Omni Metals, Inc. v. Poe & Brown of Texas, Inc. and Transcontinental Insurance Co.

Reversed and Remanded and Opinion filed June 13, 2002

Reversed and Remanded and Opinion filed June 13, 2002.

In The

Fourteenth Court of Appeals

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NO. 14-00-01081-CV

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OMNI METALS, INC., Appellant

V.

POE & BROWN OF TEXAS, INC. AND

TRANSCONTINENTAL INSURANCE CO., Appellees

_____________________________________________________________

On Appeal from the 61st District Court

Harris County, Texas

Trial Court Cause No.  96-36058-A

_____________________________________________________________

O P I N I O N

            In this appeal, we address whether an insurer and insurance agent misrepresented coverage under a bailee’s policy, or had a duty to disclose policy exclusions, in responding to an inquiry by their insured’s bailor.  The trial court granted summary judgment in favor of the insurer and insurance agency, appellees Transcontinental Insurance Company and Poe & Brown of Texas, Inc.  The bailor, appellant Omni Metals, Inc., appeals raising seven issues: (1) appellees had the duty to disclose an exclusion of coverage; (2) fact issues exist about misrepresentation of coverage; (3) fact issues exist about misrepresentations made to the bailee, upon which Omni relied; (4) Omni did not have notice of the policy and had no duty to read it; (5) Poe & Brown was not rendering a professional service that exempts it from the DTPA; (6) lack of privity does not disqualify Omni as a consumer under the DTPA; and (7) Omni has a cause of action for attorneys’ fees.  We reverse and remand.

                                                            I. BACKGROUND^[1]

            Omni is a customer of Port Metal, a steel processing company.  Port Metal’s business entails keeping large coils of steel for its customers and cutting and processing steel pursuant to customer specifications.  Port Metal keeps the steel coils at no cost for sixty days but charges a storage fee based on tonnage if they remain longer. 

            Concerned about insurance for its customers’ property while located at its premises, Port Metal sought the advice of an insurance agent.  The agent, Danny Sparks, who worked for Poe & Brown at the time of the loss, advised that Port Metal needed a bailee’s liability policy.  The agent thus procured a $3,000,000 “all risk,” bailee liability policy from Transcontinental.  The policy was renewed each year.

            In 1992, when Port Metal’s president read the policy, he noticed that it excluded coverage for property stored for a fee.  He told the insurance agent that he charged his customers a storage fee. However, the insurance agent told him that the exclusion “prohibited [Port Metal] from storing things other than coils or Port Metal Processing’s business and [Port Metal] couldn’t go out and store washing machines or something without obtaining additional coverage.”  Poe & Brown’s agent also advised at least one of Port Metal’s customers that it did not need to buy additional insurance because its steel was covered under the bailee liability policy while at Port Metal.

            During this time, Poe & Brown also provided certificates of insurance to Omni.  On the certificate for the 1992-93 policy, Poe & Brown noted the $3,000,000 bailee liability policy issued by Transcontinental.  It also noted on the certificate, “coverage includes property of others in custody of insured.”^[2]  In subsequent years, this notation was dropped, and the designation “all risk” appeared.^[3]  Finally, in 1995, two months before a fire damaged Omni’s steel, Poe & Brown sent another certificate to Omni in response to an inquiry from Omni to Port Metal. In sending the certificate to Omni, Poe & Brown understood that Omni wanted to make sure its property at Port Metal was insured.

            In December 1995, a fire started at a property adjacent to Port Metal and spread. Omni sustained over $1,000,000 in damages to its steel.  When Omni submitted its claim under Port Metal’s bailee liability policy, the insurer, Transcontinental, denied coverage because the policy did not cover property stored for a fee. 

