Opinion
No. 14-04-00661-CV
Memorandum Opinion Filed April 5, 2005.
On Appeal from the 113th District Court, Harris County, Texas, Trial Court Cause No. 03-21015.
Affirmed in Part, Reversed and Remanded in Part.
Panel consists of Chief Justice HEDGES and Justices FOWLER and FROST.
MEMORANDUM OPINION
Yigal Bosch appeals from summary judgments favoring Dallas General Life Insurance Co., Provident American Life and Health, and Ceres Group, Inc., in Bosch's lawsuit against them. Bosch sued the appellees, alleging breach of contract and intentional, negligent, and grossly negligent infliction of mental distress related to health insurance policies he obtained or attempted to obtain from them. The trial court granted summary judgment against all of Bosch's claims. We affirm in part and reverse and remand in part.
I. Background
Provident issued a health insurance certificate to Bosch, effective March 1, 2000. The certificate included provisions regarding notice of termination of the policy by Provident, as follows:
Provident is wholly owned by Central Reserve Life (a non-party), which, in turn, is wholly owned by Ceres (a co-defendant), which is a holding company.
The covered member's coverage under the policy will end at 12:01 A.M. standard time in the covered member's state of residence on the earliest of:
. . .
the premium due date following the date which we terminate all Certificates under this policy in the covered member's state of residence on the covered member's effective date of coverage. We will give the covered member 90 days notice prior to the date of termination and will offer the covered member coverage under any other policy which we are currently marketing in the covered member's state; or
the premium due date following the date which we terminate all Certificates in the covered member's state of residence on the covered member's effective date of coverage. We will give the covered member 180 days notice prior to the date of termination. . . .
We can only terminate the policy upon 90 days prior written notice if we offer the policy holder coverage, on a guaranteed basis, under any other policy which we are currently marketing or upon 180 days prior written notice if we terminate all of our policies in the state of delivery.
Provident subsequently decided to discontinue this particular policy nationwide, effective September 30, 2001. Attached to its motion for summary judgment, Provident provided a corporate officer's affidavit in which she stated that notice of cancellation was mailed to Bosch on June 22, 2001, and again on August 15, 2001. In his affidavit, Bosch stated that he learned of the cancellation for the first time when he went to his doctor complaining of pain in his legs on October 17, 2001. According to Bosch, his doctor's office told him that Provident had denied the insurance claim; when he called Provident, he was informed of the cancellation. Bosch then attempted to obtain insurance from Central Reserve Life, a company wholly owned by Ceres, but the contract was never consummated. Bosch then obtained an insurance policy from Dallas General.
On January 20, 2002, Bosch went to the hospital complaining of difficulty breathing and pain in his upper body. Bosch's doctor determined that he had blockages in several blood vessels, and angioplasty was performed on Bosch on January 23, 2002. Subsequently, Provident and Dallas General refused to pay for Bosch's medical expenses. Provident contended that by the time of Bosch's surgery, its contract with him had been cancelled. Dallas General claimed that Bosch had failed to fulfill conditions precedent to their obligation to pay when he made misrepresentations regarding his health in the application for insurance.
Bosch sued Provident, Dallas General, and Ceres. Against Provident and Dallas General, he alleged breach of contract as well as claims for intentional, negligent, and grossly negligent infliction of emotional distress. Against Ceres, he alleged intentional infliction of emotional distress. All three defendants moved for summary judgment on both no-evidence and traditional grounds. The trial court granted summary judgment in favor of the defendants on all of Bosch's causes of action without specifying the grounds on which the judgments were based. In considering the trial court's grant of summary judgment, we utilize the normal standards of review. See Tex. R. Civ. P. 166a(c), (i); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003) (no-evidence standard); Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985) (traditional standard).
III. Provident and Ceres
Bosch contends that the trial court erred in granting summary judgment against his breach of contract claim against Provident and his intentional infliction of emotional distress claims against Provident and Ceres. Bosch does not challenge the trial court's ruling regarding his claims for negligent and grossly negligent infliction of emotional distress.
