IN THE

TENTH COURT OF APPEALS

No. 10-14-00209-CV

KARL WALLACE,

Appellant

v.

AMTRUST INSURANCE COMPANY OF KANSAS, INC.,

JOHN COLE INSURANCE AGENCY, INC. 

AND JOHN COLE, INDIVIDUALLY,

Appellee

From the 278th District Court

Walker County, Texas

Trial Court No. 1125693

MEMORANDUM OPINION ON REHEARING

In several issues, appellant, Karl Wallace, challenges summary judgments entered 

in favor of appellees, AmTrust Insurance Company of Kansas, Inc., John Cole Insurance 

Agency, Inc., and John Cole, individually. In our original opinion, we reversed the trial 

court’s judgment as to AmTrust and affirmed the judgment entered in favor of the Cole 

defendants. In response to our opinion, Wallace filed a motion for rehearing challenging 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 2

our conclusion with respect to the Cole defendants. After reviewing the record, we grant 

Wallace’s motion for rehearing, withdraw our memorandum opinion and judgment

issued January 14, 2016, and substitute the following in its place. We reverse and remand.

I. BACKGROUND

Until the time of his death in 2007, Wallace’s father lived on property located at 

1100 Lone Oak Drive in Oakhurst, Texas—a few hundred miles from Fort Worth, Texas. 

This property included both a mobile home and 130 acres of land. Because he had been 

granted a life estate in the property, Robert Guenther began living in the mobile home 

until he died in 2009. Wallace, a resident of Fort Worth, subsequently took sole 

ownership of the property in late 2009.

Realizing that the property was left vacant and that the mobile home was 

deteriorating, Wallace decided to sell the property. However, to protect his interest in 

the interim, Wallace contacted John Cole of the John Cole Insurance Agency, Inc. to 

procure insurance. Wallace transacted with Cole because Cole’s company had insured 

the property for Wallace’s father.

Because he did not have authority to sell or bind coverage on behalf of AmTrust, 

Cole had to submit an application for insurance to Stroud Insurance Agency, Inc.—a 

managing general agency that had a duty to follow the underwriting guidelines of 

AmTrust. Cole asserts that Stroud and AmTrust do not issue Farm and Ranch insurance 

policies on properties that are vacant or unoccupied at the time the insurance application 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 3

is submitted. Wallace claims that he told Cole that the property was vacant and 

unoccupied. Nevertheless, an insurance application was submitted to Stroud and 

AmTrust for approval.

Wallace admitted that, on January 12, 2010, he signed the commercial application 

of insurance that was submitted to Stroud and AmTrust for approval. Wallace further 

testified that he believed that he answered all of the application questions truthfully. In 

any event, Cole, on behalf of Wallace, indicated that the property was 100% occupied, 

among other things. Furthermore, in the Farm and Ranch Supplemental, which was 

made a part of the application, Cole indicated that none of the dwellings on the property 

were vacant or unoccupied. Once the application was completed, Cole faxed the 

document to Wallace for review. Cole instructed Wallace to verify the accuracy of the 

statements and to correct any mistakes. Without making any corrections, Wallace signed 

the application, including the Farm and Ranch Supplemental, and returned it to Cole, 

who, in turn, submitted the application to Stroud for approval. Stroud and AmTrust 

ultimately approved Wallace’s application and issued a policy, with a renewal effective 

on January 18, 2011. The policy was subsequently renewed. 

No problems arose until January 29, 2011, when a grass fire destroyed the mobile 

home on the property. In an affidavit that was executed on May 17, 2012, and later struck 

by the trial court as to the Cole defendants, Wallace noted the following:

I turned in the claim for the loss to the house the day after the loss. Within 

a week or two at most, I gave statements and answered questions posed to 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 4

me by the adjuster. At that time, the adjuster was informed that the house 

was vacant and unoccupied at the time of the loss and had been vacant and 

unoccupied since I had taken possession of it. The adjuster was also 

informed that all utilities were off at the house and had been since I had 

taken possession of the house. I told them this in response to their repeated 

requests to provide them with utility bills.

