TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
ON MOTION FOR REHEARING
NO. 03-98-00078-CV
James McConnell and Kim McConnell, Appellants
v.
State Farm Lloyds, Appellee
NO. 96-00948, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
This appeal arises from claims appellants James McConnell and Kim McConnell made under their homeowner's insurance policy. Dissatisfied with State Farm Lloyds' handling of their claims relating to plumbing leaks and foundation damage, the McConnells sued for breach of contract, breach of the duty of good faith and fair dealing, a declaratory judgment, and violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA). The trial court rendered judgment for State Farm in the form of a partial summary judgment followed by a final summary judgment. We will vacate the judgment of the trial court in part, affirm it in part, and reverse and remand in part.
After the McConnells filed their second amended petition, State Farm moved for summary judgment on all the McConnells' claims. The trial court granted State Farm a partial summary judgment. The court expressly rendered judgment that the McConnells' policy excluded coverage for foundation damage and denied the McConnells' extra-contractual claims that related to the foundation claim, with one exception: the court specifically reserved ruling on the McConnells' claims that State Farm misrepresented the coverage for foundation damage. The court concluded the order by reciting that all relief not expressly granted was denied. The effect of this Mother Hubbard clause was to deny the McConnells relief on any remaining claims they had asserted in their second amended petition. See Ortiz v. Avante Villa at Corpus Christi, Inc., 926 S.W.2d 608, 611 (Tex. App.--Corpus Christi 1996, writ denied) ("catch-all" clause sweeps out those claims that are not specifically reached). (1)
In their first two points of error, the McConnells challenge the trial court's partial summary judgment, arguing that the policy covered the damage to their foundation and that State Farm failed to prove that their damage was caused by foundation movement rather than plumbing leaks. After the trial court rendered judgment in this case, the supreme court ruled that the 1991 Texas Standard Homeowner's Policy (Form B) covers foundation damage caused by plumbing leaks. See Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 739 (Tex. 1998). State Farm concedes on appeal that the McConnells' policy covers their foundation damage and that the McConnells' claim for breach of contract concerning their foundation should be remanded to determine whether the plumbing leaks caused the damage to their foundation. We accordingly sustain the McConnells' first two points of error.
Following the trial court's partial summary judgment, the McConnells filed a third amended petition, adding a claim for reformation of their policy as well as new claims for breach of contract, breach of the duty of good faith and fair dealing, and violations of the Insurance Code and the DTPA. State Farm filed a second motion for summary judgment. The court granted this motion, rendering a final take-nothing judgment against the McConnells.
In their third point of error, the McConnells contest the trial court's grant of State Farm's second motion for summary judgment. The McConnells argue first that State Farm presented no evidence on their claim for reformation of the insurance policy. By this claim, the McConnells sought to have their policy reformed to include coverage for foundation damage. Because Balandran has established that the policy includes such coverage, we agree with State Farm that Balandran renders the claim for reformation moot.
The McConnells next contend that fact issues remain on their claim for breach of the contract to pay for plumbing repairs, specifically, whether State Farm paid the full costs for plumbing pipe and labor. To be entitled to a summary judgment, the movant must 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). In reviewing a summary judgment, the appellate court must consider as true all evidence favorable to the non-movant, and indulge every reasonable inference and resolve any doubt in favor of the non-movant. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).
The McConnells' policy obligates State Farm to pay the smallest of
(1) the limit of liability under this policy applicable to the damaged or destroyed building structure(s);
(2) the cost to repair or replace that part of the building structure(s) damaged, with material of like kind and quality and for the same use and occupancy on the same premises; or
(3) the amount actually and necessarily spent to repair or replace the damaged building structure(s).
The summary-judgment evidence includes an itemized bid by The Gerloff Company to repair the McConnells' plumbing for $18,462.20. After reducing this amount by the $250 deductible, State Farm paid the McConnells $18,212.50 to have their plumbing repaired. The bid included specific amounts for plumbing pipe and labor. Bruce Marbach, an employee of Gerloff who is licensed as a master plumber, testified by affidavit that Gerloff's estimate represents a reasonable and customary rate in the plumbing industry for accessing and repairing the McConnells' plumbing system. State Farm's evidence proves conclusively that, under paragraph two of the policy quoted above, it fully paid the McConnells to repair their plumbing system. Because the trial court sustained State Farm's objections to the McConnells' evidence on this issue, they have failed to controvert State Farm's evidence. We conclude that the trial court properly rendered summary judgment for State Farm on the McConnells' claim for breach of the contract to pay for plumbing pipe and labor.
