Court of Appeals of Texas, Texarkana.

Wayne FONDREN, et al., Appellants,

v.

BARTLETT, BAGGETT & SHANDS, Appellee.

No. 06-00-00008-CV.

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Submitted Dec. 12, 2000.

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Decided Jan. 11, 2001.

Before CORNELIUS, C.J., GRANT and ROSS, JJ.

OPINION

GRANT.

*1 Wayne Fondren and Kenneth Sullivan appeal from a take-nothing jury verdict in their lawsuit against Sullivan’s insurance agency, Bartlett, Baggett & Shands. Appellants are Fondren (an injured worker), Kenneth Sullivan (the owner of the company that injured Fondren), and the Highlands Insurance Company (the company which provided worker’s compensation payments to Fondren). Although the appeal is in Fondren’s name, in this appeal he stands in the shoes of the individual (Sullivan) who owned the company that injured him. This action was brought because of the bankruptcy of Laramie Insurance Company, the insurer from which Bartlett, Baggett & Shands had obtained liability insurance to cover Sullivan’s construction company. Thus, Fondren (through Sullivan) sued Bartlett, Baggett & Shands, raising various allegations of negligence in connection with its selection of an insurer. In a negligence action, the two-year statute of limitations applies. See Tex.Civ.Prac. & Rem.Code Ann. § 16.003 (Vernon Supp.2001).

This lawsuit is an attempt by an injured worker to obtain personal injury damages from an insurance agent because the insurance company that the agent represented (and that would have covered his injury) has gone bankrupt.

On July 26, 1989, Wayne Fondren was injured during construction of a building. He was hit on the head and shoulders by a steel plate being handled by an employee of Coastal Erectors, which was the company of his present co-appellant, Kenneth Sullivan. At that time, Sullivan took Fondren to the hospital and was thus fully aware of the injury.

Before that date, Sullivan had obtained liability coverage from a surplus lines carrier, Laramie Insurance Company, through the insurance agency Bartlett, Baggett & Shands. Sullivan became aware that Laramie Insurance Company had gone into receivership in March 1990. Sullivan testified that he was aware that Fondren had filed a suit against him about two years after the injury, which would be at some point during 1991. Sullivan filed his lawsuit against Bartlett, Baggett & Shands on May 27, 1994.

Sullivan first contends that the jury’s answer finding that he did not file his lawsuit against the agent within two years of the date that he first knew, or in the exercise of reasonable diligence should have known, that he had suffered damage as a result of not having insurance coverage is not supported by the evidence. Sullivan filed his lawsuit against the insurance agency on May 27, 1994. He bases his argument on his position that he could not know that he was damaged by the bankruptcy of his workers’ compensation insurer, despite knowing that Fondren had been injured, until he discovered that Fondren had filed a lawsuit against him. He does not argue that he filed within the proper limitations period, but instead that limitations was tolled until he had knowledge of the injury.

The Discovery Rule

A cause of action accrues when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred. Murphy v. Campbell, 964 S.W.2d 265, 270 (Tex.1997); S.V. v. R.V., 933 S.W.2d 1, 4 (Tex.1996). If the discovery rule applies, however, an action does not accrue until the plaintiff knew or in the exercise of reasonable diligence should have known of the wrongful act and resulting injury. Murphy, 964 S.W.2d at 270. The statute of limitations is applied strictly, and the discovery rule is a very limited exception. Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453 (Tex.1996).

*2 The discovery rule is a very limited exception that tolls the running of limitations until the plaintiff knows or should know, in the exercise of reasonable diligence, of the facts giving rise to the cause of action. Altai, Inc., 918 S.W.2d at 455; Heron Fin. Corp. v. United States Testing Co., 926 S.W.2d 329, 331 (Tex.App.-Austin 1996, writ denied). The discovery rule tolls the applicable statute of limitations when (1) the nature of the injury is inherently undiscoverable, and (2) evidence of the injury is objectively verifiable. Murphy, 964 S.W.2d at 270; Altai, Inc., 918 S.W.2d at 456; Heron Fin. Corp., 926 S.W.2d at 332. In other words, the discovery rule applies only when it is difficult for the plaintiff to learn of the wrongful act. See Altai, Inc., 918 S.W.2d at 456; Willis v. Maverick, 760 S.W.2d 642, 645 (Tex.1988); Davis v. Minnesota Life Ins. Co., No. 03-99-00882-CV, 2000 WL 795887, at *3 (Tex.App.-Austin June 22, 2000, no pet. h.).

To be “inherently undiscoverable,” an injury need not be impossible to discover, but it must be, by nature, unlikely to be discovered within the prescribed limitations period despite due diligence. S.V., 933 S.W.2d at 7. The inherently undiscoverable requirement is strictly construed.¹

In applying the discovery rule, the burden of proof lies on the party attempting to take advantage of the rule. Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517-18 (Tex.1989). When the party having the burden of proof appeals from an adverse fact finding in the trial court, the point of error should be that the matter was established as a matter of law, or that the jury’s finding was against the great weight and preponderance of the evidence. O’Neil v. Mack Trucks, Inc., 542 S.W.2d 112 (Tex.1976). A complaint by the party with the burden of proof that there was no evidence to support the jury’s finding invokes appellate jurisdiction to consider the contention that the opposite of the finding was established as a matter of law. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983); O’Neil, 542 S.W.2d at 115; In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

The Evidence

Sullivan testified that he personally took Fondren to the hospital when he was injured in July 1989 and that he knew then that Fondren was injured by one of his employees. He also testified that he became aware of Laramie Insurance’s insolvency, at the latest, in March 1990. He also testified that he had previously stated under oath that he had read in the newspaper about Fondren’s suit against him-about two years after the date of the injury.

