Christine E. Reule v. Colony Insurance Company

Affirmed and Opinion filed July 12, 2013.

In The

Fourteenth Court of Appeals

NO. 14-11-00602-CV

CHRISTINE E. REULE, Appellant

V.

COLONY INSURANCE COMPANY, Appellee

On Appeal from the 80th District Court
Harris County, Texas
Trial Court Cause No. 2007-46357A

OPINION

In thirteen issues, Christine E. Reule argues the trial court erred by granting
Colony Insurance Company’s motion for summary judgment disposing of all of
Reule’s claims. We affirm.

I. BACKGROUND

In 1999, Reule purchased a unit in the Sherwood Valley I condominiums.
All unit owners were members of the Sherwood Valley I Council of Co-Owners
(“SVI”). As discussed below, SVI purchased a commercial general liability policy
from Colony (“the Policy”).

According to Reule’s pleadings, SVI has for years acted against her in an
effort to cause her to move. Among other claims, Reule accuses SVI of

failing to address a rodent problem,
harassment and discrimination against her because she is female, disabled,
and a single parent,
retaliation because she complained about certain infractions,
denying her voting rights and information during meetings,
denying her access to services and facilities at SVI,
fraudulently accusing her of not paying dues and then attempting to
foreclose on her unit, and
defaming her.

Reule also accuses an SVI board member of assault. Since 2003, Reule has filed a
series of suits in state and federal courts against SVI, board members, various other
individuals and entities connected to SVI, judges, and Colony, making similar
allegations as brought in this suit. Apparently, Reule’s claims in these suits have
been dismissed without prejudice.

Presently, Reule is the president of SVI and has dismissed her claims
against, or settled with, all defendants, including SVI,1 except the current suit
against Colony in Harris County district court. In this suit, Reule sues Colony for
claims based on the following:

(1) Texas Insurance Code;
(2) breach of the duty of good faith and fair dealing;
(3) fiduciary duty;
1
In the present litigation, SVI initially sued Reule for unpaid dues and foreclosure of
liens against her unit, and Reule counterclaimed. These claims have been resolved.

2
 (4) Texas Deceptive Trade Practices Act (“DTPA”);
(5) fraud and fraudulent concealment;
(6) Federal and Texas Fair Housing Acts;
(7) Federal and Texas Fair Debt Collections Acts;
(8) Federal Civil Rights Act;
(9) Federal Racketeer Influenced and Corrupt Organizations Act
(“RICO”);
(10) negligence, negligent misrepresentation, and intentional infliction
of emotional distress;2
(11) breach of contract;
(12) slander and libel; and
(13) civil conspiracy.

Colony filed a hybrid motion for summary judgment including traditional
and no-evidence grounds. Reule filed a response,3 and both parties were granted
leave to file supplemental pleadings. The trial court granted Colony’s motion for
summary judgment without specifying on what grounds, rendering a final
judgment.

II. STANDARD OF REVIEW: SUMMARY JUDGMENT

We review summary judgments de novo. Joe v. Two Thirty Nine Joint
Venture, 145 S.W.3d 150, 156–57 (Tex. 2004). When the trial court grants
summary judgment without specifying on what grounds, we will affirm if any of
the grounds presented are meritorious. FM Props. Operating Co. v. City of Austin,
22 S.W.3d 868, 872–73 (Tex. 2000). For both traditional and no-evidence motions

2
The trial court’s summary judgment included disposition of Reule’s claims for negligent
misrepresentation and intentional infliction of emotional distress. We summarily uphold
judgment as to these claims because Reule does not mention them in her brief.
3
In her fifth issue, Reule argues the trial court erred by striking her summary-judgment
response. We overrule this issue because our record indicates the trial court did not strike
Reule’s response.

3
for summary judgment, we take as true all evidence favorable to the nonmovant
and indulge every reasonable inference and resolve any doubts in the nonmovant’s
favor. See Joe, 145 S.W.3d at 157.

A party moving for traditional summary judgment must establish there is no
genuine issue of material fact and it is entitled to judgment as a matter of law. See
Tex. R. Civ. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d
211, 215–16 (Tex. 2003). If the movant establishes a right to summary judgment,
the burden shifts to the nonmovant to present evidence raising a material fact issue.
See M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex.
2000); Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).

