Appeal from the 405th District Court Galveston County, Texas
Trial Court Cause No. 12-CV-2012
consists of Chief Justice Frost and Justices Boyce and Jewell
(Frost, C.J., dissenting).
we consider whether Dickinson Independent School District
("DISD") is entitled to judgment for breach of
contract damages against Texas Windstorm Insurance
Association ("TWIA") based on an appraisal award.
sued TWIA in connection with TWIA's handling of
DISD's Hurricane Ike claims. DISD alleged breach of
contract and related claims. During the proceedings, TWIA
invoked the insurance policy's appraisal provisions, and
the resulting appraisal award totaled $10.8 million in
damages. DISD amended its petition to abandon all claims
except breach of contract and, based on the appraisal award,
filed traditional motions for partial summary judgment on the
elements of causation and damages. TWIA opposed the motions
because, among other things, DISD had not conclusively proven
that the alleged damages reflected in the appraisal award, or
any portion of them, were caused by covered perils. The trial
court granted both motions in DISD's favor. The case
proceeded to trial and the sole question put to the jury was
whether TWIA breached the policy by failing to pay the
appraisal award, which the jury answered affirmatively. The
trial court signed a final judgment against TWIA for $9, 602,
challenges the trial court's judgment in the following
• In its first issue, TWIA challenges the orders
granting partial summary judgment on causation and damages
because DISD did not conclusively prove (or TWIA raised
genuine issues of material fact) that DISD's alleged
damages were caused by a named peril or covered by the TWIA
policy. Further, TWIA asserts that DISD did not meet its
burden to prove coverage at trial through expert testimony.
As a remedy, TWIA requests rendition of judgment as a matter
of law or remand for new trial.
• In its second issue, TWIA contends that the trial
court reversibly erred in excluding TWIA's trial evidence
supporting its affirmative defenses.
• In issue three, TWIA urges that the trial court erred
in submitting DISD's jury question and in refusing to
submit TWIA's proposed question and instructions.
• Finally, in its fourth issue, TWIA contends that
legally insufficient evidence supports the jury's finding
that TWIA breached the policy by not paying the appraisal
award or that TWIA's failure to pay the award proximately
caused the damages reflected in the judgment.
reasons explained below, we sustain TWIA's first issue in
part and hold that the trial court erred in granting
DISD's motions for partial summary judgment on causation
and damages because DISD's evidence, including the
appraisal award, did not conclusively prove whether and how
much alleged loss was caused by a covered peril and otherwise
subject to coverage under the policy terms and conditions.
Having sustained this portion of TWIA's first issue, we
further conclude that remand for further proceedings, as
opposed to rendition of judgment, is the appropriate remedy
under the present circumstances. Given our resolution of
TWIA's first issue, reaching TWIA's remaining issues
is not necessary to final disposition of this appeal.
See Tex. R. App. P. 47.1. Accordingly, we reverse
the trial court's judgment and remand for further
proceedings consistent with this opinion.
issued a windstorm and hail commercial policy of insurance to
DISD, the named insured. The relevant policy period was from
September 1, 2008 to September 1, 2009. As to each covered
property, the policy provided for two potential forms of
coverage depending on whether a limit of liability for a
particular form of coverage was shown in the declarations.
The two forms of coverage were identified in the policy as
"COVERAGE A (Building)" or "COVERAGE B
(Business Personal Property)." The policy provided in
relevant part as follows:
We will provide the insurance described in this policy in
return for the premium and compliance with all applicable
provisions of this policy.
COVERED CAUSES OF LOSS
We insure for direct physical loss to the covered property
caused by windstorm or hail unless the loss is excluded in
following exclusions apply to loss to covered property:
We will not pay under any and all circumstances for loss or
damage caused by or resulting from flood, surface water,
waves, storm surge, tides, tidal water, tidal waves, tsunami,
seiche, overflow of streams or other bodies of water, or
spray from any of these, all whether driven by wind or not.
We will not pay for loss or damage caused by or resulting
from rain, whether driven by wind or not unless wind or hail
first makes an opening in the walls or roof of the described
building. Then we will only pay for loss in the interior of
the building, or the insured property within, caused
immediately by rain entering through such openings.
