lemke-concrete-construction-v-employers-mutual-casualty-company-union ( 1997 )

690 S.W.2d 546, 548-49 (Tex. 1985); Montgomery
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v. Kennedy, 669 S.W.2d 309, 310-11 (Tex. 1984); Wilcox v. St. Mary's Univ. of San Antonio,
Inc., 531 S.W.2d 589, 592-93 (Tex. 1975).
Asummary judgment cannot be affirmed on a ground not specifically presented in
the motion for summary judgment. Travis v. City ofMesquite, 830 S.W.2d 94, 100 (Tex.
1992). The motion must state with specificity the grounds upon which the movant is relying.
Tex. R. Civ. P. 166a(c). Stating grounds with specificity defines the issues and gives the
nonmovant adequate notice for opposing the motion. Westchester Fire Ins. Co. v. Alvarez,
576 S.W.2d 771, 772 (Tex. 1978). To prevail on a motion for summary judgment, a
defendant-movant is required to meet the plaintiffs causes of action as they are pleaded,
and to demonstrate that the plaintiff cannot prevail. Cook v. Brundidge, Fountain, Elliot &
Churchill, 533 S.W.2d 751, 759 (Tex. 1976). If the nonmovant does not allege a theory of
recovery in its live pleading, mentions anew theory for the first time in its response to the
motion for summary judgment, and does not amend its pleadings to include this additional
theory of recovery, the new and additional theory of recovery is not properly at issue before
the trial court when the trial court rules on the motion for summary judgment. See Jones
v. Wal-Mart Stores, Inc., 893 S.W.2d 144, 147 (Tex. App.-Houston [1st Dist.] 1995, no
writ).
When the defendant is the movant, summary judgment is proper only if the plaintiff
cannot, as a matter of law, succeed upon any theory pleaded. See Peirce v. Sheldon
Petroleum Co., 589 S.W.2d 849, 852 (Tex. Civ. App.-Amarillo 1979, no writ). Adefendant
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who moves for summary judgment must show as a matter of law that the plaintiff has no
cause of action against it. Citizens First Nat'l Bank of Tyler v. Cinco Exploration Co., 540
S.W.2d 292, 294 (Tex. 1976); Jones v. Texas Pac. Indem. Co., 853 S.W.2d 791, 794 (Tex.
App.-Dallas 1993, no writ).
Once the defendant establishes that a plaintiff cannot prevail as a matter of law, the
burden shifts to the plaintiff to respond to the defendant's motion. Jones, 853 S.W.2d at
794. The plaintiff can defeat the motion by conceding that the material facts are
undisputed, but convincing the court that the defendant's legal position is unsound. See
Estate ofDevitt, 758 S.W.2d 601, 602 (Tex. App.-Amarillo 1988, writ denied). Pleadings,
however, are not considered in determining whether fact issues are expressly presented in
summary judgment motions. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671,
678 (Tex. 1979)
Applicable Law
Pleadings themselves, even if verified, do not constitute summary judgment evidence.
Id.; Hidalgo v. Surety Sav. &LoanAss'n, 462 S.W.2d 540, 545 (Tex. 1971). However, atrial
court may properly grant summary judgment based on the pleadings alone, without
supporting or negating evidence, when the plaintiff's allegations cannot constitute a cause
of action as a matter of law. See Hidalgo, 462 S.W.2d at 543 n.l; see, e.g., Perser v. City of
Arlington, 738 S.W.2d 783, 784 (Tex. App.-Fort Worth 1987, writ denied) (suit based on
gambling debt). In such cases, summary judgment does not rest on proof supplied by
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pleading, but on deficiencies in the opposing pleading. Hidalgo, 462 S.W.2d at 543 n.l. A
review of the pleadings in such a case is de novo, with the reviewing court taking all
allegations, facts, and inferences in the pleadings as true and viewing them in the light most
favorable to the pleader. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994).
Application of Law to Facts
Lemke contends that the carriers failed to produce evidence to support their motion
for summary judgment, rendering all uncontroverted facts in Lemke's first amended original
petition admitted as true.3 Lemke's contention fails because the carriers did offer evidence
to support their motion for summary judgment. The evidence consisted of Lemke's
responses to their requests for admissions, the policies, Gonzalez's petitions against both the
carriers and Lemke, and all pleadings and discovery on file. Therefore, all uncontroverted
facts in Lemke's first amended original petition are not admitted as true. Instead, we review
the motion for summary judgment under the Nixon criteria earlier set out in this opinion.
Lemke's brief contains the following discussion:
Summary judgment may be based upon the pleadings alone when the petmon fads to ^*~'a^
Professional Ass'n of College Educators v. El Paso County Community College Dist678£W.2d 94 6 Tx.
