Opinion
Civil Action No. 4:20-cv-03372
2022-03-31
TEXAS A&M UNIVERSITY 12TH MAN FOUNDATION, Plaintiff, v. HARTFORD LLOYDS INSURANCE COMPANY, Defendant.
Erin Marie Lucas Bullard, David Patrick Ayers, Bissinger, Oshman, Williams & Strasburger LLP, Houston, TX, for Plaintiff. Thomas M. Spitaletto, Janet H. Tolbert, Wilson Elser Moskowitz Edelman Dicker LLP, Dallas, TX, David Simantob, Wilson Elser Moskowitz Edelman & Dicker LLP, Los Angeles, CA, for Defendant.
Erin Marie Lucas Bullard, David Patrick Ayers, Bissinger, Oshman, Williams & Strasburger LLP, Houston, TX, for Plaintiff.
Thomas M. Spitaletto, Janet H. Tolbert, Wilson Elser Moskowitz Edelman Dicker LLP, Dallas, TX, David Simantob, Wilson Elser Moskowitz Edelman & Dicker LLP, Los Angeles, CA, for Defendant.
OPINION AND ORDER ON SUMMARY JUDGMENT
Charles Eskridge, United States District Judge
The motion by Plaintiff Texas A&M University 12th Man Foundation for summary judgment is denied. Dkt 17. The motion by Defendant Hartford Lloyds Insurance Company for summary judgment is granted. Dkt 18.
1. Background
The ultimate question in this action is whether Defendant Hartford Lloyds Insurance Company has a duty to defend Plaintiff Texas A&M University 12th Man Foundation under an insurance policy in place between them.
a. The underlying actions
Two Texas state actions underlie the present action. They are largely identical. Compare Dkt 17-1 at 164–214 (White petition), with Id at 216–242 (Hines petition).
The Foundation began soliciting endowment scholarships in 1970. Among other benefits, donors who purchased these scholarships were allegedly promised assigned and best-available parking locations for home football games; established and best-available seating locations for home football games; best-available seating locations for away football games; and the opportunity to upgrade their established home-game parking and/or seating locations to better locations as they became available, at no additional cost. Id at 171–72 & 221. Donors would receive such benefits for life or for thirty years, depending on the type of endowment purchased. Id at 254.
The plaintiffs in the underlying actions each purchased endowment scholarships. Their stadium seats and parking spaces were established at the outset of their gift. Some allege that they received upgrades without additional cost as new stadium seats and/or parking spaces became available. Id at 171–72 & 222.
Additionally, the Foundation memorialized these endowments throughout the early 1990s with letters that it asked the underlying plaintiffs to sign and return. These letters listed the amount paid, the number of stadium seats, and the names of those whose lifetimes measured the endowment benefits. For instance, one letter stated in pertinent part:
IT IS AGREED that the benefits of the $30,000, 4-seat endowment in the names of Joe and Findley Brewster will be honored during the lifetimes of Joe, Toby, Findley, and Anne Brewster. This is in accordance with the 12th Man Foundation endowment policy of record when the endowment was established.
Ibid (White petition).
The Foundation allegedly began backing out of these agreements in 2005. Specifically, it implemented what it called a Priority Point System that reallocated parking spaces based on yearly donations—including those spaces previously held by the underlying plaintiffs. Id at 174–76 & 224. The underlying plaintiffs were thus required to compete with other donors to retain their parking spaces. Id at 176 & 224. And in practice, few underlying plaintiffs "could match the contributions of the ‘next generation’ of Aggies, who effectively purchased the most desirable parking locations via the PPS." Id at 176 (White petition); see also Id at 224. The underlying plaintiffs therefore received less desirable parking spaces. Id at 176 & 225.
The Foundation began applying the PPS to allocate tickets for away football games in 2007. Id at 176 & 225. The underlying plaintiffs allege that they then "did not receive the best available away game tickets, despite the Foundation's earlier promise when Plaintiffs purchased their endowments." Id at 177 (White petition); see also id at 225.
