Opinion
01-21-00312-CV
08-30-2022
VIRGINIA SOSA, Appellant v. AUTO CLUB INDEMNITY CO., Appellee
On Appeal from the County Civil Court at Law No. 3 Harris County, Texas Trial Court Case No. 1161202
Panel consists of Justices Landau, Guerra, and Farris.
MEMORANDUM OPINION
April L. Farris Justice
Appellant Virginia Sosa appeals from the county court's orders granting summary judgment in favor of appellee Auto Club Indemnity Co. ("Auto Club") and denying Sosa's motion for new trial. The court granted summary judgment on several grounds raised by Auto Club, including that Sosa's claims were barred by limitations and by the exclusion in her homeowner's insurance policy for damages caused by flood and surface water. In a single issue with several subparts, Sosa raises numerous challenges to the court's summary judgment and new trial rulings. Sosa does not, however, challenge the summary judgment ground that her claims were caused by flood or surface water, which is expressly excluded from coverage under her homeowner's policy. Because Sosa does not challenge this independent ground supporting the summary judgment order, we affirm.
Background
Sosa's house was damaged during Hurricane Harvey on August 26, 2017.Shortly thereafter, Sosa filed a claim with Auto Club, which insured her house. Sosa reported that two feet of floodwater had entered her home, her roof was missing shingles and was leaking, and she had sustained interior damage. Auto Club sent an adjuster to Sosa's house to inspect her claimed damage in September 2017. The adjuster estimated that the cost to repair Sosa's roof damage was $1,191.96, which was less than her deductible. Auto Club determined that any remaining damage was caused by flood water, which was expressly excluded from coverage under Sosa's homeowner's insurance policy that was in effect during Hurricane Harvey.
"Hurricane Harvey moved through the Houston area in late August 2017, bringing record-setting rains and causing widespread flooding." San Jacinto River Auth. v. Ogletree, 594 S.W.3d 833, 837 (Tex. App.-Houston [14th Dist.] 2020, no pet.).
On September 26, 2017, Auto Club sent Sosa a letter informing her that her covered roof damage was less than her deductible. The letter also informed Sosa that her remaining damage was caused by flood water or surface water that was expressly excluded from coverage under the policy. As a result, the letter notified Sosa that it was closing its claim file without issuing any payment.
On November 11, 2020, Sosa filed suit against Auto Club for breach of the insurance policy. Sosa's original petition alleged that her home in Houston sustained "significant" property damage on August 26, 2017, which was during Hurricane Harvey. She alleged that she notified Auto Club of her claim, and Auto Club assigned her a claim number and inspected her damages, but it ultimately "refused to pay [her] in full."
Sosa made numerous allegations against Auto Club, including that it did not pay her for her claimed damage and that it had knowledge of "serious cosmetic and structural damage" to Sosa's home. Sosa also alleged that Auto Club hired an adjuster to provide an estimate of Sosa's property damage, but the adjuster only "briefly inspected" her home and was "improperly trained," lacked the knowledge and experience required to adjust property damage, and was unqualified to prepare an estimate of Sosa's claimed property damage. Sosa alleged that Auto Club routinely hired poorly trained adjusters, failed to properly adjust claims, had an unfair claims process, manipulated the claims process, and required additional steps for insureds to provide notice of their claims. Sosa alleged that Auto Club's conduct was prohibited by section 541.060 of the Texas Insurance Code. See generally Tex. Ins. Code § 541.060 (proscribing unfair settlement practices by insurance company when handling insurance claim). Sosa's original petition stated a single cause of action against Auto Club for breach of the insurance policy, and she invoked an appraisal clause in the policy and demanded a mandatory appraisal of her claims.
Auto Club filed an answer and asserted numerous affirmative defenses, including that Sosa's claim was time barred by an applicable statute of limitations.
Sosa then filed a first amended petition, which was her live pleading when the county court entered summary judgment against her. Sosa's amended petition was identical to her original petition except that it changed the date of loss from August 26, 2017, to June 28, 2019. The amended petition also changed the assigned Hurricane Harvey claim number from her original petition to "TO BE DETERMINED." Like her original petition, Sosa's amended petition asserted a single cause of action for breach of contract and included a demand for appraisal.
