Tex. Windstorm Ins. Ass'n v. Jones

• Citation: 512 S.W.3d 545
• Decision Date: 15 December 2016
• Docket Number: NO. 01–16–00385–CV,01–16–00385–CV
• Parties: TEXAS WINDSTORM INSURANCE ASSOCIATION, Appellant v. Randy JONES, Appellee
• Court: Court of Appeals of Texas

512 S.W.3d 545

TEXAS WINDSTORM INSURANCE ASSOCIATION, Appellant

v.Randy JONES, Appellee

NO. 01–16–00385–CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued December 15, 2016

James R. Old, Jr., Jerry W. Fancher, Jr., Jay Old & Associates, PLLC, Beaumont, TX, for appellant.

Melissa Waden Wray, Richard D. Daly, Daly & Black, P.C., Houston TX, for appellee

Panel consists of Chief Justice Radack and Justices Jennings and Lloyd.

OPINION

Russell Lloyd, Justice

This permissive interlocutory appeal concerns recently enacted provisions of Chapter 2210 of the Texas Insurance Code, known as the Texas Windstorm Insurance Association Act ("TWIAA"). See TEX. INS. CODE ANN. §§ 2210.001 –.705 (West 2015). Appellee Randy Jones filed a first-party insurance claim against appellant Texas Windstorm Insurance Association ("TWIA" or "the association"), alleging breach of contract and violations of Insurance Code sections 2210.575 and 2210.576. TWIA filed a plea to the jurisdiction and alternative motion for summary judgment seeking dismissal of Jones's claims. On appeal, TWIA challenges the trial court's amended order denying its plea and alternative motion. We reverse the trial court's amended order denying the plea and alternative motion and render judgment dismissing Jones's claims.

Background

A. Factual History

Randy and Debra Jones are the named insureds under an insurance policy TWIA issued on June 12, 2014, covering the property located at 62 Aloe Vera Ct., Lake Jackson, Brazoria County, Texas. The policy, with an effective period from June 12, 2014 to June 12, 2015, provided coverage against direct loss to the property resulting from windstorm and hail.

On August 9, 2015, TWIA received a claim from the Joneses with a stated date of loss of April 17, 2015.¹ On August 10, 2015, TWIA assigned the Joneses' claim to Ideal Adjusting, an independent adjusting company, and an inspection was conducted the same day.

During inspection of the property, the independent adjuster performed test squares on all directional slopes of the Joneses' roof. The inspection identified six hail-damaged shingles in the front, one hail-damaged shingle on the rear slope, and one hail-damaged shingle on the right slope of the roof. After determining that a full roof replacement was not warranted, the adjuster valued the loss at $3,660.31.

On August 13, 2015, TWIA sent a Notice of Claim Acceptance to the Joneses that stated, in pertinent part:

NOTICE OF CLAIM ACCEPTANCE

You are receiving this notice because of a claim you filed with the Texas Windstorm Insurance Association (TWIA). After a reasonable evaluation of your claim TWIA accepts coverage for the claim.

Your policy covers "direct physical loss to the covered property caused by windstorm or hail unless the loss is excluded in the Exclusions." Texas Windstorm Insurance Association inspected the property on August 10, 2015 and documented the damages to the property as detailed in the attached report. Based on this evaluation, TWIA has determined the damages covered by your policy and the value of your loss, if any. TWIA's coverage and payment determinations are summarized below:

? TWIA accepts the following portion(s) of your claim:

All damages detailed on the enclosed estimate.

Here is a recap of our loss adjustment:

Full Cost of Repairs or Replacement $3,660.31

Deductible ..................... $2,920.00

Replacement Cost Value Payment.. $740.31

....

Please note that there are specific procedures that you are required to follow in order to dispute the amount TWIA will pay for covered damage. These procedures are outlined below, followed by the answers to some frequently asked questions as well as forms you can use to begin the dispute resolution process.

The information sheet attached to the Notice stated, in relevant part:

IF YOU DISAGREE WITH THE AMOUNT OF PAYMENT ON YOUR ACCEPTED CLAIM

....

3. If you dispute the amount of loss we will pay for the claim, you may request that this amount be determined through the appraisal process. All disputes concerning the amount of payment for an accepted claim under your insurance policy must be resolved through the appraisal process.

4. Please be aware that if you do not request appraisal within the time periods below, you waive your right to contest TWIA's determination on the amount of payment.

5. You must request appraisal not later than the 60th day after you receive this notice.

(Emphasis in original.) The Notice also included a "Form to Request Appraisal by Claimant(s)" stating, in relevant part:

1. I/We have received TWIA's NOTICE OF CLAIM ACCEPTANCE IN PART AND DENIAL IN PART.

2. I/We disagree with the amount of payment for the accepted part of the claim.

3. I/We request from TWIA a detailed summary of the manner in which TWIA determined the payment owed for the accepted loss.

