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Kee v. Safeco Insurance Co. of Indiana

United States District Court, N.D. Texas, Dallas Division

October 31, 2019

CAROLYN KEE, Plaintiff,
v.
SAFECO INSURANCE COMPANY OF INDIANA, Defendant.

          MEMORANDUM OPINION AND ORDER

          David C. Godbey United States District Judge.

         This Memorandum Opinion and Order addresses Defendant Safeco Insurance Company of Indiana's (“Safeco”) motion for summary judgment [11]. For the reasons below, the Court grants in part and denies in part Safeco's motion.

         I. Origin of the Dispute

         This case arises from a claim for storm damage filed by Plaintiff Carolyn Kee (“Kee”) under her homeowner's insurance policy. Pltf.'s Brief Resp. Mot. Summary Judgment 1 [12]. Kee alleges that Safeco, her insurer, conducted an inspection of her property and reported minimal damage falling below her policy's deductible. Id. Kee filed suit against Safeco alleging a breach of contract claim, Texas Prompt Payment of Claims Act claim, and extracontractual claims under the Texas Insurance Code. Original Pet. [1.3]. Safeco then pursued a binding appraisal process, provided under the insurance policy; the resulting appraisal award was significantly higher than Safeco's initial damage assessment. Pltf.'s Brief Resp. Mot. Summary Judgment 1-2 [12]. Upon payment of the appraisal award, Safeco sought summary judgment on all Kee's claims.

         II. Summary Judgment Legal Standard

         Courts “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In making this determination, courts must view all evidence and draw all reasonable inferences in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).

         The moving party bears the initial burden of informing the court of the basis for its belief that there is no genuine issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movant has made the required showing, the burden shifts to the nonmovant to establish that there is a genuine issue of material fact such that a reasonable jury might return a verdict in its favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). Factual controversies are resolved in favor of the nonmoving party “‘only when an actual controversy exists, that is, when both parties have submitted evidence of contradictory facts.'” Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th Cir. 1999) (quoting McCallum Highlands, Ltd. v. Washington Capital Dus, Inc., 66 F.3d 89, 92 (5th Cir. 1995)).

         III. The Court Denies Safeco's Motion for Summary Judgment on Kee's Breach of Contract Claim

         A. Estoppel Legal Standard

         Under Texas law, estoppel is an affirmative defense to a breach of contract claim. Church on the Rock N. v. Church Mut. Ins. Co., 2013 WL 497879, at *6 (N.D. Tex. Feb. 11, 2013) (citing Richardson v. Allstate Tex. Lloyd's, 235 S.W.3d 863, 865 (Tex. App. - Dallas 2007, no pet.)). A party asserting estoppel must show that (1) a binding and enforceable appraisal award exists; (2) the insurer timely paid the award; and (3) the insured accepted the payment. See Blum's Furniture Co., Inc. v. Certain Underwriters at Lloyds London, 459 Fed.Appx. 366, 368 (5th Cir. 2012) (quoting Franco v. Slavonic Mut. Fire Ins. Ass'n, 154 S.W.3d 777, 787 (Tex. App. - Houston [14th] 2004, no pet.)). Timeliness of payment, for purposes of an estoppel defense, is determined by the parties' contract. Church on the Rock N., 2013 WL 497879, at *6. When a party moves for summary judgment on a breach of contract claim, raising estoppel, that party bears the burden of proof. Id.

         B. Safeco Has Not Met Its Burden of Proof on its Estoppel Defense Because it Has Not Established the Timeliness of Payment

         Kee argues that Safeco has not met its burden of proof on its estoppel defense because it has not provided evidence establishing timeliness of payment. The Court agrees. While Safeco asserts it timely paid the entirety of the appraisal award in compliance with Texas Insurance Code provisions, Def.'s Mot. Summary Judgment 3 [11], these requirements govern timeliness for TPPCA claims and are insufficient to establish timeliness of payment for purposes of estoppel. See Church on the Rock N., 2013 WL 497879, at *6. Safeco has not produced the parties' insurance contract or any other evidence of appraisal requirements set forth in the contract that would show timeliness. Because there is a genuine dispute of material fact regarding whether payment of the appraisal award was timely under the insurance contract, the Court denies summary judgment on the breach of contract claim and grants Safeco leave to refile.

         IV. The Court Denies Safeco's Motion for Summary Judgment on Kee's TPPCA Claim

         A. ...


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