                            NUMBER 13-09-00292-CV

                           COURT OF APPEALS

                 THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI - EDINBURG


ALFREDO MARTINEZ, SR. AND
DEBRA MARTINEZ, INDIVIDUALLY
AND AS REPRESENTATIVES OF THE
ESTATE OF ALFREDO MARTINEZ, JR., DECEASED,                               Appellants,

                                          v.

TERI SHANNON MARTINEZ, INDIVIDUALLY
AND AS ADMINISTRATOR OF THE ESTATE
OF ALFREDO MARTINEZ, JR., DECEASED,                                         Appellee.


                    On appeal from the 93rd District Court
                         of Hidalgo County, Texas.



                       MEMORANDUM OPINION
            Before Justices Rodriguez, Garza, and Benavides
              Memorandum Opinion by Justice Benavides
      On May 26, 2009, the trial court entered its “Judgment Awarding Settlement Funds”

awarding certain funds, interpleaded into the court’s registry, to Teri Shannon Martinez
(“Teri”), appellee. See TEX . R. CIV. P. 43. On appeal, Alfredo Martinez Sr. and Debra

Martinez (“the Martinezes”), appellants, contend that the trial court improperly awarded the

funds to Teri. We affirm.

                                           I. BACKGROUND

        On October 23, 2004, Alfredo Martinez Jr. (“Alfredo”) was killed in a motor vehicle

accident. On December 2, 2004, the Martinezes, as parents of Alfredo, sued the driver of

the vehicle and the owner of the vehicle (“the Defendants”). In the same petition, the

Martinezes also sued Progressive County Mutual Insurance Company (“Progressive”),

Alfredo’s under-insured motorist insurance carrier. On June 10, 2005, Teri, Alfredo’s

widow, intervened, individually and as the administrator of Alfredo’s estate.

        On January 23, 2006, Progressive filed a motion for interpleader, making an

unconditional tender of its $20,007 policy limit and acknowledging that the Martinezes and

Teri are rival claimants to the funds. Id.

        On August 3, 2006, Teri settled her claims against the Defendants. On August 24,

2006, the trial court ruled on Progressive’s motion for interpleader, dismissed Progressive

from the case, and ordered that Progressive deposit the sums into the trial court’s registry.

On January 16, 2007, Teri filed a motion to sever, and on April 14, 2007, the trial court

granted Teri’s motion, severing the interpleader into a separate cause number.1 On April

29, 2008, the trial court signed an order dismissing with prejudice Teri’s claims against the

Defendants.

        On April 17, 2009, in trial court cause number C-2729-04-B(1), Teri moved the trial



        1
         The trial court severed the interpleader into trial court cause num ber C-2729-04-B(1), from which
this appeal arises.

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court to distribute the interpleaded funds in its registry. Teri asserted that, as Alfredo’s

widow and the administrator of his estate, she was entitled to the funds. On May 13, 2009,

the trial court held a hearing on Teri’s motion to distribute. That same day, the Martinezes

filed their trial brief and motion to distribute. At the hearing, Teri testified that she is

Alfredo’s widow and the administrator of his estate. The trial court admitted into evidence

the letters of administration, which appointed Teri the independent administrator of

Alfredo’s estate. Teri further testified that she and Alfredo owned a joint checking account

from which they paid the premiums on the under-insured motorist policy with Progressive.

       The Martinezes appeared at the hearing through their trial counsel. The Martinezes

did not present any evidence at the hearing and, instead, stated that they were “going to

stand on the trial briefs.” In their trial brief and motion to distribute, the Martinezes

asserted that, because Teri had settled with the Defendants, she was no longer entitled

to the interpleaded funds because she could not satisfy the prerequisites for recovery

under the insurance code. See TEX . INS. CODE ANN . § 1952.106 (Vernon 2009); see also

Essman v. Gen. Accident Ins. Co. of Am., 961 S.W.2d 572, 574 (Tex. App.–San Antonio

1997, no pet.); U.S. Fid. & Guar. Co. v. Cascio, 723 S.W.2d 209, 211 (Tex. App.–Dallas

1986, no writ). On May 26, 2009, the trial court distributed the funds to Teri. This appeal

ensued.

                                      II. DISCUSSION

       By their sole issue on appeal, the Martinezes argue that the trial court erred in

denying their motion to distribute the entire amount of the interpleaded funds to them. We

review the trial court’s decision under the abuse of discretion standard of review. See

generally Clayton v. Mony Life Ins. Co. of Am., 284 S.W.3d 398, 401 (Tex. App.–Beaumont


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2009, no pet.) (“If a reasonable doubt exists as to the proper party to pay, the interpleader

procedure allows the court to make that decision and discharge the stakeholder from that

responsibility.”) (citing State Farm Life Ins. Co. v. Martinez, 216 S.W.3d 799, 806 (Tex.