The Foundation also decided to apply the PPS to home-game seating in 2013. Id at 178–80 & 225. It requested that donors make certain new and continuing donations in order to remain in their current seating section. Id at 179 & 226. PPS rank then determined seating within the section, meaning that the underlying plaintiffs "were coerced to promise to pay huge additional sums in order to secure seat locations inferior to those they established for life (or for 30-year terms) through their endowments." Id at 181 (White petition); see also id at 227.
The underlying plaintiffs brought claims for breach of contract, promissory estoppel, and breach of fiduciary duty. Id at 203–11 & 235–39.
b. The subject insurance contract
Hartford Lloyds issued an insurance policy to the Foundation in 2009, which was renewed annually through the 2017–2018 period. Dkt 18 at 11. It provided at all times:
We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury", "property damage" or "personal and advertising injury" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury", "property damage" or "personal and advertising injury" to which this insurance does not apply.
Dkt 17-1 at 10.
The contract defines personal and advertising injury in pertinent part as:
The wrongful eviction from, wrongful entry into, or invasion of the right of
private occupancy of a room, dwelling or premises that the person occupies, committed by or on behalf of its owner, landlord, or lessor.
Id at 32.
The Foundation tendered both matters to Hartford Lloyds for defense after the underlying plaintiffs brought action. Id at 244 & 294. Hartford Lloyds refused. Id at 374. The Foundation then brought this action, asserting claims for breach of contract and violation of the Texas Insurance Code. It also seeks attorney fees and a declaration that Hartford Lloyds "is obligated pursuant to the terms of its insurance policy to defend and reimburse the Foundation for defense costs and to indemnify the Foundation for claims arising out of the Underlying Lawsuits." Dkt 1 at ¶¶ 14–29.
The parties now bring cross-motions for summary judgment. Dkts 17 & 18.
2. Legal Standard
Rule 56(a) of the Federal Rules of Civil Procedure requires a court to enter summary judgment when the movant establishes that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." A fact is material if it "might affect the outcome of the suit under the governing law." Sulzer Carbomedics Inc. v. Oregon Cardio-Devices Inc. , 257 F.3d 449, 456 (5th Cir. 2001), quoting Anderson v. Liberty Lobby Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). And a dispute is genuine if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Royal v. CCC & R Tres Arboles LLC , 736 F.3d 396, 400 (5th Cir. 2013), quoting Anderson , 477 U.S. at 248, 106 S.Ct. 2505.
The summary judgment stage doesn't involve weighing the evidence or determining the truth of the matter. The task is solely to determine whether a genuine issue exists that would allow a reasonable jury to return a verdict for the nonmoving party. Smith v. Harris County , 956 F.3d 311, 316 (5th Cir. 2010), quoting Anderson , 477 U.S. at 248, 106 S.Ct. 2505. Disputed factual issues must be resolved in favor of the nonmoving party. Little v. Liquid Air Corp. , 37 F.3d 1069, 1075 (5th Cir. 1994). All reasonable inferences must also be drawn in the light most favorable to the nonmoving party. Connors v. Graves , 538 F.3d 373, 376 (5th Cir. 2008), citing Ballard v. Burton , 444 F.3d 391, 396 (5th Cir. 2006).
The moving party typically bears the entire burden to demonstrate the absence of a genuine issue of material fact. Nola Spice Designs LLC v. Haydel Enterprises Inc. , 783 F.3d 527, 536 (5th Cir. 2015) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). But when a motion for summary judgment by a defendant presents a question on which the plaintiff bears the burden of proof at trial, the burden shifts to the plaintiff to proffer summary judgment proof establishing an issue of material fact warranting trial. Nola Spice , 783 F.3d at 536. To meet this burden of proof, the evidence must be both "competent and admissible at trial." Bellard v. Gautreaux , 675 F.3d 454, 460 (5th Cir. 2012).
