Summary
concluding that the insured failed to present a fact issue regarding whether an appraisal award should be set aside sufficient to avoid summary judgment
Summary of this case from In re PoolOpinion
No. 05-16-00224-CV
07-24-2017
FLOYD CIRCLE PARTNERS, LLC, Appellant v. REPUBLIC LLOYDS, Appellee
On Appeal from the County Court at Law No. 5 Dallas County, Texas
Trial Court Cause No. CC-16-00806-E
MEMORANDUM OPINION
Before Justices Bridges, Myers, and Stoddart
Opinion by Justice Stoddart
In this case involving an appraisal award under an insurance policy, plaintiff Floyd Circle Partners, LLC (FCP) appeals a summary judgment in favor of defendant Republic Lloyds. In two issues, FCP contends the trial court (1) erred in granting summary judgment, and (2) abused its discretion in denying FCP a continuance to allow it to obtain discovery to respond to the Republic's amended summary judgment motion. We affirm the trial court's judgment.
BACKGROUND
FCP owns four commercial buildings on Floyd Circle in Dallas. The property was insured under a policy issued by Republic effective from June 1, 2012 to June 1, 2013. In June 2012, FCP made a claim for damage to the properties caused by a storm. In September 2012, Retha Welch, a claims representative for Republic, informed FCP in writing that Republic completed its investigation of the claim. Welch's letter stated that an adjustor inspected the property and prepared an estimate, and the letter specified the amount of the loss. The letter further informed FCP that no payment would be made because the amount of the loss was less than the deductible. In response, Stephen Brooks, a representative of FCP, sent Welch written demand for $362,521.22 for hail damage to the properties. Brooks's letter stated that, in the event Republic did not make the payment within fourteen days, the letter was to be considered a formal demand to exercise the appraisal clause in the insurance contract. Brooks provided the name and contact information for FCP's chosen appraiser.
There is no written documentation of the claim in the record.
The policy contained the following provision regarding appraisal:
If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser and notify the other of the appraiser selected within 20 days of such demand. The two appraisers will select an umpire. If they cannot agree within 15 days upon such umpire, either may request that selection be made by a judge of a court having jurisdiction. Each appraiser will state the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding as to the amount of loss. Each party will:The policy further provided that Republic would pay for covered loss or damage within five business days after an appraisal award was made.
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal and umpire equally.
If there is an appraisal:
a. You will still retain your right to bring a legal action against us, subject to the provisions of the Legal Action Against Us Commercial Property Condition; and
b. We will still retain our right to deny the claim.
Republic did not meet FCP's demand for payment and selected its own appraiser. The two appraisers were unable to agree on an umpire, so in early June 2014, the judge of the 134th District Court appointed one at Republic's request.
FCP filed this lawsuit three days after an umpire was appointed. In its live pleading, FCP brought claims against Republic for breach of contract, negligence, negligent misrepresentation, and violations of chapter 541 of the Texas Insurance Code. Republic answered with a general denial. It later filed a motion to compel appraisal and plea in abatement, asserting that the appraisal process was a condition precedent to filing suit. FCP opposed the motion to compel appraisal for various reasons.
On September 10, 2014, the trial court granted Republic's motion to compel appraisal and abated the case for sixty days in order for the appraisal to be carried out. The order noted the parties agreed in open court to restart the appraisal process by appointing new appraisers and selecting an umpire.
Republic appointed Justin Whedbee as its new appraiser, and FCP appointed Jim Koontz. On February 25, 2015, Whedbee and Koontz signed an appraisal award. Although the award names an umpire, Whedbee and Koontz agreed on the amount of loss, so the umpire was not needed and did not sign the award. The award references the addresses of the properties involved and a claim number. It states, "We, the appraisers in the above captioned matter having carefully reviewed all information, have determined the award for all measurement issues submitted in this matter pursuant to the terms and conditions of the Appraisal Protocol." It describes the award as "The Actual Cash Value of any such hail damage to the roof that resulted from the Hail Storm occurring during the period of coverage provided by the Policy. This is a roof repair of all damaged areas." A total of $73,000 was awarded for two of the four properties: $30,535.95 for 13438 Floyd Circle and $42,464.05 for 13535 Floyd Circle. The award indicates the other two insured properties did not sustain damage.
