Rosa Ena Cantu v. Southern Insurance Company

ACCEPTED

03-14-00533-CV

3865258

THIRD COURT OF APPEALS

AUSTIN, TEXAS

1/22/2015 3:02:40 PM

JEFFREY D. KYLE

CLERK

CASE NO. 03-14-00533-CV

IN THE THIRD COURT OF APPEALS FILED IN

AUSTIN, TEXAS 3rd COURT OF APPEALS

AUSTIN, TEXAS

1/22/2015 3:02:40 PM

JEFFREY D. KYLE

ROSA ENA CANTU, Appellant Clerk

V.

SOUTHERN INSURANCE COMPANY, Appellee

On appeal from the 335th Judicial District Court of

Bastrop County, Texas

Trial Court Cause Number 29,079

APPELLEE’S BRIEF

__________________________________________________________________

Catherine L. Hanna

State Bar No. 08918280

Email: channa@hannaplaut.com

Eric S. Peabody

State Bar No. 00789539

Email: epeabody@hannaplaut.com

Laura D. Tubbs

State Bar No. 24052792

Email: ltubbs@hannaplaut.com

HANNA & PLAUT, L.L.P.

211 E. Seventh Street, Suite 600

Austin, Texas 78701

Telephone: (512) 472-7700

Facsimile: (512) 472-0205

Counsel for Appellee

Oral Argument Requested

TABLE OF CONTENTS

TABLE OF CONTENTS .......................................................................................... ii

TABLE OF AUTHORITIES ................................................................................... iv

STATEMENT OF THE CASE..................................................................................1

STATEMENT REGARDING ORAL ARGUMENT ...............................................2

ISSUES PRESENTED...............................................................................................2

After Cantu sued Southern following the 2011 Bastrop wildfires

for allegedly inadequate payment on her claim, the court ordered

the parties to appraisal. Despite participating in the appraisal

process, Cantu was dissatisfied with the award and nonsuited after

Southern paid the award and moved for summary judgment. In

Southern’s subsequent declaratory action, Cantu challenged the

appraisal award based on the original court’s replacement of the

first appraisal umpire.

1. Cantu did not seek appellate review of the original trial

court’s replacement of the appraisal umpire and cannot

collaterally attack that court’s orders in a court of concurrent

jurisdiction.

2. The appraisal award signed by the umpire and Southern’s

appraiser was valid, binding, and in substantial compliance

with the policy.

3. Cantu did not assert any extra-contractual claims regarding

Southern’s pre- or post-appraisal conduct and is not entitled

to an advisory opinion on the effect of the appraisal award on

hypothetical claims that are now barred.

STATEMENT OF FACTS ........................................................................................3

SUMMARY OF THE ARGUMENT ........................................................................6

ii

ARGUMENT AND AUTHORITIES ........................................................................6

A. Cantu cannot collaterally attack a different trial court’s

appraisal orders in this suit.......................................................................... 6

B. The appraisal award was valid and binding. ........................................... 9

C. Cantu cannot complain about the effect of the trial court’s

declarations on extra-contractual causes of action she did not

assert. .............................................................................................................. 11

CONCLUSION AND PRAYER .............................................................................12

CERTIFICATE OF SERVICE ................................................................................14

CERTIFICATE OF COMPLIANCE .......................................................................15

APPENDIX ..............................................................................................................16

iii

TABLE OF AUTHORITIES

Cases Page

Barnes v. Western Alliance Ins. Co.,

844 S.W.2d 264 (Tex. App.–Fort Worth 1992, writ dism'd by agr.) ...................11

Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds London,

459 Fed. Appx. 366 (5th Cir. 2012) ......................................................................12

Franco v. Slavonic Mut. Fire Ins. Ass’n,

154 S.W.3d 777 (Tex. App.–Houston [14th Dist] 2004, no pet.) .........................11

Harris County Appraisal Dist. v. Bradford Realty, Ltd.,

919 S.W.2d 131 (Tex. App.–Houston [14th Dist.] 1994, no writ) ..........................9

In re Barrentine,

2013 WL 6466574 (Tex. App.–Austin Nov. 27, 2013, orig. proceeding) .............8

Michels v. Safeco Ins. Co.,

544 Fed. Appx. 535 (5th Cir. 2013) ......................................................................10

Providence Lloyds Ins. Co. v. Crystal City Independent Sch. Dist.,

877 S.W.2d 872 (Tex. App.–San Antonio 1994, no writ)....................................10

Richardson v. Allstate Texas Lloyds,

2007 WL 1990387 (Tex. App.–Dallas July 11, 2007, no pet.) ....................... 10, 11

Safeco Lloyds Ins. Co. v. Barrentine,

2014 WL 7399307 (Tex. App.– Dallas Dec. 17, 2014, n.p.h.) ..............................7

TMM Investments, Ltd. v. Ohio Cas. Ins. Co.,

730 F.3d 466 (5th Cir. 2013) .................................................................................10

Wells v. American States Preferred Ins. Co.,

919 S.W.2d 679 (Tex. App.–Dallas 1996, writ denied) .........................................9

Wentworth v. Medellin,

529 S.W.2d 125 (Tex. Civ. App.–San Antonio 1975, no writ) ..............................9

iv

Statutes

TEX. INS. CODE § 541.061 .........................................................................................5

TEX. INS. CODE § 542.060..........................................................................................5

Rules

TEX. R. APP. P. 38.2 ...................................................................................................1

v

To the Honorable Court of Appeals:

Appellee Southern Insurance Company submits this brief in response to the

brief of Appellant Rosa Ena Cantu1 pursuant to Rule 38.2 of the Texas Rules of

Appellate Procedure. Southern agrees with Cantu’s list of parties and counsel, but

presents its own statement of the case, statement of the issues presented, and

statement of facts.

Statement of the Case

The lawsuit giving rise to this appeal involves Cantu’s claims under her

Southern homeowners’ insurance policy for damage resulting from the 2011

Bastrop County wildfires.2 Cantu filed suit in Bastrop district court,3 and the court

ordered the parties to appraisal. After paying the appraisal award, Southern moved

for summary judgment.4 Cantu nonsuited this Original Bastrop Suit.5 Southern

filed the declaratory action underlying this appeal, Cause Number 29,079, in the

335th Judicial District Court of Bastrop County (“Bastrop Dec Action”), the

Honorable Reva Towslee Corbett, presiding, to determine its contractual and

1

Cantu’s first name is identified in the record as both “Rose” and “Rosa.” Southern uses “Rosa”

as directed in the Court’s letter of August 27, 2014.

2

R. 5-7. The record for this appeal consists solely of an original clerk’s record [R.].

3

Cause No. 28,370; Rose Ena Cantu v. Southern Insurance Co., et al., in the 21st Judicial

District Court, Bastrop County, Texas (“Original Bastrop Suit”); R. 255-64.

4

R. 275-87.

5

R. 288.

Appellee’s Brief Page 1

statutory duties in light of its payment of the appraisal award.6 On July 23, 2014,

Judge Corbett granted Southern’s motion for summary judgment, declaring that:

(1) the award signed by Southern’s appraiser and the umpire was valid and

binding; (2) Southern’s payment of the appraisal award fulfilled Southern’s duties

under Cantu’s insurance policy; and (3) Southern’s liability was not reasonably

clear until the appraisal award was issued.7 Cantu filed her notice of appeal on

August 22, 2014.8

Statement Regarding Oral Argument

Although Southern believes that oral argument is unnecessary to resolve the

issues in this appeal, Southern reserves its right to appear.

Issues Presented

After Cantu sued Southern following the 2011 Bastrop wildfires for

allegedly inadequate payment on her claim, the court ordered the

parties to appraisal. Despite participating in the appraisal process,

Cantu was dissatisfied with the award and nonsuited after Southern

paid the award and moved for summary judgment. In Southern’s

subsequent declaratory action, Cantu challenged the appraisal award

based on the original court’s replacement of the first appraisal umpire.

1. Cantu did not seek appellate review of the original trial court’s

replacement of the appraisal umpire and cannot collaterally attack

that court’s orders in a court of concurrent jurisdiction.

6

R. 6-10.

7

R. 532-33.

8

R. 534-35.

Appellee’s Brief Page 2

2. The appraisal award signed by the umpire and Southern’s appraiser

was valid, binding, and in substantial compliance with the policy.

3. Cantu did not assert any extra-contractual claims regarding

Southern’s pre- or post-appraisal conduct and is not entitled to an

advisory opinion on the effect of the appraisal award on

hypothetical claims that are now barred.

Statement of Facts

Cantu owns a property in Paige, Texas, which Southern insured for the

period August 14, 2011 to August 14, 2012.9 Cantu reported her fire claim on or

about September 4, 2011.10 Southern hired an independent adjuster, Steven

Dollery, to inspect the loss and issued payment to Cantu for damage to the

contents, dwelling, and other structures.11

Cantu was dissatisfied with Southern’s adjustment of her claim and hired

counsel and a public adjuster, Stephen Hadhazi.12 Southern contacted Dollery and

instructed him to attempt to reach an agreement with Hadhazi on the amount of

loss.13 Dollery and Hadhazi briefly discussed the differences in their estimates by

telephone, but Hadhazi failed to reply to Dollery’s further communications.14

9

R. 7.

10

R. 158-59.

11

Id.

12

R. 159, 201-22.

13

R. 159.

14

R. 159, 223.

Appellee’s Brief Page 3

Cantu filed the Original Bastrop Suit in January 2012, and Southern

answered, reserving its right to invoke appraisal.15 In September 2012, the 21st

District Court ordered the parties to appraisal and appointed Claude Ducloux as

umpire.16 On January 16, 2013, the court, after learning of inappropriate

communications between Cantu’s counsel and the umpire, dismissed Ducloux and

appointed the Hon. Don Wittig as umpire.17 Cantu continued to participate in the

appraisal and did not ask the 21st District Court to reconsider its appointment of

Judge Wittig or seek mandamus review of this order. In April 2013, Judge Wittig

and Southern’s appraiser signed an appraisal award.18 After Cantu’s counsel failed

to respond to multiple requests for drafting instructions, Southern tendered a check

for the full replacement cost value of the appraisal award less the deductible and

prior payments.19

Following its payment of the appraisal award, Southern filed a motion for

summary judgment, arguing that the payment of the award satisfied Southern’s

obligations under the policy and negated the only bases for Cantu’s extra-

contractual causes of action.20 Shortly before her response was due, Cantu

15

R. 255-68.

16

R. 459.

17

R. 273.

18

R. 227.

19

R. 228-36.

20

R. 275-87.

Appellee’s Brief Page 4

nonsuited the Original Bastrop Suit.21 Cantu did not cash the award check because

she disputed the validity and binding effect of the appraisal award.22

Two days after Cantu’s nonsuit, Southern filed the Bastrop Dec Action,

requesting that the Court declare that:

(1) The appraisal award signed by Southern’s appraiser and the umpire

is valid and binding on the parties with regard to the amount of

Cantu’s loss;

(2) Southern’s payment of the appraisal award fulfills its obligations

under the insurance policy with regard to Cantu’s claim; and

(3) Southern’s liability to pay Cantu’s claim was not reasonably clear

until the appraisal award was issued and Southern’s payment was

therefore prompt for purposes of Texas Insurance Code sections

541.061 and 542.060 and tie-in provisions of the DTPA.23

After Southern filed the Bastrop Dec Action, Cantu filed suit in Dallas County,

alleging the same claims and causes of action she had raised in the Original

Bastrop Suit and disputing the validity of the appraisal award.24 The Dallas court

abated Cantu’s suit against Southern in favor of the Bastrop court’s dominant

jurisdiction over the parties and subject matter.25 Despite the dominant jurisdiction

of the Bastrop court, Cantu did not assert any counterclaims in the Bastrop Dec

21

R. 288.

22

R. 295.

23

R. 6-10.

24

R. 290-315.

25

R. 316-17.

Appellee’s Brief Page 5

Action.26 The Bastrop court rendered summary judgment in favor of Southern, and

this appeal ensued.27

Summary of the Argument

Appraisal awards are presumptively valid and binding. Cantu did not plead

or adduce evidence of any basis to set aside the appraisal award. She could not

collaterally attack in this suit the former trial court’s decision to appoint a new

umpire after the appraisal was complete and she had nonsuited her claims.

Because Southern promptly paid the appraisal award in full, the trial court

correctly ruled that Southern satisfied its contractual and statutory obligations with

respect to her loss. Cantu is not entitled to an advisory opinion on the effect of an

appraisal award on causes of action she never raised.

Argument and Authorities

A. Cantu cannot collaterally attack a different trial court’s appraisal

orders in this suit.

Cantu’s primary argument is that the court in which she originally filed suit

– the Bastrop 21st District Court – had no authority to replace an appraisal umpire

after finding Cantu’s counsel had inappropriate communications with that

umpire.28 In this case, Cantu complains that the 335th District Court should have

26

R. 17-22.

27

R. 532-33.

28

Cantu’s assertion that she was denied “due process” in the appointment of a new umpire is

groundless. See Appt. Br. at 13. Judge Campbell appointed Judge Wittig as the replacement

Appellee’s Brief Page 6

invalidated the appraisal award based on the 21 st District Court’s alleged lack of

jurisdiction to replace the umpire. A district court does not have the authority to

review or invalidate the orders of a court of concurrent jurisdiction.

The Dallas Court of Appeals recently rejected the same argument by Cantu’s

counsel.29 In Barrentine, the 423rd District Court of Bastrop County disqualified

umpire Ducloux for the same inappropriate contact by plaintiff’s counsel and

appointed Judge Wittig as a replacement.30 The homeowners in Barrentine

nonsuited, refiled in Dallas County, and sought a temporary injunction to prevent

the appraisal ordered by the Bastrop court from proceeding.31 On appeal, the

Dallas Court of Appeals dissolved the temporary injunction, holding that the

injunction ignored and unwound the orders of the Bastrop court, which “‘allow[ed]

the Barrentines to collaterally attack those orders in a court of concurrent

jurisdiction.’”32 The Barrentines also sought a writ of mandamus in this Court,

umpire at a hearing on Southern’s motion to compel completion of the appraisal process, which

counsel for Cantu attended. A copy of the trial court’s order setting the hearing in which Judge

Campbell removed umpire Ducloux and appointed umpire Wittig is attached at Appendix A.

