MCMC Auto Ltd. v. Sidecars, Inc.

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________

No. 02-18-00094-CV
___________________________

MCMC AUTO LTD., Appellant

v.

SIDECARS, INC., Appellee

On Appeal from the 153rd District Court
Tarrant County, Texas
Trial Court No. 153-285175-16

Before Sudderth C.J.; Walker and Birdwell, JJ.
Memorandum Opinion by Chief Justice Sudderth
Dissenting Memorandum Opinion by Justice Birdwell
 MEMORANDUM OPINION

I. Introduction

In three issues, Appellant MCMC Auto Ltd. challenges the trial court’s order

granting Appellee SideCars, Inc.’s motion for summary judgment on limitations.

Because we hold that the claims in MCMC’s 2016 lawsuit accrued in 2010, and thus

were barred by limitations, we affirm the trial court’s summary-judgment order.

II. Factual Background

According to its president Michael Thomasson, MCMC is the largest “buy

here, pay here” car dealer in North Texas. MCMC sells cars to customers who have

poor credit histories and who are not able to obtain financing from traditional lenders.

When MCMC sells a car on credit, it arranges a loan, and the car serves as

collateral. To protect its interest in the collateral, MCMC requires the customer to

obtain insurance naming MCMC as the loss payee. The customer may choose a

company from which to obtain the insurance, but if the customer cannot find such a

company, MCMC offers collateral protection coverage to the customer. In such an

arrangement, the customer pays MCMC monthly premiums. MCMC hires a third-

party administrator to run the collateral-protection-coverage program. The third-

party administrator charges MCMC a fee based on a percentage of the premiums paid

by customers and places the remainder of the premiums into a fiduciary account used

to make repairs to the cars or to reimburse MCMC for loss or damage.

2
 In 2010, SideCars proposed to administer MCMC’s collateral-protection-

coverage program for a lower fee than the company that was then running the

program charged. According to Thomasson, SideCars represented to MCMC that it

was legally authorized by the Texas Department of Insurance (the Department) to

administer the program.

In February 2010, MCMC and SideCars signed a contract for SideCars to run

the program, and SideCars began doing so shortly thereafter. In the contract,

SideCars expressly warranted that its program did not violate state insurance and

finance regulations and that MCMC’s participation in the program would not

constitute MCMC’s “engaging in the unlawful transaction of the business of insurance

as defined by state law.”

The parties’ contractual relationship was short-lived. In March 2010, the

Department informed SideCars of the Department’s position that SideCars’s program

constituted an unauthorized insurance practice by SideCars and by its “dealer-agents,”

including MCMC. The Department instructed SideCars to unwind the program and

to return all premiums. SideCars made MCMC aware of the dispute between

SideCars and the Department. According to SideCars’s president Les Olson, by

March 2010, MCMC knew that the Department had deemed SideCars to be engaging

in an unauthorized insurance practice “and that the damage that would be suffered by

any participant, including car dealers[,] would be the unwinding of the transaction.”

3
 Toward the end of March 2010, SideCars filed a declaratory-judgment lawsuit

against the Department in Travis County and provided a copy of the petition to

MCMC. In the petition, SideCars asserted that the Department was attempting to

“put the SideCars . . . program out of business without the jurisdiction to do so.”

SideCars sought, among other relief, a declaration that the Department had no

authority to regulate SideCars’s program and an injunction preventing the Department

from pursuing disciplinary proceedings against SideCars or “interfering in [any way]

with [SideCars’s collateral-protection-coverage] program.” As a result of SideCars’s

act of providing a copy of its petition to MCMC, according to Olson, by March 2010

MCMC had “notice on two different occasions that [the Department] had deemed the

SideCars program unauthorized insurance and that it was demanding the return of all

premium[s].”

In August 2010, MCMC chose a different company to administer its program

and terminated the agreement with SideCars. In October 2010, the Travis County

trial court granted summary judgment for the Department, and the next month, that

court issued a permanent injunction forbidding SideCars from conducting the

collateral-protection-coverage program. MCMC became aware of the ruling against

SideCars. SideCars appealed the Travis County trial court’s judgment, but the Austin

court of appeals affirmed the judgment in 2013. In 2014, the supreme court denied

4
SideCars’s petition for review.1 Olson has averred that he informed MCMC of all of

these developments from 2010 until 2014 “as they occurred.”

