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holding that insurance agent who procured insurance as requested by his client “had no duty to do more”
Summary of this case from Ostrovitz v. First Specialty Ins. Co.Opinion
No. 14-08-00245-CV
Memorandum Opinion filed October 1, 2009.
On Appeal from the 55th District Court Harris County, Texas, Trial Court Cause No. 2006-48922.
Panel consists of Justices ANDERSON, GUZMAN, and BOYCE.
MEMORANDUM OPINION
After an automobile accident with an underinsured motorist, appellant Theresa Leigh sued the other driver, her own automobile insurers, and her insurance agent, Richard Kuenstler Jr. As relevant to this appeal, she alleged that Kuenstler was negligent and acted unconscionably in failing to obtain uninsured/underinsured motorist coverage in an amount at least equal to her primary insurance policy's liability limits. She further alleged that Kuenstler violated the Deceptive Trade Practices-Consumer Protection Act (the "DTPA") and the Texas Insurance Code by misrepresenting the terms of her insurance policies. The trial court granted summary judgment in Kuenstler's favor, and Leigh timely appealed. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Leigh first contacted Kuenstler about obtaining automobile insurance in December 1999. As Leigh later testified, she did not request coverage in any particular amount, but instead told Kuenstler, "I wanted coverage at least what my parents had [sic]." Leigh did not verify the amount of automobile insurance coverage her parents had purchased, and admittedly had "no idea" about the coverage her parents actually had requested from Kuenstler. She gave Kuenstler no other instructions, and when she received each outline of renewal coverage, she "just didn't pay attention to it."
According to her live pleadings, the automobile insurance policies procured by Kuenstler from Southern Farm Bureau Casualty Company ("Southern Farm Bureau") afforded her liability coverage of $300,000 per person and $500,000 per occurrence. In addition, Kuenstler had procured an uninsured/underinsured motorist ("UM/UIM") policy for Leigh with coverage limits of $50,000. In contrast, Leigh's parents had only $20,000 in UM/UIM coverage. Leigh also was covered by a $1 million umbrella policy issued by Texas Farm Bureau Mutual Insurance Company ("Texas Farm Bureau"). Although she believed that the umbrella policy would afford coverage for her own medical expenses and damages she sustained as the result of an automobile accident with an underinsured motorist, Leigh admits that she simply assumed this to be the case. In fact, the umbrella policy afforded coverage only for Leigh's liability, and not for her own damages.
On September 18, 2004, Leigh was injured in an automobile accident with underinsured motorist Ashton Von Blon. Leigh sued Von Blon, Von Blon's parents, Southern Farm Bureau, Texas Farm Bureau, and Kuenstler. As relevant to this appeal, Leigh alleged that Kuenstler (1) was negligent in failing to obtain UM/UIM coverage in an amount at least equal to the policy limits of her liability insurance, and (2) violated the DTPA and the Texas Insurance Code by misrepresenting the terms of the insurance policies and by unconscionably failing to ensure that her UM/UIM coverage was at least equal to the policy limits provided by her primary liability policy.
Kuenstler initially moved for traditional summary judgment on the sole ground that he had no common-law or statutory duty to offer Leigh UM/UIM insurance in excess of the statutory minimum, and thus, no duty to offer her more than the $50,000 in UM/UIM coverage that he actually procured. In her response, Leigh argued that it would be improper to grant Kuenstler summary judgment because, inter alia, he did not move for judgment on her claim that Kuenstler "breached his contract with her to obtain the highest coverages available consistent with her requested liability limits of $300,000 per person and $500,000 per occurrence." The record contains no pleadings on file at the time in which Leigh asserted such a claim; however, Kuenstler filed a reply memorandum in which he represented that three weeks after he moved for summary judgment, Leigh filed a Second Amended Petition adding a claim for breach of contract. Kuenstler further argued in his reply that (1) no such contract was formed; (2) if a contract to procure insurance for Leigh existed, then Kuenstler fulfilled his contractual duty by procuring insurance that provided her with more coverage than her parents had; and (3) there is no evidence that he breached a contract with Leigh. On July 9, 2007, the trial court denied the motion without prejudice to the filing of further motions.
At all times relevant to this appeal, motorists were required by statute to carry motor vehicle liability insurance with coverage limits of at least $20,000 per person and $40,000 per occurrence for bodily injury or death and $15,000 per occurrence for property damage. See Act of May 1, 1995, 74th Leg., R.S., ch. 165, § 1, 1995 Tex. Gen. Laws 1025, 1710 (amended 2007) (current version at TEX. TRANSP. CODE ANN. § 601.072 (Vernon Supp. 2008)).
