text:
    Ronnie LAYTON, Appellant, v. MID-CENTURY INSURANCE COMPANY OF TEXAS, Appellee.
    No. 09-99-527 CV.
    Court of Appeals of Texas, Beaumont.
    Submitted April 13, 2000.
    Decided May 18, 2000.
    Jon B. Burmeister, Moore Landrey, LLP, Beaumont, for appellant.
    Kent Chambers, Chambers Templeton Cashiola, LLP, Beaumont, for appellee.
    Before WALKER, C.J., BURGESS and STOVER, JJ.
   OPINION

DON BURGESS, Justice.

This appeal arises from a claim by Ronnie Layton for medical payments coverage under an automobile insurance policy issued by Mid-Century Insurance Company of Texas. Competing motions for summary judgment were filed. The trial court granted Mid-Century’s motion while denying Layton’s. Layton appeals contending the trial court erred both in granting summary-judgment in favor of Mid-Century and refusing to grant summary judgment in his favor.

Ronnie Layton was involved in a one-vehicle accident while driving his 1997 Chevrolet pickup. At the time of the accident, Layton had two separate vehicular insurance policies. One policy covered the truck and provided for $10,000 in medical payments coverage. The other policy covered an Acura and a Toyota and provided for $10,000 in medical payments coverage on each vehicle.

After the accident, the medical payment provision of the truck policy paid $10,000. Layton made demand upon Mid-Century to pay an additional $20,000 (10,000 under the coverage for the Aeura and $10,000 under the coverage for the Toyota). Mid-Century refused.

Mid-Century moved for summary judgment on the basis that Layton’s medical expenses were sustained while he was occupying his 1997 Chevrolet truck and thus were not covered under the Acura/Toyota policy, which contains an owned and unscheduled motor vehicle exclusion provision. Alternatively, Mid-Century argued the terms and conditions of the Acura/Toy-ota policy limit liability to the maximum amount recoverable under either policy, which Layton has already received.

On appeal, Layton contends: (1) Texas law allows “stacking” of medical payments coverage iñ a situation such as the instant one; (2) the court should read the term “covered auto” as being any vehicle shown in the two declarations pages; and (3) regarding Mid-Century’s claim that liability is limited to $10,000, Mid-Century has waived any additional grounds to deny the claim.

The validity of owned and unscheduled motor vehicle exclusion provisions has been upheld in suits for both PIP and UM/UIM coverage. See Holyfield v. Members Mutual Ins. Co., 572 S.W.2d 672, 673 (Tex.1978); Conlin v. State Farm Mut. Auto. Ins. Co., 828 S.W.2d 332, 337 (Tex.App.—Austin 1992, writ denied); and Texas Farmers Ins. Co. v. McKinnon, 823 S.W.2d 345, 347 (Tex.App.—Beaumont 1991, writ denied). Both UM/UIM and PIP coverage are mandated by statute. See Tex Ins.Code Ann. art. 5.06 (Vernon Supp.2000). We know no reason why the exclusion, which is valid in the context of these two mandated coverages, should be invalid in the context of medical payment coverage. Layton makes no argument that it is invalid, and we are aware of no case authority declaring it invalid. Consequently, we uphold the owned and unscheduled motor vehicle exclusion in suits involving medical payment coverage and find that in the present case the exclusion denies medical payment coverage under the Acura/Toyota policy.

Layton’s injuries were sustained while occupying a vehicle owned by him, the insured, but not scheduled on the Acura/Toyota policy. Layton contends we should read the term “covered auto” in the Acura/Toyota policy to include the Chevrolet pickup. His contention is based upon the definition of “covered auto” in the policy as “[a]ny vehicle shown in the Declarations.” Layton argues because the Chevrolet pickup is shown in the Declarations of the Chevrolet policy, it is a “covered auto” within the meaning of the Acura/Toyota policy. There were two policies and two separate declarations pages. Layton cites no authority, and we are aware of none, permitting this court to read those two policies as one.

Accordingly, we find the trial court did not err in granting Mid-Century’s motion for summary judgment. Issue one is overruled. It is therefore unnecessary to address Layton’s other issue claiming the trial court erred in denying his motion for summary judgment. The judgment of the trial court is AFFIRMED.

      . Mid-Century does not dispute that Layton’s medical expenses exceeded $30,000.


source: Caselaw Access Project

author: DON BURGESS, Justice.

license: Public Domain

text:
    Sherman SAULS, Appellant, v. MONTGOMERY COUNTY and Guy Williams, individually and in his official capacity as Sheriff of Montgomery County, Appellees.
    No. 09-98-175 CV.
    Court of Appeals of Texas, Beaumont.
    Submitted Nov. 4, 1999.
    Decided May 18, 2000.

      Martin A. Shellist, Shellist, Lore & La-zara, P.C., Houston, for appellant.
    Frank Bass, County Atty., David Walker, Steve McKeithen, Asst. County Attys., Conroe, for appellee.
    Before WALKER, C.J., BURGESS and STOVER, JJ.
   OPINION

DON BURGESS, Justice.

Appellant Sherman Sauls (“Sauls”) brings this appeal from a summary judgment granted in favor of appellees Montgomery County and Guy Williams, individually and in his official capacity as Sheriff of Montgomery County.

In his suit against the appellees, Sauls contended he was wrongfully terminated from employment with the Montgomery County Sheriffs Department. He alleged violations of the Texas Commission on Human Rights Act (“TCHRA”), as codified in the Texas Labor Code. Sauls also claimed that appellees “engaged in a pattern and practice of discriminatory conduct against [him] with respect to the terms, conditions, and privileges of his employment with [the Sheriffs Department] because he is black.” He further alleged that appellees retaliated against him for “opposing the race-based discrimination.” Such conduct, according to Sauls, amounted to intentional emotional distress. Sauls additionally alleged violations of his Fourteenth Amendment rights to due process and of 42 U.S.C. § 1983 and 42 U.S.C. § 1981.

Appellees filed a motion for summary judgment and memorandum of law as a single instrument. In their motion for summary judgment, appellees set forth three grounds and then urged three additional grounds in their memorandum. We consider five of the six arguments as having been before the trial court. They are as follows: (l)Williams is entitled to official immunity; (2)Montgomery County has sovereign immunity that has not been waived and immunity based on William’s official immunity; (3)governmental units are not liable for intentional torts of their employees; (4)Sauls lacked standing to bring suit under TCHRA; and ©Montgomery County has not given Sauls permission to sue under 42 U.S.C. § 1983, and without such permission, a § 1983 civil rights claim may not be filed in a state court and should be dismissed. Without specifying the grounds relied upon, the trial court granted appellees’ motion for summary judgment.

On appeal, Sauls argues: (1) the trial court erred in granting summary judgment against Sauls by holding he was not an “employee” under TCHRA; (2) the legislature waived the governmental immunity of Montgomery County and Sheriff Williams under the TCHRA; and (3) the trial court erred in granting summary judgment against Sauls by holding Montgomery County is immune from suits arising under 42 U.S.C. § 1983. Sauls did not include a general issue attacking the summary judgment. See Malooly Brothers, Inc. v. Napier, 461 S.W.2d 119, 121 (Tex.1970).

In reviewing a summary judgment in which the trial court has not provided the basis for its decision, we must review each ground asserted in the motion and affirm the trial court’s judgment if any of these grounds is meritorious. See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex.1995); Rogers v. Ricane Enters., Inc., 712 S.W.2d 76, 79-80 (Tex.1989). The appellant is required to specifically attack “each possible basis for summary judgment to avoid a waiver of those grounds,” unless appellant included a general issue complaining of summary judgment. Warner v. Orange County, 984 S.W.2d 357, 358 (Tex.App.—Beaumont 1999, no pet.)(citing Parrish v. Brooks,. 856 S.W.2d 522, 527 (Tex.App.—Texarkana 1993, writ denied). “If summary judgment may have been granted, properly or improperly, on a ground not challenged, the summary judgment must be affirmed.” Warner, 984 S.W.2d at 358 (citing Holloway v. Starnes, 840 S.W.2d 14, 23 (Tex.App.—Dallas 1992, writ denied)).

The standards for review of summary judgments are well established: (1) the movant for summary judgment has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and (3) every reasonable inference must be drawn in favor of the non-movant and any doubts resolved in its favor. See Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). When the movant relies on an affirmative defense, such as immunity, the summary judgment evidence must establish each element of the defense as a matter of law. See Johnson & Johnson Medical, Inc. v. Sanchez, 924 S.W.2d 925, 927 (Tex.1996).

We now review each of the summary judgment grounds asserted by appellees to determine if any are meritorious.

Although appellees asserted in their motion for summary judgment that Sauls lacked standing to bring suit under TCHRA, they concede this point on appeal, and we need consider it no further. However, we note that appellees now argue that Sauls’s standing is irrelevant, as there is no express waiver of sovereign immunity in the Labor Code nor any waiver of immunity for intentional torts of a governmental unit’s officer or employee under the Texas Tort Claims Act. Since appellees’ “irrelevancy of standing” argument was not before the trial court, we need not review it for merit. Their immunity arguments, which were before the trial court, are considered below.

Appellees specifically presented three immunity arguments in support of their motion for summary judgment — one as to Williams, and two as to Montgomery County. As to Williams, they contended he is entitled to official immunity. As to Montgomery County, they contended: (a) it has sovereign immunity that has not been waived, as well as (b) immunity based on Williams’s official immunity. We note that Williams was sued individually and in his official capacity as sheriff.