In June 2015, the Texas Office of Consumer Credit Commissioner (OCCC)

sent a letter to MCMC. OCCC informed MCMC that SideCars’s litigation against the

Department had reached a conclusion in favor of the Department and expressed that

the “premiums or fees paid by retail buyers in connection with” SideCars’s program

were unauthorized. OCCC asked MCMC to provide information about customers

who had used SideCars’s program. On September 14, 2015, OCCC sent another

letter to MCMC instructing it to “provide restitution to all affected retail buyers” who

had used the program.

In April 2016, MCMC sued SideCars for breach of contract, fraud, fraudulent

inducement, fraud by nondisclosure, negligent misrepresentation, and violation of the

Texas Insurance Code. MCMC specifically alleged that SideCars had misrepresented

that its collateral-protection-coverage program was legal (or had failed to disclose that

it was not legal), that SideCars had intended for MCMC to act on the

misrepresentation, that MCMC had done so, and that MCMC’s reliance on the

misrepresentation had caused injury. SideCars filed an answer in which it pleaded

several affirmative defenses, including limitations.

1
See SideCars, Inc. v. Tex. Dep’t of Ins., No. 03-10-00720-CV, 2013 WL 2395189,
at *6 (Tex. App.—Austin May 30, 2013, pet. denied) (mem. op.).

5
 After MCMC filed its suit, in July 2016, OCCC sent a letter to MCMC

summarizing pertinent events involving MCMC and SideCars during the previous six-

year period. The letter stated in part,

On September 17, 2010, [OCCC] completed an examination of
the books and record[s] of MCMC and discovered that it had offered
and sold [collateral protection coverage] . . . that was marketed through
[SideCars].

On October 1, 2010, [OCCC] sent a letter to [SideCars] advising
[SideCars] . . . that restitution would be required because the program
did not comply with Chapter 348 of the Texas Finance Code. As
[SideCars] and [the Department] were already at the time involved in
litigation over the legality of [SideCars’s] program, it was determined that
[OCCC] would refrain from initiating further action until the completion
of the judicial process.

. . . [In 2013, t]he Third Texas Court of Appeals held that
[SideCars’s] program was subject to the authority of [the Department]
and constituted the unauthorized business of insurance. [SideCars]
appealed the decision to the Supreme Court of Texas. In 2014, the
Supreme Court of Texas denied the petition for review[,] thus upholding
the Third Texas Court of Appeals[’s] decision.

In a letter dated September 14, 2015, MCMC was instructed to
provide restitution for the unauthorized . . . premiums to the affected
retail [buyers].

For the past year, MCMC and [OCCC] have attempted to resolve
this issue through informal negotiations. However, in a letter dated
July 6, 2016, MCMC rejected [OCCC’s] final settlement offer. Due to
MCMC’s rejection of the final settlement offer, the matter has been
referred to our legal department for an enforcement action.

In October 2016, OCCC signed an “Order to Cease and Desist, and to Make

Restitution.” In the order, OCCC found that MCMC had “charged and received

premiums for substitute insurance coverage that was not written by a company

6
authorized to do business in this state.” OCCC ordered MCMC to provide restitution

to affected retail buyers. In November 2016, through an agreed order, MCMC

became obligated to pay $125,000 collectively to the affected buyers.

MCMC filed a motion for partial summary judgment on its breach-of-contract

claim against SideCars. MCMC argued that its obligation to pay $125,000 in

restitution was a “direct result of SideCars’s decision to operate in violation of the

Texas Insurance Code.” SideCars filed a response arguing that limitations barred the

claim. The trial court denied MCMC’s motion.

Three months later, SideCars sought summary judgment on its affirmative

defense of limitations. In its summary-judgment motion, 2 SideCars contended that

limitations barred all of MCMC’s claims. SideCars argued that MCMC learned of its

legal injuries that it asserted against SideCars in 2010, that limitations began to run

2
Although SideCars’s motion for summary judgment is titled as a no-
evidence motion and it recites a no-evidence summary-judgment standard, it is in
substance a traditional motion, with summary-judgment evidence attached and
argument that the defense of limitations had been established through the
“undisputed summary[-]judgment evidence” and legal authority, rather than a want
of evidence to support a particular claim. See Tex. R. Civ. P. 94 (classifying a
statute-of-limitations plea as an affirmative defense); Lindley v. McKnight, 349
S.W.3d 113, 123–24 (Tex. App.—Fort Worth 2011, no pet.) (explaining the
difference between traditional and no-evidence motions for summary judgment);
see also Nowak v. DAS Inv. Corp., 110 S.W.3d 677, 679 (Tex. App.—Houston [14th
Dist.] 2003, no pet.) (“[A] party may never properly move for no-evidence
summary judgment to prevail on its own . . . affirmative defense for which it has
the burden of proof . . . .”).

