Breshears v. State Farm Lloyds

Decision Date27 August 2004
Docket NumberNo. 13-03-580-CV.,13-03-580-CV.
Citation155 S.W.3d 340
PartiesJerry & Elva BRESHEARS, Appellants, v. STATE FARM LLOYDS, Appellee.
CourtTexas Court of Appeals

Bradford M. Condit, Corpus Christi, for appellants.

Paul Dodson, Huseman & Pletcher, Corpus Christi, for appellee.

Before Chief Justice VALDEZ and Justices RODRIGUEZ and GARZA.


Memorandum Opinion by Justice GARZA.

Jerry and Elva Breshears appeal from a summary judgment granted in favor of State Farm Lloyds in a suit for breach of an insurance contract and violations of the insurance code. Both parties filed traditional motions for summary judgment, and State Farm also filed a no-evidence motion for summary judgment. The Breshears contend the trial court erred in granting State Farms's summary judgment motion and denying their summary judgment motion. Because we conclude that there was no breach of contract or any violation of the insurance code, we affirm.


The Breshears are homeowners who have a Texas Homeowners "B" policy with State Farm. The Breshears's home required extensive plumbing repairs, which were conducted by Gulf Coast Construction and Restoration ("GCC"). GCC billed the Breshears $23,735.92 for its work, and the Breshears filed a claim with State Farm for that amount. State Farm received notice of the Breshears's claim and, pursuant to the terms of the policy, acknowledged their claim and began the investigation the following day. Two weeks later, State Farm sent the Breshears an estimate of $18,742.15 for the value of the work performed along with payment of $13,502.51 (the estimate less their deductible and some prior credits).

An oral contract between GCC and the Breshears provided that payment to GCC from the Breshears would only be in the amount paid by State Farm. In other words, the Breshears had no obligation to pay GCC any more than they received from State Farm and would only have to pay GCC additional amounts if they recovered more money from State Farm.

Regardless of this agreement, the Breshears filed suit against State Farm, alleging that it breached its insurance contract and violated provisions of the insurance code. The Breshears's insurance policy provides for an appraisal if either party disagrees with the amount of payment.1 In accordance with the terms of this policy, the trial court abated the proceedings and the two parties began the appraisal process. The appraisers and umpire determined the amount of loss to be $21,484.00. Within thirty days of this decision, State Farm paid the Breshears an additional $5,698.36. According to the Breshears, this leaves $993.77 still unpaid from their original claim, based on GCC's invoicing.

The Breshears then continued to pursue the suit. Both sides filed motions for summary judgment. The trial court granted State Farm's motion without specifying whether it was granting the traditional or no-evidence motion for summary judgment and ordered that the Breshears take nothing on their claims. Because the trial court relied on evidence attached to the motions, we consider the traditional motion for summary judgment only.2 See Michael v. Dyke, 41 S.W.3d 746, 751-52 (Tex.App.-Corpus Christi 2001, no pet.).

Standard of Review

This court reviews the granting of summary judgment de novo. Tex. Commerce Bank-Rio Grande Valley, N.A. v. Correa, 28 S.W.3d 723, 726 (Tex.App.-Corpus Christi 2000, pet. denied).

In a traditional summary judgment, the issue on appeal is whether the movant met the burden of establishing that no genuine issue of material fact exists as to at least one element of the non-movant's claim and that the movant is entitled to judgment as a matter of law. See Tex.R. Civ. P. 166a(c); Cate v. Dover Corp., 790 S.W.2d 559, 562 (Tex.1990). All doubts about the existence of a genuine issue of a material fact are resolved against the movant. Cate, 790 S.W.2d at 562; see also Acker v. Tex. Water Comm'n, 790 S.W.2d 299, 301-02 (Tex.1990). If the movant's summary judgment motion and proof facially establishes its right to judgment as a matter of law, the burden shifts to the non-movant to raise a material fact issue sufficient to defeat summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979).

Where, as in this case, the trial court does not state the specific grounds upon which the summary judgment was granted, the reviewing court must consider whether any theories set forth in the motion will support a summary judgment. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993). A summary judgment must be affirmed if any of the theories advanced by the movant are meritorious. Harwell v. State Farm Mut. Auto. Ins. Co., 896 S.W.2d 170, 173 (Tex.1995).

