Bertha Arce, Individually and as Representative of All Others Similarly Situated v. American National Insurance Company

In The
Court of Appeals
Seventh District of Texas at Amarillo
________________________
No. 07-19-00362-CV
________________________
BERTHA ARCE, INDIVIDUALLY AND AS REPRESENTATIVE
OF ALL OTHERS SIMILARLY SITUATED, APPELLANT
V.
AMERICAN NATIONAL INSURANCE COMPANY, APPELLEE
On Appeal from the 46th District Court
Hardeman County, Texas
Trial Court No. 11529; Honorable Dan Mike Bird, Presiding
August 24, 2021
OPINION
Before PIRTLE and PARKER and DOSS, JJ.
Appellant, Bertha Arce, Individually and as Representative of All Others Similarly
Situated challenges the trial court’s rendition of summary judgment in favor of Appellee,
American National Insurance Company, on her claims for breach of contract and
violations of the Texas Insurance Code, as well as her claim for recovery of attorney’s
fees and class action claims. Through two issues, Arce contends the trial court erred in
(1) overruling her objections to American National’s summary judgment evidence, and (2)
granting American National summary judgment on her claims. We reverse the judgment
of the trial court and remand for further proceedings consistent with this opinion.
BACKGROUND
This is a case involving the denial of a claim under a life insurance policy issued
by American National. In December 2016, Sergio Arce, Jr., Bertha Arce’s son, applied
for a life insurance policy with American National. Arce was the beneficiary of that policy.
Part of the application required that he answer the question of whether, in the last ten
years, he had been diagnosed, treated, tested positive for, or been given medical advice
for any disease or abnormality of the stomach, intestines, rectum, pancreas, or liver,
including cirrhosis, hepatitis, and colitis. Sergio answered that question with “no” and
signed a statement affirming that his answers in the application were “full, complete and
true to the best of [his] knowledge and belief.” However, medical records showed Sergio
had been diagnosed with hepatitis C three years earlier, in 2013. At that time, he did not
treat that condition or heed medical advice that he seek treatment or assistance in
obtaining treatment. Under American National’s underwriting guidelines, it would not
have issued the policy to Sergio if he had disclosed his hepatitis C diagnosis.
The agent who sold Sergio the policy stated she asked Sergio all of the application
questions and recorded the answers he provided. She did not, however, determine
whether he fully understood each question. American National issued a life insurance
policy to Sergio based on his application. He also signed a form indicating his
understanding that the premium he had been quoted had been modified from the original
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amount to a premium of $91 per month and that the accidental death benefit coverage
had been denied.
The policy was issued on January 4, 2017. It contained an incontestability
provision providing that the policy could not be contested after it had been in force during
the insured’s lifetime for a period of two years. Prior to the expiration of that two-year
period, American National was entitled to contest the policy for material misstatements
made in the application.
Unfortunately, Sergio was in a car accident and died thirteen days after the policy
was issued. Arce submitted a claim for benefits. American National denied the claim in
July 2017, enclosing the applicable portions of the policy and Sergio’s medical records,
as well as refunding the $91 premium paid, with interest. The denial letter explained that
while Sergio indicated on his application that he did not suffer from liver disease, including
cirrhosis or hepatitis, medical records showed a history of liver disease, untreated
hepatitis C, and continued drinking despite counseling that Sergio cease doing so. It also
explained that had Sergio provided accurate information on the application, the policy
would not have been issued under American National’s underwriting guidelines.
Arce filed suit against American National in November 2017, alleging breach of
contract, violations of sections 541.060, 541.061, and 542.060 of the Texas Insurance
Code, and seeking recovery of policy benefits, statutory penalties, and attorney’s fees.