            Omni then brought suit against Transcontinental and Poe & Brown for misrepresentation, failure to disclose, and violations of the DTPA and Insurance Code.  Poe & Brown and Transcontinental filed motions for summary judgment, claiming that there was no misrepresentation or false and misleading act.  Additionally, Poe & Brown’s motion contained the following grounds: (1) it provided Omni a professional service exempt from the DTPA; (2) Omni had a duty to read the policy; (3) Omni did not qualify as a consumer because it did not directly purchase or lease goods or services from Poe & Brown; and (4) Omni could not recover attorney’s fees as damages because Poe & Brown committed no wrongful acts.  Lastly, Transcontinental raises for the first time on appeal the ground that it has no agency liability for Poe & Brown’s actions.

            We reverse and remand because: (1) under the circumstances presented in this case, appellees had a duty to disclose additional coverage information to Omni; (2) fact issues exist about misrepresentations made to Omni; (3) fact issues exist about misrepresentations made to Port Metal, upon which Omni relied; (4) the professional services exemption does not apply to cases filed before September 1, 1996; (5) even if applicable, Poe & Brown did not meet its summary judgment burden regarding the professional services exemption; (6) one of Omni’s DTPA claims (brought via the Insurance Code) does not require consumer status; (7) Omni is not barred from its other DTPA claims because privity is not required for consumer status; (8) on the grounds presented regarding attorney’s fees as damages, Poe & Brown is not entitled to summary judgment; and (9) Transcontinental is not entitled to summary judgment on a ground first raised on appeal.

                                                    II. STANDARD OF REVIEW

            To prevail on a motion for summary judgment, a defendant must establish that no material fact issue exists and that it is entitled to judgment as a matter of law.  Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex. 1999).  If the defendant meets this burden, plaintiff must raise a genuine issue of material fact on the targeted element or elements of the cause of action.  Gonzalez v. City of Harlingen, 814 S.W.2d 109, 112 (Tex. App.—Corpus Christi 1991, writ denied).  In reviewing a summary judgment, an appellate court accepts as true all evidence supporting the non-movant.  Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549 (Tex. 1985).  All inferences are indulged in favor of the non-movant, and all doubts are resolved in its favor.  Id.  When the trial court does not state the grounds for granting the motion, and several grounds are provided, the reviewing court must determine if any of the grounds would support the judgment.  Rogers v. Ricane Enter., Inc., 772 S.W.2d 76, 79 (Tex. 1989).  Finally, because the propriety of summary judgment is a question of law, we review the trial court’s decision de novo.  Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994).

                             III. MISREPRESENTATION & DUTY TO DISCLOSE

            In its first and second issues, Omni contends that appellees misrepresented coverage and violated the duty to disclose the storage exclusion. 

                                                            A. Duty to Disclose

            We first address the duty to disclose the storage exclusion.  “Where there is a duty to speak, silence may be as misleading as a positive misrepresentation of existing facts.” Smith v. Nat’l Resort Cmty., Inc., 585 S.W.2d 655, 658 (Tex. 1979).  Whether a duty to disclose exists is a question of law.  Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001); Ralston Purina Co. v. McKendrick, 850 S.W.2d 629, 633 (Tex. App.—San Antonio 1993, writ denied).  In support of its argument, Omni cites section 551 of the Restatement of Torts and Hoggett v. Brown, 971 S.W.2d 472 (Tex. App.—Houston [14th Dist.] 1997, pet. denied).

                                                                 1. Section 551

Section 551, entitled Liability for Nondisclosure, states as follows:

class=Section3>

(1) One who fails to disclose to another a fact that he knows may justifiably induce the other to act or refrain from acting in a business transaction is subject to the same liability to the other as though he had represented the nonexistence of the matter that he has failed to disclose if, but only if, he is under a duty to the other to exercise reasonable care to disclose the matter in question.

(2) One party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated

    . . . .