App -El Paso 1984). In such acase, supporting proof is not necessary. Id.; Chandler v. Gilhs, 589 S.W.2d 552 (Tex.
Civ App -El Paso 1979, writ ref'd n.r.e.). In such acase, the court takes as true every allegation of the pleading
Igaini'which the motion is directed. Professional Ass'n of College Educators v. El Paso County Community
College Dist 678 S.W.2d 94, 96 (Tex. App.-El Paso 1984); Wood Truck Leasing, Inc. v. American Automobile
Insurance Co 526 S.W.2d 223 (Tex. Civ. App.-San Antonio 1975, no writ). When amotion for summary judgmen
is directed solely to the nonmovant's petition and is not supported by affidavits, depositions or other summary judgment
evidence, the factual allegations of the petition are admitted as true. See Abbott v. City of Ka»fman'™*™-2*™'
929 (Tex. App.-Tyler 1986); Garcia v. Fabela, 673 S.W.2d 933, 934-35 (Tex. App.-San Antonio 1984); Labbe v.
Carr, 369 S.W.2d 952 (Tex. Civ. App.-San Antonio 1963, writ ref'd n.r.e.).
Because these cases all discuss summary judgments based on legally insufficient pleadings, Lemke's reliance on them in this case
ofsummary judgment based on evidence ismisplaced.
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See Nixon, 690 S.W.2d at 548-49.
Lemke correctly asserts that summary judgment may be affirmed only on the grounds
presented in the motion for summary judgment. Lemke pleaded a cause of action for
liability based only on coverage. The carriers moved for summary judgment based on
noncoverage and, thus, no liability. Lemke's response in opposition to the motion for
summary judgment contended, for the first time, that the carriers could be liable despite
noncoverage. Lemke did not amend or supplement its pleadings to address this new and
separate noncoverage claim. Consequently, the issue of noncoverage liability was not
properly at issue before the trial court when the trial court granted the carriers' motion for
summary judgment. See Jones, 893 S.W.2d at 147.
As the defendants and movants for summary judgment, the carriers could prevail by
showing that Lemke had no cause of action as amatter of law or by conclusively negating
coverage, arequired element of plaintiffs case. As evidence, the carriers offered Lemke's
responses to their requests for admissions, the policies, Gonzalez's petitions against both the
carriers and against Lemke, and all pleadings and discovery on file. The burden then shifted
to Lemke to present evidence to create a fact question on the issue of coverage or to
convince the court that the carriers' legal position was unsound. We conclude that Lemke
neither presented evidence that created afact issue on the issue of coverage nor convinced
the court that the carrier's legal position was unsound. We overrule Lemke's first point of
error.
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BREACH OF CONTRACT
In its second point of error, Lemke argues that the trial court erred in granting the
carriers summary judgment because material questions of fact exist about whether the
carriers breached their contracts with Lemke.
The appellant has the burden on appeal of presenting "such discussion of facts and
the authorities relied upon as may be requisite to maintain the point atissue." Tex. R. App.
P. 74(f). Otherwise, the appellant has waived the point of error. See New York Underwriters
Ins. v. State Farm Mut. Auto. Ins., 856 S.W.2d 194, 204 (Tex. App.-Dallas 1993, no writ);
D/FW Commercial Roofing v. Mehra, 854 S.W.2d 182, 189 (Tex. App.-Dallas 1993, no
writ).
Lemke provides no arguments or authorities for its second point of error. Because
of this omission, Lemke has waived this point of error. Moreover, Lemke conceded at oral
argument that the wrongful discharge claim was not covered by the policies. See Missouri-
Kansas-Texas R.R. v. Heritage Cablevision, 783 S.W.2d 273, 277 (Tex. App.-Dallas 1989,
no writ) (when aparty concedes apoint of error at oral argument, the court of appeals may
refuse to consider the point). We overrule Lemke's second point of error.
BREACH OF DUTY OF GOOD FAITH AND FAIR DEALING
In its third point of error, Lemke argues that the trial court erred in granting the
carriers summary judgment because material questions of fact existed about whether the
carriers breached their duty to deal fairly and in good faith with Lemke. Lemke argues that
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an insured can recover for negligence, unfair insurance practices, and breach ofthe duty of
good faith and fair dealing even when there is no coverage because the policies do not bar
liability for unfair claims denial. Lemke argues that the carriers had a duty of good faith
and fair dealing not from the policies, but from a special trust relationship. Lemke further
asserts that a carrier has a good faith duty to obtain general releases when settling claims
rather than special releases linked to coverage. Lemke argues that the carriers had a duty
to notify Lemke of any offer to compromise or settle. Lemke admits, however, that the law
on which he relies was not in effect when this claim arose. See Tex. Ins. Code Ann. art.
