Wallace Debes v. General Star Indemnity Company

In The

Court of Appeals
Ninth District of Texas at Beaumont
_________________

NO. 09-12-00527-CV
_________________

WALLACE DEBES, Appellant

V.

GENERAL STAR INDEMNITY COMPANY, Appellee
__________________________________________________________________

On Appeal from the 136th District Court
Jefferson County, Texas
Trial Cause No. D-191,415-A
__________________________________________________________________

MEMORANDUM OPINION

Appellant Wallace Debes challenges the trial court’s summary judgment in

favor of appellee General Star Indemnity Company (“General Star”). In one issue,

Debes asserts that the trial court erred in granting summary judgment in favor of

General Star on Debes’s breach of contract claim because genuine issues of

material fact exist as to whether Debes was a third-party beneficiary of a policy

issued by General Star that insured a commercial building owned by Debes. We

affirm.

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 I. Factual and Procedural Background

Debes owns commercial property located at 315 I-10 North in Beaumont,

Texas. In February 2004, Debes entered into a written lease with Cahoots

Entertainment, Inc. (“Cahoots”), wherein Cahoots agreed to lease the property

from Debes.1 Debes signed the lease as the landlord, and Brian O’Quinn, in his

capacity as the president of Cahoots, signed the lease as the tenant. In addition,

Brian O’Quinn and his father, Jeffrey O’Quinn, each executed a personal guaranty

of the lease.

With the exception of a two-week period during which the building on the

property was closed for renovations, Cahoots operated “Alibi’s” night club on the

property continuously from June 7, 2004 until July 4, 2011. On July 4, 2011, a fire

occurred in the building on the property, causing substantial damage to the

building and its contents.

Danna O’Quinn, the wife of Brian O’Quinn, purchased a commercial

property insurance policy from General Star, which covered the premises when the

fire occurred. Danna is neither an officer nor director of Cahoots. She is also not a

1
The original term of the lease was for thirty-six months, commencing April
1, 2004. The lease, therefore, expired by its own terms on April 1, 2007. The
record does not reflect whether Debes and Cahoots entered into a subsequent
written agreement to renew the lease. However, the evidence suggests that
Cahoots continued to occupy the property until July 4, 2011, when the fire
occurred.
2
party to or a guarantor of the lease. The policy identifies “DANNA O’QUINN

DBA: ALIBI’S” as the “Named Insured.” No other person or entity is identified as

a named insured or additional insured in the policy or in any endorsement to the

policy.

After the fire, Danna made a claim under the policy for certain losses to

improvements to the building and for the loss of personal property. General Star

adjusted the claim and paid Danna $429,211.93 in damages. Debes also made a

claim under the policy for damages to the building from the fire and demanded

payment from General Star, but General Star denied coverage on his claim.

Debes subsequently filed suit against General Star for breach of contract,

alleging that General Star failed to compensate him under the policy for his

property losses due to the fire. Debes also asserted breach of contract claims

against Cahoots, Brian O’Quinn, Danna O’Quinn, and Jeffrey O’Quinn. General

Star filed a traditional motion for summary judgment, arguing that Debes lacked

standing to assert a breach of contract claim against General Star because Debes

was neither an insured nor third-party beneficiary to the insurance policy. After a

hearing, the trial court granted summary judgment in favor of General Star.

General Star then filed an unopposed motion for severance, which the trial court

granted, severing Debes’s claim against General Star into a new cause and making

3
the order granting General Star’s motion for summary judgment a final, appealable

order. Debes timely filed a notice of appeal.

II. Issue Presented

In one two-part issue, Debes argues that the trial court erred in granting

summary judgment in favor of General Star on his breach of contract claim

because genuine issues of material fact exist as to whether Debes is an intended

third-party beneficiary under the insurance contract between General Star and

Danna O’Quinn, and whether Debes will become a third-party beneficiary under

the insurance contract if and when he obtains a judgment on his claims against

Cahoots, Brian O’Quinn, Jeffery O’Quinn, and Danna O’Quinn. In response,

General Star argues that the trial court correctly granted summary judgment in its

favor on Debes’s breach of contract claim because Debes is neither a party nor a

third-party beneficiary to the insurance contract and, thus, lacks standing to enforce

the insurance contract. General Star also argues that the evidence on which Debes

relies to create a fact issue as to his third-party beneficiary status is inadmissible

and does not constitute competent summary judgment evidence.