4. I/We request appraisal to determine the payment owed for the accepted option of the claim.

It is undisputed that Jones did not request an appraisal.

B. Procedural History

On November 22, 2015, Jones's counsel notified TWIA of Jones's intent to file suit against TWIA for denial of his insurance claim. On November 23, 2015, Jones filed his original petition alleging breach of contract and violations of Insurance Code sections 2210.575 and 2210.576. On December 21, 2015, TWIA filed its answer.

On January 14, 2016, TWIA filed its plea to the jurisdiction and alternative motion for summary judgment arguing that (1) Jones could not maintain his common-law breach of contract claim because his remedies were limited to those allowed under Chapter 2210 and (2) the trial court lacked jurisdiction over his claim alleging violations of Insurance Code sections 2210.575 and 2210.576 because those sections apply only where there has been a denial of coverage, and TWIA accepted coverage for Jones's insurance claim in full. On February 17, 2016, Jones filed his response asserting that TWIA had accepted only a "portion" of his claim and denied coverage for the remainder of his claim.² Jones attached to his response the unsworn declaration and damage estimate of Robert Kitto. Kitto's estimate, dated September 14, 2015, called for a complete roof replacement at a total cost of $14,584.11. On February 22, 2016, TWIA filed its reply in which, among other things, it objected to Kitto's estimate and declaration as irrelevant and improper.

Following a hearing, the trial court entered an order denying TWIA's plea to the jurisdiction and alternative motion for summary judgment. On April 28, 2016, upon the parties' request, the trial court entered an amended order denying TWIA's plea and alternative motion and permitting the interlocutory appeal of its order. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(d) (West 2015). On June 2, 2016, this Court granted TWIA's petition for permissive appeal. See id . § 51.014(f).

Standard of Review

A plea to the jurisdiction is a dilatory plea that seeks dismissal of a case for lack of subject matter jurisdiction. Harris Cty. v. Sykes , 136 S.W.3d 635, 638 (Tex. 2004). The plaintiff has the burden to allege facts that affirmatively demonstrate that the trial court has subject matter jurisdiction. Tex. Ass'n of Bus. v. Tex. Air Control Bd. , 852 S.W.2d 440, 446 (Tex. 1993). A plea to the jurisdiction can be used to challenge whether the plaintiff has met his burden of alleging jurisdictional facts, but it can also raise a challenge to the existence of jurisdictional facts. See Tex. Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226–27 (Tex. 2004). Pleadings are construed liberally in favor of the pleader, and all factual allegations are accepted as true. See id. at 228.

A trial court's review of a plea to the jurisdiction challenging the existence of jurisdictional facts mirrors that of a traditional motion for summary judgment. Mission Consol. Indep. Sch. Dist. v. Garcia , 372 S.W.3d 629, 635 (Tex. 2012) ; Miranda , 133 S.W.3d at 228. The defendant is required to meet the summary judgment standard of proof for its assertion that the trial court lacks jurisdiction; once the defendant meets its burden, the plaintiff is then required to show that there is a disputed material fact regarding the jurisdictional issue. Miranda , 133 S.W.3d at 228. If the evidence creates a fact question regarding jurisdiction, the trial court must deny the plea to the jurisdiction and leave its resolution to the fact finder. Id. at 227–28. On the other hand, if the evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter of law. Garcia , 372 S.W.3d at 635. An order which grants or denies a plea questioning the trial court's jurisdiction is reviewed de novo. See State v. Holland , 221 S.W.3d 639, 642 (Tex. 2007).

Insurance Code Chapter 2210

TWIA contends that the trial court erred in denying its plea to the jurisdiction because no "denial of coverage" exists to provide Jones with the legal right to bring his lawsuit under Chapter 2210. Jones argues that the evidence raises a fact issue as to whether TWIA partially denied his claim. Because TWIA is challenging the existence of jurisdictional facts, we review TWIA's plea under a summary judgment standard of review.

A. Applicable Law

TWIA's primary purpose is to provide "an adequate market for windstorm and hail insurance in the seacoast territory of this state." TEX. INS. CODE ANN . § 2210.001 (West Supp. 2016). "The association is intended to serve as a residual insurer of last resort for windstorm and hail insurance in the seacoast territory." Id. Section 2210.001 states that TWIA shall "(1) function in such a manner as to not be a direct competitor in the private market; and (2) provide windstorm and hail insurance coverage to those who are unable to obtain that coverage in the private market." Id.

In 2011, the Texas Legislature passed House Bill No. 3 ("H.B. 3"), which made significant changes to Chapter 2210, including the addition of restrictions on policyholders'...