Michael Zatorski v. USAA Texas Lloyd's Company ( 2015 )

Opinion issued February 3, 2015
In The
Court of Appeals
For The
First District of Texas
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NO. 01-13-01002-CV
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MICHAEL ZATORSKI, Appellant
V.
USAA TEXAS LLOYD’S COMPANY, Appellee
On Appeal from the 234th District Court
Harris County, Texas
Trial Court Case No. 2012-09265
MEMORANDUM OPINION
After appellant Michael Zatorski’s home was burglarized, he sued USAA
Texas Lloyd’s Company, alleging that USAA had represented to Zatorski that his
renter’s insurance policy would cover greater losses than it did. USAA moved for
summary judgment on all of Zatorski’s claims, and the trial court granted the
motion. We affirm.
Background
Zatorski owned a high-rise, loft residence in Houston. In October 2009, a
kitchen pipe broke and flooded the loft. Zatorski rented a single-family home
while the loft was being repaired, and he called USAA to buy a renter’s insurance
policy. He spoke with a USAA representative, paid for a one-year renter’s
insurance policy over the phone, and did not review the written policy when he
received it.
In June 2010, armed intruders broke into Zatorski’s rental home and stole
several firearms and his safe, which contained watches, jewelry, and cash; the
items stolen had a total value of over $260,000. Zatorski made a claim against his
rental policy for the value of the stolen items, and USAA responded that the policy
limits were $1,000 for theft of jewelry, $2,000 for theft of firearms, and $200 for
theft of cash. USAA paid Zatorski $4,500, which constituted payment of the
policy limits for jewelry, firearms, and cash, plus $1,300 for the loss of the safe.
Zatorski sued. He asserted claims for misrepresentation under the Insurance
Code and the DTPA, breach of contract, breach of the duty of good faith and fair
dealing, unfair settlement practices in violation of Section 541.060 of the Insurance
Code, breach of fiduciary duty, and unjust enrichment. Zatorski alleged that he
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told the USAA representative that he wanted “full coverage” for all of the items
that would be in his rental home, and specifically mentioned that he has “numerous
luxury watches, jewelry, and flat-screen television monitors among other things.”
According to Zatorski’s petition, the representative assured him that he would have
“‘full coverage,’ including full coverage for the valuables, including the watches
and other jewelry.” He asserted that USAA should be liable to him for the full
value of all of the items stolen from his rental home plus statutory damages for the
Insurance Code violations.
USAA moved for traditional summary judgment on Zatorski’s Section
541.060 claim and no-evidence and traditional summary judgment on Zatorski’s
remaining claims. USAA’s primary arguments were that its representative’s
alleged representations regarding the rental policy’s coverage were too vague to be
actionable and that Zatorski was charged with knowledge of the contents of the
policy and therefore could not have relied upon any contrary alleged
misrepresentations. The trial court granted the motion.
Discussion
Zatorski argues that the trial court erred in granting summary judgment on
all of his claims for two reasons: (1) USAA’s representations that he had “full
coverage” were sufficiently specific to be actionable, and (2) he overcame the
presumption that he knew the contents of the policy by showing that he did not
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read the policy and instead relied upon USAA to provide a policy consistent with
its representations.
A. Standard of Review
We review a trial court’s summary judgment de novo. Travelers Ins. Co. v.
Joachim, 315 S.W.3d 860, 862 (Tex. 2010). If a trial court grants summary
judgment without specifying the grounds for granting the motion, we must uphold
the trial court’s judgment if any of the grounds are meritorious. Beverick v. Koch
Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.] 2005, pet.
denied). When a party has filed both a traditional and no-evidence summary
judgment motion, we typically first review the propriety of the summary judgment
under the no-evidence standard. See TEX. R. CIV. P. 166a(i); Ford Motor Co. v.
Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). We take as true all evidence
favorable to the nonmovant, and we indulge every reasonable inference and
resolve any doubts in the nonmovant’s favor. Valence Operating Co. v. Dorsett,
164 S.W.3d 656, 661 (Tex. 2005).
To prevail on a no-evidence motion for summary judgment, the movant
must establish that there is no evidence to support an essential element of the
nonmovant’s claim on which the nonmovant would have the burden of proof at
trial. See TEX. R. CIV. P. 166a(i); Hahn v. Love, 321 S.W.3d 517, 523–24 (Tex.
App.—Houston [1st Dist.] 2009, pet. denied). The burden then shifts to the
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nonmovant to present evidence raising a genuine issue of material fact as to each
of the elements specified in the motion. Mack Trucks, Inc. v. Tamez, 206 S.W.3d
572, 582 (Tex. 2006); Hahn, 321 S.W.3d at 524.
In a traditional summary judgment motion, the movant has the burden to
show that no genuine issue of material fact exists and that the trial court should
grant judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat Marwick
v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). A
defendant moving for traditional summary judgment must conclusively negate at
least one essential element of each of the plaintiff’s causes of action or
conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc.
v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).