After adequate time for discovery, a party may move for summary judgment
on the ground there is no evidence of one or more essential elements of a claim on
which an adverse party has the burden of proof. Tex. R. Civ. P. 166a(i); W. Invs.,
Inc. v. Urena, 162 S.W.3d 547, 550 (Tex. 2005). The movant must state the
elements on which there is no evidence. Tex. R. Civ. P. 166a(i). Unless the
nonmovant produces summary-judgment evidence raising a genuine issue of
material fact on the challenged elements, the trial court must grant the motion. Id.;
Urena, 162 S.W.3d at 550.

III. NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT

We begin by considering those portions of Reule’s eighth through thirteenth
issues pertaining to Colony’s no-evidence motion for summary judgment.

A. Trial Court Considered No-Evidence Motion for Summary Judgment

Reule initially contends the trial court considered only Colony’s traditional
grounds for summary judgment, pointing out that the trial court signed an order on
March 11, 2011 continuing consideration of the no-evidence grounds, and another

4
order on March 23, 2011 in which the court reiterated that consideration of the no-
evidence grounds had been continued. Additionally, Reule points to a March 11,
2011 hearing during which the trial court expressed it was continuing the no-
evidence portion of the motion.

Nevertheless, in its April 6, 2011 summary judgment, the trial court
indicated it considered and granted Colony’s “TRADITIONAL AND NO-
EVIDENCE MOTION FOR SUMMARY JUDGMENT.” Thus, by the plain,
unambiguous language of the judgment, the trial court granted summary judgment
based on both traditional and no-evidence grounds. See Reiss v. Reiss, 118 S.W.3d
439, 441–42 (Tex. 2003) (holding court must give effect to unambiguous language
of judgment even if such judgment is wrong under the law); Freightliner Corp. v.
Motor Vehicle Bd. of Tex. Dep’t of Transp., 255 S.W.3d 356, 363 (Tex. App.—
Austin 2008, pet. denied) (“If the judgment is plain and unambiguous, extrinsic
matters may not be considered in order to give the decree a different effect from
that expressed by the literal meaning of the words used therein.”); Wagoner v.
Rainbow Grp., Ltd., No. 03-03-00478-CV, 2004 WL 1685831, at *5 (Tex. App.—
Austin July 29, 2004, pet. denied) (mem. op.) (“We refuse to read the terms of an
interlocutory order to contradict the unambiguous terms of a final judgment.”);
Harper v. Welchem, Inc., 799 S.W.2d 492, 495 (Tex. App.—Houston [14th Dist.]
1990, no writ) (“If a judgment is unambiguous with no room for interpretation, it is
our duty to declare its effect in light of the literal language used.”).4

B. Adequate Time for Discovery

Next, Reule argues the trial court erred by determining an adequate time for
discovery had passed as to allow consideration of the no-evidence grounds.

4
Nothing in the record shows that Reule requested the trial court to correct any asserted
error in the summary-judgment order’s recitation of the grounds considered and granted.

5
 We review a trial court’s determination that there has been an adequate time
for discovery on a case-by-case basis, under an abuse of discretion standard.
Brewer & Pritchard, P.C. v. Johnson, 167 S.W.3d 460, 467 (Tex. App.—Houston
[14th Dist.] 2005, pet. denied). In considering whether the trial court permitted an
adequate time for discovery, we consider (1) the nature of the case, (2) the nature
of the evidence necessary to controvert the no-evidence motion, (3) the length of
time the case was active, (4) the amount of time the no-evidence motion was on
file, (5) whether the movant had requested stricter deadlines for discovery, (6) the
amount of discovery that already had taken place, and (7) whether the discovery
deadlines in place were specific or vague. Id. A party claiming inadequate time
for discovery must file an affidavit explaining the need for further discovery or a
verified motion for continuance. Green v. City of Friendswood, 22 S.W.3d 588,
594 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).

Reule filed her original petition on July 15, 2008, alleging many of the same
claims against Colony as in her third-amended petition. Colony filed its motion for
summary judgment on February 1, 2011. Reule responded to the motion—to both
the traditional and no-evidence grounds—on March 9, 2011. The trial court then
continued the no-evidence grounds on March 11, 2011, but, according to the plain
language of the final summary judgment, ultimately decided to consider these
grounds.

Without citation to the record, Reule asserts in her brief:

The case before this court was severed from the original proceeding.
Under the original proceeding there was a docket control order.
However, there was not one issued in the severed case until such time
[as Reule] brought it to the [trial] court’s attention. At that time, the
discovery deadline from the original proceeding had expired. Rather
than issue a new docket control order under the severed case, the clerk

6
 of the court transferred the docket order from the original case to this
case with the expired deadline.
...
Colony is in possession of documents, which establish facts vital to
[Reule’s] claims, and refuses to produce those documents. This last
point is also detrimental to Colony’s motion, given that there has not
been adequate time for discovery since [Reule] was not given fair
notice of the Docket Control Order, which was filed under the original
proceeding; and there is no order of which [Reule] is aware lifting the
abatement in the severed case[.]

