Opinion
No. 13-02-688-CV
Memorandum Opinion delivered and filed December 16, 2004.
On appeal from the 275th District Court of Hidalgo County, Texas.
Before Chief Justice VALDEZ and Justices RODRIGUEZ and CASTILLO.
MEMORANDUM OPINION
This is a suit to recover homeowners insurance benefits for damage to a home. Appellant, Jerry L. Barth, the homeowner, appeals from a summary judgment granted in favor of appellees, Royal Insurance Company and Royal SunAlliance Company (collectively Royal). By four issues, Barth contends: (1) the judgment is not final; and (2) the trial court erred by entering summary judgment against him because his claims are not barred by release, by limitations, or by accord and satisfaction. We affirm.
Seeking contractual damages, extra-contractual damages, attorney's fees, and costs, Barth asserted causes of action for violations of the deceptive trade practices act and the insurance code, fraudulent inducement, fraud, negligence, negligent misrepresentation, breach of contract, breach of warranty, and breach of the covenant of good faith and fair dealing.
Barth sued Royal SunAlliance Company as the successor to Royal Insurance Company.
I. Background
As this is a memorandum opinion and because all issues of law presented by this case are well settled and the parties are familiar with the facts, we will not recite the law or the facts here except as necessary to advise the parties of the Court's decision and the basic reasons for it. See TEX. R. APP. P. 47.4.
II. Analysis A. Finality of Judgment
By his first issue, Barth complains that the trial court's summary judgment is not final, and, therefore, we do not have jurisdiction over this appeal. See Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). A court of appeal reviews the finality of a summary judgment under a de novo standard of review. Garcia v. Comm'rs Court, 101 S.W.3d 778, 783-84 (Tex.App. 2003, no pet.).
Barth complains that the judgment is not final because the trial court's order does not contain a Mother Hubbard clause or other words of finality. He also contends that additional facts included in his fourth and/or fifth amended petitions were not addressed in Royal's first amended motion for summary judgment.
Barth specifically identifies facts pertaining to allegations regarding the quality of the contractors employed or to be employed by Royal to repair the home and the quality of repairs allegedly made or to be made to his home.
However, the judgment unequivocally states:
Accordingly, it is also ORDERED, ADJUDGED, AND DECREED that Plaintiff Jerry Barth ("Plaintiff") had no valid causes of action against Royal.
IT IS FURTHER ORDERED that Plaintiff's suit against Royal is hereby dismissed with prejudice and severed into a separate cause number.
See Lehmann, 39 S.W.3d at 192-93 ("[A] judgment issued without a conventional trial is final for purposes of appeal if and only if either it actually disposes of all claims and parties then before the court, regardless of its language, or it states with unmistakable clarity that it is a final judgment as to all claims and all parties."). Moreover, with leave of court, Royal filed a supplemental response that addressed any new allegations contained in Barth's fourth amended petition. Furthermore, although Barth's fifth amended petition, filed after Royal supplemented its motion and before the final judgment was entered in this case, expanded the factual allegations, it did not add new causes of action. Royal had specifically asserted affirmative defenses of release, limitations, and accord and satisfaction as summary judgment grounds for all of Barth's claims. Therefore, the defenses raised in Royal's amended motion for summary judgment and its supplement encompassed Barth's fifth amended petition because the petition did not raise any new causes of action. See Larson v. Family Violence Sexual Assault Prevention Ctr., 64 S.W.3d 506, 510 n. 2 (Tex.App. 2001, pet. denied).
Accordingly, we conclude the trial court's order provided a final appealable judgment to this Court as it conclusively dismissed all of Barth's claims against which Royal had asserted its affirmative defenses. Barth's first issue is overruled.
B. Affirmative Defenses
By his second issue, Barth contends the trial court erroneously granted summary judgment based on Royal's affirmative defenses of release, limitations, and accord and satisfaction.
1. Release
A release is an agreement or contract in which one party agrees that a legal right or obligation owed by the other party is surrendered. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993). A release extinguishes a claim or cause of action and is an absolute bar to any right of action on the released matter. Id. To release a claim effectively, the releasing instrument must "mention" the claim to be released. Victoria Bank Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991); see Keck, Mahin Cate v. Nat'l Union Fire Ins. Co., 20 S.W.3d 692, 698 (Tex. 2000). Although releases generally contemplate claims existing at the time of execution, a valid release may also encompass unknown claims and damages that develop in the future. Keck, 20 S.W.3d at 698.