When parties file opposing motions for summary judgment on the same issue, the court reviews each motion independently, each time viewing the evidence and inferences in the light most favorable to the nonmoving party. Amerisure Insurance Co. v. Navigators Insurance Co. , 611 F.3d 299, 304 (5th Cir. 2010). Each movant must establish that no genuine dispute of material fact exists, such that judgment as a matter of law is in order. Ibid.; see also Tidewater Inc v United States , 565 F.3d 299, 302 (5th Cir 2009). 3. Analysis
The facts here aren't in dispute, and the parties agree that Texas law controls this action. The sole question is whether allegations in one or both underlying actions could potentially give rise to liability for a personal and advertising injury. In short, they can't.
"Whether an insurer has a duty to defend its insured is a question of law." Lyda Swinerton Builders Inc. v. Oklahoma Surety Co. , 903 F.3d 435, 445 (5th Cir. 2018). Texas courts apply what's known as the eight-corners doctrine to answer that question. By this, a court must compare allegations within the four corners of the plaintiff's pleadings in the underlying action with provisions within the four corners of the insurance policy. National Union Fire Insurance Co. v. Merchants Fast Motor Lines Inc. , 939 S.W.2d 139, 141 (Tex. 1997, per curiam ). When doing so, "allegations in the petition must be construed liberally in favor of the insured, and all doubts must be resolved in favor of the duty to defend." Lyda Swinerton Builders , 903 F.3d at 446.
"If the petition pleads facts sufficient to create the potential of covered liability, then the insurer has a duty to defend the entire case, even if some of the alleged injuries are not covered." Id. at 447 (emphasis in original). But if the petition only alleges facts excluded by the policy, then the insurer has no duty to defend. Northfield Insurance Co. v. Loving Home Care Inc. , 363 F.3d 523, 528 (5th Cir. 2004). "Facts ascertained before suit, developed in the process of litigation, or determined by the ultimate outcome of the suit do not affect the duty to defend." Ibid.
a. Contractual definitions
The terms wrongful eviction, invasion of the right of private occupancy , and premises are all within the definition of personal and advertising injury in the insurance policy. Dkt 17-1 at 32. None are further defined, and the parties dispute what each means.
The words in a contract matter. They "are to be given the meaning that proper grammar and usage would assign them." Antonin Scalia & Bryan A. Garner, Reading Law § 17 (West 2012). They also can't be read in isolation. Courts therefore "must give an insurance policy's undefined words their common, ordinary meaning unless the policy itself demonstrates that the parties intended a ‘different’ or more ‘technical’ meaning." Anadarko Petroleum Corp. v. Houston Casualty Co. , 573 S.W.3d 187, 193 (Tex. 2019) (emphasis in original).
The Foundation argues that the ordinary meaning of evict is "to force out or expel" or to "dispossess." Dkt 17 at 11, quoting The Merriam Webster Online Dictionary (2021). And it postulates that one could thus be evicted from a stadium seat or parking space. But Hartford Lloyds contends that the word bears a more technical meaning, requiring a landlord-tenant relationship. Dkt 18 at 15.
The position of Hartford Lloyds is correct, primarily because the adjective wrongful modifies the noun eviction. These must be interpreted together as a phrase. See Hettler v. Travelers Lloyds Insurance Co. , 190 S.W.3d 52, 57 (Tex. App.—Amarillo 2005, pet denied ). And Texas courts have interpreted this phrase to bear a technical meaning— specifically, the offense of wrongful eviction as defined by Texas law. For example, see Butler & Binion v. Hartford Lloyd's Insurance Co. , 957 S.W.2d 566, 569 (Tex. App.— Houston [14th Dist.] 1995, writ denied ) ; Patel v. Northfield Insurance Co. , 940 F. Supp. 995, 1002 (N.D. Tex. 1996). Such a claim requires a plaintiff to show (i) the existence of an unexpired lease, (ii) the tenant's occupancy of the premises, (iii) the landlord's eviction of the tenant, and (iv) damages suffered by the tenant attributable to the eviction. Garcia v. Galvan , 2012 WL 1606312, *3 (Tex. App.—Houston [14th Dist.] 2012, pet dismissed ) ; 18 Dorsaneo Texas Litigation Guide § 282.132.