The record does not contain a docket control order, abatement order, or motions or
orders regarding lifting abatement and reinstating the case.5 Thus, we do not know
how much time Reule had to conduct discovery during the two-and-a-half-year
period from when she initially sued Colony until Colony filed its motion for
summary judgment. Without more information, we decline to hold the trial court
abused its discretion by determining an adequate time for discovery had passed.6

C. Colony’s No-Evidence Grounds

In its motion for summary judgment, Colony argued there is no evidence to
support the elements of Reule’s claims based on (1) fraud and fraudulent
concealment, (2) Texas Fair Housing Act, (3) Federal and Texas Fair Debt
Collections Acts, (4) Federal Civil Rights Act, (5) RICO, (6) negligence, (7)
breach of contract, (8) libel and slander, (9) DTPA, and (10) fiduciary duty.

Colony correctly argues that Reule does not challenge on appeal the no-
evidence grounds relative to her claims for libel and slander and based on the

5
We note that during a hearing regarding the parties’ discovery dispute, the trial court explained
its docket control orders generally set deadlines only for dispositive motions, not discovery.
6
Additionally, to the extent the trial court denied Reule’s motion to compel discovery, it
was within the trial court’s province to determine adequate time for discovery had passed. Thus,
we overrule Reule’s first through fourth issues in which she essentially argues the trial court
erred by not compelling Colony to respond to her discovery requests.

7
Federal and Texas Fair Debt Collections Acts. If an appellant fails to negate each
ground on which summary judgment may have been rendered for any claim, we
must uphold the summary judgment as to that claim. Lundstrom v. United Servs.
Auto. Ass’n-CIC, 192 S.W.3d 78, 85 (Tex. App.—Houston [14th Dist.] 2006, pet.
denied). Accordingly, we uphold summary judgment regarding these claims.

Regarding Colony’s no-evidence challenge to Reule’s claims for violations
of DTPA, RICO, Civil Rights Act, and Texas Fair Housing Act, Reule failed to
address in her response, let alone present evidence raising a fact issue regarding,
one or more elements for each of these claims. Regarding Colony’s no-evidence
challenge to Reule’s claims for fraud and fraudulent concealment, negligence,
breach of contract, and breach of fiduciary duty,7 Reule asserted facts regarding
Colony’s alleged improper acts and misrepresentations, but did not specifically
present evidence to support these facts. Aside from referring to the Policy and
SVI’s by-laws, the only evidentiary support Reule provided was a general
reference to SVI’s response to Colony’s separate motion for summary judgment,
which she argued contained evidence demonstrating Colony conspired with other
defendants to conceal information and legal advice from SVI. However, Reule
does not explain why Colony’s alleged withholding of information from SVI
demonstrates that she has claims against Colony in her individual capacity. Thus,
the trial court did not err by granting no-evidence summary judgment against
Reule on these claims. See San Saba Energy, L.P. v. Crawford, 171 S.W.3d 323,
330 (Tex. App.—Houston [14th Dist.] 2005, no pet.) (“In response to a no-
evidence ground for summary judgment, the nonmovants need not marshal their

7
Furthermore, Reule contends she had a contractual relationship with Colony via the
Policy but does not cite relevant authorities supporting why this gave rise to a fiduciary
relationship. Thus, Reule’s appellate issue regarding her claim for breach of fiduciary duty is
waived. See Tex. R. App. P. 38.1(i); I-10 Colony, Inc. v. Chao Kuan Lee, 393 S.W.3d 467,
479 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).

8
proof; however, their summary-judgment response needs to point out evidence that
raises a genuine issue of fact as to the challenged elements.”).

We overrule those portions of Reule’s eighth through thirteenth issues
pertaining to Colony’s no-evidence motion for summary judgment. In the no-
evidence portion of its motion, Colony did not challenge Reule’s claims based on
the Insurance Code, duty of good faith and fair dealing, Federal Fair Housing Act,
and conspiracy. We address these claims in following sections.

IV. REULE’S STATUS AS THIRD-PARTY CLAIMANT

We next consider Reule’s sixth issue, in which she argues the trial court
erred by determining she is a third-party claimant to whom Colony does not owe
certain duties under the Insurance Code and common law.