First, we consider whether Montgomery County has sovereign immunity that has not been waived. “Under the doctrine of sovereign immunity, the State is not hable for the negligence of its employees absent constitutional or statutory provision for liability.” University of Texas Medical Branch at Galveston v. York, 871 S.W.2d 175, 177 (Tex.1994)(citing Lowe v. Texas Tech University, 540 S.W.2d 297, 298 (Tex.1976)). Also, it is well settled in Texas that sovereign immunity extends to the State’s political subdivisions, protecting them as well from liability for torts of their officers or agents unless a constitutional or statutory provision creates such liability. See State v. Terrell, 588 S.W.2d 784, 785 (Tex.1979); Wade v. Jackson County, 547 S.W.2d 371, 373 (Tex.Civ.App.—Corpus Christi 1977, writ refd n.r.e.)(citing Heigel v. Wichita County, 84 Tex. 392, 19 S.W. 562 (1892)). Since Montgomery County is a political subdivision of the State, it is immune from suit, absent a constitutional or statutory waiver of immunity. See Munoz on Behalf of Martinez v. Cameron County, 725 S.W.2d 319, 320 (Tex.App.—Corpus Christi 1986, no writ).

Sauls contends that both the county’s immunity and Williams’s immunity as an elected official have been waived by the TCHRA. Though several cases against governmental entities have been decided under the Act, neither Sauls nor appellees cite any case that has considered whether the TCHRA waives such immunities, and we have found none. Thus, to determine if waiver has occurred, we review the statute itself in light of the three principles established by the Texas Supreme Court.

First, the waiver of governmental immunity is a matter addressed to the Legislature. Second, for the Legislature to waive sovereign immunity, it must do so by clear and unambiguous language. Finally, in accordance with section 311.023 of the Code Construction Act, we must construe the waiver provisions of the [statute] to give effect to the object sought to be attained by the statute.

York, 871 S.W.2d at 177 (citations omitted).

The TCHRA was enacted by the Texas Legislature in 1993. Act of May 12, 1993, 73rd Leg., R.S. ch. 269, § 1, 1993 Tex. Gen. Law 987. Among its objectives are:

(1)providing for the execution of the policies of Title YII of the Civil Rights Act of 1964 and its subsequent amendments;
(2) securing for persons in this state, including persons with disabilities, freedom from discrimination in certain employment transactions, in order to protect their personal dignity;
(3) make available to the state the full productive capacities of persons in this state;
(4) promote the interests, rights, and privileges of persons in this state.

See Tex. Lab.Code Ann. § 21.001. The Act prohibits discrimination by an employer on the basis of “race, color, disability, religion, sex, national origin, or age.” Tex. Lab. Code Ann. § 21.051. Thus, as observed by the San Antonio court of appeals, “[t]he act essentially codified federal employment law.” Perez v. Living Centers-Devcon, Inc., 963 S.W.2d 870, 872 (Tex.App.—San Antonio 1998, writ denied).

Certain of the Act’s definitions aid us in determining whether it waives sovereign immunity. An “employee” is “an individual employed by an employer, including an individual subject to the civil service laws of this state or a political subdivision of this state, except that the term does not include an individual elected to public office in this state or a political subdivision of this state.” .Tex. Lab.Code Ann. § 21.002(7). Under this definition, Sauls, who was terminated from his job with the Montgomery County Sheriffs Department, is an “employee.” Further, “employer” includes: (1) “an individual elected to public office in this state or a political subdivision of this state”; and (2) “a county, municipality, state agency, or state instrumentality, regardless of the number of individuals employed.” Tex. Lab.Code Ann. § 21.002(8)(C)(D). Also, “political subdivision” is “a county or municipality.” Tex. Lab.Code Ann. § 21.002(12). Thus, not only is Montgomery County an “employer” under the plain language of the statute, but Williams is an “employer” as well because, as Sheriff of Montgomery County, he is “an individual elected to public office” of “a political subdivision of this state.”

In addition to the above definitions, other of the Act’s provisions aid us in determining whether it waives sovereign immunity. The right to bring suit is established in section 21.254, which provides: “Within 60 days after the date a notice of the right to file a civil action is received, the complainant may bring a civil action against the respondent.” Tex. Lab.Code Ann. § 21.254. “Respondent” is defined as “ the person charged in a complaint filed under this chapter and may include an employer. ...” Tex. Lab.Code Ann. § 21.002(13) (emphasis added). “Respondent,” thus, includes Montgomery County and Williams, as both are “employers” as defined by the Act. Hence, the language of the Act allows for suits to be brought against governmental entities such as Montgomery County and against elected officials such as Williams. Further, the Act allows for courts to award both compensatory and punitive damages, except that punitive damages may not be recovered from a governmental entity. Tex. Lab.Code Ann. § 21.2585. This exception would not be necessary if the Legislature did not intend for governmental entities to be sued under the Act. Moreover, we do not presume the Legislature included language without a purpose. University of Texas Medical Branch at Galveston v. Hohman, 6 S.W.3d 767, 776 (Tex.App.—Houston [1st Dist.] 1999, pet. filed) (citing Chastain v. Koonce, 700 S.W.2d 579, 582 (Tex.l985)(“Language in a statute is presumed to be selected and used with care, and every word or phrase in a statute is presumed to be intentionally used with a meaning and purpose.”)

Thus, construing the above provisions to give effect to the stated general purposes of the Act, we find the Legislature has, in clear and unambiguous language, waived sovereign immunity against elected public officials and governmental entities defined by the act to be employers, and, further find appellees’ argument that Montgomery County has sovereign immunity that has not been waived to be without merit.

Next, we consider appellees’ contention that Williams is entitled to the common law defense of official immunity. However, Sauls asserts on appeal that by enacting the TCHRA, and, thus, “allowing suit against counties and elected officials, the Legislature clearly and unambiguously waived the governmental immunity of Montgomery County and Sheriff Williams.” (Emphasis added.) At least one court of appeals has concluded that both sovereign immunity and official immunity are types of “governmental immunity” even though they are “two distinct doctrines aimed at serving different policies.” Cameron County v. Carrillo, 7 S.W.3d 706, 709 (Tex.App.—Corpus Christi 1999, no pet.). As explained by the Texas Supreme Court, official immunity, “protects government officers from personal liability in performing discretionary duties in good faith within the scope of their authority.” Kassen v. Hatley, 887 S.W.2d 4, 8 (Tex.1994) (citations omitted) (emphasis added). The Kassen Court further distinguished “official immunity” from “sovereign immunity.” While official immunity protects individual officials from liability, sovereign immunity protects governmental entities. Id. In his brief, Sauls does not analyze or define “governmental immunity” to include “official immunity” but argues only that Williams is not entitled to immunity because of the waivers of immunity contained in the TCHRA. As explained above, the TCHRA allows suit against Williams in his capacity as sheriff, but does not address or waive his official immunity, i.e., his common law immunity against personal liability. Inasmuch as summary judgment may have been granted for Williams, individually, on the ground of official immunity — a ground not specifically challenged by Sauls — we find summary judgment to be proper for Williams, individually. See Warner 984 S.W.2d at 358.

Further, as to Williams’s personal liability, if any, under Sauls’s § 1983 claims, we note that both in their motion for summary judgment and appellate brief, appellees urge that Williams is entitled to “official immunity.” Confusion has resulted from the use of the terms “qualified” and “official immunity,” with some courts using them interchangeably. See, e.g., Travis v. City of Mesquite, 830 S.W.2d 94, 100 n. 2 (Tex.l992)(Cornyn, J. concurring). However, “recent cases discussing immunity defenses against both state and federal claims use the terms separately to distinguish between the standards for federal (qualified) and state (official) immunity tests.” State v. Saenz, 967 S.W.2d 910, 917, n. 2 (Tex.App.—Corpus Christi 1998, writ denied)(citing Emerson v. Borland, 927 S.W.2d 709, 719, 721 (Tex.App.—Austin 1996, writ denied); Rhodes v. Torres, 901 S.W.2d 794, 797-98 (Tex.App.—Houston [14th Dist.] 1995, no writ)). Here, appellees specifically use the term “official immunity” in their pleadings. Therefore, in view of the confusion regarding the terms, “official immunity” and “qualified immunity,” it is not clear from the record that appellees presented the affirmative defense of “qualified immunity” to the trial court as a ground relating to Sauls’s § 1983 claim in their motion for summary judgment. Thus, we do not consider the merit of “qualified immunity” as a ground for summary judgment in favor of Williams, individually. In a summary judgment proceeding, all reasonable inferences must be drawn in favor of the non-movant (here, Sauls) and any doubts resolved in his favor. See Nixon, 690 S.W.2d at 548-49.

Next, as to appellees’ specific immunity claims, we consider their assertion that Montgomery County has immunity based on Williams’s official immunity. We have previously determined summary judgment to be proper for Williams, individually, on the ground of official immunity, inasmuch as Sauls did not specifically contest that ground. However, Williams’s official immunity does not extend immunity to Montgomery County.

Relying on Harris County v. DeWitt, 880 S.W.2d 99 (Tex.App.—Houston [14th Dist.] 1994), appellees argue a governmental entity cannot be held liable when an employee enjoys official immunity. If Sauls’s claims had been brought under the Texas Tort Claims Act, appellees’ reliance on the Fourteenth Court of Appeals decision, which was affirmed by the Texas Supreme Court in DeWitt v. Harris County, 904 S.W.2d 650 (Tex.1995), would be appropriate. As explained by the Supreme Court, “[w]hether the Texas Tort Claims Act waives sovereign immunity in a given case does not affect whether the governmental employee may assert official immunity as a defense. Tex. Civ. PRAC. & Rem.Code Ann. § 101.026; Kassen, 887 S.W.2d at 8. On the other hand, whether the governmental employee is entitled to official immunity may affect whether the Texas Tort Claims Act’s limited waiver of sovereign immunity is applicable.” De-Witt, 904 S.W.2d at 653. The DeWitt Court determined that specific provisions of the Texas Tort Claims Act allow a governmental entity to retain its sovereign immunity if the employee has official immunity. Id. at 653-54 (construing Tex. Civ. PRAC. & Rem.Code Ann. §§ 101.021(1), (2)(Vernon 1998)). Here, however, Sauls brings his complaints under the TCHRA, which does not contain similar provisions benefitting a governmental entity when its employee has official immunity. See Tex. Lab.Code Ann. §§ 21.001-.556 (Vernon 1996 & Supp.2000). Thus, we find appellees’ assertion that Montgomery County has immunity based on Williams’s official immunity to be without merit.