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then, and that limitations therefore had expired by the time MCMC filed its petition

against SideCars in 2016.

In MCMC’s response to SideCars’s summary-judgment motion,3 it argued that

SideCars’s limitations argument sought to “penalize MCMC for prudently waiting for

its claims to be fully ripe before filing suit.” MCMC argued that limitations did not

begin to run until September 2015 when OCCC first informed MCMC that it would

be required to pay restitution to any buyer who participated in SideCars’s program.

MCMC contended that this date was the first occasion when MCMC knew that it had

“suffered damages as a result of SideCars’s breach.” Alternatively, MCMC argued

that limitations did not begin to run in 2010 because during SideCars’s litigation with

the Department that lasted through 2014, SideCars “repeatedly assured MCMC that

its program was legal in an effort to prevent MCMC from filing suit” against SideCars.

The trial court granted SideCars’s motion for summary judgment. The court

dismissed all of MCMC’s claims with prejudice, finding that the expiration of

limitations periods barred the claims. MCMC then perfected this appeal.

3
On the same day it filed its response, MCMC also filed its first amended
petition in which it pleaded that the discovery rule and, alternatively, equitable
estoppel applied to estop SideCars from asserting the affirmative defense of
limitations.

8
 III. Summary Judgment Was Proper on
SideCars’s Affirmative Defense of Limitations

In its first and second issues, MCMC argues that summary judgment was

improper on all of its claims. MCMC contends that SideCars was not entitled to

summary judgment on its statute of limitations defense because SideCars had failed to

(1) conclusively prove when MCMC’s causes of action accrued and (2) conclusively

negate the discovery rule pleaded by MCMC.

A. Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315

S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light most

favorable to the nonmovant, crediting evidence favorable to the nonmovant if

reasonable jurors could, and disregarding evidence contrary to the nonmovant unless

reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289

S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any

doubts in the nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex.

2008). A defendant is entitled to summary judgment on an affirmative defense if the

defendant conclusively proves all the elements of the affirmative defense. Frost Nat’l

Bank v. Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010), cert. denied, 562 U.S. 1180

(2011); see Tex. R. Civ. P. 166a(b), (c).

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B. Law on Limitations and Exceptions to Limitations

A statute of limitations “restricts the period within which a party can assert a

right.” Hunt Steed v. Steed, 908 S.W.2d 581, 583 (Tex. App.—Fort Worth 1995, writ

denied). A limitations period “compels a party to bring a cause of action within a

reasonable time so the opposing party has a fair opportunity to defend it.” Id. Claims

for breach of contract and for fraud are subject to a four-year limitations period from

the date the claims accrue. See Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(4)

(West 2002), § 16.051 (West 2015). Negligent misrepresentation claims and claims for

violation of the Texas Insurance Code carry two-year limitations periods. See Tex.

Ins. Code Ann. § 541.162(a) (West 2009); Collective Asset Partners, LLC v. McDade, 400

S.W.3d 213, 217 (Tex. App.—Dallas 2013, no pet.).

For a limitations defense, a defendant must conclusively prove when each

cause of action accrued. See Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846

(Tex. 2005). A cause of action accrues, and the statute of limitations begins to run,

when facts come into existence that authorize a claimant to seek a judicial remedy.

Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011) (op. on

reh’g) (citing Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 221 (Tex.

2003)). The general rule governing when a claim accrues, to start limitations

running, is the “legal[-]injury rule,” which provides that a claim accrues “when a

wrongful act causes some legal injury, even if the fact of injury is not discovered

until later, and even if all resulting damages have not yet occurred.” S.V. v. R.V.,

10
933 S.W.2d 1, 4 (Tex. 1996); see also Dunmore v. Chicago Title Ins. Co., 400 S.W.3d 635,

641 (Tex. App.—Dallas 2013, no pet.). “[T]he commencement of the limitations

period may be determined as a matter of law if reasonable minds could not differ

about the conclusion to be drawn from the facts in the record.” Childs v. Haussecker,

974 S.W.2d 31, 44 (Tex. 1998). A claim for breach of contract accrues when the

contract is breached. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002).