A. Reule’s Affidavit Not Part of Summary-Judgment Record

Reule contends summary judgment was improper because a fact issue exists
on whether Colony presented the correct insurance policy with its motion. Reule
averred in what appears to be an affidavit, “The policy that Colony has attached to
their motion . . . is not the same policy as SVI has in [its] file.” Reule argues
Colony fabricated this insurance policy in an attempt to deceive the court and take
advantage of Reule.

We conclude Reule’s affidavit was not part of the summary-judgment
evidence considered by the trial court. Colony filed its motion for summary
judgment on February 1, 2011, and Reule responded on March 9, 2011. On March
23, 2011, the trial court heard Colony’s traditional motion. On the same day, the
trial court granted Reule and Colony leave to file supplemental pleadings as
follows:

9
 [T]his Court GRANTS [Reule’s] request for additional time to file a
supplemental response to [Colony’s] Motion for Summary Judgment
on the limited issue of addressing contrary case law to [Colony’s] case
law on the issue of the third party status based on [Colony’s] cited
case of Rumley v. Allstate Indemnity Co[.] [This Court] GRANTS
[Reule] until March 31, 2011 to file any such Supplemental Response
and [Colony] shall have the right to reply to this Supplemental
Response by April 4, 2011.

(underlining added). On March 31, 2011, Reule filed a memorandum regarding
certain caselaw. However, she also filed her affidavit, to which she attached
several exhibits. In its April 4, 2011 reply, Colony argued the trial court should
not consider Reule’s affidavit because it was not within the limited scope of the
trial court’s leave to file supplemental pleadings. In its summary judgment, the
trial court expressed that it considered “the Motions, [the] timely response(s) to
said Motion, if any, the replies, and the oral argument of counsel, if any.”
(emphasis added).

Because Reule’s affidavit was not within the scope of the trial court’s leave
to file supplemental pleadings, and was therefore untimely, we conclude the trial
court did not consider the affidavit. See Tex. R. Civ. P. 166a(c) (providing that,
except on leave of court, a summary-judgment response must be filed no later than
seven days before hearing date); Pipkin v. Kroger Tex., L.P., 383 S.W.3d 655,
663 (Tex. App.—Houston [14th Dist.] 2012, pet. denied) (“Where nothing appears
in the record to indicate that late-filed summary judgment evidence was filed with
leave of court, we presume that the trial court did not consider it.”). Accordingly,
Reule did not raise a fact issue relative to whether the insurance policy presented
by Colony was fraudulent.8

8
Additionally, Reule argues the Policy presented by Colony was not properly
authenticated. However, Reule waived this issue by not receiving a ruling from the trial court on
her objection. See Commint Technical Servs., Inc. v. Quickel, 314 S.W.3d 646, 651 (Tex.
10
B. Claims Based on Insurance Code and Duty of Good Faith and Fair Dealing

In its motion for summary judgment, Colony challenged Reule’s claims
based on the Insurance Code and the common-law duty of good faith and fair
dealing by arguing Reule could not bring such claims because she was a third-party
claimant.

It is well-settled that a third-party claimant cannot enforce an insurance
policy directly against an insurer until it has been established, by judgment or
agreement, that the insured has a legal obligation to pay damages to the injured
party. See Angus Chem. Co. v. IMC Fertilizer, Inc., 939 S.W.2d 138, 138 (Tex.
1997) (per curiam); United Fire Lloyds v. Tippin ex rel. Tippin, 396 S.W.3d 733,
736 (Tex. App.—Houston [14th Dist.] 2013, no pet.). In her brief, Reule relies on
sections 541.060 and 542.051 of the Texas Insurance Code and the duty of good
faith and fair dealing when addressing this portion of Colony’s motion for
summary judgment.9 A third-party claimant asserting claims against the insured of
a liability policy does not have standing to bring claims against the liability insurer
for violations of sections 541.060 and 542.051. See Tex. Ins. Code Ann. §
541.060(b) (West 2009) (“[541.060(a)] does not provide a cause of action to a third
party asserting one or more claims against an insured covered under a liability
insurance policy.”); id. § 542.051(2) (West 2009) (defining “Claim” as first-party
claim brought by an insured or beneficiary for proceeds paid directly to the insured
or beneficiary); see also Atlantic Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 220–
21 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (explaining third parties
lack standing to bring claims under predecessor to section 541.060). Similarly, a

App.—Houston [14th Dist.] 2010, no pet.).
9
In her third-amended petition, Reule cited other sections of the Insurance Code.
Because she cites only sections 541.060 and 542.051 on appeal, we consider only these sections
in addressing her issue.