III. Standard of Review

We review the trial court’s decision to grant a motion for summary judgment

de novo. Tex. Mun. Power Agency v. Pub. Util. Comm’n of Tex., 253 S.W.3d 184,

4
192 (Tex. 2007). Summary judgment is proper when the movant establishes that

there is no genuine issue of material fact and that he is entitled to judgment as a

matter of law. See Tex. R. Civ. P. 166a(c); Am. Tobacco Co. v. Grinnell, 951

S.W.2d 420, 425 (Tex. 1997). “[T]he question on appeal . . . is not whether the

summary judgment proof raises fact issues[,] . . . but is whether the summary

judgment proof establishes as a matter of law that there is no genuine issue of fact

as to one or more of the essential elements of the plaintiff’s cause of action.” See

Gibbs v. Gen. Motors Corp., 450 S.W.2d 827, 828 (Tex. 1970) (emphasis omitted);

see also Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 736 (Tex. 1990).

When a defendant moves for summary judgment, it must either: (1) disprove at

least one element of the plaintiff’s theory of recovery, or (2) plead and

conclusively prove each element of an affirmative defense. Cathey v. Booth, 900

S.W.2d 339, 341 (Tex. 1995).

If the movant meets its burden, the burden then shifts to the non-movant to

raise a genuine issue of material fact precluding summary judgment. Walker v.

Harris, 924 S.W.2d 375, 377 (Tex. 1996). The evidence raises a fact issue if

reasonable and fair-minded jurors could differ in their conclusions in light of all of

the summary judgment evidence. See Goodyear Tire & Rubber Co. v. Mayes, 236

S.W.3d 754, 755 (Tex. 2007). To determine if the non-movant has raised a fact

5
issue, “a reviewing court must examine the entire record in the light most favorable

to the nonmovant, indulging every reasonable inference and resolving any doubts

against the motion.” City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).

IV. Discussion

In its motion for summary judgment and on appeal, General Star argues that

Debes lacks standing to assert a breach of contract claim against General Star

because Debes is neither an insured nor a third-party beneficiary to the insurance

policy. “In Texas, ‘standing’ denotes the presence of a real controversy between

the parties that will actually be determined by the judicial declaration sought.”

Maddox v. Vantage Energy, LLC, 361 S.W.3d 752, 756 (Tex. App.—Fort Worth

2012, pet. denied) (citing Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849

(Tex. 2005)). Standing is a necessary component of subject matter jurisdiction,

without which a court lacks authority to hear a case. See Tex. Ass’n of Bus. v. Tex.

Air Control Bd., 852 S.W.2d 440, 444-45 (Tex. 1993). To establish standing to

assert a claim for breach of contract, a party must prove its privity to the agreement

or that it is a third-party beneficiary. Brown v. Mesa Distribs., Inc., 414 S.W.3d

279, 284 (Tex. App.—Houston [1st Dist.] 2013, no pet.); Ostrovitz & Gwinn, LLC

v. First Specialty Ins. Co., 393 S.W.3d 379, 387 (Tex. App.—Dallas 2012, no pet.).

6
A. Privity under the Insurance Policy

“[P]rivity is established by proving that the defendant was a party to an

enforceable contract with either the plaintiff or a party who assigned its cause of

action to the plaintiff.” OAIC Commercial Assets, L.L.C. v. Stonegate Vill., L.P.,

234 S.W.3d 726, 738 (Tex. App.—Dallas 2007, pet. denied) (quoting Redmon v.

Griffith, 202 S.W.3d 225, 239 (Tex. App.—Tyler 2006, pet. denied)). In the

present case, the summary judgment evidence establishes that Debes is not a party

to the insurance contract. “Generally, a property-insurance policy is a personal

contract between the insured and the insurer.” Ostrovitz & Gwinn, 393 S.W.3d at

388. Here, the only “Named Insured” listed on the “Common Policy Declarations”

page and the “Commercial Property Coverage Part Declarations” page is

“DANNA O’QUINN DBA: ALIBI’S.” Debes is not identified in the policy or in

any endorsement to the policy as a named insured or an additional insured, and

Debes has not presented any argument or evidence to otherwise support a finding

that he is a named or additional insured under the policy.

Further, there is no evidence that Danna assigned her breach of contract

claim to Debes against General Star. During its investigation of Danna’s insurance

claim, General Star examined Danna under oath. General Star attached the

transcript of the examination as an exhibit to its motion for summary judgment.

