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Seim v. Allstate Texas Lloyds

Court of Appeals of Texas, Second District, Fort Worth

July 30, 2019

Richard Seim and Linda Seim, Appellants
v.
Allstate Texas Lloyds and Lisa Scott, Appellees

          On Appeal from the 141st District Court Tarrant County, Texas Trial Court No. 141-270531-14

         Before the En Banc Court Memorandum Opinion on Remand and on En Banc Reconsideration by Justice Gabriel (joined by Justices Kerr, Birdwell, Bassel, and Womack) Dissenting Memorandum Opinion on Remand and on En Banc Reconsideration by Chief Justice Sudderth (joined by Justice Pittman.)

          MEMORANDUM OPINION ON REMAND AND ON EN BANC RECONSIDERATION

          LEE GABRIEL, JUSTICE

         Appellants Richard and Linda Seim appeal from the trial court's summary judgment dismissing their contractual and extracontractual claims against their home insurer and its adjuster, appellees Allstate Texas Lloyds and Lisa Scott, after the Seims' claim for water damage to their home was denied. On original en banc submission, we affirmed the trial court's summary judgment and held that because the Seims' expert's two causation reports and supporting affidavit were effectively unsworn, none raised a fact issue on any of the Seims' claims. Seim v. Allstate Tex. Lloyds, No. 02-16-00050-CV, 2017 WL 1738028, at *5-6 (Tex. App.-Fort Worth May 4, 2017) (en banc) (mem. op. on reconsideration) ("We are thus left with no sworn evidence that the Seims' loss occurred during the policy period.") (hereinafter, Seim I), rev'd, 551 S.W.3d 161, 166 (Tex. 2018) (per curiam). The Texas Supreme Court, in reversing Seim I and remanding the appeal to this court, held that because Allstate and Scott did not secure a ruling on their objections to the evidence regarding the form defects, Allstate and Scott waived the objections. 551 S.W.3d at 163-64, 166 (hereinafter, Seim II).[1] On remand, a panel of this court held that the Seims' expert's reports were conclusory and incompetent to raise a fact issue-a substantive defect that requires no trial objection or ruling-scuttling the Seims' claims against Allstate and Scott. Seim v. Allstate Tex. Lloyds, No. 02-16-00050-CV, 2018 WL 5832106, at *6 (Tex. App.-Fort Worth Nov. 8, 2018) (mem. op.) (hereinafter, Seim III). We granted the Seims' motion for en banc reconsideration, withdrew the Seim III memorandum opinion and judgment, and now hold that Allstate and Scott conclusively established the affirmative defense of limitations, which was a ground asserted in their traditional summary-judgment motion. See Tex. R. App. P. 49.7. Thus, we affirm the trial court's summary judgment on this legal basis.

         I. BACKGROUND

         A. Claims for Insurance Coverage

         Clearly, the facts and procedural history surrounding this appeal have been recited multiple times. Seim II, 551 S.W.3d at 162-63; Seim III, 2018 WL 5832106, at *2-3; Seim I, 2017 WL 1738028, at *1-2. But because those opinions did not specifically address the grounds raised by Allstate and Scott in support of their summary-judgment motion in the context of rule 166a, we will explore the facts leading to the Seims' suit against Allstate and Scott and their pleadings. Tex.R.Civ.P. 166a(b)-(c), (i).

         The Seims' home was allegedly damaged after three storms blew through the Seims' neighborhood in a five-year period: on April 13, 2007; April 9, 2008; and May 8, 2012. The Seims filed claims with Allstate, which insured their home at the time of all three storms. Each storm occurred during and was governed by a different and separate contract based on the effective date of each contract. The Seims' claims for coverage-designated claim numbers 0102779105, 0112511373, and 0245019815[2]-were resolved in some manner.[3] The Seims later alleged that they "made the repairs as instructed by Allstate and had no issues of water ingress" after the damage caused by the 2012 storm was repaired.