When the plaintiff pleads the discovery rule as an exception to limitations, the

defendant must negate that exception. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223

(Tex. 1999). The discovery rule defers accrual of a cause of action until a plaintiff

knew or, through the exercise of reasonable care and diligence, should have known of

the facts giving rise to the cause of action. HECI Expl. Co. v. Neel, 982 S.W.2d 881,

886 (Tex. 1998). “The discovery rule, in application, proves to be a limited exception

to statutes of limitations,” Computer Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 453, 455

(Tex. 1996) (op. on reh’g), and is generally limited to situations in which “the nature

of the injury incurred is inherently undiscoverable and the evidence of the injury is

objectively verifiable.” Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006)

(quoting Altai, 918 S.W.2d at 456). An injury is “inherently undiscoverable” if it “is,

by its nature, unlikely to be discovered within the prescribed limitations period despite

due diligence.” Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734–35 (Tex. 2001).

An injury is “objectively verifiable” if the presence of injury and the producing

wrongful act cannot be disputed and if the facts upon which liability is asserted are

11
demonstrated by direct, physical evidence. See S.V., 933 S.W.2d at 7. The discovery

rule, as summarized by the Texas Supreme Court,

does not linger until a claimant learns of actual causes and possible cures.
Instead, it tolls limitations only until a claimant learns of a wrongful
injury. Thereafter, the limitations clock is running, even if the claimant
does not yet know[]

• the specific cause of the injury;

• the party responsible for it;

• the full extent of it; or

• the chances of avoiding it.

PPG Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 93–94 (Tex.

2004) (internal citations omitted).

To invoke equitable estoppel in response to a motion for summary judgment

on limitations grounds, the nonmovant must raise a fact issue that shows the

following: (1) a false representation or concealment of material facts; (2) made with

knowledge, actual or constructive, of those facts; (3) with the intention that it should

be acted on; (4) to a party without knowledge or means of obtaining knowledge of the

facts; (5) who detrimentally relies on the representations. Johnson & Higgins of Tex., Inc.

v. Kenneco Energy, Inc., 962 S.W.2d 507, 515–16 (Tex. 1998) (op. on reh’g); Forrest v.

Vital Earth Res., 120 S.W.3d 480, 486–87 (Tex. App.—Texarkana 2003, pet. denied).

When equitable estoppel is alleged in avoidance of a limitations defense, the failure to

file suit must be “unmixed” with any want of diligence on the plaintiff’s part. Leonard

12
v. Eskew, 731 S.W.2d 124, 129 (Tex. App.—Austin 1987, writ ref’d n.r.e.) (op. on

reh’g). Estoppel in avoidance of limitations may be invoked in two ways: either a

potential defendant conceals facts that are necessary for the plaintiff to know he has a

cause of action, or the defendant engages in conduct that induces the plaintiff to

forego a timely suit regarding a cause of action that the plaintiff knew existed. Rendon

v. Roman Catholic Diocese of Amarillo, 60 S.W.3d 389, 391 (Tex. App.—Amarillo 2001,

pet. denied).

C. Analysis

1. SideCars Conclusively Proved the Accrual Date 4

SideCars’s summary-judgment evidence established that from March 2010

through November 2010, MCMC was put on notice that SideCars was engaging in the

unauthorized business of insurance in Texas and that all transactions were required to

be reversed. As early as March 2010, MCMC knew that the Department had

concluded that SideCars and its dealer-agents were engaging in the unauthorized

business of insurance in Texas and that the Department had ordered SideCars to

provide written confirmation that it had ceased marketing and collecting premiums, as

well as to provide the total amount of premiums previously collected so that such

transactions could be reversed in order “to windup the affairs of the company in

4
MCMC argues that SideCars’s summary-judgment motion addressed only
MCMC’s breach-of-contract claim. SideCars’s summary-judgment motion, however,
specifically states, “All of MCMC’s claims are barred by the applicable two[-] or four-
year statute of limitations.”