Sosa states in her appellate brief that she asserted claims for breach of contract, anticipatory breach of contract, breach of the duties of good faith and fair dealing, deceptive trade practices and unconscionable conduct, violations of the Texas Prompt Payment of Claims Act, strict liability, unfair insurance practices, fraud, and ongoing conspiracy to commit illegal acts.
Sosa also attached four documents to her amended petition. The first document is titled "Formal Notice of Claim." This notice is addressed to Auto Club and states that a "wind/hail" loss occurred at Sosa's house on June 28, 2019. The second document is a demand letter and invocation of appraisal from Sosa's counsel to Auto Club dated July 30, 2020. The third document is a letter also dated July 30, 2020, from Sosa's counsel to the Auto Club claims department notifying Auto Club that Sosa was represented by legal counsel. Finally, Sosa attached a fax transmittal receipt that appears to show the preceding three documents were "sent" to a certain listed phone number on July 30, 2020.
A. Auto Club's Motion for Summary Judgment
Shortly after Sosa amended her petition, Auto Club filed an amended answer. As in its original answer, Auto Club asserted several affirmative defenses, including that Sosa's claimed damages were time barred and were excluded from coverage under her policy.
Auto Club filed a traditional motion for summary judgment arguing that it was entitled to judgment as a matter of law on several grounds. Auto Club primarily contended that Sosa's lawsuit was time barred. Auto Club argued that Sosa's claims arose in September 2017 when it denied payment for her Hurricane Harvey damage, which was the only homeowner's claim Sosa had reported to Auto Club. It argued that Sosa's claims are time barred by the two-year-and-one-day limitations period contained in Sosa's policy because Sosa filed the lawsuit more than three years after her claims accrued. Auto Club accused Sosa of improperly attempting to "recast" the date of her loss to June 2019 in an attempt to defeat limitations. Auto Club attached a certified copy of Sosa's homeowner's policy in effect from January 2017 to January 2018.
In addition to the limitations bar, Auto Club also sought summary judgment on the ground that Sosa's policy did not cover loss from flood or surface water, which it contended was the basis of Sosa's claimed damage. For support, Auto Club relied on the homeowner's policy and a sworn affidavit from Cecil Shepard, a claims manager in Auto Club's homeowner's insurance department.
Shepard averred that Sosa reported a loss from Hurricane Harvey in August 2017. Sosa reported that her home had two feet of floodwater, roof damage, and interior damage. Auto Club assigned this loss a claim number and sent an adjuster to inspect the claimed damage. The adjuster estimated that Sosa's covered damages were less than her $9,200 deductible. Auto Club then sent Sosa a letter on September 26, 2017, notifying her that it was denying payment because her covered losses were less than her deductible and because her remaining loss was expressly excluded from coverage under the flood and surface water exclusion in the policy. Auto Club relied on this letter to support its summary judgment motion.
Shepard also averred that Sosa had not filed a claim with Auto Club for a loss occurring on June 28, 2019, as alleged in her amended petition. Sosa had previously reported at least nineteen claims to various insurers, but the only homeowner's claim reported by Sosa to Auto Club was for damage during Hurricane Harvey. Shepard denied that Auto Club had received the documents attached to Sosa's amended petition that were purportedly faxed to Auto Club on July 30, 2020. Shepard stated that the phone number listed on the fax transmittal receipt was not the fax number for its registered agent, its principal place of business in California, or any other related entity's principal place of business. Shepard further averred that Sosa had provided these documents during litigation when Auto Club requested a copy of her pre-suit demand notice for her Hurricane Harvey claims. Shepard also stated that Sosa cancelled her homeowner's policy on March 13, 2020, and she should have reported any damage from June 2019 at that time.