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Danna’s testimony during the examination establishes that she has never entered

into a contract with Debes. Absent evidence that Danna had a contract with Debes,

Danna’s testimony precludes a finding that she contractually assigned her contract

rights under the policy to Debes. See D Design Holdings, L.P. v. MMP Corp., 339

S.W.3d 195, 200-01 (Tex. App.—Dallas 2011, no pet.) (“An assignment is a

contract between the assignor and assignee and operates by way of agreement or

contract.”). Debes has not argued or presented any evidence that he was assigned a

breach of contract claim by Danna or anyone else purportedly in privity with

General Star under the policy. Accordingly, we conclude that the summary

judgment evidence established, as a matter of law, that Debes is not in privity with

General Star under the policy.

B. Third-Party Beneficiary Status

We next consider whether Debes presented evidence raising a genuine issue

of material fact as to his standing as a third-party beneficiary to the policy. In

Texas, a third party may enforce a contract made between other parties only if the

parties to the contract intended to secure some benefit to the third party, and only if

the contracting parties entered into the contract directly for the third party’s

benefit. See MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651

(Tex. 1999). If the contract confers only an indirect, incidental benefit to the third

8
party, the third party cannot enforce the contract. Tawes v. Barnes, 340 S.W.3d

419, 425 (Tex. 2011).

Traditionally, Texas courts have presumed that a party contracts only for its

own benefit. Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc., 348 S.W.3d

894, 900 (Tex. 2011); MCI Telecomms., 995 S.W.2d at 651. Therefore, “[t]here is

a strong presumption in Texas law against third-party beneficiary agreements,” and

a court “must look to the terms of the contract to determine whether the contracting

parties expressly demonstrated an intent to depart from that presumption.” Ortega

v. City Nat’l Bank, 97 S.W.3d 765, 773 (Tex. App.—Corpus Christi 2003, no pet.);

see also Tawes, 340 S.W.3d at 425 (“Traditionally, Texas courts have maintained a

presumption against third-party beneficiary agreements.”); Marine Creek Partners,

Ltd. v. Caldwell, 926 S.W.2d 793, 795 (Tex. App.—Fort Worth 1996, no writ)

(noting that a third party faces a “difficult burden” in establishing a contractual

third-party beneficiary claim).

“‘In determining whether a third party can enforce a contract, the intention

of the contracting parties is controlling.’” Basic Capital, 348 S.W.3d at 900

(quoting MCI Telecomms., 995 S.W.2d at 651). “‘A court will not create a [third-

party] beneficiary contract by implication.’” Id.; In re Citgo Petroleum Corp., 248

S.W.3d 769, 775 (Tex. App.—Beaumont 2008, orig. proceeding) (per curiam).

9
The intention to contract for or confer a direct benefit to a third party must be

clearly and fully spelled out in the agreement itself, or enforcement by the third

party must be denied. Basic Capital, 348 S.W.3d at 900 (quoting MCI

Telecomms., 995 S.W.2d at 651). “‘In other words, the party claiming third-party

beneficiary status will succeed or fail according to the terms of the contract.’”

Marine Creek, 926 S.W.2d at 795 (quoting Brunswick Corp. v. Bush, 829 S.W.2d

352, 354 (Tex. App.—Fort Worth 1992, no writ). “The fact that a person is

directly affected by the parties’ conduct, or that he may have a substantial interest

in a contract’s enforcement, does not make him a third-party beneficiary.”

Maddox, 361 S.W.3d at 757 (internal quotes omitted); Rivera v. S. Green Ltd.

P’ship, 208 S.W.3d 12, 22-23 (Tex. App.—Houston [14th Dist.] 2006, pet.

denied). In determining the contracting parties’ intent, “[a]ll doubts must be

resolved against conferring third-party beneficiary status.” Tawes, 340 S.W.3d at

425. Therefore, “[i]f there is any reasonable doubt as to the contracting parties’

intent to confer a direct benefit on the third party by way of the contract, the third-

party beneficiary claim must fail.” Ortega, 97 S.W.3d at 773.

