Affirmed and Memorandum Opinion filed August 13, 2024

In The

Fourteenth Court of Appeals

NO. 14-23-00063-CV

JOSE PALMA, Appellant

V.

ALLIED TRUST INSURANCE CO., Appellee

On Appeal from the County Civil Court at Law No. 1 

Harris County, Texas

Trial Court Cause No. 1187921

MEMORANDUM OPINION

Appellant Jose Palma appeals the trial court’s summary judgment in favor of 

appellee Allied Trust Insurance Co. In three issues he contends the trial court erred 

in granting summary judgment on his claims against appellee. We affirm. 

BACKGROUND

Palma purchased an insurance policy for his home with appellee. During the 

policy period, there was a fire at Palma’s home. Palma submitted an insurance 
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claim under the policy. Appellee investigated and found that Palma had a prior 

conviction for insurance fraud that was not disclosed on his application for 

insurance. Appellee sent Palma a letter in which it rescinded the policy stating that 

Palma’s misrepresentation rendered the policy void and that it would not have 

insured Palma had Palma disclosed his prior insurance fraud conviction. 

Palma filed suit against appellee for breach of contract, breach of the duty of 

good faith and fair dealing, deceptive trade practices and unconscionable conduct, 

violations of the Texas Prompt Payment of Claims Act and Insurance Code, unfair 

insurance practices, fraud, and conspiracy. Appellee answered and asserted the 

defense that it rescinded the policy because of Palma’s “material 

misrepresentation” among other affirmative defenses. 

Appellee filed a traditional motion for summary judgment arguing that 

“there is no genuine issue of any material fact that [the policy] issued to [Palma] is 

void due to [Palma’s] material misrepresentation in the policy application that he 

was never convicted of insurance fraud.” Appellee went on to argue that it 

conclusively established that: (1) the policy contained a “concealment or fraud 

provision” which voided the insurance contract; (2) Palma made a material 

misrepresentation in his Policy application; (3) appellee relied and acted upon 

Palma’s material misrepresentation; and (4) Palma’s policy is void due to his 

material misrepresentation. In support of these elements, appellee submitted five 

exhibits: (1) the policy application; (2) the policy; (3) the “DocuSign certification 

of completion;” (4) correspondence with insurance agent; and (5) Palma’s criminal 

conviction for insurance fraud. In its motion, appellee stated that it “rescinded the 

policy due to the material misrepresentation,” that Palma “made the material 

misrepresentation in his application with the intention that it be acted upon by 
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[appellee]” and “but for [Palma’s] material misrepresentation, [appellee] would 

have never entered into the policy with [Palma].” 

Palma responded, arguing that there was no intentional or material 

misrepresentation. Palma attached as evidence the letter sent by appellee stating 

the policy was void due to his misrepresentation. Palma argued that under the 

statute, “it is a question of fact whether a misrepresentation for the policy or in the 

policy itself was material to the risk or contributed to the contingency or event on 

which the policy became due and payable.” See Tex. Ins. Code § 705.004(c). 

The trial court rendered a final summary judgment in favor of appellee

without specifying the reasons therein. Palma filed a motion for new trial and 

motion for reconsideration arguing that appellee did not prove that any 

misrepresentation was either intentional or material. The trial court did not rule on 

the motion and it was denied by operation of law. 

MISREPRESENTATION IN INSURANCE APPLICATION

Palma argues that “whether a misrepresentation is material is a question of 

fact” both under the Insurance Code and common law and, therefore, summary 

judgment was improper. Palma argues that “[b]ecause no facts have been alleged 

or proven to support that the misrepresentation was material to the risk or 

contributed to the contingency or event on which the policy became due and 

payable, then it was error to grant the motion for summary judgment.” Appellee 

contends that there is “ample, undisputed evidence in the record to show that 

[Palma’s] misrepresentation was material and no evidence to the contrary.” 

Appellee points to a letter attached to Palma’s summary judgment response that it 

sent to Palma alleging that the misrepresentation was “material” and to its own 

statement that it “would have rejected this policy application but for the 

misrepresentation made in the policy.”
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A. General Legal Principles 

“We review an order granting summary judgment de novo, taking as true all 

evidence favorable to the nonmovant and indulging every reasonable inference in 

the nonmovant’s favor.” JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 

(Tex. 2021). “To be entitled to traditional summary judgment, the movant has the 

burden to prove that no genuine issue of material fact exists and that the movant is 

entitled to judgment as a matter of law.” Id. A trial court must grant a traditional 

motion for summary judgment if the evidence shows that there is no genuine issue 

of material fact and the movant is entitled to judgment as a matter of law on the 

issues expressly set out. Tex. R. Civ. P. 166a. The burden of proof never shifts to 

the non-movant unless and until the movant has established “his entitlement to 

summary judgment by conclusively proving all essential elements of his cause of 

action or defense as a matter of law.” Draughon v. Johnson, 631 S.W.3d 81, 87 

(Tex. 2021) (internal quotations omitted).