A. Breach of Contract
In his first cause of action, Bosch alleged that Provident breached the insurance contract by failing to give proper notice of cancellation and refusing to pay his medical expenses. To recover under a breach of contract cause of action, a plaintiff must show: (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff, (3) breach of the contract by the defendant, and (4) damages sustained as a result of the breach. Renteria v. Trevino, 79 S.W.3d 240, 242 (Tex.App.-Houston [14th Dist.] 2002, no pet.). In its motion for summary judgment, Provident attacked the breach of contract claim on three general grounds, contending it conclusively demonstrated that (1) it properly cancelled the policy prior to Bosch's incurring any medical expenses, (2) its alleged breach was not the proximate cause of Bosch's damages, and (3) Bosch failed to mitigate his damages. Provident further alleged that certain of Bosch's damages claims were not compensable or were not supported by any evidence. We discuss each assertion in turn.
1. Notice
In its first ground for summary judgment, Provident contended that because it conclusively demonstrated that it provided proper notice of cancellation, Bosch cannot recover for claims based on improper notice or the failure to pay medical expenses incurred after cancellation. In making this argument in the trial court and on appeal, Provident relied on cases holding that mailing a notice of termination is sufficient to constitute proper notice regardless of whether the insured actually received the notice. See Suddeth v. Commonwealth County Mut. Ins. Co., 454 S.W.2d 196, 196-97 (Tex. 1970); U.S. Fire Ins. Co. v. Fletcher, 423 S.W.2d 89, 91 (Tex.App.-Houston [14th Dist.] 1967, writ ref'd n.r.e.); Willis v. Allstate Ins. Co., 392 S.W.2d 799, 802 (Tex.App.-Dallas 1965, writ ref'd n.r.e.). Provident's reliance on these cases is misplaced. Each of these cases dealt with an insurance policy that contained the following provision: "The mailing of notice as aforesaid shall be sufficient proof of notice." See Suddeth, 454 S.W.2d at 196; Fletcher, 423 S.W.2d at 91; Willis, 392 S.W.2d at 800. As the Supreme Court stated in Sudduth, the controlling issue under this provision was whether the notice had been mailed, not whether it had been received. See Suddeth, 454 S.W.2d at 197. Here, the certificate of insurance does not contain any such provision. Instead, the two provisions mentioning notice of termination state that Provident "will give the covered member . . . notice," and that Provident "can only terminate the policy upon . . . prior written notice." Thus, the issue here is not whether the notice was mailed, as the question was put in Sudduth, Fletcher, and Willis, but whether the notice was received. See Crisp v. Sec. Nat'l Ins. Co., 369 S.W.2d 326, 330-31 (Tex. 1963) (holding that when an insurance policy provides that it can be cancelled upon written notice, the cancellation is not effective unless the notice is received); Jones v. Ray Ins. Agency, 59 S.W.3d 739, 746 (Tex.App.-Corpus Christi 2001) (same), pet. denied, 92 S.W.3d 530 (Tex. 2002).
The Sudduth court further explained that a testimonial denial of receipt of a letter constituted some evidence that the letter was not mailed; thus, such denial created a fact issue as to whether the letter was mailed even in the face of other evidence that the letter was indeed mailed. 454 S.W.2d at 197-98. Because these cases are inapplicable to the present situation, we need not consider whether Bosch's affidavit denying receipt was sufficient to raise a fact issue regarding whether the notice was mailed.
Among its summary judgment proof, Provident provided an affidavit from a corporate officer stating that she had reviewed corporate records and had determined that notice was mailed to Bosch on June 22, 2001, and again on August 15, 2001. Attached to her affidavit are copies of letters dated June 22 and August 15 and excerpts from two spreadsheets bearing Bosch's name. However, even if this evidence conclusively proved that Provident mailed the notice letters, Provident failed to conclusively prove that Bosch received the written notice. The affidavit does not claim that Bosch received the notice, and no other proof of receipt was offered. Accordingly, it would have been improper for the court to grant summary judgment on this ground.
2. Proximate Cause Failure to Mitigate
In its motion, Provident additionally argued that it conclusively proved that (1) it did not proximately cause Bosch's damages, and (2) Bosch completely failed to mitigate his damages. We begin our analysis by noting that "proximate cause" is not the proper causal standard to be applied in breach of contract cases. Abraxas Petrol. Corp. v. Hornburg, 20 S.W.3d 741, 758 n. 12 (Tex.App.-El Paso 2000, no pet.). Instead, in order to recover compensatory damages, a breach-of-contract plaintiff must establish that he or she suffered some pecuniary loss as a result of the breach of the contract. Id. at 758; see also McKnight v. Hill Hill Exterminators, Inc., 689 S.W.2d 206, 209 (Tex. 1985). Actual damages may be recovered in a breach-of-contract action when the loss is the natural, probable, and foreseeable consequence of the defendant's conduct. Abraxas, 20 S.W.3d at 758. The mitigation-of-damages doctrine requires an injured party to exercise reasonable care to minimize his or her damages, if the damages can be avoided with only slight expense and reasonable effort. Great Am. Ins. Co. v. N. Austin Mun. Util. Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995). The defendant has the burden of demonstrating not only the plaintiff's lack of care but also the amount by which the damages sustained were increased by the failure to mitigate. Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293, 299 (Tex. 1997); Harris County v. Smoker, 934 S.W.2d 714, 721 (Tex.App.-Houston [1st Dist.] 1996, writ denied).
