Court Opinion

ID: 7800516
Source: CourtListenerOpinion
Date Created: 2022-08-15 09:14:10.250719+00
Date Added: 2024-06-11T16:29:06.524509
License: Public Domain

In the
                  Court of Appeals
          Second Appellate District of Texas
                   at Fort Worth
               ___________________________
                    No. 02-21-00335-CV
               ___________________________

         JAMES PIOT AND MARILEE PIOT, Appellants

                               V.

ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY, CHRIS
       WHITMIRE, AND MICHAEL PATTERSON, Appellees

            On Appeal from the 431st District Court
                   Denton County, Texas
                Trial Court No. 21-8729-431

           Before Sudderth, C.J.; Kerr and Birdwell, JJ.
         Memorandum Opinion by Chief Justice Sudderth
                           MEMORANDUM OPINION

                                   I. Introduction

      After a pipe in their house sprung a leak, Appellants James Piot and Marilee

Piot filed an insurance claim with their insurer, Appellee Allstate Vehicle and Property

Insurance Company. Both sides agree that the insurance policy limited any claim

from a leak originating “within or below the slab or foundation of the dwelling” to

$5,000. The Piots contended that because the leak originated above the foundation,

they were entitled to coverage for the full $611,116 policy limit, but after Allstate

determined that the leak originated below the home’s foundation, it paid the Piots

only $5,000 on their claim.

      The Piots sued Allstate for breaches of contract and the duty of good faith and

for violations of the Insurance Code and Deceptive Trade Practices Act. They also

sued Allstate and two of its insurance adjusters, Appellees Chris Whitmire and

Michael Patterson, for promissory estoppel, asserting that Whitmire and Patterson

had told them that the claim was covered to the full policy limit, and that based on

those representations, the Piots authorized repairs with Regent Restoration, Inc.1 The

Appellees prevailed on a traditional summary judgment, and the Piots now appeal,

arguing in three issues that genuine issues of material fact concerning the leak’s source

      1
       Regent intervened in the lawsuit but is not a party to this appeal.

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and the adjusters’ coverage statements should have precluded summary judgment.

We agree and reverse.

                        II. Traditional Summary Judgment

      In a summary judgment case, the issue on appeal is whether the movant met its

summary judgment burden by establishing that no genuine issue of material fact exists

and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P.

166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.

2009). We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315

S.W.3d 860, 862 (Tex. 2010).

      We consider the evidence presented in the light most favorable to the

nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could,

and disregarding evidence contrary to the nonmovant unless reasonable jurors could

not. Mann Frankfort, 289 S.W.3d at 848. We indulge every reasonable inference and

resolve any doubts in the nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392,

399 (Tex. 2008). A defendant that conclusively negates at least one essential element

of a plaintiff’s cause of action is entitled to a summary judgment on that claim. Frost

Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010); see Tex. R. Civ. P.

166a(b), (c). To prevail on a traditional summary judgment, the movant must produce

conclusive evidence establishing its right to summary judgment before the burden

shifts to the plaintiff to come forward with competent controverting evidence to raise

a fact issue. See Van v. Peña, 990 S.W.2d 751, 753–54 (Tex. 1999).

                                            3
                                    III. Analysis

A.    Breach of Contract Claim

      The Piots contend in their first issue that the trial court erred by granting

summary judgment on their breach of contract claim against Allstate. We agree.

      In its motion for summary judgment, Allstate argued that the leak had

originated below the foundation, thus precluding the Piots’ breach of contract claim.

In support, Allstate attached an affidavit from a claims analyst stating that the

company had determined the leak’s below-foundation origin based on “information

gleaned during the claim investigation process” and a report from American Leak

Detection (ALD) stating that the leak had originated below the foundation.

      We first note that the burdens of proof imposed upon the Piots and Allstate

differ depending on the stage at which adjudication is sought. To prevail at trial on

the merits on their breach of contract action against Allstate, the Piots would bear the

burden to prove that the leak originated above, not below, their home’s foundation.