B. Misrepresentation under the Insurance Code and DTPA
In its summary-judgment motion, USAA contended that there was no
evidence that it made an actionable misrepresentation to Zatorski. Thus, Zatorski
bore the burden to adduce evidence raising a genuine issue of material fact
regarding whether an actionable misrepresentation was made. See Mack Trucks,
Inc., 206 S.W.3d at 582; Hahn, 321 S.W.3d at 524. In his response, Zatorski
asserted that the summary judgment should be denied because he “was very
specific on what [he] wanted to be covered,” asked whether jewelry, watches,
firearms, and flat-panel screens would all be covered by the policy, and was told
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“everything’s covered,” and specifically, that his watch collection was “fully
covered.”
1. Applicable Law
Generally, to prevail on a misrepresentation claim under the Insurance Code
or the DTPA, an insurance policyholder must identify a specific misrepresentation
upon which he relied. See Howard v. Burlington Ins. Co., 347 S.W.3d 783, 798
(Tex. App.—Dallas 2011, no pet.); Moore v. Whitney-Vaky Ins. Agency, 966
S.W.2d 690, 692–93 (Tex. App.—San Antonio 1998, no pet.). “General claims by
the insurer of the adequacy or sufficiency of coverage . . . are not generally
actionable . . . .” See State Farm Cnty. Mut. Ins. Co. of Tex. v. Moran, 809 S.W.2d
613, 621 (Tex. App.—Corpus Christi 1991, writ denied).
2. Analysis
The summary-judgment evidence included excerpts from Zatorski’s
deposition, in which he testified that he called USAA and told the representative
that he wanted a rental policy with “full coverage.” Zatorski testified:
I’d specifically said I wanted it—him to cover all my jewelery, my
watch collection. I had guns. I had computer screens. I had expensive
computers that I use for my work. I had flat-panel screens. I had
probably eight or nine of those, and I have expensive furniture and
clothing.
According to Zatorski’s testimony, he told the USAA representative that he wanted
“full coverage for, like, if someone breaks in my house when I’m gone and steals
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everything.” The USAA representative told him that “everything’s covered,” and
“Yes, you’re covered fully.”
However, the summary-judgment evidence also shows that Zatorski did not
tell the representative the value of any of the items for which he sought to buy
coverage. Zatorski conceded that he “didn’t say a specific number. I just said
‘valuables and jewelry . . . [w]atches, guns.’” USAA confirmed, “So, you did not
give them a dollar value?” and Zatorski responded, “No . . . he asked me what I
think I needed, and I told him and so, he gave me the policy that would cover
everything.” Zatorski confirmed that he “didn’t discuss specifically the dollar
value of [his] watches,” either individually or as a group, and that he did not
discuss the value of his firearms as a group. He testified,
I discuss—I discussed the value of—when I was on the phone with
him, sitting there and calculating up, “How much do you think I need
to cover?” If you added up all those items, what I needed and he asked
me what I needed.
I said, “Well, hold on. I have this. I have that. I have watches. I
have—” so, I was, like, “Let me see.”
And we had a discussion about it—detailed discussion about it.
I said, “I’ll probably need, you know, X amount.”
He said, “Okay. You get this policy.”
I said, “It’s fully covered?”
He said, “Yes.”
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Thus, although the evidence showed that Zatorski did confirm that certain
types of items would be covered under the rental policy, it also shows that Zatorski
never told the representative the value of the items. At most, the evidence showed
that Zatorski told the representative that the value of “this,” “that,” and the
“watches” together was “X amount.” There is no evidence showing what “X
amount” was.
Zatorski does not complain that any of the types of items that he discussed
with the representative were not covered by the rental policy. He disputes only the
limits of coverage for watches, guns, and jewelry. But by Zatorski’s own
admission, he failed to give the USAA representative the dollar value of each
category of items for which he wanted coverage. Moreover, nearly $50,000 of the
amount claimed by Zatorski was comprised of cash, and there is no evidence that
Zatorski mentioned cash to the USAA representative. Thus, representations that
“everything’s covered” or “fully covered” cannot constitute an actionable
misrepresentation. See, e.g., Manion v. Sec. Nat’l Ins. Co., No. 13-01-00248-CV,
2002 WL 34230861, at *2 (Tex. App.—Corpus Christi Aug. 15, 2002, no pet.) (not
designated for publication) (affirming summary judgment because insurance
representative’s statement that homeowner was getting “full coverage” was not an
affirmative representation that policy contained specific coverage). Because
Zatorski failed to raise a fact issue regarding an actionable misrepresentation,
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summary judgment on Zatorski’s misrepresentation claims was proper. See Mack
Trucks, Inc., 206 S.W.3d at 582; Hahn, 321 S.W.3d at 524.