2007) (“[I]f a reasonable doubt exists in law or fact as to whom the proceeds belong, an

insurer should interplead them and let the courts decide.”)). “A trial court abuses its

discretion if its decision ‘is arbitrary, unreasonable, and without reference to guiding

principles.’”   Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997) (quoting

Mercedes-Benz Credit Corp. v. Rhyne, 925 S.W.2d 664, 666 (Tex. 1996)).

       The Martinezes specifically contend that Teri was not entitled to receive the

distribution of the interpleaded funds because she was not “legally entitled to recover”

under the insurance code. See TEX . INS. CODE ANN . § 1952.106. Section 1952.106

provides:

       Underinsured motorist coverage must provide for payment to the insured of
       all amounts that the insured is legally entitled to recover as damages from
       owners or operators of underinsured motor vehicles because of bodily injury
       or property damage, not to exceed the limit specified in the insurance policy,
       and reduced by the amount recovered or recoverable from the insurer of the
       underinsured motor vehicle.

Id. The Martinezes assert that because Teri settled with the Defendants who were then

dismissed with prejudice, Teri was no longer “legally entitled to recover” under section

1952.106. See id. The Martinezes cite Essman and Cascio to support their argument.

See Essman, 961 S.W.2d at 573; Cascio, 723 S.W.2d at 211.                  Both cases are

distinguishable from the present case.

       In Essman, Essman was sued for damages arising out of a car accident. Essman,

961 S.W.2d at 572. Essman settled with the plaintiffs and “entered into an agreed order



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of dismissal stating that the parties had settled and compromised all existing

controversies between them.” Id. at 573 (emphasis in original). Essman then filed a

claim with her insurance company seeking to receive the uninsured or under-insured

benefits available in her policy. Id. Her insurance company denied the claim, asserting

that it was not contractually obligated to pay the benefits to Essman because she could not

prove that she was legally entitled to recover damages from the plaintiffs. Id. Essman

sued her insurance company for breach of contract, among other causes of action. Id.

The San Antonio Court of Appeals held that the settlement and dismissal of the plaintiff’s

claims against Essman precluded her from establishing that she was legally entitled to

recover the uninsured or under-insured benefits under her own policy and that the trial

court properly rendered partial summary judgment in favor of the insurance company on

Essman’s breach of contract claim. Id. at 574.

       In Cascio, Cascio sued Mary Neal, the alleged tortfeasor in a car accident. Cascio,

723 S.W.2d at 210. Cascio joined her insurance company under the under-insured

motorist provision of her policy. Id.   Her insurance company did not file an answer. Id.

Cascio dismissed Neal with prejudice and obtained a default judgment against her own

insurance company. Id. Cascio’s insurance company appealed, asserting that default

judgment was improper because Cascio dismissed Neal with prejudice and was therefore

precluded from recovering under Cascio’s under-insured motorist policy. The Dallas Court

of Appeals reversed the default judgment, holding that by dismissing Neal with prejudice,

Cascio could not prove that Neal was liable for the accident and that Neal was under-

insured. Id.

       In both Essman and Cascio, the uninsured and under-insured motorist insurance


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carriers asserted the dismissals with prejudice as defenses to the insurance companies’

liability to pay benefits under the respective insurance contracts. See Essman, 961

S.W.2d at 573; Cascio, 723 S.W.2d at 210. However, in the case before us, Progressive

admitted, when it interpleaded the funds into the trial court’s registry, that it owed the funds

provided under Alfredo’s uninsured and under-insured motorist policy. As Essman and

Cascio indicate, whether a claimant has met the prerequisites for uninsured or under-

insured motorist benefits is a defense belonging to the insurance carrier. See Essman,

961 S.W.2d at 573; Cascio, 723 S.W.2d at 210; see also TEX . INS. CODE ANN . § 1952.001

(Vernon 2009) (noting that the provisions of chapter 1952 apply to “an insurer writing

automobile insurance in this state”).

       In the present case, in order to show her entitlement to the interpleaded funds, Teri

testified that, at the time of the deadly accident, she was married to Alfredo. See TEX . CIV.

PRAC . & REM . CODE ANN . § 71.004 (Vernon 2008) (providing that a spouse may maintain

a lawsuit for the wrongful death of her spouse). Teri also proved that she had been named

the independent administrator of his estate. See id. § 71.021 (Vernon 2008) (permitting

the “heirs, legal representatives, and estate of the injured person” to maintain an action for

damages for personal injury to the injured person). The Martinezes did not present any

evidence at the hearing on the motions to distribute. Therefore, because Teri presented

evidence that she was entitled to the interpleaded funds and the Martinezes did not, and

because the Martinezes raised a defense not available to them, we hold that the trial court

did not err by overruling the Martinezes’ motion to distribute. We overrule the Martinezes’

single appellate issue.




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                                      III. CONCLUSION

        Having overruled the Martinezes’ sole appellate issue, we affirm the judgment of the

trial court.



                                                    ______________________________
                                                    GINA M. BENAVIDES,
                                                    Justice

Delivered and filed the
26th day of August, 2010.




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