Contrary to Cantu’s assertion, the record in Cause No. 28,370 shows that Judge Campbell

explicitly removed umpire Ducloux when he appointed Judge Wittig as umpire and then set the

appraisal deadlines. See Order of January 28, 2013, attached at Appendix B. Southern agrees

with Cantu that the Court should take judicial notice of these and other documents from Cause

No. 28,370. See Appt. Br. at 14.

29

Safeco Lloyds Ins. Co. v. Barrentine, No. 05-13-01011-CV, 2014 WL 7399307 (Tex. App.–

Dallas Dec. 17, 2014, n.p.h.).

30

Id. at *1; R. 493-500.

31

Barrentine, 2014 WL 7399307 at *1.

32

Id.

Appellee’s Brief Page 7

arguing that the Bastrop trial court abused its discretion by appointing Judge Wittig

as replacement umpire. This Court summarily denied the petition and the

Barrentines’ motion for rehearing.33

After Judge Campbell replaced the umpire in the Original Bastrop Suit,

Cantu did not ask for reconsideration of this decision or file a petition for writ of

mandamus.34 Instead, Cantu participated in the appraisal process and nonsuited

when she was dissatisfied with the appraisal award. She then asked the trial court

in this case to rule on its sister court’s authority to replace the umpire. Judge

Corbett had neither the obligation nor the authority to sit in appellate review of

Judge Campbell’s appraisal orders.35

Even if the 335th District Court could have reviewed the 21st District Court’s

order to replace the umpire, the 335th District Court did not err in confirming

validity of the appraisal. Nothing in the insurance policy or Texas law limited the

21st District Court’s authority to appoint, remove, or replace the appraisal umpire.

Although appraisal is intended to take place before suit is filed, Cantu filed suit in

the 21st District Court, which gave the court jurisdiction over all matters

appurtenant to that suit, including the appraisal. Cantu has cited no authority

33

See R. 501-31; In re Barrentine, No. 03-13-00752-CV, 2013 WL 6466574 (Tex. App.–Austin

Nov. 27, 2013, orig. proceeding).

34

See Docket Sheet for Cause No. 28,370, attached hereto as Appendix C.

35

Because Cantu is actually attacking the actions of the 21st District Court in replacing the

umpire, she confuses the suit on appeal. See Appt. Br. at 14 (“Entry of the order appointing a

second Umpire was reversible error and an abuse of discretion by the District Court.”).

Appellee’s Brief Page 8

limiting that jurisdiction or discretion, and this Court already rejected the same

argument by Cantu’s counsel when it denied the petition for writ of mandamus in

Barrentine.

B. The appraisal award was valid and binding.

Cantu further argues that appraisal award was not in compliance with the

policy because it was not “itemized.”36 An appraisal award is binding and

enforceable if it is in “substantial compliance” with the policy.37 “Substantial

compliance” means fulfillment of the essential requirements of a contract or a

statute.38 The Southern policy does not require a particular form for the appraisal

award; appraisers and umpires use different templates for their awards. The award

in this case itemizes the amount of loss for all coverages provided under the

policy.39 The award is in writing and includes the actual cash value, depreciation,

and replacement cost of the damage to Cantu’s property caused by the fires. The

36

Appt. Br. at 14-16.

37

See Wells v. American States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex. App.–Dallas

1996, writ denied) (“Texas courts recognize three situations in which an appraisal award may be

disregarded: (1) when the award was made without authority; (2) when the award was the result

of fraud, accident, or mistake; or (3) when the award was not made in substantial compliance

with the terms of the contract.”). As discussed supra, Cantu’s argument that umpire Wittig was

without authority to act is really an attack on Judge Campbell’s authority to appoint him. Cantu

does not argue that the award was the result of fraud, accident, or mistake.

38

Wentworth v. Medellin, 529 S.W.2d 125, 128 (Tex. Civ. App.–San Antonio 1975, no writ); see

also Harris County Appraisal Dist. v. Bradford Realty, Ltd., 919 S.W.2d 131, 135 (Tex. App.–

Houston [14th Dist.] 1994, no writ).

39

R. 227.

Appellee’s Brief Page 9

award was signed by Southern’s appraiser and the duly-appointed umpire, Judge

Wittig.40

Cantu’s counsel has raised and had the same arguments rejected in another

Bastrop wildfire case.41 In response to the carrier’s motion for summary judgment

in Michels, plaintiffs argued that the form of the award was not in substantial

compliance with the policy because it was not itemized and provided only the

replacement cost and actual cash value of the loss.42 The district court disagreed

and denied the Michelses’ motion to set aside the award.43 The appellate court

affirmed, holding that the lump sum award substantially complied with the policy’s

requirements.44

Cantu’s reliance on Richardson v. Allstate Texas Lloyds,45 is misplaced. In

Richardson, the court held that the entire appraisal process was not in substantial

compliance with the policy because: (1) the appraisers did not prepare an itemized

list of damages; (2) the appraisers did not meet to discuss their estimates; (3) the

appraisers did not submit to the umpire the items upon which they did not agree;

40

Id.

41

See Michels v. Safeco Ins. Co., 544 Fed. Appx. 535 (5th Cir. 2013).

42

Id. at 542.

43

Id. at 537.

44

Id. at 542; see also TMM Investments, Ltd. v. Ohio Cas. Ins. Co., 730 F.3d 466, 472 (5th Cir.

2013) (“minor mistakes that do not taint the entire award should not frustrate the parties’ intent

to be bound by the appraisal provision of their contract”); Providence Lloyds Ins. Co. v. Crystal

City Independent Sch. Dist., 877 S.W.2d 872, 875-78 (Tex. App.–San Antonio 1994, no writ).

45

No. 05-06-00100-CV, 2007 WL 1990387 (Tex. App.–Dallas July 11, 2007, no pet.).

Appellee’s Brief Page 10

(4) the umpire did not discuss the award with both appraisers before it was entered;

and (5) the award was a lump-sum amount written next to the phrase “to be

determined by hygienist.”46 The lack of an itemized decision was just one part of

the wholly flawed process that was not in substantial compliance with the policy. 47

Appraisal awards “are binding and enforceable, and every reasonable

presumption will be indulged to sustain an appraisal award.”48 Because every

reasonable presumption is indulged in favor of the award, the burden of proof is on

the party seeking to avoid the award.49 Cantu did not request clarification of the

award and did not adduce any evidence that the appraisal process or award in this

case was not in substantial compliance with the policy.

C. Cantu cannot complain about the effect of the trial court’s declarations

on extra-contractual causes of action she did not assert.

Cantu’s final argument is that the trial court erred in holding that Southern’s

payment of the appraisal award foreclosed her bad-faith claims.50 This misstates

the trial court’s judgment. The trial court declared that Southern’s liability under

the policy was not reasonably clear until the appraisal award was issued and that

Southern’s timely payment of the award therefore satisfied the prompt-payment

46

Id. at *2-3.

47

See id. at *4.

48

Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777, 786 (Tex. App.–Houston [14th Dist]

2004, no pet.).

49

Id. (citing Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264, 267 (Tex. App.–Fort Worth

1992, writ dism'd by agr.)).

50

Appt. Br. at 16-19.

Appellee’s Brief Page 11

requirements of the Texas Insurance Code and tie-in provisions of the DTPA –

established holdings under Texas law.51 The court did not opine on Southern’s

“pre-appraisal conduct” or alleged “extreme acts” in processing Cantu’s claims

because Cantu did not assert any counterclaims for this extra-contractual liability.

Cantu did not assert any counterclaims at all. Her pleadings consisted solely of an

answer with affirmative defenses to the validity of the appraisal award, a plea to

the jurisdiction, and a motion to transfer venue to Dallas based on convenience.52

Even if Cantu had bad-faith claims that were not extinguished by Southern’s

payment of the appraisal award, she did not raise them, providing no impediment

to the trial court’s final summary judgment and preserving nothing for this Court to

review. Cantu is not entitled to an advisory opinion on the effect of an appraisal

award on theoretical bad-faith claims.

Conclusion and Prayer

Rather than challenge the appraisal process and award in the Original

Bastrop Suit through proper appellate channels, Cantu abandoned her claims and

sought a different district court to review the first court’s appraisal orders. The

trial court properly rejected this collateral attack. Cantu also failed to assert the

51

R. 532; see Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds London, 459 Fed.

Appx. 366, 367 (5th Cir. 2012) (collecting and discussing cases).

52

R. 17-22.

Appellee’s Brief Page 12

extra-contractual claims she contends are affected by the trial court’s declarations,

which leaves nothing for this Court to review.

WHEREFORE, PREMISES CONSIDERED, Appellee Southern Insurance

Company respectfully requests that the Court affirm the trial court’s judgment and

grant Appellee such other relief to which it may be justly entitled.

Respectfully submitted,

HANNA & PLAUT, L.L.P.

211 E. Seventh Street, Suite 600

Austin, Texas 78701

Telephone: (512) 472-7700

Facsimile: (512) 472-0205

By: /s/ Eric S. Peabody

Catherine L. Hanna

State Bar No. 08918280

Email: channa@hannaplaut.com

Eric S. Peabody

State Bar No. 00789539

Email: epeabody@hannaplaut.com

Laura D. Tubbs

State Bar No. 24052792

Email: ltubbs@hannaplaut.com

ATTORNEYS FOR APPELLEE

SOUTHERN INSURANCE COMPANY

Appellee’s Brief Page 13

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing Appellant’s

Brief has been forwarded by e-service and/or facsimile on the 22nd day of January,

2015 to:

Via Facsimile: (713) 583-8989

Email: rraytex@aol.com

Robert E. Ray

1177 West Loop South, Suite 1180

Houston, Texas 77027

Via Facsimile: (713) 467-8883

Email: houstonlaw2@aol.com

Robert L. Collins

M. Chad Gerke

Audrey E. Guthrie

P.O. Box 7726

Houston, Texas 77270-7726

Via Facsimile: (713) 467-8883

Email: lewis@texlaw.info

Christopher D. Lewis

1721 West T.C. Jester Blvd.

Houston, Texas 77008

Attorneys for Appellant

/s/ Eric S. Peabody

Eric S. Peabody

Appellee’s Brief Page 14

CERTIFICATE OF COMPLIANCE

I certify that this document was produced on a computer using Microsoft

Word 2010 and contains 3,757 words, as determined by the computer software’s

word-count function, excluding the sections of the document listed in Texas Rule

of Appellate Procedure 9.4(i)(1).

/s/ Eric S. Peabody

Eric S. Peabody

Catherine L. Hanna

Laura D. Tubbs

Attorneys for Appellee Southern Insurance Company

Dated: January 22, 2015

Appellee’s Brief Page 15

APPENDIX

Tab A Cause No. 28,370: Order setting hearing on Motion to Compel

Completion of Appraisal

Tab B Cause No. 28,370: Order Granting Motion to Compel Completion of

Appraisal

Tab C Cause No. 28,370: Docket Sheet

Appellee’s Brief Page 16

Tab A

Dec. 13. 2012 8:31AM No. 2167 P. 1/3

211` and 335th JUDICIAL DISTRICT COtrRTS

BASTROP, BURLESON, LEE AND WASHINGTON COUNTIES

TERRY FLENNIKEN, JUDGE DEBORAH SHIROCKY REVAL. TOWSLEE connErr, JUDGE

21' Judicial District Court Court Coordinator 3354' Judicial District Court

100 East Main Street, Suite 305 804 Pecan Street 100 W. Buck Street, Suitt 307

Brenhern, Texas 77833 Bastrop, Texas 78602 Caldwell, Texas 77836

(979) 277-6200 phew, (512) 581.4037 (979) 567-2335

Fax (512) 5814038

E-mail deborah.shirocky©co.bastronticms CAROLER MURRAY

JAN LYNN

Of ficial Reporter Official Reporter

(979) 542-2947 (512) 581-4236

NOTICE OF HEARING

DATE: December 11, 2012

TO: Mr. Robert L. Collins, Attorney at Law, 713-467-8883

Mr. Daniel Kistler, Attorney at Law, 866-352-5124

Mr. Eric S. Peabody, Attorney at Law, 512-472-0205

Ms. Laura D. Tubbs, Attorney at Law, 512-472-0205

Ms. Sarah Loucks, District Clerk, Hand Delivered

FROM: Deborah Shirocky, Civil Court Coordinator

RE: Cause No. 28,370; ROSE ENA CANTU vs. SOUTHERN

XNSURANCE COMPANY and STEVE A. DOLLERY; In

the 21st Judicial District Court of Bastrop County, Texas

Greetings:

PLEAE BE ADVISED that the court received the Plaintiff's Motion for

Continuance of the Oral Hearing that was set on the docket for December

12, 2012. The court GRANTED that Motion and an Order is attached.

The court has rescheduled the above entitled and numbered case for

Wednesday, January 16, 2013 at 9:00 a,m. At that time the court will

address Southern Insurance Company's Motion To Compel Plaintiff To

Complete Appraisal and To Continue Trial Setting.

FILED8%5°AM

DATE 12-3- 1 2.

Sarah Loucks

Oistiot Merk, Bastrop County

Dec. 13. 2012 8:31AM No. 2167 P. 2/3

Page 2

December 11, 2012

Cause No. 28,370

This hearing will take place on the First Floor of the Bastrop County

Courthouse Annex, located at 804 Pecan in Bastrop, Texas. Please call the

Court Coordinator, Deborah Shirocky, the day before this scheduled

hearing to confirm the location!

The Honorable Carson Campbell will be the new judge presiding over the

entitled case. Please notify the court by phone and in writing at the above

referenced numbers if this case reaches a settlement prior to the setting so

that other matters may be scheduled.

