Univ. Baptist Church of Fort Worth v. Lexington Ins. Co.

346 F.Supp.3d 880

UNIVERSITY BAPTIST CHURCH OF FORT WORTH, Plaintiff,

v.LEXINGTON INSURANCE COMPANY, Defendant.

NO. 4:17-CV-962-A

United States District Court, N.D. Texas, Fort Worth Division.

Signed October 11, 2018

Timothy M. Hoch, Hoch Law Firm PC, Fort Worth, TX, for Plaintiff.

Brett A. Wallingford, Raven M. Atchison, Walter W. Cardwell, IV, Zelle LLP, Dallas, TX, for Defendant.

MEMORANDUM OPINION and ORDER

JOHW McBRYDE, United States District Judge

Game on for consideration in the above-captioned action the motion for summary judgment filed by defendant, Lexington Insurance Company ("Lexington"). The court, having considered the motion, the response of plaintiff, University Baptist Church of Fort Worth ("Church"), Lexington's reply, the entire record, and the applicable legal authorities, finds that the motion should be granted.

I.Background

The operative pleading is Plaintiff's Amended Complaint ("Complaint") filed February 8, 2018. Doc. 19.¹ Church's claims arise out of a dispute between Church and Lexington related to hail and windstorm damage to Church's church buildings. When the Complaint was filed, there was a second defendant, York Risk Services Group, Inc. ("York"), the independent adjusting firm that worked with Church and its roofing contractor in defining the needed repairs. York filed a motion to dismiss for failure to state a claim upon which relief may be granted. Its motion was granted, and a final judgment dismissing Church's claims against York was issued May 16, 2018. See Docs. 31 & 32. The factual recitations contained in the Complaint, doc. 19 at 2-7, ¶¶ 5-37, are summarized in an abbreviated form under the heading "Plaintiff's Amended Complaint" on pages 2-6 of the Amended Memorandum Opinion and Order explaining the court's reasons for dismissing Church's claims against York, doc. 32 at 2-6. For convenience, the court adopts, and here incorporates by reference, that summarization inasmuch as the allegations were the factual bases of Church's claims against Lexington as well as those against York.

As that summarization makes apparent, Lexington was the insurance company that issued the insurance policy that provided insurance coverage for the hail and windstorm damage Church's church buildings suffered on March 17, 2016. Church's claims against Lexington are not, except in a minor respect, based on any contention that Lexington did not satisfy the obligations imposed on it by the insurance policy it issued to Church, but, instead, with that one exception, are exclusively extracontractual claims.

The only exception is the allegation in paragraph 35, on pages 6-7 of the Complaint, that Lexington was responsible for use of Verea² tile in the re-roofing of Church's church buildings instead of the Ludowici tile that was on the buildings when the roof was damaged. Doc. 19 at 6-7, ¶ 35. Church alleged that Verea is of lesser quality than Ludowici, and is not as durable as Ludowici, and that by causing the Verea tile to be used, Lexington breached the provision of the policy that required it to pay "the cost to repair, replace and rebuild the property with material of like kind and quality." Id.

Church has rather lengthy allegations in the Complaint under the heading "Breach of Contract-Lexington," but the summary judgment record, including the briefs filed by the parties, make clear that those allegations actually are related to Church's extra-contractual claims and do not describe a claim of breach of contract by Lexington.

The summary judgment record discloses that the events that led to Church's extra-contractual claims were set in motion by the making of a gross underestimate by Jeff Eubank Roofing Co., Inc. ("Eubank"), the roofing contractor selected and hired by Church, of the cost of labor and material that would be required to do the extra work during the roof repair needed to satisfy law and ordinance requirements.³ This is a subject to which the court will return. The policy had a limit of $250,000 for work of that kind. Doc. 45 at App. 013, 015. Were it not for the Ordinance or Law Amendatory Endorsement in the insurance policy, the insurance policy would not have provided any benefits to Church for increased costs attributable to enforcement of any ordinance or law regulating the construction, use or repair of the property. Id. at App. 052, § 4.b.

The parties are in agreement, and the record establishes, id. at App. 288, that Lexington paid Church the policy limit of $250,000 for the code upgrade work, and that, except for the Verea vs. Ludowici issue, Lexington complied with all of its policy obligations. Lexington paid Church a total of $852,149.52 for repair of church buildings in satisfaction of its insurance policy payment obligations as to those buildings. Id. at App. 006, ¶ 11.