Barth signed four release agreements on May 23, 1995. Each release provided that "[i]t is understood and agreed that this Release applies not only to settlement of my/our claim for payment under the above-mentioned policy but also all claims by me/us relating to the handling by the Company of the aforementioned claim." Each release also contained the following clause: "This Release contains the entire agreement between us and the Company. Specifically no representations have been made to me/us other than what are contained in this paper."
Barth urges that Royal's releases do not preclude him from asserting his claims for affirmative relief, including "claims for the failure to pay benefits under the policy or for any obligations for claims based on extra-contractual liability, much less for additional claims made pursuant to agreements made by its agent at and around the time the instruments were signed." He contends the releases are limited in scope to claims arising out of the plumbing leaks that caused damage to his home.
We disagree with Barth's characterization of the release. The language in the release is broad, encompassing not only the settlement of Barth's claim for payment under the policy for damage caused by the water leaks, but also all claims by Barth relating to the handling of the claim by the Company. The releases are not limited to a specific type of claim resulting from the plumbing leaks, nor are they limited to claims existing at the time the releases were executed. Therefore, we conclude that the broad release is sufficient to foreclose all claims for damages related to the plumbing leaks and all claims related to Royal's actions in handling the claims. The trial court did not err in granting summary judgment on this ground.
2. Limitations
A movant seeking summary judgment based on the statute of limitations must: (1) prove when the cause of action accrued; and (2) must negate the discovery rule by proving as a matter of law that there is no genuine issue of fact about when the plaintiff discovered or should have discovered the nature of the injury. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990) ; Jett v. Truck Ins. Exch., 952 S.W.2d 108, 109 (Tex.App. 1997, no writ).
As a general rule, the applicable period of limitations for a claim made pursuant to contract is four years from the date the cause of action accrues. See TEX. CIV. PRAC. REM. CODE ANN. § 16.004 (Vernon 2002). However, parties to a transaction may agree to the time in which a person must file suit, subject to section 16.070(a) of the civil practices and remedies code which provides that a person may not agree to a period shorter than two years. See id. § 16.070(a) (Vernon 1997); Jett, 952 S.W.2d at 109. In this case, paragraph eleven of Section 1-Conditions of the Texas Homeowners Policy provides that an "[a]ction brought against [Royal] must be started within two years and one day after the cause of action accrues." Texas courts have held that "when a policy states that the limitation period begins to run when the insured's cause of action accrues, the pivotal point in time is when liability is denied by the insurer." See Jett, 952 S.W.2d at 111. Barth settled his claims with Royal on May 23, 1995. If we construe the settlement as a denial of all other liability, Barth must have filed suit on his contract claims within two years and one day of May 23, 1995, when he signed the releases. Barth did not file suit until January 15, 1999. Furthermore, if we were to determine that Royal denied coverage, and thus liability, when it refused to reopen Barth's claim on July 28, 1996, at the latest, as testified to by Barth at his deposition, Barth should have discovered the nature of the injury at that time, and would have had to file suit on his contractual claims within two years and one day of July 28, 1996. He did not.
Barth argues that there is no evidence in the record of the terms of the policy. However, Royal attached a copy of the standard Texas Homeowners policy to its first amended motion for summary judgment as evidence of the terms of Barth's policy. Barth did not complain to the trial court about this summary judgment evidence, therefore he has waived this argument on appeal. See TEX. R. APP. P. 33.1(a)(1).
Barth contends, as set out in his affidavit dated May 9, 2001, that it was on August 8, 1997 that he first discovered that Royal did not intend to re-open his claim. In his affidavit Barth stated that it was around that time that Royal refused to abide by its promise to remedy any problems that would reoccur. Therefore, based on a discovery date of August 8, 1997, Barth argues his petition filed on January 15, 1999, was not time-barred.
However, at his deposition taken on September 30, 1999, before his affidavit was filed, Barth testified that when he signed the releases on May 23, 1995, Royal and Gerloff Company, Inc., the company that made the repairs, "assured [him] that . . . if it wasn't repaired, [Gerloff] would do it [under the] warranty or [Royal] would reopen the claim, and then he came back in a few months and it was obvious the problem was returning, and all of a sudden nobody knew nothing." Barth also testified that all the repair work was completed in July 1995 and "within that one year [from July 28, 1995], prior to the one [warranty] year being up, . . . [he] discovered that things were not right at the house;" "that it wasn't very long [after July 28, 1995] whenever [he] saw the problems had just come back." Barth testified that he complained to Royal about the problem coming back, but Royal told him to "[g]o talk to Gerloff. Gerloff must have not done the work right." Sometime after that, the "gist" of another conversation Barth had with Royal was that "we [Royal] have satisfied this claim, we have paid Gerloff, you have signed off on it, that's it." Moreover, during his deposition Barth explained that before he wrote the August 8, 1997 letter he had already talked to everybody. Based on Barth's deposition testimony, his conversations with Royal occurred before the summer of 1996.
