IN THE SUPREME COURT OF
TEXAS
════════════
No.
04-0055
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Progressive County Mutual
Insurance Company, Petitioner,
v.
Barry
Boyd, Respondent
════════════════════════════════════════════════════
On Petition for Review from
the
Court of Appeals for the
First District of Texas
════════════════════════════════════════════════════
PER CURIAM
Justice Willett did not participate in
the decision.
In
this case, Progressive County Mutual Insurance Company denied reimbursement for
damages sustained by Barry Boyd=s
automobile, and Boyd sued for breach of contract, bad faith, and related
extra-contractual claims. The trial court severed the bad-faith and
extra-contractual claims from the breach of contract claim and granted
Progressive=s
motion for summary judgment on the severed claims. The breach of contract suit
then went to trial, and the jury found in favor of Progressive. The court of
appeals affirmed the judgment in favor of Progressive in the breach of contract
suit, but reversed the trial court=s
summary judgment as to the bad-faith and extra-contractual claims. Progressive
filed a petition for review from the court of appeals=
judgment in the severed suit. We conclude that even if the trial court erred by
granting summary judgment as to the bad-faith and extra-contractual claims, the
error was harmless because the jury finding in the breach of contract case
negated coverage of the occurrence by Progressive=s
insurance policy. We reverse the court of appeals=
judgment and render judgment that Boyd take nothing.
On
March 20, 1997, Boyd was involved in a pre-dawn auto accident on a Houston
freeway. His car hit the freeway guardrail and was irreparably damaged. Boyd was
insured by Progressive. His policy included uninsured/underinsured‑motorists
(UIM) coverage, which covered damage to the car resulting from being struck by
an “uninsured motor vehicle,” which was defined to include “a hit and run
vehicle whose operator or owner cannot be identified.” Boyd sought recovery for
the damage to his car under this provision. He asserted that his car was
rear‑ended by a hit‑and‑run vehicle and was pushed into the guardrail. After an
investigation, Progressive denied Boyd=s
claim.
Boyd
sued Progressive on several grounds. First, he alleged that Progressive breached
the insurance contract by denying coverage. Second, he alleged that Progressive
denied his claim in bad faith and such denial violated both the common-law duty
of good faith and fair dealing and statutory duties imposed by article 21.21 of
the Insurance Code and sections 17.46 and 17.50 of the DTPA. See Tex. Ins. Code art. 21.21, § 3; Tex. Bus. & Com. Code
§§ 17.46(b); 17.50(a)(4). Third, he alleged that Progressive=s
failure to timely pay his insurance claim violated article 21.55 of the
Insurance Code. See Tex. Ins.
Code art. 21.55. Finally, Boyd alleged that Progressive=s
refusal to pay the inoperable car=s
storage fees at a private storage lot caused his car to be converted.
Boyd’s
pleadings make it clear that all his claims, including his conversion claim, are
predicated on his insurance policy and the accident being covered under the
insurance policy. For example, in regard to the conversion claim, his petition
alleged that Progressive had a contractual duty “to move Boyd’s vehicle to a
storage lot which would incur no storage fees,” and that Progressive’s failure
to do so “cause[d] a lien to be placed on . . . Boyd=s
vehicle in an amount greater than the value of the vehicle,” thus causing
“Boyd’s vehicle to be converted.”
The
trial court severed the extra-contractual claims from the breach of contract
claim. Progressive then moved for summary judgment on all the extra-contractual
claims. Boyd responded to Progressive=s
summary judgment motion as well as leveling special exceptions and objections to
the motion. On June 13, 2000, the trial court granted summary judgment as to all
claims in the severed suit.
The
breach of contract claim was tried to a jury in September, 2000. The jury found
that Boyd had not been involved in an accident with an uninsured vehicle. The
trial court entered a take-nothing judgment in that suit.
Boyd
appealed from both judgments. The court of appeals considered the two appeals
together, although the appeals were not consolidated for administrative reasons.
The court affirmed the breach of contract judgment but held that the trial court
erred in granting summary judgment on the extra-contractual claims. ___ S.W.3d
___. In reversing the summary judgment as to the extra-contractual claims, the
court of appeals noted that (1) summary judgment cannot be affirmed on grounds
not raised in the trial court, (2) the jury=s
finding was not before the trial court at the time it granted summary judgment,
and (3) the conversion, DTPA, article 21.21, and article 21.55 sections 3(a) and
3(c) claims were improperly addressed by Progressive=s
motion for summary judgment, as Progressive erroneously asserted that these
claims were recharacterizations of the bad-faith claim when in fact they
required different elements of proof. ___ S.W.3d ___; see also Stiles v.
Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993). The court of appeals
also held that there was a fact issue on Boyd’s common-law bad-faith claim. ___
S.W.3d ___. The court concluded that even if it could consider the jury=s
finding of a lack of coverage, this lack of coverage would not entitle
Progressive to summary judgment on the common-law bad-faith claim, as a finding
of “‘no breach of contract’” would not “necessarily mandate a conclusion of ‘no
bad faith.’” Id. Because we conclude that the jury=s
findings may be considered on appeal and that there is no remaining issue of
material fact, we reverse the court of appeals’ judgment.