Finally, in addition to arguing that Sosa's claims were barred by limitations and the policy exclusion, Auto Club argued that it was entitled to summary judgment because it had disproven several elements of Sosa's breach-of-contract claim. Specifically, its evidence established that Sosa did not perform under the policy, Auto Club did not breach the policy, and Sosa did not sustain damages. In the absence of a breach of contract, Auto Club argued that any extracontractual claims asserted by Sosa were also barred.
B. Sosa's Summary Judgment Response
Sosa filed a response. She denied that she was asserting any claim related to Hurricane Harvey, and she argued that the date of loss stated in her original petition was a "typographical error." Sosa "completely agree[d] that [her] Hurricane Harvey claim is beyond the statute of limitations to challenge," but she alleged that her claimed damage actually occurred on June 28, 2019, and that Auto Club had yet to acknowledge, investigate, adjust, or pay her claim. Thus, she argued, Auto Club breached the insurance policy. Sosa argued that Auto Club did not rely on sufficient evidence to support its summary judgment arguments. Sosa's summary judgment response did not rebut or mention Auto Club's arguments concerning the flood and surface water exclusion in the policy.
Sosa relied on two exhibits to support her arguments. First, she relied on her amended petition with the attached notice-of-demand and claim letters and fax transmittal receipt. She also relied on a verified estimate of damage to her home in the amount of approximately $42,000. The report included photographs depicting various damage to the roof, fence, and interior of the house.
C. Auto Club's Objections and Reply
Auto Club objected to Sosa's summary judgment argument and evidence. Auto Club argued that numerous paragraphs in Sosa's summary judgment response were not supported by any evidence. For example, Auto Club argued that no evidence supported Sosa's contention that her home sustained a covered loss in June 2019, that she had a policy with Auto Club at that time, that she reported a June 2019 loss to Auto Club, or that Auto Club did nothing after she filed her claim for that loss. Auto Club further argued that Sosa had no proof that her inclusion of a claimed loss from Harvey damage in her original petition was merely a "typographical error" that was corrected in her amended petition.
Auto Club also objected to Sosa's reliance on the July 30, 2020 claim notice, demand letter, and fax transmittal receipt. Auto Club argued that Sosa had previously produced these documents in discovery and represented that they were related to her Harvey claim, not a new claim. Auto Club also objected to Sosa's reliance on the verified estimate of damages because the estimate did not identify a date of loss, and the affidavit authenticating it offered no opinion on either the date of loss or its cause.
In its reply on the merits, Auto Club disputed Sosa's assertion that its summary judgment evidence was insufficient. Auto Club argued that it attached nine exhibits to its summary judgment motion, including the homeowner's policy in effect during Hurricane Harvey and affidavits of a claims manager and an attorney.
Auto Club argued that Sosa offered no competent summary judgment evidence supporting any of her arguments. It strongly disputed Sosa's attempt to "recast" her claims to avoid limitations. Finally, Auto Club argued that Sosa did not respond to its argument that her damages were expressly excluded from coverage under the policy.
D. County Court's Ruling and Motion for New Trial
The county court granted Auto Club's summary judgment motion. In its order, the court made several findings. The court found that Sosa did not file her suit or invoke appraisal for her loss due to Hurricane Harvey within the limitations period, including the "damages and conditions identified" in the estimate of damage attached to her summary judgment response; the suit and appraisal were barred by limitations; and Sosa's "effort to recast her Hurricane Harvey claim [was] prohibited." The court also found that Auto Club had disproved several elements of Sosa's breach of contract action; flood and surface water damages were not covered under the policy; and all flood and surface water damages were excluded from coverage. The court ordered that Sosa take nothing and dismissed her claims with prejudice. Finally, the order sustained Auto Club's objections to Sosa's summary judgment response and evidence.
Sosa filed a motion for new trial. She characterized Auto Club's limitations arguments as "outrageous," arguing that her notice of claim and demand letter prove that her loss occurred in June 2019. Sosa further argued that Auto Club's summary judgment motion contained "absolutely no evidence" except pointing out a typographical error of the date of loss in the original petition. Sosa attached a brief verification affidavit from her counsel averring that the facts stated in the motion for new trial were within counsel's personal knowledge. Sosa did not mention or challenge the county court's evidentiary ruling or its ruling that Sosa's damages were excluded under her homeowner's policy.