"A party cannot file an affidavit to contradict his own deposition testimony without any explanation for the change in testimony, for the purpose of creating a fact issue to avoid summary judgment." Farroux v. Denny's Restaurants, Inc., 962 S.W.2d 108, 111 (Tex.App. 1997, no pet.); see Cantu v. Peacher, 53 S.W.3d 5, 10 (Tex.App. 2001, pet. denied) (finding that if "a subsequent affidavit clearly contradicts a witness's earlier testimony involving the suit's material points, without explanation, the affidavit must be disregarded and will not defeat the motion for summary judgment."); cf. Smith v. Mosbacker, 94 S.W.3d 292, 295 n. 1 (Tex.App. 2002, no pet.) (notion of "sham" affidavit can and should be ignored where affidavit signed three days before deposition taken). Because Barth's subsequently-filed affidavit, without explanation, contradicts his earlier testimony involving the date he should have discovered the injury, we must disregard the affidavit. It will not defeat the motion for summary judgment.
Barth's extra-contractual claims for alleged bad faith/breach of the duty of good faith and fair dealing, negligence, breach of warranty, and violations of the insurance code and the deceptive trade practices act are also time-barred. The statute of limitations for each is two years. See TEX. CIV. PRAC. REM. CODE ANN. § 16.003(a) (Vernon 2002); TEX. INS. CODE ANN. art. 21.21 § 16(d) (Vernon Supp. 2004-2005); TEX. BUS. COM. CODE ANN. § 17.565 (Vernon 2002). The summary judgment evidence establishes the causes of action would have accrued at the latest on July 28, 1996, these causes of action are time-barred because Barth did not file suit until January 15, 1999.
Finally, Barth's alleged fraud and fraudulent inducement claims which are subject to a four-year statute of limitations, are also time-barred. See TEX. CIV. PRAC. REM. CODE ANN. § 16.004 (Vernon 2002). The fraud claim was filed on October 29, 2001, more than five years after the date the action could have accrued, and the fraudulent inducement claim was filed on August 2, 2002. Moreover, causes of action do not "relate back" under section 16.068 of the civil practice and remedies code when the original causes of action asserted in the first pleading are barred by limitations. See TEX. CIV. PRAC. REM. CODE ANN. § 16.068 (Vernon 1997); Cooke v. Maxam Tool Supply, Inc., 854 S.W.2d 136, 141 (Tex.App. 1993, writ denied) (two-prong test to determine whether amended pleading relates back: (1) original cause of action asserted in first pleading must not have been time barred when filed; and (2) pleading which changes facts or grounds of liability or defense must not be wholly based on new, distinct or different transaction or occurrence). Therefore, the doctrine of "relation back" does not apply to Barth's fraud and fraudulent inducement claims because the causes of action alleged by Barth in his original petition were subject to a plea of limitations on the date the petition was filed. Thus, we conclude Royal has proven when the cause of action accrued and has negated the discovery rule by proving as a matter of law that there is no genuine issue of fact about when Barth should have discovered the nature of the injury. See Burns, 786 S.W.2d at 267. The trial court did not err in granting summary judgment on the basis of limitations.
3. Accord and Satisfaction
Barth also contends the trial court erred by holding his claims were barred by accord and satisfaction. However, when the motion for summary judgment is based on several different grounds and the order granting the motion is silent as to the reason for granting the motion, as in this case, the appellant must show that each independent ground alleged in the motion is insufficient to support summary judgment, and the summary judgment must be affirmed if any of the theories are meritorious. See FM Props. Operating, Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2001). Because we have concluded the affirmative defenses of release and limitations are sufficient to support the summary judgment, we need not address Barth's remaining contention.
Therefore, taking as true all evidence favorable to Barth and indulging every reasonable inference in his favor, Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1996) (per curiam), under our de novo review, see Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994); Tex. Commerce Bank Rio Grande Valley v. Correa, 28 S.W.3d 723, 726 (Tex.App. 2000, pet. denied), we conclude Royal has conclusively established its affirmative defenses of release and limitations. See Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997) (per curiam); Crain v. Smith, 22 S.W.3d 58, 59 (Tex.App. 2000, no pet.). The trial court did not err in granting summary judgment in favor of Royal. Barth's second issue is overruled.