Arce later amended her petition to add claims for class relief. In February 2019, American
National filed a traditional motion for summary judgment, arguing Arce’s claims were
barred because Sergio made material misrepresentations in his application for the life
insurance policy. The trial court granted American National’s motion in July 2019, stating
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it was disposing of all claims and all parties. The trial court subsequently denied Arce’s
motion for new trial and for reconsideration and overruled her objections to American
National’s summary judgment evidence. Thereafter, Arce timely filed her notice of
appeal.
STANDARD OF REVIEW—TRADITIONAL MOTION FOR SUMMARY JUDGMENT
We review a trial court’s ruling on a motion for summary judgment under a de novo
standard of review. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
To prevail on a traditional motion for summary judgment the movant must “show that,
except as to the amount of damages, there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of law . . . .” TEX. R. CIV. P.
166a(c); Cmty. Health Sys. Pro’l Servs. Corp. v. Hansen, 525 S.W.3d 671, 681 (Tex.
2017) (citing Provident Life, 128 S.W.3d at 216); Lightning Oil Co. v. Anadarko E&P
Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017)). A fact is conclusively established if
reasonable minds could not differ about the conclusion to be drawn from the record. City
of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). In our review of a trial court’s grant
of summary judgment, we take as true all evidence favorable to the nonmovant and
indulge every reasonable inference and resolve any doubts in the nonmovant’s favor.
Valence, 164 S.W.3d at 661.
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ANALYSIS
ISSUE ONE—ARCE’S OBJECTIONS TO AMERICAN NATIONAL’S SUMMARY JUDGMENT
EVIDENCE
Through her first issue, Arce argues the trial court erred in overruling her objections
to American National’s summary judgment evidence.1 American National argues the
record shows the summary judgment evidence Arce is challenging on appeal was proper
and the trial court did not err in overruling the objections.
An appellate court should review a trial court’s decision to admit or exclude
summary judgment evidence under an abuse of discretion standard. Van Adrichem v.
Agstar Fin. Servs., FLCA, No. 07-13-00432-CV, 2015 Tex. App. LEXIS 11734, at *3 (Tex.
App.—Amarillo Nov. 13, 2015, no pet.) (mem. op.) (citing McCraw Materials, L.L.C. v.
DivLend Equip. Leasing, L.L.C., No. 07-12-00215-CV, 2013 Tex. App. LEXIS 779, at *11,
(Tex. App.—Amarillo Jan. 28, 2013, no pet.) (mem. op.), (citing In re J.P.B., 180 S.W.3d
570, 575 (Tex. 2005)). We must uphold a trial court’s evidentiary ruling if there is any
legitimate basis for it. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43
(Tex. 1998) (citing State Bar of Tex. v. Evans, 774 S.W.2d 656, 658 n.5 (Tex. 1989)).
An affidavit presented in a summary judgment proceeding must be made on
personal knowledge, set forth such facts as would be admissible in evidence, and show
affirmatively that the affiant is competent to testify to the matters stated therein. TEX. R.
CIV. P. 166a(f). A conclusory statement is “one that does not provide the underlying facts
to support the conclusion and, therefore, is not proper summary judgment proof.” Van
1 Arce contends the lack of admissible summary judgment evidence means section 705.005, rather
than section 705.101-.105, of the Texas Insurance Code applied. That, she asserts, means different
obligations were imposed on American National. We will address this aspect of her contention in our
analysis of Arce’s claims under the Texas Insurance Code.
5
Adrichem, 2015 Tex. App. LEXIS 11734, at *5 (citation omitted). Conclusory statements
“are not susceptible to being readily controverted.” Id. (citation omitted).
Arce argues paragraph three of Scott Marquis’s affidavit was inadmissible
summary judgment evidence. That paragraph provides:
3. On or about December 13, 2016, American National issued policy
number M16618556 in the amount of $25,000 on the life of Sergio Arce, Jr.
(the “Policy”), subject to the payment of additional premium because the
Policy was issued at a premium that was different than that which was
applied for. The additional premium was collected and the Policy was
effective as of January 4, 2017.
(Emphasis in Arce’s brief).
