Shafaii Children's Trust & Party & Reception Center, Inc. v. West American Insurance Co.

417 S.W.3d 614, 2013 WL 5530824, 2013 Tex. App. LEXIS 12461
CourtCourt of Appeals of Texas
DecidedOctober 8, 2013
DocketNo. 14-12-00447-CV
StatusPublished
Cited by5 cases

This text of 417 S.W.3d 614 (Shafaii Children's Trust & Party & Reception Center, Inc. v. West American Insurance Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shafaii Children's Trust & Party & Reception Center, Inc. v. West American Insurance Co., 417 S.W.3d 614, 2013 WL 5530824, 2013 Tex. App. LEXIS 12461 (Tex. Ct. App. 2013).

Opinion

OPINION

TRACY CHRISTOPHER, Justice.

Appellant, Shafaii Children’s Trust and Party and Reception Center, Inc., appeals the trial court’s summary judgment in favor of appellees, West American Insurance [617]*617Company, Liberty Mutual Insurance Company, Ohio Casualty Insurance Company, and America First Insurance Company, on its claims for breach of contract and fraud. We affirm.

I. Background

Shafaii is the named insured on an insurance policy issued by West American. The policy insured four buildings located at: (1) 1401 Holland Avenue, Galena Park, Texas; (2) 1407 Holland Avenue, Galena Park, Texas; (3) 3816 Shaver Street, Pasadena, Texas; and (4) 1000 Broadway Street, Houston, Texas. After Hurricane Ike hit Houston and the surrounding area on September 13, 2008, Shafaii filed claims for damage to three of the buildings — 1401 Holland, 1407 Holland, and 1000 Broadway.

Shafaii also claimed damage to the contents or “Business Personal Property” (“BPP”) at 1401 Holland. With respect to the 1401 Holland BPP claim, West American paid policy limits of $66,150. Prior to September 13, 2008, Shafaii had acquired property at 1622 Federal Road, Houston, Texas, and was in the process of relocating some of its operations and BPP from 1401 Holland to 1622 Federal. The 1622 Federal building was a “newly acquired location” not listed in the policy’s declarations. Shafaii reported damage to BPP at 1622 Federal. West American contracted with Stoner and Company to complete a joint physical inventory of the BPP at 1622 Federal, which estimated the damage to the BPP at the newly acquired location to be $288,500. However, West American determined that the policy set the coverage limit for BPP at 1622 Federal — a newly acquired location — at 10% of the declared limit. Therefore, according to West American, because the declarations provided a BPP limit of $66,150 for 1401 Holland, the BPP limit for 1622 Federal was $6,615 or 10% of $66,150. On September 24, 2009, in addition to paying Shafaii’s claims related to 1401 Holland, 1407 Holland, and 1000 Broadway, West American paid $6,615 on Shafaii’s claim for BPP damage at 1622 Federal.1

The original policy provided an extension of coverage to BPP at “newly acquired” locations at 10% of the declared limit, capped at $100,000 per building. An endorsement modified the policy by increasing the $100,000 limit to $250,000. Shafaii interpreted this $250,000 limit to be in addition to the 10% of the declared limit in the policy. Specifically, on March 15, 2010, Shafaii’s attorney wrote West American, claiming that “the insured was informed by all persons connected with Western [sic] American Insurance Company — including, but not limited to, the originating agent and several adjusters — that the coverage found in the Texas Master Pak Plus endorsement, including the $250,000 business personal property coverage, applied to this loss.” Shafaii demanded payment of the $250,000 limit on BPP from West American pursuant to the policy’s endorsement.

On July 22, 2010, Shafaii sued: (1) West American, Liberty Mutual, Ohio Casualty Company, and America First (hereinafter collectively, “West American”); (2) Pasadena Insurance Agency; and (3) ISO Commercial Risk Services, Inc., for breach of contract, Insurance Code and DTPA violations, and breach of the duty of good faith “accompanied by oppression, fraud, or malice.”

[618]*618West American filed a hybrid no-evidence and traditional motion for summary judgment, which sought: (1) summary judgment on the interpretation of the insurance policy with respect to BPP coverage limits and (2) summary judgment on Shafaii’s misrepresentation claims. The trial court granted West American’s motion for summary judgment and ordered that Shafaii take nothing on its claims against West American.2

Shafaii brings two issues in this appeal: (1) whether the trial court erred in granting summary judgment on the coverage issue because it found West American’s interpretation of the policy to be the only reasonable interpretation and (2) whether the trial court erred in granting no-evidence summary judgment on Shafaii’s fraud claim.

II. BPP COVERAGE

In its first issue, Shafaii contends it need only show that its policy interpretation is reasonable, and the trial court erred by finding West American’s interpretation of the policy to be the only reasonable interpretation.

A. Rule 166a(c) summary judgment standard of review

We review the trial court’s granting of a summary judgment de novo. Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642, 644 (Tex.2009) (per curiam). To be entitled to summary judgment under rule 166a(c), a movant must establish that there is no genuine issue of material fact so that the movant is entitled to judgment as a matter of law. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). We review the evidence presented in the motion and the response in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Id.

B. Standard for policy interpretation

When interpreting an insurance policy, courts apply the general rules of contract construction to ascertain the parties’ intent. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126 (Tex.2010). Our primary concern when we construe an insurance contract is to ascertain the parties’ true intent as expressed in the contract. Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc., 323 S.W.3d 151, 154 (Tex.2010) (per curiam). We examine the entire agreement and seek to harmonize and give effect to all provisions so that none will be rendered meaningless. Gilbert Tex. Constr., 327 S.W.3d at 126. We begin our analysis with the policy’s language. Id.

Whether an insurance contract is ambiguous is a question of law. State Farm Lloyds v. Page, 315 S.W.3d 525, 527 (Tex.2010). If a policy provision has only one reasonable interpretation, it is unambiguous and we must construe it as matter of law. Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746 (Tex.2006). If the agreement is susceptible to more than one reasonable interpretation, the agreement is [619]*619ambiguous. Page, 315 S.W.3d at 527. Parties’ conflicting interpretations alone do not establish ambiguity. Id.

C. Interpretation of the policy

Shafaii argues that the trial court failed to give effect to all provisions of the policy. The policy’s “Building and Personal Property Coverage Form” provides the following regarding coverage of newly acquired or constructed property:

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417 S.W.3d 614, 2013 WL 5530824, 2013 Tex. App. LEXIS 12461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shafaii-childrens-trust-party-reception-center-inc-v-west-american-texapp-2013.