As another ground in their motion for summary judgment, appellees urged: (1) Montgomery County did not give Sauls permission to sue under 42 U.S.C. § 1983; (2) without such permission, a § 1983 civil rights claim may not be filed in state court; and, therefore, Sauls’s complaint should be dismissed. This argument, which implies the county has sovereign immunity against § 1983 claims, is also without merit. As the Texas Supreme Court has explained, “a state court c[an] not refuse to entertain a section 1983 claim on the ground that it [is] barred by the defense of sovereign immunity.” Thomas v. Allen, 837 S.W.2d 631, 632 (Tex.1992)(citing Howlett v. Rose, 496 U.S. 356, 110 S.Ct. 2430, 110 L.Ed.2d 332 (1990)). Further, under § 1983, local government units may be held liable for the deprivation of federal constitutional rights. See Monell v. Dep’t of Social Servs., 436 U.S. 658, 690, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Williams v. Conroe Independent School Dist., 809 S.W.2d 954, 958 (Tex.App.—Beaumont 1991, no writ). An exception to liability exists in that states and governmental entities that are considered “arms of the state” under the Eleventh Amendment to the United States Constitution may not be held hable under § 1983. Brooks v. Center for Healthcare Services, 981 S.W.2d 279, 284 (Tex.App.—San Antonio 1998, no writ)(citing Will v. Michigan Dep’t of State Police, 491 U.S. 58, 70, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989)). However, cities and counties, though enjoying sovereign immunity, do not have immunity under the Eleventh Amendment. See San Antonio Independent School Dist. v. McKinney, 936 S.W.2d 279, 283 (Tex.1996). In fact, it is well settled that local governmental entities such as counties are “liable for damages under § 1983 for constitutional violations resulting from official county policy or custom.” See Flores v. Cameron County, Tex., 92 F.3d 258, 263 (5th Cir.l996)(citing Monell, 436 U.S. at 690-91, 98 S.Ct. 2018). Moreover, in Texas, “it has long been recognized that ... the county sheriff is the county’s final policymaker in the area of law enforcement.” Turner v. Upton County, 915 F.2d 133, 136 (5th Cir.1990). Thus, appellees’ arguments under § 1983 wih not support summary judgment in their favor.

Finally, appellees also contended that summary judgment should be granted in Montgomery County’s favor on Sauls’s causes of action for the “litany of intentional torts allegedly committed by Williams” because governmental units are not liable for the intentional torts of them employees. Appellees cite City of Hempstead v. Kmiec, 902 S.W.2d 118, 122 (Tex.App.—Houston [1st Dist] 1995, no writ) and Jones v. Houston Independent School Dist., 979 F.2d 1004 (5th Cir.1992) in support of their argument. Both cases are distinguishable, however, as they involved claims under the Texas Tort Claims Act. See Jones, 979 F.2d at 1007; Kmiec, 902 S.W.2d at 122. The Texas Tort Claims Act does not waive immunity if the claim arises “out of assault, battery, false imprisonment, or any other intentional tort....” Tex. Civ. PRAC. & Rem.Code Ann. § 101.057 (Vernon 1997). However, Sauls does not sue under the Texas Tort Claims Act, but rather alleges violations of TCHRA. The Texas Tort Claims Act’s protection against suits arising from intentional torts applies to claims brought under that act. Id. § 101.057. Appellees cite no cases extending the Tort Claims Act’s protection against intentional torts to cases brought under TCHRA, and we have found none. Hence, we find appellees’ “intentional torts” argument to be without merit.

Accordingly, we find that Williams, individually, is entitled to summary judgment on the ground of official immunity, as regards Sauls’s state law claims, and affirm the trial court’s judgment to that extent. We reverse and remand the remaining issues to the trial court for proceedings consistent with this opinion.

AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

      . Although the Montgomery County Sheriff’s Department was included in appellant’s original petition, his last "live” petition omits the department, but retains both Montgomery County and Guy Williams. The summary judgment order grants summary judgment in favor of Montgomery County and Guy Williams.

      . The current version of the Texas Commission on Human Rights Act is located at Tex. Lab.Code Ann. §§ 21.001-.S56 (Vernon 1996 & Supp.2000).

      . The sixth ground — that the Montgomery County Sheriff's Department was an agency of Montgomery County and, as such, was not susceptible to suit under § 1983 — was no longer before the trial court at the time of summary judgment as Sauls omitted the Department as a party in his last petition.

      . The Texas Commission on Human Rights filed an amicus curiae brief in which it argued that Sauls was an employee under the TCHRA and had standing to sue under the Act.

      . Appellees indirectly made another immunity argument as to Montgomery County regarding Sauls’s § 1983 claims; that argument will be discussed separately below.

        . "[A] suit against a government employee in his official capacity is distinctly different from a suit against him in his individual capacity. In suing an employee in his official capacity, a plaintiff seeks, in effect, to impose liability on the governmental unit the employee represents, rather than on the employee himself. Smith v. Davis, 999 S.W.2d 409, 416 (Tex.App.—Dallas 1999)(citing Harris County v. Walsweer, 930 S.W.2d 659, 665 (Tex.App.—Houston [1st Dist.] 1996, writ denied)). Further, “the plaintiff must look to the governmental unit to recover on any judgment rendered against the employee in his official capacity." Smith, 999 S.W.2d at 416 (citing Kentucky v. Graham, 473 U.S. 159, 166, 105 S.Ct. 3099, 3105, 87 L.Ed.2d 114 (1985); Walsweer, 930 S.W.2d at 665). Thus, "official capacity” suits are simply another way of pleading an action against the government, provided the government has notice and an opportunity ' to respond. Smith, 999 S.W.2d at 416.

      . Among the cases in which causes of actions were brought against governmental entities or state agencies under the TCHRA are the following: Thompson v. City of Austin, 979 S.W.2d 676 (Tex.App.—Austin 1998, no pet.); Passons v. Univ. of Tex. at Austin, 969 S.W.2d 560 (Tex.App.—Austin 1998, no pet.); and Guerrero v. Refugio County, 946 S.W.2d 558 (Tex.App.—Corpus Christi 1997, no writ).

      . The Kassen Court also stated that a plaintiff’s claim against the government based on the state’s waiver of sovereign immunity is not affected by whether a government employee has official immunity. Id. (citing Tex. Civ. Prac. & Rem.Code Ann. §§ 104.008, 108.002, 108.003; Washington v. City of Houston, 874 S.W.2d 791, 796 (Tex.App.—Texarkana 1994, no writ)). Moreover, "the purpose of official immunity is to insulate the functioning of government from the harassment of litigation, not to protect erring offi-ciáis.” Kassen, 887 S.W.2d at 8 (citing West-fall v. Erwin, 484 U.S. 292, 295, 108 S.Ct. 580, 583, 98 L.Ed.2d 619 (1988)).


author: RONALD L. WALKER, Chief Justice.

text:
    RAMPART CAPITAL CORPORATION, Appellant, v. EGMONT CORPORATION AND WESTLAND OIL DEVELOPMENT CORPORATION, Appellees.
    No. 09-99-146 CV.
    Court of Appeals of Texas, Beaumont.
    Submitted March 2, 2000.
    Decided May 25, 2000.

      Stephen G. Scholl, Hirseh & Westheimer, Houston, for appellant.
    William T. Fowler, Bryan Patrick Fowler, Conroe, Betsy Kamim, Woodard, Hall & Primm, Houston, for appellee.
    Before WALKER, C.J., BURGESS and STOVER, JJ.
   OPINION

RONALD L. WALKER, Chief Justice.

On May 28, 1982, Westland Oil Development Corporation executed a $4,000,000 promissory note payable to Killeen Savings & Loan Association. The note was secured by a deed of trust securing an interest in an undivided 40% interest in certain real property located in Montgomery County, Texas, and required monthly payments through May 28,1987. On April 1,1983, Fort Hood National Bank acquired an 8.182% participation interest in the Kil-leen Note. On May 28,1987, without knowing that Fort Hood owned a participation interest, Westland executed a renewal of the Killeen Note for another 5 year term, through May 28,1992. On that same date, Killeen and Fort Hood extended their participation agreement to apply to the Kil-leen Renewal Note.

On October 7, 1987, Westland filed for reorganization in the bankruptcy court. The proof of claim filed Killeen did not mention Fort Hood’s participation interest. Fort Hood did not file a proof of claim

On March 30, 1988, Killeen and Fort Hood converted the participation agreement into an assignment of an 8.182% interest in the Killeen Renewal Note. The assignment was filed in the real estate records of Montgomery County, Texas, on April 7, 1988. Killeen and Fort Hood executed another agreement, defining their respective rights and obligations, on June 28,1988.

The bankruptcy court approved West-land’s plan of reorganization on November 3, 1988. As part of the plan, Westland agreed to sell the collateral for the Killeen Renewal Note by April 30, 1989, or abandon the collateral to Killeen and give Kil-leen an additional unsecured claim for $1,500,000.

On December 28, 1988, the Federal Deposit Insurance Corporation declared Kil-leen insolvent and took over as receiver. On November 16, 1990, the FDIC sold Killeen’s interest in the Killeen Renewal Note to Egmont Corporation, the parent company of Westland. The FDIC, West-land and Egmont signed a Settlement Agreement and Release. The FDIC received an unsecured claim for $1,500,000.

On September 3, 1997, Rampart Capital Corporation obtained Fort Hood’s interest in the Killeen Renewal Note. On February 18,1998, Rampart sued Egmont for breach of contract for failing to honor the participation agreement and assignment of the Killeen Renewal Note, and for breach of fiduciary duty for failing to collect Rampart’s share of the Killeen Renewal Note. Although Rampart’s pleadings included a claim for $155,458 for its share of the unpaid balance of the Killeen Note, Rampart expressly abandoned that claim in this appeal. Thus, in the Killeen transaction, Rampart seeks relief only against Egmont.