11
third-party claimant lacks standing to sue an insurer for breach of the duty of good
faith and fair dealing. Tamez v. Certain Underwriters at Lloyd’s, Inc., 999 S.W.2d
12, 21–22 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).

Reule asserts several reasons why she is not a third-party claimant but a
first-party claimant under the Policy:

SVI’s documents and by-laws indicate that each condominium owner is
automatically a member of SVI, and SVI is a named insured under the
Policy.10
The Policy contains a section defining “insured” as “[a]ny person (other than
your ‘employee’), or any organization while acting as your real estate
manager.”11
Section 81.205 of the Texas Property Code provides: “[T]he council of
owners may acquire the insurance it deems appropriate for the protection of
the buildings and the apartment owners,” and “Each apartment owner and
mortgagee of an apartment owner is a beneficiary of the policy, whether
named as a beneficiary or not, in proportion to the interest of an apartment
owner in the condominium regime as established by the declaration.” Tex.
Prop. Code Ann. § 81.205(a)–(b) (West 2007).

However, even if these arguments prove that Reule is a named insured,
additional insured, or beneficiary of the Policy, we must examine the Policy to
determine the type of coverage Colony provided to Reule. Under the Policy,
Colony provided commercial general liability coverage that covered an insured
when the insured injured another person or property. Colony did not provide

10
SVI’s by-laws are not included in our record. Nevertheless, for purposes of our
analysis, we assume the by-laws indicate that all condominium owners are automatically
members of SVI. We further note that, although SVI’s internal by-laws may create duties
between SVI and its individual members, they are not automatically binding on Colony.
11
Reule interprets this language to mean any person who is not an employee of SVI is an
insured under the Policy, including her. However, the obvious meaning of this particular
definition is that any non-employee person who is acting as SVI’s real estate manager is an
insured under the Policy. It would be unreasonable to interpret this language to mean every non-
employee of SVI is an insured.

12
coverage to the insured for the insured’s own personal injuries or property
damage.12

Nevertheless, Reule argues that, regardless of whether the Policy provided
only liability coverage, her status as an insured under the Policy and her payments
of premiums entitled her to first-party status. According to Reule, these facts mean
she is not a third-party stranger to the policy but a first-party to whom Colony
owed responsibilities under sections 541.060 and 542.051 and the duty of good
faith and fair dealing. Reule largely supports her position with Allstate Insurance
Co. v. Watson, 876 S.W.2d 145 (Tex. 1994).

In Watson, the Supreme Court of Texas determined a third-party claimant
could not bring claims for unfair claim settlement practices under former article
21.21 of the Insurance Code13 against the tortfeasor’s insurer:

Were we to extend to third party claimants the same duties insurers
owe to their insureds, insurers would be faced with owing coextensive
and conflicting duties. An insurer owes to its insured a duty to defend
the insured against the claims asserted by a third party. Recognizing
concomitant and coextensive duties under art. 21.21 to third party
claimants, parties adverse to the insured, necessarily compromises the
duties the insurer owes to its insured. In fact, the logical result of

12
The Policy also contained a “no action” provision:
No person or organization has a right under this Coverage Part:
a. To join us as a party or otherwise bring us into a “suit” asking for damages
from an insured; or
b. To sue us on this Coverage Part unless all of its terms have been fully
complied with.
A person or organization may sue us to recover on an agreed settlement or on a
final judgment against an insured obtained after an actual trial; but we will not be
liable for damages that are not payable under the terms of this Coverage Part or
that are in excess of the applicable limit of insurance. . . .
13
Former article 21.21 was the predecessor to most of the sections in current chapter 541,
including section 541.060. Former article 21.55 was the predecessor to section 542.051.

13
 permitting a separate and direct cause of action in favor of third party
claimants allows third parties to sue for unfair claim settlement
practices even though the insured has no claim for an unfair claim
settlement practice.

Id. at 149–50 (emphasis removed). The court explained,

A third party claimant has no contract with the insurer or the insured,
has not paid any premiums, has no legal relationship to the insurer or
special relationship of trust with the insurer, and in short, has no basis
upon which to expect or demand the benefit of the extra-contractual
obligations imposed on insurers under art. 21.21 with regard to their
insureds.
Id. at 149 (emphasis added). Reule relies on this language, contending she has a
basis to expect and demand duties from Colony because she paid premiums for the
Policy. However, in Rumley v. Allstate Indemnity Co., the Beaumont Court of
Appeals rejected this contention. 924 S.W.2d 448 (Tex. App.—Beaumont 1996,
no writ).