On appeal, Provident asserts that Bosch failed to attack these two grounds in his appellate brief, and, thus, summary judgment should be upheld without regard to the merits. However, in his brief, Bosch details his attempts to procure replacement insurance after learning that his policy with Provident was being terminated. Bosch also attacks the summary judgment entered against his breach-of-contract claims against Dallas General. Since part of Provident's causation and mitigation arguments asserts that Bosch fraudulently attempted to obtain replacement insurance from Dallas General (and thus Bosch caused his own damages when Dallas General voided the policy), we do not agree that Bosch did not attack the causation and mitigation grounds on appeal.
Accordingly, we interpret Provident's argument as suggesting that it conclusively proved that none of Bosch's alleged damages were the natural, probable, or foreseeable result of its conduct.
Provident bases its cause and mitigation arguments on the fact that after Bosch received oral notice that Provident was cancelling his policy, he failed to obtain replacement insurance under the Health Insurance Portability and Accountability Act of 1996, or otherwise, that would have covered his preexisting condition and paid for his medical expenses. 42 U.S.C.A. § 300gg (West 2003) (providing increased insurance portability through limitations on preexisting condition exclusions). However, Provident offers no proof and no analysis as to whether any replacement coverage would have been as beneficial as the coverage Bosch had under his Provident policy. If Bosch could not have obtained equivalent coverage at an equivalent price, he still would have been damaged by Provident's alleged breach of contract. Thus, Provident has failed to conclusively prove that its action did not result in pecuniary loss for Bosch or that he could have completely mitigated his damages. See Austin Hill Country, 948 S.W.2d at 299 (holding that defendant has burden to demonstrate amount damages were increased by failure to mitigate); Smoker, 934 S.W.2d at 721 (same). Accordingly, it would have been improper for the trial court to grant summary judgment on these grounds. Because we hold that none of the grounds raised by Provident support the grant of summary judgment on Bosch's breach-of-contract claims, we sustain Bosch's first and second issues and reverse the judgment on those claims.
In other words, Provident argues that because Bosch failed to get someone else to pay for expenses that Provident was allegedly responsible for paying, Provident's failure to pay did not result in any pecuniary loss to Bosch. We take no position at this time as to whether summary judgment could ever be granted on such ground.
Provident argues that Bosch caused his own damages (and failed to mitigate) because he both failed to obtain coverage under HIPAA and fraudulently obtained coverage from Dallas General (thus causing the coverage to be voided by Dallas General).
Bosch could also potentially recover for reasonable and necessary expenses incurred in mitigating his damages. See Hycel, Inc. v. Wittstruck, 690 S.W.2d 914, 924 (Tex.App.-Waco 1985, writ dism'd); see also Johnson Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 513 n. 1 (Tex. 1998); Schwartz v. Pinnacle Communications, 944 S.W.2d 427, 435-36 (Tex.App.-Houston [14th Dist.] 1997, no writ).
We further note that mitigation of damages is an affirmative defense that must be pleaded or it is waived. See TEX. R. CIV. P. 94; Kinnear v. Tex. Comm'n on Human Rights ex rel. Hale, 14 S.W.3d 299, 300 (Tex. 2000); Taylor Foundry Co. v. Wichita Falls Grain Co., 51 S.W.3d 766, 774 (Tex.App.-Fort Worth 2001, no pet.). Provident did not plead a failure to mitigate in its answer.
3. Damages Issues
In its motion, Provident additionally listed traditional and no-evidence grounds against certain of Bosch's damages claims. Specifically, Provident alleged that (1) it "negated essential elements of" Bosch's claims for mental anguish and damage to his credit, (2) Bosch's claim for lost wages is not recoverable in an action for breach of an insurance contract, and (3) there is no evidence that Bosch's unspecified "expenses" were "proximately caused" by Provident's actions. On appeal, Provident contends that Bosch's failure to attack these grounds in his appellate brief means that judgment should be affirmed against these damages claims without regard to the merits. We discuss each of the grounds in turn.