21.56 historical note (Vernon Supp. 1997) [Act of 1991, 72nd Leg., R.S., ch. 242, §
11.03(a), eff. Sept. 1, 1991]. Lemke asserts, however, that the carriers had aduty to seek
the broadest release possible, not just a release of the carriers. Lemke contends that the
carriers were negligent and acted in bad faith because they did not protect Lemke's
interests. Lemke argues that because abad faith claim is independent of apolicy claim, an
insured may recover for bad faith denial of aclaim even if the claim is not covered by the
policy. Lemke further asserts that the carriers are estopped from denying their duty to
defend Lemke.
The carriers argue that bad faith exists only when there is no reasonable basis to deny
or delay payment of aclaim; that noncoverage is areasonable basis to deny aclaim; that
an insurance company does not act in bad faith when it properly denies aclaim that is not
covered; and that Lemke did not plead estoppel, did not present any summary judgment
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evidence to raise estoppel, and coverage cannot be created by estoppel.
Applicable Law
An insurer has a duty to deal fairly and in good faith with its insured in the processing
and payment of claims. Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165, 167
(Tex. 1987). Abreach of the duty of good faith and fair dealing is established when there
is an absence of a reasonable basis for denying or delaying payment of benefits under the
policy and the carrier knew or should have known that there was not areasonable basis for
denying the claim or delaying payment of the claim. Aranda v. Insurance Co. ofN. Am., 748
S.W.2d 210, 213 (Tex. 1988). Whether there is a reasonable basis for denial of a claim
must be judged by the facts before the insurer at the time the claim was denied. Republic
Ins. Co. v. Stoker, 903 S.W.2d 338, 340 (Tex. 1995). Abad faith claim is independent of
a policy claim. Transportation Ins. Co. v. Model, 879 S.W.2d 10, 17 (Tex. 1994). As a
general rule, there can be no claim for bad faith when an insurer has promptly denied a
claim that is not covered. Republic, 903 S.W.2d at 341.4
The doctrine of estoppel cannot be used to create insurance coverage when none
4 In Republic, however, the supreme court left open the possibility that lack of coverage may not necessarily preclude a
cause of action independent of the policy claim, stating, "[w]e do not exclude however, the possibility that ir> denying"im
the insurer may commit some act, so extreme, that would cause injury independentof the policy claim. See ^'"^.W-2d
at 341 (citing Aranda, 748 S.W.2d at 213). Because Lemke does not argue that the insurance companies commUesom extreme
.* ,hi «.„Liniurv independent of the policy claim, this exception does not apply in this case. Tec. R. App. P. 74(f).
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exists by the terms of the policy.5 Texas Farmers Ins. v. McGuire, 744 S.W.2d 601, 602-603
(Tex. 1988). Waiver and estoppel may operate to avoid a forfeiture of a policy, but they
have consistently been denied operative force to change, re-write, and enlarge the risks
covered by a policy. Id. at 603. Waiver and estoppel cannot create a new and different
contract with respect to risks covered by the policy. Id.
Application of Law to the Facts
Lemke argues that because a bad faith claim is independent of a policy claim, that
an insured may recover for bad faith denial of a claim even if the claim is not covered by
the policy. Lemke correctly argues that abad faith claim is independent of apolicy claim.
However, Lemke's conclusion that an insured may recover for bad faith denial of a claim
that is not covered by the policy does not necessarily follow. The carriers properly denied
coverage of Gonzalez's wrongful discharge claim against Lemke. Without coverage,
Lemke's claim that the carriers acted in bad faith is meritless.
Lemke's claim of estoppel also fails. This case does not involve forfeiture; instead,
it involves aquestion of risk coverage under the contract. The doctrine of estoppel will not
broaden the terms of the policy. Because the carriers properly relied on the limitations of
risk coverage set forth in the contract, they are not responsible for Gonzalez's wrongful
5 This general rule has one exception. If an insurer, with knowledge of facts indicating noncoverage, assumes or continues
the defense of its insured without obtaining anonwaiver agreement or areservation of ^>*"™?fcf^f™2
including those of noncoverage, or it may be estopped from raising them. See Farmers Tex. County Mut. Ins Co v. Wllk*nson'
mi^2"2\rl Civ. App -Austin 1980, writ ref'd n.r.e.). Because the insurance companies in tins case *d not
assume or continue the defense of Lemke, this exception does not apply.
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discharge judgment against Lemke. The trial court correctly denied Lemke's claim that the
carriers are estopped from denying coverage. We overrule Lemke's third point of error.