(b) matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading; and

(c) subsequently acquired information that he knows will make untrue or misleading a previous representation that when made was true or believed to be so; and

(d) the falsity of a representation not made with the expectation that it would be acted upon, if he subsequently learns that the other is about to act in reliance upon it in a transaction with him; and

(e) facts basic to the transaction, if he knows the other is about to enter into it under a mistake as to them, and that the other, because of the relationship between them, the customs of the trade or objective circumstances, would reasonably expect a disclosure of those facts.

class=Section4>

Restatement (Second) of Torts § 551 (1977).  The Texas Supreme Court has never adopted this section.  Bradford, 48 S.W.3d at 755.  Therefore, we overrule Omni’s issue as to section 551.  See Engstrom v. First Nat’l Bank, 936 S.W.2d 438, 444–45 (Tex. App.—Houston [14th Dist.] 1996, writ denied) (declining to adopt section 551).

                                                     2.  Hoggett Duty to Disclose

    In Hoggett, this court recognized that a duty to disclose may arise in a commercial context.  “A duty to disclose may arise in four situations: (1) when there is a fiduciary relationship; (2) when one voluntarily discloses information, the whole truth must be disclosed; (3) when one makes a representation, new information must be disclosed when that new information makes the earlier representation misleading or untrue; and (4) when one makes a partial disclosure and conveys a false impression.”  Hoggett, 971 S.W.2d at 487. 

    Omni contends that a duty to disclose arose under Hoggett scenarios three and four.  Considering the appellate record, we agree.

    Under Hoggett scenario three—a duty to disclose new information that makes an earlier representation misleading or untrue—Omni argues that Poe & Brown should have revealed the storage fee exclusion to correct impressions made from earlier certificates of insurance.  The earliest certificate of insurance, for the 1992-93 bailee policy, contains the following language: “coverage includes property of others in custody of insured.”^[4]  Danny Sparks, the insurance agent employed by Poe & Brown at the time of the fire loss, sent this certificate to Omni.  The summary judgment evidence also shows that Sparks was aware of the storage fee exclusion by May 1995. Further, he had been questioned about the storage fee exclusion by Port Metal’s president, who revealed that Port Metal charged its customers a storage fee.  Despite this development, Sparks did not disclose or provide additional information about the storage exclusion to Omni, even when he knew that Omni wanted to make sure that its property was covered by insurance purchased by Port Metal. Thus, Sparks never corrected the impression conveyed by the 1992-93 policy, which was misleading given facts Sparks later learned.  Accordingly, we hold that these circumstances create a fact issue on whether appellees breached the duty prescribed under Hoggett’s scenario three.

    Relying on Hoggett scenario four, Omni contends that, under the circumstances, the “all risk” certificate of insurance^[5] was a partial disclosure that conveyed a false impression.  We agree. We conclude that the evidence shows Poe & Brown understood it was answering Omni’s question, “Is my property at Port Metal’s facility covered?”  At that time, Poe & Brown knew that Port Metal wanted to cover all property of its customers, was aware of the storage exclusion in the policy, and knew that Port Metal was charging its customers a storage fee.  Despite this knowledge, the certificate of insurance was its only answer, a partial answer, to Omni’s question.  The certificate verified “all risk” bailee liability coverage with a $3,000,000 limit.  In deposition, Poe & Brown’s corporate representative admitted that the term “all risk” did not really cover all possible risks and was possibly confusing.  Thus, taken in the light most favorable to Omni, the all risk designation left a false impression under the circumstances.  Accordingly, there is a fact issue whether appellees met their duty under Hoggett scenario four.

    Having found fact issues remain about appellees’ duty to disclose additional information under Hoggett scenarios three and four, we sustain issue one.

                                                          B. Misrepresentation

    In its second issue, Omni contends that a fact issue exists on whether appellees misrepresented coverage because, under the circumstances, the “all risk” certificate of insurance was false and misleading.  The elements of misrepresentation are (1) a representation made by a defendant in the course of business; (2) the defendant supplied false information for the guidance of others in their business; (3) the defendant failed to exercise reasonable care or competence in obtaining or communicating the information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the representation.  Fed. Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). 