There was also testimony from an insurance adjuster (Nita Raymond) that Sullivan knew or should have known that liability was possible because when an employee covered by workers’ compensation is injured by a third party, that third party is immediately put on notice. She also testified that her company’s (Highland Insurance) attorney had informed the third party (Sullivan) of the third-party claim.²

*3 This is evidence that he was aware of the underlying personal injury in 1989, that he was aware of the insurer’s bankruptcy by March 1990, and that he was aware of the actual existence of a lawsuit against him by 1991. There is also evidence that he should have been aware of the certainty of a lawsuit being filed against him as soon as he was aware of the injury caused by his worker. Despite all of these factors, he did not seek any type of relief until May 27, 1994. This is evidence which the jury could have believed and which supports its answers finding that Sullivan had not filed suit against the agency until more than two years after he knew or should have known of the damages. Fondren/Sullivan has provided no conclusive evidence to the contrary.

Fondren/Sullivan argues that there was no notice because there was no “concrete injury” until at least August 20, 1992, the date that a newspaper notice attempting service ran in the local newspaper. (It states that the petition was filed on July 25, 1991.) They abstract this language from a 1986 opinion from this court. Mercer v. Woods, 717 S.W.2d 381, 398 (Tex.App.-Texarkana 1986), aff’d in part, rev’d in part, 769 S.W.2d 515 (Tex.1989). In that case, we found a negligence claim by an insured against an insurer barred by limitations as a matter of law because, although the breach of duty was over two years prior to the filing of suit, the insured suffered a concrete injury when the insurer failed to provide the insured with a defense at the underlying personal injury trial. The Supreme Court found that the failure to present the discovery rule question to the jury waived the defense.

Although we discussed the existence of a concrete injury, it was in the context of a determination as a matter of law, because no issue was sent to the jury on the question. This concept is no longer good law.

In the present case, the proper issue was sent to the jury, along with a correct explanation of the discovery rule. The jury found in favor of the appellee, and there was sufficient evidence to support its finding. The fact that no “concrete” injury occurred until later is not independently dispositive under the application of the discovery rule. This disposes of points of error one, two, and three. These contentions of error are overruled.

Because of our disposition of these contentions of error, we need not reach the remaining arguments.

The judgment is affirmed.

	Footnotes
1		We recently discussed a number of cases where the requirement was or was not applied in our opinion of Shivers v. Texaco Exploration & Prod., Inc., 965 S.W.2d 727, 734-35 (Tex.App.-Texarkana 1998, pet. denied). Courts have held that the criterion does not apply: to a claim that a defendant negligently contaminated an apartment building with chlordane where the interior chlordane residues did not exceed regulatory contamination levels until 1991 because the damages arose in 1987, Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530-32 (Tex.1997); to a claim for misappropriation of trade secrets, Computer Assoc. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453 (Tex.1996); to an embezzlement claim because the plaintiff could have discovered the embezzlement with slight diligence, Sunwest Bank of El Paso v. Basil Smith Eng’r Co., 939 S.W.2d 671, 674-75 (Tex.App.-El Paso 1996, writ denied); to a libel claim where the plaintiff had ready access to her personnel file containing the libelous memo, Ellert v. Lutz, 930 S.W.2d 152, 156-57 (Tex.App.-Dallas 1996, no writ); to a malicious prosecution claim where the plaintiff had access to court records that would have informed the plaintiff of the negligence, Lang v. City of Nacogdoches, 942 S.W.2d 752, 758 (Tex.App.-Tyler 1997, writ denied); and to a subrogated workers’ compensation insurer’s claim that the employee’s lawyer had converted settlement proceeds that should have gone to the insurer where the insurer could have learned about the settlement by reviewing the courthouse records before the statute of limitations had expired, Autry v. Dearman, 933 S.W.2d 182, 194 (Tex.App.-Houston [14th Dist] 1996, writ denied). Claims that have been held to be inherently undiscoverable include: claims for occupational injuries such as asbestosis, silicosis, and cancer where the injury is difficult to timely discover, Steel v. Rhone Poulenc, Inc., 962 S.W.2d 613, 618-19 (Tex.App.-Houston [1st Dist.] 1997), aff’d, 997 S.W.2d 217 (Tex .1999); a claim of negligently inflicted diseases where the plaintiff did not and could not know the nature of an injury at the time a cause of action accrued, Garcia v. Santa Rosa Health Care Corp., 925 S.W.2d 372, 379 (Tex.App.-Corpus Christi 1996), rev’d on other grounds, 964 S.W.2d 940 (Tex.1998); see also J.K. & Susie L. Wadley Research Inst. & Blood Bank v. Beeson, 835 S.W.2d 689, 694 (Tex.App.-Dallas 1992, writ denied); and a negligence claim where the negligent act was engineering services, because of the high degree of expertise required to detect the faulty engineering service, Thomson v. Espey Huston & Assocs., Inc., 899 S.W.2d 415, 422 (Tex.App.-Austin 1995, no writ).
2		Highland Insurance was the workers’ compensation carrier that covered Fondren’s compensation claim.