The county court signed an order denying Sosa's motion for new trial. This appeal followed.
Summary Judgment
A. Standard of Review
It is well established that appellate courts review summary judgment rulings de novo. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003); Vertex Servs., LLC v. Oceanwide Houston, Inc., 583 S.W.3d 841, 848 (Tex. App.-Houston [1st Dist.] 2019, no pet.). When, as here, a summary judgment order specifies the basis for its ruling, we consider all the summary judgment grounds that the court has ruled on, that the movant has preserved for appellate review, and that are "necessary for final disposition of the appeal." Nguyen v. Watts, 605 S.W.3d 761, 773 (Tex. App.- Houston [1st Dist.] 2020, pet. denied) (quoting Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 626 (Tex. 1996)); see also Cates, 927 S.W.2d at 626 (holding that, when necessary, courts may also "consider other grounds that the movant preserved for review and [that the] trial court did not rule on in the interest of judicial economy"). A defendant may obtain summary judgment by conclusively establishing an affirmative defense. Eagle Oil & Gas Co. v. TRO-X, L.P., 619 S.W.3d 699, 705 (Tex. 2021).
Sosa argues on appeal that we should apply an abuse of discretion standard to review the summary judgment and new trial orders. Sosa characterizes her complaints on appeal as challenges to the denial of her motion for new trial on the basis that the court erred by granting summary judgment in Auto Club's favor. We construe these arguments as challenging both the summary judgment order and the order denying Sosa's motion for new trial. Applying well-established authority, we will review the county court's summary judgment ruling under a de novo standard of review. See, e.g., Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). We will then review the county court's new trial ruling for an abuse of discretion. See, e.g., Waffle House, Inc. v. Williams, 313 S.W.3d 796, 813 (Tex. 2010); Nguyen v. Kuljis, 414 S.W.3d 236, 239 (Tex. App.-Houston [1st Dist.] 2013, pet. denied).
To prevail on a traditional motion for summary judgment, the movant bears the burden to prove that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Lujan, 555 S.W.3d at 84; Knott, 128 S.W.3d at 215-16. "If the movant carries this burden, the burden shifts to the nonmovant to raise a genuine issue of material fact precluding summary judgment." Lujan, 555 S.W.3d at 84. A scintilla of evidence is all that is required to raise a genuine issue of material fact on a summary judgment ground. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). In our summary judgment review, "we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Knott, 128 S.W.3d at 215.
B. Analysis
On appeal, Sosa primarily argues that her loss occurred in June 2019, not during Hurricane Harvey in 2017. As such, she contends that the lawsuit she filed in November 2020 is not barred by the contractual two-year-and-one-day limitations period. Sosa argues that she sent notice of her June 2019 loss and a demand for coverage to Auto Club, but Auto Club did not acknowledge or take any action on her claims, which Sosa contends is a breach of the insurance policy. She also argues that Auto Club acted intentionally, knowingly, wrongfully, and fraudulently by failing to participate in the appraisal process.
Auto Club responds on several grounds. It first argues that Sosa did not challenge the county court's evidentiary ruling sustaining its objections to Sosa's summary judgment evidence, and Sosa has therefore waived any error in the evidentiary ruling. Auto Club also argues that Sosa inadequately briefed her issues on appeal. It further argues that its evidence conclusively established that Sosa's claims arose during Hurricane Harvey, and these claims are barred by the limitations period. Finally, Auto Club argues that Sosa has not challenged the county court's ruling that Sosa's policy excludes her damages caused by flood or surface water, and therefore it is not liable for Sosa's damages.