To qualify as a third-party beneficiary, the plaintiff must show that he is

either a donee or creditor beneficiary of the contract. Stine v. Stewart, 80 S.W.3d

586, 589 (Tex. 2002); MCI Telecomms., 995 S.W.2d at 651. In the present case,

10
Debes argues that he is a creditor beneficiary to the insurance policy. A creditor

beneficiary is one to whom the performance promised will come in satisfaction of

a legal duty owed to him by the promisee of the agreement. Stine, 80 S.W.3d at

589. The legal duty owed to the third party may be an indebtedness, a contractual

obligation, or other legally enforceable commitment. Id. “To qualify as a creditor

beneficiary, the maker of the contract . . . must not only have intended to confer a

benefit upon the third party . . . , but it also must have intended for the third-party

to have the right to enforce the agreement.” Rivera, 208 S.W.3d at 23 (citing MJR

Corp., 760 S.W.2d 4, 16 (Tex. App.—Dallas 1988, writ denied)); see also Ortega,

97 S.W.3d at 774. Unless both intents are clearly and fully exhibited in the four

corners of contract, the third party remains no more than an incidental beneficiary

to the contract. See Rivera, 208 S.W.3d at 23; Ortega, 97 S.W.3d at 774.

In determining whether General Star and Danna intended to secure a benefit

to Debes by way of the insurance policy and whether they entered into the policy

directly for Debes’s benefit, we must examine the text of the policy. See MCI

Telecomms., 995 S.W.2d at 652. When interpreting a contract, we examine and

consider the entire writing in an effort to harmonize and give effect to all of its

provisions so that none will be rendered meaningless. Stine, 80 S.W.3d at 590;

MCI Telecomms., 995 S.W.2d at 652. “‘No single provision taken alone will be

11
given controlling effect; rather, all the provisions must be considered with

reference to the whole instrument.’” Seagull Energy E & P, Inc. v. Eland Energy,

Inc., 207 S.W.3d 342, 345 (Tex. 2006) (quoting Coker v. Coker, 650 S.W.2d 391,

393 (Tex. 1983)).

Reviewing the insurance policy as a whole, as we must, we conclude that the

policy does not contain any language that clearly and fully spells out an intent on

behalf of General Star and Danna to confer a direct benefit on Debes. As noted,

Debes is not listed as a named insured or an additional insured in the policy or in

any endorsement to the policy. Debes is not identified by name anywhere in the

policy, either as an insured, an owner of covered property, a loss payee, or

otherwise. The policy contains no language indicating that, by entering into the

insurance contract, General Star and Danna intended to secure a direct benefit for,

or contracted for the primary benefit of, the owners of covered property, generally.

In this respect, we note that section E.4.e of the “Building and Personal Property

Coverage Form,” under the heading “Loss Payment,” addresses payments by

General Star to “owners of lost or damaged property if other than [the named

insured].” Specifically, section E.4.e states in relevant part:

We may adjust losses with the owners of lost or damaged property if
other than you. If we pay the owners, such payments will satisfy your
claims against us for the owners’ property. We will not pay the
owners more than their financial interest in the Covered Property.

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 In Ostrovitz & Gwinn, the Dallas Court of Appeals examined a commercial

property insurance policy to determine whether the owner of a commercial

building that was damaged during a fire was a third-party beneficiary under the

policy issued to the tenant of the building. 393 S.W.3d at 383, 389. The policy

contained a provision identical to General Star’s provision, and likewise organized

under section E.4.e. Id. at 389. In that case, the policy identified the tenant as the

named insured. Id. at 383, 389. The owner of the property was not listed as a

named or additional insured under the policy, but was identified in an endorsement

to the policy as a loss payee. Id. at 383. Concluding that the language of section

E.4.e did not clearly and fully express an intention by the insurer and the tenant to

confer a direct benefit on the owner of the property, the court explained:

On our reading of section E.4.e, [the insurer] reserves the right—but
assumes no obligation—to adjust losses with and pay an owner of
covered property who is not a named insured. The provision further
establishes that such payments will count towards satisfaction of any
claim by the named insured. But section E.4.e does not clearly show
an intent by Tenant and [the insurer] to confer a direct benefit on [the
owner]. Rather, section E.4.e seems to confer a right on [the insurer]
by giving [the insurer] the option of paying the owners of covered
property, even if the owners are not named insureds, and providing
that such payments will satisfy the named insured’s claim for the
owner’s property.

Id. at 389. In concluding that section E.4.e did not support the owner’s claim that

it was a third-party beneficiary to the insurance contract, the court focused on the

fact that the language of section E.4.e did not contractually obligate the insurer to
13
adjust losses with or pay the owner of the covered property. Id. at 389-90.