On December 5, 1988, in an unrelated transaction, Westland signed a promissory note payable to NCNB Texas National Bank. On May 14,1992, Westland executed a non-recourse renewal note in favor of the FDIC as receiver for RepublicBank Dallas, N.A. The renewal deed of trust executed the same day purported to convey a secured interest in certain real property. The deed of trust included a clause that the conveyance was of “Mortgaged Property (as defined in the Prior Deed of Trust),” and that “Grantor expressly acknowledges that the hen created by this Deed of Trust and the Prior Deed of Trust result in Beneficiary receiving a lien in one hundred percent (100%) of the Land.” In its petition, Rampart alleged Westland did not in fact own ah of the secured property. The FDIC sold the FDIC Renewal Note and the FDIC Renewal Deed of Trust to Rampart on December 16,1994. Rampart foreclosed the deed of trust on November 4,1997.

When litigation commenced on February 18, 1998, Rampart sued Westland for breach of the covenant of seisen and breach of warranty for failure to convey good title to the FDIC Renewal Deed of Trust. Egmont was not involved in the transaction. In the FDIC transaction, Rampart seeks relief only against West-land.

Westland and Egmont filed a joint motion for summary judgment, on the following grounds: 1) that Rampart is not entitled to enforce payment of the Killeen Renewal Note; 2) that Egmont is a holder in due course of the Killeen Renewal Note; 3) that the statute of limitations on the Killeen Renewal note had expired; 4) that there had been accord and satisfaction on the Killeen Renewal Note; 5) that the Killeen Renewal Note had been discharged in Westland’s bankruptcy; 6) that Egmont owed no duties to Rampart because it was not aware of Fort Hood’s interest in the Killeen Renewal Note; 7) that enforcement of any duties of Egmont is barred by the Statute of Frauds; 8) that the non-recourse provision of the FDIC Deed of Trust barred Rampart’s actions against Westland for breach of warranty of title; 9) for breach of covenant of seisin; and 10) that there was no evidence to support Rampart’s causes of action. The trial court granted the motion for summary judgment.

Rampart raises seven issues on appeal. Issues one through six concern Rampart’s claims against Egmont on the Killeen Renewal Note:

Issue one: “Is Rampart precluded from enforcing its interest in the Killeen Renewal Note because it is not a holder of the note, but rather, a part owner?”
Issue two: “Does Egmont qualify as a holder in due course of the Killeen Renewal Note so as to preclude Rampart’s claims against it?”
Issue three: “Does the statute of limitations bar Rampart’s claims on the Kil-leen Renewal Note?”
Issue four: “Have Rampart’s claims against the Killeen Renewal Note been discharged by an accord and satisfaction?”
Issue five: “Does Egmont owe Rampart a duty to enforce the Killeen Renewal Note?”
Issue six: “Does the Statute of frauds bar Rampart’s claims on the Killeen Renewal Note?”
Issue seven concerns Rampart’s claims against Westland on the FDIC Deed of Trust:
Issue seven: “Do the non-recourse provisions bar Rampart’s claims with respect to the FDIC Renewal Deed of Trust?”

Rampart argues a six-year statute of limitations applies to its claims regarding the Killeen Renewal Note. The maturity date on the Killeen Renewal Note was May 28, 1992. Four years had not expired when the legislature created a six year statute of limitations in place of the previously applicable four year statute of limitation. See Tex. Bus. & Com.Code Ann. § 3.118(a) (Vernon Supp.2000); Tex. Civ. PRAC. & Rem.Code Ann. § 16.004 (Vernon Supp.2000). An action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date stated in the note. Id. While we agree with Rampart that the amended version of Section 8.118 applied to its suit to enforce the Killeen Renewal Note, Rampart abandoned its suit against Westmont on the Killeen note. The participation and assignment were made without recourse to Killeen. The only claims now being asserted concerning this transaction are Rampart’s claims against Egmont for breach of contract and breach of fiduciary duty. These claims arise out of the assignment and underlying participation agreement, neither of which are negotiable instruments. The statute applicable to these claims is Section 16.004 of the Civil Practice and Remedies Code, not Section 3.118 of the Business and Commerce Code. Rampart’s cause of action for breach of the assignment and participation agreements accrued no later than the May 28, 1992, maturity date of the note. Rampart sued Egmont on February 18, 1998, more than four years after the date Rampart’s cause of action accrued.

The trial court did not err in granting summary judgment for Egmont on Rampart’s claims against Egmont because Eg-mont proved those claims were barred by limitations as a matter of law. Because there was a valid ground for granting summary judgment, we need not address Rampart’s challenges to Egmont’s other grounds for summary judgment.

Rampart argues Westland may not exempt itself from its breach of warranty of title by relying upon the non-recourse provisions of the FDIC Deed of Trust. Section 5.25 of the deed of trust stated:

Anything herein to the contrary notwithstanding, it is specifically provided that neither Grantor nor Grantor’s agents, officers, directors, shareholders, successors or assigns shall have any personal or corporate liability for the payment or performance of any debt, expense, indemnity, tax, imposition, obligation, claim, damage, injury, covenant, duty, or liability, or for any action or cause of action, arising hereunder or under the Note or under any of the other Security Instruments (in particular, without limitation, any environmental matters), or be liable for any money judgment or otherwise, it being understood that Beneficiary and its successors and assigns as holders of the Note may as their exclusive remedy look only to the security provided herein to enforce the payment or performance of any of the foregoing.

The following paragraph, Article VI, stated:

Grantor and Beneficiary hereby acknowledge that the Prior Deed of Trust and rights, titles, interests, liens, powers and privileges by virtue thereof are hereby renewed and extended and shall be and continue to be in full force and effect to secure payment of the Note and any and all renewals, modifications, increases and extensions thereof. All terms and provisions of the Prior Deed of Trust shall remain unchanged and are in full force and effect and that Beneficiary, as holder of certain indebtedness secured by the Prior Deed of Trust, is entitled to the benefits of the hens created by the Prior Deed of Trust. Further, Grantor does hereby grant, bargain, sell, transfer, assign and convey into the Trustee (as defined in the Prior Deed of Trust), his successors and assigns, the Mortgaged Property (as defined in the Prior Deed of Trust), on the terms set forth in the Prior Deed of Trust to secure the Note and all other present and future indebtedness of Grantor to Beneficiary. Grantor expressly acknowledges that the lien created by this Deed of Trust and the Prior Deed of Trust result in Beneficiary receiving a hen in one hundred percent (100%) of the Land.

Rampart argues the non-recourse clause does not apply to the breach of warranty of title because the non-recourse clause does not mention breach of warranty of title and because the renewal clause follows the non-recourse clause in the deed of trust. An unambiguous contract must be enforced as written, examining the entire document and giving terms their plain, ordinary, and generally accepted meaning unless the instrument shows that the parties used them in a technical or different sense. Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.1996). We must consider each part with every other part so that the effect and meaning of one part on any other part may be determined, presuming that the parties intend every clause to have some effect. Id.

The entire deed of trust must be considered in determining the import and effect of the non-recourse and renewal clauses. The granting clause conveyed the “Mortgaged Property, subject only to the Permitted Exceptions.” “Mortgaged Property” is defined in Section 1.1 as “the Real Estate and the Collateral, collectively.” “Real Estate” is defined in Section 1.1 as “the Property, the Improvements, [and] the Personal Property.... ” Section 1.1 defines “Property” as follows:

“Property” shall mean an undivided forty percent (40%) interest in and to the Land, which interest is in addition to the undivided sixty percent (60%) hen interest in the Land created by the Pri- or Lien [to RepublicBank Dallas, N.A.], resulting in the Beneficiary enjoying a one hundred percent (100%) hen interest in the Land.

The deed of trust contained the following covenant: “To protect, warrant and forever defend title to the Mortgaged Property unto Beneficiary, its successors and assigns, at Grantor’s expense, against all persons whomsoever lawfully having or claiming an interest therein or a hen thereon, subject to the Permitted Exceptions .... ”

Westland clearly warranted its title to the interest conveyed to the FDIC and ultimately to Rampart. Rampart’s argument that the non-recourse clause does not apply to the warranty because it appears later in the document must fail because the granting of the interest and the express warranty appear before the non-recourse clause, not after it as Rampart claims. The non-recourse clause includes global, non-exclusive language that the Beneficiary could look “only to the security” to enforce performance of “any of the foregoing,” “anything herein to the contrary notwithstanding” and that Westland could not be liable for “any money judgment.” The purpose of the renewal clause was to renew an existing lien and to acknowledge that Westland was granting an entire hen interest, rather than the partial hen interest granted in the prior deed of trust. None of the language in that clause addresses the remedies available to the beneficiary in the event of a breach of the deed of trust. Issue seven is overruled.

We affirm the trial court’s judgment.

AFFIRMED.


author: RONALD L. WALKER, Chief Justice. DON BURGESS, Justice,

text:
    CONEX INTERNATIONAL CORPORATION, Appellant, v. James R. COX, Appellee.
    No. 09-98-496 CV.
    Court of Appeals of Texas, Beaumont.
    Submitted Jan. 27, 2000.
    Decided June 8, 2000.
    Mitchell A. Toups, Steven C. Toups, Weller, Green & Toups, Hamil M. Cupero, Jr., Conex International Corp., Beaumont, John B. Wallace, Giessel, Barker & Lyman, Inc., Houston, for appellant.
    David A. Brandom, Jane S. Brown, Provost & Umphrey Law Firm, Beaumont, for appellee.
    Before WALKER, C.J., BURGESS and STOVER, JJ.
   OPINION

RONALD L. WALKER, Chief Justice.

