Opinion
No. 07-17-00279-CV
06-05-2018
WILLIAM TURNER, APPELLANT v. PEERLESS INDEMNITY INSURANCE COMPANY, APPELLEE
On Appeal from the 249th District Court Johnson County, Texas
Trial Court No. DC-C201500422 , Honorable D. Wayne Bridewell, Presiding
MEMORANDUM OPINION
Before QUINN, C.J., and CAMBPELL and PARKER, JJ.
William Turner appeals from a final summary judgment denying him recovery against Peerless Indemnity Insurance Company. The former sued the latter for purportedly breaching its insurance contract, engaging in deceptive trade practices, violating the provisions of the Texas Insurance Code, and engaging in bad faith. The causes of action arose from a claim Turner made upon the homeowner's insurance policy issued by Peerless. The insurer investigated the loss and issued several checks to Turner reflecting its estimate of that loss. Turner disagreed with the amount of money Peerless deigned to pay and sued. Peerless then invoked the appraisal clause of the insurance policy. That resulted in the appointment of appraisers and issuance of an appraisal award. The award, less applicable deductions, was paid by the insurer, who then moved for a traditional and no-evidence motion for summary judgment upon both the contractual and extra-contractual choses-in-action alleged by Turner. The trial court granted the motion and entered a final summary judgment denying Turner recovery. Turner appealed. We affirm.
Because this appeal was transferred from the Tenth Court of Appeals, we are bound by that court's precedent in case of conflicts. TEX. R. APP. P. 41.3.
Jurisdiction
We first address an issue of jurisdiction raised by Peerless. It contends that we have none over Turner's effort to attack the trial court's decision to deny his breach of contract claims. This is purportedly so because Turner merely sought relief via his motion for reconsideration and for new trial upon his extra-contractual claims. Thus, the motion extended the deadline to perfect an appeal only with regard to the extra-contractual claims. In other words, Peerless tells us that the deadline by which Turner had to perfect an appeal upon the decision to deny his breach of contract claim was thirty days after the date on which the trial court signed the summary judgment. On the other hand, he could wait ninety days to appeal the decision to deny the extra-contractual claims. Turner replied with: "Peerless's Jurisdictional Argument Is Absurd." We overrule the contention.
A timely motion for new trial extends the deadline within which to perfect an appeal from the judgment being attacked, not particular issues within a judgment or within a motion for new trial. See TEX. R. APP. P. 26.1(a)(i) (requiring a notice of appeal to be filed within thirty days after the judgment is signed or ninety days "after the judgment is signed if any party timely files . . . a motion for new trial'). Turner filed a timely motion to reconsider and, alternatively, for new trial within thirty days of the date the trial court signed its final summary judgment. His notice of appeal was filed within ninety days of the date on which the final summary judgment was signed. Thus, we have jurisdiction to consider Turner's issues attacking the decision to deny both his contractual and extra-contractual claims.
Standard of Review
We review no-evidence and traditional motions for summary judgment under the standard of reviews recently discussed in First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214 (Tex. 2017). And, when both are sought, the Supreme Court obligates us to first consider the no-evidence motion. Id. at 219.
We also note that when multiple grounds for summary judgment are mentioned in the motion and the trial court does not indicate upon which it relied in granting same, the appellant has the burden to illustrate on appeal that none of the grounds support the ruling. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex. 1993) (stating that when a litigant presents multiple grounds for summary judgment and the summary judgment does not specify the ground upon which the trial court rendered its judgment, the appellant must negate all grounds on appeal); Abdalla v. Farmers Ins. Exch., No. 07-17-00020-CV, 2018 Tex. App. LEXIS 3358, at *7 (Tex. App.—Amarillo May 14, 2018, no pet. h.) (per curiam) (mem. op.) (stating the same). Such is the situation here. The trial court did not identify any particular ground upon which it based its decision to grant summary judgment. Thus, Turner must negate them all, and if he does not, we must affirm the summary judgment.