AmTrust began investigating Wallace’s claim.

In the meantime, Wallace filed suit against AmTrust and the John Cole Insurance 

Agency, asserting numerous claims against: (1) the John Cole Insurance Agency for 

violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act; and 

(2) AmTrust for breach of contract and violations of the Texas Insurance Code. 

Nevertheless, as part of AmTrust’s investigation, Wallace submitted to an examination 

under oath on July 26, 2011. Thereafter, on August 18, 2011, AmTrust sent a letter to 

Wallace’s attorney, stating:

This is to follow up on our conversation after the recent examination under 

oath of Karl Wallace. More particularly, AmTrust Insurance Company of 

Kansas, Inc. (“AmTrust”) discovered several things during the 

examination. First, it determined that the house was both vacant and 

unoccupied not only at the time of loss, but also, prior to the time that the 

application for insurance was filled out and sent to AmTrust for review. 

Mr. Wallace testified that both he and Mr. John Cole knew that the property 

was vacant and unoccupied. Mr. Wallace confirmed that it was his 

signature on the application. He was not under duress or any other 

condition that would have forced him to sign the application. Mr. Wallace 

knew that the executed application would be analyzed by AmTrust for the 

purposes of determining whether to issue the policy or not.

As we discussed, AmTrust does not issue or underwrite residential 

properties that are vacant or unoccupied. The risk of loss is simply too high. 

Accordingly, AmTrust is under no obligation to pay your client any benefits 

that he contends are due and owing under the policy.
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 5

AmTrust hereby offers to settle the case on the following terms and 

conditions. If Mr. Wallace will agree to dismiss AmTrust from the lawsuit 

with prejudice, AmTrust will immediately refund all premiums going back 

to the original policy it issued to Mr. Wallace. The first policy became 

effective on or about January 11, 2010.

Wallace declined AmTrust’s settlement offer and proceeded with his lawsuit. 

Wallace later amended his petition to include John Cole as an individual defendant. In 

his live petition, Wallace made agency claims, including liability for acts and omissions 

occurring within the scope of actual or apparent authority, and vicarious-liability and 

negligence claims against all the defendants. As to AmTrust, Wallace alleged: (1) 

statutory vicarious liability under section 4001.051 of the Texas Insurance Code; (2) that 

AmTrust violated numerous other provisions of the Insurance Code; and (3) breach-ofcontract and breach-of-the-duty-of-good-faith-and-fair-dealing claims. With respect to 

the Cole defendants, Wallace asserted claims for DTPA and Texas Insurance Code 

violations.

In response to Wallace’s petitions, the Cole defendants filed traditional and noevidence motions for summary judgment, arguing that, among other things, Wallace 

admitted that Cole did not make a misrepresentation regarding the insurance policy; the 

Cole defendants owed no duty to Wallace to procure coverage not specifically requested 

by Wallace; and the Cole defendants had no duty to extend Wallace’s insurance 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 6

protection.1 More specifically, the summary-judgment motions of the Cole defendants 

addressed Wallace’s Insurance Code and DTPA claims, but did not explicitly address his 

negligence or vicarious-liability claims.

In any event, Wallace responded to the Cole defendants’ summary-judgment 

motions and attached as exhibits Wallace’s examination under oath, deposition 

testimony from both Cole and Wallace, and Wallace’s May 17, 2012 affidavit. Later, the 

Cole defendants moved to strike Wallace’s May 17, 2012 affidavit as a sham. On 

September 25, 2012, the trial court granted the Cole defendants’ motion to strike and 

granted their traditional and no-evidence motions for summary judgment. 

Subsequently, Wallace filed a motion to reconsider the rulings on the Cole defendants’ 

motions; the trial court denied Wallace’s motion for reconsideration.