The gravamen of the lawsuit initially filed by appellee, James Cox, and the lone remaining action before this Court on appeal, is grounded in the anti-retaliation provision of Tex.Lab.Code Ann. §§ 451.001-451.002 (Vernon 1996). Cox, employed by appellant Conex International Corporation (Conex), sustained an injury to his hand on May 30, 1991, while in the course and scope of his employment at a facility owned by Texaco. It is undisputed that Cox availed himself of his rights under the provisions of the Texas Workers’ Compensation Act. The record further reflects that on June 12, 1991, while performing work, Cox dislocated the knuckle on his previously injured right hand. The next morning, Cox informed his foreman, Ralph Buckles, of his need to again see the doctor regarding his injured right hand. Testimony is in dispute as to whether Cox received permission to go to the doctor on June 13. At any rate, shortly after Cox returned from seeing the doctor on June 13, 1991, he was terminated by Conex.

A careful examination of the testimony and documentary evidence elicited at trial indicates that Cox was attempting to prove the following vis-a-vis his employment discrimination claim: that following his May 31, 1991, injury to his right hand Conex supervisory personnel refused to permit Cox to wear a prescribed hand brace and did not restrict Cox to light duty as recommended by Cox’s doctor ultimately resulting in Cox sustaining a very severe injury to the same hand on June 12,1991. Boiled down to its essence, as we appreciate his position to be, Cox is alleging that Conex’s refusal to allow him to follow his doctor’s orders was in retaliation for Cox pursuing his workers’ compensation claim from the May 31, 1991 injury, with said retaliation resulting in the sustaining of the severe hand injury of June 12, 1991, which then led to Cox developing the extremely debilitating condition known as “reflex sympathetic dystrophy” (R.S.D.), an incurable pain syndrome.

After both parties had concluded presenting evidence to the jury and had rested, Conex moved for a directed verdict. It was denied by the trial court. Thereafter, the jury found that Conex discriminated against Cox, and awarded him $2,000 in past physical pain and suffering, $25,000 in past mental anguish, and $23,000 in past physical impairment, or loss of enjoyment of life. The jury refused to award Cox any future damages for physical pain or impairment or mental anguish. Conex subsequently filed a motion for judgment notwithstanding the verdict which was also denied by the trial court.

Conex brings forth six appellate issues for our consideration. We will combine consideration of the first two appellate issues as that will be dispositive of the case. Said issues read as follows:

Issue 1: Cox injured his right hand at work and twelve days later had a re-injury. Although Cox received workers’ comp benefits, he sued Conex alleging that wrongful discrimination caused his re-injury. At trial, Cox recovered personal-injury damages for the re-injury. The trial court erred in denying Conex a directed verdict or JNOV because:
a) the exclusive-remedy provision bars recovery in a discrimination suit for work-related injuries;
b) Cox cannot get a double recovery for the same injuries; and
c) by receiving comp benefits, Cox elected his remedy.
Issue 2: Cox testified about his pain, mental anguish, and impairment from his work-related injuries. He did not testify about any separate mental anguish, pain, or impairment caused by discrimination. The trial court erred in denying Conex a directed verdict or JNOV because there was no evidence that the alleged discrimination caused Cox any past pain, past mental anguish, or past impairment.

The doctrine of “election of remedies” is an affirmative defense that, under certain circumstances, bars a person from pursuing two inconsistent remedies. Medina v. Herrera, 927 S.W.2d 597, 600 (Tex.1996). In Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 851 (Tex.1980), the Supreme Court noted that the election of remedies doctrine combines elements of estoppel, ratification, and unjust enrichment.

In Massey v. Armco Steel Co., 652 S.W.2d 932, 933 (Tex.1983), the Supreme Court held the following:

Although the Workers’ Compensation Act bars an employee’s common law action for negligence against his employer, the Act does not exempt employers from common law liability for intentional torts, [citations omitted] An employee, however, may waive his cause of action for intentional tort if he seeks benefits under the Act. [citations omitted] The collection of workers’ compensation benefits by an employee who subsequently alleges his injury was by intentional tort constitutes an election of remedies and estops the employee from proceeding to recover damages outside the Act. [citation omitted]

Concededly, an employee may have one claim against his employer under the Workers’ Compensation Act and a separate, distinct claim at common law for intentional tort but such claims are mutually exclusive; thus, the employee’s intentional tort claim and intentional tortious actions claim must be separate from the claim for compensation and must produce independent, separate, and' distinct injuries. Id.

Cox responds that the election of remedies/estoppel rationale set out in Massey is inapplicable to the facts of the instant case because Cox’s claims are not mutually exclusive. Cox reasons it thusly:

Cox had to pursue his right to benefits under the compensation Act [sic] to invoke the Act’s protection. Once he did so and Conex retaliated against him, he had a claim for wrongful discrimination under the Act. The wrongful discrimination claim is dependent upon the worker’s compensation claim.

Cox’s argument as set out above is correct as far as it goes. It overlooks what we believe is the key phrase in the quote from Massey, “and must produce an independent, separate, and distinct injuries.” See Sowell v. Dresser Industries, Inc., 866 S.W.2d 803, 812 (Tex.App.—Beaumont 1993, writ denied).

In a case similar in nature to the one before us, Nash v. Northland Communications Corp., 806 S.W.2d 952 (Tex.App.—Tyler 1991, writ denied), the plaintiff injured his back on the job, pursued and settled a workers’ compensation claim, returned to work, was assigned more strenuous work, injured his back again, settled a second workers’ compensation claim, and was subsequently fired while off work recuperating from the second injury. The plaintiff in Nash subsequently filed a discrimination lawsuit against his employer claiming the discrimination caused past and future damages of loss of wage-earning capacity, reasonable and necessary medical expenses, pain and suffering, mental anguish, physical impairment, and severe emotional and mental distress. The trial court severed out and then granted partial summary judgment in favor of the employer with regard to the discrimination claims allegedly resulting in the second injury because plaintiff had already received workers’ compensation benefits for those injuries. In affirming the trial court’s grant of the partial summary judgment against the plaintiff, the Tyler Court reasoned as follows:

The appellant is barred from asserting a [§ 451.001] discrimination claim for personal injuries received while digging the ditch because he has already recovered workers’ compensation for these damages. He does not assert that the discriminatory ditch-digging assignment harmed him because it reduced his hours, wage rate or fringe benefits, or because it degraded him, or caused him any damage other than those related to his back injury for which he has already been compensated under the act. Those damages are separate and independent of the personal injury previously compensated under the Workers’ Compensation Act. Such injuries are not present in the appellant’s case. Instead, the damages that appellant seeks are for personal injuries that stem solely and inseparably from the back injury incurred during the ditch digging assignment. He is limited to one workers’ compensation recovery for the same injury. Another recovery under the guise of a discrimination claim would be a double recovery under the act. Double recovery is not permitted. K-Mart Corporation v. Martinez, 761 S.W.2d 522, 524 (Tex.App.—Corpus Christi 1988, writ denied); Hendon v. Glover, 761 S.W.2d 120, 122 (Tex.App.—Beaumont 1988, writ denied).

Id. at 953.

In his brief, Cox argues that Nash’s holding regarding “double recovery” is inapplicable to him because Cox “never filed a workers’ compensation claim for his second injury he suffered on June 12, 1991. The fact that the workers’ compensation insurance carrier paid Cox benefits for the injuries caused by Conex’s wrongful discrimination is irrelevant as these benefits fall far short of the full range of personal injury damages available by virtue of the anti-discrimination provision of the Act.” We believe that Cox totally misplaces at least the spirit, if not the letter, of the holdings in Massey and Nash. In the first place, the fact that Cox did not make a separate claim for the June 12 injury seems to us to be of no consequence as Cox himself responded affirmatively that he had received “any and all benefits” that were available to him under the workers’ compensation act for the injuries made the basis of the lawsuit, and that it was the June 12, 1991, injury, not the May 31, 1991, injury, that caused Cox to eventually develop R.S.D. In the second place, the record is absolutely silent as to whether the compensation insurance carrier segregated any payments to Cox for his May 31 injury versus his June 12 injury. In either instance, Cox’s arguments have no merit when set against the essential holdings in Massey and Nash.

In the instant case, Cox has wholly failed to prove any “independent, separate, and distinct injuries” he sustained from the alleged discriminatory act or acts of Conex and for which he has not already received compensation benefits. As was observed in Vickery v. Vickery, 999 S.W.2d 342, 373 (Tex.1999):

The purpose of election of remedies doctrine is to prevent double recovery for a single wrong. Green Oaks, Ltd. v. Cannan, 749 S.W.2d 128, 131 (Tex.App.—San Antonio 1987), writ denied per curiam, 758 S.W.2d 753 (Tex.1988). A plaintiff is entitled to one satisfaction for sustained injuries. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 7 (Tex.1991). The “one satisfaction” rule applies to prevent a plaintiff from obtaining more than one recovery for the same injury.

We do not believe that the holdings of Massey and Nash result in a total bar to recovery of physical impairment damages under § 451.001. We therefore are in agreement with the observation made in Wal-Mart Stores, Inc. v. Holland, 956 S.W.2d 590, 598 (Tex.App.—Tyler 1997), rev’d on other grounds, 1 S.W.3d 91 (Tex.1999), that if wrongful discrimination causes physical impairment, but the discriminated party accepts a settlement pursuant to the workers’ compensation act for that discrimination-caused physical impairment, he cannot then recover those same damages under § 451.001. Where we depart from the strict statement in Holland, and possibly from Nash as well, is that we are not limiting the estoppel or “double recovery” rationale to instances where the injured plaintiff has reached a settlement with his or her employer. We believe that accepting workers’ compensation insurance benefits, and certainly continuing to accept such benefits up to and during trial, as Cox was doing, bars said plaintiff from any wrongful discrimination damages not fully separate and independent from the injury damages.