Kuenstler's summary-judgment motion is actually entitled "Defendant's, Richard J. Kuenstler, Jr., Memorandum in Support of his Traditional Motion for Summary Judgment [sic]." In the document's introduction and in its certificate of service, Kuenstler again refers to it as a "Memorandum in Support of his Traditional Motion for Summary Judgment." Nevertheless, Leigh has never asserted that the document is a brief rather than a motion. To the contrary, the parties have stipulated that this document is the motion for summary judgment at issue and is simply improperly titled. We therefore treat the document as a summary-judgment motion just as the parties have done. See TEX. R. CIV. P. 71 ("When a party has mistakenly designated any plea or pleading, the court, if justice so requires, shall treat the plea or pleading as if it had been properly designated.").
The Second Amended Petition is not in the record.
Although Kuenstler did not submit a second summary-judgment motion, the trial court granted final judgment disposing of all claims and all parties on August 14, 2007. Despite the existence of a final judgment against Leigh, Kuenstler then filed a motion to re-urge his earlier summary-judgment motion, together with a supplemental memorandum in support of summary judgment. In the latter, Kuenstler stated that he incorporated his original and reply memorandums, and he repeated his argument that he fulfilled his only duty to Leigh by procuring the coverage she requested. Leigh moved for new trial and filed a response to Kuenstler's motion.
On October 2, 2007, the trial court vacated its previous judgment, partially granted Leigh's motion for new trial, and reconsidered and granted Kuenstler's summary-judgment motion. As a result of this order, only Leigh's claims against Ashton Von Blon and her breach-of-contract claim against Southern Farm Bureau remained in the case. Leigh subsequently dismissed her claims against Southern Farm Bureau, and pursuant to her motion to nonsuit, the trial court dismissed Von Blon from the suit. As a result of this order, the summary judgment in Kuenstler's favor became final. Leigh then filed a second motion for new trial, which the trial court denied, and this appeal ensued.
II. ISSUE PRESENTED
In the dispositive issue presented on appeal, Leigh contends the trial court erred in granting Kuenstler's motion for summary judgment.
Leigh also presents a second issue in which she asks, "What is an insurance agent's duty to his insured in connection with making sure that the uninsured/underinsured policy limits match the primary limits of liability coverage?" This issue appears to correspond to Leigh's argument that Kuenstler had a duty to recommend or procure UM/UIM coverage for her in an amount equal to the coverage limits of her primary liability policy, and thus, the trial court erred in granting summary judgment in Kuenstler's favor. We therefore conclude that Leigh's second issue is subsumed in her first issue.
III. STANDARD OF REVIEW
We review summary judgments de novo, Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005), and where the trial court grants the summary-judgment motion without specifying the grounds, we affirm the judgment if any of the grounds presented are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 873 (Tex. 2000). We consider all grounds the appellant preserves for review that are necessary for final disposition of the appeal. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996).
In a traditional motion for summary judgment, the movant has the burden of showing that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). To be entitled to traditional summary judgment, a defendant must conclusively negate at least one essential element of each of the plaintiff's causes of action or conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). Evidence is conclusive only if reasonable people could not differ in their conclusions. City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). Once the defendant establishes its right to summary judgment as a matter of law, the burden shifts to the plaintiff to present evidence raising a genuine issue of material fact. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979).
IV. ANALYSIS
A. Common-Law Negligence
A cause of action for negligence requires a legal duty owed by one person to another, a breach of that duty, and damages proximately caused by the breach. D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002). Under well-established Texas law, an insurance agent who undertakes to procure insurance for another owes his client the common-law duties to use reasonable diligence in attempting to place the requested insurance and to inform the client promptly if he is unable to do so. May v. United Servs. Ass'n of Am., 844 S.W.2d 666, 669 (Tex. 1992); Sonic Sys. Int'l, Inc. v. Croix, 278 S.W.3d 377, 389 (Tex. App.-Houston [14th Dist.] 2008, pet. filed). The agent has no duty to extend the client's insurance protection merely because the agent may know of the client's need for additional insurance, especially in the absence of evidence of prior dealings in which the agent customarily has attended to the client's insurance needs without consulting her. McCall v. Marshall, 398 S.W.2d 106, 109 (Tex. 1965); Critchfield v. Smith, 151 S.W.3d 225, 230 (Tex. App.-Tyler 2004, pet. denied); Moore v. Whitney-Vaky Ins. Agency, 966 S.W.2d 690, 692 (Tex. App.-San Antonio 1998, no pet.).