    In their motions for summary judgment, appellees argued that the “all risk” representation in the certificate cannot be considered a misrepresentation as a matter of law, citing N. Am. Shipbuilding, Inc. v. S. Marine & Aviation Underwriting, Inc., 930 S.W.2d 829, 835-36 (Tex. App.—Houston [1st Dist.] 1996, no writ). While it is true that “all risk” is an accepted term of art in the insurance industry,  Muniz v. State Farm Lloyds, 974 S.W.2d 229, 234 (Tex. App.—San Antonio 1998, no writ), we do not agree that a false impression can never be conveyed by use of the term.  For instance, in Lexington Ins. Co. v. Buckingham Gate, Ltd., 993 S.W.2d 185, 195 (Tex. App.—Corpus Christi 1999, pet. denied), the use of the term “all risk” was part of the evidence that an insurance broker misrepresented the scope of insurance it obtained on a property.

    Further, N. Am. Shipbuilding is distinguishable for several reasons.  First, the “all risks” representation in that case was found in the insurance policy, not just in two words on a certificate: “[this policy] insures against all risks of physical loss or damage to the Vessel . . . except as herein provided.”  930 S.W.2d at 831.  Second, an exclusion for faulty workmanship was also fully delineated in the same document. In comparison, the certificate sent to Omni did not set forth the storage exclusion.  Third, the defendants in N. Am. Shipbuilding did not communicate the “all risk” policy clause in response to a specific inquiry.  In contrast, Poe & Brown provided the “all risk” certificate in response to Omni’s inquiry for confirmation that its steel was covered while at Port Metal.  Fourth, in N. Am. Shipbuilding, the insured failed to provide summary judgment proof that the insurer misrepresented the coverage to include faulty workmanship.  The summary judgment proof here reveals that appellees told Port Metal that the storage exclusion did not apply.

    We find the case of Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20 (Tex. 1990), more analogous to the present case.  In Black, an employer purchased an automobile liability policy for a truck leased to it and used by an employee.  The policy excluded coverage for accidents arising from personal use of the truck.  The employee who used the truck did not receive a copy of the policy.  Instead, he only received a card, which stated, “This policy complies with the compulsory auto laws of the State of Texas.”  Id. at 24.  Further, the employee averred in an affidavit that through his payment of premiums, conversations with his employer, and the insurance card, he understood the insurance to cover personal use of the truck.  Additionally, Victoria Lloyds had misrepresented that “complete liability insurance” had been provided.  Id. at 25.  Based on the card and the employee’s affidavit, the Texas Supreme Court found that a fact issue existed “concerning misrepresentation of the liability insurance coverage for personal use.”  Id.  Here, we have not only the certificate of insurance but also evidence indicating that appellees misrepresented the scope of the bailee policy to Port Metal.  Moreover, appellees sent the certificate in answer to Omni’s inquiry to verify coverage, and their representative admitted that the “all risk” term was confusing.  Considering all of the circumstances under which the certificate was published and delivered, we hold that a fact issue exists as to whether appellees misrepresented the coverage afforded by the policy. Accordingly, we sustain issue two.

                                                         C. Counter-Arguments

    In considering issues one and two, we will address appellees’ three counter-arguments, urged generally in reply to issues one and two. Appellees argue (1) as a matter of law, issuance of an insurance certificate does not create a duty to the certificate holder; (2) as a matter of law, disclaimers in the certificate prevent creation of a false impression; and (3) an insurer should have no duty to explain policy exclusions to a certificate holder because it has no duty to explain them to the insured.  We acknowledge insurance industry custom and applicable legal doctrines, but find that all these arguments are distinguishable from the facts before us.

    Appellees first argue that, as a matter of law, issuance of a certificate of insurance to a non-customer does not create a duty to the certificate holder, citing Lu-An-Do, Inc. v. Kloots, 721 N.E.2d 507, 510 (Ohio Ct. App. 1999). In Lu-An-Do, a mortgagee of real property received a certificate of insurance that evidenced insurance on the building.  The insurer did not know that the mortgagee also held an interest in the contents of the building.  When a fire damaged the building and its contents, the mortgagee sued the insurance company for negligent misrepresentation because the policy did not cover the contents.  The court held that (1) issuance of a certificate to a non-customer does not create a duty to the certificate holder; and (2) though the mortgagee might be a third party to whom the insurer must not make misrepresentations, the extent of the mortgagee’s reliance on the certificate in this instance was unforeseeable.