Under a point of error questioning the denial of a motion for directed verdict, the appellant must show that the record contains evidence establishing the movant’s position as a matter of law. Hams Packaging Corp. v. Baker Concrete Const. Co., 982 S.W.2d 62, 65 (Tex.App.—Houston [1st Dist.] 1998, writ denied). A directed verdict is proper when: (1) a defect in an opponent’s pleadings makes them insufficient to support a judgment; (2) the evidence conclusively proves a fact that establishes a party’s right to judgment as a matter of law; or (3) the evidence is insufficient to raise an issue of fact. Id. In the instant case, even taking as true that Cox proved Conex’s acts discriminated against him to the point that he sustained the second hand injury, we find that Cox failed to present enough evidence to raise a fact issue on either of the following: (1) that he had not already received compensation for the second hand injury, or (2) that he sustained, apart from the second hand injury, another separate and independent injury traceable to Conex’s discriminatory practices for which Cox had not already been compensated. We therefore sustain Conex’s first two appellate issues. The trial court erred in failing to direct a verdict in favor of Conex because Cox was estopped from recovering any further damages for the injuries as they were submitted to the jury based upon the evidence in the record before us. We reverse the judgment of the trial court and render judgment that Cox recover no damages from Conex.

REVERSED AND RENDERED.

DON BURGESS, Justice,

concurring.

I concur with the majority. Mr. Cox, under the case law and this record, was precluded from any further recovery once he accepted benefits under the workers’ compensation plan. However, Mr. Cox was in a “no-win” situation if he was to receive the medical care he required. This is a problem our legislature should examine to preclude other workers from being placed in the same position.

      . The record before us reflects the following offer of proof, see TexR. Evid. 103(a) & (b), by Conex as its trial counsel cross-examined Cox regarding his workers’ compensation benefits:
      Q.[Conex trial counsel] Well, in this lawsuit you’re claiming that your severe injury that caused your R.S.D. was on June 12th, '91, true?
      A.[Cox] (Pause)
      Q. True?
      A. Yes, sir.
      Q. All right. And you are not telling this jury [sic] in this particular case that the injury of May 31st caused you to get R.S.D., are you?
      A. The injury on May the 31st?
      Q. Right.
      A. That's right.
      Q. Now, Mr. Cox, you have received workers’ compensation insurance benefits including medical benefits and wages and— any and all benefits that are available under the workers’ compensation act, haven’t you, for your injuries that are made the basis of this lawsuit?
      A. Yes, sir.


author: LAMBERT, Chief Justice.

text:
    GENERAL MOTORS ACCEPTANCE CORPORATION, Appellant, v. LINCOLN NATIONAL BANK, Appellee.
    No. 98-SC-0489-DG.
    Supreme Court of Kentucky.
    Jan. 20, 2000.
    As Modified on Denial of Rehearing June 15, 2000.
    John T. McGarvey, Thomas C. Fenton, Morgan & Pottinger, P.S.C., Louisville, for appellant.
    K. Gregory Haynes, Kevin P. Crooks, Wyatt, Tarrant & Combs, Louisville, for appellee.
   LAMBERT, Chief Justice.

The issue presented is whether a bank may apply the cash proceeds of collateral to overdrafts allowed a depositor, thereby defeating established priorities, on grounds of the “ordinary course of business” exception contained in official comment 2(c) to UCC § 9-306(2) (KRS 355.9-306(2)). In the case at bar the trial court and the Court of Appeals allowed such a result. We reverse.

From 1976 through 1991, General Motors Acceptance Corporation (“GMAC”) provided floor plan financing to Donohue Ferrill Motor Company, Inc., (“Donohue Ferrill”), a Chevrolet dealer in Hodgen-ville. Under the floor plan agreement, GMAC lent funds to Donohue Ferrill to purchase new vehicle inventory. Donohue Ferrill granted GMAC a security interest in all of its vehicle inventory and all of the proceeds of that inventory. The security agreements and financing statements were executed by A.G. Back, Jr., the founder of Donohue Ferrill and its president from 1966 through August 1990. Back was also a longtime officer of Lincoln National and chairman of its board of directors. Back was board chairman of Lincoln National when he, as president of Donohue Ferrill, signed the security agreement in favor of GMAC on September 26,1983.

Routinely, Lincoln National’s president, Robert D. Haynes, dealt with customer overdrafts. The established procedure when an account was overdrawn was for Haynes to contact the customer, inquire about the problem, and decide whether to authorize payment of the overdraft or return the check. However, this procedure was not followed when Donohue Ferrill’s account was overdrawn. All of Donohue Ferrill’s overdrafts were handled by Back personally, not by Haynes. For 38 of the 62 business days of September, October, and November 1991, Donohue Ferrill’s account was overdrawn. Lincoln National honored 133 overdrafts during these three months and charged Donohue Ferrill a total of $1,995 in fees. The total amount of the overdrawn balances for those 38 days was $1,943,306.25.

In December 1991, Donohue Ferrill failed as a business and defaulted on its obligations to GMAC. After liquidation of its assets, Donohue Ferrill remained indebted to GMAC in the amount of $308,-088.22. Prior to Donohue Ferrill’s business failure, in September, October, and November 1991, Donohue Ferrill sold six trucks that were covered by GMAC’s perfected security interest. The proceeds from these sales were deposited in a demand deposit (or checking) account Dono-hue Ferrill maintained at Lincoln National. The proceeds, along with other funds in the checking account, were applied to Do-nohue Ferrill overdrafts at Lincoln National. Donohue Ferrill never paid GMAC for the six trucks, even though the security agreement specifically required Donohue Ferrill to “faithfully and promptly remit” from the proceeds of the vehicles the amounts loaned by GMAC.

GMAC sued Lincoln National in Larue Circuit Court for $124,610.80 in proceeds from the sale of these six vehicles. GMAC argued that these proceeds were identifiable upon their deposit to the checking account and the trial court so found. Thus, GMAC argues, the bank’s application of those funds to Donohue Ferrill’s overdrafts constituted a conversion of its monies by the bank. GMAC based its claim upon KRS 355.9-306(2), which states

Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale, exchange or other disposition thereof unless the disposition was authorized by the secured party in the security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor.

The bank sought dismissal of the complaint, contending that it took the funds free of any security interest because the funds were used to cover the overdrafts in the ordinary course of the bank’s business with Donohue Ferrill. The bank also argued that GMAC’s complaint should fail because GMAC acquiesced in the bank’s possession and use of the proceeds.

The trial court granted the bank’s motion for summary judgment. In reaching this result, the trial court found that the funds in question, upon deposit with other funds in the Donohue Ferrill account, lost their identifiable security cloak because the funds were credited by the bank against the account overdrafts in the ordinary course of its business with Donohue Ferrill. See UCC § 9-306(2), Official Comment 2(c), infra. Furthermore, the trial court believed GMAC was aware of the bank’s custom of covering Donohue Ferrill’s overdrafts, and, under the floor plan agreement, GMAC had access to Do-nohue Ferrill’s bank records, which clearly revealed the pattern of overdrafts. Moreover, despite GMAC’s manifest knowledge of Donohue Ferrill’s financial difficulties, GMAC did not request that the bank separate or otherwise treat differently the funds generated by Donohue Ferrill from the sale of the floor plan vehicles. Finally, the trial court concluded that even if the subject transfers were not legitimized by the “ordinary course of business” principle, GMAC’s claims would be barred because of GMAC’s acquiescence in the banking relationship between Donohue Ferrill and Lincoln National.

The Court of Appeals affirmed, holding that Lincoln National’s actions did not exceed the scope of its “ordinary course of business.” For its interpretation of KRS 355.9-806(2), the Court of Appeals relied upon the official commentary to the UCC as follows:

Where cash proceeds are covered into the debtor’s checking account and paid out in the operation of the debtor’s business, recipients of the funds of course take free of any claim which the secured party may have in them as proceeds. What has been said relates to payments and transfers in ordinary course. The law of fraudulent conveyances would no doubt in appropriate cases support recovery of proceeds by a secured party from a transferee out of ordinary course or otherwise in collusion with the debtor to defraud the secured party.

UCC § 9-306(2), Official Comment 2(c). The Court of Appeals also noted that KRS 355.4-401(1) specifically permits a bank to honor an overdraft if it is “authorized by the customer and is in accordance with any agreement between the customer and the bank.” Without providing an explanation, the court stated that it was not persuaded by the reasoning presented in a factually similar Iowa case, C & H Farm, Service of Iowa v. Farmers Savings Bank, which construed the identical UCC language as favoring the secured party against the bank. Upon the view that the reasoning and the application of the law expressed in C & H Farm Service of Iowa is proper, we now reverse the courts below.

Payment of an overdraft by a bank is of the nature of a loan to the account owner and is premised upon the condition of repayment. Thus, Lincoln National made loans to Donohue Ferrill in the amount of the overdrafts paid. Since the bank had no security for such loans, it was an unsecured creditor of Donohue Ferrill.

KRS 355.9-201 gives a secured party priority over all others in the collateral or its proceeds, except as provided elsewhere by Article 9. Under KRS 355.9-306, a security interest continues in the identifiable proceeds of collateral. Thus, as an unsecured creditor, Lincoln National was without any right to take or retain assets of Donohue Ferrill that were subject to the perfected security interest of GMAC, unless allowed by an exception to KRS 355.9-306.

The trial court and the Court of Appeals found such an exception in Official Comment 2(c) to the UCC § 9-306 (KRS 355.9-306), holding that the proceeds of the collateral used to cover prior overdrafts were transferred out of Donohue Ferrill’s account in the ordinary course of business. We disagree with this interpretation. Although the commentary provides an exception for proceeds from the debtor’s checking account and paid in the ordinary course of the operation of the debtor’s business, this exception does not apply when a bank seizes funds deposited in a customer’s account and applies such funds to payment of overdrafts or antecedent debts. Such an interpretation would eviscerate the security interest in proceeds of collateral contrary to KRS 355.9-306(2) and permit a bank that had made an unsecured loan to leapfrog secured creditors. This view was recognized in Linn Cooperative Oil Co. v. Norwest Bank Marion N.A.:

When encumbered collateral is applied to an antecedent obligation, the transfer- or’s ability to satisfy secured creditors is reduced proportionately. That result occurs in transfers of cash proceeds collateral to the same extent as it occurs in transfers of goods subject to a security interest.