4. Duties After Loss.
a. Your Duties After Loss. In case of a loss to covered
property caused by windstorm or hail you must:
(1) Give us prompt written notice. Include a description of
the property involved;
(2) Protect the property from further damage;
(3) Make reasonable, necessary, and temporary repairs to
protect the property;
(4) Keep an accurate record of repair expenses;
(5) Furnish a complete inventory of damaged personal property
showing the quantity, description, and amount of loss. Attach
all bills, receipts and related documents which you have that
justify the figures in the inventory. . . .
10. Appraisal. If you and we fail to agree on the actual cash
value, amount of loss, or cost of repair or replacement,
either can make a written demand for appraisal. Each will
then select a competent and independent appraiser and notify
the other of the appraiser's identity within 20 days of
receipt of the written demand. The two appraisers will choose
a competent and independent umpire. If they cannot agree upon
an umpire within 15 days, you or we may request that the
choice be made by a judge of a district court of a judicial
district where the loss occurred. The two appraisers will
then determine the amount of loss, stating separately the
actual cash value and loss to each item.
If the appraisers fail to agree, they will submit their
differences to the umpire. An itemized decision agreed to by
any two of these three and filed with us will determine the
amount of the loss.
Each party will pay its own appraiser and bear the other
expenses of the appraisal and umpire equally.
Ike struck Galveston County, Texas on September 13, 2008,
during the effective dates of the TWIA policy. Three days
later, DISD notified TWIA of windstorm damage to several of
its buildings. TWIA acknowledged DISD's claim and hired
an adjuster to manage the claim. TWIA's adjuster and DISD
personnel inspected DISD's campuses and documented the
damage found. TWIA's adjuster verified damages exceeding
policy deductibles on numerous insured structures and sent
the documentation to DISD personnel for review. In December
2009, TWIA paid DISD $220, 232.85 for these damages. DISD
subsequently signed a proof of loss, reflecting the cash
value of the claim, as well as depreciation that TWIA would
pay upon completion of repairs. TWIA paid DISD recoverable
depreciation of $8, 667.80 in March 2010.
September 2011, DISD contacted TWIA concerning a roof on one
of DISD's buildings. DISD had replaced the roof and
sought reimbursement of $1, 550, 645.75 as additional damages
caused by Hurricane Ike. TWIA paid $999, 577.19 for this
supplemental claim in October 2011 (DISD's "Roof
Claim"), though apparently no documentation was provided
establishing a wind-created opening on the roof. This amount
did not include general contractor overhead and profit
amounts. In March 2012, DISD provided a new sworn proof of
following September, DISD filed the instant lawsuit against
TWIA. DISD claimed that TWIA breached its contract, violated
the Texas Insurance Code, breached its duties of good faith
and fair dealing, and committed fraud. Prior to filing suit,
DISD did not notify TWIA of any additional losses it
contended were covered under the policy. TWIA asserted a
general denial and several affirmative defenses.
demanded that TWIA pay $311, 623.04 for overhead and profit
related to DISD's Roof Claim, $292, 942.12 in statutory
interest, and $225, 000 for attorney's and expert fees,
for a total of $829, 566.16. In response, TWIA invoked
the policy's appraisal clause.
designated Mark Domangue as its appraiser, and TWIA selected
Jonathan Held. The trial court appointed former judge Donnie
Ray Burgess as umpire over TWIA's objection. Initial
appraisal inspections occurred between October 1 and October
9, 2013. By that time, DISD already had repaired, replaced,
or sold some of the damaged property for which it claimed
further compensation was due under the policy. Domangue
provided Held his initial damages estimates in early June
2014. Held reciprocated two months later and also sent
Domangue a comparison detailing the differences in their
initial estimates. Held and Domangue met to review estimates.
They agreed to some items and changes, but were unable to
agree on an overall damages estimate. They were to exchange
revised estimates for final review before meeting with
Burgess. Domangue did not provide Held with his revised
appraisal, but instead informed Held that the revisions were
not "significant" and would not change his overall
inspected DISD's buildings in March 2015. Neither Held
nor Domangue were present when Burgess inspected the
buildings. Burgess, Held, and Domangue met in early April
2015 to review the appraisers' estimates. At this
meeting, Held discovered that Domangue's revised
estimates increased DISD's claim by $6 million.
