Opinion
No. 05-08-00184-CV
Opinion Filed March 10, 2009.
On Appeal from the 101st Judicial District Court, Dallas County, Texas, Trial Court Cause No. 06-08752.
Before Justices RICHTER, LANG, and MURPHY.
Opinion By Justice LANG.
MEMORANDUM OPINION
Appellant Michael Mitchell appeals from a take nothing judgment against him and in favor of appellee State Farm Lloyds ("State Farm") in a suit involving an insurance claim. In two issues, Mitchell asserts the trial court erred in granting summary judgment on his breach of contract cause of action because (1) State Farm was estopped from applying the policy deductible to each "damaged element in the property" based upon prior application of the policy deductible to a "complete loss" and (2) the evidence raised material questions of fact as to the ambiguity of material terms in the policy and State Farm failed to meet its burden to establish, as a matter of law, it was entitled to summary judgment despite the ambiguities raised as to such terms.
For the reasons below, we decide against Mitchell on both issues. Because all dispositive issues are well settled in law, we issue this memorandum opinion. See Tex. R. App. P. 47.2(a), 47.4. The trial court's judgment is affirmed.
I. FACTUAL AND PROCEDURAL BACKGROUND
Mitchell owned a rental home (the "property") insured by a "Rental Dwelling Policy" (the "policy") issued by State Farm. The policy provided in relevant part a "[b]asic 1%" deductible in the amount of $1827 "will be applied per occurrence and will be deducted from the amount of loss." According to Mitchell's brief before this Court, after tenants who had rented the property for approximately nine years moved out, Mitchell filed a claim under the policy based on "a multitude of damaged items." State Farm applied the deductible amount separately to each damaged item. Because there was no damaged item for which the claimed amount of loss exceeded the policy deductible of $1827, State Farm advised Mitchell no payment was due to be made for any of the damage claimed.
Mitchell filed this suit against State Farm alleging, in relevant part, breach of contract, contending State Farm failed to honor the policy by "asserting that an individual deductible applies to each separate damaged item." Further, in his fourth amended petition, the live petition at the time the trial court granted summary judgment, Mitchell contended, in pertinent part, State Farm "is estopped from denying the claim in issue because of its prior actions in adjustment of a similar claim and payment of the same." State Farm filed a traditional motion for summary judgment regarding Mitchell's breach of contract claim, asserting in relevant part (1) it properly applied a separate policy deductible to each of Mitchell's claimed damages and (2) it was not estopped from asserting any defenses available to it as a matter of law.
In his response to State Farm's motion for summary judgment, Mitchell contended there was (1) a genuine issue of material fact as to the meaning of several "undefined terms" in the policy critical to the determination of coverage, including "accidental direct physical loss" and "occurrence" and (2) a question of fact as to whether State Farm "has turned over to its insurance adjusters, the power to interpret terms of the contract that are never disclosed to the insured." Mitchell's response included (1) an affidavit of Mitchell in which he described his interpretation of the policy at issue and the handling of a previous claim by him under a State Farm policy on a different property owned by him and (2) excerpted deposition testimony of a State Farm claims representative regarding the meaning of certain terms alleged by Mitchell to be ambiguous.
State Farm filed a "Motion to Strike Summary Judgment Evidence and Affidavits of Plaintiffs," asserting testimony in Mitchell's affidavit lacked a proper predicate and was speculative, conclusory, and based on hearsay. The record does not show a ruling by the trial court on that motion. Additionally, State Farm filed a reply to Mitchell's response, asserting in relevant part (1) Mitchell did not show the policy is ambiguous on its face or ambiguous when applied to the subject matter of the instant action, (2) Mitchell did not provide competent summary judgment evidence of the applicability of the elements of estoppel, and (3) estoppel cannot be used to create coverage under the policy in this case.
After a hearing on State Farm's motion for summary judgment, the trial court granted judgment for State Farm that Mitchell take nothing. Mitchell's other claims were nonsuited and the judgment became final. This appeal timely followed.