After Republic sent payment of the award to FCP, it filed a traditional motion for summary judgment. Republic asserted that it was entitled to judgment as a matter of law because its payment of the appraisal award precludes FCP's breach of contract claim. Republic also sought summary judgment on FCP's extra-contractual claims. Republic attached as summary judgment evidence various documents, including the insurance policy, the appraisal award, a letter from Chuck Street to FCP's attorney, and copies of two checks payable to FCP. In Street's letter, dated March 4, 2015, Street, Republic's senior claims representative, informed counsel that Republic was enclosing two checks totaling $59,314.50 in payment of the appraisal award less the deductible for each location. Republic also relied on Street's affidavit, which included a statement that on March 24, 2015, he sent a letter to FCP's counsel enclosing full payment of the appraisal award.
Thereafter, FCP served notice of its intention to depose Welch, Street, and "Person or Persons with REPUBLIC LLOYDS with the most knowledge of the claims made the basis of this suit" on April 21, 2015. Republic filed a "motion to quash depositions and motion for protective order." At the same time, FCP moved for continuance of Republic's motion for summary judgment until such time as FCP has an adequate time to conduct discovery.
The record reflects that the trial court held a hearing on May 1, 2015, but we do not have a record of it. In letter to the court following the hearing, FCP argued Republic's summary judgment motion must be denied due to Street's statement in his affidavit that he paid the appraisal award on March 24, 2015, more than five days after the appraisal award. Republic responded with a letter informing the court that March 24, 2015, was a typographical error in the affidavit. The correct date was March 4, 2015, the date on the letter itself and on the checks tendered to FCP. The trial court notified the parties that the matters heard in the May 1 hearing remained under advisement. A few days later, the trial court granted FCP's motion for continuance. Its order stated that Republic could reset its motion for summary judgment after July 9, 2015.
The trial court later ruled on Republic's motion to quash depositions and motion for protective order in a "Discovery/Protective Order." In its order, the court found that Republic's motion objected to FCP's request to "conduct depositions of Retha Welch, Chuck Street, and Republic's corporate representative." The court granted Republic's motion, subject to an exception giving FCP permission to conduct discovery related to the issue of when Republic made its payment for the appraisal award, "[t]o the extent [FCP] has a good faith basis for questioning when Republic Lloyds made payment for the appraisal award."
In June, FCP again noticed its intent to depose Street and also "Person or Persons with REPUBLIC LLOYDS with the most knowledge of Republic Lloyd's defenses raised in its latest summary judgment motion and the 'appraisal' that Republic relies upon." Republic moved to quash the depositions. It asserted the notices exceeded the permissible scope of discovery set out in the court's protective order prohibiting FCP from deposing Street or Republic's corporate representative on any issue except when payment of the appraisal award was made. Republic also objected to the time and place of the depositions. Thus, the depositions were automatically quashed pending a hearing. See TEX. R. CIV. P. 199.4. On July 13, 2015, the trial court granted Republic's motion to quash the deposition notices for Street and Republic's corporate representative.
At the expiration of the time granted for continuance, Republic filed an amended no evidence and traditional motion for summary judgment. As traditional grounds for summary judgment, Republic asserted the evidence conclusively established that the appraisal award is enforceable as a matter of law and that Republic's payment of the award satisfies its contractual payment obligations as a matter of law. Republic also moved for summary judgment on FCP's extra-contractual claims on both traditional and no-evidence grounds. Republic attached various documents to its amended motion, including a new affidavit from Street and one from its appraiser Whedbee. This time, Street's affidavit stated he sent the letter to FCP's counsel with payment of the award on March 4, 2015.
On August 7, 2015, FCP moved to continue Republic's amended motion for summary judgment to allow FCP adequate time to conduct discovery. FCP asserted it was precluded from any discovery following the appraisal award. FCP also filed a response to the amended motion for summary judgment.
One week later, the trial court held a hearing on FCP's motion for continuance and Republic's amended summary judgment motion. The trial court took the motions under advisement. On August 20, 2015, the trial court granted Republic's amended no evidence and traditional motion for summary judgment and dismissed FCP's causes of action against Republic with prejudice. The trial court granted the motion without specifying the grounds on which it was granted. Republic later moved to sever FCP's claims against it from claims FCP brought against its insurance agent. After the court severed FCP's claims against Republic into a separate cause, this appeal followed.