The McConnells complain that State Farm's second summary-judgment motion failed to address their claims for breach of contract to pay the contractor's overhead and profit, to pay investigative costs such as plumbing and engineering testing, and to conduct a reasonable and thorough investigation of their claims before denying coverage. These claims were denied in the trial court's partial summary judgment and were no longer live issues before the court. The McConnells therefore have not shown that the trial court erred in rendering judgment against them on these breach-of-contract claims.
The McConnells next argue that the court erred in granting State Farm's second motion for summary judgment as to their misrepresentation claims. The McConnells alleged in their third amended petition that State Farm misrepresented the facts and policy provisions relating to foundation coverage and misrepresented that all damages caused by plumbing leaks were covered. The McConnells brought their misrepresentation claims under both the Insurance Code and the DTPA; all of the McConnells' DTPA claims were stated as claims of misrepresentation. In its second summary-judgment motion, State Farm contended that its denial of the McConnells' foundation claim for a reason different than the one it asserted in the summary-judgment proceedings does not subject it to liability. Because State Farm's ground for summary judgment does not address the claims the McConnells pleaded, the trial court erred in granting summary judgment on the McConnells' claims for misrepresentation as to foundation coverage. Tex. R. Civ. P. 166a(c); Chessher v. Southwestern Bell Tel. Co., 658 S.W.2d 563, 564 (Tex. 1983).
We turn to the McConnells' misrepresentation claims relating to coverage for plumbing repairs. After the trial court rendered partial summary judgment denying these claims, the McConnells amended their petition, but raised no new misrepresentation claims relating to coverage for plumbing repairs. Such claims were therefore not at issue in the proceedings on State Farm's second summary-judgment motion. We view any grounds raised by State Farm after the partial summary judgment on these claims as surplusage and conclude that the McConnells have not shown that the trial court erred in rendering judgment against them.
Except for the claims concerning misrepresentation as to foundation coverage, the trial court denied the McConnells' claim for violation of the Texas Insurance Code in its partial summary judgment. In their third amended petition, the McConnells pleaded only one new violation of the Insurance Code, namely that State Farm failed to fully pay their plumbing access costs within five business days from the date it said it would pay. See Tex. Ins. Code Ann. art. 21.55(4) (West Supp. 1999). State Farm failed to address the timeliness of its payment in its second summary-judgment motion. The trial court therefore erred in granting summary judgment on the McConnells' claim under article 21.55 of the Insurance Code. Tex. R. Civ. P. 166a(c); Chessher, 658 S.W.2d at 564.
Turning to the McConnells' claim for breach of the duty of good faith and fair dealing, the trial court denied this claim in its entirety in its first order granting partial summary judgment. When the McConnells subsequently amended their petition, they brought new charges that State Farm had breached this duty by the manner in which it issued policies and by its failure to pay for all plumbing repairs, including pipe and labor. In its second summary-judgment motion, State Farm argued that because it conclusively proved its right to recover on the McConnells' claim for breach of its contract to pay for plumbing repairs, the McConnells' related claim for breach of the duty of good faith and fair dealing must fail. We agree that, having fulfilled its contractual duty to pay for the McConnells' plumbing repairs, State Farm has negated their claim for breach of the duty of good faith in paying for the plumbing repairs. Liberty Nat'l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996); Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341 (Tex. 1995). The trial court thus did not err in granting summary judgment for State Farm on this claim.
State Farm failed to address the McConnells' newly pleaded claim for breach of the duty of good faith and fair dealing in regard to issuing policies. The Texas Supreme Court has defined an insurer's duty of good faith and fair dealing to cover the insurer's conduct in evaluating, processing, and denying claims. Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex. 1987); see also Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 52 (Tex. 1997). The supreme court has not expanded the duty of good faith beyond these confines, and we decline to extend the duty to the insurer's conduct in issuing policies. Cf. Pickens v. Texas Farm Bureau Ins. Cos., 836 S.W.2d 803, 806-07 (Tex. App.--Amarillo 1992, no writ) (refusing to extend good-faith duty to require insurer to disclose range of liability coverage amounts).
