an undivided interest in the Common Elements. The Declaration
defined the Common Elements broadly to mean “[a]ll portions of the
Condominium, including both the General Common Elements and
Limited Common Elements, and including the Residential Unit’s interest
in the Master Common Elements but excluding the Units.”
2
created by filing a document referred to as a declaration in the real
property records of the county where the condominium is built. 3 A limited
partnership formed The Shore in 2006, dedicating the property to be used
as a condominium by filing a “Condominium Declaration” (the
Declaration) in the real-property records of Travis County, Texas. Under
the Declaration, the purchasers of units at The Shore became members
of The Shore Condominium Association, Inc. (the Association). Under the
Declaration, the Association is responsible for managing the
Association’s affairs. The owners of the units must pay Association dues,
which are used among other things to purchase insurance to cover the
property at The Shore. To comply with that obligation, the Association
bought an insurance policy from Great American Insurance Company of
New York, which insured the property The Shore was required to insure
under the Uniform Condominium Act against the risk of loss from fires,
less the policy’s deductible.
After the May 2019 fire, Great American paid the claims presented
to it that were covered under its policy from the fire. The claims Great
American paid came from owners of units who had property damaged in
3Id. §§ 82.051(a), .111.
3
their units, including the Evanses. Great American also paid to repair
damages that occurred to property in the common areas of the floors
damaged in the fire. In the areas outside the units, the owners of the
units hold an undivided interest, which The Shore’s Declaration defines
as Common Elements. 4
The Declaration also required the Evanses to obtain insurance on
the property in their unit. And the Declaration required them to obtain
“insurance covering damage to other Units or property located therein,
the cause of which originates from such Owner’s Unit.” To comply with
their obligations under the Declaration, the Evanses bought a
condominium policy issued by Nationwide Mutual Insurance Company.
Nationwide’s policy covered the Evanses for up to $300,000 per
occurrence for their negligent “ownership, maintenance or use of real or
personal property[.]”
The Settlement
Great American’s settlement is tied to an email dated December 16,
2019, that its attorney Chris Surber, sent Nationwide’s adjuster, Ross
Ver Helst. In the email, Great American offered “to resolve any and all
4See n.2.
4
claims and causes of action it has or may have against Dana and Donna
Evans arising out of and related to the [May 2019] fire for the total
amount of $373,212.93 or Dana and Donna Evans’ insurance policy
liability limit, whichever is less.” 5 On January 16, 2020, Ver Helst
sent Surber an email and responded to his settlement demand:
Chris, this is confirmation that we are accepting your demand
for the damages to The [Shore] Condominium Association for
the remainder of our insured’s liability limit. We have
previously settled subrogation claims for two of the condo unit
owners and have remaining liability limit[s] of $266,540.25 of
our insured’s $300,000 liability policy limit. 6
5See Tex. Prop. Code Ann. § 82.111(a) (requiring the unit owners
association, to maintain property insurance on the insurable common
elements if that insurance is reasonably available); § 82.111(b) (when the
building contains units with “horizontal boundaries described in the
declaration,” the unit owners association must maintain insurance when
it is reasonably available that “include[s] the units,” but the insurance
“need not include improvement and betterments installed by unit
owners”).
6Surber’s demand letter and Ver Helst’s emails refer to the
condominium association responsible for managing The Shore as “The
Waterfront Master Condominium Association.” The Clerk’s Record,
however, shows that as of May 2019 the correct legal name for the
condominium where the fire occurred is The Shore’s Condominium
Owner’s Association, Inc. The Clerk’s Record includes a corrective
amendment, which shows The Waterfront Master Condominium
Association, Inc. became The Shore Condominium Association, Inc. in
2006. In August 2019, an endorsement was added to Great American’s
policy naming “The Shore Condominium Association” as a named insured
under Great American’s policy, with the name change retroactive to the
policy’s inception. For clarity and to avoid confusion, we have chosen to
5
On receiving Ver Helst’s email, Surber sent Ver Helst the following
email:
My client accepts your offer of $266,540.25. Please make the
check payable to “Gauntt, Koen, Binney & Kidd LLP as
trustee for Great American Insurance Company of New York”
and mail the same to my attention at the below address. A
copy of my firm’s W9 is attached. If you require a release,
please send the same as soon as you can.