When, as here, “a trial court’s order granting summary judgment does not 

specify the grounds on which its order is based, the appealing party must negate 

each ground upon which the judgment could have been granted.” Rosetta Res. 

Operating, LP v. Martin, 645 S.W.3d 212, 226 (Tex. 2022). 

Insurance policies are contracts that establish the respective rights and 

obligations agreed to by the insurer and insured. Am. Nat’l Ins. Co. v. Arce, 672 

S.W.3d 347, 353 (Tex. 2023). Insurance policies are construed and enforced as 

contracts. Id. “[A]n insurer cannot avoid contractual liability based on a 

misrepresentation in an application for any type of insurance without pleading and 

proving: (1) the making of the misrepresentation; (2) the falsity of the 

representation; (3) reliance by the insurer; (4) the intent to deceive on the part of 

the insured in making the same; and (5) materiality of the representation.” Id. at 
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353–54 (citing Mayes v. Mass. Mut. Life Ins. Co., 608 S.W.2d 612, 616 (Tex. 

1980)). 

Section 705.004 constrains an insurer’s ability to avoid an insurance 

obligation based on misrepresentation in an insurance application. See id. at 356 

(“Both the statutory and the common-law elements govern an insurer’s 

misrepresentation defense because, grammatically, section 705.051 [Immaterial 

Misrepresentation in Life, Accident, or Health Insurance Application] states 

conditions that are necessary, not sufficient, to defeat recovery.”). Section 

705.004, provides:

§ 705.004. Policy Provision: Misrepresentation in Policy Application

(a) An insurance policy provision that states that false statement made 

in the application for the policy or in the policy made the policy 

void or voidable:

(1)has no effect; and

(2)is not a defense in a suit brough on the policy.

(b)Subsection (a) does not apply if it is shown at trial that the matter 

misrepresented:

(1)was material to the risk; or

(2) contributed to the contingency or event on which the policy 

became due and payable.

(c) It is a question of fact whether a misrepresentation made in the 

application for the policy or in the policy itself was material to the 

risk or contributed to the contingency or event on which the policy 

became due and payable. 

Tex. Ins. Code § 705.004. “Materiality is viewed as of the time of the issuance of 

the policy, . . . and if the representation concerned a matter which was material to 

the risk at that time, and did actually induce the insurer to issue the policy, . . . it is 

grounds for avoidance of the policy without proof that the condition 
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misrepresented actually caused the loss.” Robinson v. Reliable Life Ins. Co., 554 

S.W.2d 231, 234 (Tex. App.—Dallas 1977), aff’d, 569 S.W.2d 28 (Tex. 1978). 

B. Analysis

In its motion for summary judgment, appellee argued that Palma made a 

“material misrepresentation” because he indicated he had never been convicted of 

a “felony, arson, or insurance fraud.” On appeal appellee points to the letter it sent 

Palma rescinding the policy as conclusive evidence that Palma’s misrepresentation 

was material to the risk. In the letter, appellee states that it would not have issued 

the policy had it known of Palma’s prior conviction for insurance fraud. The 

“Applicant’s Statement” in the policy application indicates that Palma agreed the 

policy would be void “if such information is false or misleading in any way that 

would affect the premium charged or eligibility of the risk based on company 

underwriting guidelines.” Appellee, in its letter, indicated that it would not agree 

to the policy at all, necessarily affecting the premium charged, if it had known the 

truth at the time it issued the policy. See Jackson v. Nat’l Life & Accident Ins. Co., 

161 S.W.2d 536, 537–38 (Tex. App.—Dallas 1942, writ. ref’d w.o.m.) 

(representation that insured had not been injured and had not consulted a physician 

was material to the risk since insurer’s knowledge of these facts would influence it 

in making the contract); Indiana & Ohio Live Stock Ins. Co. v. Smith, 157 S.W. 

755, 756 (Tex. App.—Austin 1913, writ ref’d) (misrepresentation concerning 

amount paid for insured livestock was material to the risk since facts showed 

representation induced insurer to write the policy); see also Hinna v. Blue Cross 

Blue Shield of Tex., No. 4:06-CV-810-A, 2007 WL 3086025, at *6 (N.D. Tex. Oct. 

22, 2007) (evidence supporting element that misrepresentation was material to the 

risk included a “risk committee report” and letter rescinding plaintiff’s policy 

because the two items established that had the insurer known of the risk at the time 
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of the application, the insurer would have issued the policy with an exclusion for 

that risk). Thus, through submission of this evidence, appellee established that 

Palma’s misrepresentation was material to the risk. 