Two days before the summary judgment hearing, FCP filed a petition for writ of mandamus in this Court asking us to vacate the trial court's Discovery/Protective Order and order quashing the depositions of Street and Republic's corporate representative. We denied the petition because FCP failed to establish its right to mandamus relief. In re Floyd Circle Partners, No. 05-15-00968-CV, 2015 WL 5029248 (Tex. App.—Dallas Aug. 26, 2015, orig. proceeding) (mem. op.).
DISCUSSION
1. Denial of Motion for Continuance of Amended Motion for Summary Judgment
We begin with FCP's second issue, in which it contends the trial court abused its discretion in refusing to grant a continuance on Republic's amended motion for summary judgment. FCP asserts that because the court did not allow the continuance, FCP could not obtain meaningful and material discovery to defeat the summary judgment motion. FCP maintains the court's actions prevented it from obtaining discovery that would allow it to attack the appraisal award. FCP complains it was not allowed to depose Street and Whedbee for that purpose.
We review a trial court's decision to deny a motion for continuance of a summary judgment hearing seeking additional time to conduct discovery for an abuse of discretion. Hill v. Hill, 460 S.W.3d 751, 761 (Tex. App.—Dallas 2015, pet. denied). When a party contends that it has not had an adequate opportunity for discovery before a summary judgment hearing, it must file either an affidavit explaining the need for further discovery or a verified motion for continuance. Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996); Cooper v. Circle Ten Council Boy Scouts of Am., 254 S.W.3d 689, 696 (Tex. App.—Dallas 2008, no pet.); see TEX. R. CIV. P. 166a(g), 251, 252. The affidavit must describe the evidence sought, explain its materiality, and set forth facts showing the due diligence used to obtain the evidence prior to the hearing. Cooper, 254 S.W.3d at 696. In considering whether the trial court abused its discretion, we consider various factors, including the length of time the case had been on file before the hearing, the materiality of the discovery sought, whether the party seeking the continuance exercised due diligence in obtaining the discovery, and what the party expected to prove. Hill, 460 S.W.3d at 761; Cooper, 254 S.W.3d at 696.
FCP's motion for continuance of Republic's amended motion for summary judgment was not verified. Although the motion was supported by the April 24, 2015 affidavit of FCP's counsel, that affidavit — made prior to Republic's amended summary judgment motion and identical to the affidavit supporting FCP's response to Republic's first motion for summary judgment — does not provide information relevant to FCP's need for a continuance. Instead, the affidavit primarily provides information about an evaluation of the insured properties and a report prepared by the roofing consultant hired by FCP's counsel. The affidavit does not describe the evidence sought, explain its materiality, or set forth facts showing the due diligence used to obtain the evidence prior to the hearing. See Cooper, 254 S.W.3d at 696. If a motion for continuance is not verified or supported by affidavit, we will presume the trial court did not abuse its discretion in denying the motion. Moreno v. Silva, 316 S.W.3d 815, 818 (Tex. App.—Dallas 2010, pet. denied). We can overrule FCP's second issue on this basis alone.
Even if FCP's motion was properly verified or supported by affidavit, we still find no abuse of discretion in the trial court's denial of a second continuance. FCP's assertion that the trial court refused FCP all discovery is unsupported by the record. After Republic filed its first motion for summary judgment, the trial court granted FCP a continuance of almost two months, from mid-May to at least July 9, 2015. During that time, the trial court issued its Discovery/Protective Order in which it quashed the depositions of Welch, Street, and Republic's corporate representative, with an exception giving FCP permission to conduct discovery related to when Republic made its payment for the appraisal award. The only discovery FCP sought during this time period was the depositions of Street and "Person and Persons . . . with the most knowledge of Republic Lloyd's defenses raised in its latest summary judgment motion and the 'appraisal' that Republic relies upon." The trial court did not allow these depositions because the notice did not limit discovery of these individuals to the narrow issue set out in its earlier order.