Finally, can you tell me if you paid the other condo owners
100% of their claim, based on a pro rata basis, etc?
On January 17, 2019, Dana Evans sent Ver Helst the following
email:
I do not believe that the Great American Insurance Co.
of New York has the right to a claim against my policy.
The Texas Property Code Sec. 82.111 requires
condominium associations to maintain an insurance
policy covering the building, common elements and the
units, except for improvements and betterments in the
individual units. The Code also requires that each unit
owner must be insured by the policy against liability
arising out of the person’s ownership of the common
elements or membership in the association as required
by the association declarations (subsection (d)(1)). This
would appear to limit any liability that I would have
use The Shore Condominium Association when referring to the entity in
charge of the condominium based on the documents in the Clerk’s Record
that show that was the entity’s legal name of record when the fire
occurred in May 2019.
6
relating to damages to common elements of the building.
In addition, the Association insurance policy must waive
the right to subrogation against a unit owner (subsecti on
(d)(2)). Finally, if the unit owner has insurance coverin g
the same loss, the association insurance is primary
(subsection (d)(4)). If a unit owner is partly or wholly
responsible for a loss, the association may assess the
owner for the amount of the association insurance policy
deductible and any costs exceeding the insurance limits
(section (l)). This recovery is not available to the
insurance company.
The Shore Condominium Declarations Section VI,
subsection 6.1.c. requires that insurance purchased by
the Association or an Owner must waive the right to
subrogation against any member or owner of the
association.
The Great American Insurance Co. of New York
insurance policy for The Shore Condomini u m
Association complies with the requirements of the Texas
Property Code. It provides coverage for the building
except for improvements and betterments and
appliances installed in individual units (Building and
Personal Property Coverage Form page 36, and Texas
Condominium Association Coverage Amendment page
100). Under the Texas Condominium Associati on
Coverage Amendment, the policy specifically waives the
right to recover against any unit owner (page 101). The
deductible for any loss is $25,000 (page 109). This
amount would be recoverable by The Shore
Condominium Association, through their trustee, and
not by Great American Insurance Co. of New York.
Based on this information, I do not see how Great
American Insurance Company of New York can make a
claim against me for any losses that they insure under
the Association policy. My liability for the deducti ble
amount should be paid to the Association Trustee. I am
responsible for damage to property of other owners not
7
covered under the Association policy, and I expect that
to be covered under liability section of my policy with
Nationwide Mutual.
Please explain to me how I have this wrong. 7
After Northwestern received Dana’s email, it didn’t fund the
settlement or send Great American any releases. In February 2020,
Great American sued Nationwide alleging that Nationwide accepted and
then breached the agreement it made with Great American to settle
Great American’s subrogation claim. Nationwide answered and filed a
counterclaim. In its counterclaim, Nationwide alleged that assuming an
agreement to settle did occur, which it denied, the agreement was illegal
and unenforceable as a matter of public policy under the Uniform
Condominium Act. In the alternative, Nationwide claimed the settlement
resulted from a mutual mistake. It asked the court based on its claims of
mistake to set the settlement aside.
The parties sought to resolve the claims and defenses raised in their
pleadings in a series of six dispositive motions: (1) Great American’s
7Dana Evans learned in a telephone call with Ver Helst on January
16 that Great American had threatened to sue the Evanses if
Northwestern refused to pay the amount Great American demanded to
settle the subrogation claim that it represented to Ver Helst it had
against the Evanses.
