                           NUMBER 13-10-00071-CV

                              COURT OF APPEALS

                     THIRTEENTH DISTRICT OF TEXAS

                        CORPUS CHRISTI - EDINBURG


CYNTHIA FARIAS, AS NEXT FRIEND OF VIDAL
DE JESUS FARIAS, A MINOR,                                                  Appellant,

                                          v.

ALLSTATE INSURANCE COMPANY AND ALLSTATE
PROPERTY AND CASUALTY INSURANCE COMPANY,                                    Appellee.


              On appeal from the County Court at Law No. 1
                       of Hidalgo County, Texas.


                             MEMORANDUM OPINION

 Before Chief Justice Valdez and Justices Rodriguez and Benavides
           Memorandum Opinion by Chief Justice Valdez
      In this case, appellant, Cynthia Farias, as next friend of Vidal de Jesus Farias, a

minor (“Farias”), complains about a summary judgment granted in favor of appellee,

Allstate Insurance Company and Allstate Property and Casualty Insurance Company
(“Allstate”).   By two issues, Farias argues that:            (1) Allstate waived its “affirmative

defense” of standing; and (2) she has standing to sue Allstate as a third-party

beneficiary of the insurance policy between Allstate and its insured. We affirm.

                                          I.      BACKGROUND

       The dispute in this case pertains to an incident where Farias‟s eleven-year-old

son was bitten by a dog owned by Jose Ocanas, an insured of Allstate. In her original

petition, Farias alleged the following:

              On or about October 3, 2005[,] 11-year-old Vidal de Jesus Farias
       was walking his family dog, a miniature schnauzer, near his home.
       Without provocation, Defendant Ocanas‟ [sic] dog attacked Vidal and bit
       him several times in the legs and buttocks. Defendant Ocanas‟ [sic]
       housekeeper watched the whole thing and did nothing to get the dog off of
       Vidal even though Vidal was screaming for help.

                ....

             Plaintiff [Farias] filed a claim with the Allstate Defendants, the
       insurance companies that insure Defendant Ocanas[,] and they have
       denied the claim.

Farias further alleged that Allstate was liable for breach of contract, breach of the duty

of good faith and fair dealing, negligence, and violating several provisions of the Texas

Insurance Code, including sections 542.003, 542.055, 542.056, 542.057, and 542.058.1

See TEX. INS. CODE ANN. §§ 542.003, 542.055, 542.056, 542.057, 542.058 (West 2009

& Supp. 2010).

       Allstate entered a general denial denying all of the allegations contained in

Farias‟s original petition. Allstate later filed a traditional motion for summary judgment,
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         Farias also alleged that Ocanas was negligent in the handling of the dog involved in the attack
and was strictly liable for the injuries sustained by Vidal because Ocanas knew that the dog was vicious
and dangerous. In their appellate brief, Allstate mentions that the dog involved in the attack was “co-
owned” by Ocanas and Jose Sepulveda. Farias also filed suit against Sepulveda in a separate lawsuit.
That case has been resolved. The record reflects that Farias‟s claims against Ocanas were severed by
court order on February 1, 2010, and Allstate asserts that these claims are still pending in the Hidalgo
County district court.

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alleging that Farias had failed to state a cause of action under Texas law. Specifically,

Allstate contended that Farias‟s lawsuit “fails because Texas law does not recognize a

direct cause of action in a third-party scenario against an insurer for the mishandling of

a third-party claim.” Allstate further argued that: (1) violations of chapter 542 of the

insurance code do not apply in third-party scenarios; (2) Farias‟s breach of the duty of

good faith and fair dealing causes of action do not apply in a third-party scenario; (3)

Farias cannot maintain a breach of contract action against Allstate because there is no

privity between Farias and Allstate and because Farias is not a third-party beneficiary;

and (4) Farias‟s negligence cause of action must fail because Allstate did not owe a

duty to either Farias or Vidal.

       In her response to Allstate‟s traditional motion for summary judgment, Farias

construed Allstate‟s arguments as attacking her standing to bring suit and asserted that

Allstate failed to address the “Medical Payments Coverage” clause of Ocanas‟s policy in

its motion. Farias further asserted that this clause “is a no-fault type of insurance” and,

thus, her claims are not third-party claims and she has standing to sue as a third-party

beneficiary. In its reply to Farias‟s response, Allstate argued that Farias was not a third-

party beneficiary under the insurance contract between Allstate and Ocanas and that

“[t]here is no distinction between medical payments coverage and other insurance

coverage which entitles a third party to bring a direct action against the insurer for denial

of medical benefits payments.”