Issue One - Summary Judgment on Breach of Contract
Peerless urged several grounds within its motion for summary judgment to defeat the breach of contract allegation. They included both the propositions that it 1) complied with the insurance contact and 2) timely paid the appraisal award thereby estopping Turner from pursuing the chose-in-action. It further alleged that Turner 1) could "produce no evidence that Peerless breached the contract - i.e., the Policy," and 2) "ha[d] no evidence of either breach of the contract/Policy or injury caused by that breach, each of which is an essential element of the cause of action." Again, the trial court agreed that summary judgment was appropriate but did not specify which of the foregoing grounds it found determinative. To reverse that decision, Turner now argues that the trial court erred because 1) a material issue of fact existed regarding the timeliness of Peerless's payment and 2) he "may use the difference between the appraisal award and the amount of damage Peerless initially found to defeat Peerless's no-evidence motion for summary judgment." We overrule the issue for several reasons.
First, one asserting a claim of breached contract must prove 1) the existence of a valid contract, 2) he performed or tendered performance, 3) his opponent failed to perform or tender performance, and 4) he suffered damages as a result of his opponent's default. USAA Tex. Lloyds Co. v. Menchaca, ___S.W.3d ___, ___, 2018 Tex. LEXIS 313, at *41 n.21 (Tex. Apr. 13, 2018) (op. on reh'g). Among others, the latter element was put into play here when Peerless alleged that Turner had no evidence of suffering due to the purported breach. Thus, it was encumbent upon him to offer evidence sufficient to create a material issue of fact on the element of damages. Yet, we found nothing within his brief directly addressing the topic. Arguably, his reference to "us[ing] the difference between the appraisal award and the amount of damage Peerless initially found" could be viewed as effort to fill the void. Yet, no one disputes that the insurer paid that "difference" shortly after the litigants completed the appraisal process in accordance with the insurance contract. See Hall v. Germania Farm Mut. Ins. Ass'n, No. 07-16-00304-CV, 2017 Tex. App. LEXIS 9654, at *8 (Tex. App.—Amarillo Oct. 13, 2017, no pet.) (mem. op.) (stating that "[b]y including a provision in the insurance contract relating to appraisal, the parties have effectively adopted a procedure for calculating loss and cannot disregard it"). So, we are left wondering about the nature and extent of damages recoverable by Turner. He did not specify what they were or attempt to explain how he remained injured by an alleged breach of contract. This is especially troublesome since the appraisal and its payment serve to resolve any dispute regarding damages arising from the purported breach. Id. at *7 (stating that "the 'effect of an appraisal award is to estop one party . . . from contesting the issue of damages, in a suit on the insurance contract, leaving only the question of liability'" (quoting Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794 (Tex. App.—Amarillo 1995, writ denied))).
Second, we disagree with the suggestion that the summary judgment evidence created a material issue of fact regarding the timeliness of the appraisal payment, and, therefore, the applicability of estoppel. Again, undertaking an appraisal and timely paying the subsequent award generally estops the insured from contesting damages. Id. Furthermore, whether the payment was timely is a relative concept normally involving a question of fact. Id. at *10. But, that it normally involves a question of fact does not mean it always involves a question of fact to be adjudicated by a trial. Indeed, as we observed in Hall, when the underlying facts are undisputed, the issue may well become a question of law. Id. We find that to be the case here.
The underlying facts are undisputed. The last appraiser signed the award on October 13, 2016. On October 14th, counsel for Peerless (Dan) emailed Turner's counsel (Will) informing him of the award and its entry. He also 1) described the net amount payable after various deductions were made and until repairs were completed, 2) asked if Will agreed with the calculations, 3) asked for "drafting instructions for issuance of the payment," assuming Will agreed with the calculations, and 4) inquired about the identity of the payees and if they were to include Will's law firm. Will did not respond to the electronic missive; so, Dan again emailed him on October 19th.
