Life Ins. Co. of Southwest v. Verex Assur., Inc., 05-90-00673-CV
| Decision Date | 26 March 1991 |
| Docket Number | No. 05-90-00673-CV,05-90-00673-CV |
| Citation | 810 S.W.2d 416 |
| Parties | LIFE INSURANCE COMPANY OF THE SOUTHWEST, Appellant, v. VEREX ASSURANCE, INC., Appellee. |
| Court | Texas Court of Appeals |
John J. Irvin, Dallas, for appellant.
William L. Kirkman, Fort Worth, for appellee.
Before ROWE, LAGARDE and OVARD, JJ.
This appeal arises from a suit by Life Insurance Company of the Southwest (Southwest) against Verex Assurance, Inc. (Verex) seeking recovery under a mortgage guaranty insurance policy issued by Verex to cover a mortgage loan on which Southwest was the insured. After default on the loan, Southwest sued Verex for recovery under the policy. Verex refused to pay the claim, contending that the policy did not cover the type of loan in question and that Verex was misled into insuring the loan. Both sides moved for summary judgment based on stipulated facts, affidavits, and deposition testimony. The trial court granted summary judgment for Verex. Southwest appeals.
In a single point of error, Southwest urges that the trial court erred in granting Verex's motion for summary judgment because Verex was not entitled to summary judgment as a matter of law on its affirmative defenses of fraudulent misrepresentation and failure of conditions precedent to the effectuation of the insurance policy. We find that the trial court properly granted summary judgment based on the affirmative defense that conditions precedent to the effectuation of the policy were not met. We overrule appellant's point of error and affirm the summary judgment.
Summary judgment is proper if the summary judgment record shows that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. See TEX.R.CIV.P. 166a(c). In reviewing the propriety of a summary judgment, we are bound by these standards: (1) the movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant, and any doubts must be resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).
The summary judgment evidence in this case showed the following: In late 1983, Berg-Sutton, a home builder, acquired property at 506 Whipporwill, Missouri City, Texas, in trade from Calvin Manuel. Manuel traded the property on Whipporwill to Berg-Sutton in exchange for a new home built by Berg-Sutton. At the time of exchange, there was an outstanding and assumable loan of $39,557.02 from University Savings on the property. Berg-Sutton assumed the loan when it acquired the property.
Berg-Sutton then refinanced the property with Texas Western, a local mortgage company. Berg-Sutton's purpose for refinancing the property was to convert to cash its newly acquired equity in the property. The amount of the loan sought was $63,900. The loan to be paid off was $39,577.02. Berg-Sutton was to collect the difference.
In connection with Berg-Sutton's refinancing of the loan, the loan processor at Texas Western put together a loan file--that is, she ordered credit reports, deposit verifications, mortgage verifications, requested tax returns, a current profit and loss statement, and a balance sheet on Berg-Sutton. After the loan file was put together, Texas Western applied to Verex for insurance on the loan. At that time, Texas Western held a master policy from Verex which entitled Texas Western to apply for coverage on individual loans. In applying for insurance, Texas Western sent Verex a copy of the loan file which had been prepared. The loan file showed that the loan was a new loan made to purchase the property on Whipporwill as opposed to a refinance of an existing loan.
The loan file generated by Texas Western and sent to Verex specifically showed that: (1) the purpose of the loan was for purchase and not to refinance; (2) the estimated cash required to be paid by the borrowers at closing was $11,600; and (3) the source of the buyer's down payment was to be its bank funds. The "Details of Purchase" section, which was not to be completed if the loan was for refinancing, stated that the purchase price was...
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