       On June 2, 2009, the trial court conducted a hearing on Allstate‟s summary

judgment motion.     After hearing arguments from the parties, the trial court granted

Allstate‟s summary judgment motion. This appeal followed.



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                               II.    STANDARD OF REVIEW

      We review the granting of a traditional motion for summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life &

Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003); Branton v. Wood, 100

S.W.3d 645, 646 (Tex. App.–Corpus Christi 2003, no pet.). In a traditional motion for

summary judgment, the movant has the burden to establish that no genuine issue of

material fact exists and that he is entitled to judgment as a matter of law. Sw. Elec.

Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002) (citing TEX. R. CIV. P. 166a(c); City

of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979)). “[W]e take

as true all evidence favorable to the non[-]movant, and we indulge every reasonable

inference and resolve any doubts in the non[-]movant‟s favor.” Valence Operating Co.,

164 S.W.3d at 661.

      When, as in the present case, an order granting summary judgment does not

state the specific grounds on which summary judgment was granted, we must affirm the

trial court‟s judgment if any of the theories advanced are meritorious. See W. Invs. v.

Urena, 162 S.W.3d 547, 550 (Tex. 2005); Cincinnati Life Ins. Co. v. Cates, 947 S.W.2d

608, 610 (Tex. 1997); see also Rivas v. MPII, Inc., No. 13-09-00177-CV, 2011 Tex.

App. LEXIS 2196, at *6 (Tex. App.–Corpus Christi Mar. 24, 2011, no pet. h.) (mem. op.).

                                     III.   ANALYSIS

A. Farias’s Waiver Contention

      By her first issue, Farias asserts that Allstate waived its standing “affirmative

defense” by not pleading it in its answer. We disagree.




                                            4
       Standing “focuses on whether a party has a sufficient relationship with the lawsuit

so as to have a „justiciable interest‟ in its outcome.” Austin Nursing Ctr., Inc. v. Lovato,

171 S.W.3d 845, 848 (Tex. 2005). Essentially, a plaintiff has standing when she is

personally aggrieved, regardless of whether she is acting with legal authority.        See

Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996)

(holding that the standing doctrine requires that there be (1) “a real controversy between

the parties,” that (2) “will be actually determined by the judicial declaration sought”).

The complained-of injury “must be concrete and particularized, actual or imminent, not

hypothetical.” DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304-05 (Tex. 2008)

(footnotes omitted); see Tex. Lottery Comm’n v. Sci. Games Int’l, 99 S.W.3d 376, 280

(Tex. App.–Austin 2003, pet. denied) (holding that “[t]o establish standing, one must

show a justiciable interest by alleging an actual or imminent threat of injury peculiar to

one‟s circumstances and not suffered by the public generally”); see also Elizondo v.

Tex. Natural Res. Conservation Comm’n, 974 S.W.2d 928, 932 (Tex. App.–Austin 1998,

no pet.) (citing Warth v. Seldin, 422 U.S. 490, 498-99 (1975) (noting that the general

standard for determining whether a plaintiff has standing is whether she has such a

personal stake in the outcome of the controversy as to warrant invocation of the court‟s

jurisdiction and to justify exercise of the court‟s remedial powers on her behalf)).

       Furthermore, and perhaps most importantly with respect to this issue, standing is

implicit in subject-matter jurisdiction and cannot be waived. See Lovato, 171 S.W.3d at

849; see also Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex.

1993). As such, challenges to standing can be raised at any time, including for the first

time on appeal. See Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d 849, 850 (Tex.



                                             5
2000). Because the issue of standing cannot be waived, we reject Farias‟s contention

that Allstate waived the issue of standing by failing to plead it in its answer. See Lovato,

171 S.W.3d at 849; Gibson, 22 S.W.3d at 850; Tex. Ass’n of Bus., 852 S.W.2d at 443.

Accordingly, Farias‟s first issue is overruled.

B. Standing & Third-Party Beneficiary Status Under Allstate’s Insurance Contract
   With Ocanas

       By her second issue, Farias contends that she has standing to sue Allstate as a

third-party beneficiary under Allstate‟s insurance contract with Ocanas. Specifically, she

alleges that “Medical Payments Coverage” clause of Ocanas‟s policy confers third-party

beneficiary status upon her and, thus, gives her standing to sue.