But for Allstate to prevail on the breach of contract action by way of its traditional

motion for summary judgment, the burden was on Allstate to conclusively disprove

that the leak originated above the foundation.2 To that end, Allstate produced a single

      2
        Allstate contended at trial, and it contends on appeal, that its summary
judgment evidence conclusively negated the Piots’ contention that the leak originated
above the foundation by conclusively proving the opposite, i.e., that the leak
originated below the foundation. See City of Keller v. Wilson, 168 S.W.3d 802, 814–15
(Tex. 2005) (discussing, generally, the concept of legally insufficient evidence on a
vital fact issue when the opposite of the vital fact is proven as a matter of law). As

                                           4
piece of summary judgment evidence—the inspection report by ALD stating that the

origin of the leak was located below the slab foundation.3 Assuming, without holding,

that this single report rose to the level of conclusive proof sufficient to support a

traditional summary judgment motion, the Piots impeached that evidence with

testimony from Derrick J. Hahn, one of the Piots’ attorneys, who testified that the

author of the ALD report admitted to Hahn that he had not inspected the property to

determine the source of the leak:

      5.     I spoke with Mr. Gonzales with regard to the specific statement in
      his report that the leak was “[b]elow slab.”

             6.    I inquired of Mr. Gonzales as to what methodology he
      employed to make the determination that the leak was below the slab
      versus above the slab. I learned from my conversation with Mr.
      Gonzalez that he did not actually perform any inspection to make a
      specific determination as to whether the leak was below the slab or
      above the slab. I learned from Mr. Gonzalez that the reference to
      “[b]elow slab” was merely his opinion.

            7.    I inquired of Mr. Gonzales as to whether his report could
      be corrected to accurately reflect that he did not actually perform an

discussed below, however, the “conclusive proof” that Allstate relies upon was not
conclusive at all. Its reliability was impeached, thus creating doubt as to a fact issue
that must be resolved in the Piots’ favor on summary judgment review. See id. at 820
(noting that jurors may even disregard testimony from a disinterested witness that has
not been impeached, and a reviewing court must “assume they did so in favor of their
verdict, and disregard it in the course of legal sufficiency review”).
      3
        On appeal, Allstate focuses primarily upon the Piots’ lack of summary
judgment evidence proving that the leak originated above the foundation, but that
puts the cart before the horse. Allstate, not the Piots, bore the initial burden. Allstate
was required to bring conclusive proof to negate the Piots’ claim that the leak
originated above the foundation.

                                            5
      inspection to make a specific determination as to whether the leak was
      below the slab or above the slab.

             8.    I learned from Mr. Gonzales that the company policy
      prohibited him from changing any language in his reports once they are
      written.

             9.     I further inquired of Mr. Gonzales as to whether company
      policy also prevented him from making changes to the report to correct
      inaccurate statements. I learned from Mr. Gonzales that the company
      policy did prohibit such changes.

Allstate did not object to Hahn’s affidavit, nor did it obtain a ruling excluding it. See

Tex. R. Evid. 802 (providing that “[i]nadmissible hearsay admitted without objection

may not be denied probative value merely because it is hearsay”).

      On appeal, Allstate argues that Hahn’s affidavit “presents no evidence that the

leak originated above the foundation, which was the one critical fact the Piots had to

establish to avoid summary judgment.” But Allstate’s argument reverses the burden

of proof. Because, at the traditional summary judgment stage, Allstate bore the

burden to conclusively negate the Piots’ contention that the leak originated above the

foundation, the Piots did not have to “establish” that the leak did originate above the

foundation to avoid summary judgment; they only had to raise a fact issue as to

Allstate’s contention that the leak did not originate above the foundation.4        And

      4
        Allstate did not file a no-evidence motion for summary judgment, which
would have shifted the burden to the Piots to produce more than a scintilla of
evidence to prove that the leak’s source was above the foundation. See Tex. R. Civ. P.
166a(i) (allowing a party, without presenting evidence, to file a no-evidence summary
judgment motion, which places the burden of proof on the nonmovant to produce

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impeachment of the sole piece of evidence that Allstate offered to conclusively

disprove the Piots’ contention that the leak originated above the foundation was

sufficient to defeat Allstate’s motion.