    We distinguish Lu-An-Do for several reasons. First, the court did not address a failure to disclose claim.  Second, foreseeability of Omni’s reliance on the certificate was not raised in this case.  Third, our holding that a duty to disclose arose and a fact issue exists on misrepresentation does not stand for the proposition that mere issuance of a certificate of insurance creates a duty to the certificate holder.  Finally, Ohio case law is merely persuasive authority, not precedent. Appellees have not cited any Texas authority that directly addresses and supports their “no duty” argument.

    Next, appellees contend that disclaimers in the certificate^[6] prevent creation of a false impression, citing Frith v. Guardian Life Ins. Co. of Am., 9 F. Supp. 2d 744 (S.D. Tex. 1998).  Frith is an insurance premium case in which the defendants moved for dismissal for failure to plead the allegations with sufficient particularity.  See id. at 744 (Federal Rule of Procedure 9(b) requires averments of fraud or mistake to be stated with particularity).  The opinion only minimally reveals the facts of the case.^[7]  Apparently, the plaintiffs tried to bring a misrepresentation claim based on cost illustrations provided by the insurer.  Id. at 744–45.  Without identifying which aspect of the cost illustration the plaintiffs alleged was false, the court noted disclaimers were present and alluded to a previous ruling that “nothing in the illustrations . . . stated that Plaintiffs would no longer have to make premium payments . . . or that the premium payments would vanish.”  Id. at 745.  Additionally, the plaintiffs claimed breach of a duty to disclose. While the court recognized that “a person who makes a partial disclosure has a duty to tell the whole truth,” the factual allegations in plaintiff’s pleadings were insufficient to support such a contention.  Id. 

    Consequently, we do not read Frith to contain the bright-line rule advanced by appellees that disclaimers preclude creation of a false impression as a matter of law.  In this case, the insurance certificate contains both the pre-printed disclaimers and the “all risk” designation, which the summary judgment proof shows could be confusing.  Thus, the disclaimers in the certificate present a conflicting fact that we must disregard in applying the summary judgment standard of review.  See Harwell v. State Farm Mut. Auto Ins. Co., 896 S.W.2d 170, 173 (Tex. 1995) (all conflicts in the evidence will be disregarded).

    Lastly, appellees contend they have no duty to disclose to a noncustomer because they have no duty to explain policy exclusions to an insured, citing Nwaigwe v. Prudential Prop. & Cas. Ins. Co., 27 S.W.3d 558 (Tex. App.—San Antonio 2000, pet. denied) (fire policy excluded coverage if dwelling was vacant 60 consecutive days).  Again, we do not find such a bright-line rule iterated in Nwaigwe.  Further, we are not establishing a general duty to explain policy exclusions to insureds or certificate holders.  Instead, the Hoggett duty to disclose arose in this case only because, under the circumstances, the appellees made a partial disclosure and failed to prevent their partial or ambiguous statement from being misleading. Finally, although the insured in Nwaigwe was not told about the vacancy exclusion, the insured told the insurer that his dwelling would not remain vacant for more than 30 days.  Because of this, the court found no duty to disclose the exclusion. In contrast, the summary judgment evidence here reveals that appellees provided the certificate as an answer to Omni’s inquiry about whether its steel was covered at Port Metal.  Appellees knew about the storage exclusion, knew that Port Metal was charging its customers a storage fee, knew that Port Metal intended to cover all property of its customers, and professed to Port Metal to have provided such coverage.  Appellees chose to answer Omni’s question without providing information about the exclusion.

    In summary, our narrow holding is that issuance of a certificate of insurance (Exhibit 1) without disclosure of additional information about the storage fee exclusion and issuance of another certificate (Exhibit 3), coupled with the circumstances under which it was sent to Omni and the assurances of coverage to Port Metal, give rise to causes of action for misrepresentation.  We reject appellees’ arguments that, as a matter of law, issuance of an insurance certificate does not create a duty; presence of disclaimers precludes the creation of a false impression; no duty to disclose arises because there is no duty to explain policy exclusions to an insured; and the use of “all risk” cannot convey a false impression.  We have sustained Omni’s issues one and two.