Should you have any questions regarding the rescheduling of this hearing,

please do not hesitate to contact this office at the above referenced number.

Respectfully,

onAL

Deborah Shirocky

Civil Court Coordinator

Dec. 13. 2012 8 31AM No. 2167 P. 3/3

To lodosgai a of 7 .T.i1 0/M0i= 3:47..44 P.M =-W-r- I Etela455q DTA PrOrn: nob." rt Colt! no

CAUSE NO. 2S,370

ROSE ENA CANTU IN THE DISTRICT COURT OF

Faintiff,

VS. 218T JUDICIAL DISTRICT

SOUTHERN INSURANCE

COMPANY and STEVE A.

DOLLERY

Defendants. BASTROP COUNTY, TEXAS

ORDER GRANTING MOTION FOR CONTINUANCE OF ORAL IEEARING

On this day the Court considered the Motion for Continuance of Oral Hearing requesting

a continuance of the December 12, 2012oial hearing. After reviewing the Motion for

Continuance of Oral Hearing, the Court finds and concludes that the Motion should be

GRANTED.

IT IS THEREFORE ORDERED that this matter be reset, for hearing on the

day of , 2013 at * 0 0 lar,?"‘

SIGNED this id day of , 2012.

PILE

occrF. -.L.at,f1E(

. : .

tleCt

6eaq

Tab B

01/28/2013 15:56 9792776235 LYNN MITCHELL PAGE 02/02

Jan, 23. 2013 3:10PM Hanna & Haut, 1., F. No, 989/ P. 3

CAUSE NO. 28,370

ROSE ENA CANTU IN THE DISTRICT COURT

Plaintiff,

vs

BASTROP, TEXAS

SOUTHERN INSURANCE COIVCPANY §

And STEVE A DOLLERY

PARKER CLAIMS SERVICE 21ST JUDICIAL DISTRICT

ORDER GRANTING MOTION TO CCOMPEL COMPLETION OF APPRAISAL

CAME ON FOR CONSIDMATION the Motion to Compel. Completion of the Appraisal

in, the above-referenced action, The Court, having considered the motion, the Plaintiff's

response, and arguments of counsel, removed the previously appointed umpire, Mr, Claude

Nam, and appointed lien, ton Wittig as umpire of the appraisal on January 1.6, 2013

IT IS ORDERED that the following deadlines will govern the appraisal:

Jamlary 28, 2013 Appraisers shall confer regarding their estimates

January 29, 2013 Appraisers shall submit their differences to the umpire

February 8, 2013 Appraisal panel shall inspect the residence

February' 15, 2013 Appraisal panel shall meet to dimass estimates and award

February 22,2011 Appraisal shall be completed

SIGNED this, 2S%of J P•bk r 013.

or

01/28/2013 15:56 9792776235 LYNN MITCHELL PAGE 01/02

21' and 335th JUDICIAL DISTRICT COURTS

BASTROP, BURLESON, ACE, AND WASHINGTON COUNTIES

CARSON CAMPBELL, JUDGE REVA L. TOWSLEE CORBETT, JUIY

21" Judicial District Court LYNN MITCHELL 335th Judicial Diatriet Co , rt

100 East Main Street, Suite 305 Court Coordinator 100 W. Buck Street, Suite 4.1

Brenham, Texas 77833 100 E. Main Street, Suite 305 Caldwell, Texas 771.15

(979) 277-6200 Brenham, Texas 77833 (979) 567.2,13

(979) 277.6200, cxi, 156

JAN LYNN (979) 2776235 fax HOLLY SOIL V,

Official Reporter itma i l. ImitchollZwnwnty,com Official Repor I ;Tr

(979);542-2947

FACSIMI

DATE: January 28, 2013

TO: Eric Peabody, Attorney at Law FAX #: (512) 472-0205

Robert Collins, Attorney at Law (713) 467-8883

Daniel Kistler, Attorney at Law (866) 352-5124

FROM: Lynn Mitchell

RE: No. 28,370; Rose ,Ella Cantu v. Southern Insurance Company, et al.;

In the 21' Judicial District Court at Law of Bastrop County, Texas

PAGES: 2

MESSAGE:

Attached, please find the Order Granting Motion to Compel Completion of Appraisal on the abov

referenced case signed by Judge Campbell today.

cc: Ms. Deborah Shirocky,

Court Coordinator

Tab C

1/20/2015 co.bastrop.tx.us:8080/CaseDetail.aspx?CaselD=526080

Ski• to Main Content Lo•out M Account Search Menu New Civil Search Refine Search Back Location : All Courts Help

REGISTER OF ACTIONS

CASE No. 28,370

ROSE ENA CANTU vs.SOUTHERN INSURANCE COMPANY and STEVE § Case Type: Contract - Other

A. DOLLERY Date Filed: 01/11/2012

Location: 21st District Court

PARTY INFORMATION

Attorneys

Defendant DOLLERY, STEVE A.

Defendant SOUTHERN INSURANCE COMPANY ERIC S PEABODY

Retained

512-472-7700(W)

LAURA D TUBBS

Retained

512-472-7700(W)

Plaintiff CANTU, ROSE ENA ROBERT L. COLLINS

Retained

713-467-8884(W)

DANIEL KISTLER

Retained

713-855-0827(W)

EVENTS & ORDERS OF THE COURT

DISPOSITIONS

07/08/2013 Non Suit (Judicial Officer: Flenniken, Terry)

0 IDER EVENTS AND HEARINGS

01/11/2012 Original Petition (OCA)

01/11/2012 Case Information Sheet

01/11/2012 COVER LETTER

01/18/2012 Citation by Certified Mail

01/18/2012 Citation

DOLLERY, STEVE A. Returned Unserved 01/24/2012

Returned 01/24/2012

01/18/2012 Citation by Certified Mail

01/18/2012 Citation

SOUTHERN INSURANCE COMPANY Served 01/25/2012

01/25/2012 Green Card Received

02/10/2012 Answer

02/10/2012 COVER LETTER

04/09/2012 Notice

04/09/2012 Notice

04/19/2012 COVER LETTER

04/19/2012 Motion

05/07/2012 COVER LETTER

05/07/2012 Motion

05/09/2012 Notice

05/30/2012 Motion

06/05/2012 Notice of Hearing

06/05/2012 COVER LETTER

06/07/2012 COVER LETTER

06/07/2012 Motion

06/07/2012 Notice

06/13/2012 Hearing (9:00 AM) (Judicial Officer Flenniken, Terry)

06/18/2012 Order of Mediation

08/02/2012 Order

08/06/2012 Report of Mediation (ACTIVE)

08/07/2012 Notice of Hearing

08/07/2012 Notice of Hearing

09/04/2012 COVER LETTER

09/04/2012 Response

09/05/2012 STATUS HEARING (9:00 AM) (Judicial Officer Flenniken, Terry)

09/05/2012 Order

http://co.bastrop.bus:8080/CaseDetall.aspx?CaselD=526080 1/2

1/20/2015 co.bastrop.1x.us:8080/CaseDetail.aspx?CaselD=526080

09/06/2012 Notice of Hearing

11/30/2012 Motion

11/30/2012 COVER LETTER

12/05/2012 COVER LETTER

12/05/2012 Notice of Hearing

12/11/2012 COVER LETTER

12/11/2012 Motion

12/11/2012 Other/Misc

12/11/2012 Order

12/11/2012 Notice of Hearing

12/12/2012 CANCELED Hearing (9:00 AM) (Judicial Officer Flenniken, Terry)

Other

12/13/2012 COVER LETTER

12/13/2012 Motion

01/15/2013 COVER LETTER

01/15/2013 Response

01/16/2013 Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

01/16/2013 Order

01/23/2013 COVER LETTER

01/23/2013 Notice

01/29/2013 Order

01/30/2013 COVER LETTER

02/25/2013 Report

02/25/2013 COVER LETTER

02/26/2013 COVER LETTER

02/27/2013 Pre-Trial Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

02/27/2013 Agreed Order

03/07/2013 Notice

03/18/2013 CANCELED Jury Trial (9:00 AM) (Judicial Officer Campbell, Carson)

Per Judge

04/10/2013 STATUS HEARING (9:00 AM) (Judicial Officer Campbell, Carson)

05/01/2013 Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

06/10/2013 COVER LETTER

06/10/2013 Motion

06/18/2013 Notice of Hearing

06/18/2013 COVER LETTER

07/08/2013 Notice of Nonsuit

07/17/2013 CANCELED Summary Judgment Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

Case Disposed

09/18/2013 CANCELED Pre-Trial Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

Case Disposed

09/23/2013 CANCELED Jury Trial (9:00 AM) (Judicial Officer Campbell, Carson)

Case Disposed

10/31/2013 Motion

11/12/2013 COVER LETTER

11/12/2013 Response

11/12/2013 Notice of Hearing

12/04/2013 Motions Hearing (9:00 AM) (Judicial Officer Campbell, Carson)

FINANCIAL INFORMATION

Plaintiff CANTU, ROSE ENA

Total Financial Assessment 418.00

Total Payments and Credits 418.00

Balance Due as of 01/20/2015 0.00

01/17/2012 Transaction Assessment 252.00

01/18/2012 Transaction Assessment 166.00

01/18/2012 Payment Receipt # 2012-07272 COLLINS, ROBERT L. (418.00)

http://co.bastrop.bus:8080/CaseDetail.aspx7CaselD=526080 2./2

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

844 S.W.2d 264

Court of Appeals of Texas, OPINION

Fort Worth.

DAY, Justice.

W. Ray BARNES, Barnes Maintenance Co., Inc.,

W.R.B. Properties, and Softline Services, W. Ray Barnes, Barnes Maintenance Company, and

Intervenor, Appellants, W.R.B. Properties (Barnes) brought this action against

v. Western Alliance Insurance Company (Western) to

WESTERN ALLIANCE INSURANCE COMPANY, enforce an insurance appraisal award. Softline Services

Appellee. (Softline) intervened in the suit, asserting its right to 20%

of the gross damages Barnes recovered from Western,

No. 2–92–034–CV. | Dec. 16, 1992. | Rehearing pursuant to a contract between Barnes and Softline that

Denied Jan. 26, 1993. antedated this proceeding. Barnes claimed that the roofs

of two of his buildings were hail-damaged on March 1,

Insured brought action against insurer to enforce appraisal 1988. Barnes filed a claim for this alleged loss with

award and entity, which had contracted with insured to

Western. Barnes and Western could not agree on the

investigate and document insured’s claims and to receive

amount of the loss, so Barnes, through Softline, 1

20% of gross damages recovered from insurer,

demanded that an appraisal be made and an award given

intervened. The 89th District Court, Wichita County,

based on that appraisal, pursuant to *267 a provision in

Temple Driver, J., set aside appraisal award, rendered the insurance contract between Barnes and Western. The

judgment for insured for actual and treble damages,

insurance contract provided as follows:

attorney fees, and prejudgment and postjudgment interest,

and awarded entity 20% of insured’s actual damages and

prejudgment interest. Insured and entity appealed. The Appraisal. In case the insured and this Company shall

Court of Appeals, Day, J., held that: (1) evidence was fail to agree as to the actual cash value or the amount of

sufficient to support finding that appraisal award was loss, then, on the written demand of either, each shall

result of fraud, accident, or mistake; (2) jury question select a competent and disinterested appraiser and

asking whether appraisal award should be set aside notify the other of the appraiser selected within twenty

because of fraud, accident, or mistake was not days of such demand. The appraisers shall first select a

impermissibly multifarious; and (3) entity was entitled to competent and disinterested umpire; and failing for

20% of overall, total amount insured was awarded in fifteen days to agree upon such umpire, then, on

action. request of the insured or this Company, such umpire

shall be selected by a judge of a district court of a

Affirmed in part and reversed and rendered in part. judicial district where the loss occurred. The appraisers

shall then appraise the loss, stating separately actual

cash value and loss to each item; and, failing to agree,

Attorneys and Law Firms shall submit their differences only to the umpire. An

*266 Schell, Nicholas, Thompson, Beene & Vaughan, award in writing, so itemized, of any two when filed

L.L.P., and Russell W. Schell, Gregory Alan Scott, with this Company, shall determine the amount of

actual cash value and loss. Each appraiser shall be paid

Baltasar D. Cruz, Dallas, for appellants.

by the party selecting him and the expenses of appraisal

Pohl, Bennett & Mathews, and Michael A. Pohl, Daniel and umpire shall be paid by the parties equally.

L. Ellwood, James A. Dunn, Houston, for appellant

Softline Services. When Loss Payable. The amount of loss for which

this Company may be liable shall be payable sixty

Oldham & Barnard, and Charles M. Barnard, Charles W. days after proof of loss, as herein provided, is

Oldham, Wichita Falls, for appellee. received by this Company and ascertainment of the

loss is made either by agreement between the insured

Before MEYERS, DAY and CLYDE R. ASHWORTH and this Company expressed in writing or by the

(Retired, Sitting by Assignment), JJ. filing with this Company of an [appraisal] award as

herein provided.

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

Barnes appointed Gene E. Thayer, Sr. (Thayer) as his *268 Do you find from a preponderance of the

appraiser, and Western selected Dennis Olsovsky evidence that the [appraisal] award should be set aside

(Olsovsky). Thayer and Olsovsky were unable to agree on because of fraud, accident, or mistake?

an umpire, so Judge Brotherton, of the 30th District Court

of Wichita County, appointed Joseph E. Ashmore, Jr. Answer “Yes” or “No.”

(Ashmore) as umpire. Thayer and Olsovsky submitted

their differences as to the actual cash value of the loss in ANSWER: Yes

writing to Ashmore. Ashmore and Thayer signed an

appraisal award for $402,978.08 on June 6, 1990. Jury Instruction No. 14–A:

Olsovsky did not sign the award. Western failed to

You are instructed that “fraud” means:

challenge or pay the award sixty days after it was

rendered, whereupon Barnes instituted this suit. Softline (1) that a material representation was made; (2) that it

intervened in the suit on July 29, 1991. was false; (3) that when the speaker made it, he knew it

was false or made it recklessly without any knowledge

Following a trial on the merits, the jury found that Barnes of its truth and as a positive assertion; (4) that he made

had suffered hail damage in the amount of $67,834.89 and it with the intention that it should be acted upon by the

that the appraisal award should be set aside because of party; (5) that the party acted in reliance upon it; and

fraud, accident, or mistake. The jury also found that (6) that he thereby suffered injury.