C. Breach of contract
In its summary-judgment motion, USAA contended that there was no
evidence that it breached any provision of the rental policy. Thus, Zatorski bore
the burden to adduce evidence raising a genuine issue of material fact regarding
breach. See Mack Trucks, Inc., 206 S.W.3d at 582; Hahn, 321 S.W.3d at 524. The
elements of a breach of contract are: (1) the existence of a valid contract;
(2) performance or tendered performance by the plaintiff; (3) breach of the contract
by the defendant; and (4) damages sustained by the plaintiff as a result of the
breach. Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex. App.—Houston [1st Dist.]
2003, pet. denied).
The summary-judgment evidence included the rental policy, which provided
a $2,000 limit for theft of firearms, a $1,000 limit for theft of jewelry, and a $200
limit for theft of money. The policy also provided that no changes to the coverage
stated therein could be made except by USAA in writing. The summary-judgment
evidence further showed that USAA tendered payment to Zatorski to the policy
limits.
Zatorski contends that USAA breached the policy because it did not provide
Zatorski with the full coverage that it promised to provide during Zatorski’s
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telephone conversation with the USAA representative. But Zatorski cannot rely on
an alleged breach of a promise outside of the written contract to raise a fact issue
on breach. See, e.g., Osborne v. Coldwell Banker United Realtors, No. 01-01-
00463-CV, 2002 WL 1480894, at *8 (Tex. App.—Houston [1st Dist.] July 11,
2002, no pet.) (not designated for publication) (to raise fact issue regarding breach
of contract, movant must identify provision within that contract that was breached).
And Zatorski did not identify any provision contained in the policy that USAA
breached. See id. Accordingly, summary judgment on Zatorski’s breach of
contract claim was proper. See Mack Trucks, Inc., 206 S.W.3d at 582; Hahn, 321
S.W.3d at 524.
D. Breach of the duty of good faith and fair dealing
In its summary-judgment motion, USAA contended that there was no
evidence that it breached the duty of good faith and fair dealing. Thus, Zatorski
bore the burden to adduce evidence raising a genuine issue of material fact
regarding breach of the duty of good faith and fair dealing. See Mack Trucks, Inc.,
206 S.W.3d at 582; Hahn, 321 S.W.3d at 524. An insurer violates its duty of good
faith and fair dealing by denying or delaying payment of a claim when it is
“reasonably clear” that the claim is covered. See Universe Life Ins. Co. v Giles,
950 S.W.2d 48, 55–56 (Tex. 1997).
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The summary-judgment evidence showed that USAA paid Zatorski’s claim
up to the policy’s express limits. Zatorski contends that USAA breached the duty
of good faith and fair dealing by failing to provide a higher amount of coverage
promised to Zatorski during his phone conversation with a USAA representative.
Because Zatorski failed to raise a fact issue on his contract claim—i.e., failed to
adduce evidence raising a genuine issue of material fact about whether USAA
denied or delayed payment of any covered claim—summary judgment on this
claim was proper. See Mack Trucks, Inc., 206 S.W.3d at 582; Hahn, 321 S.W.3d
at 524.
E. Unfair settlement practices under Insurance Code Section 541.060
In its summary-judgment motion, USAA contended that it was entitled to
traditional summary judgment on Zatorski’s unfair settlement practices claim
because it was entitled to summary judgment on his breach of the duty of good
faith and fair dealing claim, and the standard for these claims is the same. The
common-law standard for an insurer’s breach of the duty of good faith and fair
dealing is the same as the standard under Insurance Code Section 541.060. See
Mid-Century Ins. Co. of Tex. v. Boyte, 80 S.W.3d 546, 549 (Tex. 2002) (common
law and statutory standard is failing to effectuate settlement of claim when
insurer’s liability has become reasonably clear; construing predecessor to Section
541.060); compare TEX. INS. CODE ANN. § 541.060(a)(2)(A) (West 2009) (unfair
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settlement practice is “failing to attempt in good faith to effectuate a prompt, fair,
and equitable settlement of a claim with respect to which the insurer’s liability has
become reasonably clear”) with Giles, 950 S.W.2d at 55–56 (insurer violates duty
of good faith and fair dealing by denying or delaying payment of a claim when it is
“reasonably clear” that claim is covered).
Zatorski contends that summary judgment on his breach of the duty of good
faith and fair dealing claim was improper, and therefore summary judgment on his
unfair settlement practices claim was improper. But we have concluded that
summary judgment on Zatorski’s breach of the duty of good faith and fair dealing
claim was proper; thus, we conclude that summary judgment on Zatorski’s unfair
settlement practices claim was also proper. See Boyte, 80 S.W.3d at 549.
We overrule Zatorski’s two issues. 1
Conclusion
We affirm the trial court’s judgment.
Rebeca Huddle
Justice
Panel consists of Chief Justice Radack and Justices Bland and Huddle.
1
Zatorski abandoned two claims—breach of fiduciary duty and unjust
enrichment—on which the trial court granted summary judgment by failing to
address them on appeal.
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