Gavion et al v. ACE American Insurance Company

Filing 20

MEMORANDUM OPINION AND ORDER granting 11 MOTION for Summary Judgment, granting in part 12 MOTION to Strike (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

United States District Court
Southern District of Texas

ENTERED
May 04, 2017

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

MICHAEL J. GAVION, JR. and
MICHAEL JACKSON and AMANDA
JACKSON, As Successors in
Interest to the Rights of
MICHAEL GAVION, JR.,

David J. Bradley, Clerk

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Plaintiffs,

CIVIL ACTION NO. H-16-1930

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§
§
§
§
§
§

v.

ACE AMERICAN INSURANCE COMPANY,
Defendant.

MEMORANDUM OPINION AND ORDER

Plaintiffs brought this action against defendant ACE American
Insurance Company ("ACE American") for failing to defend plaintiff
Michael

J.

Gavion,

Jr.

in

a

suit

arising

from

an

automobile

accident and for failing to pay the resulting judgment.

Pending

before the court are ACE American Insurance Company's Motion for
Summary Judgment
plaintiffs'
Alternatively

("Defendant's MSJ")

Motion
to

to

Extend

Strike
Time

("Plaintiffs' Motion to Strike")
reasons

explained below,

(Docket Entry No.

Requests
to

Respond

for
to

Admissions
Those

(Docket Entry No. 12) .

Plaintiffs'

Motion to

11)

and
and

Requests
For the

Strike will

be

granted in part and denied in part, and ACE American's Motion for
Summary Judgment will be granted.

I.

Undisputed Facts and Procedural Background 1

In August of 2009 plaintiff,

Michael J.

Gavion,

Jr.,

drove

into the path of a Houston Metropolitan Transit Authority train and
was struck by the train.

Gavion was driving a company vehicle

provided to his mother, an employee of Xerox Corporation ("Xerox") .
Gavion's
Plaintiff

mother
Amanda

lent

Gavion

Jackson

was

the
a

vehicle

passenger

accident and was injured as a result.

for
at

the

personal
time

of

use.
the

She, along with plaintiff

Michael Jackson, sued Gavion and ACE American in Louisiana state
court (the "Louisiana action").
that suit.

ACE American was dismissed from

Gavion never appeared in the Louisiana action and never

tendered the lawsuit to ACE American or sought a defense.

The

Jacksons obtained a default judgment against Gavion for $185,000.
Gavion then assigned any rights he may have had to recover against
ACE American to the Jacksons.
The Jacksons asserted Gavion's rights in a suit in the 129th
Judicial District Court of Harris County,

Texas.

ACE American

timely removed and now moves for summary judgment.

1

Undisputed facts
are
taken from Plaintiffs'
Original
Petition, Exhibit 1 to Notice of Removal, Docket Entry No. 1-1,
pp. 2-4; Defendant's MSJ, Docket Entry No. 11, pp. 7-9; and
Michael J. Gavion, Jr. , Michael Jackson and Amanda Jackson as
Successors in Interest to the Rights of Michael Gavion, Jr.'s
Opposition to ACE American Insurance Company's Motion for Summary
Judgment ("Plaintiffs' Response"), Docket Entry No. 17, pp. 7-15.
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II.
A.

Motion for Summary Judgment

Standard of Review
Summary judgment is appropriate if the movant establishes that

there is no genuine dispute about any material fact and the movant
is entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(a).

Disputes about material facts are genuine "if the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party."

Anderson v.

Liberty Lobby.

Inc.,

106 S. Ct.

2505,

2510

(1986).

The moving party is entitled to judgment as a matter of

law if "the nonmoving party has failed to make a sufficient showing
on an essential element of her case with respect to which she has
the burden of proof."

Celotex Corp. v. Catrett, 106 S. Ct. 2548,

2552 (1986).
A party moving for summary judgment "must

'demonstrate the

absence of a genuine issue of material fact,' but need not negate
the elements of the nonmovant' s case."
37 F.3d 1069, 1075 (5th Cir. 1994)

Little v. Liquid Air Corp.,

(en bane)

(per curiam)

(quoting

"If the moving party fails to meet

Celotex, 106 S. Ct. at 2553).

this initial burden, the motion must be denied, regardless of the
nonmovant's response."
this burden,

Id.

If, however,

the moving party meets

"the nonmovant must go beyond the pleadings"

and

produce evidence that specific facts exist over which there is a
genuine
2553-54)

issue

for

trial.

Id.

(citing Celotex,

106 S.

Ct.

at

The nonmovant "must do more than simply show that there
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is some metaphysical doubt as to the material facts."

Matsushita

Electric Industrial Co., Ltd.

106 S.

v.

Zenith Radio Corp.,

Ct.

1348, 1356 (1986).
In reviewing the evidence "the court must draw all reasonable
inferences in favor of the nonmoving party,
credibility determinations

or weigh

the

and it may not make

evidence."

Reeves

Sanderson Plumbing Products, Inc., 120 S. Ct. 2097, 2110

v.

(2000).

Factual controversies are to be resolved in favor of the nonmovant,
"but only when there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts."

Little,

37 F.3d at 1075.
B.

Analysis

1.