                                 IV. MISREPRESENTATIONS TO PORT METAL

    In issue three, Omni contends that fact issues exist about whether appellees made misrepresentations to Port Metal, upon which Omni relied.  We agree. Certain persons, other than the direct recipient of a misrepresentation, can sue for negligent misrepresentation. See Restatement (Second) of Torts § 552(2) (1977).^[8]  Texas courts have adopted section 552.  McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 791 (Tex. 1999); Fed. Land Bank Ass’n of Tyler, 825 S.W.2d at 442.

    Appellees did not argue in their motions for summary judgment that Omni was precluded from the class of persons who could sue for appellees’ misrepresentations to Port Metal. Further, the summary judgment evidence shows that appellee Poe & Brown erroneously informed Port Metal’s president that the storage exclusion prohibited him “from storing things other than coils or Port Metal Processing’s business and [he] couldn’t go out and store washing machines or something without additional coverage.” Poe & Brown’s employee also told Port Metal’s president that the policy would cover “[p]roduct owned by my customers for processing in—located in my facility.” This evidence raises a fact issue about whether appellees misrepresented coverage to Port Metal. Accordingly, we sustain issue three.

                                                V. FAILURE TO READ POLICY

    In its fourth issue, Omni contends that the trial court erred in granting summary judgment on the ground that Omni failed to read the policy.  Poe & Brown, the only appellee to advance this ground, offered no authority in its motion for summary judgment that Omni had a duty to read the policy.  It also failed to provide any authority that such a duty would preclude misrepresentation and DTPA claims.  In its appellate briefing, Poe & Brown concedes that “it may be true that Omni had no ‘duty’ to read the policy.”  Further, in two cases upon which Omni relies, the failure to read the policy was no apparent bar to a claim for misrepresentation.  Black, 797 S.W.2d at 21–25; Lexington, 993 S.W.2d at 194, 196.  Given the dearth of authority in support of appellees’ position, Omni’s failure to read the policy does not support the granting of summary judgment.  Issue four is sustained.

                              VI. DTPA PROFESSIONAL SERVICE EXEMPTION

    In its fifth issue, Omni contends that the trial court erred in granting summary judgment on its DTPA claims based on the professional service exemption.  See Tex. Bus. & Com. Code Ann. § 17.49(c) (Vernon Supp. 2002) (subchapter does not apply to a claim based on the rendering of a professional service, the essence of which is provision of advice, judgment, opinion, or similar professional skill).  First, this exemption was not effective for cases filed before September 1, 1996. See Stafford v. Lunsford, 53 S.W.3d 906, 910 (Tex. App.—Houston [1st Dist.] 2001, n.p.h.). Omni apparently filed its original petition in July 1996.^[9]

    Second, there is very little case law interpreting the professional services exemption. Omni contends that the provision is meant “to remove the DTPA as a vehicle for professional malpractice claims.” Teel Bivins et al., The 1995 Revisions to the DTPA: Altering the Landscape, 27 Tex. Tech L. Rev. 1411, 1451 (1996).  This intent was certainly followed  in Stafford, in which a legal malpractice claim was barred by the exemption.  53 S.W.3d at 910.  However, the plain language of section 17.49(c) is not limited to malpractice claims.