Burgess and Domangue signed an appraisal award that totaled
$10, 815, 967.43 (the "Appraisal Award"). Held did
not sign the Appraisal Award.
the Appraisal Award was issued, DISD filed several motions
for partial summary judgment, including a no-evidence motion
regarding TWIA's affirmative defenses to the Award, a
traditional motion on causation or alternatively to exclude
evidence of causation, a traditional motion on the amount of
DISD's damages, and a traditional motion on DISD's
breach of contract claim. The trial court denied DISD's
motions on TWIA's affirmative defenses and DISD's
contract claim. The relevant motions for purposes of this
appeal are DISD's motions on causation and property
damages. In both motions, DISD argued that the Appraisal
Award conclusively established certain elements of DISD's
breach of contract claim, namely the amount of damages caused
by wind from Hurricane Ike.
filed responses to both motions, arguing that the Appraisal
Award did not conclusively establish, or address, whether the
damages identified therein were caused by a covered peril.
TWIA also provided, inter alia, evidence that
DISD's alleged damages were caused by events other than
covered perils. The trial court granted DISD's motions on
causation and property damages less than a week before trial
pretrial hearing, DISD argued that the court's summary
judgment orders on causation and damages foreclosed all of
TWIA's affirmative defenses, as well as any argument or
evidence by TWIA at trial that any portion of the damages
listed in the Appraisal Award were not covered by the policy.
TWIA responded that, regardless of the partial summary
judgment orders, it was entitled to introduce evidence
supporting its affirmative defenses and that DISD still had
"to prove coverage." The trial court ruled that the
summary judgment order on damages "forecloses all
affirmative defenses regarding the amount of damages."
Similarly, the trial court ruled that "the issue of
causation is foreclosed given that there is an appraisal and
the previous decisions made regarding this
commenced after the pretrial hearing. Because DISD had
nonsuited its extra-contractual claims pretrial, the only
remaining disputed issue for the jury to determine was
whether TWIA breached its insurance contract. After a
five-day trial, the jury was asked to decide a single issue:
"Did Texas Windstorm Insurance Association fail to
comply with the agreement entitled Texas Windstorm Insurance
Association Policy Windstorm and Hail?" The jury
answered, "Yes." Based on the jury's verdict,
DISD moved to enter judgment; TWIA opposed entry on various
grounds. The trial court signed a final judgment in which it
ordered that DISD recover from TWIA a total of $9, 602,
542.82, comprised of the following amounts: $8, 193, 168.85
for the Appraisal Award less prior payments, deductibles, and
sales tax; $159, 373.97 in interest on the award; and $1,
250, 000.00 in attorney's fees.
timely moved for judgment notwithstanding the verdict or for
a new trial. In its motions, TWIA asserted, in pertinent
part, that no legally sufficient evidence supported causation
or coverage. Additionally, TWIA argued that, because DISD had
"de-designated" its only causation expert before
the trial court ruled on DISD's summary judgment motion,
DISD had not proved, and could not prove, that the Appraisal
Award reflected only damages covered by the insurance policy.
TWIA also challenged the trial court's striking of its
affirmative defenses. TWIA's post-trial motions were
overruled by operation of law, and this appeal timely
first issue, TWIA claims that the trial court erred in
granting partial summary judgment on causation and damages.
As part of this issue, TWIA argues that DISD did not
conclusively establish how much of DISD's alleged
damages, if any, were caused by wind and covered by the
policy because the Appraisal Award by itself fails to prove
these contested issues.
Standard of Review
review a trial court's grant of summary judgment de novo.
Exxon Corp. v. Emerald Oil & Gas Co., 331 S.W.3d
419, 422 (Tex. 2010). A trial court properly grants summary
judgment if the movant establishes that there is no genuine
issue of material fact and that the movant is entitled to
judgment as a matter of law. Tex.R.Civ.P. 166a(c); Gastar
Exploration Ltd. v. U.S. Specialty Ins. Co., 412 S.W.3d
577, 582 (Tex. App.-Houston [14th Dist.] 2013, pet. denied).
We indulge every reasonable inference and resolve all doubts
in the non-movant's favor. Gonzalez v. Mission Am.