8
Traditional Motion for Summary Judgment (Nationwide’s Breach of
Contract Claim); (2) Great American’s Traditional Motion for Partial
Summary Judgment (Nationwide’s Counterclaim for Declaratory
Judgment and Motion to Dismiss for Lack of Subject Matter
Jurisdiction); (3) Nationwide’s Traditional Motion for Summary
Judgment (Great American’s Breach of Contract Claim); (4) Nationwide’s
Traditional Motion for Summary Judgment (Great American’s Claims for
Declaratory Relief); (5) Great American’s Amended Traditional Motion
for Partial Summary Judgment (Nationwide’s Breach of Contract Claim);
and (6) Great American’s Plea to the Jurisdiction and Motion to Dismiss.
In October 2020, the trial court ruled on these motions, incorporating its
rulings in a Final Judgment.
Great American complains the trial court erred in granting
Nationwide’s Traditional Motion for Summary Judgment on its breach of
contract claim. Based on that ruling, the trial court ordered Great
American to “take nothing on its claims and causes of action against
Defendant Nationwide[.]” The trial court made its take-nothing judgment
final by including language of finality in its judgment. The last two
9
sentences of the judgment state: “All relief not granted is denied. This
Judgment is final as to all claims and parties and is appealable.” 8
After the trial court signed the judgment, Great American moved
for a new trial. The trial court later overruled the motion and Great
American appealed.
Standard of Review
We review summary judgments de novo. 9 “To prevail on a
traditional motion for summary judgment, the movant must show no
material fact issues exist and that it is entitled to judgment as a matter
of law.” 10 We take as true all evidence favorable to the respondent, and
we indulge every reasonable inference and resolve any doubts in favor of
the non-movant. 11 “When both parties move for summary judgment and
the trial court grants one motion and denies the other, . . . we review both
8See Bella Palma, LLC v. Young, 601 S.W.3d 799, 801 (Tex. 2020)
(“A trial court may express its intent to render a final judgment by
describing its action as (1) final, (2) a disposition of all claims and parties,
and (3) appealable.”).
9Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 218 (Tex.
2022).
10Id.; Tex. R. Civ. P. 166a(c).
11Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215
(Tex. 2003).
10
sides’ summary judgment evidence and render the judgment the trial
court should have rendered.” 12
In its motion for summary judgment, Northwestern relied on more
than one theory to support its claim that it was entitled to summary
judgment. When the trial court ruled on Northwestern’s motion, it did
not explain the theory on which it decided to grant Northwestern’s
motion. Since the court did not specify the grounds on which it granted
the motion, we must affirm the trial court’s “summary judgment if any of
the grounds asserted are meritorious.” 13
Analysis
Great American raises three issues in its brief. In issue one, Great
American argues that its settlement with Northwestern doesn’t violate
public policy under the Uniform Condominium Act because the
legislature didn’t intend to prevent parties from settling disputes under
Chapter 82. In issue two, Great American argues the trial court erred in
granting Northwestern’s motion because the evidence conclusively
12Endeavor Energy Res., L.P. v. Energen Res. Corp., 615 S.W.3d 144,
147-48 (Tex. 2020).
13Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39,
45 (Tex. 2017).
11
proved the parties agreed to settle and their agreement is enforceable
under Texas law. In issue three, Great American argues the trial court
erred in granting the motion based on Northwestern’s argument that
Great American failed to comply with a condition precedent to
Northwestern’s policy before Great American filed suit.
We note that both parties have cited the Uniform Condominium Act
throughout their briefs. 14 For convenience, we will address Great
American’s argument that the settlement doesn’t violate public policy
first. And when addressing this argument, which Great American relied
on in the first two issues of its brief, we will assume without deciding that
the representatives of Northwestern and Great American had full
knowledge of all the facts needed to reach a binding agreement when they
exchanged the emails that resulted in the settlement that led to the
dispute. 15 With these assumptions, we are left with two questions of law:
14Tex. Prop. Code Ann. §§ 82.001-.164 (West 2014 & Supp. 2022) (the
Uniform Condominium Act or the UCA). Although the legislature has
amended various sections of the UCA after the May 2019 fire, there are
no changes in the statute relevant to Great American’s appeal. For that
reason, we cite the current version of the statute in the opinion.