Instead, it merely gave the insurer the right, to be exercised at the insurer’s sole

option, to adjust the owner’s losses and pay the owner in the event of a covered

loss. Id. at 389. Based on the policy language, the court concluded that the intent of

the contracting parties in agreeing to section E.4.e was not to confer a benefit on

the third-party property owner, but to reserve a right in favor of the insurer. Id.

Accordingly, the court concluded that the insurance policy did not “clearly and

fully spell out the necessary intention” by the tenant and the insurer to confer a

direct benefit on the owner of the property to make the owner a third-party

beneficiary of the policy. Id. at 392.

We agree with the reasoning in Ostrovitz and conclude that section E.4.e of

General Star’s policy does not clearly and unequivocally spell out an intention by

General Star and Danna to confer a direct benefit on Debes, as an “owner[] of lost

or damaged property[.]” Like the policy provision in Ostrovitz, section E.4.e of the

policy before us does not contain language that contractually obligates General

Star to adjust losses with or make a payment to an owner of lost or damaged

property in the event of a covered loss. Instead, section E.4.e merely expresses an

intention by the parties to confer a right on General Star by giving General Star the

option of paying the owner and providing that any such payments will satisfy the

14
named insured’s claim for the owner’s property. We conclude, therefore, that

section E.4.e does not confer third-party beneficiary status on Debes.

Further, we note that the policy contains no language that identifies any

indebtedness, contractual obligation, or other legal duty owed by either Danna or

General Star to Debes, and it contains no language requiring either Danna or

General Star to undertake any action to discharge or protect any indebtedness,

contractual obligation, or other legal duty owed to Debes. Compare Stine, 80

S.W.3d at 590 (concluding that plaintiff was third-party creditor beneficiary to

contract where contract identified existing obligation owed to plaintiff and

expressed an intent that defendant satisfy that obligation), with Ortega, 97 S.W.3d

at 774-76 (concluding that the plaintiffs were not third-party beneficiaries when the

contract failed to identify any legal obligation owed to the plaintiffs and did not

require either party to the contract to undertake any action to satisfy any legal

obligation owed to the plaintiffs). There is also no language in the policy that

indicates that Debes may sue to enforce the policy to secure the performance of an

action intended to discharge or protect a legal obligation owed to him. See Ortega,

97 S.W.3d at 774. Reviewing the insurance policy as a whole, we agree with

General Star that the policy does not express an intention by General Star and

Danna to secure a benefit to Debes, and it contains no language indicating that they

15
entered into the insurance contract with the intent to directly benefit Debes.

Accordingly, at most, the policy language establishes that Debes was only an

incidental beneficiary to the insurance contract.

Despite the plain language of the policy, Debes argues that genuine issues of

material fact exist as to whether he is a third-party beneficiary to the policy

because, he contends, the policy was purchased for the purpose of satisfying

Cahoots’s contractual obligation under the lease to purchase insurance coverage

for the protection of Debes’s interest in the leased property. Therefore, Debes

argues, he is a creditor beneficiary under the policy and can enforce the policy to

collect insurance proceeds for the damage to his building. We disagree.

First, in order for Debes to be a third-party creditor beneficiary to the

insurance policy with standing to enforce the policy against General Star, Debes

was required to identify a legal obligation owed to him by Danna under the policy,

that General Star’s performance under the policy was intended to satisfy. See Stine,

80 S.W.3d at 589 (“[A]n agreement benefits a ‘creditor’ beneficiary if, under the

agreement, ‘that performance will come to him in satisfaction of a legal duty owed

to him by the promisee.’”). Debes, however, failed to identify or present evidence

16
of a legal obligation owed by Danna to Debes.2 Danna is neither a party nor a

guarantor to the lease. The lease, therefore, does not impose any contractual

obligation, including an obligation to purchase insurance coverage, on Danna.

Further, General Star presented summary judgment evidence establishing that

Danna has never entered into a contractual relationship with Debes at any time.

Debes made no effort to contradict this evidence with competent summary

judgment evidence of his own. We conclude that General Star conclusively

established that Danna did not owe a legal obligation to Debes that General Star’s

performance under the policy was intended to satisfy.

Second, contrary to Debes’s argument, the lease does not require the

purchase of insurance coverage protecting Debes’s interest in the leased property.

Article X of the lease, entitled “INSURANCE; FIRE & CASUALTY DAMAGE,”

states, in relevant part:

Tenant shall maintain fire and extended coverage insurance in
a minimum amount of $500,000.00 on the PREMISES (the “Casualty
Insurance”) for it’s [sic] own benefit, subject to the following
provisions of this paragraph.

