Opinion ID: 2831441
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: LaWayne Greene’s homeowners’ insurance policy provides that the coverage for damage to her house “will be suspended effective 60 days after the dwelling becomes vacant” and will “remain suspended during such vacancy.” It is undisputed that Greene’s home had been vacant for more than sixty days when it was damaged by a fire. Greene contends that the vacancy provision should not apply and the policy should cover her loss because: (1) it is unenforceable under an anti-technicality statute, see TEX. INS. CODE § 862.054; (2) it is unenforceable under our material-breach coverage cases because the vacancy did not contribute to the fire or otherwise prejudice the insurer, see Lennar Corp. v. Markel Am. Ins. Co., 413 S.W.3d 750, 755 (Tex. 2013); Prodigy Commc’ns Corp. v. Agric. Excess & Surplus Ins. Co., 288 S.W.3d 374, 375 (Tex. 2009); PAJ, Inc. v. Hanover Insurance Co., 243 S.W.3d 630, 631 (Tex. 2008); Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 694 (Tex. 1994); and (3) it is unenforceable on public policy grounds under Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 937 (Tex. 1984). The Court rejects Greene’s arguments and enforces the vacancy provision, concluding that section 862.054, our material-breach coverage cases, and Puckett do not apply. I agree that section 862.054 does not apply, and I agree that we should not impose a prejudice requirement in this case, either under our material-breach cases or under Puckett’s public policy approach. But I do not agree that our four material-breach coverage cases are distinguishable from this case. In those cases, we held that insurers could not deny coverage based on policy provisions that defined the scope of coverage in terms of certain conduct by the insured (specifically, in those cases, the 2 insured’s untimely notice of a claim or settlement of a claim without the insurer’s consent) unless the insurer showed that the conduct prejudiced its interests. See Lennar, 413 S.W.3d at 755; Prodigy, 288 S.W.3d at 375; PAJ, 243 S.W.3d at 632; Hernandez, 875 S.W.2d at 694. Here, we hold that the insurer can deny coverage based on a policy provision that defines the scope of coverage in terms of certain conduct by the insured (specifically, the insured’s vacating the home for more than sixty days) regardless of whether the conduct prejudiced the insurer’s interests. As I1 and others before me2 have observed, the Court incorrectly based its holdings in Hernandez, PAJ, Prodigy, and Lennar on a faulty application of the material-breach rule. Today, the entire Court agrees that the material-breach rule does not apply, but it cannot meaningfully distinguish this case from those. For the very reasons the Court finds the material-breach rule does not apply in this case, it did not apply in Lennar, Prodigy, PAJ, and Hernandez. I would therefore disapprove of the reasoning in those cases. To promote stability and consistency in our jurisprudence, I would leave our holdings in those cases in place, but I would expressly decline to extend those holdings beyond the specific kinds of notice-of-claim and consent-to-settlement provisions at issue in them. I acknowledge that this is not a perfect solution because, for purposes of imposing the prejudice requirement, those kinds of provisions are not logically distinguishable from the vacancy clause at issue in this case. But it is the Court’s best option at this point because it will fulfill the public expectations that those decisions have created while providing predictability and certainty for the future. While illogical certainty is admittedly undesirable, it is at least better than the illogical uncertainty that will result from the Court’s decision in this case. 1 See Lennar, 413 S.W.3d at 765–66 (Boyd, J., concurring). 2 See Prodigy, 288 S.W.3d at 383–89 (Johnson, J., joined by Hecht and Willett, JJ., dissenting); Id. at 383 (Wainwright, J., concurring); PAJ, 243 S.W.3d at 637–45 (Willett, J., joined by Hecht, Wainwright, and Johnson, JJ., dissenting); Hernandez, 875 S.W.2d at 694–95 (Enoch, J., dissenting). 3