    Texas courts have addressed the definition of “professional services” in circumstances other than the DTPA.  See, e.g., Atlantic Lloyd’s Ins. Co. of Tex. v. Susman Godfrey, L.L.P., 982 S.W.2d 472, 477 (Tex. App.—Dallas 1998, pet. denied); Md. Cas. Co. v. Crazy Water Co., 160 S.W.2d 102, 104 (Tex. Civ. App.—Eastland 1942, no writ).  Under the case law, a “professional service” is more than an act flowing from mere employment.  Atlantic Lloyd’s, 982 S.W.2d at 477.  “We do not deem an act a professional service merely because it is performed by a professional.  Rather, it must be necessary for the professional to use his specialized knowledge or training.”  Id.  For the DTPA exemption, the essence of the professional service provided must be advice, judgment, opinion, or similar professional skill.  Tex. Bus. & Com. Code Ann. § 17.49(c).  Reflecting this view of a professional service in the context of the DTPA is Cole v. Central Valley Chems., Inc., 9 S.W.3d 207, 210 (Tex. App.—San Antonio 1999, pet. denied).  In Cole, a farmer sued a herbicide seller for misrepresentation of the benefits of a weed killer.  The court held that the basis of the suit was the purchase of weed killer, not the rendering of a professional service.  Id.

    In this case, Poe & Brown argues in its motion that the certificate of insurance faxed to Omni “was simply giving its judgment or opinion that the policy listed . . . provided coverage.”  However, Poe & Brown fails to point to proof that in providing the certificate, it was providing “advice, judgment, opinion, or similar professional skill.” There is no evidence of specialized knowledge or training that would make faxing the certificate and the information on it a professional service instead of a mere act of employment. Additionally, Omni sued for failure to disclose under section 17.46(b)(23) of the DTPA, and the professional service exemption does not apply to such a claim.  Tex. Bus. & Com. Code Ann. § 17.49(c)(2).  For these reasons, Poe & Brown failed to meet its burden to earn summary judgment based on the professional services exemption to the DTPA. 

    Accordingly, because section 17.49(c) became effective after this case was apparently filed and because Poe & Brown did not conclusively establish its entitlement to summary judgment under the professional services exemption, we sustain issue five.

                                                      VII. CONSUMER STATUS

    In its sixth issue, Omni argues the trial court erred in granting summary judgment on its DTPA claims because privity is not required to be a consumer within the meaning of the statute.  In one paragraph in its motion for summary judgment, Poe & Brown argued that Omni was not a consumer because it did not purchase or lease goods or services from Poe & Brown.  It offered no case law in support of its argument.  Its appellate briefing is similarly devoid of case law and argument about Omni’s consumer status.

    Omni brought its DTPA-based claims through article 21.21 of the Insurance Code.  Tex. Ins. Code Ann. art. 21.21, § 16(a) (Vernon Supp. 2002).  Article 21.21, section 16(a), provides a cause of action for “unlawful deceptive trade practice[s]” defined under the laundry list of DTPA section 17.46(b).  Article 21.21 does not require consumer status to bring a DTPA-based cause of action. Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 386 (Tex. 2000).  “But if the terms of a subsection of DTPA section 17.46(b) require consumer status, then consumer status is required to bring an action under article 21.21 for its violation.”  Id.  

    Omni pleaded violations of DTPA section 17.46(b)(5), (7), (12), and (23).  By their terms, subsections (5), (7), and (23) require consumer status.  Id. at 387.  However, subsection (12) does not require consumer status.  Id.  Because consumer status is not required, the trial court erred in granting summary judgment on Omni’s claim for violation of DTPA section 17.46(b)(12).

    For the remaining DTPA provisions pled by Omni, we must determine whether consumer status requires direct purchase or lease of services from Poe & Brown. “Privity of contract with a defendant is not required for the plaintiff to be a consumer.” Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996).  Further, “[t]he consumer does not have to be the actual purchaser of the insurance in order to be classified as a consumer under the DTPA.”  HOW Ins. Co. v. Patriot Fin. Serv. of Tex., Inc., 786 S.W.2d 533, 539 (Tex. App.—Austin 1990), overruled on other grounds by Hines v. Hash, 843 S.W.2d 464 (Tex. 1992).  Accordingly, Omni is not denied consumer status by lack of privity with Poe & Brown.  The trial court erred in granting summary judgment on this ground, and we thus sustain issue six.