         Allstate again issued the Seims a home-insurance policy in a separate contract, making coverage effective from April 27, 2013, through April 27, 2014. This contract provided that during the coverage period, damage "caused by rain . . ., whether or not driven by wind," would not be covered "unless the direct force of wind or hail makes an opening in the roof or wall and the rain . . . enters through this opening and causes the damage." The contract further provided that any cause of action or suit brought against Allstate "must be started within two years and one day after the cause of action accrues." See generally Godoy v. Wells Fargo Bank, N.A., 575 S.W.3d 531, 533, 537-38 (Tex. 2019) (holding contractual waiver of statutory limitations period allowed if specific and for a reasonable time).

         On August 13, 2013, a severe storm again hit the Seims' neighborhood. The Seims filed a claim with Allstate-claim number 0297959876-seeking coverage for damages to their roof and in two rooms of their home that they asserted were caused by hail and rain from this most recent storm. Scott inspected the home on September 10, 2013. During her inspection, she noticed some interior leaks, primarily around the skylights in the great room and sunroom, but found no collateral damage to the home's exterior. Scott also inspected the tile roof and found no wind or hail damage. Some of the tiles, however, had "thermal cracking," and it was apparent that prior repairs to the ridge line had been made. Scott did find a tile with a missing piece that was next to a skylight. But because there was no opening in the roof caused by wind or hail-"shingles off or hail so big that . . . it's gone through and water can penetrate"-Scott concluded that any new damage was not covered under the policy. Scott did not inspect the attic, which she would do "sometimes," because she had not seen any damage to the roof caused by wind or hail. The same day as Scott's inspection, Allstate formally denied the claim and informed the Seims in the denial letter that because "[t]here is no opening created by wind or hail that is causing the roof to leak, . . . there is no coverage for the interior water damage."

         B. Trial-Court Proceedings

         The Seims filed suit against Allstate on February 11, 2014, regarding its actions and inactions after the 2013 storm and its ultimate denial of the Seims' claim for coverage.[4] They raised claims for unfair settlement practices, common-law fraud, breach of contract, violations of the statutory prompt-payment-of-claims requirements (PPC), and breach of the common-law duty of good faith and fair dealing (GFFD).

         Two months later on April 15, 2014, the Seims filed a first amended petition against Allstate, the Seims' local insurance agent Maria Golseth, and Michael Pierce, the inspector who assessed the damage to the Seims' home after the 2007 storm. The factual allegations were specifically limited to the named defendants' actions and inactions regarding claim number 105-the claim the Seims filed after the 2007 storm. Indeed, the Seims exclusively referred to their "claim," not "claims," for coverage in their factual allegations.[5] Against Allstate, Maria, and Pierce, the Seims raised causes of action for unfair settlement practices and fraud. Against Allstate, the Seims additionally alleged breach of contract, PPC violations, and breach of the duty of GFFD.

         Three weeks later on May 6, 2014, the Seims filed a second amended petition against Allstate; Maria's husband Chad (who the Seims alleged sold the Allstate policy to them along with Maria); Pierce; and for the first time, Scott. Their factual allegations were limited to the claims they filed after the 2007, 2008, and 2012 storms and specified only claim numbers 105, 373, and 815. Although Scott inspected the property after the 2013 storm, the Seims alleged that Pierce and Scott "failed to conduct reasonable investigations" only after the 2007, 2008, and 2012 storms. They also alleged that Allstate "underpaid" based on "grossly deficient damage and cost of repair estimates," which led to the Seims' inability to satisfactorily repair the damage caused by the 2007, 2008, and 2012 storms. Against all named defendants, the Seims raised claims for unfair settlement practices, violations of the Deceptive Trade Practices Act (DTPA), common-law fraud, conspiracy to commit fraud, PPC violations, and breach of the duty of GFFD. Against Allstate, the Seims additionally alleged a claim for breach of contract. Allstate, Scott, and the Golseths answered the second amended petition and raised the affirmative defense of limitations.[6] See Tex. R. Civ. P. 94.