       1. The “Medical Payments Coverage” Clause

       We begin our analysis of this issue by examining the “Medical Payments

Coverage” clause of the insurance contract between Ocanas and Allstate. The clause

provides as follows:

       COVERAGE D (Medical Payments to Others)

              We will pay the necessary medical expenses incurred or medically
       determined within three years from the date of an accident causing bodily
       injury. Medical expenses means reasonable charges for medical,
       surgical, x-ray, dental, ambulance, hospital, professional nursing,
       prosthetic devices and funeral services. This coverage does not apply to
       you or regular residents of your household. This coverage does apply to
       residence employees. As to others this coverage applies only:

          1. to a person on the insured location with the permission of an
             insured.

          2. to a person off the insured location, if the bodily injury:

              a. arises out of a condition on the insured location or the ways
                 immediately adjoining.

              b. is caused by the activities of an insured.

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                c. is caused by a residence employee in the course of the
                   residence employee’s employment by an insured.

                d. is caused by an animal owned by or in the care of an insured.

(Emphasis in original.) Farias argues that this language expressly provides a benefit for

Vidal as a third-party beneficiary and, thus, confers standing upon her to sue Allstate for

breach of contract on behalf of Vidal.2

        2. Third-Party Beneficiaries

        A stranger to a contract may enforce the contract as a third-party beneficiary if

the parties to the contract intended to secure a benefit to that third party and entered

into the contract directly for the third party‟s benefit. In re Palm Harbor Homes, Inc., 195

S.W.3d 672, 677 (Tex. 2006); Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002); MCI

Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex. 1999); In re Citgo

Petroleum Corp., 248 S.W.3d 769 ,775 (Tex. App.–Beaumont 2008, orig. proceeding).

The person claiming to be a third-party beneficiary must establish the existence of a

contract and standing as a third-party beneficiary.                  Paragon Sales Co. v. New

Hampshire Ins. Co., 774 S.W.2d 659, 660 (Tex. 1989). A party is presumed to contract

only for its own benefit; thus, any intent to benefit a third party must be clearly apparent.

MCI Telecomms. Corp., 995 S.W.2d at 652; Corpus Christi Bank & Trust v. Smith, 525

S.W.2d 501, 503-04 (Tex. 1975) (holding that in determining whether a third party may

enforce or challenge a contract between others, it is the contracting parties‟ intent that

controls); In re Bayer Materialscience, LLC, 265 S.W.3d 452, 456 (Tex. App.–Houston


        2
          At the hearing on Allstate‟s summary judgment motion, Farias admitted that all of the causes of
action alleged against Allstate in her original petition hinge upon whether the “Medical Payments
Coverage” clause of Ocanas‟s insurance policy with Allstate confers third-party-beneficiary status upon
her.

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[1st Dist.] 2007, orig. proceeding). There is a presumption against, not in favor of, third-

party beneficiary agreements. MCI Telecomms. Corp., 995 S.W.2d at 652; In re SSP

Partners, 241 S.W.3d 162, 170 (Tex. App.–Corpus Christi 2007, orig. proceeding); see

Marine Creek Partners, Ltd. v. Caldwell, 926 S.W.2d 793, 795 (Tex. App.–Fort Worth

1996, no writ) (noting that establishing a contractual third-party beneficiary claim is a

difficult burden; that courts presume that parties contracted only for themselves and not

for the benefit of third parties, unless the obligation to the third party is clearly and fully

spelled out; and that the party claiming third-party beneficiary status will succeed or fail

according to the terms of the contract). Once some evidence has been produced to

show a contract and standing as a third-party beneficiary, it is incumbent upon the

opposing party to prove any defenses that would limit or bar recovery by the third-party

beneficiary. See Paragon Sales Co., 774 S.W.2d at 661.

       Here, the “Medical Payments Coverage” clause does not specifically mention

Farias or Vidal, nor does the plain language of the insurance policy indicate that Farias

or Vidal were contemplated when Ocanas and Allstate entered into the insurance

contract so that Farias or Vidal could bring any claim directly against Allstate. See MCI

Telecomms. Corp., 995 S.W.2d at 651 (stating that it is not enough that a third party

benefits incidentally by the performance of a contract; that the contracting parties must

have negotiated the provision with the third party expressly in mind; and that “[a] court

will not create a third-party beneficiary contract by implication”); see also Day Cruises

Mar., L.L.C. v. Christus Spohn Health Sys., 267 S.W.3d 42, 57 (Tex. App.–Corpus

Christi 2008, pet. denied) (noting that the burden is on the third party seeking to enforce

the agreement to show that the agreement was intended for that party‟s direct benefit)



                                              8
(citing German Alliance Ins. Co. v. Home Water Supply Co., 226 U.S. 220, 230 (1912)).