"An appellant must challenge each independent ground that could fully support" the trial court's challenged ruling. Rollins v. Pressler, 623 S.W.3d 918, 926 (Tex. App.-Houston [1st Dist.] 2021, pet. denied); see Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970); Britton v. Tex. Dep't of Crim. Just., 95 S.W.3d 676, 681 (Tex. App.-Houston [1st Dist.] 2002, no pet.). "If an appellant does not, then we must affirm the ruling or judgment." Britton, 95 S.W.3d at 681; see Fairfield Indus., Inc. v. EP Energy E&P Co., 531 S.W.3d 234, 253 (Tex. App.- Houston [14th Dist.] 2017, pet. denied) (overruling appellant's issue after concluding that appellant did not brief arguments challenging each independent summary judgment ground).
This rule requiring an appellant to challenge each ground independently supporting a ruling is premised on appellate courts' inability to "alter an erroneous judgment in favor of an appellant in a civil case who does not challenge that error on appeal." Britton, 95 S.W.3d at 681 (citing Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993) (per curiam)). When an unchallenged ground supports a complained-of ruling or judgment, "we must accept the validity of that unchallenged independent ground, and thus any error in the grounds challenged on appeal is harmless because the unchallenged independent ground fully supports the complained-of ruling or judgment." Hartwell v. Lone Star, PCA, 528 S.W.3d 750, 763 (Tex. App.- Texarkana 2017, pet. dism'd) (quoting Oliphant Fin. LLC v. Angiano, 295 S.W.3d 422, 424 (Tex. App.-Dallas 2009, no pet.)); see Britton, 95 S.W.3d at 681; Tex.R.App.P. 44.1(a) (providing that no judgment may be reversed on appeal on ground that trial court made error of law unless such error probably caused rendition of improper judgment or prevented appellant from properly presenting case to appellate court).
This Court has repeatedly applied this rule to affirm a trial court's ruling when an appellant does not challenge an independent ground supporting the ruling. For example, in Ellis v. Precision Engine Rebuilders, Inc., Precision moved for summary judgment on Ellis's deceptive trade practices claim on two grounds: (1) Ellis actually asserted a breach of contract action; and (2) the action was time barred. 68 S.W.3d 894, 898 (Tex. App.-Houston [1st Dist.] 2002, no pet.). The Court granted Precision's summary judgment motion without stating the basis for its ruling, and thus Ellis was required to defeat both grounds to prevail on appeal. Id. Ellis did not, however, address the limitations issue on appeal. Id. This Court therefore affirmed the summary judgment order on the unchallenged ground of limitations, stating that it need not address the merits of the unchallenged issue in order to affirm on that ground. Id.; see Britton, 95 S.W.3d at 680 (affirming order granting plea to jurisdiction because appellant challenged only two of six grounds asserted in plea, and stating that "judgment must be affirmed" even if trial court improperly granted plea on unchallenged grounds) (quoting Ellis, 68 S.W.3d at 898); Armbruster v. Mem'l Sw. Hosp., 857 S.W.2d 938, 941 (Tex. App.-Houston [1st Dist.] 1993, no writ) (affirming summary judgment because appellant did not assign error to two of several grounds raised in hospital's summary judgment motion).
Here, Auto Club sought summary judgment on four grounds. First, Auto Club argued that Sosa's claimed damages were excluded from coverage under the homeowner's policy, and therefore it was not liable for her damages. Second, Auto Club argued that Sosa's claims were time barred. Third, Auto Club argued that its evidence disproved several elements of Sosa's breach of contract claim. Finally, Auto Club argued that Sosa's extracontractual claims were not viable in the absence of a breach of contract. The county court granted summary judgment, and its order stated the grounds for its ruling. See Nguyen, 605 S.W.3d at 773 (stating that appellate courts consider all grounds on which trial court ruled when summary judgment order specifies basis for ruling); see also Cates, 927 S.W.2d at 626 (stating that appellate courts may consider grounds not ruled on that are preserved for review). The summary judgment order determined that Sosa's claims were time barred, her damages were excluded from coverage by the policy exclusion for loss resulting from flood and surface water, and Auto Club had disproved several elements of breach of contract. By dismissing all of Sosa's claims, the court also impliedly granted summary judgment on any extracontractual claim asserted by Sosa.