Additionally, AmTrust filed a traditional motion for summary judgment, which 

was supplemented several times to include collateral estoppel assertions and a motion 

for rescission.2 Wallace responded to AmTrust’s summary-judgment motion and 

attached as exhibits: (1) Wallace’s examination under oath; (2) deposition testimony from 

 

1

In support of their no-evidence motion for summary judgment, the Cole defendants contended 

that there was no evidence that they “committed false, misleading or deceptive acts that were a producing 

cause of actual damages to the Plaintiffs. Accordingly, Plaintiff has failed to provide any evidence 

supporting one or more elements of its DTPA claim and summary judgment is proper as a matter of law.” 

Additionally, the Cole defendants argued that there was no evidence that they violated Chapter 541 of the 

Insurance Code or that their actions or practices were a producing cause of Wallace’s actual damages.

2 Although not relevant to this appeal, AmTrust filed cross-claims for contribution and/or 

indemnity against the Cole defendants, and the Cole defendants moved for summary judgment on the 

cross-claims. AmTrust eventually non-suited its cross-claims against the Cole defendants.
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 7

both Cole and Wallace; and (3) affidavits executed by Wallace on April 10, 2012 and May 

17, 2012. Thereafter, AmTrust objected to Wallace’s May 17, 2012 affidavit, arguing that 

“[a] party cannot file an affidavit to contradict his own deposition testimony without any 

explanation for the change in the testimony, for the purpose of creating a fact issue to 

avoid summary judgment.” However, AmTrust did not obtain a ruling on its objection 

to Wallace’s affidavit. 

 On June 10, 2014, the trial court entered its final judgment, wherein the trial court: 

(1) once again denied Wallace’s motion for reconsideration and granted the Cole 

defendants’ motions for summary judgment; (2) granted AmTrust’s motion for summary 

judgment and its supplemental materials; (3) granted AmTrust’s summary judgment 

based on collateral estoppel; (4) granted AmTrust’s motion to rescind the insurance 

policies; and (5) ordered AmTrust to refund the premiums paid by Wallace for the 

insurance policies. The trial court also dismissed all of Wallace’s claims against AmTrust 

and the Cole defendants with prejudice and ordered that Wallace take nothing by his 

lawsuit. This appeal followed.

II. STANDARD OF REVIEW

Different standards of review apply to summary judgments granted on noevidence and traditional grounds. See TEX.R. CIV. P. 166a(c), (i). A no-evidence summary 

judgment is equivalent to a pre-trial directed verdict, and we apply the same legal 

sufficiency standard on review. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 8

2006). Once an appropriate no-evidence motion for summary judgment is filed, the nonmovant, here Wallace, must produce summary judgment evidence raising a genuine 

issue of material fact to defeat the summary judgment. See TEX. R. CIV. P. 166a(i). “A 

genuine issue of material fact exists if more than a scintilla of evidence establishing the 

existence of the challenged element is produced.” Ford Motor Co. v. Ridgway, 135 S.W.3d 

598, 600 (Tex. 2004). We do not consider any evidence presented by the movant unless it 

creates a fact question. Binur v. Jacobo, 135 S.W.3d 646, 651 (Tex. 2004).

“Less than a scintilla of evidence exists when the evidence is ‘so weak as to do no 

more than create a mere surmise or suspicion of fact.’” Ortega v. City Nat’l Bank, 97 S.W.3d 

765, 772 (Tex. App.—Corpus Christi 2003, no pet.) (op. on reh’g) (quoting Kindred v. 

Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). Conversely, more than a scintilla exists 

when the evidence “raises to a level that would enable reasonable and fair-minded people 

to differ in their conclusions.” Id. (citing Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 

1994)). In determining whether the non-movant has met his burden, we review the 

evidence in the light most favorable to the non-movant, crediting such evidence if 

reasonable jurors could and disregarding contrary evidence unless reasonable jurors 

could not. Tamez, 206 S.W.3d at 582; City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 

2005).