In the first ground, Provident alleged that it "negated essential elements of" Bosch's claims for mental anguish and damage to his credit. However, at no point does Provident specify what "elements" it negated or how it negated them in regard to these damages claims. Provident's only attempts to negate any element of Bosch's breach-of-contract cause of action are discussed and disposed of above. Because we have held above that Provident's grounds attacking the breach-of-contract claim did not support the grant of summary judgment, we likewise hold that the asserted grounds do not support summary judgment against the claims for mental anguish and damage to his credit.
Although Provident briefly listed this damages-related ground in its section titled "Grounds For Motion," it did not address it in any other section of the motion, particularly not in the "Undisputed Facts" section or the "Argument and Authorities" section.
We also held above that Bosch did respond to the grounds attacking the breach of contract claim. See supra n. 3.
In the second ground, Provident asserted that Bosch's claim for lost wages is not recoverable in an action for breach of an insurance contract. Bosch failed to address this ground in his response to the motion or on appeal. Accordingly, he has waived any arguments regarding this ground. See TEX. R. APP. P. 38.1(h); Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979).
In the third ground, Provident asserted that there is no evidence that Bosch's unspecified "expenses" were "proximately caused" by Provident's actions. We again note that "proximate cause" is not the proper causal standard in breach of contract actions. Abraxas, 20 S.W.3d at 758 n. 12. However, if Bosch was confused by this erroneous standard or wished to complain about it, he should have filed special exceptions in the trial court. See McConnell v. Southside I.S.D., 858 S.W.2d 337, 342-43 (Tex. 1993). Bosch neither filed special exceptions nor addressed this ground in his response to the motion or on appeal. Accordingly, he has waived any responsive arguments. See TEX. R. APP. P. 38.1(h); Star-Telegram, 915 S.W.2d at 473; Clear Creek Basin, 589 S.W.2d at 678-79. In summary, the trial court properly awarded summary judgment against Bosch's claims for lost wages and unspecified expenses, but it erred in awarding judgment against Bosch's claims for mental anguish and damage to his credit.
Bosch mentioned this ground in his response to the motion but then provided no argument or evidence regarding the unspecified expenses.
It should be noted, however, that because the expenses were unspecified, it may be difficult to demonstrate exactly what expenses Bosch will be barred from claiming on remand.
B. Intentional Infliction of Emotional Distress
In his second cause of action, Bosch alleged intentional infliction of emotional distress against Provident and Ceres. To be entitled to judgment on an intentional infliction claim, a plaintiff must show that (1) the defendant acted intentionally or recklessly, (2) the conduct was extreme and outrageous, (3) the actions of the defendant caused the plaintiff emotional distress, and (4) the emotional distress suffered by the plaintiff was severe. Twyman v. Twyman, 855 S.W.2d 619, 621 (Tex. 1993) (citing RESTATEMENT (SECOND) OF TORTS § 46 (1965)). As a preliminary matter, the trial court must determine whether the alleged conduct may reasonably be regarded as so extreme and outrageous as to permit recovery. Brewerton v. Dalrymple, 997 S.W.2d 212, 216 (Tex. 1999) (citing RESTATEMENT (SECOND) OF TORTS § 46 cmt. h). It is not enough that the action was criminal in nature or done intentionally or with malice. Id. at 215-16. Liability for outrageous conduct should be found "only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Twyman, 855 S.W.2d at 621 (quoting RESTATEMENT (SECOND) OF TORTS § 46 cmt. d).
In their motion, Provident and Ceres contended that as a matter of law the alleged conduct was not sufficiently "extreme and outrageous" to support liability for intentional infliction of emotional distress. In his petition, Bosch claimed that Provident and Ceres caused him emotional distress by refusing to pay for his medical expenses and by cancelling his policy without proper notice. A refusal to pay insurance benefits, even if done arbitrarily or in bad faith, is not alone extreme and outrageous enough to support a claim for intentional infliction of emotional distress. See Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699-700 (Tex. 1994). The gravamen of Bosch's allegation that Provident failed to properly notify him of cancellation is that his medical expenses then went unpaid. Accordingly, we find the trial court could have properly determined that Provident's and Ceres's alleged conduct was not sufficiently extreme and outrageous to support a claim for intentional infliction of emotional distress. See id.