NEGLIGENT FAILURE TO SETTLE, OBTAIN RELEASE, DEFEND
In its fourth point of error, Lemke argues that the trial court erred in granting
summary judgment in favor of the carriers because material questions of fact exist about
whether the carriers were negligent in failing to (i) reasonably attempt to settle, (ii)
reasonably attempt to obtain a general release from Gonzalez, (iii) defend Lemke, and (iv)
take other reasonable steps necessary to protect Lemke's interest. Lemke further contends
that the carriers negligently misrepresented that Robinson represented Lemke.
The carriers argue that Lemke is not responsible for workers' compensation benefits
and is not a proper party in a suit seeking these benefits. The carriers contend that because
of noncoverage, they had no duty to settle Gonzalez's retaliatory discharge claim against
Lemke; they only had a duty to settle the workers' compensation claim; and they owed a
duty of good faith and fair dealing in the settlement of the workers' compensation claim only
to Gonzalez, not to Lemke. They argue that their duty to Gonzalez neither requires nor
allows a negotiated release of uncovered claims when settling covered claims.
Applicable Law
In this case, as in many cases, the interests of the injured worker and the interests
of the employer are not the same. In 1992, when Gonzalez sued Lemke for wrongful
discharge, it was deemed unethical or fraudulent conduct for an insurance carrier to allow
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an employer to dictate the methods by which and the terms on which a claim was handled
and settled. 28 Tex. Admin. Code § 65.10(1)(I) (West 1996) (Tex. Workers' Compensation
Comm'n).6
When confronted with a defendant's motion for summary judgment that the plaintiff
take nothing, the plaintiff can defeat summary judgment by presenting evidence that creates
a fact question on those elements of the plaintiffs case that the defendant attacks.
American Med. Elecs., Inc. v. Kom, 819 S.W.2d 573, 576 (Tex. App.-Dallas 1991, writ
denied). However, pleadings themselves, even verified, do not constitute summary
judgment evidence. Clear Creek, 589 S.W.2d at 678. ,
Application of Law to Facts
The carriers deny that they offered to defend Lemke in the wrongful discharge claim
because they were prohibited by rule from doing so. Lemke relies on a letter from
Robinson, contending that the letter "represented to Lemke that Robinson was representing
Lemke as to Gonzalez's claims against Lemke." This letter is not in the summary judgment
evidence before us. Lemke had the burden to present evidence to create a fact issue about
whether any additional duties existed. Lemke did not meet this burden. Lemke contends
that because the pleadings contain statements about the letter, we must accept the pleadings
as facts. However, Lemke's pleadings are not summary judgment evidence. We overrule
6 The legislature subsequently enacted this regulation into statutory law, making acarrier guilty of an administrative
violation if it allows an employer, other than aself-insured employer, to dictate the methods by which and the terms on which
a claim is handled. Tex. Labor Code Ann. § 415.002(a)(8) (Vernon 1996).
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Lemke's fourth point of error.
DTPA, INSURANCE CODE VIOLATIONS, AND VICARIOUS LIABILITY
In its fifth, sixth, and seventh points of error, Lemke argues that the trial court erred
in granting the carriers summary judgment because material questions offact existed about
whether the carriers violated provisions of the DTPA and the insurance code and about
whether the carriers are vicariously liable to Lemke for the actionable conduct of defendants
Robinson and his law firm. Lemke argues that the carriers' motion for summary judgment
was based only on noncoverage and did not address violations of the DTPA, violations of
the Texas Insurance Code, or vicarious liability, thus, summary judgment on these claims
was improper. The carriers argue that all ofLemke's claims depend on coverage.
Applicable Law
Aparty may not be granted relief in the absence of pleadings to support that relief.
Cunningham v. Parkdale Bank, 660 S.W.2d 810, 813 (Tex. 1983). Ajudgment must be
supported by the pleadings and, if not so supported, it is erroneous. City of Fort Worth v.
Gause, 129 Tex. 25, 29, 101 S.W.2d 221, 223 (1937). The judgment shall conform to the
pleadings. Tex. R. Civ. P. 301. Issues not expressly presented to the trial court by written
motion, answer, or other response shall not be considered on appeal as grounds for reversal.
Tex. R. Civ. P. 166a.
Application of Law to Facts
Lemke pleaded claims based only on coverage. Thus, neither the carriers' motion
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for summary judgment nor the trial court's grant of summary judgment addressed violations
of the DTPA, violations of the Texas Insurance Code, or vicarious liability. Summary
judgment was predicated only on noncoverage because Lemke's pleadings were predicated
only on coverage. Lemke conceded the issue of coverage at oral argument. We overrule
Lemke's fifth, sixth, and seventh points of error.
CONCLUSION
We hold that the trial court properly granted summary judgment in favor of
Employers Mutual Casualty Company, Union Mutual Insurance Company of Providence,
and Emcasco Insurance Company. We affirm the trial court's judgment.
Do Not Publish
Tex. R. App. P. 901
951259F.U05
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