In contrast, we review the trial court’s grant of a traditional motion for summary 

judgment de novo. See Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 9

2003). When reviewing a traditional motion for summary judgment, we must determine 

whether the movant met its burden to establish that no genuine issue of material fact 

exists and that the movant is entitled to judgment as a matter of law. See TEX. R. CIV. P.

166a(c); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The movant bears the 

burden of proof in a traditional motion for summary judgment, and all doubts about the 

existence of a genuine issue of material fact are resolved against the movant. See Grant, 

73 S.W.3d at 215. We take as true all evidence favorable to the non-movant, and we 

indulge every reasonable inference and resolve any doubts in the non-movant’s favor. 

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We will affirm a 

traditional summary judgment only if the record establishes that the movant has 

conclusively proved its defense as a matter of law or if the movant has negated at least 

one essential element of the plaintiff’s cause of action. IHS Cedars Treatment Ctr. of DeSoto, 

Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004); Am. Tobacco Co. v. Grinnell, 951 S.W.2d 

420, 425 (Tex. 1997). 

When the trial court’s judgment does not specify which of several grounds 

proposed was dispositive, we affirm on any ground offered that has merit and was 

preserved for review. See Joe v. Two Thirty Nine J.V., 145 S.W.3d 150, 157 (Tex. 2004). 

Moreover, when a party moves for summary judgment under both rules 166a(c) and 

166a(i), “[we] first review the trial court’s summary judgment under the standards of rule 

166a(i).” Ridgway, 135 S.W.3d at 600. 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 10

III. AMTRUST AND THE NOTICE PROVISION OF SECTION 705.005

OF THE INSURANCE CODE

Among the many arguments advanced by Wallace on appeal is that AmTrust 

failed to meet its burden regarding a required statutory notice provision—namely, 

section 705.005 of the Insurance Code. See TEX. INS. CODE ANN. § 705.005 (West 2009). 

Section 705.005 provides the following:

(a) This section applies to any suit brought on an insurance policy issued or 

contracted for after June 29, 1903.

(b) A defendant may use as a defense a misrepresentation made in the 

application for or in obtaining an insurance policy only if the defendant 

shows at trial that before the 91st day after the date the defendant 

discovered the falsity of the representation, the defendant gave notice 

that the defendant refused to be bound by the policy:

(1) to the insured, if living; or

(2) to the owners or beneficiaries of the insurance policy, if the 

insured was deceased.

(c) This section does not:

(1) make available as a defense an immaterial misrepresentation; or

(2) affect the provisions of Section 705.004[3].

 

3 Section 705.004 of the Insurance Code states:

(a) An insurance policy provision that states that false statements made in the application 

for the policy or in the policy make the policy void or voidable:

(1) has no effect; and

(2) 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:
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 11

Id. On appeal, Wallace contends that “AmTrust did not conclusively prove that it 

provided the required notice because a fact issue remains regarding when it discovered 

the misrepresentations.”4 In making this argument, Wallace relies heavily on his May 17, 

2012 affidavit, which was struck as to the Cole defendants but not as to AmTrust.

As summary-judgment evidence, AmTrust submitted the August 18, 2011 letter it 

sent to Wallace, wherein AmTrust noted that it discovered misrepresentations during 

Wallace’s July 26, 2011 examination under oath and that AmTrust had no obligation to 

pay Wallace under the policy. However, in his May 17, 2012 affidavit, which was 

included in the summary-judgment evidence as to AmTrust, Wallace indicated that, 

among other things, he notified the AmTrust adjuster that the house was vacant and 

unoccupied at the time of the loss and had been vacant and unoccupied since he had 

taken possession of the property. See Randall v. Dallas Power & Light Co., 752 S.W.2d 4, 5 

(Tex. 1988) (“[A] deposition does not have controlling effect over an affidavit in 

 

(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 ANN. § 705.004 (West 2009).