After Republic filed its amended motion for summary judgment, FCP moved for another continuance in early August, asserting it needed adequate time to conduct discovery. At the hearing on FCP's second motion for continuance, FCP's attorney discussed emails from Republic's attorney. Some months earlier, when FCP's attorney requested a deposition date for Street and the corporate representative, Republic's attorney answered, "We will be asking the court to consider our summary judgment before allowing any discovery." In July 2015, FCP's attorney informed Republic's attorney he planned to notice the deposition of Republic's appraiser, Whedbee, and asked if Republic's attorney was going to move to quash that deposition. Republic's attorney responded, "I don't control Whedbee." The court noted it put limitations on discovery from Republic, but said "the protective order I signed didn't go to Mr. Whedbee." Republic's attorney referenced his May 27, 2015 letter to FCP's counsel. In that letter, which included a proposed order on Republic's motion to quash and motion for protective order (identical to the order the court signed), counsel stated, "As you will note, the proposed Order does not pertain to discovery from the parties' appraisers." The trial judge stated it had not occurred to him that FCP took his order to mean FCP could not "do discovery of people who aren't parties to this lawsuit." The judge agreed to review his protective order to make sure it was not broader than intended. The judge explained that his order permitted deposition of Street on the issue of when the payment on the appraisal award was made and that "[a]ll the rest was not relevant" because Street was not there at the appraisal. The court took the request for a continuance under advisement and later denied it.
To show that it was denied all discovery, FCP relies on communications from Republic rather than actions of the trial court. FCP asserts Republic stated that its intention was to preclude all discovery and cites the above-mentioned emails between its attorney and Republic's attorney. In determining whether the trial court abused its discretion, we consider only the decisions of the trial court, not the actions or intent of counsel.
To the extent FCP complains about the trial court's two discovery orders, we find no abuse of discretion. A trial court has broad discretion in matters of discovery. Cruz v. Schell, Beene & Vaughn, L.L.P., No. 05-01-00565-CV, 2012 WL 3194074, at *5 (Tex. App.—Dallas Aug. 7, 2012, pet. denied) (mem. op.). The court's Discovery/Protective Order did not preclude FCP from all discovery. Rather, it limited the depositions of Republic's representatives to the issue of the timeliness of Republic's payment of the award. The trial court was within its discretion to place such limits on discovery.
During the continuance, FCP sought to take the depositions of Street and the corporate representative, but did not limit its notice to the issue set out in the protective order. FCP never noticed the deposition of Republic's appraiser Whedbee and did not take the deposition of its own appraiser, Koontz. FCP asserts that when the trial court learned at the hearing that FCP was under the apparent misapprehension that FCP could not take the appraisers' depositions, the court could have granted a brief continuance to allow Whedbee's deposition to be taken. But at the hearing FCP did not ask the judge to take this specific action based on a misunderstanding of the protective order. Under these circumstances, FCP did not exercise due diligence in obtaining the desired discovery. We cannot conclude the trial court abused its discretion in denying FCP a second continuance. We overrule FCP's second issue. 2. Granting of Summary Judgment for Republic
We now turn to FCP's first issue, in which it contends the trial court erred in granting summary judgment for Republic. As part of this issue, FCP contends the trial court should have excluded affidavits from Street and Whedbee because Republic did not identify them as persons with knowledge of relevant facts or as experts. Further, FCP complains of Republic's reliance on documents not produced in response to written discovery.
FCP raised these objections in its response to Republic's amended motion for summary judgment and at the hearing on the motion. The trial court did not expressly rule on FCP's objections. FCP contends that, by granting summary judgment for Republic and denying FCP a continuance, the trial court implicitly overruled the objections to the summary judgment evidence.
The granting of a motion for summary judgment does not necessarily provide an implicit ruling that either sustains or overrules objections to the summary judgment evidence. Bastida v. Aznaran, 444 S.W.3d 98, 104 (Tex. App.—Dallas 2014, no pet.); Ennis, Inc. v. Dunbrooke Apparel Corp., 427 S.W.3d 527, 532 (Tex. App.—Dallas 2014, no pet.). For there to be an implicit ruling, there must be some indication that the trial court ruled on the objections in the record or in the summary judgment itself, other than the mere granting of summary judgment. Ennis, Inc., 427 S.W.3d at 532; see Duncan-Hubert v. Mitchell, 310 S.W.3d 92, 100-01 (Tex. App.—Dallas 2010, pet. denied). Here, there is nothing in the summary judgment order, or elsewhere in the record, to indicate that the trial court overruled FCP's objections to the summary judgment evidence.