15Northwestern disputes that Ver Helst had full knowledge of all
the relevant facts. But his knowledge is not relevant if the Uniform
Condominium Act prevents the courts from enforcing the agreement even
12
(1) Does the Uniform Condominium Act apply to a condominium owners
association’s insurance company? (2) If so, did the Texas legislature
intend to prevent parties from using settlement agreements under
circumstances that involve the insurance the Uniform Condominium Act
requires condominiums to carry as a device to avoid the limitations and
prohibitions in Property Code section 82.111? 16
Does the Uniform Condominium Act
Apply to Great American?
Just like any other individual or entity, insurance companies are
free to settle doubtful and disputed claims and “may contract as they
wish so long as the agreement reached does not violate positive law or
offend public policy.” 17 Still, the “freedom of contract is not unbounded.”18
“When a contractual arrangement is inconsonant with public policy
expressed in a regulatory statute, preservation of contractual freedom
and its ‘indispensable partner’—contract enforcement—must yield.” 19
when the parties know all the relevant facts needed to allow parties to
reach a binding settlement.
16Id. § 81.111 (Insurance).
17Phila. Indem. Ins. Co. v. White, 490 S.W.3d 468, 475 (Tex. 2016).
18Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653,
664 (Tex. 2008).
19White, 490 S.W.3d at 490.
13
Great American argues that nothing in the Act prohibited Great
American “from making a subrogation claim against Nationwide” or
Northwestern from “accepting Great American’s” demand. Great
American also claims the Uniform Condominium Act doesn’t apply to
insurers who sell insurance to condominium associations, suggesting its
reach is limited to condominium owners’ associations and to the owners
of the units in condominiums. As Great American sees it, its settlement
with Northwestern “conferred a new, independent right to Great
American upon which Great American could recover without aid, or
assistance of the allegedly illegal policy or right/claim, especially
considering the fact that the settlement included the Association’s
deductible.” In response to Northwestern’s argument claiming Great
American waived its rights of subrogation under Chapter 82 and its
policy, Great American suggests that Northwestern should have raised
that claim in response to Great American’s settlement demand. Great
American concludes Northwestern lost its right to raise that claim after
agreeing to the settlement.
14
Starting with the Act, we note the Act regulates how condominiums
created since January 1, 1994, are regulated and managed. 20 Given the
inherent complexities involved in carving real estate up into separately
and commonly owned parts, the UCA establishes baseline rules that
apply the creation, development, and management of condominiums.21
The insurance coverage condominiums must carry is just one of the areas
where the legislature became involved in the business of regulating and
managing condominiums under the Act. 22 And when a condominium
includes units with horizontal boundaries described in the declaration
filed of record, the legislature said the condominium owner’s association
must obtain a policy, if reasonably available, that includes the property
in an owner’s unit, except for the “improvements and betterments” that
the unit owner installed. 23
20Tex. Prop. Code Ann. §§ 82.001, .051, .055, .101-.116.
21Id. §§ 82.001-.164.
22Id. § 82.111(d).
23Id. § 82.111(b). The Declaration for The Shore states the physical
boundaries of the units are “depicted on the “Map[.]” The Declaration
defines “Map” as “the plats and plans described as Exhibit ‘B’ attached to
the Declarations.” However, the Clerk’s Record does not contain the plats
and plans exhibit that the documents filed of record in Travis County
reference as an attachment to the Declaration, Exhibit B. Still, the
definition of “Map” in The Shore’s Declaration states Exhibit B incudes a
15
In addition to the above, the Uniform Condominium Act contains
additional requirements obligating the Association to obtain insurance
coverage for the property of The Shore. Under Property Code section
82.111(d), the Association had to obtain a policy (1) naming each unit
owner as an insured, (2) waiving the carrier’s right to subrogation against
each unit owner, (3) providing that no act or omission of a unit owner—
unless acting within the unit owner’s authority for the Association—
would void the Association’s policy, and (4) making the Association’s
policy the primary policy should a unit owner obtain insurance that also
covered their loss. 24
No one has argued that a policy meeting the requirements of
Property Code section 82.111 wasn’t reasonably available when the
Association bought the policy insuring The Shore against the losses that
were caused by the May 2019 fire. Indeed, the evidence shows Great
American treated the individual unit owners, including the Evanses, as
insureds under its policy as it paid claims as they were presented by unit
“survey plat of the Property and dimensional drawings that horizontally
and vertically identity and describe the Units and the Common
Elements.”