In the event that both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review the summary judgment evidence presented by both sides and determine all questions presented and render the judgment the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000).

State Farm Lloyds's Motion for Summary Judgment

State Farm contends it did not breach its contractual obligations under the insurance policy; there are no grounds for setting aside the appraisal award; and it is not liable for prejudgment interest, penalty interest or attorney's fees.

Breach of Contract

The Breshears argue that because the appraisal award was greater than the initial payment made by State Farm, State Farm was in breach of the contract as a matter of law. However, they overstate the effect of appraisal decisions: an appraisal decision is intended "to estop one party from contesting the issue of the value of damages in a suit on the insurance contract," Allison v. Fire Ins. Exch., 98 S.W.3d 227, 253 (Tex.App.-Austin 2002, pet. abated), not to facilitate this type of liability. See Wells v. Amer. States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex.App.-Dallas 1996, writ denied) (appraisal awards leave questions of liability to the court); Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 797-98 (Tex.App.-Amarillo 1995, writ denied) (same). The Breshears may not use the fact that the appraisal award was different than the amount originally paid as evidence of breach of contract, especially when the contract they claim is being breached provides for resolution of disputes through appraisal.

The Breshears argue that the Texas Supreme Court's dicta in In re Allstate County Mut. Ins. Co., 85 S.W.3d 193, 195 (Tex.2002) (orig.proceeding), supports their breach of contract claim. The issue in Allstate was whether the trial court abused its discretion in refusing to uphold an appraisal clause in an automobile insurance policy. Id. The supreme court held that the trial court should have enforced the appraisal clause and explained, "[a]s to the plaintiffs' breach of contract claim, the parties have agreed in the contract's appraisal clause to the method by which to determine whether a breach has occurred. That is, if the appraisal determines that the vehicle's full value is what the insurance company offered, there would be no breach of contract." Id. at 196. The exact language of the appraisal clause that the court relied on to draw this conclusion is not cited in the opinion.

The Breshears appear to argue that this language indicates that if an appraisal award is different from the amount initially offered by the insurance company, a breach of contract has necessarily occurred. We disagree that this conclusion must follow from the supreme court's statement, particularly in light of the language of the contract before us in this case. The State Farm insurance contract clearly specified an appraisal process was the remedy for any disagreement regarding the amount of loss, and that the decision reached by the appraisers and umpire "will set the amount of the loss" and "shall be binding on you and us." Here, State Farm provided evidence establishing that it participated in the appraisal process and fully paid the amount set by the appraisers and umpire. There is no indication in the contract that a payment made prior to appraisal that differs from the appraisal award amounts to a breach of contract.

As State Farm complied with every requirement of the contract, it cannot be found to be in breach. Thus, the trial court did not err in granting summary judgment for State Farm on the breach of contract claim.

Appraisal Award

The Breshears also moved to set aside the appraisal award, which the trial court denied in granting State Farm's motion for summary judgment. An appraisal award made pursuant to an insurance policy is binding and enforceable unless the insured proves that the award was unauthorized or the result of fraud, accident, or mistake. See Allison v. Fire Ins. Exch., 98 S.W.3d at 252; Providence Lloyds Ins. Co. v. Crystal City I.S.D., 877 S.W.2d 872, 875 (Tex.App.-San Antonio 1994, no writ) (citing Scottish Union & Nat'l Ins. Co. v. Clancy, 71 Tex. 5, 8 S.W. 630, 631 (1888)); see also In re Allstate, 85 S.W.3d at 195 (appraisal claims are enforceable). Every reasonable presumption will be indulged to sustain an appraisal decision. See Providence Lloyds, 877 S.W.2d at 875. In the present case, there is no evidence suggesting any fraud, accident, or mistake. State Farm's summary judgment evidence shows that the appraisal award was made pursuant to the insurance policy, and payment was made reflecting the award determined by the appraisers appointed by each party and the independent umpire. Thus, because there is no evidence showing grounds to set aside the appraisal award, the trial court did not err in granting summary judgment on this issue.

Insurance Code Claims

State Farm also disputed in its motion for summary judgment the Breshears's claim that it was liable under article 21.55 of the insurance code and section 304.102 of the finance code for...

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