                                        VIII. ATTORNEY’S FEES AS DAMAGES

    In its seventh issue, Omni contends the trial court erred, if it in fact so ruled, that Omni has no cause of action to recover attorney’s fees as damages.  Omni incurred attorney’s fees and costs in pursuing prior litigation against the third party on whose property the damaging fire started.  The trial court’s general order granting summary judgment is defined by the grounds in appellees’ motions for summary judgment.  Here, Poe & Brown did not assert that no cause of action exists for recovery of attorney’s fees incurred in prior litigation.^[10]  We thus do not address such an issue.  See Travis v. City of Mesquite, 830 S.W.2d 94, 100 (Tex. 1992) (summary judgment cannot be affirmed on a ground not specifically presented in the motion).

    What Poe & Brown actually contended was that it committed no “wrongful act” that would entitle Omni to recover its prior litigation fees.^[11]  As we have already addressed in this opinion, summary judgment was improper on Omni’s claims. Accordingly, there remain fact issues about whether Poe & Brown’s acts were wrongful.  Thus, on the ground presented in Poe & Brown’s motion, it was error to grant summary judgment on Omni’s claims for prior litigation attorney’s fees.  Accordingly, we sustain issue seven.

                              IX. TRANSCONTINENTAL’S AGENCY LIABILITY

    Lastly, in its briefing, Transcontinental urges that Poe & Brown was not its agent and that it cannot be held liable for Poe & Brown’s actions. Transcontinental did not urge this argument in its motion for summary judgment.  The motion itself must expressly present the grounds on which it is made.  McConnell v. Southside I.S.D., 858 S.W.2d 337, 341 (Tex. 1993).  We cannot affirm a summary judgment on a ground not specifically presented in the motion for summary judgment.  Travis, 830 S.W.2d at 100.

    In conclusion, we hold that the trial court erred in granting summary judgment on Omni’s claims.  Accordingly, we reverse and remand for further proceedings.

                                                             /s/                    Charles W. Seymore

                                                                                     Justice

Judgment rendered and Opinion filed June 13, 2002.

Panel consists of Chief Justice Brister and Justices Fowler and Seymore.

Do Not Publish — Tex. R. App. P. 47.3(b).

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    ^[1]  We note that this is Omni’s version of the facts, taken in the light most favorable to it as nonmovant.

    ^[2]  See Exhibit 1 (the 1992 certificate of insurance).

    ^[3]  See Exhibits 2 (the 1994 certificate of insurance) and 3 (the 1995 certificate of insurance).

    ^[4]  See Exhibit 1.

    ^[5]  See Exhibit 3.

    ^[6]  Pre-printed portions of the certificate read, “[T]he insurance afforded by the policies described herein is subject to all the terms, exclusions[,] and conditions of such policies” and “[t]his certificate does not amend, extend, or alter the coverage afforded by the policies below.”

    ^[7]  The Frith court set out factual allegations in a previous order, which is unfortunately not published.  See Frith, 9 F. Supp.2d at 744.

    ^[8]  Restatement (Second) of Torts section 552(2) describes those who may sue a person for negligent misrepresentation:

(a) . . . the person or one of a limited group of persons for whose benefit and guidance he intends to supply the information or knows that the recipient intends to supply it; and

(b) through reliance upon it in a transaction that he intends the information to influence or knows that the recipient so intends or in a substantially similar transaction.

    ^[9]  The original petition is not included in the appellate record so that we may verify the date of filing. Additionally, Omni has never argued that it filed its case before the effective date of the professional services exclusion.  

    ^[10]  Only Poe & Brown moved for summary judgment on the issue of attorney’s fees as damages.

    ^[11]  See Baja Energy, Inc. v. Ball, 669 S.W.2d 836, 839 (Tex. App.—Eastland 1984, no writ) (“Courts have also allowed recovery for attorney’s fees and other litigation expenses of a previous suit where a party was required to prosecute or defend the previous suit as a consequence of the ‘wrongful act’ of the defendant.”).  But see Martin-Simon v. Womack, 68 S.W.3d 793, 797–98 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (declining to adopt wrongful-act exception to allow recovery of attorney’s fees).