The Supreme Court of Iowa recently confronted the issue here in a case bearing great similarity to this case, C & H Farm Service Co. v. Farmers Savings Bank.' In circumstances where a secured creditor had priority over the bank by virtue of a security agreement, the issue was whether the bank could reimburse itself for overdrafts paid from identifiable cash proceeds deposited to its customer’s account. Analyzing the issue, the Iowa court stated:

When the bank paid Sehellhorns’ checks regardless of the fact that there were no funds in Sehellhorns’ account, the bank became a creditor of Sehellhorns and accepted the risk of an unsecured loan to them....
C & H’s security interest in the proceeds of its collateral, therefore, takes priority over the bank’s attempted set-off. To the extent that the bank applied deposited proceeds of C & H’s' collateral to reduce the debit balance of Schell-horns’ account, the bank is liable to C & H for conversion.

(Citations omitted.) Summarizing its view, the Court said:

Our conclusion here ... is that a secured party’s right to proceeds of collateral deposited to the debtor’s bank account is superior to the bank’s right to a setoff of the same proceeds against amounts the debtor owes the bank. In other words, the bank may not loan money to Sehellhorns by paying Schell-horns’ overdrafts and then expect to “jump over” C & H’s priority in identifiable proceeds of C & H’s collateral. The bank is liable for conversion of C & H’s collateral to that extent.

(Citations omitted.)

We have considered the Bank’s contention that GMAC’s claim of conversion should fail due to acquiescence in the relationship between Donahue Ferrill and the Bank. We believe this contention is sufficiently answered by our analysis of the law contained hereinabove and the paucity of evidence that GMAC knew of the Bank’s practice of allowing such overdrafts. The evidence was woefully inadequate to establish that GMAC voluntarily relinquished a known right effectively waiving the provisions of KRS 355.9-306(2) and subordinating its priority as a creditor to that of the Bank. In any event, mere acquiescence is insufficient to constitute estoppel.

For the foregoing reasons, the decision of the Court of Appeals is reversed, and this cause is remanded to the trial court for entry of judgment consistent herewith.

COOPER, GRAVES, JOHNSTONE, KELLER, STUMBO and WINTERSHEIMER, JJ„ concur.

      . CR 52.01.

      . KRS 355.1-110 permits the use of the official comments in the construction and application of Chapter 355; see Ranier v. Gilford, Ky.App., 688 S.W.2d 753, 755 (1985) (stating that there seemed to be no reason why the Official Comment to 9-306 should not be adopted).

      . 449 N.W.2d 866 (Iowa 1989).

      . Dalton v. First National Bank of Grayson, Ky.App., 712 S.W.2d 954, 957 (1986).

      . KRS 355.9-201 states: "Except as otherwise provided by this chapter, a security agreement is effective according to its terms between the parties, against purchasers of the collateral and against creditors.”

      . 444 N.W.2d 497, 499 (Iowa 1989).

      . 449 N.W.2d 866 (Iowa 1989).

      . Id. at 877.

      . Id. at 876.

      . Id. at 876-877.

      . Nolin Production Credit Association v. Canmer Deposit Bank, Ky.App., 726 S.W.2d 693, 703-704 (1986).


author: /s/ Joseph E. Lambert Chief Justice

text:
    INQUIRY COMMISSION, Movant, v. Alecia LOCOCO, Respondent.
    No. 1999-SC-0473-KB.
    Supreme Court of Kentucky.
    Feb. 24, 2000.
    As Amended March 6, 2000.
   OPINION AND ORDER

The Inquiry Commission, pursuant to SCR 3.165, petitioned this Court on May 12, 1999, to issue an order temporarily suspending Aleda Lococo of Hazard from the practice of law in Kentucky. It claimed that probable cause existed to believe that she misappropriated funds or improperly dealt with funds within the meaning of SCR 3.165(l)(a). The Commission further believed that Lococo’s conduct poses a substantial threat of harm to her clients and to the public which requires appointing a trustee to assume immediate control of her bank accounts and enjoining all banks in the Commonwealth from making any further payment from her bank accounts, except as authorized by the trustee.

The Inquiry Commission also moved this Court on May 12, 1999, to issue an order requiring Lococo to show cause why she should not be held in contempt because of her failure to respond to either of the two subpoenas duces tecum served upon her in connection with disciplinary proceedings against her.

This Court entered a confidential order on May 17, 1999, giving Lococo twenty days to show cause why she should not be temporarily suspended for the reasons set forth in the petition. Lococo finally responded on July 7, 1999, when she filed a motion for an extension of time in which to file a response to the petition for temporary suspension and the motion for contempt. She claims that she was not aware that a complaint had been filed against her until she received notice from the Clerk of this Court that the petition and contempt motion had been filed. Lococo maintains that she called the KBA and learned for the first time that a complaint had been filed against her as well as the petition for suspension and the motion for contempt.

Thereafter, she contends that she received a letter from the KBA dated May 19,1999, signed by Benjamin Cowgill, Jr., Chief Deputy Bar Counsel, which advised her as follows:

After conferring with your secretary Donna [Ritchie], it is my understanding you were riot aware of such proceedings. With the assurance of your cooperation, I will proceed to withdraw the Petition and Motion for Contempt filed with the Courts.

Lococo claims that she relied on the letter, which she attached as an exhibit to her motion, to signify that the petition and motion would be withdrawn and she would not be required to file a formal response with this Court. Further, she believed that the subpoenas were now moot because the case was returning to the initial stages.

After several alleged correspondences and alleged failed communications with the KBA, Lococo contends she contacted the Clerk of this Court on July 2, 1999, to ascertain whether the petition or motion had been withdrawn. She claims that only at this time did she learn that they had not been withdrawn, and in fact had been submitted to the Court for a ruling with her in default, and that a show cause hearing had been scheduled without her being given notice. Lococo stated that she had a meritorious defense to all matters and sought an order from this Court granting her an extension of time.

The Inquiry Commission responded to Lococo’s motion by filing a verified memorandum in support of the motion for extension of time. In response, it set forth a detailed and very troubling allegation, supported in part by affidavits from Cowgill and two staff members, that the correspondences relied upon by Lococo were forgeries and that her chronology of the events were a falsehood. Further, it claimed that Lococo was on notice of the forged letters before she filed her motion but chose to rely on the forged documents nonetheless.

This Court remanded the matter to the Inquiry Commission for an evidentiary hearing on all questions raised by the petition for temporary suspension, motion for contempt and the response to the motion for extension of time. In particular, we remanded for issues presented in the verified memorandum in support of the response filed by the Commission, and to make findings of fact and a recommendation to the Court.

Thereafter, the Inquiry Commission filed an amended petition for temporary suspension, appointment of trustee and restriction on access to accounts. The amended petition set forth additional allegations in support of the relief requested in the original petition. Lococo responded answering the' amended petition and demanded that both the original petition and amended petition be dismissed and held for naught.

Pursuant to this Court’s order, the trial commissioner submitted a report to this Court on December 8, 1999. Following is a brief recitation of her report.

Lococo employed Ritchie as the secretary/receptionist and bookkeeper. Although she had no formal bookkeeping or paralegal training before joining the practice, Ritchie was provided with the checkbooks for the various bank accounts, including the client escrow account, and was authorized to use Lococo’s signature stamp in order to write checks. From time to time, Lococo asked about the status of the various bank accounts, but otherwise gave Ritchie complete responsibility for all accounts except her personal account. Loco-co claimed that she explained to Ritchie that an escrow account was to be used solely for client funds but was unaware that Ritchie was deficient in her understanding of this point.

During 1998, Ritchie began using Loco-co’s escrow account as a supplemental operating account for the office. According to Ritchie, she moved substantial sums of money in and out of the escrow account in an attempt to “stay ahead” of the mounting debts of the law office without regard to funds received as settlement proceeds. Consequently, the escrow account ceased to be a separate account and overdrafts began appearing regularly.

Lococo denies knowledge of the mishandling of funds. However, in November 1998, she became personally aware that a settlement check to one of her clients had been returned for insufficient funds. On November 17, 1998, Lococo issued a check for $11,086.27 on the escrow account to Southwood, a client whom she represented in a personal injury case. Southwood endorsed the check in favor of a funeral home but when they attempted to deposit the check it was returned because of insufficient funds. After repeated attempts by the funeral home to contact Lococo were intercepted by Ritchie, the funeral director met with Lococo and informed her of the problem. Lococo directed Ritchie to pay the funeral home in full but their repeated attempts to receive payment were unsuccessful. Despite the problem, Lococo continued to rely on Ritchie to resolve the problem. Ritchie apparently advised Lo-coco that the funeral home had been paid in full and even showed her copies of two cashier checks as proof, one of which later proved to be a forgery.

Unable to collect his payment, the funeral director filed a bar complaint. Lococo’s office was sent a certified letter containing the complaint from the KBA which another employee received and then gave to Ritchie to deliver to Lococo. Ritchie responded to a reminder letter from the KBA regarding the complaint by telling Cowgill that a response would be forthcoming. Lococo denies any knowledge of the matter claiming that Ritchie concealed it from her.

Unknown to Bar counsel, two subpoenas duces tecum which were to be personally served on Lococo as requested, were simply left at her office.

On May 17, 1999, this Court gave Loco-co 20 days to show cause why she should not be temporarily suspended. Lococo claims that she did not receive the order because Ritchie concealed it from her. Earlier, on May 4, 1999, the Inquiry Commission filed a charge against Lococo which was apparently received by Ritchie who signed Lococo’s name. Lococo denies any knowledge of the letter.

During the months of March, April and May, Ritchie called Cowgill and assured him that Lococo was working on her response to the complaint. When Cowgill asked to speak to Lococo, Ritchie told him that she was out of the office.

Lococo denies ever receiving the complaint and claims no knowledge of such until she received a certified mail receipt notice from the Clerk of Court which referred to the petition for temporary suspension. At that point she asked Ritchie to set up a telephone conference or meeting with Bar Counsel.