Landlord shall repair any damage or destruction to the
PREMISES (but not to Tenant’s property) caused by any peril

2
Debes does not argue and has presented no evidence that Danna has
personal liability under the lease by virtue of the fact that she is the wife of Brian
O’Quinn, who personally guaranteed the lease. See Tex. Fam. Code Ann. § 3.201
(West 2006). Therefore, we express no opinion on the merits of such an argument.
17
 covered by the Casualty Insurance, to the extent Landlord receives
proceeds from the Casualty Insurance.

The plain language of the lease establishes that Cahoots, as “Tenant,” was required

to purchase fire and extended coverage insurance for Cahoots’s own benefit.

Although Article X requires Debes, as “Landlord,” to make certain repairs to the

property “to the extent Landlord receives proceeds from” the insurance obtained

by Cahoots, nothing in Article X requires Cahoots or anyone else to obtain

insurance coverage for the benefit or protection of Debes. Therefore, Debes has

failed to identify a contractual obligation owed to him by anyone, including

Cahoots, to purchase insurance coverage protecting his interest in the leased

property.

Despite the clear language of Article X, Debes argues that the parties to the

lease actually intended for Cahoots to purchase insurance coverage for the leased

premises for the benefit of both Cahoots and Debes. This intent, he contends, is

evidenced by certain statements allegedly made by Jeffrey O’Quinn to Debes

during a meeting to negotiate the terms of the lease. In support of this argument,

Debes relies only on the following allegations contained in paragraph 4 of his

response to General Star’s motion for summary judgment:

Debes and Jeffrey O’Quinn had been business partners prior to
the execution of the subject Lease. Both Debes and Jeffrey O’Quinn
met at the office of Kenneth D. Furlow to discuss the terms of the
Lease. Jeffrey O’Quinn wanted to pay for the fire and other casualty
18
 insurance and agreed to carry at least $500,000.00 for the protection
of Landlord and an additional amount to protect Tenant. Jeffrey
O’Quinn wanted Cahoot’s [sic] to be able to dictate the repairs to be
done out of the payment of insurance, so the language was for that
purpose, however, Debes is definitely a third party beneficiary under
the policy.

At the end of his summary judgment response, Debes included a “Sworn

Affidavit,” in which Debes stated, under oath: “I am duly authorized to sign this

Affidavit and have personal knowledge of the correctness and truth of the

allegations in this Motion.” Debes did not attach any other affidavits or evidence

to his response. It is well-settled that “[a] party may not support its response to a

motion for summary judgment with a document in the form of an affidavit in

which the party attempts to verify the truth and correctness of all ‘allegations and

facts’ in the response.” Olsen v. Comm’n for Lawyer Discipline, 347 S.W.3d 876,

886 (Tex. App.—Dallas 2011, pet. denied); see also Livingston Ford Mercury, Inc.

v. Haley, 997 S.W.2d 425, 431 (Tex. App.—Beaumont 1999, no pet.); Keenan v.

Gibraltar Sav. Ass’n, 754 S.W.2d 392, 394 (Tex. App.—Houston [14th Dist.]

1988, no writ). “Such a document amounts to nothing more than a verified

responsive pleading, which is not competent summary judgment evidence.” Olsen,

347 S.W.3d at 886; see also Livingston Ford, 997 S.W.2d at 431. Rather, “[t]o

effectively oppose a motion for summary judgment, the affidavit must itself set

forth facts and show that the affiant is competent to testify to those facts.” Olsen,

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347 S.W.3d at 886 (internal quotes omitted); see also Webster v. Allstate Ins. Co.,

833 S.W.2d 747, 749 (Tex. App.—Houston [1st Dist.] 1992, no writ).

Accordingly, we find that the sworn statements contained in paragraph 4 of

Debes’s summary judgment response do not constitute competent summary

judgment evidence and are insufficient to raise a fact issue precluding summary

judgment in favor of General Star.

