Summary
holding that an insured's cause of action "accrues as a matter of law when the insurer unambiguously makes a final determination concerning the insured's claim, such as when . . . the insurer closes its claim file"
Summary of this case from De Jongh v. State Farm LloydsOpinion
NUMBER 13-14-00488-CV
02-25-2016
FRED FEURTADO, Appellant, v. STATE FARM LLOYDS, Appellee.
On appeal from the 444th District Court of Cameron County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Longoria
Memorandum Opinion by Chief Justice Valdez
On February 21, 2013, appellant Fred Feurtado sued appellee State Farm Lloyds, his insurer, for allegedly underpaying an insurance claim that he submitted in February 2011. State Farm moved for summary judgment alleging that the two-year limitations period governing Feurtado's suit had run. Agreeing with State Farm, the trial court granted summary judgment and dismissed Feurtado's suit. By one issue, Feurtado contends that the trial court erred in entering summary judgment against him. We affirm.
I. Background
Feurtado submitted an insurance claim to State Farm after a plumbing leak caused water damage to his home. In response to the claim, State Farm sent a representative to Feurtado's home to inspect the premises and assess the damage. After inspecting Feurtado's home, the claims representative determined that Feurtado's insurance policy covered some, but not all, of the damage caused by the plumbing leak. Thereafter, State Farm mailed two checks to Feurtado to pay for the damage that it determined was covered under his policy. Feurtado accepted both checks.
On February 14, 2011, State Farm sent a letter informing Feurtado that the investigation into his claim was complete and that a final coverage decision had been made. The letter also explained why Feurtado's insurance policy did not cover certain property losses. On February 16, 2011, after notifying Feurtado in writing that a final coverage decision had been made, State Farm formally closed its claim file.
A few months later, Feurtado began repairing the damage to his home and discovered that the money State Farm paid on his claim was not sufficient to cover the total cost of repair. Feurtado subsequently informed State Farm about the issue, but State Farm did not change its original determination concerning coverage on Feurtado's claim.
On February 21, 2013, Feurtado filed suit alleging, among other things, that State Farm breached its contractual obligations, acted in bad faith, and violated various provisions of the Texas Deceptive Trade Practices Act and the Texas Insurance Code. Specifically, Feurtado alleged that State Farm "enacted and adopted, pricing, investigation techniques, form letters, and adjustment procedures that were designed to limit, deny, or underpay claims." State Farm answered and pleaded, among other things, the statute of limitations as a bar to Feurtado's suit.
State Farm then filed a motion for summary judgment alleging that Feurtado's suit was barred by the two-year contractual limitations period governing the suit. In support of its motion for summary judgment, State Farm included, among other things: (1) a copy of the February 14, 2011 letter that notified Feurtado that a final coverage decision had been made on his claim; and (2) an affidavit from the State Farm representative, wherein she testified that State Farm "formally closed" Feurtado's claim file on February 16, 2011. In response to State Farm's summary judgment motion, Feurtado asserted that a fact issue remained as to whether his cause of action accrued some "months" after February 2011, when, according to his deposition testimony, he allegedly discovered that State Farm's payment was insufficient to cover the total cost of repair. After considering these arguments, the trial court granted State Farm's motion for summary judgment and dismissed Feurtado's suit with prejudice. This appeal followed.
II. Discussion
By one issue, Feurtado challenges the trial court's summary judgment determination that his suit was barred by the applicable two-year statute of limitations.
A. Standard of Review
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Under Texas Rule of Civil Procedure 166a(c), the party moving for summary judgment bears the burden to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). When reviewing a summary judgment, "we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor." See Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003) (citing Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002)).
B. Applicable Law
The statute of limitations period on a cause of action begins to run when the cause of action "accrues." Knott, 128 S.W.3d at 221. Whether limitations has run usually presents a question of law for the reviewing court. Id. Generally, a cause of action accrues when facts come into existence that authorize a party to seek a judicial remedy. See id. However, in some circumstances, a plaintiff may raise what is known as the "discovery rule" to defer the accrual date of claims subject to a statute of limitations. See BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 65-66 (Tex. 2011). The discovery rule is applied to instances in which "the nature of the injury incurred is inherently undiscoverable and the evidence of injury is objectively verifiable." Id. (citing Computer Assoc. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996)). An injury is inherently undiscoverable when it is the type of injury that could not be discovered through the exercise of reasonable diligence. Id.