III. Conclusion
We affirm the judgment of the trial court.
DISSENTING MEMORANDUM OPINION
Assuming without deciding that the judgment is final and this Court has jurisdiction, I would hold that the competent summary-judgment evidence does not affirmatively establish the release and limitations bars to each and every cause of action alleged in Barth's live pleading. In affirming summary judgment on the affirmative defenses of release and limitations, the majority opinion does not address a threshold inquiry: whether the summary-judgment grounds and evidence conclusively encompass Barth's complaint that Royal: (1) did not reopen any or all of his four settled claims; or, (2) did not open a new claim; or, (3) both. For the reasons stated below, I conclude that Barth's live pleading and his summary judgment response contemplate both. The motion and evidence did not. Thus, I respectfully dissent.
I. SUMMARY JUDGMENT
The function of summary judgment is to eliminate patently unmeritorious claims and defenses, not to deprive litigants of the right to a jury trial. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n. 5 (Tex. 1979); Swilley v. Hughes, 488 S.W.2d 64, 68 (Tex. 1972). Summary judgment is a harsh remedy. Martin v. Martin Richards, Inc., 991 S.W.2d 1, 11 (Tex.App.-Fort Worth 1997); rev'd on other grounds, 989 S.W.2d 357 (Tex. 1998). We strictly construe substantive rules applicable to summary-judgment proceedings. Guinn v. Zarsky, 893 S.W.2d 13, 17 (Tex.App. 1994, no writ). We review de novo a trial court's grant or denial of a traditional motion for summary judgment. Alaniz v. Hoyt, 105 S.W.3d 330, 345 (Tex.App. 2003, no pet.). The movant bears the burden of showing both no genuine issue of material fact and entitlement to judgment as a matter of law. Id.; TEX. R. CIV. P. 166a(c). In deciding whether there is a genuine issue of material fact, we take evidence favorable to the non-movant as true. Id. We make all reasonable inferences and resolve all doubts in favor of the non-movant. Id. Summary judgment for a defendant is proper if the defendant disproves at least one element of each of the plaintiff's claims or affirmatively establishes each element of an affirmative defense to each claim. Id. A non-movant has the burden to respond to a traditional summary-judgment motion if the movant conclusively: (1) establishes each element of its cause of action or defense; or (2) negates at least one element of the non-movant's cause of action or defense. Id. Summary judgments must stand on their own merits. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). On appeal, the movant still bears the burden of showing that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Id.
I turn now to the heart of the parties' dispute.
II. RELEASE
As grounds for summary judgment, Royal asserted that Barth contractually released Royal from "any and all liability" for the contract and extra-contractual claims. The majority concludes that the "broad release" is sufficient to foreclose all claims for damages related to the plumbing leaks and all claims related to Royal's actions in handling the claims.
A. Request to Reopen Prior Claims
"Claim" means a first party claim made by an insured or a policy holder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary. TEX. INS. CODE ANN. art. 21.55, 1(3) (Vernon Supp. 2004). The summary-judgment evidence does not answer, and the majority does not address, whether Barth's request to reopen was a claim as statutorily defined.
The record shows that Barth filed four claims at the time the problems originally surfaced. On May 23, 1995, he executed four "proof of loss" forms for insurance benefits from his homeowner's policy. The first claim alleged damage on August 18, 1993 due to leaking sewer pipes. The second claim alleged damage on August 18, 1993 as the result of a leaking shower pan. The third claim alleged damage to the foundation on December 15, 1993 as the result of water "leaking from a 3/4 [inch]" line on the right front of the dwelling." The fourth claim asserted that "water drain lines and pressure lines on pool between pool and garage are leaking," alleged to have occurred on August 29, 1994.
The record also shows that, on May 23, 1995, Barth executed a release on each claim. Each release provides:
. . . I/we, the undersigned, do hereby release, acquit and forever discharge Royal Insurance Company, its officers, agents, employees and representatives, hereinafter referred to as the Company, of and from all claims under Policy No. DKG557629 issued by the Company for loss or damage to property insured under and by said policy occurring on or about [(1) August 18, 1993, due to damage from leaking sewer pipes; (2) August 18, 1993, due to water damage from leaking shower pan; (3) December 15, 1993, due to water leaking from a 3/4" line on the right front of dwelling causing damage to foundation under the addition; (4) August 29, 1994, due to water drain lines and pressure lines on pool between pool and garage are leaking.]