Finally, even if the statements contained in paragraph 4 of Debes’s summary

judgment response constituted competent summary judgment evidence, they do not

raise a genuine issue of material fact as to Debes’s status as a third-party

beneficiary to the insurance policy. As stated above, in order for Debes to be a

third-party creditor beneficiary to the insurance policy with standing to enforce the

policy against General Star, Debes was required to identify a legal obligation owed

to him by Danna that General Star’s performance under the policy was intended to

satisfy. See Ortega, 97 S.W.3d at 774. The statements contained in paragraph 4 of

Debes’s response, however, relate only to alleged agreements made by Jeffrey

O’Quinn on behalf of himself or possibly Cahoots; they do not constitute evidence

of any legal obligation owed by Danna to Debes. In other words, even if we

assume that Jeffrey O’Quinn did orally agree during the lease negotiations to

purchase at least $500,000 in fire and other casualty insurance for the protection of

20
Debes and to purchase additional insurance for the protection of Cahoots, as Debes

argues, such an agreement does not impose any sort of contractual obligation on

Danna that General Star’s performance under the insurance policy was intended to

satisfy. Therefore, the statements contained in paragraph 4 of Debes’s summary

judgment response do not raise a fact issue as to whether Debes was a third-party

beneficiary to the insurance policy. We overrule the first part of Debes’s sole issue

on appeal.

Debes also argues that he will become a third-party creditor beneficiary to

the insurance contract if and when he obtains a judgment on his claims against

Cahoots, Jeffrey O’Quinn, Brian O’Quinn, and Danna O’Quinn. Therefore, Debes

contends, the trial court erred in granting summary judgment in favor of General

Star when the issue of the other defendants’ liability to Debes remains unresolved.

Debes relies heavily on P.G. Bell Co. v. U.S. Fid. & Guar. Co., 853 S.W.2d 187

(Tex. App.—Corpus Christi 1993, no writ), in support of this argument.

In P.G. Bell, a contractor entered into a contract with a subcontractor for the

subcontractor to erect precast concrete slabs in connection with a construction

project. Id. at 188. As part of the contract, the subcontractor agreed to present the

contractor with certificates of insurance proving it had comprehensive general

liability coverage. Id. In accordance with the terms of the contract, the

21
subcontractor presented the contractor with proof of a comprehensive general

liability insurance policy. Id. The policy covered all sums the subcontractor would

become legally obligated to pay for damage to covered property of the contractor

and provided that the insurer of the policy had a right and duty to defend any suit

filed against the subcontractor related to property covered by the policy. Id. After

the subcontractor cracked one of the slabs during the construction project and

refused to pay for the damages, the contractor filed suit against the subcontractor

and subsequently took a default judgment against it. Id. After the issuer of the

policy refused to pay the judgment awarded the contractor, the contractor filed suit

against the issuer of the policy, alleging claims for breach of contract, breach of the

duty of good faith and fair dealing, violations of the Deceptive Trade Practices Act,

and to recover the amount of the default judgment taken against the subcontractor.

Id. The insurer filed a motion for summary judgment, asserting, inter alia, that the

contractor could not bring a breach of contract claim against the insurer because it

was not a party to the insurance policy. Id. at 188-89. The trial court granted

summary judgment in favor of the insurer. Id. at 189.

On appeal, the contractor argued that the trial court erred in granting

summary judgment on its breach of contract claim against the insurer because the

contractor was a judgment creditor of the subcontractor and, under the terms of the

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policy, was entitled to enforce the policy against the insurer to recover the amount

of the default judgment up to policy limits. Id. at 189. The court reversed and

remanded the trial court’s order granting summary judgment in favor of the

insurer. Id. at 193. The court explained:

This court recently held that an entity becomes a [third-party]
beneficiary to an insurance contract when it obtains a judgment
against the insured; at that time, the entity becomes a [third-party]
judgment creditor. [Third-party] judgment creditors are bound by the
rights, duties, and obligations of the insured under the terms and
conditions of the contract between the insurance company and the
insured.

Id. at 189 (citations omitted). The court then pointed to the following language of

the policy, which expressly provided that a third party who has secured a judgment

against the insured could enforce the policy against the insurer to recover the

amount of the judgment under the policy to the extent of the policy limits:

5. Action Against Company No action shall lie against the Company
unless . . . the amount of the Insured’s obligation to pay shall have
been fully determined . . . by judgment against the Insured after
actual trial . . . . Any person or organization or the legal representative
thereof who has secured such judgment or written agreement shall
thereafter be entitled to recover under this policy to the extent of the
insurance afforded by this policy.

Id. at 190 (emphasis in original). Relying on this policy language, the court

concluded that the contractor became a third-party beneficiary to the insurer’s

liability policy when it obtained the default judgment against the subcontractor and

that the contractor had standing to assert a breach of contract cause of action
23
against the insurer to recover the amount of the default judgment up to the policy

limits. Id. at 189-90.