         On April 13, 2015, almost a year after the Seims filed their second amended petition, the Seims filed a notice of nonsuit of their claims against Pierce. See Tex. R. Civ. P. 163. On October 5, 2015, Allstate, Scott, and the Golseths moved for partial summary judgment regarding the claims in the second amended petition arising from the 2007 and 2008 storms based on limitations. In the motion, they noted that although the Seims' original petition raised claims regarding the 2013 storm, "[a]ll causes of action arising from this August 13, 2013 claim have been dismissed by subsequent amendments." See Tex. R. Civ. P. 65 (dictating pleading that is later amended "shall no longer be regarded as a part of the pleading in the record of the cause . . . unless it be necessary to look to the superseded pleading upon a question of limitation"). Allstate, Scott, and the Golseths also filed separate summary-judgment motions directed to the Seims' claims arising from the 2012 storm, again noting that all claims arising from the 2013 storm had been dismissed by operation of the first and second amended petitions. On October 27, 2015, the Seims noticed their nonsuit of their claims against the Golseths.

         The next day-October 28, 2015-the Seims filed a third amended petition against Allstate and Scott, almost eighteen months after they had filed the second amended petition. Their factual allegations were specifically limited to the damage to their home arising from the 2013 storm and the handling of claim number 876. The Seims acknowledged that they had "submitted claims to Allstate for damage to the roof" before August 13, 2013, but in an about-face, they averred that they "made the repairs as instructed by Allstate and had no issues of water ingress during the twelve months leading up to the August 13, 2013 storm." The Seims raised claims against Allstate and Scott for unfair settlement practices, violations of the DTPA, fraud, and conspiracy to commit fraud. Against Allstate alone, they additionally raised claims for breach of contract, PPC violations, and breach of the duty of GFFD. Allstate and Scott answered the third amended petition and again pleaded the affirmative defense of limitations.

         On November 3, 2015, Allstate and Scott moved for a no-evidence and traditional summary judgment, primarily arguing that the Seims' claims were time-barred because they did not file their third amended petition until more than two years after the 2013 claim was denied in September 2013.

         The Seims responded that their claims arising from the 2013 storm were not time-barred because they related back to the date of their original petition- February 11, 2014-which raised claims arising only from the damage caused by the 2013 storm. See Tex. Civ. Prac. & Rem. Code Ann. § 16.068 (providing amendment to petition that changes facts or grounds of liability or defense in prior petition is not subject to limitations "unless the amendment . . . is wholly based on a new, distinct, or different transaction or occurrence"); accord Fed. R. Civ. P. 15(c) (providing for relation back of amended pleading under certain circumstances, including adding a claim that "arose out of the conduct, transaction, or occurrence [originally] set out"). The Seims argued that the relation-back doctrine applied because the omission of the 2013 claims in their first and second amended petitions was inadvertent and because relation back would not prejudice Allstate and Scott. They based their no-prejudice argument on the fact that the case had proceeded as if the damages from all four storms had been at issue and because Allstate and Scott did not notify the Seims that their first and second amended petitions did not raise claims directed to the 2013 storm:

Plaintiffs did not realize at that time that the August 13, 2013 storm had been left out of the [first and second amended] petition[s]. The parties continued to conduct discovery and proceeded as though the claim related to the August 13, 2013, storm was still a part of this suit. Defendants did not raise any relevance objection to discovery relating to the claim based on the August 13, 2013 storm, and Defendants did not object when witnesses were deposed regarding that claim, or otherwise draw Plaintiff's counsel's attention to the fact that that claim had been omitted from the live pleadings. As far as Plaintiffs['] counsel can tell, the first time Defendants' counsel mentioned the absence of the claim based on the August 13, 2013 storm was in the fine print of a footnote to Defendants Chad Golseth, Maria Golseth[, ] and Lisa Scott's summary judgment motion filed on October 5, 2015. The October 5, 2015, summary judgment motion was based on a May 6, 2012, claim that was discussed in the First Amended Petition ...

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