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Texas.” By October 2010, MCMC knew that the Travis County court handling

SideCars’s declaratory-judgment suit had, by virtue of the trial court’s granting of

SideCars’s motion for summary judgment, ruled SideCars’s program constituted

engaging in the unauthorized business of insurance. And the following month, in

November 2010, MCMC knew that the Travis County court had signed an order

permanently enjoining SideCars from selling insurance in Texas. Also by this time,

MCMC had ceased doing business with SideCars. Thus, SideCars’s summary-

judgment evidence proving these facts established that all of MCMC’s causes of

action accrued no later than November 2010—when the contract was breached

because SideCars could no longer warrant that its program did not violate state

insurance regulations. See Diversicare Gen. Partner, Inc., 185 S.W.3d at 846; Tucker v.

Bedgood, No. 13-16-00433-CV, 2016 WL 7011584, at *7 (Tex. App.—Corpus Christi

Dec. 1, 2016, no pet.) (mem. op.) (holding that appellees conclusively proved that

appellant’s breach-of-contract claim accrued in 2008 at the latest).

Despite SideCars’s uncontroverted summary-judgment evidence, MCMC

argues that its claims against SideCars were not ripe,5 and therefore did not accrue, in

2010 because MCMC did not “actually suffer damage as a result [of SideCars’s breach]

until September 14, 2015”—when OCCC ordered MCMC to pay restitution. MCMC

5
A case is not yet ripe if the facts are not sufficiently developed and if the
resolution of the case depends on contingent or hypothetical facts. Waco ISD v.
Gibson, 22 S.W.3d 849, 851–52 (Tex. 2000); Patterson v. Planned Parenthood of Houston &
Se. Tex., Inc., 971 S.W.2d 439, 443 (Tex. 1998).

14
relies on a mandamus case involving a potential claim for attorney malpractice and a

plea-to-the-jurisdiction case involving potential claims if the city’s permit application

for a landfill received regulatory approval. See In re Shulman, 544 S.W.3d 861, 864

(Tex. App.—Houston [14th Dist.] 2017, orig. proceeding); City of Anson v. Harper, 216

S.W.3d 384, 390–91 (Tex. App.—Eastland 2006, no pet.).6 To the extent those cases

hold that the claims involved were not ripe,7 they are distinguishable from the present

case because the injury here was not contingent upon a future event. Here, the legal

injury at issue occurred in 2010 when SideCars’s program was deemed unauthorized

6
To the extent that MCMC’s reference to these two cases could be interpreted
as arguing for the Hughes tolling rule to be applied to this case, MCMC makes clear in
its reply brief that it is not seeking to have limitations tolled, stating, “Tolling is not
the issue. . . . Tolling is only an issue if the cause of action has already accrued.”
Moreover, based on our analysis, this case is not one that falls within the narrow
parameters of the Hughes rule, and we decline to broaden that narrow exception to the
limitations defense, especially when such relief was not pleaded or requested by
MCMC.
7
MCMC states in its brief that the Shulman court “ruled that [the client’s] claims
were not ripe.” Although the Shulman court intimated that some of the client’s claims
might not be ripe, it held that the mandamus record was not sufficiently developed to
determine questions of ripeness but that

[t]he parties should have the opportunity to fully address ripeness
questions now that we have ordered the abatement lifted, and the trial
court should have the opportunity to rule on them. To the extent some
or all claims or damages are ripe and subject[-]matter jurisdiction exists,
then Shulman has the right to a prompt ruling on his pending
summary[-]judgment motions[.]

544 S.W.3d at 873.

15
and was ordered to cease operations. 8 Additionally, MCMC’s argument that its claims

were not ripe until it was assessed damages in the restitution order ignores established

case law providing that a claim for breach of contract accrues when the contract is

breached and that a breach occurs when a party fails or refuses to do something it has

promised to do. See Stine, 80 S.W.3d at 592; Santander Consumer USA, Inc. v. Palisades

Collection, LLC, 447 S.W.3d 902, 906 (Tex. App.—Dallas 2014, pet. denied). MCMC’s

argument also ignores that under the legal-injury rule, a claim accrues when a

wrongful act causes some legal injury, even if all resulting damages have not yet

occurred. See S.V., 933 S.W.2d at 4. Accordingly, MCMC’s ripeness argument is

without merit. See Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 73 (Tex. App.—

Texarkana 2004, pets. denied) (holding that sufficient evidence supported “the jury’s

determination that PWW knew or should have known by January 1, 1998, that UPRC

had damaged the well and thus interfered with its contract. The fact that the extent of

the damages . . . did not become apparent until it was sued by the Burkes does not toll

the statute of limitations”).