As support for the proposition that the trial court impliedly overruled its objections by granting summary judgment and denying the continuance, FCP relies solely on this Court's opinion in Clement v. City of Plano, 26 S.W.3d 544 (Tex. App.—Dallas 2000, no pet.), disapproved of on other grounds by Telthorster v. Tennell, 92 S.W.3d 457 (Tex. 2002). But Clement involved special exceptions, rather than objections to summary judgment evidence. In Clement, this Court determined that the trial court implicitly overruled the nonmovant's special exceptions to a motion for summary judgment, in which the nonmovant claimed the motion did not set out the specific grounds for summary judgment, by granting the summary judgment. Id. at 550 n.5. On this record, we decline to conclude that the trial court impliedly ruled on FCP's objections. See Hewitt v. Biscaro, 353 S.W.3d 304, 307 (Tex. App.—Dallas 2011, no pet.). Accordingly, for purposes of reviewing the merits of the summary judgment, we consider all of Republic's summary judgment evidence.
a. Breach of Contract Claim
We first consider the merits of Republic's traditional motion for summary judgment on FCP's claim for breach of the insurance contract. We apply well-known standards in our review of traditional summary judgment motions. See J & K Tile Co. v. Aramsco Inc., No. 05-15-01065-CV, 2016 WL 6835717, at *1 (Tex. App.—Dallas Nov. 3, 2016, no pet.) (mem. op.) (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985)); see also TEX. R. CIV. P. 166a. The movant has the burden to demonstrate that no genuine issue of fact exists and that it is entitled to judgment as a matter of law. J & K Tile, 2016 WL 6835717, at *1. We consider the evidence in the light most favorable to the nonmovant. Id. We credit evidence favorable to the nonmovant if a reasonable factfinder could, and we disregard evidence contrary to the nonmovant unless a reasonable factfinder could not. Id. A defendant may obtain summary judgment by negating one of the elements of the plaintiff's cause of action or by conclusively proving all of the elements of an affirmative defense. Stanfield v. Neubaum, 494 S.W.3d 90, 96 (Tex. 2016). If the defendant produces evidence demonstrating summary judgment is proper, the burden shifts to the plaintiff to present evidence creating a fact issue. Id. at 97. Within this framework, we review the trial court's summary judgment de novo. J & K Tile, 2016 WL 6835717, at *1.
Because courts seek to implement the intention of the parties as expressed in the language of a contract, it has long been the rule in Texas that an appraisal award made pursuant to the provisions of an insurance contract is binding and enforceable. Richardson v. Allstate Tex. Lloyd's, No. 05-06-00100-CV, 2007 WL 1990387, at *3 (Tex. App.—Dallas July 11, 2007, no pet.) (mem. op.); see Garcia v. State Farm Lloyds, 514 S.W.3d 257, 264 (Tex. App.—San Antonio 2016, pet. denied); Wells v. Am. States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex. App.—Dallas 1996, writ denied). The contractual appraisal process settles the issue of damages, leaving only the question of liability for the court. National Sec. Fire & Cas. Co. v. Hurst, No. 14-15-00714-CV, 2017 WL 2258243, at *3 (Tex. App.—Houston [14th Dist.] May 23, 2017, no pet. h.); Garcia, 514 S.W.3d at 264. Tender of the full amount owed under the award estops the insured from bringing a breach of contract claim against the insurer. Hurst, 2017 WL 2258243, at *3. By paying the full amount, the insurer complies with every requirement of the contract and cannot be found to be in breach. Id.
An appraisal award is binding and enforceable unless the insured proves that the award should be set aside. Garcia, 514 S.W.3d at 264-65. Texas courts recognize three situations in which an appraisal award may be disregarded: (1) when the award was made without authority; (2) when the award was the result of fraud, accident, or mistake; or (3) when the award was not made in substantial compliance with the terms of the contract. Wells, 919 S.W.2d at 683. Every reasonable presumption will be indulged to sustain an appraisal award, and the burden of proof is on the party seeking to avoid the award. Garcia, 514 S.W.3d at 265. When reviewing a summary judgment, however, this rule must yield to the degree its application conflicts with the presumptions required to be made in favor of the summary judgment nonmovant. Id.; Wells, 919 S.W.2d at 683. We are required to view the summary judgment evidence in the light most favorable to FCP, the nonmovant, and to resolve against Republic any doubt as to the existence of a genuine issue of material fact on its estoppel defense. See Garcia, 514 S.W.3d at 265.
