Court Opinion

ID: 9555614
Source: CourtListenerOpinion
Date Created: 2023-08-14 16:16:08.413891+00
Date Added: 2024-06-11T15:37:08.549870
License: Public Domain

Opinion issued August 10, 2023

                                      In The

                               Court of Appeals
                                      For The

                          First District of Texas
                            ———————————
                               NO. 01-22-00523-CV
                            ———————————
                              J.R. ARGO, Appellant
                                         V.
           USAA CASUALTY INSURANCE COMPANY, Appellee

                     On Appeal from the 61st District Court
                             Harris County, Texas
                       Trial Court Case No. 2021-30588

                          MEMORANDUM OPINION

      Appellant, J.R. Argo, challenges the trial court’s rendition of summary

judgment in favor of appellee, USAA Casualty Insurance Company (“USAA-CIC”),

in his suit against USAA-CIC for breach of contract, breach of the duty of good faith
and fair dealing, and violations of the Texas Insurance Code. In two issues, Argo

contends that the trial court erred in granting USAA-CIC summary judgment.

      We affirm.

                                    Background

      Argo filed an original petition bringing claims against USAA-CIC on May 21,

2021, but that petition was not served on USAA-CIC. On July 28, 2021, Argo filed

his first amended petition and a “Request for Issuance of Service” by citation to

“USAA Casualty Insurance Company” through its agent, Corporation Service

Company, in Austin, Texas. USAA-CIC’s registered agent was served with citation

on August 24, 2021.

      In his first amended petition, Argo alleged that he owned a property in

Cypress, Harris County, Texas (“the property”) that was insured by “USAA.” On

or about May 9, 2019, “a hailstorm and/or windstorm” caused “extensive damage”

to the “roof and interior” of the property.

      Argo “submitted a claim to USAA” for property damage and “requested that

USAA cover the cost of repairs,” including the “replacement of the roof[].”

According to Argo, an adjuster working under contract for USAA “conducted a

substandard inspection” of the property and “failed to recognize” that the damages

to the property “were caused by the [s]torm.” After Argo notified USAA “of the

improper adjustment,” USAA hired an engineer to inspect the property.         The

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engineer “concluded that he could find no wind or hail damage to [Argo’s] roof.”

As a result, USAA denied Argo’s insurance claim.

      Based on those allegations, Argo brought claims against USAA-CIC for

breach of contract, breach of the duty of good faith and fair dealing, and violations

of the Texas Insurance Code.1 On November 5, 2021, he filed a second amended

petition which asserted substantially the same claims as his first amended petition

and named “USAA” as the defendant in the body of his pleading. But Argo did not

request issuance of service by citation on USAA or otherwise seek to join USAA as

a defendant.2

      USAA-CIC answered, generally denying Argo’s allegations and including a

verified plea in which it denied having issued “the homeowner’s insurance policy”

for the property. USAA-CIC argued that there was “a misidentification because

[Argo] named and served the incorrect entity.” USAA-CIC also asserted that Argo

failed to provide the proper written notice required” for his claims under the Texas

Insurance Code. And USAA-CIC maintained that Argo’s claims were “barred by

[the statute of] limitations because [Argo had] failed to exercise diligence in

procuring service . . . within the limitations period.”

1
      See TEX. INS. CODE ANN. §§ 541.060(a)(4), (7), 542.060.
2
      USAA did not file an answer and is not a party to this appeal.
                                               3
      USAA-CIC then moved for summary judgment, arguing that it was entitled

to judgment as a matter of law on Argo’s claims against it because it was not the

entity that had issued Argo’s homeowner’s insurance policy. USAA-CIC explained

that the insurance company that had issued Argo’s homeowner’s insurance policy,

USAA, was “a separate legal entity” from USAA-CIC.               Thus, according to

USAA-CIC, Argo’s breach-of-contract claim failed as did his extra-contractual

claims for violations of the Texas Insurance Code and breach of the duty of good

faith and fair dealing.

      Second, USAA-CIC argued that it was entitled to judgment as a matter of law

on Argo’s claims “because they [were] barred by [the applicable statute of]

limitations.” Argo’s claims accrued on May 22, 2019, the date that USAA denied

coverage under his homeowner’s insurance policy. Further, Argo’s homeowner’s

insurance policy “permissibly shortened” the applicable statute of limitations period

by providing “that claims for breach of the insurance policy [had to] be brought

within two years and one day after the cause of action accrues.”3 (Internal quotations

omitted.) The same contractual two-year limitations period also applied to Argo’s

claims for violations of the Texas Insurance Code and breach of the duty of good

faith and fair dealing. Thus, according to USAA-CIC, the statute of limitations

3
      See TEX. CIV. PRAC. & REM. CODE ANN. § 16,070(a); Hewlett Packard Co. v.
      Benchmark Elecs., 142 S.W.3d 554, 560 (Tex. App.—Houston [14th Dist.] 2004,
      pet. denied).
                                             4
expired no later than May 23, 2021, and Argo did not serve USAA-CIC until August

24, 2021, “after limitations had expired.”