It is unclear exactly what Bosch claims Ceres did to injure him other than by owning Provident, but Bosch did not raise any doctrine for piercing the corporate veil between Ceres and Provident.
Also in their motion, Provident and Ceres asserted that Bosch could provide no evidence of the requisite severe emotional distress. "Severe emotional distress is distress that is so severe that no reasonable person could be expected to endure it." GTE Southwest, Inc. v. Bruce, 998 S.W.2d 605, 618 (Tex. 1999). Bosch did not make any statements regarding his alleged emotional distress in his responsive affidavit, nor did he provide any other summary judgment proof to support his distress claims. Provident provided excerpts from Bosch's deposition in which he stated that he was not deprived of any medical treatment due to Dallas General's actions and that the experience "was not pleasant, but overall it did not destroy me." This testimony amounts to no evidence of severe emotional distress sufficient to support a claim for intentional infliction of emotional distress. See id.
Because Bosch failed to present any evidence regarding severe emotional distress, and, as a matter of law, Provident's and Cere's alleged conduct was not sufficiently extreme and outrageous to support a claim for intentional infliction of emotional distress, the trial court properly granted summary judgment against this claim. Bosch's third issue is overruled.
C. Negligent Infliction of Emotional Distress
In his petition, Bosch alleged negligent and grossly negligent infliction of emotional distress against Provident. In its motion for summary judgment, Provident asserted that Texas law does not recognize either of these causes of action, citing Boyles v. Kerr, 855 S.W.2d 593, 597 (Tex. 1993), and Newman v. Tropical Visions, Inc., 891 S.W.2d 713, 721 (Tex.App.-San Antonio 1994, writ denied). On appeal, Bosch raises no issues concerning these two causes of action. Accordingly, we find no error in the trial court's grant of summary judgment against these claims.
IV. Dallas General
Bosch contends that the trial court erred in considering Dallas General's motion for summary judgment and in granting summary judgment on his breach-of-contract and intentional-infliction-of-emotional-distress claims against Dallas General. Bosch makes no arguments relating to his claims for negligent and grossly negligent infliction of emotional distress.
A. Consideration of the Motion
Bosch contends that the trial court erred in considering Dallas General's motion for summary judgment because the motion was prematurely filed, discovery was not complete, and the parties had agreed to mediation. Bosch, however, does not cite to any place in the record wherein he preserved these complaints by making them in the trial court, and our review of the record does not demonstrate that he in fact preserved them. Accordingly, these arguments are waived. See TEX. R. APP. P. 33.1 (a) (stating that to preserve a complaint for appellate review a party must make a timely and sufficiently explicit request, objection, or motion in the trial court).
Bosch's response to the motion for summary judgment and motion for new trial appear in the record, but neither alleges that the court would or did err in considering the motion. Bosch also attached to his appellate brief his motion to dismiss the motion for summary judgment and his motion to extend time to respond to the motion for summary judgment; however, neither of these documents appears in the record, and neither document addressed the issues raised on appeal. See Adams v. Reynolds Tile and Flooring, Inc., 120 S.W.3d 417, 423 (Tex.App.-Houston [14th Dist.] 2003, no pet.) (holding that the attachment of a document to a brief does not make it part of the appellate record).
Additionally, even if these arguments had been preserved, they are without merit. Regarding the first assertion, that the motion was prematurely filed, Bosch contends that when the trial court granted the continuance on May 10, 2004, all dates in the docket control order were moved forward 180 days; thus, the first allowable date for filing a motion for summary judgment would have been October 1, 2004. Bosch misreads the docket control order. The order contains dates by which dispositive motions and pleas must be set for hearing, but it does not specify the earliest date on which dispositive motions may be filed. There is a space provided on the form for the earliest date on which such motions may be set, but the court left the space blank. Therefore, even if the continuance moved all dates in the docket control order forward by 180 days, it had no effect on the earliest date on which dispositive motions could be filed. Thus, Bosch's first contention is without merit.
The docket control order does not appear in the record but was attached as an exhibit to Bosch's brief. See Adams, 120 S.W.3d at 423.