4 The record reflects that Wallace raised this contention in his response to AmTrust’s traditional 

motion for summary judgment.
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 12

determining whether a motion for summary judgment should be granted.” (citing Gaines 

v. Hamman, 163 Tex. 61, 358 S.W.2d 557, 562 (1962))); Cantu v. Peacher, 53 S.W.3d 5, 10-11 

(Tex. App.—San Antonio 2001, pet. denied) (“Most differences between a witness’s 

affidavit and deposition are more a matter of degree and details than direct contradiction. 

This reflects human inaccuracy more than fraud.”); see also TEX. R. CIV. P. 166a(f) 

(authorizing the use of affidavits as summary-judgment evidence so long as certain 

criteria are met).5 According to Wallace, this conversation occurred within a week or two 

of the grass fire, which would have been in mid-February 2011.

Given that we take as true all evidence favorable to Wallace, and we indulge every 

reasonable inference and resolve any doubts in Wallace’s favor, see Valence Operating Co., 

164 S.W.3d at 661, we believe that the statements Wallace made in his May 17, 2012 

affidavit raise a material fact issue as to whether AmTrust complied with the notice 

provision of section 705.005(b) of the Insurance Code. See TEX. INS. CODE ANN. § 

705.005(b). In other words, the record contains competent summary-judgment evidence 

that AmTrust may have discovered Wallace’s false statements in mid-February 2011, but 

 

5 Texas Rule of Civil Procedure 166a(f) states the following, in relevant part:

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth 

facts as would be admissible in evidence, and shall show affirmatively that the affiant is 

competent to testify to the matters stated therein. Sworn or certified copies of all papers 

or parts thereof referred to in an affidavit shall be attached thereto or served therewith. 

The court may permit affidavits to be supplemented or opposed by depositions or by 

further affidavits.

TEX. R. CIV. P. 166a(f).
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 13

did not deny coverage under the policy until August 18, 2011, which was more than 

ninety days after mid-February 2011. We therefore conclude that the trial court erred in 

granting summary judgment in favor of AmTrust. See TEX. R. CIV. P. 166a(c); Knott, 128 

S.W.3d at 215; Grant, 73 S.W.3d at 215. And because AmTrust was not entitled to 

summary judgment on their misrepresentation defenses, we cannot say that it was 

entitled to rescission of the insurance policies at this time. See, e.g., Hannon, Inc. v. Scott, 

No. 02-10-00012-CV, 2011 Tex. App. LEXIS 3624, at **27-27 (Tex. App.—Fort Worth May 

12, 2011, pet. denied) (mem. op.) (“Rescission is an equitable remedy that extinguishes 

legally valid contracts that must be set aside because of, among other things, fraud. Upon 

rescission, the rights and liabilities of the parties are extinguished; any consideration paid 

is returned, together with such further special damage or expense as may have been 

incurred by the party wronged; and the parties are restored to their respective positions 

as if no contract had ever existed.”). Furthermore, we need not address Wallace’s other 

complaints regarding AmTrust because section 705.005 of the Insurance Code “applies to 

any suit brought on an insurance policy issued or contracted for after June 29, 1903,” 

because Wallace’s claims in the trial court were derived from AmTrust’s refusal to 

provide coverage under the insurance policies, and because the crux of AmTrust’s 

defense was that Wallace made misrepresentations in the insurance application—a 

scenario that is covered by Chapter 705 of the Insurance Code. See TEX. INS. CODE ANN.

§ 705.005; see also TEX. R. APP. P. 47.1, 47.4. We sustain Wallace’s first issue.
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 14

IV. THE COLE DEFENDANTS

In his second and third issues, Wallace contends that the trial court abused its 

discretion in granting the Cole defendants’ motion to strike his May 17, 2012 affidavit and 

that the trial court erred in granting summary judgment in favor of the Cole defendants. 