Arce contends that the sentence, “[t]he additional premium was collected and the
Policy was effective as of January 4, 2017” was not supported by Marquis’s personal
knowledge. She asserts that Marquis is the Senior Vice President of Life Underwriting at
American National and nothing in his title or job description indicates any connection to
the sale of policies or the collection of premiums such that he would have the personal
knowledge to make the statement he made in paragraph three of his affidavit, nor does
Marquis point to any documentation supporting his assertion. Thus, Arce asserts, there
is no foundation for this averment and it cannot be considered admissible as summary
judgment evidence.
American National argues the affidavit is based on personal knowledge and was
thus admissible summary judgment evidence. It notes Marquis’s position as the Senior
Vice President of Life Underwriting at American National and that he has worked for the
company for over twenty years. The affidavit also states that Marquis is “familiar with the
above-captioned matter.” Marquis then relates the above-quoted statements in
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paragraph three, setting forth the details of the policy at issue here. The only aspect of
those details challenged by Arce is the statement that “[t]he additional premium was
collected and the Policy was effective as of January 4, 2017.” If Marquis’s position and
history at American National gave him the personal knowledge to aver to the
unchallenged facts, it follows it also gave him the personal knowledge to aver to the
challenged fact, i.e., the collection of the premium. Furthermore, even assuming that
statement is conclusory, the remaining unchallenged facts in other summary judgment
evidence and the undisputed fact that the policy issued is sufficient to overcome Arce’s
objection to this evidence. Arce’s cause of action itself is predicated on the issuance of
an insurance policy and the payment of a premium. Therefore, even if the trial court did
err in admitting this summary judgment evidence, we find such error would be harmless.
Accordingly, we resolve Arce’s first issue against her.
ISSUE TWO—PROPRIETY OF TRIAL COURT’S GRANTING OF SUMMARY JUDGMENT ON
ALL OF ARCE’S CLAIMS, INCLUDING CLASS CLAIMS
BREACH OF CONTRACT CLAIMS
In her second issue, Arce contends the trial court erred in granting summary
judgment in American National’s favor because it failed to prove Sergio intended to
deceive American National for the purpose of obtaining a life insurance policy. Both
parties agree misrepresentation to avoid a policy is governed by the Texas Insurance
Code. However, the parties disagree as to the standard to be applied here. Arce argues
American National was required to prove the common law-imposed element of intent to
deceive to obtain the insurance policy in addition to the elements set forth in the statute.
American National argues that section 705.051 of the Insurance Code applies and, due
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to the recodification of the applicable provisions, it was not required to prove intent to
deceive because that element does not appear in the statute.
Chapter 705 of the Texas Insurance Code is divided into three subchapters. The
first, Subchapter A, section 705.001-705.005, provides general default provisions
applicable to all insurance policies but provides it does not apply to a life insurance policy
with a two-year incontestability provision2 on which premiums have been duly paid.3 See
TEX. INS. CODE ANN. § 705.105. The second, Subchapter B, section 705.051, is a
provision applicable to life, accident, and health insurance policies. See TEX. INS. CODE
ANN. § 705.051. The third, Subchapter C, section 705.101-.105, establishes provisions
applicable to misrepresentations in life insurance applications. See TEX. INS. CODE ANN.
§ 705.101-.105.
American National asserts that because Arce submitted a claim within one year of
the issuance of the policy, section 705.051 controls. Arce does not agree. Rather, she
argues that the common law-imposed requirement of intent to deceive is an additional
element that must be proven. Section 705.104, the only other section relating to
misrepresentation defenses that mentions intent, is inapplicable because it applies only
to suits brought on or after the second anniversary of the issuance of the policy. Section
705.051, on the other hand, does not speak to an intent to deceive and therefore,
American National argues, it was not required to prove Sergio intended to deceive
2 Arce admits the life insurance policy here contained a two-year incontestability provision.
3 At points, Arce argues there is no proof that the additional premium, i.e., that beyond the premium
initially stated, was ever collected. However, she does admit the policy issued and we find the policy would
not have issued without payment of the additional premium.
