Opinion
No. 05-02-01763-CV.
Opinion issued July 10, 2003.
Appeal from the County Court at Law No. 2, Dallas County, Texas, Trial Court Cause No. 02-05994-B.
Affirmed.
MEMORANDUM OPINION
Progressive County Mutual Insurance Company appeals a summary judgment granted to Budget Motors, Inc. on its suit for breach of an insurance contract. Because we conclude Progressive is estopped as a matter of law to deny the existence of the insurance contract, we hold the trial court did not err in granting Budget's motion for summary judgment and we affirm the trial court's judgment.
FACTUAL AND PROCEDURAL BACKGROUND
On January 14, 2002, Budget sold a motor vehicle to Demarcus Brown a/k/a Marcus Brown. Before releasing the vehicle to Marcus, Budget required proof of insurance on the vehicle with Budget listed as a loss payee. Also on January 14, 2002, Progressive faxed a "coverage verification sheet" to Budget showing insurance coverage on the vehicle sold by Budget and listing Lashiondria Kirk-Brown as the insured, Lashiondria Kirk-Brown and Marcus Brown as named drivers, Budget as a loss payee, and the effective date of coverage as January 14, 2002 with coverage for a period of six months. The coverage verification sheet does not list any restrictions on or conditions to be met for the coverage to be effective. Unknown to Budget, Lashiondria had applied for the insurance by telephone on that same day. Also unknown to Budget, sometime after the telephone call, Progressive sent Lashiondria an application for insurance that contained a clause providing that payment of the first premium is a condition precedent to coverage under the policy. The clause provides that if payment is made by "check, draft or other remittance" which is not honored, Progressive will be deemed "not to have accepted the payment and [the] policy shall be void from inception." The record before us does not contain a signed or dated copy of this application.
On January 24, 2002, unknown to Budget, the Browns stopped payment on their check to Progressive for payment of the premium for the insurance. Budget received a lienholder notification, dated January 30, 2002, advising it that Progressive intended to "cancel" Lashiondria's policy on the vehicle effective February 10, 2002 at 12:01 a.m. standard time and listing Marcus Brown as an excluded driver. Budget received another lienholder notification from Progressive dated January 31, 2002 which states that Lashiondria's policy has been "rescinded" and listing Marcus Brown as an excluded driver. The January 31, 2002 notice states all coverage under the policy "was rescinded and declared void as of 12:01 a.m. standard time on the date of the policy inception. 1/14/2002."
Marcus was involved in an automobile accident on January 22, 2002, which resulted in the vehicle being declared a total loss. Budget filed a claim for the loss with Progressive. Progressive denied payment on Budget's claim under the policy. Budget sued Progressive for breach of contract as a named third party beneficiary to Lashiondria's contract with Progressive and for fraud. Budget alleged it released the vehicle to the Browns in reliance on Progressive's written verification that a policy of insurance was in effect for the vehicle with Budget named as a loss payee and that Budget was damaged when Progressive refused payment under the policy. Progressive filed a general denial.
Budget filed a traditional motion for summary judgment with supporting affidavits asserting it relied on the written assurance of Progressive that there was insurance coverage on the vehicle beginning January 14, 2002 with Budget as a named loss payee, that it relied on this assurance as a basis for releasing the vehicle to the Browns, the vehicle was "totaled" in an accident, Budget made demand for payment under the policy for the value of the vehicle, and Progressive refused to pay benefits under the policy to Budget. Budget claimed that the insurance had not been terminated at the time of the accident because Progressive was legally required to provide coverage for ten days after sending Lashiondria notice that Progressive was canceling the policy. The notice was not sent until January 30, 2002 so insurance was in effect until February 10, 2002, well after the accident on January 22, 2002. In response to the motion for summary judgment, Progressive claimed it had rescinded the insurance contract on January 31, 2002 effective January 14, 2002 so there was no policy through which Budget could recover as a third party beneficiary. Progressive admitted sending the written verification of coverage to Budget, but it argued that Budget should have known coverage was contingent upon payment of the premium. Progressive also asserted that because it rescinded the contract for insurance, it was not required to provide coverage during statutory notice periods applicable to cancellation of insurance. Budget filed a reply contending Progressive is estopped from denying the existence of a contract because Budget relied on Progressive's written verification of coverage and the statutory notice period does apply. The trial court granted summary judgment to Budget awarding it damages, costs, and attorney's fees. The judgment does not state the grounds on which it was granted.
In its brief on appeal, Progressive argues the trial court erred in granting Budget summary judgment because no contract for insurance was formed between Progressive and Lashiondria because she failed to pay the premium and, even if a contract was formed before the accident, Progressive rescinded it making the contract ineffective from its inception. Budget asserts the summary judgment is proper because Progressive sent Budget a written verification sheet with no caveats or exceptions to coverage noted thereon, thus Budget was entitled to rely on the representation that insurance was in effect, and that it did rely on that assurance to its detriment. Budget also argues that only a court can grant recission and that the most Progressive can do unilaterally is cancel the contract. Budget also argues Texas law requires a ten-day notice of cancellation before an automobile insurance policy terminates and, at the time of this cancellation the notice period had not expired, thus Budget asserts it is entitled to recover from Progressive for its loss.
STANDARD OF REVIEW
We review summary judgment de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994). In a traditional summary judgment, the movant bears the burden of showing there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Nixon v. Mr. Property Mgmt., Co. 690 S.W.2d 546, 548-49 (Tex. 1985). When a plaintiff moves for summary judgment, it must establish all elements of its cause of action as a matter of law. Tex.R.Civ.P. 166a(c); City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1979). In deciding if there are disputed material fact issues precluding summary judgment, evidence favorable to the non-movant will be taken as true and every reasonable inference and doubt will be resolved in favor of the non-movant. Id. Once the movant establishes a right to summary judgment, the non-movant bears the burden of responding and presenting issues that preclude summary judgment. Clear Creek, 589 S.W.2d at 678.