A. Applicable Law

“Rulings on the admission or exclusion of summary judgment evidence are 

reviewed under an abuse of discretion standard.” Moreno v. Quintana, 324 S.W.3d 124, 

127 (Tex. App.—El Paso 2010, pet. denied) (citing Barraza v. Eureka Co., A Div. of White 

Consol. Indus., Inc., 25 S.W.3d 225, 228 (Tex. App.—El Paso 2000, pet. denied)). “A trial 

court abuses its discretion when the trial court fails to act in accordance to guiding rules 

or principles.” Id. (citing Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex. 2002)).

B. Discussion

1. The Sham-Affidavit Doctrine

Here, the Cole defendants filed a motion to strike Wallace’s affidavit as a sham. 

Specifically, the Cole defendants alleged that the affidavit contradicted Wallace’s earlier 

deposition testimony and was only filed to create a fact issue to avoid summary 

judgment. The trial court ultimately granted the motion to strike Wallace’s affidavit.

In Thompson v. City of Corsicana Housing Authority, this Court declined to recognize 

the sham-affidavit doctrine and noted the following:
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 15

In one of the earliest reported cases disclosed by our research, the San 

Antonio Court of Civil Appeals had the following to say about the rule on 

affidavits made in bad faith:

While this section provides penalties for the making of affidavits in 

bad faith, the striking of the offending affidavit or pleading is not 

made one of them. We think it rather apparent that the trial judge 

was of the opinion that appellants were evasive and equivocal of 

statement and were trifling with the court by raising frivolous and 

groundless defenses. But such conclusions necessarily involve fact 

questions relating to the credibility of witnesses, which under our 

system of jurisprudence must be determined by a jury [when 

demanded] in actions to determine civil liability. A case may be 

determined by summary judgment only when no material fact issues 

are involved and questions of law alone are presented.

Toliver v. Bergmann, 297 S.W.2d 208, 210 (Tex. Civ. App.—San Antonio 1956, 

no writ) (citations omitted).

. . . .

We believe Toliver states the correct rule. It is certainly arguable that Nance 

made her affidavit in bad faith to avoid what appeared a certain summary 

judgment on her premise defect claim. However, that goes directly to her 

credibility, which is not an issue on which a court can grant a summary 

judgment. As we have said on another occasion, conflicts or inconsistencies 

in the summary judgment evidence of a single witness create a fact issue to 

be resolved by a jury.

. . . .

For these reasons, we adhere to our statement in Sosebee. If a party provides 

inconsistent or conflicting summary judgment proof, that party has created 

a fact issue for the trier of fact to resolve. As the Supreme Court has stated, 

[i]f the motion involves the credibility of affiants or deponents, or the 

weight of the showings or a mere ground of inference, the motion should 

not be granted.

It can be argued that this approach allows an unscrupulous party to 

file summary judgment affidavits solely for the purpose of creating “sham” 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 16

fact issues. However, we must rely on attorneys as officers of the court to 

honor their duty of candor toward the court. An attorney’s failure to 

observe this duty constitutes professional misconduct for which sanctions 

may be imposed.

57 S.W.3d 547, 556-58 (Tex. App.—Waco 2001, no pet.) (internal citations & quotations 

omitted); see Baker v. City of Robinson, 305 S.W.3d 783, 794 (Tex. App.—Waco 2009, pet. 

denied).

Therefore, because this Court does not recognize the sham-affidavit doctrine, we 

conclude that the trial court abused its discretion in striking Wallace’s affidavit from the 

summary-judgment record. See Baker, 305 S.W.3d at 794; Thompson, 57 S.W.3d at 556-58; 

see also Moreno, 324 S.W.3d at 127. Accordingly, in analyzing Wallace’s complaints about 

the summary judgment entered in favor of the Cole defendants, we will consider 

Wallace’s affidavit as part of the summary-judgment record.