A trial court generally cannot render summary judgment on a cause of action that is not addressed in a summary-judgment proceeding. Tex. R. Civ. P. 166a(c); Chessher, 658 S.W.2d at 564. An exception to this rule has been recognized, however, when reversing the judgment as to a particular cause of action would be meaningless because no such cause of action exists. Withrow v. State Farm Lloyds, 990 S.W.2d 432, 438 (Tex. App.--Texarkana 1999, pet. denied). We agree with the Withrow court that reversing the summary judgment as to a nonexistent claim would be needlessly inefficient. We therefore hold that summary judgment on the McConnells' claim for breach of the duty of good faith and fair dealing in issuing policies was not error.
In sum, we do not address the McConnells' claim for reformation, which has become moot. We sustain point three as to the McConnells' claims for misrepresentation as to foundation coverage and untimely payment for plumbing access costs under article 21.55 of the Insurance Code. We overrule point three as to the McConnells' claims for breach of the contract to pay for plumbing repairs, the contractor's overhead and profit, and investigative costs, and to reasonably investigate their claims; misrepresentation as to coverage for plumbing repairs; and breach of the duty of good faith and fair dealing as to plumbing repairs and the issuance of insurance policies.
In their fourth point of error, the McConnells contend that the trial court erred in sustaining State Farm's objections to the evidence supporting their response to State Farm's second summary-judgment motion. The McConnells complain that State Farm violated a local rule by submitting an order to the court without first giving their counsel a chance to inspect or respond to it. Because the McConnells have not provided a record supporting their complaint, however, they have not preserved the complaint for review. Even if the record documented their complaint, the McConnells neither objected to the trial court nor obtained a ruling on it, thereby waiving the complaint for review. Tex. R. App. P. 33.1(a)(1). In addition, the McConnells summarily state, without argument, that the court erred in sustaining the objections because all their summary-judgment evidence was proper. The McConnells' failure to offer argument and authorities to support this contention waives it for review. See id. 38.1(h). We overrule point four.
In their fifth point of error, the McConnells assert that the trial court erred in striking their fourth amended petition. On September 18, 1997, the court heard State Farm's second summary-judgment motion, but deferred ruling on it. On October 2, before the trial court rendered judgment, the McConnells filed their fourth amended petition, adding a new claim for "fraud/misrepresentation" relating to coverage for plumbing repair and foundation damage. State Farm objected that the new claim was untimely and prejudicial, and the trial court granted its motion to strike the amended petition. The trial court acts within its discretion in striking a pleading that raises a new claim and is filed less than seven days before a summary-judgment hearing. See Tex. R. Civ. P. 63; Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex. 1990). We therefore overrule point five, but observe that the McConnells are free to amend their pleadings to raise new claims on remand to the trial court.
In point of error six, the McConnells argue that the trial court erred in denying their motion to reconsider the order granting State Farm's second summary-judgment motion. The McConnells support this point by referring to their arguments under points three, four, and five. We therefore sustain point six to the extent we have sustained point of error three. We overrule the remainder of point six.
Having considered each of the McConnells' points of error, we reverse the trial court's summary judgment as to the McConnells' claims for breach of contract as to foundation coverage, misrepresentation as to foundation coverage, and untimely payment of plumbing access costs under article 21.55 of the Insurance Code; we remand these claims to the trial court for further proceedings. We vacate the trial court's judgment on the McConnells' claim for reformation of the insurance policy, and we dismiss that claim as moot. The remainder of the trial court's summary judgment is affirmed.
Bea Ann Smith, Justice
Before Justices Jones, B. A. Smith and Yeakel
Affirmed in Part; Reversed and Remanded in Part; Vacated in Part
Filed: October 14, 1999
Do Not Publish
1. Despite the presence of the Mother Hubbard clause in the partial summary judgment, we do not regard the judgment as final. Because it is more specific, the trial court's express reservation of the misrepresentation claims regarding foundation coverage controls over the court's general denial of all relief not expressly granted. The misrepresentation claims were thus left for later adjudication. Cf. Mafrige v. Ross, 866 S.W.2d 590, 592 (Tex. 1993).
judgment as to a nonexistent claim would be needlessly inefficient. We therefore hold that summary judgment on the McConnells' claim for breach of the duty of good faith and fair dealing in issuing policies was not error.
