Court Opinion

ID: 4311956
Source: CourtListenerOpinion
Date Created: 2018-09-13 00:00:20.038262+00
Date Added: 2024-06-11T14:43:41.881550
License: Public Domain

Case: 17-51106      Document: 00514639486         Page: 1    Date Filed: 09/12/2018

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                       United States Court of Appeals
                                                                                Fifth Circuit

                                      No. 17-51106                            FILED
                                                                      September 12, 2018
                                                                         Lyle W. Cayce
SUSAN SIDEMAN; MARK SIDEMAN,                                                  Clerk

              Plaintiffs–Appellants,

v.

FARMERS GROUP, INCORPORATED, A Nevada Corporation,

              Defendant–Appellee.

                   Appeal from the United States District Court
                        for the Western District of Texas
                              USDC No. 5:17-CV-23

Before JONES, BARKSDALE, and WILLETT, Circuit Judges.
PER CURIAM:*
       In this insurance dispute over hail-damage coverage, the homeowners
argue their insurer breached the consumer-protection provisions of Texas
Insurance Code § 541. We need not reach the merits, though, as the
homeowners’ claims are time-barred.

                                    I. BACKGROUND
       Plaintiffs–Appellants Susan and Mark Sideman maintained a Texas
Farmers Insurance Company (“TFIC”) homeowner’s insurance policy.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                 No. 17-51106
Defendant–Appellee Farmers Group (“Farmers”) managed TFIC’s policies and
communicated with customers on TFIC’s behalf.
      In June 2013, Farmers mailed the Sidemans an offer package including
(1) notice that TFIC was not renewing the policy; (2) an offer for a new policy;
(3) a summary comparison of the old policy and the new policy; and (4) a new
endorsement—prominently titled “Exclusion of Marring of Metal Roof
Materials”—that limited coverage to situations where a covered peril (such as
hail) punctures a roof or renders it functionless, and explicitly excluded
coverage for mere marring (like denting or scratching). The offer package also
included a letter bearing the signature and return address of Farmers’
insurance agent, Michael Woods, though Woods neither prepared the offer
package nor wrote the letter. The offer package did not include a copy of the
proposed policy but instead urged the Sidemans to review the policy and to
contact Woods for more information. The Sidemans went ahead and purchased
the policy.
      Nearly three years passed. In April 2016, a hail storm cosmetically
damaged the Sidemans’ metal roof. They filed a claim but were told that
cosmetic hail damage was not covered. Upset, the Sidemans sued under the
Texas Insurance Code § 541, alleging that several items in (or omitted from)
the offer package were false or misleading. Specifically, they claim the
package’s summary comparison and marring exclusion were misleading; the
failure to include a full-text physical copy of the new policy was deceptive and
misleading; and the letter bearing Woods’s return address and signature
deceptively implied he helped prepare the offer package. Separately, the
Sidemans claim Farmers misrepresented the scope of its homeowner’s
insurance policies when it reported them to the Texas Department of
Insurance in 2011.

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                                  No. 17-51106
      Farmers successfully moved for judgment on the pleadings under Rule
12(c). The court held that the Sidemans failed to state any viable cause of
action because they could show no affirmative misrepresentations, and in the
alternative, their claims were time-barred. The Sidemans timely appealed.

                            II. STANDARD OF REVIEW
      We “review de novo a district court’s grant of judgment on the pleadings
under Federal Rule of Civil Procedure 12(c).” United States v. Renda Marine,
Inc., 667 F.3d 651, 654 (5th Cir. 2012). “[W]e must look only to the pleadings
and accept all allegations contained therein as true.” Brittan Commc’ns Int’l
Corp. v. Sw. Bell Tel. Co., 313 F.3d 899, 904 (5th Cir. 2002). “The issue is not
whether the [Sidemans] will ultimately prevail, but whether they are entitled
to offer evidence to support their claims.” Ferrer v. Chevron Corp., 484 F.3d
776, 780 (5th Cir. 2007).

                                 III. DISCUSSION
A.    The June 2013 Package
      To recap, the Sidemans allege: (1) the summary comparison
misrepresented actual coverage; (2) the marring exclusion was misleading; (3)
the use of Woods’s return address and signature falsely implied he was directly
involved in preparing the package materials; and (4) the failure to provide a
copy of the entire policy—when other materials said a copy was included—was
an actionable misrepresentation.
      These claims, whatever their merit, are time-barred. The applicable
statute of limitations states:
      A person must bring an action under this chapter before the second
      anniversary of the following: (1) the date the unfair method of
      competition or unfair or deceptive act or practice occurred; or (2)
      the date the person discovered or, by the exercise of reasonable
      diligence, should have discovered that the unfair method of
      competition or unfair or deceptive act or practice occurred.

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                                 No. 17-51106
TEX. INS. CODE § 541.162(a). District courts routinely and properly grant
judgment on the pleadings based on a limitations bar that is apparent from the
face of the pleadings. See, e.g., Brown v. Walraven, 9 F.3d 1546 (5th Cir. 1993)
(unpublished) (affirming grant of judgment on the pleadings because statute
of limitations barred plaintiff’s action); see also, McGee v. State Farm Fire &
Cas. Co., 515 Fed. App’x 291, 294 (5th Cir. 2013) (unpublished).
      The Sidemans’ claims are based upon the packet received in June 2013.
But they did not sue until January 2017. This is well past the two-year statute
of limitations. See TEX. INS. CODE § 541.162(a).
      The Sidemans argue that under the discovery rule, limitations was tolled
until the hail storm in April 2016. Before then, they maintain, the “exercise of
reasonable diligence” would not have permitted them to discover the basis for
their claims. That is, the exercise of reasonable diligence would not have
alerted them that the entire policy was not included in the packet, that the
summary comparison and marring exclusion had misleading language, and
that Woods did not actually write the letter encouraging the Sidemans to
contact him about the new policy.
      We disagree. Reasonable diligence would have led to the discovery of the
policy’s absence and allegedly misleading language in the summary
comparison and marring provision. The alleged misuse of Woods’s name and
return address, if affirmatively misrepresentative of some material fact, would
likewise have been discovered through reasonable diligence. The Sidemans did
not contact Woods about this letter until 2016. The discovery rule does not save
their Insurance Code claims.
      The Sidemans have not asserted that they were prevented from
obtaining a copy of the policy, reading the summary comparison and marring
exclusion, or contacting Woods. They have not alleged any plot to conceal the
new policy. Just the opposite. The Sidemans acknowledge they received the
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                                  No. 17-51106
summary comparison and marring provision in the packet and that other
packet materials urged them to review the full policy. They never contacted
anyone about the missing policy before purchasing it. The Sidemans offer only
the following counterfactual argument to show why limitations was tolled: Had
they contacted Woods about the new policy in 2013, he may have been unable
to answer their questions, which would have contradicted package materials
signed by Woods with his return address that represented he was able to
answer questions. Even accepting all allegations in the pleading as true, see
Brittan Commc’ns, 313 F.3d at 904, courts need not accept baseless
speculation.
B.    Farmers’ Representations to the Texas Department of Insurance
      The Sidemans argue that in 2011, Farmers made actionable statements
in a letter to the Department. Setting aside the fact that the Sidemans do not
allege they relied upon, or were even aware of, the contents of this letter at any
point prior to this litigation, any cause of action arising out of the letter is
likewise time-barred. See TEX. INS. CODE § 541.162(a).
                                                                    AFFIRMED.

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