Church is using the events that followed Eubank's underestimate of the cost of doing the code upgrade work as predicates for its extra-contractual claims. By doing so, Church attempts to shift the significant extra cost resulting from that underestimate from the Church and/or Eubank to Lexington.

II.Lexington's Summary Judgment Motion

Lexington seeks summary judgment as to Church's breach of contract claims for the reasons that there is no evidence in the summary judgment record that it breached any obligation it had under the policy contract, and the summary judgment record establishes as a matter of law that it performed its policy contractual obligations.

Summary judgment is sought by Lexington as to Church's extra-contractual claims (claims under chapters 541 and 542 of the Texas Insurance Code, for alleged breach of the duty of good faith and fair dealing, and alleged violations of the Texas Deceptive Trade Practices-Consumer Protection Act ("DTPA") ) for the reason that there is no summary judgment evidence that would support a finding of the existence of all of the essential elements of any of those theories of recovery.

III.Analysis

A. Pertinent Summary Judgment Principles

Rule 56(a) of the Federal Rules of Civil Procedure provides that the court shall grant summary judgment on a claim or defense if there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a) ; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The movant bears the initial burden of pointing out to the court that there is no genuine dispute as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant can discharge this burden by pointing out the absence of evidence supporting one or more essential elements of the nonmoving party's claim, "since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial." Id. at 323, 106 S.Ct. 2548.

Once the movant has carried its burden under Rule 56(a), the nonmoving party must identify evidence in the record that creates a genuine dispute as to each of the challenged elements of its case. Id. at 324, 106 S.Ct. 2548 ; see also Fed. R. Civ. P. 56(c) ("A party asserting that a fact ... is genuinely disputed must support the assertion by ... citing to particular parts of materials in the record ...."). If the evidence identified could not lead a rational trier of fact to find in favor of the nonmoving party as to each essential element of the nonmoving party's case, there is no genuine dispute for trial and summary judgment is appropriate. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 597, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In Mississippi Prot. & Advocacy Sys. v. Cotten, the Fifth Circuit explained:

Where the record, including affidavits, interrogatories, admissions, and depositions could not, as a whole, lead a rational trier of fact to find for the nonmoving party, there is no issue for trial.

929 F.2d 1054, 1058 (5th Cir. 1991).

The standard for granting a motion for summary judgment is the same as the standard for rendering judgment as a matter of law.⁴

Celotex Corp., 477 U.S. at 323, 106 S.Ct. 2548. If the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial. Matsushita, 475 U.S. at 597, 106 S.Ct. 1348 ; see also Mississippi Prot. & Advocacy Sys., 929 F.2d at 1058.

B. The Breach of Contract Claim

Church bases its breach of contract claim on statements made by Allen Seymour ("Seymour"), an account manager for Eubank, in his affidavit as follows:

5. [Eubank] was hired as the roofing contractor for University Baptist Church ("UBC") for storm damages to their property at 2720 Wabash, Fort Worth, Texas (the "Property").

6. Our original proposal was to complete the Project for the price of $651,891.40. See Exhibit A-1 attached hereto. However, the adjuster for York Risk Services Group, Kevin Forman ("Forman"), would not approve the tile that was of like kind and quality to the original tile. The like kind and quality roof tile was a Ludowici product which was included in our original estimate. Therefore, I had to use an inferior tile product (Verea tile) to bring the project in line with the price Forman would approve even though the product of was inferior quality.

Doc. 54 at App. 0004-5, ¶¶ 5-6. But, Seymour did not tell the entire story. If the roof damage had been repaired with Ludowici tiles, as Seymour suggested, the work would have gone as expert Brett A. Lockridge ("Lockridge") described in his unchallenged declaration as follows:

13. The like, kind and quality repair to the roof of the church following the storm [would be] to remove and relay tiles on the damaged portion of the roof, and any quantity deficiency could be made up from matching tile from salvage yards or by replacing a smaller roof facet with completely new, but matching clay roof tiles.

Doc. 45 at App. 128, ¶ 13. Considering that the roof repair work, as actually done, consisted...