A defendant moving for summary judgment on the affirmative defense of limitations has the burden to (1) conclusively prove when the cause of action accrued, and (2) negate the discovery rule, if it applies and has been pled or otherwise raised. See Walker v. Presidium, Inc., 296 S.W.3d 687, 694 (Tex. App.—El Paso 2009, no pet.) (citing KPMGPeat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999)); see also In re Estate of Matejek, 960 S.W.2d 650, 651 (Tex. 1997).
When the plaintiff's cause of action involves insurance benefits, the injury-producing event which starts the limitations clock is sometimes unequivocally clear. For example, a plaintiff-insured's cause of action against a defendant-insurer accrues as a matter of law when the insurer unambiguously makes a final determination concerning the insured's claim, such as when the insurer notifies the insured in writing that it has made a final determination with respect to coverage or when the insurer closes its claim file. See Knott, 128 S.W.3d at 221 (citing Kuzniar v. State Farm Lloyds, 52 S.W.3d 759, 761 (Tex. App.—San Antonio 2001, pet. denied)). Courts have consistently held that when the insurer leaves no ambiguity concerning the finality of its determination with respect to the insured's claim, the discovery rule does not apply to postpone the accrual date of the insured's cause of action. See Lozada v. Farrall & Blackwell Agency, Inc., 323 S.W.3d 278, 289 (Tex. App.—El Paso 2010, no pet.); Davis v. Aetna Cas. & Sur. Co., 843 S.W.2d 777, 778 (Tex. App.—Texarkana 1992, no writ); Cigna Ins. Co. v. Simmons, 35 F.3d 561 (5th Cir. 1994); Painter Family Investments, LTD., L.L.P. v. Underwriters at Lloyds, Syndicate 4242 Subscribing to Policy No. 42-7560009948-L-00, 836 F. Supp. 2d 484, 492 (S.D. Tex. 2011); see also McGuinness v. State Farm Fire & Cas. Co., No. 01-98-00071-CV, 1998 WL 767728, at *3 (Tex. App.—Houston [1st Dist.] Nov. 5, 1998, pet. denied) (mem. op.).
C. Analysis
Here, the undisputed summary judgment evidence showed that State Farm paid Feurtado for covered losses to his property, notified him in writing that a final coverage decision had been made on February 14, 2011, and formally closed its claim file on February 16, 2011. Thus, at the very latest, Feurtado's cause of action accrued as a matter of law on February 16, 2011, when State Farm formally closed its file. See Knott, 128 S.W.3d at 221 (citing Kuzniar, 52 S.W.3d at 761); see also Castillo v. State Farm Lloyds, 210 Fed. Appx. 390, 394 (5th Cir. 2006); Chapa v. Allstate Texas Lloyds, 7:15-CV-30, 2015 WL 3833074, at *4 (S.D. Tex. June 22, 2015) (holding that the insured's cause of action accrued as a matter of law when the insurer paid the claim, sent a final letter to the insured, and closed its claims file). This injury-producing event occurred more than two years before Feurtado filed suit on February 21, 2013.
On appeal, Feurtado does not dispute that State Farm's action in February 2011 unambiguously indicated that nothing further would be done on his claim. Instead, Feurtado argues that his cause of action did not accrue until some months after February 2011 when he discovered the full extent of the damage to his home and realized that State Farm had underpaid his claim. In essence, Feurtado contends that summary judgment was improper in this case because State Farm failed to negate the discovery rule. However, as previously noted, a summary judgment movant must negate the discovery rule only when it applies and has been pled or otherwise raised. See Lozada, 323 S.W.3d at 289; Davis, 843 S.W.2d at 778; Painter, 836 F. Supp. 2d at 492; Cigna, 35 F.3d at 561; see also McGuinness, 1998 WL 767728, at *3. Here, the discovery rule does not apply because State Farm's action in February 2011 left no ambiguity concerning the finality of its determination on Feurtado's claim. See Kuzniar, 52 S.W.3d at 761; Knott, 128 S.W.3d at 221. Furthermore, Feurtado did not plead or otherwise sufficiently raise the discovery rule in his response to State Farm's summary judgment to properly put the matter in issue for the trial court. See In re Estate of Matejek, 960 S.W.2d at 651 (holding that a party seeking summary judgment on a limitations defense is not required to negate the discovery rule when the nonmovant fails to plead or otherwise raise the discovery rule). We therefore overrule Feurtado's sole issue.
III. Conclusion
We affirm the judgment of the trial court.
/s/ Rogelio Valdez
ROGELIO VALDEZ
Chief Justice Delivered and filed this the 25th day of February, 2016.