Western had knowingly violated the Texas Insurance

Code and the Deceptive Trade Practices–Consumer Jury Instruction No. 14–B:

Protection Act.

You are instructed that “accident” means an

The trial court denied Barnes’ and Softline’s motions for unexpected, unforseen [sic] or undesigned happening

judgment non obstante veredicto to disregard the jury’s or consequence from either a known or unknown cause.

finding on the damages issue and rendered judgment for

Barnes for actual and treble damages, attorneys’ fees, and Jury Instruction No. 14–C:

pre- and postjudgment interest. The judgment also

provided for Softline to recover 20% of Barnes’ actual You are hereby instructed that “mistake” means a

damages and prejudgment interest. situation where the appraisers and umpire were

laboring under a mistake of fact by which their

We affirm in part and reverse and render in part. appraisal award was made to operate in a way they did

not intend, such that the award does not speak the

[1] [2] [3] intention of the appraisers and umpire, or where the

Texas courts have long held that appraisal awards

made pursuant to the provisions of an insurance contract error resulting in the award is so great as to be

are binding and enforceable. Standard Fire Ins. Co. v. indicative of gross partiality, undue influence, or

Fraiman, 514 S.W.2d 343, 344–45 (Tex.Civ.App.— corruption.

Houston [14th Dist.] 1974, no writ). Every reasonable

presumption will be indulged to sustain an appraisal Jury Question No. 10 asked:

award, and the burden of proof lies on the party seeking to

avoid the award. Continental Ins. Co. v. Guerson, 93 [F]rom a preponderance of the evidence[, w]hat sum of

S.W.2d 591, 594 (Tex.Civ.App.—San Antonio 1936, writ money, if paid now in cash, would fairly and

dism’d). An award entered by appraisers and an umpire reasonably compensate W. Ray Barnes for his

can be disregarded in only two instances: (1) if the award damages, if any, for the storm, hail, and resulting

damage to the insured buildings from the occurrence in

was made without authority; or (2) if the award was made

question?

as the result of fraud, accident, or mistake. See Fisch v.

Transcontinental Ins. Co., 356 S.W.2d 186, 190

....

(Tex.Civ.App.—Houston 1962, writ ref’d n.r.e.);

Guerson, 93 S.W.2d at 594. Answer in dollars and cents for damages, if any.

Western contended at trial that the appraisal award was ANSWER: $67,834.89

the result of fraud, accident, or mistake. The trial court

allowed Western to submit that issue to the jury in the Because the jury answered Question 14 in the affirmative,

form of Jury Question 14. the trial court based Barnes’ damages on the jury’s

answer to Question 10 rather than on the appraisal award.

Jury Question No. 14 asked:

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

....

[4] [5] [6] [7]

In their first two points of error, Barnes and

Softline each complain that the jury’s affirmative finding Q: And you know that you ordered a new roof on the

in response to Question 14 was supported by no evidence Winn’s portion before the hail?

or insufficient evidence.2 In point of error three, Barnes

contends that he was entitled to specific performance of A: Yes, sir.

the appraisal award as a matter of law, and Softline

asserts that the trial court should have based damages on Q: And although you told us in your prior testimony

the appraisal award as a matter of law, rather than on the that the entire roof was fine before the hail, you now

jury’s answer to Question 10. know that it was so bad that one section of it you had

completely ordered a re-roofing job?

[8] [9]

In determining a “no evidence” point, we are to

A: Yes, sir.

consider only the evidence and inferences that tend to

support the finding of the jury and disregard all evidence ....

and inferences to the contrary. See Sherman v. First Nat’l

Bank, 760 S.W.2d 240, 242 (Tex.1988) (per curiam); Q: So whatever work you were having done, not

Larson v. Cook Consultants, Inc., 690 S.W.2d 567, 568 only to that roof but to the inside of the Winn’s

(Tex.1985) (per curiam); In re King’s Estate, 150 Tex. building, obviously was not work caused by that

662, 244 S.W.2d 660, 661–62 (1951) (per curiam). If particular hail?

there is any evidence of probative force to support the

finding of the jury, the point must be overruled and the A: That’s true.

finding upheld. In re King’s Estate, 244 S.W.2d at 661–

62. ....

The record reveals numerous instances in which Barnes Q: Back in October of 1990. And you told the court

admitted in open court that he had previously lied about reporter that at that time you believe[d] the Winn’s

the hail damage *269 to the roof and about the repair roof damage was from the hail, and that’s a lie?

costs. Barnes testified at trial as follows:

A: That’s right.

Q: Now, in your deposition you told us that the work

that was done on Winn’s3 was done after the hail and ....

because of the hail and you had to get that roof because

of the hail; didn’t you? Q: And before the deposition she had you raise your

right hand and swear that everything you stated

before her was true and correct?

A: Yes, sir, I did.

A: That’s true.

Q: That’s not true; is it?

Q: Do you have anything in writing that you can

A: That is not true. show this jury that from March 1, 1988 up to

December 28th, 1990 that you ever told the

.... insurance company that you were not claiming

damage to the Winn’s portion of the roof?

Q: Have you ever at any point prior to the last five

minutes ever told the defendants in this case ... that A: No, sir.

you were no longer claiming that that was part of the Judge Ashmore, the umpire, testified as follows:

hail damage?

Q: ... If this roof [over Winn’s] was under repair at the

A: No, sir, I have not done that. time of the hail, that repair was finished after the hail

without any additional charges other than what was

.... already going to be charged, and it was a permanent

roof, and they gave a roofing guarantee, then you

Q: ... You never told the umpire or Thayer that that wouldn’t expect there to be any award if you had

new roof was not from the hail? known those facts, for that section of the roof that that

roofer had done the work on?

A: No, sir.

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

.... guaranteed its work and that Barnes had never asked

Armored to make good on its guarantee.

A: If I had had that information, I would have factored

it in. Unfortunately, I didn’t have that information. (3) Ashmore testified that he was shocked by

Olsovsky’s letter sent after the award was made

This testimony is some evidence from which the jury because of the difference between Ashmore’s and

could reasonably have concluded, based on the definition Olsovsky’s findings and because Olsovsky was so

given in Jury Instruction 14–A, that Barnes had upset about the award. Ashmore asked Judge

committed fraud, thus causing the appraisal award to be Brotherton what he should do about the situation.

based on fraud. This testimony also provides some Ashmore testified that Olsovsky’s letter did not contain

evidence from which the jury could have concluded that anything that would have made a difference in the

the appraisal award was the result of accident or mistake, award, but he also admitted that he got his figures

as those terms were defined in Jury Instructions 14–B and solely from Thayer.

14–C.

(4) Ashmore testified that he could not tell which part

Because we find some evidence that supports the jury’s of the Thaten property roof was over Winn’s store and

affirmative finding to Question 14, we overrule Barnes’ that he did not know whether the roof he had inspected

and Softline’s first points of error. was permanent or temporary or whether his appraisal

figures were for the whole roof, including the part that

[10]

We will now consider Barnes’ and Softline’s was roofed after the hail by Armored.

challenge to the factual sufficiency of the evidence.

(5) Ashmore admitted that he had received two

*270 [11] [12] [13] [14] An assertion that the evidence is different letters from Armored that predated the

“insufficient” to support a finding of fact can mean that appraisal award, showing that Armored had performed

the evidence supporting the finding is so weak or the two repair jobs on Winn’s store: one in process before

evidence to the contrary is so overwhelming that the and completed after the hail and one several months

finding should be set aside and a new trial ordered. Garza later. Ashmore further testified that he knew this

v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We are information when he made his appraisal award.

required to consider all of the evidence in the case in

making this determination. See id. Findings of fact are the (6) Ashmore testified that Olsovsky complained of the

exclusive province of the jury and/or the trial court. Winn’s roof being repaired before the appraisers and

Bellefonte Underwriters Ins. Co. v. Brown, 704 S.W.2d umpire could inspect it so that it was difficult to tell

742, 744–45 (Tex.1986). A court of appeals cannot make whether there had been hail damage to the roof in 1988.

findings of fact; it can only “unfind” facts. Id.

(7) Olsovsky’s estimate for roof repairs was $135.00

per square. Olsovsky provided Ashmore this

Based on our review of the entire record on this issue, we

information, substantiated by estimates from Lydick

find that there is sufficient evidence to support the jury’s

Roofing and Weatherford Roofing, at $142.00 per

affirmative answer to Question 14. In addition to Barnes’

square and $135.00 per square, respectively. Thayer’s

admissions that he had lied about the March 1988 hail

per-square estimate was $325.00, and Ashmore could

damage and correspondent repair costs, evidence was

provide no information from Thayer that backed this

presented of the following:

estimate. Ashmore testified that he had access to this

(1) When questioned about whether Winn’s store information and considered it in making his award, but

needed considerable work before the hail (inside and that he could not tell if it was for the same type of roof

out) and whether the price changed after the hail, as the roof for which he made the award. Ashmore

Barnes would not give a direct answer but could relied on Thayer’s figures when making the award

produce no evidence that his roofing contractor, because he thought they were correct.

Armored Roofing (Armored), changed its contract

price after the hail. Barnes’ testimony shows that he did not tell the truth

about the 1988 hail damage to the Thaten property.

(2) Armored completed its roofing job a few days after Barnes’ and Ashmore’s testimony reveals that there was a

the March 1988 hailstorm, and Barnes knew of no great deal of confusion about which part of the roof on the

damage to the roof after that time. Barnes refused to Thaten property was actually damaged during the 1988

assume that any leakage damage to the Winn’s store hailstorm, so *271 much so that the appraisers and umpire

was not from the hail but admitted that Armored had

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

could not tell which part needed to be replaced because of finding and as such would be improper.” Id., 596 S.W.2d

the storm. at 290.

[16]

This evidence is sufficient for the jury to have reasonably Both of these cases were decided before the 1988

concluded that the appraisal award was based on fraud. amendment to TEX.R.CIV.P. 277. Rule 277 provides, in

The jury could have found that: (1) Barnes made a pertinent part:

material representation as to which part of the roof was

actually damaged by the March 1988 hailstorm; (2) this In all jury cases the court shall,

representation was false; (3) Barnes knew it was false whenever feasible, submit the cause

when he made it; (4) Barnes intended that Western, upon broad-form questions. The

Thayer, Olsovsky, and Ashmore should act upon it; (5) court shall submit such instructions

Ashmore4 did act in reliance upon it pursuant to the and definitions as shall be proper to

insurance contract between Western and Barnes; and (6) enable the jury to render a verdict.

Western thereby suffered injury. Additionally, the

evidence of Barnes’ dishonesty and the resultant Id. (emphasis supplied). In Texas Dep’t of Human

confusion as to which portion of the roof actually required Resources v. E.B., 802 S.W.2d 647, 649 (Tex.1990), the

replacing was sufficient for the jury to have reasonably supreme court stated that “whenever feasible” means “in

concluded that the appraisal award was the result of any or every instance in which it is capable of being

accident or mistake, based on Jury Instructions 14–B and accomplished.” Thus, unless “extraordinary

14–C. circumstances” exist, a trial court must submit broad-form

questions. Id.

Because we find sufficient evidence from which the jury

could have concluded that the appraisal award was the The “controlling question” in E.B. was whether the

result of fraud, accident, or mistake, we overrule Barnes’ parent-child relationship between the mother and her

and Softline’s second points of error. In view of our children should be terminated, and not what specific

finding with respect to Barnes’ and Softline’s first and ground or grounds the jury relied on to affirmatively

second points of error, we deem it unnecessary to address answer the question posed. Id. The E.B. court also

their third points of error. rejected arguments that the jury was required to agree on

the specific grounds for termination. Rather, it was

[15]

By his fourth point of error, Barnes complains that enough that the jurors agreed that the mother had

Jury Question No. 14 was impermissibly multifarious endangered her children by doing one or more of the

because fraud, accident, and mistake are distinct things listed in the jury instruction. Id.

affirmative defenses that should have been submitted

separately to the jury. Barnes contends that the question *272 In the case before us, the controlling question was

was improper because there is no way of knowing which whether the appraisal award was the result of fraud,

of these defenses the jury intended from its affirmative accident, or mistake and not which of these specific

finding. grounds the jury relied upon to answer Question 14.

Under E.B., the jury was not required to agree on the

We have found that evidence sufficient to prove each of specific ground that resulted in the improper appraisal

these theories was presented to the jury at trial. award. See also TEX.R.CIV.P. 277 (court may submit a

Nonetheless, we must consider whether it is necessary question disjunctively when it is apparent from the

that we be able to determine which of the defenses the evidence that one or the other of the conditions or facts

jury intended from its affirmative finding. inquired about necessarily exists). Moreover, the trial

judge complied with Rule 277 by submitting the

Barnes primarily relies on European Import Co. v. Lone instructions necessary to enable the jury to render a

Star Co., 596 S.W.2d 287, 290 (Tex.Civ.App.—Houston verdict on the appraisal award issue.

[1st Dist.] 1980, writ ref’d n.r.e.) and Parker v. Keyser,

540 S.W.2d 827, 830–31 (Tex.Civ.App.—Corpus Christi Because we find that Jury Question 14 was proper in light

1976, no writ). The European court ruled that a special of the current version of Rule 277 and the supreme court’s

issue inquiring whether the execution of a guaranty interpretation of that rule, we overrule Barnes’ fourth

agreement was obtained by fraud or duress was point of error.