According to the uncontroverted summary-judgment evidence, Leigh requested from Kuenstler only that he procure insurance coverage in an amount at least equal to the coverage provided to Leigh's parents under their automobile insurance policies. Leigh's parents had $20,000 in UM/UIM coverage; Kuenstler procured $50,000 in UM/UIM coverage for Leigh. Thus, he fulfilled his common-law duty to Leigh, and as a matter of law, he had no duty to do more.
Leigh argues that the affidavit of her expert, Roy L. Phillips, raises a genuine issue of material fact on the question of whether Kuenstler owed her a duty to procure UM/UIM coverage in an amount equal to her liability coverage. But the existence of a duty is not a question of fact but a question of law for the court to decide "from the facts surrounding the occurrence in question"; thus, our analysis is unaffected by Phillips's affidavit. Moreover, his conclusions, which are contrary to governing law, are based at least in part on assumptions that are contrary to the undisputed facts. See Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995) ("When an expert's opinion is based on assumed facts that vary materially from the actual, undisputed facts, the opinion is without probative value and cannot support a verdict or judgment."); see also Burrow v. Arce, 997 S.W.2d 229, 236 (Tex. 1999) (explaining that an expert opinion with no demonstrable basis lacks probative value).
Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).
In his affidavit, Phillips attested in pertinent part as follows:
It is my opinion that an Agent is responsible for providing the same Uninsured/Underinsured Motorist limits as those of the Bodily Injury and Property Damage under the Texas Personal Auto Policy.
It is important to recognize that the Leigh family has been a client of the defendant Agent for many years. . . . This special relationship with the Leigh family, in my opinion, carries with it a responsibility to assure that the policies provided to the Plaintiff meets [sic] the standard of care that we have described as being taught in the insurance industry. . . .
It is my opinion that the Insured did not have an understanding of the difference between Liability to third parties, and first[-]party coverage for damages cause[d] by an Uninsured/Underinsured motorist[.] This, in my opinion, constitutes an unleveled field of knowledge to the detriment of the Insured.
It is therefore my opinion that the Defendant did not meet the standard of care expected of a prudent agent in the State of Texas arising from the same or similar circumstances.
The record, however, contradicts Phillips's assumption that Leigh and her family had been Kuenstler's clients "for many years" so as to create "a special relationship with the Leigh family." Leigh's own testimony establishes that she had no relationship with Kuenstler before 1999. In addition, her insurance application contains an area for "Agent's Representation" in which Kuenstler was asked, "How long have you known applicant?" Kuenstler responded that he had known Leigh for less than a year, and Leigh signed the application directly below the statement, "I declare the foregoing statements to be true to the best of my knowledge and belief. . . ." Leigh further testified that she never met Kuenstler in person before she filed this suit. She does not allege that Kuenstler has a fiduciary relationship with her, and she has never claimed that she communicated to him the extent to which she understands or fails to understand insurance issues.
We conclude that the trial court did not err in granting summary judgment in Kuenstler's favor on Leigh's common-law negligence claim, and we overrule Leigh's appellate issue as it pertains to this cause of action.
B. Breach of Implied Contract
Regarding her contract claim, Leigh argues on appeal that the trial court erred in granting summary judgment because a conflict in the testimony creates a genuine issue of material fact "as to what coverages she wanted and what she was told" by Kuenstler. According to Leigh, Kuenstler testified that he told Leigh she could increase her UM/UIM coverage limits to match the limits of her liability coverage, whereas she denied that he made such a statement. Her argument that this purported conflict in the testimony precluded summary judgment is unpersuasive on both evidentiary and legal grounds.
First, as a simple factual matter, Leigh did not deny that Kuenstler told her she could increase her UM/UIM policy limits to match her liability coverage; to the contrary, she testified repeatedly that she had no recollection of their conversation and agreed that "if [she] were to try to describe accurately the content of any of those conversations, [she would] have to just speculate about it." In response to Kuenstler's summary-judgment motion, Leigh filed an affidavit in which she stated she did not recall Kuenstler telling her that she could purchase UM/UIM coverage in the same amount as her primary liability policy limits. She further stated, "I don't think he told me about this option because if he had told me that I could purchase that coverage for a mere $38.00 more in premiums every 6 (six) months, I would have done it in a minute." But this testimony actually is consistent with Kuenstler's testimony, because Kuenstler testified that Leigh did not ask and he did not volunteer information regarding the difference in premiums for a higher level of coverage.
Leigh testified, "I don't remember anything about the conversation. I mean it was B I just remembered that I needed car insurance." "I have no idea what I said. I think I B I have no idea. I mean I don't remember the conversation." "I told him B I think this is what I told him B that I wanted coverage at least what my parents had, because I just assumed that my parents would be carried at the highest."
