Lidawi v. Progressive County Mut. Ins. Co.

• Decision Date: 17 July 2003
• Docket Number: No. 14-02-00908-CV.,14-02-00908-CV.
• Citation: 112 S.W.3d 725
• Parties: Mohammad LIDAWI and Zeina Mohamad, Appellants, v. PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

112 S.W.3d 725

Mohammad LIDAWI and Zeina Mohamad, Appellants, v. PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Appellee.

No. 14-02-00908-CV.

Court of Appeals of Texas, Houston (14th Dist.).

July 17, 2003.

Michael C. Engelhart, Houston, for appellants.

Mark Lapidus, Houston, for appellees.

Panel consists of Justices ANDERSON, SEYMORE, and GUZMAN.

OPINION

JOHN S. ANDERSON, Justice.

In this case arising from denial of an insurance claim based on the insured's non-cooperation, we address an issue of first impression: whether clauses in an insurance contract requiring the insured to cooperate in the investigation of a claim and to submit to an examination under oath (EUO) permit the insurance company to require separate, segregated examinations of the insureds. We conclude that when, under the terms of an insurance policy a person may be required to submit to an EUO, it is reasonable to infer that the insurer may require such examination to be separate and segregated from the examination of any other person. Accordingly, we affirm that part of the trial court's judgment declaring that the Standard Texas Personal Auto Policy at issue in this case permits Progressive to require separate, segregated examinations under oath from Lidawi and Mohamad. Nevertheless, because this is a matter of first impression in Texas, in the interest of justice we reverse that part of the trial court's judgment dismissing appellants' lawsuit for failure to comply with a condition precedent. We remand for further proceedings consistent with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

Appellants Mohammad Lidawi and Zeina Mohamad, who are husband and wife, represent they are victims of an accident in which someone failed to stop at a stop sign, striking the left side of appellants' automobile as appellants passed through the intersection. According to appellants, the driver then drove away without providing any identifying information. Appellants filed a claim with their insurer, Progressive County Mutual Insurance Company, the appellee. Appellants' policy provides in part: "A person seeking any coverage must ... [c]ooperate with us in the investigation ... of any claim." The policy also provides, "A person seeking any coverage must ... [w]hen required by us ... submit to examination under oath."

On or after February 9, 2001, Progressive Claims Inspector David Tews took a recorded statement from Lidawi regarding the accident. Progressive also inspected appellants' automobile. This inspection revealed damage from multiple impacts involving several incidents. Additionally, the impacts left paint transfer marks that did not match Lidawi's description of the vehicle causing the accident. Based on the discrepancies between the physical damage and Lidawi's statement, Tews hired an engineer to investigate the damage. The engineer also concluded the damage was not consistent with Lidawi's statement.

On March 14, 2001, Tews sent letters to appellants and their attorney, Michael Engelhart, requesting appellants submit to an EUO. The letter did not refer to separate examinations. On April 11, 2001, Engelhart, appellants, and an interpreter met Tews and another Progressive representative at Engelhart's office. When Progressive insisted the EUOs be conducted separately, Engelhart insisted each appellant be permitted to be in the room when the other was examined because "they are husband and wife, and are both claimants and insured under the policy." Progressive refused, and Tews left without taking the examination.

On April 16, 2001, Tews sent Engelhart a letter formally requesting that appellants submit to individual and separate EUOs. Engelhart responded, indicating there was nothing in the insurance policy that required individual and separate examinations. Engelhart reiterated appellants' willingness to be examined so long as they could be in the same room while being questioned. On April 25, Tews wrote Engelhart and appellants stating Progressive was denying appellants' claim because of appellants' non-cooperation in the request for the EUO.

Appellants then sued Progressive for breach of contract and also sought a declaratory judgment regarding their rights and duties under the policy, specifically the duty of cooperation, the requirement of separate examinations, and the insurer's waiver of examination. Progressive counterclaimed for a declaratory judgment (1) that its request for separate examinations was consistent with the cooperation obligations of the contract, appellant's failure to cooperate constituted a breach of the policy, and Progressive therefore properly denied the claim; and (2) by failing to cooperate and refusing separate examinations, appellants failed to meet all conditions precedent to recovery on their suit.

