ORDER

JAMES R. NOWLIN, Chief U.S. District Judge

Before the Court is Defendant's Motion to Dismiss, Alternatively Motion for Summary Judgment (Clerk's Doc. No. 3), Plaintiffs' Response (Clerk's Doc. No. 7), Defendant's Reply (Clerk's Doc. 23). This lawsuit involves a dispute over the payment of a first-party insurance claim. The parties are diverse. Defendant argues that Plaintiff's contract claims are barred by the two-year limitation contained in the insurance policy. Defendant further argues that Plaintiff's other claims are barred by the two-year statute of limitations. Plaintiff contends the two-year provision contained in the insurance policy is void by Texas law. As a result, the statue of limitations on his contract claims is four years. As for his other claims, Plaintiff asserts that he filed those claims within two years of the denial of his insurance claim, therefore are timely filed. After reviewing the arguments presented in the motions and applicable case law, the Court enters the following Order.

FACTUAL BACKGROUND

On October 17, 1997, Dimas Douskos, the brother of the Plaintiff purchased an insurance policy covering certain property at his auto repair shop. On November 30, 1997, a theft occurred at the repair shop. Shortly thereafter, the Plaintiff submitted a claim to the Defendant. Over the course of the next year, the parties corresponded regarding the insurance claim. On several occasions in 1997 and 1998 the Defendant tried to get additional documentation regarding ownership of the stolen property. See. Exhibits 2-6, 9, 10, Defendant's Motion to Dismiss. Plaintiff did not comply with these requests. By way of letter, the Defendant closed Plaintiff's case without payment on December 10, 1998. On February 15, 2001, Plaintiff filed the present lawsuit.

Defendant initially filed this as a Motion to Dismiss along with some affidavits in support. Because the Defendant seeks to introduce matters outside the record, the Court will treat this Motion as a Motion for Summary Judgment. Fed.R.Civ.P. 12(b)(6).

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment carries the burden of demonstrating that there is an absence of evidence to support the non-moving party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986). After a proper motion for summary judgment is made, the non-movant must set forth specific facts showing that there is a genuine issue for trial. See Hanks v. Transcontinental Gas Pipe Line Corp., 953 F.2d 996, 997 (5th Cir. 1992).

The Court begins its determination by consulting the applicable substantive law to determine what facts and issues are material. See King v. Chide, 974 F.2d 653, 655-56 (5th Cir. 1992). It then reviews the evidence relating to those issues, viewing the facts and inferences in the light most favorable to the non-movant. See id. If the non-movant sets forth specific facts in support of allegations essential to his claim, a genuine issue is presented. See Brothers v. Klevenhagen, 28 F.3d 452, 455 (5th Cir. 1994).

BREACH OF CONTRACT CLAIM

Texas law prohibits parties from entering into agreements, contracts or stipulations that limits the time in which to bring suit on the agreement, contract or stipulation to periods shorter than two years. Tex.Civ.Prac Rem. Code Ann. § 16.070(a) (1997). Any provision that limits the time in which to bring suit for a period shorter than two years is void. Id. The issue before the Court is whether the insurance policy properly limits the time to bring suit to a period of two years or more. If it so, then Plaintiff's contract claim is time barred and should be dismissed. If not, then the statutory four-year statute of limitation for contract claims applies and Plaintiff should be allowed to proceed.

The policy contains the following limitation provision:

"D. LEGAL ACTION AGAINST US

No one may bring legal action against us under this Coverage Part unless:

1. There has been full compliance with all the terms of this Coverage Part; and

2. The action is brought within 2 years after the date on which the direct physical loss or damage occurred." Exhibit 8, Defendant's Motion to Dismiss.

This issue turns on the construction of the phrase "within 2 years" and whether it constitutes a period shorter than two years. Courts differ in their opinion about the meaning the phrase "within 2 years". Some think it includes two years others think it represents a period shorter than two years. In Texas the phrase "within 2 years" is considered shorter than two years. Commercial Casualty Ins. Co. v. Loper, 104 S.W.2d 580, 581 (Tex.Civ.App.-Beaumont 1937). In Loper, the Court held the limitation provision which called for causes of action to be filed "within two years" violated article 5545 (now Tex. Code Prac. Rem. Code Ann Proc. 16.070(a)) and was void. Applying Texas law, the limitation provision relied on by the Defendant is void and the four-year statute of limitation applies to Plaintiff's contract claims.