Second, the testimony at issue does not concern a material fact. A fact is "material" for summary-judgment purposes only if it affects the outcome of the suit under the governing law. Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 433 (Tex. App.-Houston [14th Dist.] 1999, no pet.). Because Kuenstler had no duty to offer Leigh UM/UIM coverage in an amount equal to her primary liability policy limits, his failure to do so would not have breached a duty.
Repeating the substance of the arguments presented in connection with her common-law negligence claim, Leigh next asserts that Phillips's affidavit constitutes "uncontroverted proof that an insurance agent has a duty to obtain UM/UIM coverage in the same amount as the primary liability policy." She further contends that "the long standing [sic] relationship between the Leigh family and Kuenstler's agency, together with [Leigh's] testimony, create a fact question as to whether Kuenstler's failure to obtain UM/UIM coverages which matched [Leigh's] primary limits breached the implied term of the contract between the parties to procure appropriate coverages" for her. As previously discussed, however, Kuenstler had no such duty under the common law, and Leigh does not contend that Kuenstler expressly agreed to procure UM/UIM insurance for Leigh in that amount. Although she suggests on appeal that the trier of fact could imply such a term to the parties' agreement, it is undisputed that she signed an application for insurance requesting coverage in the amounts actually procured. Her argument therefore must fail, because "[i]f the parties have expressly stated the terms of their agreement, they have created an express contract and are bound by it to the exclusion of conflicting implied terms." Emmer v. Phillips Petroleum Co., 668 S.W.2d 487, 490 (Tex. App.-Amarillo 1984, no writ).
We conclude that the trial court did not err in granting summary judgment in Kuenstler's favor on Leigh's contract claim. We therefore overrule the issue presented as it pertains to this cause of action.
C. Insurance Code Violation
Lastly, Leigh argues that the trial court erred in granting summary judgment in Kuenstler's favor on Leigh's claim that he violated section 541.061 of the Texas Insurance Code. See TEX. INS. CODE ANN. § 541.061 (Vernon 2009). This section provides in pertinent part that "[i]t is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to misrepresent an insurance policy by . . . failing to state a material fact necessary to make other statements made not misleading, considering the circumstances under which the statements were made. . . ." Id. § 541.061(2). Leigh asserts that Kuenstler violated this statute by failing to tell her that (1) in the event of an accident with an uninsured or underinsured motorist, the umbrella policy would not "drop down" to cover damages she sustained in excess of her UM/UIM policy limits; and (2) she could purchase UM/UIM insurance with the same coverage limits as those provided in her primary liability policy. According to Leigh, these omissions led her to believe that she was "fully covered in excess of [one] million dollars because of the umbrella policy."
Although Leigh argued in her second motion for new trial that Kuenstler did not move for summary judgment on this claim, she does not raise this argument on appeal, and we cannot reverse a judgment in a civil case based on unassigned error. See Pat Baker Co. v. Wilson, 971 S.W.2d 447, 450 (Tex. 1998) (per curiam); Exxon Mobil Corp. v. Hines, 252 S.W.3d 496, 507 (Tex. App.-Houston [14th Dist.] 2008, pet. denied).
Leigh identifies no statements by Kuenstler that were misleading absent explanations of the coverage provided by the umbrella policy and the availability of UM/UIM insurance with higher policy limits; to the contrary, she testified that she "just thought" that the umbrella policy would provide coverage for the same expenses covered by the UM/UIM policy, and she admitted that this was simply an assumption on her part. But see Moore, 966 S.W.2d at 692-93 (explaining that, "'[i]n the absence of some specific misrepresentation by the insurer or agent about the insurance, a policyholder's mistaken belief about the scope or availability of coverage is not generally actionable'" under the DTPA or the Insurance Code (quoting Sledge v. Mullin, 927 S.W.2d 89, 94 (Tex. App.-Fort Worth 1996, no writ))). Her appellate argument does not address the evidence, but instead consists of a nearly-verbatim recital of the allegations made in her Third Amended Petition, unsupported by citations to the record or to authority. We therefore conclude that Leigh has waived her contention that the trial court erred in granting summary judgment on her claim that Kuenstler violated section 541.061 of the Insurance Code. See TEX. R. APP. P. 38.1(i) (requiring appellants to support their arguments with appropriate citations to authorities and to the record); Trenholm v. Ratcliff, 646 S.W.2d 927, 934 (Tex. 1983) (holding that issues unsupported by argument and authorities are waived).
V. CONCLUSION
For the foregoing reasons, we hold that Kuenstler established his entitlement to judgment as a matter of law on Leigh's claims of negligence and breach of contract, and Leigh's challenge to the judgment on her statutory claims is waived. We therefore affirm the trial court's judgment.