Republic asserted it was entitled to summary judgment on FCP's contract claim because it paid the appraisal award. FCP contends Republic failed to show a valid and enforceable appraisal award was issued and paid in accordance with the policy. To its amended motion for summary judgment, Republic attached a copy of the policy in question, FCP's letter invoking the appraisal clause in the policy, the appraisal award, the letter from Republic to FCP dated March 4, 2015, checks payable to FCP dated March 4, 2015, and a copy of an email from FCP's attorney confirming receipt of the checks.
Republic also relied on the affidavit of its appraiser Whedbee. In his affidavit, Whedbee stated he was retained by Republic to conduct an appraisal of the amount of wind and hail damage to the four buildings on Floyd Circle. Whedbee and FCP's appraiser Koontz inspected the buildings and reached an agreement on the amount of damages. Koontz prepared the award document, and they both signed it on February 25, 2015. According to Whedbee, the two appraisers agreed that all damages could be repaired and the dollar amounts specified in the award are based on the full cost of repairs to the buildings. Further, Whedbee and Koontz agreed to list the amount of loss as "Actual Cash Value" because the award represents the actual cash value of the full cost of repairs, and they did not deduct any amount for depreciation.
Republic also provided a new affidavit from senior claims representative Street. He stated that FCP submitted a claim under the policy for hail and wind damage, which allegedly occurred on June 13, 2012. He set out the history regarding how the claim was handled, eventually resulting in the appraisal award. Street concluded by stating that he sent a letter on March 4, 2015, to FCP's counsel enclosing full payment of the appraisal award, less the applicable deductibles.
One of FCP's arguments is that Republic did not prove it paid the appraisal award in compliance with the policy. There are three affidavits from Street in the record. The first two affidavits were made in connection with Republic's first motion for summary judgment and state that Street sent the payment to FCP on March 24, 2015. The third one, attached to Republic's amended motion for summary judgment — the one the trial court granted — states he sent payment to FCP on March 4, 2015. FCP asserts that Republic was not entitled to summary judgment on this inconsistent evidence. But in connection with its amended motion, Republic presented evidence that FCP's attorney received the payment of the award on March 6. On that date, counsel for FCP sent an email to Republic's counsel informing him he received a March 4 letter from him with enclosures. Attached to that email were copies of the checks from Republic stamped "Received" on March 6 by FCP's attorney. Thus, Republic's evidence in support of its amended summary judgment motion shows payment was sent on March 4 rather than March 24.
FCP acknowledges this evidence in its brief, but argues without any citation to authority that it was inadmissible because Republic failed to authenticate the attachments to its summary judgment motion. FCP has failed to adequately brief this contention. See TEX. R. APP. P. 38.1(i).
FCP provides several other reasons why Republic did not conclusively establish the appraisal award was binding and enforceable and thus cannot be used as a defense to FCP's contract claim. First, FCP complains of the award's failure to identify a date of loss or the peril involved. Next, although the award mentions only hail, Republic's summary judgment evidence references both hail and wind. FCP also contends the appraisal award was required to include replacement cost values (RCV), and it includes only actual cash values (ACV). According to FCP, omission of RCV means the award is not compliant with the policy. Further, while the award specifies it is for "roof repair of all damaged areas," FCP asserts that the award did not include all damage to the property. FCP maintains the record shows there was interior damage as well. FCP also notes that the award references "all measurement issues" and "Appraisal Protocol" without explanation of these terms. FCP further contends Republic was required to demonstrate the two appraisers were competent and impartial.
FCP cites State Farm Lloyds v. Johnson in support of its assertion that the appraisal award is invalid because it does not specify a specific occurrence, i.e., a date of loss. 290 S.W.3d 886 (Tex. 2009). FCP relies on the Supreme Court's statement in Johnson that "An appraisal is for damages caused by a specific occurrence." Id. at 893. But Johnson did not involve the sufficiency of an appraisal award. The appraisal had yet to take place, and the issue was whether an appraisal was needed because appraisers cannot decide causation. Id. at 890. Johnson does not support FCP's assertion that the appraisal award at issue is invalid on its face for failing to include a date of loss.