In its motion, the Defendant also relies on the savings clause contained within another limitation provision to support its contention that a two year limitation period exists. The savings clause states:

"17. Suit Against Company: No suit, action or proceeding for the recovery of any claim under this policy shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after discovery by the Insured of the occurrence which gives rise to the claim. Provided, however, that if by the laws of the State within which this policy is issued such limitation is invalid, then any such claims shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of such State to be fixed herein." (Emphasis Added)

Exhibit 8, Defendant's Motion to Dismiss

The saving clause does not fix the problem. In Duster v. Aetna, 668 S.W.2d 806 (Tex.App. .— Houston (14th Dist.)1984), the Court held that in order to benefit from Tex.Prac. Rem. Code Ann. § 16.070(a), the limitation provision must specifically state the period of limitation as a term of contract. Merely referring to the time allowed by State law is insufficient. Duster, 668 S.W.2d at 807. Alternatively, referencing State law does not help. State law sets the limitation period for contract claims at four years.

It is undisputed that the loss occurred on November 30, 1997, and the suit was filed on February 15, 2001. That being the case, the Court need not decide when the limitation period began to run on the contract claims. The Court finds that the Plaintiff timely filed his contract claims within the four year statute of limitation.

BAD FAITH CAUSES OF ACTION

It is undisputed that the statue of limitations for the remaining causes of actions, specifically, the Texas Deceptive Trade Practices Act, violations of the Texas Insurance Code and the Breach of Good Faith and Fair Dealing, is two years. See TEX.CIV.PRAC. REM. CODE § 16.003(a); TEX.BUS. COM. CODE ANN. § 17.565; TEX.INS. CODE ANN. art 21.21 16(d). It is also undisputed that these claims accrue on the date the insurance claim at issue is denied. Murray v. San Jacinto Agency Ins., 800 S.W.2d 826, 828 (Tex. 1990).

The Plaintiff claims the Defendant officially denied the claim on March 19, 2001, when it answered this lawsuit. Plaintiff's Response, p. 3. Plaintiff argues that Defendant's December 10, 1998, letter was not a proper denial and did not start the limitations clock. The letter implies that if proper documentation was provided the claim may be approved. Obviously, the Defendant disagrees. The Defendant asserts that the December 10th letter clearly indicates their intent to deny the claim. The surplus language does not change the fact that the case was closed without payment.

Determination of when a cause of action accrued is a question of law. Willis v. Maverick, 760 S.W.2d 642, 644 (Tex. 1988). As a general rule, accrual occurs when a wrongful act causes some legal injury even if the fact or injury is not discovered until later. See S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). This general rule is applicable unless the cause of action is not discoverable because of fraud or misrepresentation or it is one that is inherently undiscoverable. There is no mention of fraud so the Court looks to whether the denial was inherently undiscoverable.

To be inherently undiscoverable the injury must be of the type that is unlikely to be discovered within the prescribed limitation time despite due diligence. Id. at 7. The evidence reflects that Plaintiff was inactive for several months before the December 10th letter through the time he filed his petition on February 15, 2001, more than three and half years after the theft. The evidence clearly shows that the Plaintiff did not exercise due diligence in pursuing his insurance claim. Any activity or inquiry by the Plaintiff within the three and a half years would have revealed that the Defendant had closed the case and effectively denied the claim on December 10, 1998. It was that action that unambiguously demonstrated the Defendant's intent not to pay the claim.

The Court finds that no reasonable finder of fact could find that the Plaintiff acted with due diligence in seeking judicial recourse for his injury. Therefore, the Court finds that Plaintiff suffered legal injury when he received the December 10, 1998, letter notifying him that his insurance claim had been closed. As a result, the deadline for filing the bad faith causes of actions was December 10, 2000. Plaintiff's claims are time barred and should be dismissed.

THEREFORE, IT IS ORDERED that Defendant's Motion to Dismiss, or Alternatively Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART.

IT IS ORDERED that Plaintiff's Breach of Duty of Good Faith and Fair Dealing, Violations of the Texas Insurance Code and Texas Deceptive Trade Practices Act claims are time barred and are hereby DISMISSED.

IT IS FURTHER ORDERED that Plaintiff be allowed to proceed with his Breach of Contract claim

SIGNED and ENTERED.