Requests for Admission

ACE American served requests
December 15, 2016. 2

for

admissions

on Gavion on

As of the filing of ACE American's Motion for

Summary Judgment on March 14, 2017, Gavion had not responded. 3

As

part of its motion, ACE American moved to have the requests for
admissions deemed admitted under Federal Rule of Civil Procedure
36(a)(3). 4

2

Gavion

moved

to

strike

the

admissions

and,

Defendant's MSJ, Docket Entry No. 11, p. 4 n.12.

4

Id.; "A matter is admitted unless, within 30 days after being
served, the party to whom the request is directed serves on the
requesting party a written answer or objection addressed to the
matter and signed by the party or its attorney." Fed. R. Civ. P.
36(a)(3).
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to

extension does

not prejudice ACE American,

provided

the

extend

court

with

the

a

extension will be granted.
Motion

to

Strike

will

be

time

to

respond. 5

alternatively,

credible

reason

Because

an

and because Gavion
for

the

delay,

an

The admissions attached to Plaintiffs'
considered

timely

responses

to

ACE

American's original requests for admission. 6
2.

Motion for Summary Judgment

This case turns on whether ACE American owed a duty to defend
Gavion in the Louisiana action.

ACE American's contractual duties

in the event of a suit are described in Section IV. A. 2 of ACE
Policy No. ISA H08250388. 7
2.

The policy provides, in relevant part:

Duties In The Event Of Accident, Claim, Suit Or Loss

We have no duty to provide coverage under this policy
unless there has been full compliance with the following
duties:
a.

In the event of "accident", claim, "suit" or
"loss", you must give us or our authorized
representative prompt notice of the "accident"
or "loss".

b.

Additionally, you and any other involved
"insured" must:
(1)

Assume no obligation, make no payment or
incur no expense without our consent,
except at the "insured's" own cost.

5

Plaintiffs' Motion to Strike, Docket Entry No. 12.

6

See pp. 13-15 of Docket Entry No. 12 for responses.

7

Business Auto Declarations,
Docket Entry No. 11-1, pp. 3-458.
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Exhibit A to Defendant's MSJ,

(2)

Immediately send us copies of any request,
demand, order, notice, summons or legal
paper received concerning the claim or
"suit". 8

It is undisputed that ACE American, as a party to that action, had
notice of the Louisiana action.
neither

tendered

the

It is also undisputed that Gavion

underlying

lawsuit

to

ACE

American

nor

demanded a defense at any time before the default judgment against
Gavion in the Louisiana action. 9
failure

The

consequence

of

Gavion' s

to tender the Louisiana action to ACE American and to

request a defense is the basis for ACE American's motion.
The Texas Supreme Court resolved this issue definitively in
response to a

certified question from the Fifth Circuit.

National Union Fire Ins.

8

Co.

of Pittsburgh,

PA v.

Crocker,

See
246

Id. at 31-32.

9

Gavion's response to ACE American's request for admission on
this point makes clear that Gavion relies on ACE American's
awareness of the suit and not any communication from Gavion:
1. Admit that you did not tender the Underlying Lawsuit
to ACE for either defense or indemnity.
ANSWER: Denied. ACE was aware of the Underlying Lawsuit
(hereinafter sometimes referred to as "lawsuit") as it
had been served with a copy of the same and filed motions
to get itself dismissed as the Louisiana Direct Action
Statute was inapplicable. As a result of being named in
the lawsuit, both ACE and its counsel were fully aware of
the claims pending against the plaintiff as he was a
party to the same suit. Despite this knowledge, ACE did
not undertake to provide the plaintiff with a defense and
allowed a judgment to be entered against him.
Plaintiffs' Motion to Strike, Docket Entry No. 12, p. 13.
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S . W. 3d 6 0 3 , 61 0 ( Tex . 2 0 0 8 ) .

The Texas Supreme Court held that

"[i]nsurers

provide

owe

no

duty

to

unrequested, unsolicited defense."

Id.

an

unsought,

uninvited,

This is, in part, because

"[a]n insurer cannot necessarily assume that an additional insured
who has been served but has not given notice to the insurer is
looking to

the

insurer to provide a

defense."

Assuming

without deciding that Gavion would have been eligible for coverage,
and drawing all reasonable inferences and resolving all factual
controversies in favor of Gavion, there is no genuine dispute about
any material fact in this action.

Gavion sought no defense in the

Louisiana action and thus is entitled to none.

Gavion's failure

was not that he did not notify ACE American that an action was
pending but

that

he

did not

notify ACE American

that

he

entitled to, and expected, a defense when one was available.
result, ACE American was prejudiced as a matter of law. 10

was
As a

Gavion

is therefore not entitled to recovery.
III.

Conclusions and Order

For the reasons explained above, Gavion's Motion to Strike is
GRANTED in part .

The court concludes,

however,

that Gavion has

failed to raise a genuine issue of material fact for trial with

10

See Maryland Casualty Company v. American Home Assurance
Company, 277 S.W.3d 107, 117 (Tex. App.-Houston [1st Dist.] 2009,
pet. dism'd) (concluding that insurer was prejudiced, as a matter
of law, because "notice-provided only after the claims had been
settled-was so late that it wholly deprived [the insurer] of its
ability to defend the lawsuit").
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regard

to his

alleged claim for

relief.

The

court

therefore

concludes that ACE American is entitled to judgment as a matter of
law.

Accordingly,

ACE American Insurance Company's Motion for

Summary Judgment (Docket Entry No. 11) is GRANTED.
SIGNED at Houston, Texas, on this the 4th day of May, 2017.

UNITED STATES DISTRICT JUDGE

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