II. SUMMARY JUDGMENT ON BREACH OF CONTRACT CLAIM A. Standard of Review
We review the trial court's granting of a traditional motion for summary judgment de novo. Tex. Mun. Power Agency v. Pub. Util. Comm'n, 253 S.W.3d 184, 192 (Tex. 2007). To prevail on a traditional summary judgment motion, a movant must show there is no genuine issue as to any material fact and it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Little v. Tex. Dep't of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004). To defeat a plaintiff's cause of action on a traditional summary judgment motion, a defendant must either conclusively negate at least one element of each of the plaintiff's theories of recovery or conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff's cause of action. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Case Corp. v. Hi-Class Bus. Sys. of Am., Inc., 184 S.W.3d 760, 776 (Tex.App.-Dallas 2005, pet. denied). A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence. Triton Oil Gas Corp. v. Marine Contractors Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982); Dallas Fort Worth Int'l Airport Bd. v. Cox, 261 S.W.3d 378, 382 (Tex.App.-Dallas 2008, no pet.).
In our review, we examine the entire record in the light most favorable to the nonmovant. Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006); see also City of Keller v. Wilson, 168 S.W.3d 802, 824-25 (Tex. 2005). Evidence favorable to the nonmovant must be taken as true, and every reasonable inference from the evidence must be drawn in favor of the nonmovant. Sudan, 199 S.W.3d at 292; Hackberry Creek Country Club, Inc. v. Hackberry Creek Home Owners Ass'n, 205 S.W.3d 46, 50 (Tex.App.-Dallas 2006, pet. denied). When, as here, the trial court's order granting summary judgment does not specify the grounds upon which it was granted, we will affirm the judgment if any of the grounds presented to the trial court and preserved for appellate review are meritorious. See Provident Life Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003); Ling v. BDAK Bus. Servs., Inc., 261 S.W.3d 341, 345 (Tex.App.-Dallas 2008, no pet.).
B. Analysis 1. Estoppel
In his first issue, Mitchell contends the trial court erred in granting summary judgment on his breach of contract cause of action because State Farm "was estopped from applying the 1% of policy deductible to each damaged element in the property based on its prior application of the 1% policy deductible to the complete loss" pursuant to a claim under another policy on a different property. Mitchell asserts he submitted evidence to the trial court regarding a prior, similar claim by him on an "identical" State Farm rental dwelling policy covering a different property owned by him. According to Mitchell, "[i]n that situation, one deductible was ascribed to the entire grouping of items damaged by the tenants." Further, Mitchell contends he submitted evidence he relied upon State Farm's handling of that prior claim in filing his claim under the policy at issue. Mitchell argues State Farm did not prove, as a matter of law, the term "occurrence" in the contract at issue applied to "each damage" caused by his one tenant, during one occupancy. Accordingly, Mitchell contends, the trial court "abused its discretion" in granting State Farm's summary judgment and not finding State Farm was estopped from taking a position regarding application of its 1% policy deductible that was inconsistent with its handling of Mitchell's prior claim.
State Farm argues there was no evidence presented to the trial court of any of the elements required to prove the doctrine of estoppel. Further, State Farm asserts, the doctrine of estoppel cannot create coverage where none exists by the terms of the insurance policy. Therefore, State Farm contends, it was not estopped from asserting any of the defenses available to it.
Equitable estoppel is based on the principle that one who by his conduct has induced another to act in a particular manner should not be permitted to adopt an inconsistent position and thereby cause loss or injury to another. See Ulico Cas. Co. v. Allied Pilots Ass'n, 262 S.W.3d 773, 778 (Tex. 2008); Fiengo v. Gen. Motors Corp., 225 S.W.3d 858, 861 (Tex.App.-Dallas 2007, no pet.). Estoppel is established when (1) a false representation or concealment of material facts, (2) is made with knowledge, actual or constructive, of those facts, (3) with the intention that it should be acted upon, (4) to a party without knowledge or means of obtaining knowledge of the facts, (5) who detrimentally relies on the representations. Fiengo, 225 S.W.3d at 861 (citing Johnson Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 (Tex. 1998)). The party asserting estoppel has the burden of proving the essential elements of estoppel, and the failure to prove any element is fatal. Mangrum v. Conrad, 185 S.W.3d 602, 606 (Tex.App.-Dallas 2006, pet. denied). As a general rule, the doctrine of estoppel cannot be used to create insurance coverage where none exists under the terms of the policy. Tex. Farmers Ins. Co. v. McGuire, 744 S.W.2d 601, 602-03 (Tex. 1988) (op. on reh'g); State Farm Lloyds, Inc. v. Williams, 960 S.W.2d 781, 785 (Tex.App.-Dallas 1997, pet. dism'd by agr.).