In sum, we do not address the McConnells' claim for reformation, which has become moot. We sustain point three as to the McConnells' claims for misrepresentation as to foundation coverage and untimely payment for plumbing access costs under article 21.55 of the Insurance Code. We overrule point three as to the McConnells' claims for breach of the contract to pay for plumbing repairs, the contractor's overhead and profit, and investigative costs, and to reasonably investigate their claims; misrepresentation as to coverage for plumbing repairs; and breach of the duty of good faith and fair dealing as to plumbing repairs and the issuance of insurance policies.
In their fourth point of error, the McConnells contend that the trial court erred in sustaining State Farm's objections to the evidence supporting their response to State Farm's second summary-judgment motion. The McConnells complain that State Farm violated a local rule by submitting an order to the court without first giving their counsel a chance to inspect or respond to it. Because the McConnells have not provided a record supporting their complaint, however, they have not preserved the complaint for review. Even if the record documented their complaint, the McConnells neither objected to the trial court nor obtained a ruling on it, thereby waiving the complaint for review. Tex. R. App. P. 33.1(a)(1). In addition, the McConnells summarily state, without argument, that the court erred in sustaining the objections because all their summary-judgment evidence was proper. The McConnells' failure to offer argument and authorities to support this contention waives it for review. See id. 38.1(h). We overrule point four.
In their fifth point of error, the McConnells assert that the trial court erred in striking their fourth amended petition. On September 18, 1997, the court heard State Farm's second summary-judgment motion, but deferred ruling on it. On October 2, before the trial court rendered judgment, the McConnells filed their fourth amended petition, adding a new claim for "fraud/misrepresentation" relating to coverage for plumbing repair and foundation damage. State Farm objected that the new claim was untimely and prejudicial, and the trial court granted its motion to strike the amended petition. The trial court acts within its discretion in striking a pleading that raises a new claim and is filed less than seven days before a summary-judgment hearing. See Tex. R. Civ. P. 63; Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d 938, 939 (Tex. 1990). We therefore overrule point five, but observe that the McConnells are free to amend their pleadings to raise new claims on remand to the trial court.
In point of error six, the McConnells argue that the trial court erred in denying their motion to reconsider the order granting State Farm's second summary-judgment motion. The McConnells support this point by referring to their arguments under points three, four, and five. We therefore sustain point six to the extent we have sustained point of error three. We overrule the remainder of point six.
Having considered each of the McConnells' points of error, we reverse the trial court's summary judgment as to the McConnells' claims for breach of contract as to foundation coverage, misrepresentation as to foundation coverage, and untimely payment of plumbing access costs under article 21.55 of the Insurance Code; we remand these claims to the trial court for further proceedings. We vacate the trial court's judgment on the McConnells' claim for reformation of the insurance policy, and we dismiss that claim as moot. The remainder of the trial court's summary judgment is affirmed.
Bea Ann Smith, Justice
Before Justices Jones, B. A. Smith and Yeakel
Affirmed in Part; Reversed and Remanded in Part; Vacated in Part
Filed: October 14, 1999
Do Not Publish
1. Despite the presence of the Mother Hubbard clause in the partial summary judgment, we do not regard the judgment as final. Because it is more specific, the trial court's express reservation of the misrepresentation claims regarding foundation coverage controls over the court's general denial of all relief not expressly granted. The misrepresentation claims were thus left for later adjudication. Cf. Mafrige v. Ross, 866 S.W.2d 590, 592 (Tex. 1993).
judgment as to a nonexistent claim would be needlessly inefficient. We therefore hold that summary judgment on the McConnells' claim for breach of the duty of good faith and fair dealing in issuing policies was not error.
In sum, we do not address the McConnells' claim for reformation, which has become moot. We sustain point three as to the McConnells' claims for misrepresentation as to foundation coverage and untimely payment for plumbing access costs under article 21.55 of the Insurance Code. We overrule point three as to the McConnells' claims for breach of the contract to pay for plumbing repairs, the contractor's overhead and profit, and investigative costs, and to reasonably investigate their claims; misrepresentation as to coverage for plumbing repairs; and breach of the duty of good faith and fair dealing as to plumbing repairs and the issuance of insurance policies.
In their fourth point of error, the McConnells contend that the trial court erred in sustaining State Farm's objections to the evidence supporting their response to State Farm's second summary-judgme