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American National before it denied Arce’s claims on the basis of Sergio’s
misrepresentation.
Section 705.051 is entitled “Immaterial Misrepresentation in Life, Accident, or
Health Insurance Application.” It provides that “[a] misrepresentation in an application for
a life, accident, or health insurance policy does not defeat recovery under the policy
unless the misrepresentation: (1) is of a material fact; and (2) affects the risks assumed.”
TEX. INS. CODE ANN. § 705.051 (emphasis added). American National argues that when
these elements are proven, there can be no recovery under the policy. It contends that
Arce did not challenge either of those elements and thus, it was entitled to summary
judgment as a matter of law. American National also argues that as recodified, the
provision does not require that American National prove anything else, including an intent
to deceive. Accordingly, American National contends the trial court did not err in granting
summary judgment in its favor.
Arce first attacks American National’s focus on the recodification of the Texas
Insurance Code as being based on a faulty premise. American National argues that when
the Code was re-codified, it resulted in a substantial change in the language of the statute,
thereby eliminating the intent to deceive element for avoiding a life insurance policy based
on misrepresentation. Consequently, it contends, to deny Arce’s claim, it was only
required to satisfy section 705.051 of the Code, a provision requiring only proof of
misrepresentation of a material fact and that the misrepresentation affected the risk
assumed, and it was not required to satisfy the five-part test set forth in Mayes v. Mass.
Mut. Life Ins. Co., 608 S.W.2d 612, 616 (Tex. 1980). In response, Arce argues
recodification did not change the existing law and thus, American National had the burden
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of proof to prove the element of intent to deceive in order to deny Arce’s claim under her
son’s life insurance policy. Because it did not, Arce asserts, the trial court erred in
granting summary judgment in American National’s favor.
Arce first argues the case on which American National’s argument almost
exclusively depends, Colonial Penn Life Ins. Co. v. Parker, 362 F. Supp. 3d 380 (S.D.
Tex. 2019), is not binding precedent, was founded on objective dicta,4 is an undisputed
outlier, and is premised on a conclusory analysis that cannot be reconciled with Texas
authorities. In Colonial Penn, an insurer moved for summary judgment to dismiss claims
against it for denying a claim on a whole life insurance policy. Id. at 382. In the
application for life insurance, the insured answered “no” to the question of whether he
had, in the three years before the application date, been treated for drug or alcohol abuse.
Id. at 384. He also affirmed by his signature that he read all the questions and that his
answers were true and correct. Id. Evidence in the matter showed the insured’s answer
was untrue. Id. at 385-98. The insured died in a car accident seven months after the
issuance of the policy. Id. at 382. The insurance company denied recovery on the basis
of the misrepresentation in the application. Id. The trial court granted summary judgment
in favor of the insurance company.
In determining whether the granting of summary judgment was proper, the federal
appellate court acknowledged that Texas case law required five elements, including intent
to deceive, to be proven to rescind an insurance contract and it cited Mayes, 608 S.W.2d
at 616 for that proposition. Colonial Penn. 362 F. Supp. at 399. However, it then said
4 Before discussing the intent to deceive element, the court concluded the insurance company was
entitled to summary judgment on its failure to pay premium ground.
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that when the Texas Legislature recodified the statute, it opted not to include an intent
requirement in section 705.051. Id. at 402. It cited Fleming Foods of Tex. v. Rylander, 6
S.W.3d 278, 284 (Tex. 1999), for the proposition that Texas will not allow prior statutes
“to alter or disregard the express terms” of an unambiguous statute. Colonial Penn, 362
F. Supp. At 399. Therefore, it said, the obvious omission of an intent requirement in
section 705.051 was intentional and insurers are not required to prove intent to deceive
under that provision. Accordingly, American National argues, it is clear the Legislature
enacted different requirements for different policies. If the intent to deceive element was
required in all policies, the specific inclusion of that intent in section 705.104 would be
superfluous. Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex. 2001)
(“Ordinarily when the Legislature has used a term in one section of a statute and excluded
it in another, we will not imply the term where it has been excluded.”).