The Rumley court considered whether a party who was a premium-paying
insured under an insurance policy was in a first-party posture when she sued
another insured under the liability provision of the policy. Wife and husband were
both insured under a policy which provided liability and personal-injury protection.
Id. at 448. They were riding together in a vehicle when husband crashed, injuring
wife. Id. The insurer paid personal-injury benefits to wife but refused to pay
liability benefits to her. Id. Wife sued the insurer for violations of the duty of
good faith and fair dealing, certain sections of former article 21.21, and the DTPA.
Id. at 449. The insurer eventually settled wife’s claim against husband and then
moved for summary judgment on wife’s claims against insurer, arguing she was a
third-party claimant to whom the insurer did not owe the alleged duties. Id. The
trial court granted summary judgment. Id.

14
 Relying on Watson, the court of appeals recognized that third-party
claimants cannot sue insurers for unfair claim settlement practices. Id. The court
then explained why wife’s connection to the policy did not transform her third-
party claim into a first-party claim:

[Wife] was named as an insured on the policy and premiums were
paid from community funds, so she certainly had a contractual
relationship with [insurer]. The duty to act in good faith does not
arise in every situation where there is a contractual relationship
between the claimant and the insurer, as demonstrated in those cases
where the claimant and the insured both maintained separate policies
with the same insurance company.
...
Although [wife] had a contractual relationship with [insurer], the
claim underlying the allegations of bad faith in failing to promptly
settle for policy limits is based not upon benefits payable to her under
the policy, but upon her husband’s tort liability to her for his
negligence. . . . When [wife] asserted a liability claim against her
spouse, she assumed the posture of a third-party claimant. Although
[wife] had a relationship with [insurer], just as she had a relationship
with [husband], in the context of her claim based on [husband’s]
negligence she was antagonistic to both insurer and spouse, and it
cannot be said she dared rely upon [insurer’s] good faith any more
than any other injured party would. While [wife] might ultimately
benefit from a bad faith claim which [husband] might pursue against
[insurer], that duty is owed to [husband] and not to [wife]. As a third-
party claimant, [wife] had no standing to assert extra-contractual and
statutory claims against [insurer] for the denial and delay in the
payment of her claim. The trial court did not err in granting summary
judgment.

Id. at 449, 450. More recently, the Dallas Court of Appeals followed this
reasoning, concluding an entity, even though it was an additional insured under a
policy, could not sue the insurer for policy proceeds before the insured’s liability to
the entity was determined by judgment or settlement. Ohio Cas. Ins. Co. v. Time

15
Warner Entm’t Co., L.P., 244 S.W.3d 885, 888–89 (Tex. App.—Dallas 2008, pet.
denied); see also Caserotti v. State Farm Ins. Co., 791 S.W.2d 561, 566 (Tex.
App.—Dallas 1990, writ denied) (“We conclude that an insurer does not owe the
duty of good faith and fair dealing to its insured who is asserting a third-party
claim against another insured of the same company.”).

We agree with the rationale applied in Rumley. Even if Reule paid
premiums for and was entitled to liability coverage under the Policy, in her current
posture as a third-party claimant, Colony did not owe her duties under sections
541.060 and 542.051 and the duty of good-faith and fair dealing. See Rumley, 924
S.W.2d at 449 (holding wife “assumed the posture of a third-party claimant”). To
hold otherwise would mean Colony owed conflicting duties to its tortfeasor
insureds and to Reule.

Urging us not to adopt Rumley, Reule cites a 2011 case in which the high
court of West Virginia expressly rejected Rumley. See Loudin v. Nat’l Liab. &
Fire Ins. Co., 716 S.E.2d 696, 703–05 (W. Va. 2011). In Loudin, William and
Thomas were working on Thomas’s truck when William accidently drove over
Thomas, causing severe injuries. Id. at 698. Thomas had purchased a liability
policy for the truck; under the circumstances, William was covered by the policy
as a permissive operator despite having no contractual privity with the insurer. Id.
Thomas filed a first-party claim with the insurer under the liability provision,
which the insurer denied. Id. Thomas then sued William for negligence and the
insurer for bad faith, breach of contract, breach of the duty of good faith and fair
dealing, and DTPA violations. Id. at 698–99. The insurer settled the claims
against William and moved for summary judgment against Thomas, arguing he
was a third-party claimant to whom the insurer owed no duties; the trial court
granted summary judgment. Id. at 699.