24Id. § 82.111(d).
16
owners for the property covered by the policy in the units damaged by the
fire.
While Great American argues the legislature didn’t intend Chapter
82 to apply to insurance companies, the language of the statute shows its
argument lacks merit. For instance, Property Code section 82.111(g)
provides that “[t]he insurer issuing the policy may not cancel or refuse to
renew it less than 30 days after written notice of the proposed
cancellation or nonrenewal has been mailed to the association.” 25 And
when a claim is submitted that is payable for damages to the Common
Elements of the condominium under a policy purchased by the
Association, “[t]he insurance proceeds for that loss shall be payable to an
insurance trustee designated by the association for that purpose[.]” 26 All
in all, Property Code section 82.111 represents a tightly regulated
scheme that designates the insurance condominiums built after January
1, 1994, must carry. 27
Thus, it’s clear from the language in the statute that the legislature
intended section 82.111 to apply to insurers that sell condominium
25Id. § 82.111(g).
26Id. § 82.111(e).
27Id. §§ 82.111, .111(d).
17
policies to condominium associations subject to Chapter 82. 28 When a
“statute is clear and unambiguous, we must read the language according
to its common meaning without resort to rules of construction or extrinsic
aids.” 29 We reject Great American’s argument that Chapter 82 doesn’t
apply to Great American. The summary-judgment evidence shows Great
American sold an insurance policy to a condominium owner’s association
that is required to carry a policy that contains the coverage required by
Property Code section 82.111(d). 30 Great American concedes its coverage
did comply with the Act, and based on our review of the policy, we agree
the provisions in the policy include a waiver of subrogation against those
who own units in The Shore. 31
Does Chapter 82 Render the Settlement Unenforceable?
Great American argues Chapter 82 doesn’t reach its agreement.
But the language of Chapter 82 prohibits parties from using any device
28Id. § 82.111.
29State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006).
30Tex. Prop. Code Ann. § 82.111(d).
31See Great American Policy Endorsement SB 87 66 Texas —
Condominium Association Coverage Amendments, IV. Select Business
Policy Conditions, Loss Conditions[—Amendments, Waiver of Rights of
Recovery]; Condominium Declaration For The Shore, A Condominium,
Article VI, Insurance, Section 6.1(c).
18
except as expressly provided by Chapter 82 from evading the Chapter’s
limitations or prohibitions. 32 The section of the Property Code restricting
the freedom of parties to freely contract around the provisions in Chapter
82 states:
Except as expressly provided by this chapter, provisions of
this chapter may not be varied by agreement, and rights
conferred by this chapter may not be waived. A person may
not act under a power of attorney or use any other device to
evade the limitations or prohibitions of this chapter or the
declaration [filed of record for the condominium]. 33
To be sure, the legislature used “except as provided” in many of the
sections of Chapter 82. 34 But we find it significant that it didn’t provide
for any exceptions in Property Code section 82.111(a)-(d), the subsections
of Chapter 82 that create the rules prescribing the insurance coverage for
condominium owners associations like the one responsible for managing
The Shore. 35
To be sure, section 82.004 applies to persons and that term isn’t
defined in the Uniform Condominium Act. 36 Still, we must assume that
32Id. § 82.004.
33Id.
34Id. §§ 82.102(f), .103(a), .107(a)-(d), .170, .111(i), .112(d), .113(d),
.114(j), .117, .151(a), .152(a), .157(a), .007(b), .067(a), .068(f).