The court in Colonial Penn makes the statement that when the Legislature adopts
an amendment, it intends to make some change in the existing law and thus, courts
should endeavor to give effect to the amendment. Colonial Penn, 362 F. Supp. 3d at 402.
While that is true when there is an amendment, as Arce points out, what occurred here
was a recodification, not an amendment, through which the Legislature specifically stated
it did not intend to change any substantive law. See TEX. INS. CODE ANN. § 30.001(a).
Accordingly, Arce contends American National is still required to prove the common law
element of intent to deceive.
Similarly, the other case on which American National relies, Fleming, 6 S.W.3d at
283, speaks to statutory interpretation when the language of a codified version clearly
changes the meaning of the statute. In that situation, courts are to consider the prior law
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repealed and apply the traditional rules to the “plain words” of the codified statute. Id. at
285. The recodification here explicitly did not change the meaning of the statute and thus,
courts are to interpret the statutes in accordance with prior law. Cash America Intern.,
Inc. v. Bennett, 35 S.W.3d 12, 16 (Tex. 2000). Consequently, Arce says, intent to deceive
is essential to providing a misrepresentation defense regardless of the type of policy
involved. Medicus Ins. Co. v. Todd, 400 S.W.3d 670, 677-78 (Tex. App.—Dallas 2013,
no pet.).5 As an intermediate appellate court, this court is duty-bound to follow precedent
issued by the Texas Supreme Court. As such, Arce insists, and we agree, the five-part
test set forth in Mayes, 608 S.W.2d at 616, is still applicable to the facts of this case. In
Mayes, the Texas Supreme Court found that five elements must be pled and proved
before the insurer may avoid a policy because of the misrepresentation of the insured.
Those elements include: (1) the making of the representation; (2) the falsity of the
representation; (3) reliance thereon by the insurer; (4) the intent to deceive on the part of
the insured in making same; and (5) the materiality of the representation. Id. The
applicability of those five elements was again confirmed in Union Bankers Ins. Co. v.
5 The court in Medicus concluded:
Section 705.004, in its different codifications, is now 110 years old. Although the statute
has never expressly required the insurer to prove the insured intended to deceive the
insurer with a misrepresentation in the policy application, the courts of Texas have
consistently held that an insurer may not rescind a policy due to a misrepresentation in an
insurance application unless the insurer proves the insured intended to deceive the insurer
with the misrepresentation. We cannot vary from this long history of case law imposing
this duty upon insurers. We conclude “the intent to deceive on the part of the insured in
making” a misrepresentation in an application for insurance is an element the insurer must
prove to obtain a declaratory judgment that a policy is void due to the misrepresentations.
Medicus Ins. Co., 400 S.W.3d at 679.
American National distinguishes this opinion, arguing it was a medical malpractice matter under
section 705.004 and did not discuss sections 705.051 or 705.104. Further, American National asserts, it
involved facts very different from those in the present case. Lastly, it argues, the court did not analyze
recodification or its impact on prior case law.
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Shelton, 889 S.W.2d 278, 282 (Tex. 1994), and we believe they are still applicable today.
Tex. Farm Bureau Mut. Ins. Co. v. Rogers, 351 S.W.3d 103, 107 (Tex. App.—San Antonio
2011, pet. denied).
As Arce points out, the Texas Insurance Code was recodified effective April 1,
2005, and while the recodification involved the renumbering of statutes, it expressly did
not change substantive law. See TEX. INS. CODE. ANN. § 30.001(a) (“The program
contemplates a topic-by-topic revision of the state’s general and permanent statute law
without substantive change.”). Prior to recodification, the statutory provision addressing
misrepresentation in an application for an insurance policy did not include an express
intent to deceive element. Rather, that element was incorporated from the common law.