Palma does not point to any evidence in the record raising a genuine issue of 

material fact on this element. Instead, Palma asserts that whether a 

misrepresentation is material to the risk is always a question of fact, precluding 

summary judgment. Palma contends the statute supports this interpretation

because the Insurance Code states “[i]t is a question of fact whether a 

misrepresentation made in the application for the policy or in the policy itself was 

material to the risk.” See Tex. Ins. Code § 705.004(c). 

“The purpose of a summary judgment is to ‘provide a method of summarily 

terminating a case when it clearly appears that only a question of law is involved 

and that there is no genuine issue of fact.’” G & H Towing Co. v. Magee, 347 

S.W.3d 293, 296–97 (Tex. 2011) (quoting Gaines v. Hamman, 358 S.W.2d 557, 

562 (Tex. 1962)). Various elements of claims may be a “question of fact” where 

there is an actual, genuine dispute between the parties about the facts. However, 

when no genuine issues of material facts exist, a court may properly grant 

summary judgment because there are no facts to find. See IKB Indus. (Nigeria) 

Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 441 (Tex. 1997) (“[I]f summary judgment 

is proper, there are no facts to find.”); see also Kholaif v. Safi, 636 S.W.3d 313, 

318 (Tex. App.—Houston [14th Dist.] 2021, pet. denied) (“When a party cannot 

show a material fact issue, there is nothing to submit to the jury, and the rendition 

of summary judgment does not violate the right to a jury.”).

Here, appellee submitted its undisputed evidence establishing its affirmative 

defense. Palma did not respond with evidence to dispute the facts as stated by 
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appellee. We have already concluded summary judgment was proper because 

Palma failed to submit evidence to raise a genuine issue of material fact. 

We overrule Palma’s first issue.

RELIANCE

In his second issue Palma argues that appellee could not have relied on his 

misrepresentation because the policy application was not submitted until after 

appellee had issued the policy. Appellee argues Palma has waived this argument 

because it was not presented to the trial court. Palma concedes that it was “not 

specifically mentioned in the argument section” of its response, but nevertheless 

was raised by the summary judgment evidence—pointing to the letter sent by 

appellee to Palma rescinding the policy and two other exhibits. 

We disagree with Palma that this issue was raised by the submission of this 

evidence. “Issues a non-movant contends avoid the movant’s entitlement to 

summary judgment must be expressly presented by written answer to the motion or 

by other written response to the motion and are not expressly presented by mere 

reference to summary judgment evidence.” McConnell v. Southside Indep. Sch. 

Dist., 858 S.W.2d 337, 341 (Tex. 1992). 

We overrule Palma’s second issue. 

STATUTORY CONSTRUCTION 

In his third issue, Palma contends that the proper interpretation of “if it is 

shown at trial” means that a policy cannot be voidable unless “the case goes to 

trial.” Palma did not make this argument below to the trial court as a basis for 

avoiding summary judgment. As a result, it has not been preserved for our review. 

See id.; see also TXU Portfolio Mgmt. Co., L.P. v. FPL Energy, LLC, 529 S.W.3d 

472, 479–80 (Tex. App.—Dallas 2016, no pet.) (discussing whether statutory 
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construction argument was preserved for review). Even if we concluded it was 

preserved, we disagree with Palma’s interpretation. 

Section 705.004 provides: 

(a) An insurance policy provision that states that false statement made 

in the application for the policy or in the policy made the policy 

void or voidable:

(3)has no effect; and

(4)is not a defense in a suit brought on the policy.

(b)Subsection (a) does not apply if it is shown at trial that the matter 

misrepresented:

(3)was material to the risk; or

(4) contributed to the contingency or event on which the policy 

became due and payable.

Tex. Ins. Code § 705.004 (emphasis added). Put simply, the plain language of the 

statute indicates that a policy provision rendering the policy void or voidable for 

any false statement made in the application is ineffective and is not a defense to a 

suit brought to enforce the policy. See id. Instead, such a provision is a defense if 

the insurer demonstrates the misrepresentation was material to the risk or 

contributed to the contingency or event on which the policy became payable or 

due. See id. As detailed above, the common law provides other requirements that 

the insurer must also demonstrate to establish its defense. See Arce, 672 S.W.3d at 

353–54 (citing Mayes v. Mass. Mut. Life Ins. Co., 608 S.W.2d 612, 616 (Tex. 

1980)). None of these requirements obviates the insurer’s ability to obtain 

summary judgment on its defense when the facts are undisputed. Palma has not 

articulated any reason for instilling such a requirement or provided any case law 

supporting his interpretation. 

We overrule Palma’s third issue. 
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CONCLUSION

Having overruled Palma’s issues on appeal, we affirm the judgment of the 

trial court. 

 /s/ Ken Wise 

Ken Wise 

 Justice

Panel consists of Chief Justice Christopher and Justice Wise and Jewell.