Moreover, the Texas Supreme Court has held that “an injured party cannot sue the

tortfeasor‟s insurer directly until the tortfeasor‟s liability has been finally determined by

agreement or judgment.” Angus Chem. Co. v. IMC Fertilizer, Inc., 939 S.W.2d 138, 138

(Tex. 1997) (per curiam) (citing Great Am. Ins. Co. v. Murray, 437 S.W.2d 264, 265

(Tex. 1969)); see Ohio Cas. Ins. Co. v. Time Warner Entm’t Co., L.P., 244 S.W.3d 885,

888 (Tex. App.–Dallas 2008, pet. denied).3

        The record does not reflect that Ocanas‟s “liability has been finally determined by

agreement or judgment.”            Angus Chem. Co., 939 S.W.2d at 138; see Murray, 437

S.W.2d at 265; see also Ohio Cas. Ins. Co., 244 S.W.3d at 888. Because Ocanas‟s


        3
          In Ohio Casualty Insurance Company v. Time Warner Entertainment Company, L.P., the Dallas
Court of Appeals stated the following:

        “Texas is not a direct action state.” Jones v. CGU Ins. Co., 78 S.W.3d 626, 629 (Tex.
        App.–Austin 2002, no pet.). In other words, “[a] tort claimant has no direct cause of
        action against the tortfeasor‟s liability insurer until the insured-tortfeasor is adjudged liable
        to the tort claimant.” Id.; accord Angus Chem. Co. v. IMC Fertilizer, Inc., 939 S.W.2d
        138, 138 (Tex. 1997) (per curiam) (“In Texas, the general rule (with exceptions not
        relevant here) is that an injured party cannot sue the tortfeasor‟s insurer directly until the
        tortfeasor‟s liability has been finally determined by agreement or judgment.”); State Farm
        County Mut. Ins. Co. of Tex. v. Ollis, 768 S.W.2d 722, 723 (Tex. 1989) (“[An injured third
        party] cannot enforce the policy directly against the insurer until it has been established,
        by judgment or agreement, that the insured has a legal obligation to pay damages to the
        injured party.”).

                ....

        There is also a public-policy basis for the rule, which is the prevention of the conflict of
        interest that could arise if a third-party claimant were permitted to sue an insurer before
        obtaining judgment against the insured. . . . We have construed this rule as being a rule
        of standing.

244 S.W.3d 885, 888 (Tex. App.–Dallas 2008, pet. denied); see Owens v. Allstate Ins. Co., 996 S.W.2d
207, 208-09 (Tex. App.–Dallas 1998, pet. denied) (dismissing an interpleader action brought by a liability
insurer against third-party claimants for lack of standing and justiciability); Sun Oil Co. v. Employers Cas.
Co., 550 S.W.2d 348, 349 (Tex. Civ. App.–Dallas 1977, no writ) (“[U]ntil [the insured‟s] obligation is
established by a final judgment, [Sun Oil] has no standing to sue the insurers as a third-party
beneficiary.”).



                                                       9
liability has not been finally determined by agreement or judgment and because the

language of the “Medical Payments Coverage” clause does not overcome the strong

presumption against conferring third-party-beneficiary status to Farias, we conclude that

Farias lacks standing in this matter. See Angus Chem. Co., 939 S.W.2d at 138; Murray,

437 S.W.2d at 265; Day Cruises Mar., L.L.C., 267 S.W.3d at 57 (“Christus therefore did

not meet its burden in showing that the Guarantee was intended for its benefit, and so it

did not have standing to enforce the Guarantee as a third-party beneficiary.”); Ohio Cas.

Ins. Co., 244 S.W.3d at 888; Sun Oil Co., 550 S.W.2d at 349; see also Inman, 252

S.W.3d at 304-05; Lovato, 171 S.W.3d at 848; Nootsie, Ltd., 925 S.W.2d at 661. As a

result, we cannot say that the trial court erred in granting summary judgment in favor of

Allstate. See Urena, 162 S.W.3d at 550; Grant, 73 S.W.3d at 215; Cates, 947 S.W.2d at

610. We, therefore, overrule Farias‟s second issue.

                                    IV.    CONCLUSION

      Having overruled both of Farias‟s issues, we affirm the judgment of the trial court.



                                                       _________________
                                                       ROGELIO VALDEZ
                                                       Chief Justice

Delivered and filed the
2nd day of June, 2011.




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