Further, each release states:
It is understood and agreed that this Release applies not only to settlement of my/our claims for payment under the above-mentioned policy but also all claims by me/us relating to the handling by the Company of the aforementioned claim.
This release contains the entire agreement between us and the Company. Specifically, no representations have been made to me/us other than what are contained in this paper.
Royal did not reopen any of the four claims. Even so, if Barth's request to reopen were a claim, the date of the claim is not established in the summary-judgment evidence. Further, even if Barth agrees that Royal denied the request to reopen, the summary-judgment evidence does not conclusively set the date of Royal's denial. In order to apply the release bar, the claim must be established.
See article 21.55 of the insurance code, which states:
Sec. 2. (a) Except as provided by Subsection (d) of this section, an insurer shall, not later than the 15th day after receipt of notice of a claim or the 30th business day if the insurer is an eligible surplus lines insurer:
(1) acknowledge receipt of the claim;
(2) commence any investigation of the claim; and
(3) request from the claimant all items, statements, and forms that the insurer reasonably believes, at that time, will be required from the claimant. Additional requests may be made if during the investigation of the claim such additional requests are necessary.
(b) If the acknowledgment of the claim is not made in writing, the insurer shall make a record of the date, means, and content of the acknowledgment.
TEX. INS. CODE ANN. art. 21.55 (Vernon Supp. 2004).
Royal's summary-judgment evidence establishes that Barth sent letters dated August 8, 1997 after he "had already talked to everybody." The letters, however, are not in the record. The record does not establish whether Barth intended the letters as his "claim." I agree with the majority that, in reviewing the limitations issue, "the pivotal point in time is when liability is denied by the insurer."
B. The "Claim for Benefits" in the Live Pleading
In his live pleading, Barth asserted a "claim for benefits," alleging, "Plaintiff is suing Royal for payment on his claim for all benefits he is entitled to receive under any and all applicable insurance policies that exist by and between [Barth] and [Royal] and their successors and assigns." In his summary-judgment affidavit, Barth attested, "Unfortunately, when the problems reoccurred, a new claim was not and has not been opened to address the severe structural problems in my home." Similarly, the deposition excerpts attached to Royal's motion, reflect:
Q. Do you know whether or not that it was warranty work that you're claiming or whether it was part of the claim that Royal should have opened? Do you know which one it is or are you claiming which one it is, or are you just saying either/or?
A. No. I am saying either/or, and I am saying that within this one year I notified Gerloff, I called, wrote them a letter, I told Royal, and, obviously, a year has passed from that date — more than a year, but I've been just going everywhere.
Barth was also asked, "Well, the warranty appears to be dated 7-28-95, so that would bring us a year later to 7-28-96, correct?" Barth answered, "Yes."
Q. I know. And what you said is when you called Gerloff, they said go to Royal and —
A. Yeah, you know.
Q. And when you called Royal, they said go to Gerloff?
A. Yeah, exactly.
* * *
Q. Okay. At any time during those conversations that you had with Mr. Moore where he said if there's any more problems we'll reopen the claim file, did he ever represent to you that there would be coverage for any further problems?
A. Sure. That was implied, that we would reopen the claim and we would file an amended claim and it would be repaired.
Further, as to each of the claims, Barth was asked, "[D]id you understand this to be a release of any further liability for Royal in processing or handling this claim?" Barth responded that he was assured that Royal would reopen the claim or Gerloff would apply the warranty.
C. Discussion
Respectfully, I disagree that the releases foreclose "all claims for damages related to the plumbing leaks," as the majority concludes. The record establishes that: (1) Barth complained of Royal's failure to reopen the four claims; and (2) Barth complained of Royal's failure to open a new claim. The releases expressly state that Barth released Royal "of and from claims under Policy No. DKG557629 . . . for loss or damage to property insured under said policy occurring on or about [August 18, 1993, August 18, 1993, December 15, 1993, and August 29, 1994]." Mindful that we strictly construe substantive rules applicable to summary-judgment proceedings and we take evidence favorable to the non-movant as true, I would hold that the competent summary-judgment evidence does not conclusively establish that the releases foreclose a new claim. I conclude that the releases are limited to "loss or damage to property insured" occurring on the dates of the four claims. The parties agree that Royal did not reopen them. Assuming without deciding that the request to reopen was a claim that Royal denied, I question whether the releases foreclose Barth's claims without addressing first his fraud and fraudulent inducement claims. Even so, Royal's summary-judgment motion and evidence do not address Barth's complaint regarding a new claim.