Every reasonable presumption will be indulged to sustain an appraisal award. Garcia, 514 S.W.3d at 265. We conclude the evidence Republic submitted in support of its amended motion for summary judgment was sufficient to establish that it paid an award made under the appraisal clause in the insurance policy. FCP made written demand for an appraisal under the policy. FCP and Republic each appointed an appraiser. The two appraisers agreed on the amount of loss and signed the appraisal award on February, 26, 2015. The appraisal award includes the claim number and the addresses of the property and states it was for hail damage to the roof resulting from a hail storm during the coverage period. Republic presented evidence showing it paid the amount of loss, less the deductibles, within five business days after the award, on March 4, 2015. See Garcia, 514 S.W.3d at 265 (holding that similar evidence showed insurer entitled to summary judgment on estoppel defense unless insured raised fact issue as to ground for setting award aside); Anderson v. Am. Risk Ins. Co., No. 01-15-00257-CV, 2016 WL 3438243, at *4 (Tex. App.—Houston [1st Dist.] June 21, 2016, no pet.) (mem. op.) (holding that similar evidence conclusively established insurer fulfilled its obligations under contract); Toonen v. United Servs. Auto. Ass'n, 935 S.W.2d 937, 940 (Tex. App.—San Antonio 1996) (similar evidence sufficient to show claim appraised pursuant to policy and insurer tendered amount awarded), abrogated on other grounds by USAA Tex. Lloyds Co. v. Menchaca, No. 14-0721, 2017 WL 1311752 (Tex. Apr. 7, 2017); cf. Richardson, 2007 WL 1990387, at *3-4 (award should be set aside where policy required each appraiser to make list stating actual cash value and loss as to each item and summary judgment evidence did not show they did this).
Once Republic showed that the appraisal process was invoked regarding FCP's claim, two appraisers agreed on the amount of loss and signed an appraisal award for the claim, and that Republic timely tendered payment of the award, the burden shifted to FCP, who seeks to avoid the award, to raise a fact issue on whether the award should be disregarded. See Garcia, 514 S.W.3d at 264-65; see also Wells, 919 S.W.2d at 683. FCP contends it raised genuine issues of material fact regarding whether the award should be disregarded for mistake, not being made in substantial compliance with the policy, and being made without authority. In its response to Republic's amended summary judgment motion, FCP relied in part on the affidavit of Brooks, who described himself as the authorized representative and manager of FCP. Brooks stated the storm caused damage to the interior of the buildings and neither appraiser inspected the interior of any FCP property. Brooks further stated FCP hired a roofing consultant, Scott Franklin, to evaluate the damages and prepare a report. Franklin's report was furnished to FCP's appraiser Koontz. FCP also relied on Franklin's declaration, in which he stated he inspected the properties and observed failure of the roofing system and "its inability to prevent moisture entry with the interiors" of two properties. Franklin attached to his affidavit a copy of the report he prepared which describes "moisture intrusion" at several locations in two of the buildings.
To show that fact issues exist regarding whether the award was made in substantial compliance with the policy, FCP contends the award does not identify a specific occurrence, it does not specify the amount of loss in terms of RCV, and Street described payment of the award as a compromise in his letter enclosing payment. FCP also asserts fact issues exist regarding whether the award was timely paid in compliance with the policy. FCP has failed to raise a fact issue on the timeliness of payment. The trial court permitted FCP to conduct discovery related to when Republic made its payment to the extent FCP had a good faith basis for questioning when payment was made. FCP did not seek to conduct discovery on this limited issue. On this record, there is no genuine issue of material fact regarding when payment was sent.
We find the Garcia case to be instructive on the other issues of substantial compliance. In that case, Garcia submitted a claim to her insurer for storm damage to her house. Garcia, 514 S.W.3d at 262. Garcia hired a private adjustor. Both Garcia's adjustor and the insurer's adjustor prepared estimates that included costs to repair certain items, such as the interior kitchen ceiling. Id. at 265-66. The appraisers, however, did not include these items in their appraisal award. Id. at 266. Garcia argued this evidence raised a fact issue on whether the appraisers exceeded their authority. The court of appeals noted that nothing in the appraisal clause specified the manner in which the appraisers were to determine the amount of loss, nor were they required to refer to any prior damage estimates. Id. at 267. The court of appeals concluded that the fact the appraisers' findings differed from the adjustors' findings was not, standing alone, evidence that the appraisers acted outside the scope of their authority. Id. at 268. The court noted that Garcia provided no summary judgment evidence regarding why both appraisers omitted the items. Id.