Likewise, invasion of the right of private occupancy must also be read as a phrase. While it isn't a legal term or phrase of art, it's associated with wrongful eviction and wrongful entry in a context suggesting that the phrases have something in common. Decorative Center of Houston v. Employers Casualty Co. , 833 S.W.2d 257, 260 (Tex. App.—Corpus Christi 1992, writ denied ). They should therefore "be assigned a permissible meaning that makes them similar." Scalia & Garner, Reading Law § 31. Texas courts have thus interpreted this phrase to cover landlord-tenant scenarios or situations "when the occupier has a vested interest in the occupancy of the premises." Decorative Center , 833 S.W.2d at 263 ; 21 Dorsaneo Texas Litigation Guide § 341.09.
The Foundation also argues that premises essentially includes any subunit of a property—whether a fixture, a building, or a portion of the land. Dkt 17 at 12. Consequently, stadium seats and parking spaces are premises from which someone can be evicted. Id at 13. But this isn't so. The New Oxford American Dictionary defines premises as "a house or building, together with its land and outbuildings, occupied by a business or considered in an official context." Angus Stevenson & Christine A. Lindberg, eds, New Oxford American Dictionary 1379 (Oxford UP 3d ed 2010) (emphasis added). Similarly, Garner's Modern English Usage states that premise refers "to a house or building along with its grounds." Bryan A. Garner, ed, Garner's Modern English Usage 721 (Oxford UP 4th 2016) (emphasis added); see also Black's Law Dictionary (Westlaw) (same definition). Each definition describes premises as the whole property, not a subunit of the property. In fact, sources proffered by the Foundation generally concur. For example, see Dkt 17 at 11, citing The Merriam Webster Online Dictionary (defining premises as "a tract of land with the buildings thereon").
It must also be noted that premises is preceded in sequence by room and dwelling. The reading offered by the Foundation would render these words superfluous, as a room and dwelling are themselves specific subunits of a property. This won't do. Instead, each word and every provision must "be given effect" if possible, with none "given an interpretation that causes it to duplicate another provision or to have no consequence." Scalia & Garner, Reading Law § 26. The definition sponsored by Hartford Lloyds observes this rule of construction and affords each word independent meaning. When read together, the clause protects the insured if it wrongfully evicts an individual or entity from "a part or division of a building"; a "house, apartment, or other place of residence"; or the property as a whole. See Stevenson & Lindberg, New Oxford American Dictionary 541 & 1517. But the clause doesn't protect an insured who expels an individual from any single portion of the property if that portion isn't a room or dwelling.
Proper construction also dictates that "a word or phrase is presumed to bear the same meaning throughout a text." Scalia & Garner, Reading Law § 25. And the policy consistently uses premises to refer to the property as a whole. For example, it states that Hartford Lloyds will cover certain personal property "owned by you that is used to maintain or service the buildings or structures on the premises. " Dkt 17-1 at 64 (emphasis added). It also states that Hartford Lloyds won't pay more than "it would cost to restore the Building on the same premises. " Id at 71 (emphasis added). And it defines extra expense to mean expense incurred to "avoid or minimize the suspension of business and to continue operations ... at replacement premises or at temporary locations." Id at 73 (emphasis added). Interpreting premises in the clause at issue to mean the property as a whole is thus consistent with its use in these and other provisions.
b. Application of contractual definitions
Whether the underlying plaintiffs stated facts that could potentially give rise to a personal and advertising injury becomes clear with application of the foregoing definitions. By those lights, they haven't stated facts that could potentially establish a claim for wrongful eviction or the invasion of the right of private occupancy. And regardless, they don't allege that they were wrongfully evicted from or had the right of private occupancy of a room, dwelling, or premises.
As established above, a claim for wrongful eviction requires the existence of an unexpired lease. Garcia , 2012 WL 1606312 at *3 ; 18 Dorsaneo Texas Litigation Guide § 282.132. "A lease is a grant of an estate in land for a limited term, with conditions attached." Abest Holdings LLC v. Fort Worth Mar-G Ltd. , 2021 WL 2252351, *6 (Tex. App.—Waco, no pet ). While no particular words are necessary to establish a lease, "it is indispensable that it should appear to have been the intention of one party to dispossess himself of the premises and the other to occupy them." Tatro v. Texas , 580 S.W.3d 740, 744 (Tex. App.— Houston [14th Dist.] 2019, no pet ).