Applying the four-year statute of limitations to November 2010—the accrual

date conclusively established by SideCars—MCMC’s breach-of-contract claim was

8
If MCMC was concerned about the correctness or viability of the
Department’s ruling, MCMC could have filed its own suit for declaratory judgment,
which is a judicial remedy. See City of Garland v. Dallas Morning News, 22 S.W.3d 351,
357–58 (Tex. 2000) (determining that City had an available judicial remedy—to bring
a declaratory-judgment action).

16
barred after November 2014, absent an applicable doctrine that tolled the running of

limitations. See Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(1), (4).

2. SideCars Conclusively Negated Application of the Discovery Rule

Because MCMC pleaded the discovery rule, we turn next to whether SideCars

negated application of the discovery rule to toll the running of the limitations period

on MCMC’s claims. SideCars relied on uncontroverted statements from Olson’s

affidavit that SideCars had provided MCMC a copy of the Department’s March 24,

2010 letter and the orders signed in SideCars’s Travis County suit—all of which

showed that SideCars’s program had been deemed unauthorized insurance in 2010.

SideCars also relied on the uncontroverted statement in Olson’s affidavit that MCMC

had stopped self-insuring with SideCars in August 2010 because MCMC believed that

SideCars’s program had been deemed unauthorized insurance. We conclude that

SideCars’s summary-judgment evidence conclusively established that MCMC had

sufficient facts to know that it had a cause of action against SideCars for breach of

contract by November 2010, at the latest. See B. Mahler Interests, L.P. v. DMAC Constr.,

Inc., 503 S.W.3d 43, 54 (Tex. App.—Houston [14th Dist.] 2016, no pet.) (holding that

discovery rule did not operate to defer accrual of claims because they were actually

discovered, at the latest, by January 2008 and thus discovery rule did not make timely

appellant’s claims that were filed in October 2012); Canada v. Canada, No. 02-11-

00483-CV, 2013 WL 1759894, at *5 (Tex. App.—Fort Worth Apr. 25, 2013, no pet.)

(mem. op.) (holding that appellee conclusively negated discovery rule because

17
appellant’s own testimony showed that she knew of claims in 2002 but did not

investigate those claims until 2010 and did not file suit until 2011). SideCars has

proven as a matter of law that there is no genuine issue of material fact about when

MCMC discovered the nature of the injury because it was not “inherently

undiscoverable,” thus negating the discovery rule. See Shell Oil Co. v. Ross, 356 S.W.3d

924, 930 (Tex. 2011) (stating that the discovery rule applies “only when the nature of

the plaintiff’s injury is both inherently undiscoverable and objectively verifiable”)

(emphasis added); Lerner v. First Commerce Bank, 302 S.W.3d 16, 18 n.1 (Tex. App.—

Houston [14th Dist.] 2009, no pet.) (holding that bank negated the discovery rule’s

applicability and established accrual date of appellant’s claim by presenting summary-

judgment evidence that appellant knew of bank’s refusal to honor the check, and

therefore the accrual of his claim, on or before October 20, 1980). The burden then

shifted to MCMC to present controverting evidence regarding how its injury was

inherently undiscoverable.

In its response to SideCars’s motion for summary judgment, 9 MCMC, without

citing to any summary-judgment evidence, argued only that “the circumstances

9
Based on MCMC’s brief and reply brief, it appears that MCMC relies solely on
its ripeness challenge to defeat SideCars’s limitations defense. Because we are
required to indulge every reasonable inference in the nonmovant’s favor, see 20801,
Inc., 249 S.W.3d at 399, and because we consider the material on file with the trial
court as of the time the summary judgment was granted, see Brookshire v. Longhorn
Chevrolet Co., 788 S.W.2d 209, 213 (Tex. App.—Fort Worth 1990, no writ), we review
the arguments raised and the evidence cited in MCMC’s response.