If a summary judgment does not specify the grounds on which it is granted, the judgment may be affirmed on appeal on any meritorious theory advanced. Wilkinson v. Dallas/Fort Worth Int'l. Airport Bd., 54 S.W.3d 1, 8 (Tex.App.-Dallas 2001, pet. denied), cert denied, 534 U.S. 1128 (2002). To prevail on appeal an appellant must establish each ground asserted below is insufficient to support the summary judgment. Id. In this case, the summary judgment does not specify the grounds on which it was granted, so Progressive must successfully challenge every ground asserted by Budget.
ESTOPPEL
In its sole issue on appeal Progressive asserts the trial court erred in granting Budget's motion for summary judgment on breach of contract because no contract was formed or if one was formed it was rescinded. Budget asserts Progressive is estopped from denying the existence of a contract. The doctrine of promissory estoppel requires: (1) a promise, (2) that it be foreseeable to the promisor that the promisee would rely on the promise, and (3) the promisee does substantially rely on the promise to his detriment. English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983). Budget moved for summary judgment on the ground of breach of contract, asserting it detrimentally relied on Progressive's assurance the vehicle was covered by insurance when Budget released the vehicle to the Browns. Progressive responded that there was no contract to breach because no contract was formed or because Progressive rescinded any contract. In its reply, Budget asserted Progressive was estopped from denying the existence of a contract.
On appeal, Progressive argues that Budget's estoppel argument could not be a basis for the summary judgment because it was not asserted in the motion for summary judgment. A party need not use the magic words "estoppel" or "promissory estoppel" to raise the theory. Moore Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936 (Tex. 1972). Additionally, in its brief on appeal, Progressive argues it did not have to "dispute any reliance" by Budget because it was not raised in the motion for summary judgment. This is incorrect. Budget's motion for summary judgment and reply specifically assert that Budget detrimentally relied on Progressive's written verification of insurance coverage. Budget sufficiently alleged facts which, if true, would give rise to the legal concept of promissory estoppel. Further, Budget specifically used the word "estopped" in its reply to Progressive's response to the motion for summary judgment. Progressive waived any error as to Budget's reply because it did not object to it below. Ajibade v. Edinburg Gen. Hosp., 22 S.W.3d 37, 40 (Tex.App.-Corpus Christi 2000, no pet.) (failure to object to new grounds raised in supplemental motion for summary judgment waives error). The trial court could have granted summary judgment by finding Progressive was estopped from denying the existence of the contract and Budget proved all elements of breach of contract. Because Progressive does not challenge any element of a breach of contract cause of action except the existence of a contract we will review the contract to determine if Progressive is estopped to deny its existence.
Progressive argues no legal contract was formed or if one was formed it was rescinded so there is no contract to enforce. It makes no difference to Budget's claims whether either of those assertions is correct. Estoppel provides a remedy where a promisee has failed to bind the promisor to a legally enforceable contract but where the promisee has acted in reliance upon the promise to his detriment. Moore Burger, 492 S.W.2d at 936-37(after Moore sued for breach of contact, the defendant denied the existence of a contract and Moore countered that defendant was estopped from such denial; the courts held defendant was estopped to deny the contract); Wheeler v. White, 398 S.W.2d 93, 97 (Tex. 1965) (stating the function of the doctrine of promissory estoppel is defensive in that it estops a promisor from denying the enforceability of the promise).
Progressive does not deny sending the coverage verification sheet to Budget. Progressive argues that Budget should have known its "coverage verification sheet" was not verification that a contract of insurance existed. Progressive asserts:
For every bit of information on the Sheet that Budget Motors urges reliance upon, the document is significant for what it does not show and could not have been relied upon by Budget Motors. The Coverage Verification Sheet does not state that the Browns had provided consideration to Progressive or that valid payment of sufficient funds had been received from the Browns.
Progressive's argument misplaces the burden to verify the truth of statements made in Progressive's coverage verification sheet. There is no information on the sheet which would give Budget notice that it could not rely on statements made or that there were any exceptions to the statements made. There is no evidence that Budget should have known it could not trust Progressive's written statements to be truthful.
The very nature of the document sent by Progressive shows that it was meant to assure Budget that a contract for insurance existed and that Budget was a named loss payee. Verification means ". . . the authentication of truth or accuracy . . ." Webster Third New Int'l Dictionary Unabridged (1981 ed.). Verify means "to confirm or substantiate in law by oath or proof . . . to establish the truth of. . . ." Id. It is synonymous with "confirm." Id. The verification sheet's name and purpose is to confirm to Budget that the vehicle was insured. If Progressive wanted to alert Budget to exceptions to its confirmation that the vehicle was insured, it was Progressive's duty to notify Budget because any such information would be in Progressive's, not Budget's, possession. Budget proved as a matter of law that (1) Progressive made a promise to it by verifying insurance coverage of the vehicle with Budget as a loss payee, (2) it was foreseeable to Progressive that the named loss payee would rely on the confirmation that insurance coverage was in place, (3) the evidence conclusively shows Budget relied on the promise of coverage in releasing the vehicle to the Browns and has been harmed by loss of the vehicle.
We conclude the trial court properly granted summary judgment to Budget because Progressive is estopped from denying the contract as to Budget's claims and Progressive has not denied that if there was a contract it was breached and Budget was damaged. We resolve Progressive's sole issue against it. We affirm the judgment.