“multifarious and would cause the court to speculate

[17]

concerning what the jury intended from an affirmative In its fourth point of error, Softline complains the trial

court improperly limited Softline’s recovery to 20% of

Barnes’ actual damages and prejudgment interest because

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

the contract between Softline and Barnes and the jury’s Barnes does not assert that Softline was engaged in the

answer to Question 13 entitled Softline to 20% of Barnes’ unauthorized practice of law. He does not dispute the

gross recovery from Western. existence of the contract with Softline or any of its terms,

nor does he contend that the contract was unconscionable

Jury Question No. 13 asked: or the result of unequal bargaining power. Based on the

evidence presented at trial, the jury concluded that

Do you find from a preponderance of the evidence that Softline was entitled to recover 20% of the gross amount

Softline Services and Plaintiffs agreed that Softline was Barnes recovered from Western, pursuant to that contract.

to be paid by the Plaintiffs an amount equal to 20% of Aside from his mistaken reliance upon Jansen, Barnes has

the gross amount recovered prior to any alterations presented no evidence or authority on appeal, and we are

and/or depreciation with no limitations or restrictions aware of none, why he should not be required to abide by

on the method of recovery, or for time and expenses, the terms of his contract with *273 Softline. Thus,

whichever is greater, and directed all interested parties Barnes’ argument must fail.

to honor Softline Services’ interest and lien in the

agreement? [Emphasis supplied.] [18]

Words used in a contract are to be given their plain,

ordinary, and generally accepted meanings unless the

Answer “Yes” or “No.” instrument itself shows them to have been used in a

technical or different sense. Western Reserve Life Ins. Co.

ANSWER: Yes v. Meadows, 152 Tex. 559, 261 S.W.2d 554, 557 (1953),

cert. denied, 347 U.S. 928, 74 S.Ct. 531, 98 L.Ed. 1081

Similarly, the contract between Barnes and Softline

(1954). The term “gross” means “an overall total

provided that Barnes was to pay Softline “an amount

exclusive of deductions.” WEBSTER’S THIRD NEW

equal to 20% of the gross amount recovered prior to any

INTERNATIONAL DICTIONARY 1002 (1981). Thus,

deductions for deductibles and/or depreciation with no

the “gross amount” is the overall, total amount Barnes

limitations or restrictions on the method of recovery” for

was awarded. That amount includes: (1) actual damages

Softline’s services in collecting insurance proceeds for the

of $67,834.89, trebled to $203,504.67, (2) attorneys’ fees

hail-damaged roof from Western.

of $13,500.00, (3) prejudgment interest of $16,325.99,

and (4) postjudgment interest at 10% per annum from and

Relying on Unauthorized Practice of Law Committee v.

after the date of the judgment until fully paid.

Jansen, 816 S.W.2d 813, 814 (Tex.App.—Houston [14th

Accordingly, Softline is entitled to 20% of each of these

Dist.] 1991, writ denied), Barnes asserts that Softline is

amounts.

precluded from any recovery. In the judgment that formed

the basis of the Jansen appeal, the trial court permanently

We sustain Softline’s fourth point of error.

enjoined a public insurance adjusting firm (Jansen) from

asserting a contingent fee claim against a client who has [19]

In two cross-points Western complains that the trial

contracted with an attorney on a contingent fee basis in

court erred in awarding Barnes treble damages and

the same matter. Id. at 814. The trial court’s ruling on that

attorneys’ fees. Western directs us to TEX.BUS. &

issue was undisputed on appeal. Id. Without the benefit of

COM.CODE ANN. § 17.50(b) (Vernon Supp.1993),

knowledge of the facts in that case, we cannot determine

which provides that only consumers who prevail in a trial

whether Jansen was in the practice of contracting with his

on the merits are entitled to recover treble damages.

clients on a contingency fee basis before or after those

Western contends that Barnes did not prevail at trial

clients entered into contingency fee contracts with

because of the jury’s affirmative finding in response to

attorneys on the same matters.

Question 14. This argument is without merit.

In the case before us, however, Barnes contracted with

In his original petition Barnes sought to recover damages

Softline on February 8, 1989, over a year-and-a-half

from Western for breach of contract, insurance code

before Barnes filed suit against Western. We find it

violations, breach of duty of good faith and fair dealing,

inconceivable that the Jansen trial court intended to

DTPA violations, and negligence and gross negligence.

enable insureds to avoid contingency fee contracts already

The jury found that Western breached its duty of good

in existence with insurance adjustors by subsequently

faith, engaged in unfair or deceptive practices, in violation

contracting on a contingency fee basis with an attorney

of the Texas Insurance Code and the Texas Deceptive

about the same matter. Moreover, we are not bound by the

Trade Practices–Consumer Protection Act, and was

decisions of our sister appellate courts, much less those of

grossly negligent in its handling of Barnes’ claim. Thus,

the trial courts.

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6

Barnes v. Western Alliance Ins. Co., 844 S.W.2d 264 (1992)

Barnes prevailed on all of his causes of action. Moreover, 827 (Tex.App.—Austin 1990, writ denied);

Western does not dispute any of these findings. TEX.R.APP.P. 74(f).

The jury also found that Barnes had suffered damages in We overrule both of Western’s cross-points.

the amount of $67,834.89 as a result of the March 1988

hailstorm and that he was entitled to attorneys’ fees in the We affirm the trial court’s judgment, except as it relates

amount of $13,566.98. Barnes did not recover the amount to Softline’s fourth point of error. With respect to that

of damages requested in his petition, but many litigants do point, we reverse the trial court’s judgment and render

not recover the entire amount they seek at trial. judgment for Softline of 20% of Barnes’ gross damages

recovered, including actual and trebled damages, pre- and

Western’s complaint that the trial court improperly postjudgment interest, and attorneys’ fees.

awarded Barnes attorneys’ fees is without support in the

record or the case law. Accordingly, this point is waived The parties shall share equally the costs of this appeal.

on appeal. Lakeway Land Co. v. Kizer, 796 S.W.2d 820,

Footnotes

1 On February 8, 1989, Barnes and Softline entered into an agreement under which Softline agreed to investigate and document

Barnes’ claims for presentation to Western. A Softline representative initiated the appraisal process provided for in the

insurance contract between Barnes and Western.

2 Barnes contends that the jury’s factual finding was against the great weight and preponderance of the evidence. When a party

without the burden of proof on a special issue complains of the jury’s adverse fact finding, that party should phrase his point of

error as “insufficient evidence” to support the jury’s findings. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). Since

fraud, accident, and mistake are affirmative defenses, Western, and not Barnes, had the burden of proof on Jury Question 14.

The supreme court has adopted a liberal rule of reference to the construction of points of error contained in appellate briefs,

however, (see Pool v. Ford Motor Co., 715 S.W.2d 629, 630 (Tex.1986) (opinion on reh’g), O’Neil v. Mack Trucks, Inc., 542

S.W.2d 112, 114 (Tex.1976), and TEX.R.APP.P. 74(p)), and so we will construe an inappropriately phrased point of error as

raising a challenge to the factual sufficiency of the evidence. See Muhlbauer v. Muhlbauer, 686 S.W.2d 366, 368

(Tex.App.—Fort Worth 1985, no writ).

3 Barnes claimed that the March 1988 hailstorm damaged two of his properties: the Lamar property, where Barnes maintained

offices, and the Thaten property, which was a strip shopping center. Winn’s Variety Stores was one of two tenants located at the

Thaten property.

4 We cannot determine the basis of Thayer’s and Olsovsky’s award because their testimony is not before us.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7

Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...

Thomas Clark Wright, Wright & Close, L.L.P., Frank

459 Fed.Appx. 366

Anthony Piccolo, I, Esq., Preis & Roy, A.P.L.C., Henry

This case was not selected for publication in the

Sim Platts, Jr., Esq., Wright & Close, L.L.P., Houston,

Federal Reporter.

TX, for Defendant–Appellee.

Not for Publication in West’s Federal Reporter See

Fed. Rule of Appellate Procedure 32.1 generally Appeal from the United States District Court for the

governing citation of judicial decisions issued on or Southern District of Texas, 4:09–CV–3479.

after Jan. 1, 2007. See also Fifth Circuit Rules 28.7,

47.5.3, 47.5.4. (Find CTA5 Rule 28 and Find CTA5 Before KING, JOLLY, and GRAVES, Circuit Judges.

Rule 47)

United States Court of Appeals,

Fifth Circuit. *367 PER CURIAM:*

BLUM’S FURNITURE COMPANY, INC.,

Plaintiff–Appellant,

v.

CERTAIN UNDERWRITERS AT LLOYDS FACTS AND PROCEDURAL BACKGROUND

LONDON, Defendant–Appellee.

Certain Underwriters at Lloyds London (“Lloyds”) issued

No. 11–20221 | Summary Calendar. | Jan. 24, 2012. to Blum’s Furniture Company (“Blum’s”) an insurance

policy, number PUC 102524 (“policy”), covering its

business property. During Hurricane Ike in 2008, the

Synopsis insured’s building and contents (collectively “the

Background: Insured company brought Texas state-court property”) sustained extensive damage. On September 17,

action against insurer, alleging breach of contract, fraud, 2008, Blum’s submitted its claim under the policy to

conspiracy, and common-law and statutory bad faith Lloyds.

claims in relation to insurance claim, under business

property policy, stemming from hurricane damage. On September 26, 2008, T.M. Mayfield & Company, an

Insurer removed action and asserted defense of estoppel independent insurance claims adjuster hired by Lloyds,

based on ongoing appraisal procedure provided for by inspected the property. After conducting its inspection,

policy. The United States District Court for the Southern T.M. Mayfield & Co. forwarded to Lloyds a detailed

District of Texas, Nancy F. Atlas, J., 2011 WL 819491, report containing an estimate for payment of Blum’s

granted insurer’s summary judgment motion. Company claim. On October 28, 2008, Lloyds requested a proof of

appealed. loss in exchange for payment of $50,000.00. Less than a

year after Hurricane Ike, Lloyds obtained a second

estimate from Belfor USA. Upon receiving Belfor USA’s

report, Lloyds adjusted the claim and paid Plaintiff

Holdings: The Court of Appeals held that:

approximately $300,000.00. Plaintiff accepted this

[1] payment, but invoked the appraisal provision under the

insurer did not breach its contract with company, and

policy on August 10, 2009.

[2]

insurer did not act in bad faith in processing company’s

According to the appraisal provision, if the parties to the

claim.

policy disagreed on the value of the property loss, either

party may make written demand for an appraisal of the

Affirmed. loss. In the event that a party demands appraisal, each

party will select its own impartial appraiser. If the

selected appraisers cannot agree on the value of the loss,

Attorneys and Law Firms the two appraisers will select an umpire to whom the

differences will be submitted. Once an umpire has been

*366 Peter M. Kelly, Attorney, Law Office of Peter M. selected, an agreement on the amount of loss by the

Kelly, P.C., Robert Chamless Lane, Middagh & Lane, umpire and either appraiser will be binding. However,

P.L.L.C., Houston, TX, for Plaintiff–Appellant. Lloyds still retained its right to deny the claim.

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...

Less than one month later, Blum’s filed this lawsuit in Fed.R.Civ.P. 56(c). The moving party bears the burden of

Texas state court asserting causes of action for breach of identifying an absence of evidence to support the

contract, fraud, conspiracy, and common law and nonmoving party’s case. Celotex Corp. v. Catrett, 477

statutory bad faith claims. Lloyds then removed the U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In

lawsuit to federal court and asserted the defense of determining whether summary judgment is appropriate,

estoppel based on the appraisal procedure. the evidence and factual inferences drawn therefrom are

to be viewed in a light most favorable to the non-movant,

Meanwhile, the appraisal process continued. Each party and all reasonable doubts about the facts should be

selected an appraiser who inspected the property and resolved in favor of the non-movant. Boston Old Colony

issued estimates of damage. When the appraisers could Ins. v. Tiner Associates Inc., 288 F.3d 222, 227 (5th

not agree on the proper value of the damage, they selected Cir.2002).

an umpire as required under the policy. After more than

one year spent in the appraisal process, the umpire Where, as here, jurisdiction is based upon diversity, this

ultimately issued an award for damage to the property court applies the law of the forum state. Holt v. State

exceeding $1,000,000. Farm Fire & Cas. Co., 627 F.3d 188, 191 (5th Cir.2010).

Accordingly, Texas substantive law controls. In the

Thereafter, Lloyds issued two checks to Blum’s for the absence of a final decision by the Texas Supreme Court

appraisal amount, less amounts already paid and other addressing the issue at hand, this court must determine, in

deductions provided for by the policy. Blum’s accepted its best judgment, how the state’s highest court would

Lloyds’s payment of the appraisal amount, but continued resolve the issue if presented with it. Id. Because the

to pursue the breach of contract and extra-contractual Texas Supreme Court has not addressed the issue at hand,

claims. we must make an “Erie guess.” Id. at 191–192.

Following the close of discovery, Lloyds filed its motion

for summary judgment. The district court granted Lloyds’

motion for summary judgment, finding that “when an

insurer makes timely payment of a binding and DISCUSSION

enforceable appraisal award, and the insured accepts that

payment, the insured is ‘estopped by the appraisal award In this case, Blum’s raises two issues challenging the

from pursuing a breach of contract claim the insure[r] district court’s grant of summary judgment in favor of

[sic].’ ” Blum’s Furniture Co. v. Certain Underwriters at Lloyds. These issues, however, hinge upon the same

Lloyds *368 London, 2011 WL 819491, *1, *3 argument—that Lloyds breached its duty of good faith

(S.D.Tex.2011) (citing Franco v. Slavonic Mut. Fire Ins. and fair dealings with Blum’s by failing to promptly pay

Ass’n., 154 S.W.3d 777, 787 (Tex.App.2004)). Based on the full policy claim.

this holding, the district court found that an insured

cannot maintain a common law and/or statutory bad faith In Liberty Nat’l Fire Ins. Co. v. Akin, the Texas Supreme

claim where the breach of contract claim fails, unless the Court recognized that “in most circumstances, an insured

insurer’s actions fall within one of the recognized may not prevail on a bad faith claim without first showing

exceptions, to which Blum’s has failed to present any that the insurer breached the contract.” 927 S.W.2d 627,

evidence. Id. at *3–*5. 629 (Tex.1996). The only recognized exceptions to this

rule are if the insurer “commit[s] some act, so extreme,

Aggrieved by the district court’s grant of summary that would cause injury independent of the policy claim,”

judgment, Blum’s appealed. or fails “to timely investigate the insured’s claim.”

Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341

(Tex.1995).

Under Texas law, when an insurer makes timely payment

STANDARD OF REVIEW of a binding and enforceable appraisal award, and the

insured accepts the payment, the insured is “estopped by

This court reviews a district court’s grant or denial of the appraisal award from maintaining a breach of contract

summary judgment de novo. Dunn–McCampbell Royalty claim against [the insurer].” Franco v. Slavonic Mut. Fire

Interest, Inc. v. Nat’l Park Serv., 630 F.3d 431, 435 (5th Ins. Ass’n, 154 S.W.3d 777, 787 (Tex.App.2004).

Cir.2011). Summary judgment may be granted if there is

no genuine issue as to any material fact and the moving According to Blum’s, because the appraisal award was

party is entitled to judgment as a matter of law. See greater than the initial payment made by Lloyds

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...

(approximately $300,000), Lloyds’ final payment of the based on the general rule, Blum’s cannot maintain an

claim was untimely and constituted a breach of contract. action for bad faith where the breach of contract claim

Lloyds argues that Blum’s cannot use the difference in the fails, Akin, 927 S.W.2d at 629, and neither exception

appraisal award and initial payment as evidence of a applies. Stoker, 903 S.W.2d at 341.

breach of contract. See *369 Breshears v. State Farm

Lloyds, 155 S.W.3d 340, 343 (Tex.App.2004) (“The Blum’s, however, would have this court believe that it

Breshears may not use the fact that the appraisal award suffered additional damages because Lloyds initially paid

was different than the amount originally paid as evidence only a portion of the entire claim thereby forcing Blum’s

of breach of contract, especially when the contract they to invoke the appraisal process. To the contrary, Lloyds

claim is being breached provides for resolution of began investigating Blum’s claim nine days after Blum’s

disputes through appraisal.”). submitted its claim. Lloyds inspected the property damage

and obtained estimates from two adjusters. Based on these

[1]

Here, it seems clear that Lloyds did not breach its estimates, Lloyds adjusted the claim and paid Blum’s

contract with Blum’s. Blum’s made a claim, Lloyds approximately $300,000.00. Because Blum’s disagreed

inspected the property, obtained estimates on the amount with the amount of payment, it invoked the appraisal

of damage, and made an initial payment to Blum’s. When provision.

Blum’s disputed the amount paid, it invoked the appraisal

process to have independent appraisers determine the It is undisputed that the appraisal process can only

amount of covered loss. Upon the conclusion of the determine the value of damages, while liability is left for

appraisal process, Lloyds paid the difference between the the courts to decide. See, e.g., In re Universal

appraisal award and the initial payment. Furthermore, the Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 407 (Tex.

district court found that “it is undisputed that Lloyds paid May 6, 2011). However, at no time during the claims

the appraisal amount in a timely manner after the award process did Lloyds dispute the issue of coverage. Once

was issued,” and that “Blum’s accepted that payment.” the appraisal process concluded with an award to Blum’s,

Blum’s Furniture Co., 2011 WL 819491, at *3. Therefore, Lloyds made payment of that amount and Blum’s

we find that Blum’s has failed to present any evidence accepted. Based on the evidence presented, Blum’s has

which would establish a genuine issue of material fact failed to establish a genuine issue of material fact

regarding its breach of contract claim against Lloyds. regarding its bad faith claims against Lloyds.

As stated above, “in most circumstances, an insured may

not prevail on a bad faith claim without first showing that

the insurer breached the contract.” Akin, 927 S.W.2d at

629. The only recognized exceptions to this rule are if the CONCLUSION

insurer “commit[s] some act, so extreme, that would

cause injury independent of the policy claim,” or fails “to Based on the foregoing analysis, the judgment of the

timely investigate the insured’s claim.” Republic Ins. Co. district court is AFFIRMED.

v. Stoker, 903 S.W.2d 338, 341 (Tex.1995).

[2]

Here, Blum’s argues that because the initial payment Parallel Citations

made by Lloyds was less than the appraisal award,

Lloyds’ failure to pay the full amount of the claim 2012 WL 181413 (C.A.5 (Tex.))

constituted an act, so extreme, that caused injury

independent of the policy claim. Lloyds contends that,

Footnotes

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3

Blum’s Furniture Co., Inc. v. Certain Underwriters at Lloyds..., 459 Fed.Appx. 366...

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4

Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

H. Dwayne Newton, Houston, Jeffrey Lee Hoffman,

154 S.W.3d 777

Richmond, for appellees.

Court of Appeals of Texas,

Houston (14th Dist.). Panel consists of Justices ANDERSON, HUDSON, and

FROST.

Patsy FRANCO, Individually and as Next Friend of

Jesse Ryan Villanueva, Alyssa Villanueva, Victoria

Villanueva, and Pete Villanueva, Minors, and

Jesse Villanueva, Appellants,

v.

SLAVONIC MUTUAL FIRE INSURANCE OPINION

ASSOCIATION, Jed Walzel, Southland Services,

Inc., Carl King, and Ernie Afflitto, Appellees. JOHN S. ANDERSON, Justice.

No. 14–03–01433–CV. | Dec. 16, 2004. Appellants, Patsy Franco, individually and as next friend

of her four children Jesse Ryan, Alyssa, Victoria, and Pete

Villanueva, and Jesse Villanueva, her husband, appeal

Synopsis summary judgments granted *780 in favor of appellees.

Background: Insureds brought action against This suit arises from a claim filed by Patsy Franco, the

homeowners’ insurer, its employee, and adjusters to insured, with her insurer seeking coverage under a fire

recover for breach of contract and based on extra- and extended coverage insurance policy for damage

contractual causes of action stemming from alleged caused by a plumbing leak in her home. Appellants, Patsy

misrepresentations concerning the policy and the handling Franco and her family, filed suit against appellees, the

of the claim for damage from plumbing leak. The 149th insurer, adjuster, and individuals who handled the

District Court, Brazoria County, Robert E. May, J., insurance claim, alleging breach of contract and extra-

entered summary judgments in favor of defendants. contractual causes of action stemming from alleged

Insureds appealed. misrepresentations made concerning the policy and the

handling of the claim. We affirm.

Holdings: The Court of Appeals, John S. Anderson, J.,

held that:

[1] FACTUAL AND PROCEDURAL BACKGROUND

insurer’s appraiser was not shown to be biased against

insureds; On June 18, 2000, Patsy Franco noticed water on her

[2]

porch. It was discovered that the water was the result of a

insureds failed to present evidence creating factual plumbing leak in her home. She notified her insurer,

issue precluding summary judgment on extra-contractual Slavonic Mutual Fire Insurance Association, of the

claims; and plumbing leak and sought coverage for the cost of

[3]

repairing the damage caused by the plumbing leak under a

statutes of limitations applicable to extra-contractual fire and extended coverage insurance policy issued by

claims began to run at time of insurer’s alleged Slavonic insuring her home from certain losses.1

misrepresentations in connection with sale of policy more

than five years before suit was commenced. Jed Walzel, secretary of Slavonic, acknowledged Franco’s

claim and hired Southland Services, Inc. to inspect the

premises at Franco’s residence and adjust the claim.

Affirmed. Southland assigned the claim to individual adjustors Ernie

Afflitto and Carl King. King contacted Franco about her

claim and instructed her to contact a plumber. The section

Attorneys and Law Firms of the pipe that was leaking was located within the wall

*779 John Steven Mostyn, Eric Vincent Blanchard, cavity, and King authorized the kitchen wall to be opened

Houston, for appellants. for plumbing repairs. It was discovered that the leak was

caused by a hole in a drain pipe connected to the kitchen

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

sink that leaked only when the sink was used. Franco did Garibay agreed on the appointment of Lynn Taylor as the

not know how long the pipe had been leaking. umpire, and the appraisal process moved forward.

After the plumbing repairs were made, King returned to Franco and Kubala claimed mold in Franco’s home was

Franco’s home, inspected the damage, and prepared an caused by water from the plumbing leak and needed to be

estimate of the repairs. On July 7, 2000, King sent his tested. Kubala estimated the cost of repair as $12,397.72.

estimate of the cash value of the repairs to Slavonic. King Garibay disagreed with Kubala’s estimate and, instead,

estimated the amount of the actual cash value of the agreed with an estimate prepared by Southland estimating

repairs as $3,930.55, less a $250 deductible, for a total the cost of repair as $4,002.2

cash value of $3,680.55. On July 18, 2000, Slavonic

tendered a check in that amount to Franco. Slavonic also On December 28, 2000, Taylor sent a proposed appraisal

paid an invoice in the amount of $285 for emergency award to Kubala and Garibay proposing $8,273.53 as the

services at the Franco residence related to the plumbing cost of repair and $6,863.03 as the amount of the loss

leak. Franco did not cash the check for $3,680.55. with depreciation deducted. Taylor’s proposed award

included an allowance for “mold treatment” but not for

On July 21, 2000, Southland was notified by John Kubala, any special remediation effort because Taylor had “not

Franco’s designated appraiser, that Franco was invoking been presented with any information that the mold

the appraisal provision of the Slavonic policy. On July 31, condition that presently exists is one that warrants special

Walzel received a fax from Southland transmitting environmental remediation.”

Franco’s demand for appraisal. The appraisal provision in

the policy provides the following: On January 13, 2001, Taylor submitted a revised,

proposed award to Kubala and Garibay. Taylor and

Appraisal. In case the insured and this Company shall Kubala both agreed to the revised proposed award of

fail to agree as to the actual cash value or the amount of $8,350.51 for the cost of repair and $6,902.03 for the

loss, then, on the written demand of either, each shall actual amount of loss, and Slavonic paid Franco

select a competent and disinterested appraiser and $6,652.03 on January 22, which represented the actual

notify the other of the appraiser selected within twenty value of the loss as determined by the revised, proposed

days of such demand. The appraisers shall first select a award agreed to by Kubala and Taylor, less the $250

competent and disinterested umpire; and failing for deductible specified in the policy. Franco accepted

fifteen days to agree upon such umpire, then, on payment and deposited the check.

request of the insured or this Company, such umpire

shall be selected by a judge of a district court of a In June 2001, appellants filed suit against Slavonic,

judicial district where the loss occurred. The appraisers Walzel, Southland, Afflitto, and King, alleging violations

shall then appraise the loss, stating separately actual of Texas Insurance Code articles 21.21 and 21.55 and the

cash value and loss to each item; and, failing to agree, Texas Deceptive Trade Practices Act (“DTPA”) and

shall submit their differences only to the umpire. An claims of negligent misrepresentation, fraud, breach of

award in writing, so itemized, *781 of any two when contract, breach of the duty of good faith and fair dealing,

filed with this Company, shall determine the amount of breaches of warranty, unconscionable conduct, gross

actual cash value and loss. Each appraiser shall be paid negligence, and malice. All of appellants’ claims stem

by the party selecting him and the expenses of appraisal from alleged misrepresentations made by appellees

and umpire shall be paid by the parties equally. concerning the policy and its coverage and the appellees’

alleged mishandling of Franco’s claim.3 Appellants sought

On August 14, 2000, Afflitto notified Kubala that economic and mental anguish damages, treble damages

Slavonic designated Sergio Garibay as its appointed under the DTPA, exemplary damages, and attorney’s fees.

appraiser.

In April 2003, Slavonic and Walzel filed a joint motion

In mid-July 2000, prior to Garibay’s appointment as for summary judgment (“Slavonic’s motion”) asserting

Slavonic’s appraiser, Southland had contacted Garibay to traditional and no-evidence grounds as follows:

examine the premises of the Franco home and determine

the cause of the damage, and Garibay issued a report 1. The Plaintiffs submitted their contractual claim to

regarding his examination of the Franco residence and his binding appraisal under the policy [and the appraisal

findings. Franco protested Garibay’s appointment as award] was paid by Defendant Slavonic;

Slavonic’s appraiser because of his previous investigation

of the leak. However, on October 4, 2000, Kubala and *782 2. The Plaintiffs are estopped to claim

additional damages under the policy of insurance

WestEawNext © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

since they have retained the benefit of the appraisal and (4) appellants have no evidence to support certain

award paid by Slavonic; elements of their article 21.21, DTPA, and

3. The Plaintiffs’ contractual claims are not covered negligence/gross negligence claims. In August 2003, the

under the policy because the plumbing leak was not trial court signed a “Final Judgment of Dismissal”

sudden but was a repeated leak over at least a period granting Southland’s summary judgment motion.

of weeks;4

4. The summary judgment evidence establishes that

no misrepresentation/fraud took place, the claims are DISCUSSION

barred by the applicable statute of limitations, or, in

the alternative there is no evidence to support Appellants challenge the summary judgments rendered in

Plaintiffs’ misrepresentation/fraud claims; favor of appellees Slavonic, *783 Walzel, Southland,

King, and Afflitto in five issues, arguing: (1) the trial

5. The summary judgment evidence establishes court abused its discretion in overruling their special

compliance with the provisions of Art. 21.55 of exception to Slavonic’s motion; (2) Slavonic’s payment

the Texas Insurance Code as a matter of law; of the appraisal award does not dispose of appellants’

breach of contract claim; (3) Slavonic’s motion fails to

6. There is no evidence to support Plaintiffs’ show there are no fact issues as to any elements of

claims of violations of Art. 21.21 of the Texas appellants’ extra-contractual causes of action; (4)

Insurance Code or the Texas DTPA or that Southland’s motion does not establish that there are no

Plaintiffs were damaged thereby; fact issues as to any elements of appellants’ extra-

contractual causes of action; and (5) fact issues preclude

7. There is no evidence to support Plaintiffs’ no-evidence summary judgment in favor of Southland,

Art. 21.21, DTPA and misrepresentation/fraud Afflitto, and King.

claims against Jed Walzel; and

8. There is no evidence that Slavonic or Walzel

prevented Plaintiffs from remediating their

premises or intentionally, knowingly, recklessly STANDARD OF REVIEW

or negligently caused the minor Plaintiffs any

bodily injury. The movant for summary judgment has the burden to

show that there is no genuine issue of material fact and

Appellants filed a response and specially excepted to that it is entitled to judgment as a matter of law. TEX.R.