16
 The high court reversed, concluding Thomas was a first-party insured
because he paid premiums for, and was a named insured on, the policy and had a
contractual relationship with the insurer. Id. at 702–03. The court cited Rumley
and other opinions in which courts concluded an insurer does not owe duties to an
insured when the insured was injured by a co-insured and has made a claim to the
insurer from a third-party standpoint. Id. at 703–04. The court recognized the
rationale in these opinions is the avoidance of placing the insurer in a situation in
which it owes conflicting duties to the tortfeasor insured and the injured insured.
Id. Nevertheless, the court explained that the injured insured in its case (and in the
cited cases) initially filed an administrative claim directly with the insurer,
meaning, at that point, there was no antagonism because the tortfeasor insured was
not part of the equation. Id. at 704. The court concluded the later introduction of
the tortfeasor insured did not “transform the pre-suit bad faith settlement into third-
party bad faith settlement.” Id. The court also supported its holding by noting that
William, the tortfeasor, was not a named insured and did not pay premiums:

[W]e now hold that, when a named policyholder files a claim with
his/her insurer, alleging that a nonnamed insured under the same
policy caused him/her injury, the policyholder is a first-party claimant
in any subsequent bad faith action against the insurer arising from the
handling of the policyholder’s claim.

Id. at 703, 704–05.

We decline to follow Loudin in the present case. We fail to see how an
injured insured’s initial direct claim for benefits to the liability insurer permanently
renders him a first-party claimant even after he files suit against the tortfeasor
insured. See id. at 706 (Benjamin, J., dissenting) (“[T]he majority opinion places
insurance companies in the impossible position of owing a duty of good faith and
fair dealing to two potentially antagonistic parties at the same time.”).

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Accordingly, we hold that Reule does not have standing to bring claims based on
sections 541.060 and 542.05114 and breach of the duty of good faith and fair
dealing.15 We overrule Reule’s sixth issue.

V. DUE PROCESS AND EQUAL PROTECTION

In her seventh issue, Reule contends the trial court erred by granting
summary judgment against her on her constitutional claims for violations of due
process and equal protection. In her third-amended petition, Reule alleges “her
due process rights were consistently violated by the courts, including the
[Fourteenth] Court of Appeals who dismissed [her] case because she could not
afford the filing fees and Social Security had already determined she was 135%
below poverty level.”16 Reule also alleges she had brought an equal protection

14
We reiterate that Reule limited her appellate argument to sections 541.060 and
542.051. Thus, our holding regarding third-party claims does not necessarily apply to other
provisions of the Insurance Code. We also note that our holding does not prevent Reule from
asserting claims against Colony for any unfair settlement practices or bad faith related to its
actions occurring after Reule settled with, or obtained judgment against, other insureds of the
Policy.
15
After Colony filed its motion for summary judgment, Reule amended its petition to
include a claim for breach of the duty of good faith and fair dealing. Reule argues the trial court
erred by granting summary judgment against her on this claim because Colony did not amend its
motion for summary judgment to challenge the new claim.
A party may not be granted summary judgment on a claim not addressed in a summary-
judgment proceeding. Espeche v. Ritzell, 123 S.W.3d 657, 663 (Tex. App.—Houston [14th Dist.]
2003, pet. denied). Nevertheless, if a motion for summary judgment is sufficiently broad to
encompass later filed claims, the movant is not required to amend the motion. See Wilson v.
Korthauer, 21 S.W.3d 573, 579 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). Reule did
not allege new facts to support her added claim for breach of the duty of good faith and fair
dealing. Furthermore, Colony argued in its motion that it owed no fiduciary duties to Reule and
cited Rumley expressly for the proposition that the insured wife was a third-party claimant to
whom the insurer did not owe the duty of good faith and fair dealing. Accordingly, we hold
Colony’s motion for summary judgment was sufficiently broad to encompass Reule’s additional
claim. See Nall v. Plunkett, --- S.W.3d ---, No. 12-0627, 2013 WL 3240335, at *3 (Tex. June 28,
2013) (holding traditional summary-judgment challenge to duty element of social-host-liability
claim broad enough to encompass duty element of negligent-undertaking claim).
16
In 2006, we dismissed Reule’s appeal in one of her prior suits because she failed to pay
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claim against Colony in a prior federal suit. Because it does not appear that Reule
brings due process or equal protection claims against Colony in this suit, we
conclude the trial court’s summary judgment did not encompass such claims, but
that Reule cannot raise them for the first time on appeal. We overrule Reule’s
seventh issue.