III. LIMITATIONS A. Date of Accrual
Limitations statutes afford plaintiffs what the legislature deems a reasonable time to present their claims and protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents or otherwise. Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex. 1990). Generally, when a cause of action accrues is a question of law. Provident Life and Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 222 (Tex. 2003); Ehrig v. Germania Farm Mut. Ins. Assn., 84 S.W.3d 320, 324 (Tex.App. 2002, pet. denied).
For the purpose of application of statute of limitations, a cause of action generally accrues at the time when facts come into existence which authorize a claimant to seek a judicial remedy. Murray, 800 S.W.2d at 828. Put another way, "a cause of action can generally be said to accrue when the wrongful act effects an injury." Id. This "legal injury" rule is not without exception. See S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). Sometimes, the cause of action does not accrue until the plaintiff knew or in the exercise of reasonable diligence should have known of the wrongful act and resulting injury. Id. Deferring accrual and thus delaying the commencement of the limitations period is distinct from suspending or tolling the running of limitations once the period has begun. See id. Strictly speaking, the cases in which the Supreme Court has deferred accrual of causes of action for limitations purposes fall into two categories: (1) those involving fraud and fraudulent concealment; and, (2) all others. See id. The deferral of accrual in the latter cases is properly referred to as the discovery rule. Id.
The distinction between the two categories is observed because each is characterized by different substantive and procedural rules. S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996).
The phrase is sometimes used to refer generally to all instances in which accrual is deferred, including fraud and fraudulent concealment. S.V., 933 S.W.2d at 4.
The discovery rule delays the accrual of a cause of action until the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, the nature of his injury. Childs v. Haussecker, 974 S.W.2d 31, 40 (Tex. 1998). Discovering the "nature of the injury" requires knowledge of both the wrongful act and the resulting injury. Id.; Murphy v. Campbell, 964 S.W.2d 265, 270 (Tex. 1997); S.V., 933 S.W.2d at 4; Allen v. Roddis Lumber and Veneer Co., 796 S.W.2d 758, 761 (Tex.App. 1990, writ denied). As the Supreme Court explained:
When the discovery rule applies, accrual is tolled until a claimant discovers or in the exercise of reasonable diligence should have discovered the injury and that it was likely caused by the wrongful acts of another. But once these requirements are satisfied, limitations commences, even if the plaintiff does not know the exact identity of the wrongdoer.
Childs, 974 S.W.2d at 40. However, "when there is no outright denial of a claim, the exact date of accrual of a cause of action . . . should be a question of fact to be determined on a case-by-case basis." Provident Life, 128 S.W.3d at 211. An insurer is not required to include "magic words" in its denial of a claim if an insurer's determination regarding a claim and its reasons for the decision are contained in a clear writing to the insured. Id; see Tex. Ins. Code Ann. art. 21.55, § 3(a), (c) (Vernon Supp. 2004).
Article 21.55 of the insurance code states, in part:
Sec. 3. (a) Except as provided by Subsections (b) and (d) of this section, an insurer shall notify a claimant in writing of the acceptance or rejection of the claim not later than the 15th business day after the date the insurer receives all items, statements, and forms required by the insurer, in order to secure final proof of loss.
* * *
(c) If the insurer rejects the claim, the notice required by Subsections (a) and (b) of this section must state the reasons for the rejection.
TEX. INS. CODE ANN. art. 21.55 (Vernon Supp. 2004).
Thus, when seeking summary judgment based on limitations, the movant must: (1) prove when the cause of action accrued; and (2) negate the discovery rule by proving as a matter of law that there is no genuine issue of material fact about when the plaintiff discovered or should have discovered the nature of the injury. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990).
B. Discussion
Since Barth pleaded both the discovery rule and fraudulent concealment, in order to succeed in its limitations defense, Royal was required to: (1) establish when the claims accrued; and, (2) either (a) negate the application of the discovery rule, or (b) show there was no genuine issue of material fact as to when Barth discovered or should have discovered the nature of the injury.
As causes of action, Barth alleged: (1) deceptive trade practices; (2) violations of the insurance code; (3) fraudulent inducement; (4) fraud; (5) negligence; (6) negligent misrepresentation; (7) breach of contract; (8) breach of warranty; (9) breach of the covenant of good faith and fair dealing; (10) a claim for benefits; (11) damages; (12) attorney fees; and (13) costs.