In the October 19th communication, Dan wrote: "Hey, Will. Just following up on this. Can you please provide drafting instructions so we can get the check for ACV amount of the appraisal award issued?" Several minutes later, Will replied with: "Dan - Sorry for the delay. Your ACV calculations are correct. 60% to . . . Bank & William Turner, 40% to [law firm] and William Turner." This led Dan to reply about ninety minutes later with: "Will, since the appraisal award fixes the amount of damages, [the bank] needs to be included on the entirety of the ACV payment, along with Turner and your firm. Please advise if you disagree." Will answered the following day (i.e., October 20th) via an email saying: "Dan - You're right, I erred." A check reflecting both the amount and payees agreed upon was issued on October 24, 2016. Dan's law firm then forwarded it to Will by overnight mail on October 25th.
The foregoing illustrates that Turner received payment for the loss within thirteen calendar days of the date the appraisal award was finalized. Five of those thirteen days were spent awaiting Will's answer to Dan's email soliciting confirmation about the net amount payable and the identity of the payees. Moreover, Dan had to not only nudge Turner's counsel into responding but also correct his opponent's inaccurate information. Unlike the circumstances before us in Hall, neither the insurance company nor its attorney attached conditions to the payees' negotiation of the check. So too do we have evidence here of the date on which the insurer's attorneys received the check and forwarded the instrument to the insured's representative; that data was also missing in Hall. These rather important factual differences distinguish the summary judgment record at bar from that before us in Hall. Indeed, we perceived the factual record in Hall as rising to a level that would enable reasonable and fair-minded people to differ in whether the payment there was timely. The same is not true here, which, in turn, compels us to forgo Turner's invitation to apply the outcome in Hall to the situation at bar. Those factual differences also lead us to hold, as a matter of law, that the thirteen-day period between finalization of the appraisal process and payment of the award was timely and reasonable, given the absence of any expressed period for satisfying the appraisal award in the insurance policy. Consequently, the trial court's decision to grant summary judgment upon Turner's claim of breached contract has the support of at least one ground urged by Peerless.
Turner would have us interpret the request for drafting instructions as Peerless's attempt to condition payment, but it would be unreasonable to do so. Per the words of Dan's email, he merely sought confirmation of his mathematical calculations once deductions were made from the appraisal award as authorized by the insurance policy. Furthermore, one other potential payee had interjected itself into the mix, that payee being the law firm representing Turner. In effect, Dan wanted to know if that law firm also had a pecuniary interest in the payment and, if so, assure that it be included as a payee. Despite our obligation to view the evidence in a light most favorable to Turner, we nonetheless hold that a factfinder cannot reasonably infer that asking opposing counsel about whom to pay and if the amount to be sent met with his approval constituted a condition delaying payment of the award. Nor can we say that one could reasonably infer from the foregoing inquiries an intent by the insurer to secure relief to which it was unentitled under the policy. The same could not be said of the condition imposed upon the negotiation of the check in Hall.
Issue Two - Summary Judgment on extra-contractual claims
In its summary judgment motion, Peerless argued, among other things, that Turner had no evidence of an independent injury upon which to base his extra-contractual claims. That is, he had no evidence of suffering damages aside from those represented by supposedly lost policy benefits. Because that was a potential ground upon which the trial court may have entered summary judgment, Turner had the responsibility to address the matter here. He did so by apparently suggesting that the lost benefits under the policy could serve as evidence of an independent injury. We disagree and overrule this issue as well.