Thereafter, Ritchie told Lococo that she had spoken with Cowgill and showed her the forged letter indicating that the petition would be withdrawn. Based on this letter, Lococo took no further steps to respond to the petition for temporary suspension. On June 4, 1999, Ritchie faxed Cowgill an unsigned two page response to the Bar Complaint. When Cowgill called to complain of the deficient response, Rit-chie told him that Lococo was out of the office and that she would pass the message along. Lococo denies ever receiving this message. Ritchie gave her a second letter purportedly prepared and faxed by Cow-gill updating her on the current matter which also was a complete fabrication.

On June 30, 1999, the Chair of the Inquiry Commission signed an order reciting that the charge had been served on Loco-co, that she failed to answer and that the case was ready for submission to the Board of Governors as a default case. On July 1, 1999, the Disciplinary Clerk filed the order of submission and issued a receipt notice to Cowgill and Lococo. The next day, for the first time, Lococo called Bar Counsel regarding the case. She claimed that she did not respond to the petition for temporary suspension because of her reliance on the two prior letters which had promised to withdraw the petition. Cowgill informed her that the two letters never existed.

Since the time of the original petition, at least eight other cases spanning an eighteen-month period have been discovered in which client funds were mishandled. In October of 1998, after Lococo settled a claim for her client Campbell, Ritchie issued a check for partial payment of the settlement funds she was entitled to receive. Campbell attempted to cash the check but was informed that Lococo’s escrow account did not contain sufficient funds for the check to be honored. As a result, Campbell did not receive her money until almost a month later, when the check was paid from settlement funds which Lo-coco had just received and deposited on behalf of another client, Southwood.

In August 1998, Lococo negotiated a settlement of a collection case against her client Carter, for $11,000. Carter then paid said sum to Lococo by cashiers’ check and it was deposited in her escrow account. The money, however, was not paid to the claimant but was used to pay outstanding obligations in the escrow account. Carter was unable to learn of the status of her case because Ritchie continually put her off. The attorney for the claimant also made several calls and sent several letters seeking payment. When payment was not forthcoming, the attorney filed for summary judgment in circuit court. At the hearing on the matter, Lococo stated that she thought the case had previously been resolved. She then provided the attorney for the claimant with another cashiers’ check to satisfy the claim. The check was a forgery and as of the date of the commissioner’s hearing, the claimant was awaiting final clearance of another check it received from Lococo.

Sometime in 1998, Ritchie received a settlement check for $4,000 from an insurance company in connection with a claim Lococo had pursued on behalf of her client Neace. Ritchie deposited the check into the escrow account, but then permitted the funds to be used to honor other checks from the account. Later, Ritchie demanded that the insurance company issue another check claiming that the original check had never been received. The insurance company issued a replacement check and stopped payment on the original. Ritchie then deposited the replacement check into the escrow account three months after its receipt. This resulted in a charge against Lococo’s escrow account for $4,000, which was paid from funds on deposit that belonged to other clients.

In February of 1998, another client, also named Campbell, retained Lococo to represent her in a personal injury claim. Campbell was advised that her contact person would be Ritchie, who would help her in submitting all medical forms. Campbell gave Ritchie prescription receipts to file in order to obtain reimbursement but the receipts were never submitted. Later, Ritchie contacted Campbell to tell her that the insurance company had offered to settle for $12,000 or $15,000. Campbell rejected the offer. A few months later, Ritchie informed Campbell that her case had been settled for $25,000, the maximum amount, and that she had to come to the office to sign a release form. When Campbell came to the office, she refused to sign the release because it appeared to her that the form had been altered.

Campbell eventually retained new counsel and was informed that the insurance company had issued a settlement check for $15,000. She denies ever receiving the check and claims her endorsement on the check is a forgery. Lococo denies any knowledge of wrongdoing and contends that her endorsement on the check is also a forgery.

In the spring of 1998, Lococo also settled certain claims on behalf of her client Williams for $25,000. Later, a settlement check in the amount of $10,500 was received from the insurance company and deposited in the escrow account. Despite only receiving a partial payment, Ritchie wrote a check on the escrow account to Williams for $16,000 and to another attorney who assisted in the case for $4,166.67. This resulted in another client’s funds being used to pay a portion of Williams’ settlement proceeds and the other attorney’s legal fees.

In early 1998, Lococo settled certain claims on behalf of her client Collins, for $25,000. Before receiving the settlement proceeds, Ritchie used the escrow account to make a partial payment to the client and to Lococo for her attorney fees. This resulted in charges against the escrow account which were paid from funds on deposit that belonged to other clients.

In March of 1998, Lococo settled certain claims on behalf of her clients, the Sand-lins. In connection with the settlement, the Sandlins were asked to sign a release which contained a provision holding Loco-co and her co-counsel harmless for any failure to assert claims on their behalf. Lococo denies having any knowledge of the language in the release and insists that it was prepared by Ritchie without her authority.

Later, Ritchie paid co-counsel his fee with a check from the escrow account before the settlement proceeds were deposited into the account. To date, the Sandlins have not been paid in full and the settlement, which involved a minor, had not been approved by the Court.

Ritchie told another client, Johns, that her case had been settled for $50,000. Rit-chie provided her with a letter purportedly signed by Chris Porter, representative of the insurance company, confirming the settlement. Thereafter, Ritchie issued a check to Johns from the escrow account in the amount of $83,000 which was returned for insufficient funds. When confronted, Ritchie gave Johns a purported fax from the insurance company indicating that they had agreed to increase their settlement to $60,000.

When the client contacted the insurance company herself, she was told that they did not have an employee by the name of Chris Porter and that no settlement had been reached regarding her claim. Lococo claimed that she never authorized any settlement on behalf of Johns and was not aware of the check issued to her in the amount of $33,000.

Since the institution of this proceeding, Lococo’s investigation of her files reveals cases containing releases which her clients have executed, for which the clients have received settlement monies, but for which no actual settlement has occurred. Lococo testified that in other instances, Ritchie apparently advised individuals that she would represent them in a particular matter but would not advise her of this fact. Lococo admits that she failed to oversee the management of her escrow account and failed to supervise Ritchie’s handling of client funds which could have prevented the illegal activity. She has since terminated Ritchie’s employment and has instituted certain corrective measures in the management of her practice.

The Trial Commissioner noted that even though lawyers may employ non-lawyers to assist in fulfilling their fiduciary duties with regards to client funds, lawyers must provide adequate training and oversight to ensure that employees act in full compliance with the ethical and legal obligations required when dealing with said funds. See SCR 3.130(5.1). Although the Trial Commissioner found that Lococo’s conduct does not give rise to the level of knowing misappropriation, she determined that probable cause existed to believe that Lo-coco was grossly negligent in her perpetuation of an inadequate accounting system that led to negative balances in her escrow account and other bank accounts. Thus, given the nature and number of incidents involved, the trial commissioner concluded that probable cause exists to believe that Lococo has misappropriated funds held for others to her own use, or has otherwise improperly dealt with funds held for others within the meaning and contemplation of SCR S.166(1)(A).

Moreover, given the nature and number of incidents in which clients suffered actual losses, the trial commissioner determined that probable cause exists to believe that Lococo’s conduct poses a substantial threat of harm to her clients and the public at large within the meaning and contemplation of SCR 3.165(1)(B). Noting that Lo-coco had not retained an accountant to reconcile her bank accounts, the trial commissioner also concluded that probable cause exists to believe that it is necessary to appoint a trustee to assume immediate control over'Lococo’s bank accounts, and to enjoin the bank from making any payment from respondent’s accounts except as authorized by the trustee, pursuant to SCR 3.165(2).

Finally, the Trial Commissioner found that there was absolutely no evidence presented that Lococo participated in or had prior knowledge of the fabrication of the forged documents. Thus, she concludes that probable cause does not exist to believe that Lococo’s use and reliance on the forged documents poses a substantial threat of harm to her clients and the public.

We agree with the findings of the Trial Commissioner and, therefore, ORDER:

1) that Alecia Lococo of Hazard, Kentucky is temporarily suspended from the practice of law in this Commonwealth, effective immediately upon entry of this order and until superseded by subsequent order.

2) Disciplinary proceedings against Lo-coco shall be acted upon by the Inquiry Commission pursuant to SCR 3.160.

3) Pursuant to SCR 3.165, Lococo shall, within twenty days from the date of the entry of this order, notify all clients in writing of her inability to continue to represent them and shall furnish copies of all such letters of notice to the Director of the Kentucky Bar Association. Further, Lo-coco shall immediately, to the extent possible, cancel and cease any advertising activities in which she is engaged. Failure to comply with this rule shall subject Lococo to a charge of contempt of court.

4) This order shall be served upon any and all banks maintaining any account upon which Lococo may make withdrawals. Pursuant to SCR 3.165(2), this order shall serve as an injunction to prevent said bank(s) from making further payment from such accounts except in accordance with this order or future orders issued by this Court.

5) Any fees tendered Lococo after the entry of this order shall be deposited in a trust fund from which withdrawals may be made only in accordance with the terms of this or future orders issued by this Court.

6) Honorable William G. Francis, Post Office Box 268, Prestonsburg, KY 41653, is hereby appointed trustee and shall be the sole person authorized to make withdrawals from the bank(s) referred to in this order. The trustee is hereby granted the full power to act in accordance with SCR 3.165(2). The Court may require the trustee to render an accounting of said funds to the court and to furnish a copy of the accounting to the Director. The trustee shall receive reasonable compensation for his or her services.

7) Each person or entity upon whom this order is served shall fully comply with the provisions of SCR 3.165(2), a copy of which shall be affixed to this order;

8) Lococo shall cooperate with the trustee to the extent necessary to fulfill the purpose of this order.

9) Lococo shall be responsible for all costs arising out of this proceeding.

All concur.

ENTERED: February 24, 2000.

/s/ Joseph E. Lambert Chief Justice