18
demonstrate MCMC’s injuries are inherently undiscoverable” and that it “did not

know that the representations SideCars made regarding the legality of its program

were false . . . until the Third Court of Appeals entered its ruling.” MCMC’s

summary-judgment evidence demonstrates that it terminated the agreement with

SideCars in August 2010 and moved all of its customers covered by SideCars’s

program to a new insurer but that it “refrained from filing suit against SideCars until

after [OCCC] ordered MCMC to pay restitution.” Even after considering the

evidence presented in the light most favorable to MCMC as the nonmovant, MCMC’s

evidence does not create a fact issue about when the injury or breach occurred.

MCMC’s evidence instead supports the conclusion that the breach occurred in 2010

and that MCMC failed to file suit before the limitations period had expired.

3. SideCars Conclusively Negated Application of Equitable Estoppel

Because MCMC also pleaded equitable estoppel, we analyze whether SideCars

negated the application of equitable estoppel to MCMC’s claims. As set forth above,

in order to trigger the application of equitable estoppel, there must be a false

representation or concealment of material facts that is made to a party without

knowledge or means of obtaining knowledge of the facts who detrimentally relies on

the representations. SideCars’s summary-judgment evidence conclusively proved that

there was no concealment regarding the Department’s determination that the program

constituted unauthorized insurance and that MCMC had knowledge of this as shown

by Olson’s affidavit, which stated that SideCars gave MCMC notice of the

19
unauthorized nature of its program multiple times in 2010. SideCars also conclusively

proved that MCMC did not detrimentally rely on any representation from SideCars

because MCMC ceased doing business with SideCars in August 2010. SideCars thus

conclusively negated the fourth and fifth elements of equitable estoppel. The burden

then shifted to MCMC to present controverting evidence regarding the elements of

equitable estoppel.

In its response to SideCars’s summary-judgment motion, MCMC failed to

rebut SideCars’s summary-judgment evidence detailing that SideCars sent MCMC

multiple documents in 2010 showing that SideCars’s program had been deemed

unauthorized insurance. MCMC also failed to rebut SideCars’s summary-judgment

evidence showing that MCMC ceased doing business with SideCars in August 2010

and therefore did not detrimentally rely on SideCars’s representations about whether

its program was authorized. MCMC thus failed to raise a fact issue regarding its

equitable estoppel defense. See City of Houston v. McDonald, 946 S.W.2d 419, 422 (Tex.

App.—Houston [14th Dist.] 1997, writ denied) (affirming summary judgment because

no evidence showed false representation or concealment of material facts to support

equitable estoppel). 10

Additionally, as stated in this court’s recent opinion in Woods v. Soules,
10

[w]e have not located . . . a case holding that a genuine issue of material
fact existed concerning the fourth and fifth elements of the equitable-
estoppel defense to avoid application of the statute of limitations when

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 4. Outcome

Considering the evidence presented in the light most favorable to MCMC as

the nonmovant, crediting evidence favorable to MCMC if reasonable jurors could,

and disregarding evidence contrary to MCMC unless reasonable jurors could not,

SideCars established as a matter of law that (1) MCMC suffered a legal injury in 2010

when SideCars breached the agreement, (2) the discovery rule does not apply to toll

the limitations period because the breach was not inherently undiscoverable, and

(3) equitable estoppel does not apply to toll the limitations period because MCMC had

knowledge of the unauthorized nature of SideCars’s program in 2010 and ceased

doing business with SideCars in August 2010. Because MCMC did not bring its

claims against SideCars for almost six years after the claims accrued in 2010, all of

MCMC’s claims are barred by limitations. We therefore hold that the trial court did

not err by granting summary judgment in SideCars’s favor, and we overrule MCMC’s

first and second issues. 11

the “party without knowledge or means of [obtaining] knowledge of the
facts” was a party represented by counsel.

No. 02-17-00336-CV, 2018 WL 2248488, at *2 (Tex. App.—Fort Worth May 17,
2018, pet. filed) (mem. op.).

In its third issue, MCMC states that “[u]pon reversing the trial court’s
11

judgment, this Court must render the judgment the trial court should have rendered”
and urges this court to render a partial summary judgment for MCMC on its breach-
of-contract claim. Because we are affirming the trial court’s summary-judgment
order, MCMC’s third issue is moot.

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 IV. Conclusion

Having overruled MCMC’s dispositive first and second issues, we affirm the

trial court’s summary-judgment order.

/s/ Bonnie Sudderth

Bonnie Sudderth
Chief Justice

Delivered: October 25, 2018

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