Shelton, 889 S.W. 2d at 281-82. The recodification of the Code did not change any of
the substantive law relevant to this matter and, as Arce notes, both the prior statutes and
the recodified versions include the term “misrepresentation.” The definition of that term
includes the intent to deceive or deception. Black’s Law Dictionary, 1016 (7th ed. 1999)
(defining “misrepresentation” as “[t]he act of making a false or misleading statement about
something, usu. with the intent to deceive”).6
In accordance with the law as it existed prior to the recodification, American
National was required to prove Sergio acted with an intent to deceive in applying for the
life insurance policy. Because intent to deceive is not a basis on which summary
judgment may be granted, the trial court erred in granting American National’s motion.
6 American National argues Arce did not raise that argument at the trial level and is thus precluded
from doing so here. Moreover, it asserts, the term misrepresentation cannot include an intent to deceive
because if so, the Legislature (and courts in case law like Mayes) needlessly included the intent element in
several statutes.
13
Murray v. Cadle Co., 257 S.W.3d 291, 302 (Tex. App.—Dallas 2008, pet. denied) (issues
of knowledge and intent are rarely appropriate for summary judgment); Kirk v. Kemper
Investors Life Ins. Co., 448 F. Supp. 2d 828, 835 (S. D. Tex. 2006) (noting insured’s intent
to deceive may not be established at the summary judgment stage). Further, intent to
deceive is difficult to prove and American National’s summary judgment proof did not
meet that burden. Texas courts have held that an insured’s knowledge of a health
condition that is not disclosed on an application for a policy is insufficient to establish
intent to deceive as a matter of law and accordingly, summary judgment on that basis is
improper. See Flowers v. United Ins. Co., 807 S.W.2d 783, 786 (Tex. App.—Houston
[14th Dist.] 1991, no writ). See also Shelton, 889 S.W.2d at 279-83; Garcia v. John
Hancock Variable Life Ins. Co., 859 S.W.2d 427, 429–33 (Tex. App.—San Antonio 1993,
writ denied). Rather, a fact question precluding summary judgment was raised as to
Sergio’s intent when he answered “no” to the question on the application. Flowers, 807
S.W.2d at 786.
American National was not entitled to summary judgment for another reason. The
undisputed summary judgment evidence shows American National asserted rescission
well beyond the ninety-day period set forth in section 705.005 of the Code. TEX. INS.
CODE ANN. § 705.005. Accordingly, Arce argues American National is precluded from
claiming recission and asserting misrepresentation as a defense to Arce’s claims. See
Gotham Ins. Co. v. Warren E&P, Inc., 455 S.W.3d 558, 567, n.21 (Tex. 2014); Myers v.
Mega Life and Health Ins. Co., 2008 Tex. App. LEXIS 2803, at *8 (Tex. App.—Amarillo
April 17, 2008, pet. denied) (section 705.005 is a defense to a misrepresentation claim
and is strictly construed against an insurer); Protective Life Ins. Co. v. Russell, 119
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S.W.3d 274, 284–85 (Tex. App.—Tyler 2003, pet. denied). Accordingly, the trial court
erred in granting summary judgment on American National’s contract claims.
INSURANCE CLAIMS
In her second issue, Arce argues that because American National did not show it
would prevail on her contract claim, it was not entitled to summary judgment on her
insurance claims. American National argues that all of Arce’s claims are dependent on
whether the denial of life insurance benefits was proper and because its position is that it
was, it contends that all of Arce’s Insurance Code claims fail since each relies on her
contract claim.