Both parties moved for summary judgment. Appellants moved for traditional summary judgment on their claims and a partial no-evidence summary judgment on Progressive's request for declaratory judgment that appellants failed to satisfy a condition precedent to the lawsuit. Progressive moved for traditional summary judgment. The trial court rendered judgment, ordering:

1. The Standard Texas Personal Auto Policy permits Progressive to require separate examinations under oath from Lidawi and Mohamad;

2. Since Lidawi and Mohamad failed to comply with Progressive's proper request for separate examinations, they have failed to comply with a condition precedent to recovery under their insurance policy with Progressive;

3. As a result, summary and declaratory judgment is hereby entered in favor of Progressive;

4. Plaintiffs' suit is hereby dismissed; and

5. Costs and attorney's fees are taxed against the incurring party.

DISCUSSION

Introduction and Standard of Review

Appellants raise two points of error. In point of error one, they contend they are entitled to summary judgment on their affirmative claims for breach of contract and declaratory judgment because, as a matter of law, the insurance policy does not entitle Progressive to separate, segregated EUOs. In point of error two, they contend they are entitled to summary judgment on their affirmative claim that Progressive waived its right to EUOs because they appeared, were ready, willing and able to proceed with the examination, and Progressive refused to proceed. For the same reasons, they argue they are "entitled to summary judgment and a no-evidence summary judgment" on Progressive's "defense" that all conditions precedent have not been met.¹

When, as in this case, the parties file competing motions for summary judgment, and the trial court grants one motion and denies the other, this court may consider the propriety of the denial as well as the grant. Gramercy Ins. Co. v. MRD Invs., Inc., 47 S.W.3d 721, 724 (Tex.App.-Houston [14th Dist.] 2001, pet. denied) (citing Comm'rs Court v. Agan, 940 S.W.2d 77, 81 (Tex.1997)). If the issue raised is based on undisputed and unambiguous facts, we may determine the question presented as a matter of law. Id. at 724. We may then either affirm the judgment or reverse and render the judgment the trial court should have rendered, including one that denies both motions. Id. (citing Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988)). If, however, resolution of the issues rests on disputed facts, summary judgment is inappropriate, and we should reverse and remand for further proceedings. Id. at 724 (citing Coker v. Coker, 650 S.W.2d 391, 394-95 (Tex.1983)). We may also remand when the interests of justice so require. See Tex.R.App. P. 43.3(b); N. County Mut. Ins. Co. v. Davalos, 84 S.W.3d 314, 317 (Tex.App.-Corpus Christi 2002, pet. granted).

The movant for summary judgment has the burden to show there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). When deciding whether there is a disputed material fact issue precluding summary judgment, the appellate court must take as true all evidence favorable to the non-movant. Id. at 548-49. The reviewing court must indulge every reasonable inference in favor of the non-movant and resolve any doubts in its favor. Id. at 549.

A defendant moving for traditional summary judgment assumes the burden of showing as a matter of law the plaintiff has no cause of action against him. Levesque v. Wilkens, 57 S.W.3d 499, 503 (Tex.App.-Houston [14th Dist.] 2001, no pet.). Traditional summary judgment for a defendant is proper only when the defendant negates at least one element of each of the plaintiff's theories of recovery, or pleads and conclusively establishes each element of an affirmative defense. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).

Additionally, after sufficient time for discovery has passed, a party may file a "no evidence" motion for summary judgment if there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. See Tex.R. Civ. P. 166a(i). As with the traditional summary judgment, in reviewing a "no evidence" summary judgment, we review the evidence in the light most favorable to the nonmovant and disregard all evidence and inferences to the contrary. Coastal Conduit & Ditching, Inc. v. Noram Energy Corp., 29 S.W.3d 282, 284 (Tex.App.-Houston [14th Dist.] 2000, no pet.). We sustain a no evidence summary judgment if (1) there is a complete absence of proof of a vital fact; (2) rules of law or evidence bar the court from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. Id.

We review declaratory judgments under the same standards as other judgments and decrees. See Tex. Civ. Prac. & Rem. Code Ann. § 37.010 (Vernon 1997); City of Galveston v. Giles, 902 S.W.2d 167, 170 (Tex.App.-Houston [1st Dist.] 199...