Slavonic’s motion, contending it is unclear what type CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690

of summary judgment motion, traditional or no- S.W.2d 546, 548 (Tex.1985). We review the summary

evidence, Slavonic filed. The trial court specifically judgment evidence using familiar standards of review. See

denied Slavonic’s motion for summary judgment Dolcefino v. Randolph, 19 S.W.3d 906, 916–17

with respect to the lack of coverage ground, but (Tex.App.-Houston [14th Dist.] 2000, pet. denied).

granted the motion in all other respects, ordering that

appellants take nothing as to Slavonic and Walzel. A defendant moving for traditional summary judgment

In June 2003, Southland, Afflitto, and King jointly moved assumes the burden of showing as a matter of law the

for summary judgment (“Southland’s motion”) on both plaintiff has no cause of action against him. Levesque v.

traditional and no-evidence grounds. Southland’s motion Wilkens, 57 S.W.3d 499, 503 (Tex.App.-Houston [14th

alleged summary judgment was proper based on the Dist.] 2001, no pet.). Traditional summary judgment for a

following: (1) because appellants’ claims against Slavonic defendant is proper only when the defendant negates at

failed, their claims against Slavonic’s agents, Southland, least one element of each of the plaintiff’s theories of

King, and Afflitto, also must fail; (2) appellants’ recovery, or pleads and conclusively establishes each

acceptance of the appraisal award waives appellants’ element of an affirmative defense. Science Spectrum, Inc.

claim for insurance benefits; (3) the summary judgment v. Martinez, 941 S.W.2d 910, 911 (Tex.1997). A

evidence shows Slavonic paid Franco’s plumbing-leak defendant may file a “no evidence” motion for summary

claim in its entirety as determined by appraisal, thus judgment, after sufficient time for discovery has passed, if

Southland, King, and Afflitto are entitled to summary there is no evidence of one or more essential elements of

judgment on appellants’ DTPA and insurance code claims a claim or defense on which an adverse party would have

premised upon the contention that the claim was denied; the burden of proof at trial. See TEX.R. CIV. P. 166a(i).

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

As with the traditional summary judgment, in reviewing a 858 S.W.2d 337, 343 n. 7; Dolcefino, 19 S.W.3d at 925–

“no evidence” summary judgment, we review the 26; see also Rosas v. Hatz, 147 S.W.3d 560, 562

evidence in the light most favorable to the non-movant (Tex.App.-Waco, 2004, no pet. h.) (refusing to infer a

and disregard all evidence and inferences to the contrary. ruling on a special exception based only upon the trial

Coastal Conduit & Ditching, Inc. v. Noram Energy Corp., court’s disposition of the summary judgment motion

29 S.W.3d 282, 284 (Tex.App.-Houston [14th Dist.] standing alone); Well Solutions, Inc., v. Stafford, 32

2000, no pet.). S.W.3d 313, 316–17 (Tex.App.-San Antonio 2000, no

pet.) (holding “a trial court’s ruling on an objection to

[1] [2] [3]

Because the propriety of summary judgment is a summary judgment evidence is not implicit in its ruling

question of law, we review the trial court’s decision de on the motion for summary judgment; a ruling on the

novo. See Provident Life & Accident Ins. Co. v. Knott, objection is simply not ‘capable of being understood’

128 S.W.3d 211, 215 (Tex.2003). In an appeal from a from the ruling on the motion for summary judgment”).

summary judgment, issues an appellate court may review As a general rule, a complaint is preserved for appellate

are those the movant actually presented to the trial court. review only if the record establishes the complaint was

Travis v. City of Mesquite, 830 S.W.2d 94, 100 made known to the trial court in a timely manner, and the

(Tex.1992). When the trial court grants summary trial court ruled on the complaint. See TEX.R.APP. P.

judgment specifically on fewer than all grounds asserted, 33.1(a).

Rule 166a does not prevent an appellate court from

affirming the judgment on other grounds the parties Appellants concede that the trial court did not explicitly

properly raised before the trial court. Cincinnati Life Ins. rule on their special exception. Instead, appellants

Co. v. Cates, 927 S.W.2d 623, 625 (Tex.1996). If the trial contend that the trial court implicitly overruled their

court grants a motion for summary judgment without special exception pursuant to Rule 33.1 by (1) granting

stating the grounds on which it relied, we must affirm the Slavonic’s motion and not requiring Slavonic to replead

summary judgment if any ground argued in the motion its summary judgment grounds, and (2) refusing to sign

was sufficient. Star–Telegram, Inc. v. Doe, 915 S.W.2d an order setting forth its denial of the special exception or

471, 473 (Tex.1995); Blan v. Ali, 7 S.W.3d 741, 747–48 the bases for granting Slavonic’s motion for summary

(Tex.App.-Houston [14th Dist.] 1999, no pet.). judgment when appellants reurged the special exception

in their motion for reconsideration. See TEX.R.APP. P.

33.1(a)(2)(A). Slavonic and Walzel contend that

appellants have waived appellate review of this issue by

I. Slavonic’s Motion for Summary Judgment not obtaining a ruling on their special exception in the

court below.

A. The Special Exception to Slavonic’s Motion for

Summary Judgment [7]

We examine the record to determine whether or not

In issue one, appellants challenge the trial court’s denial appellants obtained a ruling on the special exception.

of their special exception to Slavonic’s motion. In their First, with regard to appellants’ arguments pertaining to

response to Slavonic’s motion, appellants *784 their motion for reconsideration, despite their assertions to

complained by special exception that Slavonic’s motion the contrary, nowhere in the motion for reconsideration

was vague and unclear in that they were unable to tell do appellants request the trial court to reconsider or rule

whether the motion was a traditional, no-evidence, or a on the special exception. Thus, the trial court’s denial of

hybrid motion for summary judgment.5 Appellants the motion for reconsideration is not an implicit ruling on

requested that Slavonic be required to replead the motion their special exception. See Alejandro v. Bell, 84 S.W.3d

for summary judgment with more specificity “so as to 383, 388 (Tex.App.Corpus Christi 2002, no pet.) (holding

identify what type of motion it is and clearly distinguish trial court implicitly ruled on objections to summary

between traditional grounds and any no-evidence grounds judgment evidence where the appellant complained in his

asserted.” motion for new trial of the trial court’s refusal to rule on

[4] [5] [6]

his objections).

When a summary judgment is attacked on

specificity grounds, a special exception is required. [8]

Second, we address appellants’ contention that the trial

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d court’s order granting summary judgment in favor of

337, 342 (Tex.1993) (“An exception is required should a Slavonic constitutes an implicit denial of appellants’

non-movant wish to complain on appeal that the grounds special exception. Appellants contend a denial is implied

relied on by the movant were unclear or ambiguous.”). because the trial court did *785 not order Slavonic to

The excepting party must obtain a ruling on the special replead its motion for summary judgment. Slavonic and

exception to preserve the issue for appeal. McConnell,

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

Walzel counter that the entry of summary judgment could contract are binding and enforceable, and every

just as easily evidence an abandonment of the issue in the reasonable presumption will be indulged to sustain an

trial court by appellants and, in addition, holding the entry appraisal award. Providence Lloyds Ins. Co. v. Crystal

of a summary judgment constitutes an implicit denial of a City Indep. Sch. Dist., 877 S.W.2d 872, 875 (Tex.App.-

special exception would render the refusal to rule San Antonio 1994, no writ). The effect of an appraisal

provision of Rule 33.1(a) meaningless. provision is to estop one party from contesting the issue

of damages in a suit on the insurance contract, leaving

In light of the relevant rules and caselaw, we simply are only the question of liability for the court. Wells v.

unable to infer from the record in this case that the trial American States Preferred Ins. Co., 919 S.W.2d 679,

court implicitly overruled or implicitly made any ruling 683–85 (Tex.App.-Dallas 1996, writ denied) (analyzing

regarding appellants’ special exception. See Dolcefino, 19 similar appraisal provision and concluding authority of

S.W.3d at 926–27. The summary judgment order does not appraisal panel limited to determining only the amount of

mention the special exception, and a ruling on the special loss). Because every reasonable presumption will be

exception cannot be inferred based solely upon the indulged to sustain an appraisal award, the burden of

disposition of Slavonic’s summary judgment motion. proof is on the party seeking to avoid the award. Barnes v.

Appellants were required to obtain a ruling, and they Western Alliance Ins. Co., 844 S.W.2d 264, 267

failed to do so.6 Having failed to preserve the issue for (Tex.App.-Fort Worth 1992, writ dism’d by agr.). Texas

review, we overrule appellants’ first issue. courts recognize three situations in which the results of an

otherwise binding appraisal may be disregarded: (1) when

the award was made without authority; (2) when the

award was made as a result of fraud, accident, or mistake;

B. The Appraisal Award or (3) when the award was not in compliance with the

[9]

In issue two, appellants assert (1) the appraisal award requirements of the policy. Wells, 919 S.W.2d at 683;

should be set aside because the appraisal was not Providence Lloyds Ins. Co., 877 S.W.2d at 875.

conducted in substantial compliance with the insurance

policy, and (2) even if the appraisal award is valid, [15]

Appellants argue that exception (1) applies;

Slavonic’s payment of the appraisal award is not specifically, that “Garibay had a predetermined opinion as

dispositive of the breach of contract action alleged against to what the scope of his appraisal would be and was,

Slavonic and Walzel.7 therefore, bias[ed] against the Franco family.” We are

required to view the summary judgment proof in the light

[10]

Appellants contend the appraisal award should be set most favorable to appellants and to resolve against

aside because Garibay was an interested, prejudiced, and Slavonic any doubt as to the existence of a genuine issue

biased appraiser, due to his status as an investigating of material fact. The evidence relied upon by appellants to

engineer for Southland and the fact that he already had support their claim of bias consists of (1) Franco’s

issued a report containing his opinions regarding the statement in a deposition excerpt that Garibay was an

scope of appellants’ damages and coverage prior to his engineer hired by Southland to inspect their home and

appointment as appraiser. Additionally, for the first time that he was appointed as an appraiser, and (2) Garibay’s

on appeal, appellants contend that the award should be set affidavit in which he acknowledges being hired by

aside because Garibay did not follow the procedure for Southland in mid-July 2002 to conduct an examination of

the appraisal process because he did not submit an appellants’ house in order to determine the cause of the

appraisal for consideration by Kubala or Taylor in damage from a plumbing leak and discusses his

accordance with the appraisal provision of the policy. observations and conclusions concerning the leak.

Because appellants did not raise the second asserted basis [16]

Upon reviewing the record before us, we find

for setting aside the *786 appraisal award in their appellants have not presented summary judgment proof of

response to Slavonic’s motion in the trial court, we may Garibay’s bias against the Franco family, thus no fact

only examine whether the summary judgment evidence issue was presented. The showing of a pre-existing

raised a fact issue as to whether Garibay was biased and, relationship, without more, does not support a finding of

if so, whether evidence of such bias raises a fact issue as bias. See *787 Allison v. Fire Ins. Exchange, 98 S.W.3d

to the appraisal award’s validity.8 See TEX.R.APP. P. 227, 255 (Tex.App.-Austin 2002, pet. granted, judgm’t

33.1(a); City of Houston v. Clear Creek Basin Auth., 589 vacated w.r.m.); Gardner v. State Farm Lloyds, 76

S.W.2d 671, 678 (Tex.1979). S.W.3d 140, 143–44 (Tex.App.-Houston [1st Dist.] 2002,

no pet.). Here, the summary judgment evidence shows

[11] [12] [13] [14]

Texas courts have long held that appraisal that Garibay was hired by Southland “to examine the

awards made pursuant to the provisions of an insurance

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

premises” and “determine the cause of the damage, was no false advertisement or misleading or false

possibly from a reported sink drain line leak.” Garibay statement or representation made to Franco in the sale of

was not an employee of Slavonic, and Garibay’s report the insurance policy; (3) any misrepresentations or fraud

and conclusions regarding the cause of the plumbing leak regarding the policy’s coverage when it was purchased

were his own. There is no evidence suggesting that would have occurred, if at all, in February 1996 and are

Slavonic influenced or exercised control over Garibay, barred by limitations; (4) any misrepresentations made

that Garibay had a financial interest in Franco’s claim, or concerning the policy or appellants’ claim were not the

that Garibay’s previous inspection of the premises producing cause of any damages to appellants because

somehow factored into his damages valuation. Moreover, Slavonic paid the amount of the loss as determined by the

the final appraisal award was entered into by Kubala, appraisal; (5) even if Slavonic denied appellants’ claim,

Franco’s appraiser, and the umpire. Viewing the evidence the damage resulting from the plumbing leak was not a

in the light most favorable to appellants, the evidence covered loss or was specifically excluded from coverage

does not raise a fact issue as to Garibay being biased by the policy; (6) there is no evidence Slavonic failed to

against appellants. meet the time deadlines imposed by article 21.55, or,

alternatively, the summary judgment evidence

[17]

Appellants further allege that “payment of an appraisal conclusively established Slavonic met the time deadlines

award is not dispositive of the Franco Family’s entire of article 21.55; and (7) there is no evidence that

breach of contract cause of action against Slavonic appellants sustained bodily *788 injury or that Slavonic or

Mutual.” Slavonic counters that the appraisal award is Walzel acted criminally, negligently, recklessly,

binding and enforceable. The summary judgment record intentionally, or knowingly to cause any bodily injury.

reveals that Slavonic did not deny Franco’s claim. Rather,

Slavonic paid the full amount of the appraisal award to In response, appellants cite to the following evidence as

Franco, and Franco accepted payment of the award. The raising a fact issue with regard to Slavonic’s alleged

award is binding and enforceable. Under these violations of article 21.21 of the Texas Insurance Code

circumstances, appellants are estopped by the appraisal and the DTPA in the sale of the policy: (1) Villanueva’s

award from maintaining a breach of contract claim against deposition testimony that he was told the policy “was a

Slavonic. See Gardner, 76 S.W.3d at 143–44 (affirming standard policy that homeowners have” and that he was

summary judgment where there was no evidence raising a led to believe that they “had the max[imum]” coverage;

fact issue about whether the insurer’s appraiser lacked and (2) Franco’s deposition testimony that she thought the

independence). We hold summary judgment was proper Slavonic policy was the same as any other insurance

in favor of Slavonic on appellants’ breach of contract policy, and that this evidences an omission of fact

claim. regarding the policy by Slavonic’s representative.