VI. REULE’S REMAINING CLAIMS

Reule’s remaining claims are for violation of the Federal Fair Housing Act
(“FFHA”) and civil conspiracy. In portions of her ninth and tenth issues, Reule
contends judgment was improperly rendered as to these claims because Colony did
not challenge them in its motion for summary judgment.

In its motion, Colony challenged Reule’s Texas Fair Housing Act (“TFHA”)
claim but not her FFHA claim. Colony argues Reule’s failure to present evidence
raising a fact issue as to her TFHA claim necessarily means the motion for
summary judgment was broad enough to encompass her FFHA claim.

Colony challenged Reule’s TFHA claim by arguing she could present no
evidence that Colony committed any discriminatory act or violation prohibited
under the TFHA. Under the TFHA, “discriminatory housing practice” is defined
as an act prohibited under subchapter B or conduct denominated as a criminal
offense under subchapter I. See Tex. Prop. Code Ann. § 301.003(7) (West 2007).
The FFHA defines “discriminatory housing practice” in a similar manner. See 42
U.S.C.A. § 3602(f). In her third-amended petition, Reule alleged Colony violated
both Acts by (1) failing to provide property insurance based on her disability, (2)
providing coverage to non-disabled, non-insured males but not her, (3) not
renewing her insurance policies and increasing her premiums even though

filing fees. See Reule v. Sherwood Valley Council of Co-Owners, No. 14-05-01231-CV (Tex.
App.—Houston [14th Dist.] Mar. 30, 2006, no pet.) (per curiam).

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Colony’s business was real estate-related transactions, and (4) retaliating against
her because she filed claims under, and helped others enjoy the rights provided by,
the Acts. As asserted in her petition, these allegations pertain to substantially
similar sections of the Acts. Compare Tex. Prop. Code Ann. § 301.025(b)–(c), §
301.026, § 301.171 (West 2007), with 42 U.S.C.A. § 3604(f)(2)–(3), § 3605, §
3617.

Because the elements of Reule’s TFHA and FFHA claims are intertwined,
and Reule failed to present any evidence that Colony committed an act prohibited
under the TFHA, we conclude her FFHA claim is precluded as a matter of law.
See G & H Towing Co. v. Magee, 347 S.W.3d 293, 297–98 (Tex. 2011) (holding it
was harmless error for trial court to grant summary judgment for employer on
vicarious-liability claim, even though claim was not challenged in motion for
summary judgment, because trial court properly granted no-evidence summary
judgment for employee on underlying negligence claim); Lampasas v. Spring Ctr.,
Inc., 988 S.W.2d 428, 436–37 (Tex. App.—Houston [14th Dist.] 1999, no pet.)
(holding elements were similar for each of plaintiff’s negligence-based claims and,
thus, plaintiff’s failure to present evidence as to one claim in response to no-
evidence motion meant all negligence claims were precluded); see also Nall, 2013
WL 3240335, at *3 (holding traditional summary-judgment challenge to duty
element of social-host-liability claim broad enough to encompass duty element of
negligent-undertaking claim). It would be improvident to remand for further
proceedings on Reule’s FFHA claim when she was unable to present any evidence
supporting the same alleged discriminatory acts under the TFHA.

Finally, Reule’s conspiracy claim is a derivative claim for which she must
prove Colony was liable for some underlying tort. See Wohlstein v. Aliezer, 321
S.W.3d 765, 775 (Tex. App.—Houston [14th Dist.] 2010, no pet.); SP Midtown,

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Ltd. v. Urban Storage, L.P., No. 14-07-00717-CV, 2008 WL 1991747, at *9 (Tex.
App.—Houston [14th Dist.] May 8, 2008, pet. denied) (mem. op.). Because we
uphold summary judgment relative to all of Reule’s other claims, an essential
element of her conspiracy claim has been negated—namely, an underlying tort.
Accordingly, summary judgment is also proper as to her conspiracy claim. We
overrule those portions of Reule’s ninth and tenth issues relative to the FFHA and
conspiracy.

We affirm the trial court’s judgment.

/s/ John Donovan
Justice

Panel consists of Chief Justice Hedges and Justices Boyce and Donovan.

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