Scurlock Oil Co. v. Smithwick

McGEE, Justice,

concurring.

I concur in the court’s opinion but only write in an attempt to clear up the Mary Carter admissibility quagmire.

As the court recognizes, General Motors Corporation v. Simmons, 558 S.W.2d 855, 858-859 (Tex.1977), permits disclosure of a Mary Carter agreement to impeach a settling party’s financial interest in the plaintiff’s case. However, a party’s financial interest under a Mary Carter agreement never becomes an issue at trial unless a settling party does something to help the plaintiff recover. Clayton v. Volkswagenwerk, 606 S.W.2d 15, 19 (Tex.Civ.App.—Houston [1st Dist.] 1980, writ ref’d n.r.e.). Only then is the Mary Carter’s admissibility invoked and only then can the non-settling party reveal its existence to the jury and introduce portions of the agreement to impeach a settling party. The non-settling defendant cannot hint of the existence of a Mary Carter agreement at voir dire or at any other time until a party to the agreement invokes its admissibility. Id. at 17 . Cf. Brown v. Gonzales, 653 S.W.2d 854, 864 (Tex.App.—San Antonio 1983, no writ) (plaintiff opened the door to admissibility of the Mary Carter agreement at voir dire). Neither may a non-settling defendant call a settling party adversely in an effort to offer a Mary Carter agreement into evidence just so he can impeach the settling party with the agreement. Clayton, 606 S.W.2d at 18 ; Republic National Life Ins. Co. v. Heyward, 568 S.W.2d 879, 885 (Tex.Civ.App.—Eastland 1978, writ ref’d n.r.e.). Therefore, the test for admissibility of a Mary Carter agreement in Texas is two-pronged: (1) the settling defendant has a financial interest in the plaintiff’s recovery, and (2) the settling defendant, his counsel, or his witnesses assist the plaintiff's recovery.

Once the admissibility test is met, a non-settling defendant may impeach a settling party by revealing the existence of a Mary Carter agreement and actually introducing portions of the agreement into evidence. But, before the contents of the agreement are revealed to the jury, the trial court must delete those portions that are hearsay, prejudicial, and purport to resolve the issues of liability and damages clearly within the province of the jury. Brown v. Gonzales, 653 S.W.2d 854, 864 (Tex.App.—San Antonio 1983, no writ). See also Dan aho Refining Co. v. Pan American Petroleum Corp., 383 S.W.2d 941, 946 (Tex.Civ.App.—Waco 1964, writ ref’d n.r.e.) (deduction, speculation, inference or surmise of a witness about the proximate cause of an accident is properly excluded when the jury may draw the inference). Cf. McAllen Kentucky Fried Chicken No. 1 v. Leal, 627 S.W.2d 480, 484 (Tex.Civ.App.—Corpus Christi 1981, writ ref’d n.r.e.) (interpreted in Brown v. Gonzalez to hold that the entire Mary Carter agreement as altered by deletions is admissible into evidence).

Another question arising in this case is whether the guaranty amount of the Mary Carter agreement may be disclosed to the jury. The policy behind the disclosure of Mary Carter agreements is to reveal to the jury the collusive relationship between the settling parties. Disclosure of the guaranty amount goes beyond that policy; it gives the appearance that liability has been admitted by the settling party and plaintiff has already been partially or fully Compensated. The guaranty amount should be excluded by the rule that settlement agreements are not admissible to prove liability. Tex.R.Evid. 408. Accord City of Houston v. Sam P. Wallace & Co., 585 S.W.2d 669, 673 (Tex.1979). In addition, a rule sanctioning disclosure of the guaranty amount frustrates the policy favoring the settlement of lawsuits. McGuire v. Commercial Union Insurance Co. of New York, 431 S.W.2d 347, 352 (Tex.1968); Simmons, 558 S.W.2d at 857 .