American National argues summary judgment was proper with regard to Arce’s
prompt pay claim under section 542.060. See TEX. INS. CODE ANN. § 542.060. It argues
that Arce’s claim was based on the wrongful denial of policy benefits and because the
denial was not wrongful, Arce’s prompt pay claim also fails. American National argues
that insureds “cannot recover damages for a statutory violation if they have no right to
recover under the policy and have sustained no independent injury.” USAA Tex. Lloyds
Co. v. Menchaca, 545 S.W.3d 479, 490 (Tex. 2018). See also Tucker v. State Farm Fire
& Casualty Co., 981 F. Supp. 461, 645 (S. D. Tex. 1997) (remaining “extra-contractual
claims live or die depending on whether [plaintiff’s] bad faith claim has any viability”).
American National reiterates its position that it was not required to prove intent to deceive
and that it properly denied payment to Arce and therefore, the trial court properly granted
summary judgment in its favor regarding Arce’s prompt payment claim. Arce disagrees,
arguing she should prevail on her contract claim and that she has, at a minimum, raised
a genuine issue of material fact precluding summary judgment on this claim.
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American National also argues summary judgment was proper with regard to
Arce’s Insurance Code claims under sections 541.060 and 541.061 (pertaining to unfair
settlement practices and unfair methods of competition or deceptive acts) due to Sergio’s
answers on the application. See TEX. CODE INS. ANN. §§ 541.060, 541.061. It contends
either a bona fide dispute exists precluding liability for violations of the Insurance Code
or there was no coverage due to Sergio’s misrepresentation. Furthermore, American
National contends that even if it is incorrect in its assertion that it did not need to prove
Sergio’s intent to deceive, that assertion is simply a question of statutory construction and
is not actionable as bad faith under the Insurance Code. U.S. Fire Ins. Co. v. Williams,
955 S.W.2d 267, 269 (Tex. 1997).
Arce asserts that the existence of inaccurate answers to questions on a life
insurance application is not a bona fide dispute between Arce and American National and
is not sufficient as a matter of law to preclude recovery under sections 541.060 and
541.061 of the Code. TEX. INS. CODE ANN. § 541.060. While Arce admits statutory claims
for unfair settlement practices generally only apply to covered claims, she argues this is
a covered claim on which summary judgment was improperly granted.
Because we have found genuine issues of material fact exist as to Arce’s contract
claim, we also find she has raised genuine issues of material fact precluding summary
judgment on her insurance claims.
CLASS CLAIMS
Finally, as part of Arce’s second issue, she argues the trial court erred in granting
summary judgment regarding her class claims because American National did not move
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for summary judgment on those grounds. After American National filed its motion for
summary judgment, Arce amended her petition to request injunctive relief for a putative
class. Consequently, American National did not address Arce’s class claims in its motion
nor did it amend its motion to do so.
American National argues summary judgment was proper despite this. It points to
the Texas Supreme Court’s opinion in Texas Commerce Bank, N.A. v. Grizzle, 96 S.W.3d
240, 255 (Tex. 2002), in which the court said where “summary judgment against the sole
class representative is proper on all the class representative’s claims, then the entire case
including the class claims may be dismissed.” American National contends summary
judgment against Arce was proper on all of her individual claims and thus, because she
had no live claims, summary judgment on her class claims was proper despite American
National’s failure to address those claims.
A motion for summary judgment must itself expressly present the grounds on
which it is made. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex.
1993). A motion must stand or fall on the grounds expressly presented in the motion. Id.In determining whether grounds are expressly presented, reliance may not be placed on
briefs or summary judgment evidence. Id.The record shows American National did not seek summary judgment regarding
Arce’s class claims7 and did not address those claims in any way. Therefore, summary
7 Class certification had not yet occurred.
17
judgment was improper as to those claims. Id. Accordingly, we sustain Arce’s second
issue as to all claims.
CONCLUSION
For the reasons set forth herein, we find the trial court erred in granting summary
judgment in American National’s favor. We reverse the judgment of the trial court and
remand this cause to the trial court for further proceedings consistent with this opinion.
Patrick A. Pirtle
Justice
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