Similarly, in this case, there was nothing in the appraisal clause that specified the manner in which to determine the amount of loss. Nothing in the policy's appraisal provision required the appraisal award to identify the date of loss or the peril involved. Nor did it require the amount of loss to be described in terms of RCV. Further, Whedbee's affidavit stated he and Koontz did not deduct any amount for depreciation when calculating the amount of loss. Thus, the ACV and the RCV would be the same. Finally, Street's mention of a compromise in his letter is not evidence that the award was not made in compliance with the policy. FCP has failed to raise a fact issue regarding whether the award was not made in substantial compliance with the policy.
FCP also maintains it offered the following evidence of mistake: (1) the award only mentions hail, not wind, and (2) the appraisers examined only the roofs and not the interiors of the buildings. A court may set aside an award on the ground of mistake only upon a showing that the award does not speak the intention of the appraisers. Garcia, 514 S.W.3d at 269. "Mistake" in this context has a narrowly defined meaning; an actionable mistake is one that caused an award to operate in a way the appraisers did not intend. Id. Whedbee's affidavit indicates the award reflects the intention of both appraisers. FCP presented no evidence to the contrary. There is no evidence to explain why the award did not include any interior repair or to show why the award mentioned hail, but not wind damage. See id. at 270 (other than prior damage estimates, Garcia provided no evidence to explain why certain items were included in adjustors' estimates but omitted from appraisal award and therefore did not raise fact issue on mistake). FCP has not raised a fact issue on mistake.
FCP also asserts there is evidence the appraisers acted without authority by determining coverage. It argues that because the award includes the ACV that resulted from "the hail storm," the appraisers improperly determined coverage. Causation relates to both liability and damages because it is the connection between them. State Farm Lloyds v. Johnson, 290 S.W.3d 886, 891-92 (Tex. 2009). Appraisers must always consider causation, at least as an initial matter. Id. at 893. An appraisal is for damages caused by a specific occurrence, not every repair a home might need. Id. Any appraisal necessarily includes some causation element, because setting the amount of loss requires appraisers to separate damages for which coverage is claimed from damages caused by everything else. Id. We find nothing improper about the fact that the award states it is for hail damage to the roof. FCP has failed to raise a fact issue regarding whether the appraisal award should be set aside. Accordingly, the trial court did not err in granting summary judgment for Republic on FCP's contract claim.
b. Extra-Contractual Claims
Turning to FCP's remaining claims, Republic asserted as no-evidence grounds that because FCP's breach of contract claim fails, FCP cannot recover for its chapter 541 claims because FCP had no evidence of an independent injury or an untimely investigation. Where a plaintiff's claim for breach of an insurance contract fails, to prevail on an action for violations of chapter 541 of the insurance code, the plaintiff must show either that the insured failed to timely investigate the claim or that the insurer committed an extreme act that caused an injury independent of the policy claim. Bernstien v. Safeco Ins. Co. of Ill., No. 05-13-01533-CV, 2015 WL 3958282, at *2 (Tex. App.—Dallas June 30, 2015, no pet.) (mem. op.); see USAA Tex. Lloyds Co. v. Menchaca, No. 14-0721, 2017 WL 1311752, at *11-12 (Tex. Apr. 7, 2017). Republic asserted that FCP provided no evidence that either of these exceptions apply in this case. In its appellate brief, FCP contends the summary judgment evidence shows it sustained an independent injury, namely, having to give its tenants rent discounts and concessions because of the damage to the buildings. FCP's response to Republic's motion for summary judgment, however, makes no mention at all of FCP's insurance code claims. It thus cannot be said to have provided any summary judgment evidence of an independent injury. As such, the trial court properly granted summary judgment on the chapter 541 claims.
FCP's brief does not mention its claims for negligence and negligent misrepresentation. Thus, it has not challenged the trial court's granting of summary judgment as to these claims. See TEX. R. APP. P. 38.1. We overrule FCP's first issue.
Accordingly, we affirm the trial court's summary judgment.
/Craig Stoddart/
CRAIG STODDART
JUSTICE 160224F.P05
JUDGMENT
On Appeal from the County Court at Law No. 5, Dallas County, Texas
Trial Court Cause No. CC-16-00806-E.
Opinion delivered by Justice Stoddart, Justices Bridges and Myers participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee REPUBLIC LLOYDS recover its costs of this appeal from appellant FLOYD CIRCLE PARTNERS, LLC. Judgment entered this 24th day of July, 2017.