The
court of appeals properly noted that summary judgment cannot be affirmed on
grounds not raised in the trial court and that the jury=s
finding was not before the trial court at the time of its summary judgment. ___
S.W.3d ___; see also Stiles, 867 S.W.2d at 26. However, we have
previously held that a trial court=s
erroneous decision to grant summary judgment can be rendered harmless by
subsequent events in the trial court. See Martin v. Martin, Martin &
Richards, Inc., 989 S.W.2d 357, 359 (Tex. 1998). In Martin, we noted
that the trial court erred in granting defendants’ motion for summary
judgment without notice to the plaintiff. We held that the error was harmless
because the court subsequently considered the plaintiff’s response and
reconfirmed its ruling. We concluded that a trial court is not required to
vacate a summary judgment and then reinstate it to accomplish the same end.
Id.
In
this case, the breach of contract claim was fully litigated after the summary
judgment was granted. The subsequent trial, jury finding, and take-nothing
judgment which was affirmed on appeal as to Boyd’s coverage claim negate
Boyd=s
extra-contractual claims. Boyd does not argue otherwise. We conclude that the
subsequent events, being properly before the court of appeals and this Court,
should be considered in determining harm from the trial court’s grant of summary
judgment. See Tex. R. App.
P. 44.1; Tex. R. App. P.
61.1. We also conclude that these events demonstrate that there is no remaining
issue of material fact.
First,
Boyd’s conversion claim is negated by the jury=s
finding that Boyd lacked coverage. Boyd did not allege that Progressive took any
action in regard to having his vehicle placed in or being kept in the storage
facility. He alleged only that his accident was covered by the Progressive
policy and because Progressive did not pay the storage fees pursuant to its
contractual obligation, his vehicle was converted. The subsequent jury finding
and judgment in the breach of contract suit negate recovery on his conversion
allegations.
Boyd
asserted that Progressive=s
motion for summary judgment was conclusory and did not address the elements of
his conversion claim. Progressive’s motion for summary judgment may have been
subject to special exception and objection because of generality or for other
reasons. Indeed, Boyd attacked the motion for summary judgment by such vehicles.
Nevertheless, Progressive’s motion sought judgment on all extra-contractual
causes of action, including the conversion claim. Even if Progressive’s summary
judgment motion as to Boyd’s conversion claim was deficient and subject to
special exception or objection, the claim was addressed by the motion. If the
trial court erred in granting the motion for summary judgment as to the
conversion claim, the error was harmless. See Tex. R. App. P. 44.1; Tex. R. App. P. 61.1.
Boyd’s
claim that Progressive violated sections 3(a) and 3(c) of Insurance Code article
21.55 is also negated by the lack of coverage. Article 21.55 establishes
requirements for the prompt payment of claims. Tex. Ins. Code art. 21.55. There can be
no liability under article 21.55 if the insurance claim is not covered by the
policy. See id. (providing that damages are to be awarded when the
insurer is liable “pursuant to a policy of insurance”); see also Mid‑Century
Ins. Co. of Tex. v. Barclay, 880 S.W.2d 807, 811 (Tex. App.CAustin
1994, writ denied). As with its motion for summary judgment on Boyd’s conversion
claim, Progressive’s motion for summary judgment as to the extra-contractual
claims for violations of sections 3(a) and 3(c) may have been subject to special
exception or objection because of generality or for other reasons. But, the
claims were addressed by the motion. If the trial court erred in granting the
motion for summary judgment as to the sections 3(a) and 3(c) claims, the error
was harmless. See Tex. R. App.
P. 44.1; Tex. R. App. P.
61.1.
Boyd’s
common-law bad-faith claims are also negated by the determination in the breach
of contract claim that there was no coverage. Am. Motorists Ins. Co. v.
Fodge, 63 S.W.3d 801, 804 (Tex. 2001). We have left open the possibility
that an insurer=s
denial of a claim it was not obliged to pay might nevertheless be in bad faith
if its conduct was extreme and produced damages unrelated to and independent of
the policy claim. Id.; see also Republic Ins. Co. v. Stoker, 903
S.W.2d 338, 341 (Tex. 1995). Boyd has made no such allegations. He alleges only
that Progressive improperly denied his claim and failed to fairly investigate
the facts of the accident. He does not allege that he suffered any damages
unrelated to and independent of the policy claim. If the trial court erred in
granting summary judgment on the common-law bad-faith claims, the error was
harmless. See Tex. R. App.
P. 44.1; Tex. R. App. P.
61.1.
Because
the common-law bad-faith standard is the same as the statutory standard, Boyd’s
claim for treble damages predicated on bad faith pursuant to article 21.21 of
the Insurance Code and section 17.46 of the DTPA must likewise fail. Stewart
Title Guar. Co. v. Aiello, 941 S.W.2d 68, 72 (Tex. 1997) (holding that
although a jury finding of bad faith in handling an insurance claim could
sustain a claim “that the insurer engaged in an unlisted deceptive trade
practice under section 17.46 of the DTPA,” the lack of such a jury finding would
preclude a bad-faith claim under section 17.46); see also Mid‑Century Ins.
Co. v. Boyte, 80 S.W.3d 546, 549 (Tex. 2002). The determination that
Boyd=s
article 21.21 claim is not valid disposes of Boyd=s
claim under 17.50 of the DTPA, which is also predicated on a violation of
article 21.21 of the Insurance Code. See Tex. Bus. & Com. Code § 17.50(a)(4)
(allowing a consumer to bring a DTPA claim for an act or practice in violation
of article 21.21, Insurance Code). Again, if the trial court erred in granting
the motion for summary judgment as to these claims, the error was harmless.
See Tex. R. App. P. 44.1;
Tex. R. App. P. 61.1.
Accordingly,
without hearing oral argument, we reverse the court of appeals’ judgment and
render judgment that Boyd take nothing. Tex. R. App. P. 59.1.
OPINION
DELIVERED: August 26, 2005