Barth filed his lawsuit on January 15, 1999. In support of its summary-judgment motion on limitations grounds, Royal posited three different dates when the contractual cause of action accrued, two years and a day from: (1) May 23, 1995 when Barth signed the releases; (2) December 1995 when Royal denied coverage; and (3) July 28, 1996 when Royal denied reopening his claim. Similarly, Royal asserted in its summary-judgment motion that the extra-contractual causes of action accrued, at the very latest, on July 28, 1996. In its supplemental motion for summary judgment, Royal asserted that by July 28, 1996, Barth was fully aware of all the additional problems with his residence and he communicated them to Royal, which had denied his alleged subsequent claims. The summary-judgment evidence does not establish that Royal denied Barth's contractual claim in writing. As previously discussed, whether Royal denied the new claim is not answered by the competent summary-judgment evidence or by the majority opinion.
The majority holds that Barth's contractual claims are barred: (1) if the settlement were construed as a denial of all other liability on May 23, 1995; and (2) if it were determined that Royal denied coverage, and thus liability, by refusing to reopen Barth's claim on July 28, 1996, at the latest. The majority concludes that Barth should have discovered the nature of the injury and filed suit on these claims within two years and a day of July 28, 1996. He did not. Similarly, the majority concludes that: (1) Barth's extra-contractual claims are also time-barred; and (2) Royal proved when the cause of action accrued and has negated the discovery rule. Respectfully, I disagree.
Once more, determination of the nature of Barth's contractual causes of action, couched as "reopening" of his claims and a "new" claim, is critical. The injury producing event is the denial of coverage in writing. Murray, 800 S.W.2d at 829. Royal asserts that Barth admitted: (1) Royal "denied coverage" by at least December 1995; and, (2) by July 28, 1996, at the latest, Barth understood Royal "was denying the reopening of his claims." In his live pleading, Barth includes a "claim for benefits" under "any and all applicable insurance policies that exist." Royal's summary-judgment evidence, excerpted from Barth's deposition testimony, shows Barth's awareness of the distinction between reopening the claims and opening a new claim, but does not affirmatively fix the accrual date for his causes of action:
Q. And what did you tell him [unidentified] in the initial conversation you had with him in '95?
A. I'm sure I told him that the problem was coming back, the cracks were there. I'm sure I told him that the garage was starting to tilt again. I'm sure I told him that — you know, water leaks.
Q. And what was his response the first time you talked to him?
A. It was, "Go talk to Gerloff. Gerloff must have not done the work right."
Q. Did he that first time you talked to him represent to you during that conversation that any new problems that you were experiencing with the house would be covered under any homeowner's policy that you had with Royal?
A. Whenever they finished the repairs, he had told me that we could reopen the claim. Whenever I talked to him the first time, it was, "Go talk to Gerloff." Then sometime after that, and I cannot tell you the day, the time, or nothing like that, I got — and I don't know if he said it directly or if he implied it, but the gist of the conversation was we have satisfied the claim, we have paid Gerloff, you have signed off on it, that's it.
* * *
Q. Okay. So again I'll ask you, having paid you policy benefits and having done so in a prompt manner so that you could pay Gerloff, what are you claiming they did wrong in paying this claim?
A. I am claiming that they did wrong in that they did not uncover the cause of the problem and the problem was not fixed.
Q. And those were things that you discovered in the fall of 1995, correct?
A. A few months after Gerloff finished.
Q. Okay. Which was, approximately, the fall of 1995?
A. Whenever it was.
Royal also attached the following deposition testimony as evidence:
Q. Is it your testimony that you discovered all of this damage that you're claiming concerning Gerloff's work within the one year after that warranty?
A. All, you said? I don't know about all. It's my testimony that within that one year, prior to the one year being up, that I discovered that things weren't right at the house. . . . And I know is [sic] that the problem has gone right back to where it was.
From additional deposition testimony, the record establishes that Barth sent letters on August 8, 1997. In his summary-judgment affidavit, Barth attests, "On or about August 8, 1997 is the date I first discovered that named Defendants never intended to honor what they had represented because it is approximately about that time that they refused to abide by their promise.
See note 2.
The majority disregards Barth's affidavit because it, "without explanation, contradicts his earlier testimony involving the date he should have discovered the injury." However, we must first determine whether Royal's summary-judgment evidence negated the discovery rule. Burns, 786 S.W.2d at 267. Further, when reviewing summary-judgment proof, the trial court is required to consider all summary judgment evidence on file with the court, provided the relevant party expressly identifies in its motion or response all supporting evidence on file which it seeks to have considered by the court. Kotzur v. Kelly, 791 S.W.2d 254, 257 (Tex.App. 1990, no writ). The affidavit is attached to Barth's summary-judgment response in support of the discovery rule and fraudulent concealment. The affidavit is, thus, part of the summary judgment record.
