Opinion
Civil Action No. 5:02-CV-137-C
June 23, 2003
ORDER
On this day the Court considered Defendant Danny Mayfield's Motion for Summary Judgment filed May 15, 2003. Plaintiff, American Automobile Insurance Company, filed a Response to Defendant's Motion for Summary Judgment on June 4, 2003. Defendant filed no reply. After considering all relevant arguments and evidence, the Court DENIES Defendant's Motion for Summary Judgment.
On this day the Court also considered Plaintiff's Objections to Defendant's Summary Judgment Evidence filed on June 4, 2003. Plaintiff's Objections are denied as moot. This Court did not consider the evidence submitted by Defendant because conclusory allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation are not adequate substitutes for specific facts showing that there is a genuine issue for trial. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428 (5th Cir. 1996) (en banc); SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993).
I. BACKGROUND
Plaintiff filed this declaratory judgment action on June 21, 2002, seeking a determination of the parties' rights and obligations under two separate policies of insurance. On December 1, 1999, Plaintiff issued to agents of American United Life Insurance Company a policy of "Life Insurance Agents Errors and Omissions Liability Coverage." Danny Mayfield was an agent of American United Life Insurance Company during this policy period. On December 1, 2000, Plaintiff issued to agents of American United Life Insurance Company a policy of "Life Insurance Agents Errors and Omissions Liability Coverage." Danny Mayfield was an agent of American United Life Insurance Company during this policy period.
On January 4, 2002, Defendant Betty Ruth Wood filed suit against Danny Mayfield in the 64th District Court of Hale County, Texas. Defendant Wood alleges that Danny Mayfield counseled and advised her concerning investment products and sold her three Chemical Trust Guaranteed Contracts. Defendant Wood alleged that the Chemical Trust investment was a scam and all representations made to her were fabrications as the operation was in fact a Ponzi scheme.
On July 28, 2000, Defendants Finis Wright, Ann Wright, Billy G. Wright, and Dorothy Wright filed suit against Danny Mayfield in the 72nd District Court of Lubbock County, Texas, alleging that Danny Mayfield sold the Wright Defendants Chemical Trust Guaranteed Contracts which were unregistered securities and falsely misrepresented the Chemical Trust Guaranteed Contracts as a business trust "in the business of purchasing and selling distressed properties, U.S. Treasury-backed securities and bank notes." The Wright Defendants allege that the Chemical Trust investment was a scam and all representations made to them were fabrications as the operation was in fact a Ponzi scheme.
On January 10, 2002, Defendant Wayne A. Henderson Trust filed suit against Danny Mayfield in the 242nd District Court of Hale County, Texas. Defendant Henderson made the same allegations as Defendant Wood and the Wright Defendants. In a letter dated March 13, 2002, Defendant Thomas D. Dement asserted claims against Danny Mayfield as a result of losses incurred in the Chemical Trust investment.
Danny Mayfield tendered each of the underlying fraud actions to Plaintiff. Plaintiff seeks a declaration of no duty to defend or indemnify and asserts that the allegations alleged against Danny Mayfield are not covered pursuant to the terms and conditions of the policies at issue.
II. STANDARD
Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," when viewed in the light most favorable to the non-moving party, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986) (internal quotations omitted). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Id. at 248. In making its determination, the court must draw all justifiable inferences in favor of the non-moving party, Id. at 255. Once the moving party has initially shown "that there is an absence of evidence to support the nonmoving party's case," Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the non-movant must come forward, after adequate time for discovery, with significant probative evidence showing a triable issue of fact. FED. R. CIV. P. 56(e); State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). Conclusory allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation are not adequate substitutes for specific facts showing that there is a genuine issue for trial. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428 (5th Cir. 1996) (en banc); SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993). To defeat a properly supported motion for summary judgment, the non-movant must present more than a mere scintilla of evidence. See Anderson, 477 U.S. at 251. Rather, the non-movant must present sufficient evidence upon which a jury could reasonably find in the non-movant's favor. Id.
Finally, in reviewing the summary judgment evidence, "Rule 56 does not impose upon this Court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998). Rather, the Court need rely only on those portions of the submitted documents to which the nonmoving party directs the Court's attention. Id. See also Forsyth v. Barr, 19 F.3d 1527, 1536-37 (5th Cir. 1994) (finding that two volumes of summary judgment evidence was insufficient to preclude summary judgment when plaintiffs failed to identify specific portions which supported their claims). Moreover, Local Rule 56.5(c) expressly requires that a party filing an appendix "must include in its brief citations to each page of the appendix that supports each assertion that the party makes concerning the summary judgment evidence." To the extent the parties ask this Court to search the documents to find evidence to support the summary judgment arguments, this Court refuses to do so. Rather, this Court will only consider the admissible summary judgment evidence discussed and specifically identified in the parties' motions and responses.
III. DISCUSSION
Defendant Mayfield asserts that he is entitled to summary judgment based on the affirmative defenses of waiver and estoppel. Specifically, Defendant Mayfield alleges that Plaintiff has waived, or is estopped from claiming, noncoverage because Plaintiff settled two virtually identical claims brought under the policy in question in this case. Waiver requires the voluntary surrender of a known right. See Utils. Ins. Co. v. Montgomery, 138 S.W.2d 1062, 1064 (Tex. 1940). Estoppel requires a showing that the insured was prejudiced by the conduct of the insurer. See Employers Casualty Co. v. Tilley, 496 S.W.2d 552, 560 (Tex. 1973). The doctrines of waiver and estoppel cannot be used to create insurance coverage where none exists under the terms of the policy. See Tex. Farmers Ins. Co. v. McGuire, 744 S.W.2d 601, 602-03 (Tex. 1988). However, there is authority supporting an exception to this rule. That is, if an insurer assumes an insured's defense without declaring a reservation of rights or obtaining a non-waiver agreement, and with knowledge of facts indicating noncoverage, all policy defenses, including those of noncoverage, are waived or the insurer may be estopped from raising them. See Farmers Tex. County Mut. Ins. Co. v. Wilkinson, 601 S.W.2d 520, 522 (Tex.Civ.App.-Austin 1980, writ ref'd n.r.e.).
In the instant case, Plaintiff has submitted evidence that a reservation of rights was issued in each case in which Plaintiff agreed to defend Defendant, including the two cases that Plaintiff settled. In the two settled cases, Defendant was sent a letter informing Defendant that the settlement did not "constitute a waiver of our coverage defenses." Defendant has submitted no evidence controverting the reservation of rights issued by Plaintiff nor has Defendant submitted evidence controverting Plaintiff's denial of waiver of its coverage defenses. In addition, Defendant has not presented this Court with evidence of any prejudice that resulted from Plaintiff's conduct. Any attempt by Plaintiff to settle the case could do nothing but benefit Defendant. Defendant has submitted no evidence of any waiver or claim for estoppel. Nothing in the record indicates that Defendant voluntarily surrendered a known right or that he was harmed or prejudiced by the conduct of Plaintiff. Accordingly, Defendant's Motion for Summary Judgment is DENIED.
CONCLUSION
For the reasons previously discussed, Defendant's Motion for Summary Judgment is DENIED. All relief not expressly granted is DENIED.
SO ORDERED.