Mitchell does not specifically address the five elements of equitable estoppel either in the trial court or before us in his brief. The summary judgment evidence submitted by Mitchell included an affidavit of Mitchell in which he testified he relied on a prior representation of State Farm in filing the claim at issue. However, Mitchell does not assert, and the record does not show, detrimental reliance by him. See Fiengo, 225 S.W.3d at 861. In fact, the record in this case, when examined in its entirety in the light most favorable to Mitchell, shows no evidence of any of the five elements of equitable estoppel. See id. Moreover, to the extent Mitchell seeks to use estoppel to create coverage where none exists under the terms of the policy at issue, the doctrine of estoppel cannot be used to create such coverage. See Tex. Farmers Ins. Co., 744 S.W.2d at 602-03; State Farm Lloyds, 960 S.W.2d at 785.
Accordingly, we conclude the trial court did not err in determining as a matter of law State Farm was not estopped from applying the 1% policy deductible to each itemized loss with respect to Mitchell's claim. We decide Mitchell's first issue against him.
2. Ambiguity
In his second issue, Mitchell asserts the trial court erred in granting summary judgment on his breach of contract cause of action because the evidence raised material questions of fact as to the ambiguity of the material terms "occurrence," "vandalism," and "uninhabitable" in the policy and State Farm failed to meet its burden to establish, as a matter of law, it was entitled to summary judgment despite those ambiguities. According to Mitchell, given the failure of State Farm to define those terms "in the policy, or in any other manner, including in any way to the individuals handling claims such as Mitchell's," State Farm failed to show those terms were to be interpreted, as a matter of law, in its favor. Therefore, Mitchell asserts, the trial court "abused its discretion" in granting summary judgment on State Farm's breach of contract claim. State Farm asserts Mitchell's arguments with respect to this issue are "incorrect and not supported by Texas law or the insurance contract."
We review a trial court's interpretation of a contract de novo. See MCI Telecomms. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 650-51 (Tex. 1999); First Trust Corp. TTEE FBO v. Edwards, 172 S.W.3d 230, 233-34 (Tex.App.-Dallas 2005, pet. denied). It is well settled the general rules of contract construction apply to the interpretation and construction of insurance policies. See Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 23 (Tex. 2008); Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). Effectuating the parties' expressed intent is our primary concern. See Don's Bldg. Supply, 267 S.W.3d at 23; U.S. Fire Ins. Co. v. Scottsdale Ins. Co., 264 S.W.3d 160, 167 (Tex.App.-Dallas 2008, no pet.).
When construing a policy's language, we must give effect to all contractual provisions so none will be rendered meaningless. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003); see also Fiess v. State Farm Lloyds, 202 S.W.3d 744, 748 (Tex. 2006). Policy terms are given their ordinary and commonly understood meaning unless the policy itself shows the parties intended a different, technical meaning. Don's Bldg. Supply, 267 S.W.3d at 23; Gonzales v. Mission Am. Ins. Co., 795 S.W.2d 734, 736 (Tex. 1990); Harrison v. Great Am. Assurance Co., 227 S.W.3d 890, 892-93 (Tex.App.-Dallas 2007, no pet.). No one phrase, sentence, or section of the policy should be isolated from its setting and considered apart from other provisions. Don's Bldg. Supply, 267 S.W.3d at 23. In addition, we must give the policy's words their plain meaning, without inserting additional provisions into the contract. Id.
Whether a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996); see also Nat'l Union Fire Ins. Co., 907 S.W.2d at 520. An ambiguity does not arise merely because the parties advance conflicting contract interpretations. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 465 (Tex. 1998). "Ambiguity must be evident from the policy itself; it cannot be created by introducing parol evidence of intent." Fiess, 202 S.W.3d at 747; Nat'l Union Fire Ins. Co., 907 S.W.2d at 520. If policy language is worded so it can be given a definite or certain legal meaning, it is not ambiguous and we construe it as a matter of law. Am. Mfrs. Mut. Ins. Co., 124 S.W.3d at 157; see also Kelley-Coppedge, 980 S.W.2d at 465. If, however, a contract is susceptible to more than one reasonable interpretation, the policy is ambiguous, and any ambiguity will be resolved in favor of coverage. Don's Bldg. Supply, 267 S.W.3d at 23; U.S. Fire Ins. Co., 264 S.W.3d at 167.