We find P.G. Bell to be distinguishable from the present case. The

insurance policy in P.G. Bell was a third-party liability policy. Third-party

insurance “requires the insurer to perform its duty to indemnify not directly to the

insured[,] but directly, on the insured’s behalf, to a third-party claimant injured by

the insured’s conduct.” Hartman v. St. Paul Fire & Marine Ins. Co., 55 F. Supp.

2d 600, 603 (N.D. Tex. 1998) (applying Texas law) (citing 1 ERIC MILLS HOLMES

& MARK S. RHODES, APPLEMAN ON INSURANCE 2D § 3.3 (1st ed.1996)) (“Liability

insurance is customarily described and classified as third-party insurance because

the liability insurer’s duty to pay runs not directly to the insured but directly (on

the insured’s behalf) to a third-party claimant who is injured by the insured’s

conduct.”). The intent of the parties to a third-party liability contract is to

indemnify, and if the third-party obtains a judgment, the policy confers a direct

benefit to a third-party claimant injured by the insured. As such, a third-party

claimant who has obtained a judgment against the insured for a covered loss under

the third-party liability policy has been held to be a third-party beneficiary to the

liability policy. See P.G. Bell, 853 S.W.2d at 189; Filley v. Ohio Cas. Ins. Co., 805

S.W.2d 844, 847 (Tex. App.—Corpus Christi 1991, writ denied).

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 By contrast, the insurance policy in the present case is a first-party property

coverage policy. The purpose of first-party insurance is to “‘reimburse[] the

insured for losses that he incurs as a result of injury to himself or damage to

property that he owns or leases.’” Am. Nat’l Fire Ins. Co. v. Hammer Trucking,

Inc., No. 2-04-327-CV, 2006 WL 3247906, at *2 n.16 (Tex. App.—Fort Worth

Nov. 9, 2006, pet. denied) (mem. op.) (quoting 1 BARRY R. OSTRAGER & THOMAS

R. NEWMAN, HANDBOOK ON INSURANCE COVERAGE DISPUTES § 12.12(a) (12th ed.

2004)). “‘The classic example of first-party insurance is property insurance.’”

Hartman, 55 F. Supp. 2d at 603 (quoting HOLMES & RHODES, APPLEMAN ON

INSURANCE 2D § 3.2). Unlike third-party liability policies, first-party “[p]roperty

insurance policies are ‘intended solely to indemnify the insured for his actual

monetary loss by the occurrence of the disaster[.]’” Highlands Ins. Co. v. City of

Galveston ex. rel. Bd. of Trustees of Galveston Wharves, 721 S.W.2d 469, 471

(Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.) (quoting 4 J. APPLEMAN,

INSURANCE LAW & PRACTICE § 2107 (rev. 1969)). Because the policy in the

present case is a first-party policy, the purpose of which is to indemnify the

insured, Danna O’Quinn, for her own direct losses, we find the rule established in

P.G. Bell to be inapplicable to the present case.

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 Further, unlike the policy in P.G. Bell, the insurance policy in the present

case does not contain any language that provides a third party who has secured a

judgment against an insured for a covered loss with a right to enforce the policy

against the insurer to recover the amount of the judgment up to the policy limits.

Such contract language was central to the court’s holding in P.G. Bell that the

contractor was a third-party beneficiary to the policy. See P.G. Bell, 853 S.W.2d at

190; see also Basic Capital, 348 S.W.3d at 900 (concluding that a contract confers

third-party beneficiary status if “[t]he intention to contract or confer a direct

benefit to a third party must be clearly and fully spelled out or enforcement by the

third party must be denied.”). Accordingly, the absence of similar policy language

expressly providing Debes with a right to recover under the policy also renders the

P.G. Bell case inapplicable to the present case. We overrule the second part of

Debes’s sole issue on appeal.

General Star has established as a matter of law that Debes was not in

contractual privity with General Star and was not a third-party beneficiary to the

insurance policy. Debes, therefore, lacked standing to bring a claim against

General Star for breach of the insurance contract. We conclude that the trial court

properly granted summary judgment in favor of General Star on Debes’s breach of

contract claim. We affirm the trial court’s order.

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 AFFIRMED.

_____________________________
CHARLES KREGER
Justice

Submitted on July 1, 2013
Opinion Delivered July 10, 2014

Before McKeithen, C.J., Kreger and Horton, JJ.

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