Regarding the second assertion, that discovery was not yet complete, Bosch claims not that he needed more time to conduct discovery but that Dallas General needed more time to complete discovery. Bosch cites no authority, and we are aware of none, that would permit a nonmovant to defeat a motion for summary judgment on the basis that the movant did not have sufficient time for discovery. Furthermore, even if Bosch had argued that he did not have sufficient time to complete discovery, he failed to file either an affidavit explaining the need for further discovery or a verified motion for continuance, as is required to preserve the complaint for appeal. See Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996). Bosch's second contention is without merit.
In his third contention, Bosch asserts that because the agreed motion for continuance recites the need to mediate as a grounds for the continuance, the trial court should not have considered the motion for summary judgment prior to mediation. Although the motion for continuance does mention mediation as a reason for needing a continuance, the motion neither mentions the motion for summary judgment, nor does it request that the trial court hold the motion in abeyance until after mediation is completed. Nor is there any indication in the record that the parties agreed that the motion would be held in abeyance until after mediation. Bosch did attach letters between counsel to his appellate brief, but even were we able to consider these attachments, they would show only that Dallas General's counsel intended to pursue summary judgment regardless of mediation and so informed Bosch's counsel. Indeed, the letters also indicate that Bosch's counsel knew the motion was set for hearing. Further, Bosch cites no authority, and we are aware of none, suggesting that a party cannot pursue a motion for summary judgment after having agreed to mediate absent an agreement to postpone or forego the hearing on the motion. Thus, Bosch's third contention is also without merit.
Bosch additionally suggests that he did not have sufficient time to have his affidavit notarized and filed prior to the deadline for filing summary judgment proof. He claims that he was in Atlanta, Georgia, and was not notified of the need to file the affidavit until the day it was due and then had trouble finding a notary. However, the record contains no evidence supporting these assertions. Furthermore, the letters attached to his brief indicate that his attorney knew the hearing on the motion was not going to be passed at least three days prior to the deadline for filing proof.
Because each of Bosch's arguments regarding the trial court's consideration of the motion for summary judgment are waived and without merit, we find that the trial court did not err in considering the motion. Accordingly, Bosch's fourth and fifth issues against Dallas General are overruled.
B. Breach of Contract
In his first cause of action, Bosch alleged that Dallas General breached the insurance contract by failing to pay his medical expenses. In its motion for summary judgment, Dallas General's sole contention regarding the breach-of-contract claim was that Bosch could provide no evidence to establish that he had fulfilled all conditions precedent to recovery under the contract. A party seeking to recover under a contract bears the burden of proving that all conditions precedent have been satisfied. Associated Indemn. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 283 (Tex. 1998). Dallas General specifically alleged that Bosch cannot demonstrate that he gave accurate and complete information in his application and that the provision of accurate and complete information in the application is a condition precedent under the contract. Dallas General construes the following language from the application as creating a condition precedent:
I understand that the above answers shall be the basis for the insurer to issue a certificate of insurance. I declare all statements contained in this entire form about myself and my dependents to be insured are true and correct to the best of my knowledge and that no material information has been withheld or omitted.
It is well-settled in Texas that responses in an application for insurance that are declared true and correct constitute representations and not conditions precedent. Mayes v. Mass. Mut. Life Ins. Co., 608 S.W.2d 612, 614-15 (Tex. 1980); Protective Life Ins. Co. v. Russell, 119 S.W.3d 274, 280-82 (Tex.App.-Tyler 2003, pet. denied); Am. Nat'l Ins. Co. v. Paul, 927 S.W.2d 239, 242-43 (Tex.App.-Austin 1996, writ denied); see also TEX. INS. CODE ANN. art. 21.16 (Vernon 1981); Riner v. Allstate Life Ins. Co., 131 F.3d 530, 536-38 (5th Cir. 1998). An insurer may still try to avoid liability for false representations in an application, but it is a matter for an affirmative defense and not an issue of proof for the insured. See Tex. Ins. Code Ann. art. 21.16; Mayes, 608 S.W.2d at 616; Paul, 927 S.W.2d at 242; see also Riner, 131 F.3d at 537-38. A movant cannot be granted a no-evidence summary judgment on an issue on which it has the burden of proof. TEX. R. CIV. P. 166a(i). Accordingly, the trial court erred in granting summary judgment against Bosch's breach-of-contract claim. Bosch's second issue against Dallas General is sustained.