       Allstate relied exclusively on the report that Gonzales created,5 and the Piots

countered with probative evidence that, if believed, would show that Gonzales’s

conclusion as to the source of the leak was unfounded. On summary judgment, the

trial court was not at liberty to disregard this evidence. Cf. City of Keller, 168 S.W.3d at

813 (stating that in a legal sufficiency review, a court “cannot disregard contrary

evidence showing the witness was unqualified to give an opinion” or that the expert’s

opinion evidence was based on unfounded assumptions). Hahn’s affidavit cast doubt

on the reliability of the report’s conclusion that the leak originated below the

foundation, and that doubt must be resolved in the Piots’ favor. See Van, 990 S.W.2d

at 753.

       Proof is conclusive “only if reasonable people could not differ in their

conclusions.” City of Keller, 168 S.W.3d at 816. Based on the summary judgment

evidence here, a reasonable factfinder could have either accepted the ALD report as

true or rejected the report as unfounded; thus, a material issue of fact was presented

evidence raising a genuine issue of material fact as to the element or elements
challenged).

      In its brief on appeal, Allstate also points to the estimate prepared by SWAT
       5

Plumbing, LLC as evidence that “also indicated the leak originated below the
foundation,” but the SWAT invoice makes no mention of the source of the leak.

                                             7
for a factfinder to resolve. Because a fact issue existed as to the single challenged

element of the Piots’ breach of contract action against Allstate, the trial court erred by

granting Allstate’s traditional motion for summary judgment on this ground.

         We sustain the Piots’ first issue.

B.       Extracontractual Claims

         In their second issue, the Piots contend that the trial court erred by granting

summary judgment on their extracontractual claims against Allstate. We agree.

         Allstate’s attack on the Piots’ extracontractual claims is premised on the

assumption that summary judgment was appropriate on the Piots’ breach of contract

claim. In its summary judgment motion, Allstate argued that the absence of any

breach of contract claim foreclosed recovery on the extracontractual claims. But

because we have held that the trial court erred by granting summary judgment on the

Piots’ breach of contract claim, Allstate’s argument with regard to the extracontractual

claims must fail. We sustain the Piots’ second issue.

C.       Promissory Estoppel Claim

         In their third issue, the Piots contend that the trial court erred by granting

Appellees’6 summary judgment motion on the Piots’ promissory estoppel claim. We

agree.

       Allstate, Whitmire, and Patterson filed a joint motion for summary judgment
         6

and did not differentiate as to which Appellees were attacking the Piots’ promissory
estoppel cause of action.

                                              8
      The elements of the Piots’ promissory estoppel claim are: (1) Whitmire and

Patterson made a promise to the Piots; (2) the Piots reasonably and substantially relied

upon the promise to their detriment; and (3) the Piots’ reliance was foreseeable. See

Spicer v. Maxus Healthcare Partners, LLC, 616 S.W.3d 59, 122–23 (Tex. App.—Fort

Worth 2020, no pet.) (op. on reh’g). Thus, for Appellees to prevail on their traditional

motion for summary judgment on the Piots’ promissory estoppel claims, they must

conclusively disprove one of these elements. The summary judgment motion does

not specifically identify which element it challenges.7 But based upon the arguments

and the evidence on which the motion relies, we assume that Appellees contend that

they conclusively disproved the first element, that a promise was made.

      In their motion and on appeal, Appellees argue that the Piots had already

contracted with Regent before meeting with the adjusters; that the adjusters did not

and could not make coverage representations; that Whitmire disclaimed any

representation of coverage by providing a written “zero” estimate; that any

representations by Patterson were made after Regent had completed the repairs; that

the Piots could not recover funds they were not entitled to under the policy; and that

no consideration supported any promise allegedly made by either adjuster. In support

of the argument, Appellees point to the following chronology of events:

      7
       A traditional summary judgment motion must state the grounds on which it is
made. Tex. R. Civ. P. 166a(c). As a general rule, the granting of a motion that fails to
expressly state the grounds constitutes reversible error. See G&H Towing Co. v. Magee,
347 S.W.3d 293, 297 (Tex. 2011) (“Summary judgments, however, may only be
granted upon grounds expressly asserted in the summary judgment motion.”).