35Id. § 82.111(a)-(d).
36See id. § 82.003 (Definitions).
19
the legislature intended for courts to interpret the word person to include
corporations since the legislature defined person to include corporations
in the Code Construction Act, an Act that applies to defining the words
the legislature didn’t specifically define in the Uniform Condominium
Act. 37 A careful examination of the Act’s structure reveals that if
insurance coverage is reasonably available to a condominium required to
cover the risks listed in section 82.111(a)-(d), the condominium owners
association and its insurer cannot waive the requirements. No one has
claimed that insurance covering those risks was not reasonably available
to The Shore. Thus, as a person subject to restrictions and prohibitions of
section 82.111 and 82.004, Great American could not use any “device to
evade the limitations or prohibitions” of the waiver of subrogation
required in section 82.111(d). 38
Faced with the language of the statute, Great American still argues
that enforcing its arm’s-length agreement with Northwestern outweighs
Northwestern’s public policy argument that its settlement should be
declared void as a matter of public policy despite the policy preference
37Tex. Gov’t Code Ann. §§ 311.002, 311.005(2) (“‘Person’ includes
corporation, organization, . . . and any other legal entity.”).
38Tex. Prop. Code Ann. §§ 82.004, .111, .111(d).
20
the legislature expressed prohibiting parties from using any device to
evade the limitations of Chapter 82. According to Great American,
enforcing settlements and allowing parties to settle claims is more
important than allowing it to use the settlement in the manner they used
it here. Northwestern responds that enforcing the settlement offends
public policy because enforcing the agreement would allow Great
American to collect on a subrogation claim that both doesn’t exist under
its policy and to collect on a subrogation claim the legislature required it
to waive. 39
Great American cites several cases to support its argument that the
trial court erred in holding its settlement with Northwestern was
unenforceable. The cases it cites, however, may be distinguished on their
facts. For example, Great American relies heavily on Jistel v. Tiffany
Trail Owners Association, Incorporated, 215 S.W.3d 474, 482 (Tex.
App.—Eastland 2006, no pet.) to support its claim that Nationwide can’t
rely on section 82.004 to avoid the terms of its agreement to fund the
settlement based on the $266,540 term on which the parties agreed. 40
39See n.31.
40Jistel v. Tiffany Trail Owners Ass’n, Inc., 215 S.W.3d 474, 477-78
(Tex. App.—Eastland 2006, no pet.).
21
But unlike here, the parties involved in the lawsuit in Jistel were
the unit owner and the condominium association. The question before the
Eastland Court of Appeals was whether Chapter 82 allowed the parties
to settle a claim Larry Jistel, as the plaintiff, filed after suing Tiffany
Trail to repair his unit on a claim against Tiffany Trail Condominium
Association under Property Code section 82.107. 41 Under section 82.107,
a condominium owner’s association is “responsible for maintenance,
repair, and replacement of the common elements” of the condominium.42
In section 82.107, the legislature provided room for a condominium
association to alter the maintenance, repair, and replacement
requirements. But in section 82.111, the provision that mandates the
insurance coverage condominiums must carry, the legislature did not
provide room allowing condominiums to alter the insurance coverage the
legislature required. 43
To boil it down, the Eastland Court of Appeals didn’t address a
settlement based on a claim waived under section 82.111, a section where
the legislature didn’t allow variances from the insurance coverage the
41Tex. Prop. Code Ann. § 82.107(a).
42Jistel, 215 S.W.3d at 482; Tex. Prop. Code Ann. § 82.107(a).
43Compare Tex. Prop. Code Ann. § 82.107(a)-(d), with § 82.111.