Article 21.16 states that:
Any provision in any contract or policy of insurance issued or contracted for in this State which provides that the answers or statements made in the application for such contract or in the contract of insurance, if untrue or false, shall render the contract or policy void or voidable, shall be of no effect, and shall not constitute any defense to any suit brought upon such contract, unless it be shown upon the trial thereof that the matter or thing misrepresented was material to the risk or actually contributed to the contingency or event on which said policy became due and payable, and whether it was material and so contributed in any case shall be a question of fact to be determined by the court or jury trying such case.
TEX. INS. CODE ANN. art. 21.16. This section has been repealed, effective April 1, 2005, as part of the recodification of the Insurance Code. Act of June 21, 2003, 78th Leg., R.S., Ch. 1274, 2003 Tex. Gen. Laws 3611, 4138.
Conceivably, Dallas General could have argued, but did not, that the first sentence of the excerpt converted the representations into conditions precedent. However, it has been held in other cases that substantially similar language did not create conditions precedent. See, e.g., Riner, 131 F.3d at 536; Mayes, 608 S.W.2d at 613, 615-16; Russell, 119 S.W.3d at 280; Paul, 927 S.W.2d at 243.
In order to prevail on an affirmative defense of misrepresentation, an insurer must prove (1) the making of the representation; (2) the falsity of the representation; (3) reliance thereon by the insurer; (4) the intent to deceive on the part of the insured; and (5) the materiality of the representation. Mayes, 608 S.W.2d at 616.
Because we sustain Bosch's second issue, we need not address his first issue which also attacked the summary judgment on his breach-of-contract claim.
C. Intentional Infliction of Emotional Distress
In his petition, Bosch also alleged intentional infliction of emotional distress against Dallas General. In its motion for summary judgment, Dallas General asserted that (1) as a matter of law, the alleged conduct was not sufficiently "extreme and outrageous" to support liability for intentional infliction of emotional distress, and (2) Bosch could provide no evidence of the requisite severe emotional distress.
The arguments and evidence regarding the intentional infliction allegation against Dallas General are substantially similar to the arguments and evidence discussed above regarding the intentional infliction claims against Provident and Ceres. Bosch claimed that Dallas General caused him emotional distress when it refused to pay for his medical expenses and cancelled his insurance policy. However, as stated, a refusal to pay insurance benefits, even if done arbitrarily or in bad faith, is not alone extreme and outrageous enough to support a claim for intentional infliction of emotional distress. See Natividad, 875 S.W.2d at 699-700.
Further, in its motion, Dallas General asserted that Bosch could provide no evidence of the requisite severe emotional distress. Bosch failed to provide a timely response to the motion; thus, Bosch presented no evidence regarding severe emotional distress. Dallas General, however, did provide excerpts from Bosch's deposition in which he stated that he was not deprived of any medical treatment due to Dallas General's actions and that the experience "was not pleasant, but overall it did not destroy me." This amounts to no evidence of severe emotional distress sufficient to support a claim for intentional infliction of emotional distress. Because Bosch failed to present any evidence regarding severe emotional distress, and as a matter of law, Dallas General's alleged conduct was not sufficiently extreme and outrageous to support a claim for intentional infliction of emotional distress, the trial court properly granted summary judgment against this claim. Bosch's third issue against Dallas General is overruled.
D. Negligent Infliction of Emotional Distress
In his petition, Bosch alleged negligent and grossly negligent infliction of emotional distress. In its motion for summary judgment, Dallas General asserted that Texas law does not recognize either of these causes of action, citing Boyles, 855 S.W.2d at 597, and Newman, 891 S.W.2d at 721. On appeal, Bosch raises no issues concerning these two causes of action. Accordingly, we find no error in the trial court's grant of summary judgment against these claims.
V. Conclusion
Regarding Bosch's claims against Provident, the trial court properly awarded summary judgment against Bosch's claims for intentional, negligent, and grossly negligent infliction of emotional distress and his claims for lost wages and unspecified expenses. However, the court erred in granting summary judgment against Bosch's breach-of-contract cause of action and his claims for mental anguish and damage to his credit. The trial court properly awarded summary judgment against Bosch's sole claim against Ceres for intentional infliction of emotional distress. Regarding Dallas General, the trial court properly awarded summary judgment against Bosch's claims for intentional, negligent, and grossly negligent infliction of emotional distress, but the court erred in granting summary judgment against Bosch's breach-of-contract cause of action. Accordingly, we reverse the portion of the summary judgment regarding the breach-of-contract claims against Provident and Dallas General and remand to the trial court for further proceedings in accordance with this opinion.