                                           9
      •      Plaintiffs communicated with Regent prior to providing Allstate
             with notice of the Claim on December 17, 2019;

      •      Plaintiffs entered into a repair contract with Regent on December
             18, 2019;

      •      Whitmire inspected the Property with Plaintiff and [the Regent
             representative] present on December 19, 2019;

      •      Whitmire prepared a “zero” estimate dated December 20, 2019;

      •      ALD inspected the Property and prepared a report of findings
             dated December 27, 2019;

      •      Regent’s completed repair invoices are dated December 31, 2019;
             and

      •      Patterson inspected the Property and prepared an estimate on
             January 2, 2020. [Indentation altered.]

      According to Appellees, these facts, which they characterize as “undisputed,”

render the Piots’ version of the events “patently inaccurate.” Given the chronology

that Appellees rely upon, they reason that “neither Whitmire nor Patterson could have

authorized recovery of full dwelling policy limits as alleged.”

      But this analysis misses the mark. For promissory estoppel purposes, the

question is not whether they could have authorized full dwelling policy coverage up to

$600,116.00, but rather whether they did represent to the Piots that the water damage

would be fully covered up to that amount. In other words, Whitmire and Patterson

could have lied, or they could have exceeded their authority, and neither scenario

would negate this element of the Piots’ promissory estoppel claim.

                                           10
      Appellees argue that Whitmire and Patterson “could not have advised [the

Piots] that the loss was ‘fully covered under the Policy up to the policy limit of

$611,116.00, and they could not have ‘approved’ repairs and remediation at the

Property” because Whitmire did not have the necessary information to make that

determination.   Furthermore, knowing that the leak had originated below the

foundation, Patterson “could not have promised more than an amount sanctioned by

the Policy.” But this ignores the Piots’ summary judgment evidence that Whitmire

and Pattterson actually did make these representations.

      In James Piot’s affidavit, he averred that

•     he hired Regent to provide an estimate;

•     Whitmire inspected the leak at his home on December 19;

•     Whitmire told both James and the Regent repairman that “the loss was fully

      covered under the Policy up to the policy limit of $611,116.00”;

•     James told Whitmire that “Regent won’t proceed without your approval”;

•     Whitmire acknowledged that he was aware that Regent would not proceed

      without his approval and that he agreed at that time “to pay to Regent their

      quoted amount for making the repairs” and directed the Regent representative

      to “send its bills/repair invoices directly to Defendant Allstate for payment”;

                                          11
•     About three weeks later, on January 2, Patterson came to James’s home and

      informed him that “there was coverage for up to $611,000.00 (the policy limit),

      for repairing the damage, less depreciation and the deductible”;

•     Patterson told James that “he had reviewed and approved the estimate from

      Regent”; and

•     Had James known that Allstate was limiting coverage to $5,000 he “would not

      have authorized Regent to make repairs totaling in excess of $20,000, and

      additional repairs totaling in excess of $80,000.”

      Notably, James did not contend that Whitmire’s and Patterson’s statements to

him and the Regent representative were true.           James simply stated that those

representations were made and that he relied upon those representations to his

detriment. Without belaboring the summary judgment standard of review as set forth

above in our breach of contract analysis, suffice it to say that on this evidence a fact

issue exists. At trial a jury would be free to believe either the Piots’ version of events

(i.e., that Whitmire and Patterson represented to James that Allstate would cover the

repairs up to the $611,116 policy limit) or Appellees’ version of events that no such

representations were made.

      Because a fact issue exists as to whether these representations were made, the

trial court erred by granting summary judgment on the Piots’ promissory estoppel

cause of action. We sustain the Piots’ third issue.

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                                   IV. Conclusion

      Having sustained all three of the Piots’ issues on appeal, we reverse and

remand. Tex. R. App. P. 43.2(d).

                                                     /s/ Bonnie Sudderth

                                                    Bonnie Sudderth
                                                    Chief Justice

Delivered: August 11, 2022

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