2. The Summary Judgment in Favor of the Cole Defendants

As noted earlier, Wallace made agency claims, including liability for acts and 

omissions occurring within the scope of actual or apparent authority, and vicariousliability and negligence claims against the Cole defendants. Additionally, Wallace 

asserted DTPA and Insurance-Code violations against the Cole defendants. In response 

to Wallace’s claims, the Cole defendants filed no-evidence and traditional motions for 
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 17

summary judgment as to Wallace’s DTPA and Insurance-Code violations.6 However, the 

Cole defendants’ summary-judgment motions did not address all of Wallace’s claims.

The Texas Supreme Court has stated that: “Summary judgments, however, may 

only be granted upon grounds expressly asserted in the summary judgment motion.” G 

& H Towing Co. v. Magee, 347 S.W.3d 293, 297 (Tex. 2011) (citing TEX. R. CIV. P. 166a(c); 

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993)). “Granting 

summary judgment on a claim not addressed in the summary judgment motion therefore 

is, as a general rule, reversible error.” Id. (citing Chessher v. Sw. Bell Tel. Co., 658 S.W.2d 

563, 564 (Tex. 1983) (per curiam)).

In its final judgment, the trial court granted the Cole defendants’ summaryjudgment motions and dismissed all of Wallace’s claims against the Cole defendants with 

prejudice. As such, the trial court ordered that Wallace “take nothing by his suit” against 

the Cole defendants. This is not authorized under the law governing summary 

judgments. See Magee, 347 S.W.3d at 297; McConnell, 858 S.W.2d at 341; Chessher, 658 

S.W.2d at 564. The Cole defendants did not move for summary judgment as to all of 

 

6 The Cole defendants do assert in their summary-judgment motions that they did not “owe a legal 

duty to extend the insurance protection of Plaintiff.” However, in his live pleading, Wallace alleged that 

the Cole defendants owed him “a duty to assure that Plaintiff received the services he requested and paid 

for” and that the failure to exercise ordinary care in performing that duty proximately caused him damage. 

A review of the record demonstrates that the duty alleged by Wallace differs from the duty described by 

the Cole defendants in their summary-judgment motions. As such, it appears as if the trial court not only 

improperly granted summary judgment as to Wallace’s agency and vicarious-liability claims, but also his 

negligence claims. And even if one were to construe the Cole defendants’ summary-judgment motions as 

properly addressing Wallace’s negligence claims, after taking as true all evidence favorable to Wallace, the 

non-movant, we conclude that the record evidence raises a fact issue as to the breach element of Wallace’s 

negligence cause of action against the Cole defendants.
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 18

Wallace’s claims. Accordingly, the trial court could not grant summary judgment on 

Wallace’s negligence, agency, and vicarious-liability claims and ultimately enter a takenothing judgment in the Cole defendants’ favor. See Magee, 347 S.W.3d at 297; McConnell, 

858 S.W.2d at 341; Chessher, 658 S.W.2d at 564; see also LaGoye v. Victoria Wood Condo. Ass’n, 

112 S.W.3d 777, 786 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (“Because a trial court 

cannot grant more relief than was requested by a motion for summary judgment, the trial 

court erred in granting summary judgment on these unchallenged claims. . . . . Therefore, 

we reverse summary judgment as to the claims that are based on alleged violations of the 

Real Estate Licensing Act, breach of a duty of good faith and fair dealing, breach of a duty 

to fairly settle claims, and unfair claims settlement practices, and remand those claims to 

the trial court.” (internal citations omitted)). We therefore sustain Wallace’s second and 

third issues. 

V. CONCLUSION

Having sustained all of Wallace’s issues on appeal, we reverse the trial court’s final 

judgment as to AmTrust and the Cole defendants and remand for proceedings consistent 

with this opinion.

AL SCOGGINS

Justice
Wallace v. Amtrust Insurance Company of Kansas, Inc. Page 19

Before Chief Justice Gray,

Justice Davis, and

Justice Scoggins

Reversed and remanded

Opinion delivered and filed June 2, 2016

[CV06]