Here, the underlying plaintiffs don't allege facts that demonstrate the Foundation intended to dispossess itself of the stadium seats and parking spaces at issue. Indeed, the alleged verbal and written contracts asserted by the underlying plaintiffs don't identify any specific piece of property to be transferred. What's alleged here is instead best understood as a license, being " ‘a privilege or authority given to one or retained by one to do some act or acts on the land of another, but which does not amount to an interest in the land itself.’ " Abest , 2021 WL 2252351 at *6, quoting Settegast v. Foley Brothers Dry Goods Co. , 114 Tex. 452, 270 S.W. 1014, 1016 (Tex.Com.App. 1925) ; for example, see Digby v. Hatley , 574 S.W.2d 186, 190 (Tex. App.—San Antonio 1978, no writ ) (hunting lease held more in nature of license granting right or privilege to hunt on property that conveys no interest in or title to property concerned). The underlying plaintiffs simply haven't pleaded facts demonstrating the potential existence of an unexpired lease, thus precluding a claim for wrongful eviction.
The Foundation alternatively argues that the underlying plaintiffs allege facts potentially establishing an invasion of the right of private occupancy. But such claim requires a vested property right. Dkt 17 at 2; Decorative Center , 833 S.W.2d at 263 ; Patel , 940 F. Supp. at 1002 ; Mid-Continent Casualty Co. v. Camaley Energy Co. , 364 F. Supp. 2d 600, 608 (N.D. Tex. 2005). Indeed, a respected Texas practice guide states, "The right of private occupancy refers only to those rights associated with a person's act of inhabiting the premises and not to rights associated with the person's right to use and enjoy the premises." 21 Dorsaneo Texas Litigation Guide § 341.09, citing Decorative Center , 833 S.W.2d at 261. And the "term ‘property right’ refers to any type of right to specific property, including tangible, personal property." City of Corpus Christi v. Maldonado , 398 S.W.3d 266, 270 (Tex. App.—Corpus Christi 2011, no pet ) (emphasis added). "A right is vested when it has a definitive rather than potential existence." Ibid.
To the contrary, the underlying plaintiffs nowhere allege a right to any specific property. They instead contend that they purchased an endowment that resulted in benefits , two of which were the "best available" stadium seats and parking spaces. As such, they haven't pleaded facts potentially establishing a claim for the invasion of the right of private occupancy.
Last, even if the underlying plaintiffs did allege facts potentially supporting a claim for wrongful eviction or the invasion of the right of private occupancy, they don't allege that the Foundation evicted them from or invaded their right of private occupancy of a room, dwelling , or premises. The underlying plaintiffs contend that the PPS resulted in their receipt of inferior stadium seats and parking spaces. No one contends that stadium seats and parking spaces fall within the definition of room or dwelling. And no native English speaker would suggest that a stadium seat or parking space is a premises. A stadium seat is instead located on the premises or is part of the premises. A parking space likewise is located on the premises or is part of the premises—it's not itself a premises.
In sum, a comparison of the facts pleaded in the two underlying Texas state court actions with the provisions within the four corners of the insurance policy at issue demonstrates that the potential for a covered liability doesn't exist. This means that Hartford Lloyds doesn't have a duty to defend the Foundation. And it further means that the motion by the Foundation for summary judgment must be denied, and the motion by Hartford Lloyds for summary judgment must be granted. Dkts 17 & 18.
4. Conclusion
The motion by Plaintiff Texas A&M University 12th Man Foundation for summary judgment is DENIED. Dkt 17.
The motion by Defendant Hartford Lloyds Insurance Company for summary judgment is GRANTED. Dkt 18.
The claims against Defendant Hartford Lloyds Insurance Company are DISMISSED WITH PREJUDICE.
A final judgment will enter separately.
SO ORDERED .