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At a Glance:
Title:
Botello v. Parkway Transport, Inc.
Date:
September 13, 1995
Citation:
04-95-00003-CV
Status:
Unpublished Opinion

Botello v. Parkway Transport, Inc.

Court of Appeals of Texas, San Antonio.

Yolanda BOTELLO, Individually and as Next Friend of Juan Botello, Sr., Deceased and Nancy Botello, Minor Child, and Juan Botello, Jr., Jorge Botello, Yolanda Botello, and Antonio Botello, Appellants,

v.

PARKWAY TRANSPORT, INC., Appellee.

04-95-00003-CV.

|

Sept. 13, 1995.

Before HARDBERGER and HILL1, JJ.

Opinion

HILL, Justice.

*1 Yolanda Botello, individually and as next friend of Juan Botello, Sr., Deceased, and Nancy Botello, Minor Child, and Juan Botello, Jr., Jorge Botello, Yolanda Botello, and Antonio Botello appeal from a judgment in favor of Parkway Transport, Inc., the appellee, dismissing their suit based upon their failure to amend their petition after the trial court had sustained special exceptions directed to the failure of the appellants’ petition to allege a cause of action recognized under Texas law. The appellants contend in two points of error that the trial court erred in sustaining the special exceptions because it denied them their right to allege a cause of action based upon their status as third party beneficiaries of a truck leasing agreement entered into by Parkway and Richard Falcon, and it denied them their right to allege a cause of action based upon the theory that Parkway negligently failed to force truck lessor Richard Falcon to comply with the requirements under his lease agreement with Parkway that he carry workers’ compensation insurance.

We affirm because we hold that (1) the appellants have no cause of action in contract against Parkway, the promisee, as opposed to an action against Falcon, the promisor who had promised to provide workers’ compensation insurance, and (2) the appellants have no cause of action in tort against Parkway because Parkway had no legal duty outside the contract to require workers’ compensation insurance and because the appellants seek only the economic loss they suffered due to any failure of Parkway to perform under its contract with Falcon.

The appellants contend in point of error number one that the trial court erred in sustaining Parkway’s special exceptions to their pleading because it denied them the right to allege a cause of action based upon their status as third-party beneficiaries of a truck leasing agreement entered into between Parkway and Falcon.

Beginning in May 1990, Falcon and Parkway’s predecessor corporation entered into an agreement in which Falcon was to lease his truck and any driver he provided to Parkway for certain periods of time. The agreement provided, among other things, that Falcon was to provide workers’ compensation insurance and to provide certificates of the insurance to Parkway.

Approximately eighteen months later, Juan Botello, Sr., was killed in a traffic accident while driving one of the trucks leased by Falcon to Parkway. The appellants here are his wife and children. Despite the agreement between Falcon and Parkway, Botello was not covered by workers’ compensation insurance at the time of the fatal accident. In their pleadings against Parkway, the appellants alleged that Parkway was negligent in failing to note that Falcon had not supplied it with workers’ compensation insurance, in failing to require Falcon to submit evidence of such coverage prior to the date of the accident, and in failing to terminate the lease between it and Falcon due to his failure to present evidence of such coverage. Additionally, they alleged, as third-party beneficiaries, that Parkway and Falcon had breached the lease contract due to Falcon’s failure to provide such insurance and never providing proof of such insurance to Parkway.

*2 Parkway filed special exceptions urging that these two allegations failed to state a cause of action under Texas law. The trial court sustained the special exceptions and gave the appellants the opportunity to replead. The appellants refused to amend their final pleading, which continued the same allegations of negligence against Parkway as previously noted. Upon the appellants’ refusal to amend, the trial court dismissed their claim and rendered judgment on behalf of Parkway.

Even if the deceased and the appellants could be construed as intended third-party beneficiaries of the truck-leasing contract between Falcon and Parkway, any cause of action for breach of that contract would have been against Falcon, who had the duty under the contract to provide the insurance. See Barnes v. Wendy’s Int’l, Inc., 857 S.W.2d 728, 731 (Tex.App.-Houston [14th Dist.] 1993, no writ). For that reason, we hold that the trial court did not err in dismissing the appellants’ claim against Parkway based upon breach of the contract between Parkway and Falcon due to the lack of workers’ compensation insurance or failure to provide notice of such insurance.

The appellants place primary reliance on the case of James Stewart & Co. v. Law, 149 Tex. 392, 233 S.W.2d 558 (1950). In that case, North American Aviation contracted with the Stewart company for a construction project. The contract provided that Stewart was to require its subcontractors to provide liability insurance. Stewart failed to require Nethery, one of its subcontractors, to provide such insurance. Nethery injured Law, an employee of North American. After Law sued Nethery and could not collect, he and his workers’ compensation carrier sued Stewart, which had breached its promise to require Nethery to have liability insurance. Their recovery was upheld on appeal. We find the case distinguishable because in that case suit was brought against the promisor that was obligated under the contract to provide insurance, whereas the appellants in this case sought to bring suit against Parkway, the promisee. Falcon, not Parkway, was the promisor that was obligated to provide workers’ compensation insurance.

The appellants also rely on the cases of Kinne v. Indus. Comm’n, 609 P.2d 926 (Utah 1980). We have examined these authorities and find none that would support the appellants’ view that a promisee would be liable to a third-party beneficiary under the contract where it had no obligation to the third party arising outside the contract.

The appellants also appear to be relying on Section 310 of the Restatement (Second) of Contracts as giving them such a right to proceed against the promisee. RESTATEMENT (SECOND OF CONTRACTS § 310 (1979). As the section itself says, however, the intended beneficiary may proceed against the promisee where he or she has an enforceable claim against the promisee. This means that the third-party beneficiary may maintain an action against the promisee where the beneficiary has a previous enforceable claim against the promisee and the promisor has assumed the promisee’s obligation. See District of Columbia v. Campbell, 580 A.2d 1295, 1302 (D.C.1990). We overrule point of error number one.

*3 The appellants contend in point of error number two that the trial court erred in sustaining special exceptions to their pleading, denying their right to allege a cause of action based upon the theory that Parkway negligently failed to force Falcon to comply with the lease requirements regarding the provision of workers’ compensation insurance. Parkway would not conceivably have any liability to the appellants for their loss independent of the existence of the contract between it and Falcon. The injury complained of by the appellants is only for their economic loss due to Parkway’s alleged failure to perform under that contract. Therefore, Parkway has no liability to the appellants in tort. See Southwestern Bell Tel. Co. v. Delanney, 809 S.W.2d 493, 494-95 (Tex.1991).

The appellants rely on the case of Dalkowitz Bros., 110 S.W. at 564. This case does not involve any allegation of negligence regarding repairs, and the injury to Mr. Botello, the deceased, was not proximately caused by the negligence alleged by the appellants.

The appellants also rely on Section 362 of the Restatement (Second) of Torts. RESTATEMENT (SECOND) OF TORTS § 362 (1964). That section relates to liability of a lessor of land making repairs to third parties due to negligence of the Lessor in performing the repairs. As previously noted, this case does not involve any allegations of negligence in making any repairs. We overrule point of error number two.

The judgment is affirmed.

Footnotes

1

Assigned to this case by the Chief Justice of the Supreme Court of Texas pursuant To Tex. Gov’t Code Ann. § 74.003(b) (Vernon 1988).

End of Document
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