Ins. Co., 795 S.W.2d 734, 736 (Tex. 1990).
movant seeking a traditional summary judgment must establish
its right to that relief by conclusively proving all elements
of the movant's claim as a matter of law. See
Tex. R. Civ. P. 166a(c); Havlen v. McDougall, 22
S.W.3d 343, 345 (Tex. 2000). Here, DISD moved for partial
summary judgment, so it was required to conclusively prove
only those elements raised in its motion. See Tex.
R. Civ. P. 166a(a) (explaining that claimant may move for
summary judgment "upon all or any part thereof" of
its claim). If the movant's motion and summary judgment
evidence facially establish its right to judgment as a matter
of law, the burden shifts to the non-movant to raise a
genuine, material fact issue sufficient to defeat summary
judgment. Dolcefino v. Randolph, 19 S.W.3d 906, 916
(Tex. App.-Houston [14th Dist.] 2000, pet. denied). On the
other hand, if the movant fails to meet its initial summary
judgment burden, the summary judgment cannot stand regardless
whether the non-movant responds. See Grynberg v. Grey
Wolf Drilling Co., 296 S.W.3d 132, 137 & n.13 (Tex.
App.-Houston [14th Dist.] 2009, no pet.) (summary judgment
must stand on its own merits; non-movant has no burden to
respond unless movant conclusively establishes entitlement to
summary judgment); see also City of Houston v. Clear
Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979)
("Summary judgments must stand on their own merits, and
the non-movant's failure to answer or respond cannot
supply by default the summary judgment proof necessary to
establish the movant's right."); Williams
Consol. I, Ltd./BSI Holdings, Inc. v. TIG Ins. Co., 230
S.W.3d 895, 900 (Tex. App.-Houston [14th Dist.] 2007, no
pet.) (movant bears burden to conclusively prove all elements
of its claim or defense).
Scope of Review
addressing whether DISD met its summary judgment burden, we
consider the scope of evidence properly included within the
summary judgment record on appeal. DISD relied on identical
evidence to support both of its motions for partial summary
judgment: (a) a copy of the TWIA policy, (b) the Appraisal
Award, (c) TWIA's live answer, and (d) TWIA's letter
invoking the appraisal process. After TWIA responded to
DISD's motions, DISD filed various replies and
supplements, which attached additional evidence. All of
DISD's evidence other than the evidence attached to its
initial motions was filed within twenty-one days of the
summary judgment hearing, which generally is not timely
absent leave of court. See Tex. R. Civ. P. 166a(c).
TWIA contends that DISD did not secure leave to file any
evidence late and that the only exhibits properly before the
trial court at the time it granted partial summary judgment
were those attached to DISD's initial motions, including
the Appraisal Award.
166a requires a party seeking summary judgment to file and
serve the motion and any supporting affidavits or evidence at
least twenty-one days before the hearing on the motion.
Tex.R.Civ.P. 166a(c). If a party intends to use discovery
products that have not been filed with the trial court clerk,
that party must file an appendix containing the evidence or a
"notice containing specific references to the discovery,
" along with a statement of intent to use the specified
discovery, within the applicable time frames. Tex.R.Civ.P.
judgment evidence, either supporting or opposing the motion,
may be filed late only with leave of court. Alphaville
Ventures, Inc. v. First Bank, 429 S.W.3d 150, 154 (Tex.
App.-Houston [14th Dist.] 2014, no pet.) (citing Tex.R.Civ.P.
166a(c); Benchmark Bank v. Crowder, 919 S.W.2d 657,
663 (Tex. 1996)); see also Lopez v. Exxon Mobil Dev.
Co., No. 14-16-00826-CV, 2017 WL 4018359, at *5 (Tex.
App.-Houston [14th Dist.] Sept. 12, 2017, pet. denied) (mem.
op.). Leave to file summary judgment evidence late may be
shown by a separate order, a recital in the summary judgment
order, or an oral ruling contained in the reporter's
record of the summary judgment hearing. Alphaville
Ventures, 429 S.W.3d at 154 (citing Pipkin v. Kroger
Tex., L.P., 383 S.W.3d 655, 663 (Tex. App.-Houston ...