      USAA-CIC also explained that the statute of limitations could not have been

tolled under the “equitable tolling doctrine” because Argo’s initial error in not

identifying the proper defendant constituted misidentification, not misnomer, and

when a plaintiff sues the wrong party limitations is not tolled.

      Third, USAA-CIC argued that it was entitled to judgment as a matter of law

on Argo’s claims because they were barred by the statute of limitations and his delay

in effecting service “demonstrate[d] a lack of due diligence as a matter of law.” Argo

“delayed for [sixty-four] days before requesting citation on the correct registered

agent,” and then it did not serve USAA-CIC’s registered agent until twenty-seven

days after that request.

      In his response to USAA-CIC’s summary-judgment motion, Argo argued that

his “partial error” in suing USAA-CIC rather than USAA was a “case of misnomer”

because he had served “the correct agent and clearly referenced the USAA policy in

his petition.” “USAA [was] the parent company of USAA-CIC,” and “[t]hey

share[d] the same registered agent, phone number, fax number, and business

address.” Further, according to Argo, “USAA could not have been prejudiced [by

his mistake] because it received notice of the []suit when the correct registered agent

was served with [his] petition that referenced th[e] correct USAA policy number.”

                                              5
Thus, Argo asserted that his “amended petition should relate back to the original

petition’s filing date,” which was “within the [statute of] limitations period.”

      Argo also asserted that he had raised a fact issue as to whether he had

exercised due diligence in serving “USAA’s registered agent.” He “mistakenly and

unintentionally” served the wrong registered agent after having listed the wrong

registered agent in his original petition. He did not realize his mistake until after the

deadline for a defendant to file an answer had passed. Argo then “filed his [f]irst

[a]mended [p]etition” to name “USAA’s correct registered agent,” but “[d]ue to an

absence of the normal filing staff” in his attorney’s law office, another staff member

filed the first amended petition, and it was only later “discovered that citations were

not issued for the [f]irst [a]mended [p]etition.” “Immediately upon discovery” of

that error, citations were requested and “service was perfected shortly after.”

      In its reply, USAA-CIC pointed out that Argo did not offer any evidence to

dispute the fact that USAA-CIC and USAA were “separate legal entities,” making

this a case of misidentification and not misnomer. Further, according to USAA-CIC,

the equitable tolling doctrine did not apply because the correct entity did not have

notice of the suit within the statute of limitations period.

      The trial court granted summary judgment in favor of USAA-CIC on Argo’s

claims against it and ordered that Argo take nothing on his claims.

                                               6
                                 Standard of Review

      We review a trial court’s decision to grant summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident Life

& Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In conducting our

review, 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, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215. When, as here,

the trial court does not specify the grounds on which it granted summary judgment,

we must affirm if any of the summary-judgment grounds are meritorious. See

Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.]

2005, pet. denied).

      To prevail on a matter-of-law summary-judgment motion, a movant has the

burden of establishing that there is no genuine issue of material fact and it is entitled

to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900 S.W.2d

339, 341 (Tex. 1995). When a defendant moves for summary judgment on the

plaintiff’s claim, it must either (1) disprove at least one essential element of the

plaintiff’s cause of action or (2) plead and conclusively establish each essential

element of its affirmative defense, thereby defeating the plaintiff’s cause of action.

Cathey, 900 S.W.2d at 341; Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197

(Tex. 1995). Once the movant meets its burden, the burden shifts to the non-movant

                                               7
to raise a genuine issue of material fact precluding summary judgment. See Siegler,

899 S.W.2d at 197; Transcont’l Ins. Co. v. Briggs Equip. Tr., 321 S.W.3d 685, 691

(Tex. App.—Houston [14th Dist.] 2010, no pet.). The evidence raises a genuine

issue of fact if reasonable and fair-minded jurors could differ in their conclusions in

light of all the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes,

236 S.W.3d 754, 755 (Tex. 2007).

                                Summary Judgment

      In his first issue, Argo argues that the trial court erred in granting summary

judgment in favor of USAA-CIC on his claims against it because he raised a fact

issue as to whether his claims against USAA related back to the date of the filing of

his original petition and thus were not barred by the applicable two-year statute of

limitations period. Argo asserts that it was misnomer, and not misidentification,

when he “inadvertently named [USAA-CIC] instead of [USAA]” in his petition.

      “[A] misnomer occurs when a party misnames itself or another party, but the

correct parties are involved.” Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 594

(Tex. 2017) (internal quotations omitted); see also Giles v. Giles, No.