The independent injury rule is alive and well, as reiterated by the Texas Supreme Court in its recent Menchaca opinion and recognized by us in Abdalla, 2018 Tex. App. LEXIS 3358, at *9-10. The Supreme Court began its explanation of the rule by observing that it derived "from the fact that an insurer's extra-contractual liability is 'distinct' from its liability for benefits under the insurance policy." Menchaca, 2018 Tex. LEXIS 313, at *36. Then it proceeded to describe "two aspects" of the rule. In discussing the first, it said that: 1) when "an insurer's statutory violation causes an injury independent of the insured's right to recover policy benefits, the insured may recover damages for that injury even if the policy does not entitle the insured to receive benefits"; and 2) "an insured can recover actual damages caused by the insurer's bad-faith conduct if the damages 'are separate from and . . . differ from benefits under the contract.'" Id. at *36-37 (quoting Twin City Fire Ins. Co. v. Davis, 904 S.W.2d 663 (Tex. 1995)). Effort was then made to explain why an insured could not recover such damages in a case it previously decided, e.g., Provident Am. Ins. Co. v. Castaneda, 988 S.W.2d 189 (Tex. 1998). According to the court, recovery was denied the insured in Castaneda "because 'none of the [insurer's] actions or inactions . . . was the producing cause of any damage separate and apart from those that would have resulted from a wrongful denial of the claim.'" Menchaca, 2018 Tex. LEXIS 313, at *37 (quoting Provident Am. Ins. Co. v. Castaneda, supra).
Regarding the second aspect of the independent injury rule, the Supreme Court explained that "an insurer's statutory violation does not permit the insured to recover any damages beyond policy benefits unless the violation causes an injury that is independent from the loss of the benefits." Id. at *38-39. That statement was followed with the observation that the court "further limited the natural range of injury by insisting that an injury is not 'independent' from the insured's right to receive policy benefits if the injury 'flows' or 'stems' from the denial of that right." Id. at *40.
Admittedly, Menchaca's discussion of the rule seems to have particular application to situations where a claim falls outside the coverage provided by the insurance policy and the insured nonetheless sues for damages. There may indeed be situations where damages unrelated to the supposed policy benefits are recoverable, though they would be rare, according to the Supreme Court. Id. Here, though, there was coverage and full payment was made timely once the parties completed the appraisal process as established by the insurance policy. So, as observed when discussing the issue of breached contract, we are left wondering about the nature and extent of damages sought and recoverable by Turner when the contract was actually performed. He got what the contract permitted him to get, just as did the insured in Abdalla. Yet, the independent injury rule seems to tell us that even if there is no breach of contract, extra-contractual claims may still be pursued when they are not predicated on the loss being covered under the policy. See Menchaca, 2018 Tex. LEXIS 313, at *38 (stating that the independent injury rule "does not apply if the insured's statutory or extra-contractual claims 'are predicated on [the loss] being covered under the insurance policy' . . . or if the damages 'flow' or 'stem' from the denial of the claim for policy benefits"). This suggests that when benefits are paid per the contract and the insurer performed its contractual obligation (i.e., has not breached the contract), an insured may still pursue extra-contractual causes of action but only when they are not founded upon the loss or injury allegedly covered by the policy. That is, they must be founded on an act that caused injury independent of the policy claim. See, e.g., Garcia v. State Farm Lloyds, 514 S.W.3d 257, 274-79 (Tex. App.—San Antonio 2016, pet. denied) (wherein the insurer timely paid the appraisal and the court held that absent evidence of an act so extreme that it caused injury independent of the policy claim, the insured had no bad faith claim). That is not what Turner did here.
Instead, Turner posits that "[i]f the claim is covered - as Turner's was - the insurer is bound by its statutory duties, and when the insurer breaches those duties, the amount of benefits the insured loses out on as a result is transformed into 'legal damage' and while that amount may not be recoverable in contract, the insured may elect to recover it under the bad faith statute." (Second Emphasis added). As can be seen, his argument remains focused on the benefits recoverable under the policy, which benefits have already been paid. But, under what we perceived to be Menchaca's explanation of the independent injury rule, his injury cannot be so predicated. It must be independent of what he claims he lost "out on" under the policy. Thus, the decision to grant summary judgment upon the extra-contractual claims urged by Turner has the support of at least one ground, and we overrule the second issue.
Having overruled Turner's issues, we affirm the summary judgment.
Brian Quinn
Chief Justice