22
legislature required condominiums to have. 44 And unlike section 82.107,
which applies to the maintenance and repair obligations of condominium
associations, section 82.111, which governs a condominium association’s
insurance obligations, doesn’t allow the association or its insurer the
right to vary or waive the rights conferred on unit owners in section
82.111 including the waiver of subrogation provision, section
82.111(d)(2). 45
The other cases Great American relies on in its brief are also
distinguishable. None of them involve statutory provisions like the ones
in Property Code sections 82.004 and 82.111. 46
44Jistel,215 S.W.3d at 482-83; Compare Tex. Prop. Code Ann. §
82.107, with id. § 82.111.
45Compare Tex. Prop. Code Ann. § 82.107, with id. §§ 82.111,
.111(d)(2).
46(1) Hartford Fire Ins. Co. v. Galveston, H. & S.A. Ry. Co., 239 S.W.
919, 923 (Tex. Comm’n App. 1922, holding approved, judgm’t adopted);
(2) Am. Nat’l Ins. Co. v. Tabor, 230 S.W. 397, 399 (1921); (3) De Leon v.
Trevino & Bros., 49 Tex. 88, 91-92 (1878); (4) Plano Parkway Office
Condos. v. Bever Props., LLC, 246 S.W.3d 188, 195 (Tex. App.—Dallas
2007, pet. denied) (op. on reh’g); (5) Beyers v. Roberts, 199 S.W.3d 354,
358 (Tex. App.—Houston [14th Dist.] 2006, pet. denied); (6) Associated
Milk Producers v. Nelson, 624 S.W.2d 920 (Tex. App.—Houston [14th
Dist.] 1981, writ ref’d n.r.e.); (7) Markman v. Gaitz, 499 S.W.2d 692, 696
(Tex. Civ. App.—Houston [1st Dist.] 1973, writ ref’d n.r.e.); (8) Castilleja
v. Camero, 402 S.W.2d 265, 269 (Tex. App.―Corpus Christi 1966), aff’d,
414 S.W.2d 424 (Tex. 1967); (9) City of Garland v. Tex. Power & Light
23
Since the text in section 82.004 and 82.111 is clear, it “is
determinative of legislative intent unless the plain meaning of the
statute’s words would produce an absurd result.” 47 The text of the statute
required Great American to waive its subrogation rights, which left it
with no right to sue the Evanses in an effort to shift the losses that fell
on its policy to the Evanses and their insurer, Northwestern. For that
reason, voiding Great American’s settlement with Northwestern doesn’t
strike us as absurd or unfair.
Conclusion
We hold the trial court did not err in granting Northwestern’s
motion for summary judgment. The summary-judgment evidence
conclusively established that Great American waived its subrogation
claim against the Evanses, 48 and that under an endorsement to Great
American’s policy, Great American’s policy is the primary policy that was
Co., 295 S.W.2d 925, 930 (Tex. Civ. App.—Dallas 1956, no writ); (10) Fred
Miller Brewing Co. v. Coonrod, 230 S.W. 1099 (Tex. Civ. App.—San
Antonio 1921, writ ref’d).
47Tex. Workforce Comm’n v. Wichita Cty., 548 S.W.3d 498, 492 (Tex.
2018).
48See n.31.
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required to respond to the damages that resulted from the fire at The
Shore. 49 We overrule Great American’s first two issues. 50 The trial court’s
judgment is
AFFIRMED.
_________________________
HOLLIS HORTON
Justice
Submitted on May 12, 2022
Opinion Delivered February 9, 2023
Before Golemon, C.J., Horton and Johnson, JJ.
49See Great American Policy Endorsement SB 87 66 Texas —
Condominium Association Coverage Amendments, IV. Select Business
Policy Conditions, Loss Conditions (making Great American’s policy
primary when a unit owner has other insurance that covers the loss);
Condominium Declaration For The Shore, A Condominium, Article VI,
Insurance, Section 6.2(a)(iii); see also Tex. Prop. Code Ann. § 82.111(d)(4).
50We need not reach Great American’s third issue since we have
affirmed the summary judgment on Northwestern’s claim the settlement
is unenforceable against it under Chapter 82. See Tex. R. App. P. 47.1.
25