01-20-00571-CV, 2022 WL 2251814, at *4 (Tex. App.—Houston [1st Dist.] Jan. 8,

2009, no pet.) (mem. op.) (when correct defendant is served under wrong or

misspelled name, case is one of misnomer); Cybiz, Inc. v. Gaskill, No.

14-16-00405-CV, 2017 WL 1015560, at *2 (Tex. App.—Houston [14th Dist.] Mar.

                                              8
14, 2017, no pet.) (mem. op.). Generally, courts allow parties to correct a misnomer

if it is not misleading. Rincones, 520 S.W.3d at 594.

      Misidentification, on the other hand, occurs “when two separate legal entities

actually exist and a plaintiff mistakenly sues the entity with a name similar to that of

the correct entity.” Reddy P’ship v. Harris Cnty. Appraisal Dist., 370 S.W.3d 373,

376 (Tex. 2012) (internal quotations omitted); Giles, 2022 WL 2251814, at *3. The

consequences of misidentification are “generally harsh.” Rincones, 520 S.W.3d at

594; Reddy P’ship, 370 S.W.3d at 376. For example, if a “plaintiff is mistaken as to

which of two defendants is the correct one and there is actually existing a corporation

with the name of the erroneously named defendant (misidentification), then the

plaintiff has sued the wrong party and [the statute of] limitations is not tolled.”

Enserch Corp. v. Parker, 794 S.W.2d 2, 5 (Tex. 1990).

      Here, the undisputed evidence shows that USAA-CIC and USAA are two

separate legal entities, making this a case of misidentification. Yet USAA-CIC and

USAA are related entities. When misidentification involves related entities, an

equitable exception to the general rule for misidentification cases may apply. See

Flour Bluff Indep. Sch. Dist. v. Bass, 133 S.W.3d 272, 274 (Tex. 2004). “The statute

of limitations will be tolled in misidentification cases if there are two separate, but

related, entities that use a similar trade name and the correct entity had notice of the

suit and was not misled or disadvantaged by the mistake.” Id. This exception

                                              9
requires proof that the correct entity received actual notice of the plaintiff’s suit

within the statute of limitations period. See Bell v. XTC Cabaret (Dallas), Inc., No.

05-21-00294-CV, 2022 WL 1420974, at *3 (Tex. App.—Dallas May 5, 2022, no

pet.) (mem. op.); Burchinal v. PJ Trailers-Seminole Mgmt. Co., LLC, 372 S.W.3d

200, 212–13 (Tex. App.—Texarkana 2012, no pet.); Mishak v. Wilhelm, No.

10-05-00177-CV, 2006 WL 949891, at *1 (Tex. App.—Waco Apr. 12, 2006, no

pet.) (mem. op.); Torres v. Johnson, 91 S.W.3d 905, 908 (Tex. App.—Fort Worth

2002, no pet.).

      Argo notes that USAA-CIC and USAA “share[d] a registered agent, as well

as an address, telephone number, and fax number” and “they also share[d] the same

law firm.” He also points out that he identified his insurance policy as a USAA

policy and put the policy number in his petition. But that evidence does not raise a

fact issue as to whether USAA had actual notice of Argo’s suit. See Bell, 2022 WL

1420974, at *3 (“The fact that businesses have the same registered agent and the

same attorneys is not evidence that they were aware of whom [plaintiffs] intended

to sue.”). Texas law presumes that two separate corporations are distinct entities,

and no evidence shows that “the corporate form has been used as part of a basically

unfair device to achieve an inequitable result” such that USAA-CIC’s knowledge

should be imputed to USAA. See SSP Partners v. Gladstrong Invs. (USA) Corp.,

                                            10
275 S.W.3d 444, 451 (Tex. 2008); cf. BMC Software Belgium, N.V. v. Marchand, 83

S.W.3d 789, 798 (Tex. 2002).

      Further, the record shows that while Argo filed his suit within the statute of

limitations period, he did not serve USAA-CIC with citation until after the statute of

limitations had expired.4 That delay precludes Argo from showing that USAA

received actual notice of Argo’s suit within the limitations period as required to

qualify for the equitable exception to the general rule for misidentification cases.

Thus, we conclude that the trial court did not err in granting summary judgment in

favor of USAA-CIC based on the statute of limitations.

      We overrule Argo’s first issue.5

                                     Conclusion

      We affirm the order of the trial court.

                                                Julie Countiss
                                                Justice

4
      We express no opinion about whether or how this equitable tolling doctrine applies
      to a contractual limitations period. See TEX. R. APP. P. 47.1.
5
      Because of our disposition of Argo’s first issue, we do not reach his second issue.
      See id.; Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston
      [1st Dist.] 2005, pet. denied) (appellate courts affirm summary judgment if any
      asserted ground is meritorious).
                                              11
Panel consists of Justices Landau, Countiss, and Guerra.

                                           12