Respectfully, I disagree with the majority that Royal conclusively established the accrual date. The law is well settled that an outright denial of an insurance claim triggers commencement of the statute of limitations period for causes of action stemming from the denial of coverage. See Murray, 800 S.W.2d at 829; Ehrig, 84 S.W.3d at 324. The question in this case is whether an oral denial of the claim constituted an unambiguous, "outright denial" of Barth's claim which triggered commencement of the statute of limitations period. Ehrig, 84 S.W.3d at 324.
The summary-judgment evidence does not establish that Royal denied the claims in writing. Royal does not concede that it: (1) denied Barth's request to reopen the claims; and (2) denied Barth's new claim. Rather, Royal relies on Barth's deposition testimony that he understood Royal was denying the reopening of his claims by July 28, 1996. Whether Royal's oral denial of his claim to reopen constituted an "outright denial" sufficient to trigger the commencement of limitations is a question of fact for the jury's determination. Further, the summary-judgment evidence does not establish that Royal denied Barth's new claim, either orally or in writing.
Respectfully, I also disagree with the majority that Royal's summary-judgment evidence negated the discovery rule by proving as a matter of law that there is no genuine issue of material fact about when the plaintiff discovered or should have discovered the nature of the injury as to each of his claims. Royal first addressed the discovery rule in its amended summary-judgment motion, after the summary-judgment hearing, with leave of court. Offered to negate the discovery rule, Royal's summary-judgment proof includes Barth's deposition testimony:
Q. Right. So is it fair to say that you discovered these problems between the summer of '95 and the summer of '96, since Gerloff finished their work in the summer of '95?
A. Whatever — whatever the dates were.
Q. All right. Well, the warranty appears to be dated 7-28-95, so that would bring us a year later to 7-28-96, correct?
A. Yes.
Q. Do you recall when was the first time you contacted Mr. Moore to let him know that you considered there to be new problems with the house?
A. It was within that one year period.
Q. Okay. So before — you actually contacted him, before you wrote him this August 8th, 1997 letter, correct?
A. Let me see that. Yeah. See, I wrote these letters after I had already talked to everybody.
Q. Okay. So you had already talked to him?
A. Yeah.
Q. And he had already told you that — had he already told you to speak to somebody else about it?
A. Yeah, Gerloff. Who is with Gerloff? He wanted me to talk to you.
Q. And this was in — before the summer — before 7-25-96, correct?
A. Uh-huh. Yes, I'm sorry.
Q. And, I assume, that he also told you, as you're claiming, that you say he said that there was nothing more that they — essentially, there was nothing more they could do for you?
A. His response was, "Go talk to Gerloff."
Q. And that was it?
* * *
A. I'm sorry, yes.
Q. Okay. And that was in the summer of '96?
A. It may have been before the summer of '96. It may have been in December. You know, six months — it wasn't very long whenever I saw that the problems had just come back.
Q. But it wasn't any later than summer of '96?
A. No, it would not have been any later than a year, no.
On this record, I would hold that the facts are arguably not clear enough to put Barth on notice of a legal injury.
Because Royal asserted summary-judgment grounds of limitations, the summary-judgment evidence must establish conclusively the applicability of the statute of limitations. As part of the proof, Royal had to establish as a matter of law the date upon which limitations commenced on each of Barth's causes of action. I would hold that Royal did not show, as a matter of law, that all of Barth's claims are barred by limitations. Thus, I would that summary judgment was improper.
IV. CONCLUSION
Without question, Royal had the exclusive control over the evaluation, processing and denial of Barth's request to reopen his claims and his new claim. The trial court granted summary judgment in favor of Royal on all Barth's causes of action, whether contractual or extra-contractual. In order to decide whether the summary judgment on release and limitations grounds was properly granted as to each of Barth's claims, we must first resolve whether Royal's summary-judgment grounds and evidence encompass Barth's complaints regarding reopening his prior claims and his new claim. This, Royal's summary-judgment evidence did not do, and the majority opinion does not answer.
In sum, I conclude that the releases are limited to "loss or damage to property insured" occurring on the dates of the four claims. Royal did not reopen them. Royal's summary-judgment motion and evidence do not address Barth's complaint regarding a new claim. Further, I conclude that Royal has not negated application of the discovery rule or shown that there was no genuine issue of material fact as to when Barth discovered or should have discovered the nature of the injury of each of his alleged claims. Respectfully, I would reverse and remand.