a. Ambiguity as to the Term "Occurrence"
The policy at issue provides, "In case of loss under this policy, the deductibles will be applied per occurrence and will be deducted from the amount of the loss." The policy consists of two main sections, titled "Section I-Your Property" and "Section II-Your Liability." In addition, the policy contains a list of definitions separate from either of those sections. Included within the list of definitions is the following:
"[O]ccurrence", when used in Section II of this policy, means an accident, including exposure to conditions, which results in:
a. bodily injury;
b. property damage; or
c. personal injury;
during the policy period. Repeated or continuous exposure to the same general conditions is considered to be one occurrence.
The term "occurrence" is not otherwise defined in the policy.
Mitchell contends the policy is ambiguous because the term "occurrence" is defined only as it applies to Section II of the policy. Mitchell asserts, and State Farm does not dispute, the claim at issue was filed pursuant to Section I of the policy. According to Mitchell, given the absence of a specific definition of "occurrence" applicable to Section I, the definition stated in the policy should be applied to all sections.
In support of his argument, Mitchell cites (1) his affidavit in which he testified as to the handling of a previous claim and his understanding of the terms of the policy at issue, and (2) deposition testimony of a State Farm claims representative regarding her interpretation of certain policy terms. However, such parol evidence is not admissible for the purpose of creating an ambiguity. See Fiess, 202 S.W.3d at 745 (ambiguity in insurance policy cannot be created from previous policies or an agency's interpretation). Further, we cannot agree that Mitchell's interpretation of the policy is reasonable. See U.S. Fire Ins. Co., 264 S.W.3d at 167 (ambiguity exists where policy is subject to two or more reasonable interpretations). When construing a policy's language, we must give effect to all contractual provisions so none will be rendered meaningless. Am. Mfrs. Mut. Ins. Co, 124 S.W.3d at 157; see also Fiess, 202 S.W.3d at 748. The policy provides a definition of "occurrence" specifically applicable to Section II of the policy. Construing that definition to also apply, on its face, to Section I would render meaningless the phrase "when used in Section II of this policy." See Am. Mfrs. Mut. Ins. Co., 124 S.W.3d at 157; see also Fiess, 202 S.W.3d at 748 (alternative unreasonable constructions do not make policy ambiguous). Accordingly, we conclude the evidence raised no material question of fact as to ambiguity of the policy with regard to the term "occurrence."
b. Ambiguity as to the Terms "Uninhabitable" and "Vandalism"
Mitchell contends the deposition testimony of a State Farm claims representative "regarding the internal handling of the undisclosed meaning of `uninhabitable' which is the basis for State Farm's refusal to pay for lost rents" was "confusing." Further, Mitchell asserts the representative's testimony regarding "explanation of the undefined term `vandalism'" was "less than clarifying." However, as stated above, an ambiguity cannot be created by introducing parol evidence. See Fiess, 202 S.W.3d at 747; Nat'l Union Fire Ins. Co., 907 S.W.2d at 520. Unless the policy itself shows the parties intended otherwise, policy terms are given their ordinary and commonly understood meaning. See Don's Bldg. Supply, 267 S.W.3d at 23; see also Fiess, 202 S.W.3d at 746. Mitchell does not explain, and the record does not show, how the terms "uninhabitable" and "vandalism" created an ambiguity in the policy at issue. Therefore, we conclude the evidence raised no material question of fact as to ambiguity with respect to those terms. Mitchell's second issue is decided against him.
III. CONCLUSION
We conclude the trial court did not err in determining as a matter of law State Farm was not estopped from applying the 1% policy deductible to each "damaged element" with respect to the claim at issue. In addition, we conclude the evidence raised no material question of fact as to the ambiguity of the policy regarding the terms "occurrence," "uninhabitable," and "vandalism." Accordingly, the trial court did not err in granting summary judgment on State Farm's breach of contract cause of action.
We decide Mitchell's two issues against him. The trial court's judgment is affirmed.