Appellants further contend the following evidence shows

We overrule appellants’ second issue. Slavonic and Walzel violated the Insurance Code and the

DTPA during the claim-handling process: (1) Franco’s

deposition testimony that King told her that the policy

covers damage from plumbing leaks so long as the

C. Appellants’ Extra–Contractual Claims Against plumbing leak is above the foundation slab; and (2)

Slavonic and Walzel Villanueva’s testimony, in response to being asked what

In issue three, appellants contend Slavonic’s motion for was the first conversation he recalled having with Walzel,

summary judgment did not conclusively establish that that “I don’t recall the first one. I know a conversation

there are no genuine issues of material fact as to any was related to the—where we weren’t happy about what

element of appellants’ extra-contractual causes of action. was going to be done to the house and we had—God, I

Specifically, appellants argue that Franco and can’t recall, but I know his response was, ‘Well, you hired

Villanueva’s lack of knowledge regarding the breaches an appraiser. He needs to represent ya’ll now.’ ”

and/or violations is not dispositive of the merits of their Additionally, appellants cite the following evidence as

extra-contractual causes of action. proof showing they were met with resistance and delay:

(1) Franco’s testimony that Slavonic “took forever” to

With regard to appellants’ extra-contractual claims, name their appraiser, and that when she disputed Garibay

Slavonic and Walzel moved for summary judgment based as the appraiser, that it took another 20 to 30 days,

on the following grounds: (1) there is no evidence that “somewhere around there,” to rename Garibay; and (2)

Slavonic or Walzel misrepresented the terms of the policy Villanueva’s testimony that he felt “nothing was getting

or made any false representations, statements, or resolved.” Finally, appellants cite to Walzel’s deposition

advertisements concerning coverage afforded by the testimony in which he states that he does not know the

policy; (2) the summary judgment evidence shows there

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

provisions of article 21.21 “off the top of [his] head” as pleaded or otherwise raised, by proving as a matter of law

evidence that Walzel “has a complete lack of that there is no genuine issue of material fact about when

understanding with regard to the provisions and the plaintiff discovered, or in the exercise of reasonable

requirements of [the] Texas Insurance Code.” diligence should have discovered, the nature of its injury.

If the movant establishes that the statute of limitations

bars the action, the nonmovant must then adduce

summary judgment proof raising a fact issue in avoidance

1. Walzel’s No–Evidence Motion for Summary of the statute of limitations. Id.

Judgment

[18] [22] [23]

The only evidence appellants cite in support of their Generally, a cause of action accrues when a

extra-contractual claims asserted against Walzel are (1) wrongful act causes an injury, regardless of when the

Walzel’s statement that he did not know the specific plaintiff learns of the injury. Moreno v. Sterling Drug,

provisions of article 21.21 of the Texas Insurance Code Inc., 787 S.W.2d 348, 351 (Tex.1990). We note that

off the top of his head, and (2) Villanueva’s statement that appellants did not respond to Slavonic’s statute of

Walzel told them to contact their appraiser during the limitations summary judgment ground in the trial court or

appraisal process. Appellants do not explain how these on appeal. Because appellants did not raise the discovery

statements raise a fact issue on their article 21.21, DTPA, rule, Slavonic is not required to negate the applicability of

and negligence claims alleged against Walzel. We the discovery rule by proving as a matter of law that there

conclude the two cited statements do not raise a fact issue is no genuine issue of fact concerning the date when the

on appellants’ extra-contractual claims alleged against Franco’s discovered or should have discovered the injury.

Walzel. Additionally, the record shows appellants did not Here, the summary judgment evidence shows that

present any evidence of bodily injury or any evidence that Slavonic sold Franco the policy in February 1996, and

Walzel acted criminally, negligently, intentionally, or that this suit was filed June 14, 2001, over five years later.

knowingly to cause any bodily injury. Accordingly, we

overrule appellants’ issue three as to Walzel. We conclude Slavonic proved as a matter of law that the

statutes of limitations bar appellants’ fraud, negligent

misrepresentation, DTPA, and article 21.21 claims

stemming from alleged misrepresentations Slavonic made

2. Article 21.55 Violations when the policy was purchased in 1996. See TEX. BUS.

We next address appellants’ article 21.55 claims against & COM.CODE ANN. § 17.565 (Vernon 2002) (providing

Slavonic. Appellants do not complain on appeal of the two-year statute of limitations for claims filed under the

summary judgment in favor of Slavonic on their article DTPA); TEX. CIV. PRAC. & REM.CODE ANN. §§

21.55 claims. Furthermore, viewing the evidence in the 16.003, 16.004 (Vernon 2002) (providing two and four-

light most favorable to appellants, there is no evidence year statute of limitations, respectively, applicable to

raising a fact issue about Slavonic’s compliance with the causes of action for negligent misrepresentation and

time deadlines imposed by article 21.55. Accordingly, fraud); TEX. INS.CODE ANN. art. 21.21, § 16(d)

summary judgment in favor of Slavonic was proper on (Vernon Supp.2004) (providing two-year statute of

appellants’ article 21.55 claims. limitations applicable to actions brought under article

21.21). We affirm the summary judgment in favor of

Slavonic on appellants’ extra-contractual claims

stemming from the sale of the policy.

3. Statutes of Limitations

Slavonic asserted in its motion for summary judgment

that appellants’ misrepresentation, *789 fraud, DTPA,

and article 21.21 claims stemming from alleged 4. Article 21.21 and DTPA Violations

misrepresentations made by Slavonic in the sale of the Slavonic moved for summary judgment on the ground

policy are barred by statutes of limitations. that there is no evidence that appellants suffered any

[19] [20] [21]

damages from the alleged violations of article 21.21 and

A defendant moving for summary judgment on the DTPA. Appellants did not produce any summary

the affirmative defense of limitations has the burden to judgment evidence of damages in their response.

conclusively establish that defense and must conclusively Accordingly, we conclude that summary judgment in

prove when the cause of action accrued. KPMG Peat favor of Slavonic on these claims was proper.

Marwick v. Harrison County Housing Finance Corp., 988

S.W.2d 746, 748 (Tex.1999). Additionally, a defendant

must negate the discovery rule, if it applies and has been

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

5. Other Claims no evidence Southland committed a felony under Texas

Slavonic also moved for summary judgment on the Penal Code section 22.04 in the work on Franco’s home.

ground that there is no evidence that it prevented Franco

[24]

from remediating the damage to her home or caused the Appellants, as the non-movants, had the burden to

minor appellants any injury. Appellants did not introduce raise a genuine issue of material fact as to the elements

any evidence in response to these grounds, nor do challenged in Southland’s motion. See TEX.R. CIV. P.

appellants contest these grounds on appeal. Accordingly, 166a(i). In their response to Southland’s motion,

we affirm the summary judgment on these grounds. appellants only addressed the no-evidence grounds

pertaining to their alleged article 21.21 violations.

We overrule appellants’ third issue. Because appellants did not present any evidence in

response to Southland’s no-evidence grounds pertaining

to appellants’ DTPA, negligence, and gross negligence

claims, we affirm the summary judgment in favor of

II. Southland’s Motion for Summary Judgment Southland, King, and Afflitto on these claims. See

In issues four and five, appellants argue summary Dolcefino, 19 S.W.3d 906, 917.

judgment was improper for *790 Southland9 because (1)

Southland did not conclusively disprove appellants’ We are left to examine whether summary judgment was

“extra-contractual” causes of action; (2) Southlands’ no- proper on appellants’ article 21.21 claims. The evidence

evidence motion was legally insufficient; and (3) fact appellants cite in support of their claims under article

issues precluded no-evidence summary judgment in favor 21.21 consists of the following: (1) Franco’s deposition

of Southland. We first address appellants’ complaints testimony that King told her the policy covers damage

regarding Southland’s no-evidence motion. from plumbing leaks so long as the plumbing leak is

above the foundation slab; (2) Franco’s testimony that she

Appellants argue that the no-evidence motion is legally took out a loan with her attorney and hired a company to

insufficient because it does not identify the elements that come out and prepare a scope of remediation with regard

are being challenged. However, contrary to appellants’ to mold in her home; (3) a letter dated October 26, 2000,

assertions, Southland’s no-evidence motion adequately from Afflitto to Kubala discussing the relevant policy

sets forth the elements as to which there is no evidence, provisions and notifying appellants that Slavonic’s offer

and we overrule this subissue. of $4,002.42 would be left on the table for an additional

thirty days; and (4) a fax cover sheet dated October 24,

In fact, Southland’s no-evidence summary judgment 2000, from Afflitto to Walzel, concerning records from

motion specifically alleges that there is no evidence of Garibay.

damages with regard to appellants’ claims that Southland

violated article 21.21 by: wrongfully denying Franco’s *791 [25] One of the grounds in Southland’s motion is that

claim; falsely stating the policy does not cover the claim; there is no evidence of damages caused by the alleged

not attempting in good faith to effectuate a prompt, fair, article 21.21 violations. Section 16(a) of article 21.21

and equitable settlement of the claim; not promptly provides:

providing Franco a reasonable explanation of the basis for

denial of the claim; not affirming or denying coverage or Any person who has sustained

submitting a reservation of rights; refusing to pay the actual damages caused by another’s

claim; and making untrue statements of material fact engaging in an act or practice

concerning the policy’s coverage. Southland’s motion declared in Section 4 of this Article

further alleges that there is no evidence of a knowing to be ... unfair or deceptive acts or

violation of article 21.21. practices in the business of

insurance ... may maintain an

With regard to appellants’ DTPA claims, Southland’s action against the person or persons

motion alleges there is no evidence of damages or of engaging in such acts or practices.

unconscionable conduct. As pertaining to appellants’

negligence and gross negligence claims, Southland’s TEX. INS.CODE ANN. art. 21.21, § 16(a) (Vernon

motion argues there is no evidence of bodily injury, no Supp.2004). Here, appellants offer Franco’s statement

evidence of the breach of any legal duty, no evidence that that she obtained a loan from her attorney for scope of

Southland’s conduct was the proximate cause of bodily remediation work conducted at her home as evidence of

injury to appellants, no evidence that Southland refused to damages. However, this evidence is not connected to the

allow appellants to repair their home, and no evidence of article 21.21 claims (or any other claim for that matter)

exemplary damages. The motion further asserts there is and, therefore, does not raise a fact issue as to whether

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Franco v. Slavonic Mut. Fire Ins. Ass’n, 154 S.W.3d 777 (2004)

appellants sustained damages attributable to their alleged address the remaining summary judgment grounds.

article 21.21 claims. Because appellants did not present Accordingly, we overrule appellants’ fourth and fifth

evidence raising a genuine issue of material fact as to issues and affirm the summary judgment in favor of

damages, we conclude summary judgment in favor of Southland, King, and Afflitto.

Southland, King, and Afflitto was proper on appellants’

article 21.21 claims. We affirm the judgment of the trial court.

Because we conclude that no-evidence summary

judgment was proper in favor Southland, King, and

Afflitto on all of appellants’ causes of action, we do not

Footnotes

1 In 1996, Franco purchased a fire and extended coverage insurance policy from Slavonic to insure her home, and this same

policy had been renewed each year and was in effect in June 2000.

2 During the appraisal process, Slavonic offered Franco $4,002.52 to compromise the claim, but this offer was not accepted.

3 Appellants did not seek in their petition to set aside the appraisal award.

4 Slavonic asserted the plumbing leak claim was not covered by the policy because of a specific provision in the policy governing

coverage for accidental water damage:

ACCIDENTAL WATER DAMAGE—Water damage is limited to a loss of a sudden nature or circumstance....

Water damage covers loss above foundation from accidental discharge, leakage, or overflow of water or steam from within

a plumbing, heating or air-conditioning system or domestic appliance....

This Association shall not be liable for loss caused directly or indirectly by ... (4) by continuous or repeated seepage or

leakage over a period of weeks, months, years[.]

5 Slavonic’s motion raises both traditional and no-evidence grounds, and appellants concede the rules do not prohibit a hybrid

summary judgment motion such as Slavonic’s.

6 Appellants did not identify in their special exception (or on appeal) the particular grounds in Slavonic’s motion that lack

specificity. We recognize that Slavonic’s motion is not a model of clarity—the motion does not set forth the applicable

standards of review under Rule 166a(c) and (i) and does not segregate the traditional from the no-evidence grounds; however,

the motion does comply with Rule 166a in stating the grounds and sufficiently puts appellants on notice of the claims and

causes of action being challenged by appellees. The better practice is to file two separate motions or to file one document

containing both motions but with the arguments and authorities for each clearly delineated and separated from one another. For

example, Southland’s motion also was a hybrid, but it clearly segregated the traditional from the no-evidence grounds.

7 Notably, appellants do not allege a cause of action to set aside the appraisal award in their petition. The claims and facts alleged

in appellants’ live petition focus on alleged misrepresentations made by appellees concerning the policy and the alleged

mishandling of Franco’s claim. Howeve

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