On appeal, Sosa challenges only three of these four grounds. Sosa argues that her claims and invocation of appraisal were not time barred, and that she adequately alleged claims for breach of contract and extracontractual claims. But Sosa does not challenge the summary judgment order on the ground that her claimed damages were covered under the policy. Indeed, her appellate brief does not mention flood or surface water.
A policy provision that excludes claimed damages is an independent ground that supports dismissal of such claims. See, e.g., Valley Forge Ins. Co. v. Hicks Thomas & Lilienstern, L.L.P., 174 S.W.3d 254, 259 (Tex. App.-Houston [1st Dist.] 2004, pet. denied) (holding that, under stipulated facts and pertinent policy provisions, insurance policy provision excluded law firm's flood and surface water loss, and thus trial court erred by denying insurer's summary judgment motion). Because Sosa's claims are contractual in nature and Auto Club's liability for her claims flows from the homeowner's policy, Auto Club is not liable for damages that are expressly excluded under the insurance policy. See id.; see also RSUI Indem. Co. v. Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015) (stating that insurance policy is contract, and courts' primary concern in construing policy is to determine parties' intent as expressed in policy).
We need not decide whether summary judgment is meritorious on this ground in order to affirm, however, because Sosa has not challenged this ruling on appeal. See Malooly Bros., 461 S.W.2d at 121 (declining to consider merits of appellant's assigned errors because appellant did not challenge all independent grounds supporting order granting summary judgment); Britton, 95 S.W.3d at 680. Sosa does not argue that the county court erred by granting summary judgment on the ground that her policy excluded coverage for her damages because they resulted from flood or surface water. See Britton, 95 S.W.3d at 681 (stating that appellant's failure to challenge independent ground fully supporting challenged order requires appellate court to accept validity of unchallenged independent ground, necessarily rendering any challenged error harmless). This ground independently supports summary judgment in Auto Club's favor because Auto Club is not liable for damages expressly excluded under Sosa's homeowner's policy. See Valley Forge Ins. Co., 174 S.W.3d at 259; Britton, 95 S.W.3d at 681. Therefore, any other error about which Sosa complains on appeal is harmless in light of the unchallenged ground supporting the summary judgment order. See Malooly Bros., 461 S.W.2d at 121; Britton, 95 S.W.3d at 681; Tex.R.App.P. 44.1(a); see also Hartwell, 528 S.W.3d at 763 (stating that because one "ground has not been challenged and fully supports the trial court's order, Appellants have not shown harmful error").
We note that Sosa's summary judgment response and motion for new trial likewise did not mention or attempt to rebut Auto Club's argument that her claims fell within the flood and surface water exclusion in the homeowner's policy. See Tex. R. Civ. P. 166a(c) ("Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal."); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004) (stating that nomovant must raise genuine issue of material fact, or "more than a scintilla of evidence establishing the existence of the challenged element," to defeat summary judgment).
Furthermore, because summary judgment was proper, we disagree with Sosa that the county court abused its discretion by denying her motion for new trial. See Nguyen v. Kuljis, 414 S.W.3d 236, 239 (Tex. App.-Houston [1st Dist.] 2013, pet. denied). Sosa's motion for new trial did not challenge or mention the flood and surface water policy exclusion. Because we have already determined that summary judgment was proper and any error raised by Sosa is harmless, we conclude that the county court did not act arbitrarily, unreasonably, or without reference to guiding rules or principles in denying Sosa's motion for new trial. See id. (stating that court abuses its discretion when it acts in arbitrary or unreasonable manner or without reference to guiding rules or principles) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985)). Therefore, the county court did not abuse its discretion by denying Sosa's motion for new trial.
Because we conclude that Sosa has not challenged an independent ground supporting summary judgment, we decline to consider the parties' remaining arguments. See Tex. R. App. P. 47.1; State v. Ninety Thousand Two Hundred Thirty-Five Dollars and No Cents in U.S. Currency ($90,235), 390 S.W.3d 289, 294 (Tex. 2013) (stating that, after court of appeals affirms summary judgment on one ground, court need not address additional grounds challenging summary judgment ruling).
Conclusion
We affirm the county court's summary judgment and new trial orders.