University Baptist Church v. Lexington Ins Co
Filing
30
Memorandum Opinion and Order...Motion of York granted; pltfs claims against York dismissed. From this point forward, the style shall read "University Baptist Church of Fort Worth, Plaintiff vs. Lexington Insurance Company, Defendant". Court directs entry of final judgment as to the dismissal of Plaintiff's claims against York. (Ordered by Judge John McBryde on 5/16/2018) (wrb)
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U.S. DISTRTCT COURT
NORTHERNDlSTRICTOFTEXMl
I J._L-1,c_,L.-IN THE UNITED STATES DISTRI T couv-~-----NORTHERN DISTRICT OF TE AS
I MAY i 6 20\8
FORT WORTH DIVISION
~TT 1--i,T~
L-
UNIVERSITY BAPTIST CHURCH
FORT WORTH,
Plaintiff,
vs.
-·-1
_\
CLERK, U.S. DISTlUCT COUIG'
§
BY~~~--::--~~~~~
§
§
Dcpnly
§
§
§
§
NO. 4:17-CV-962-A
LEXINGTON INSURANCE COMPANY
§
AND YORK RISK SERVICES GROUP INC§,
§
Defendants.
§
OPINION
and
ORDER
MEMORANDU~
Came on for consideration in the above-captioned action the
motion to dismiss filed by defendant York Risk Services Group,
Inc.
("York") .
The court, having considered the motion, the
response of plaintiff, University Baptist Church of Fort Worth,
thereto, York's reply, the entire record, including the
supplemental authority submitted by plaintiff, and the applicable
legal authorities, finds that the motion should be granted.
I.
Plaintiff's Amended Complaint
Plaintiff's live pleading is Plaintiff's Amended Complaint.
In it, plaintiff alleges the following claims against York:
York was hired by defendant Lexington Insurance Company
("Lexington") to adjust the alleged loss sustained to plaintiff's
•
property following a hail and wind storm on March 17, 2016.
I
'
tt
Doc.' 19 at 2,
7-8.
York, in turn, assigned one of its
employees, Kevin Forman ("Forman"), to examine the property and
adjust the loss.
Id.,
t
8.
On September 14, 2016, Lexington
sent documentation to plaintiff indicating that the undisputed
loss and agreed scope of costs for replacement of the roof was
$586,040.20.
Id. at 3,
tt
9 & 11.
Also in September, after
concerns arose about whether plaintiff's commercial property
complied with the necessary code requirements, Forman retained a
third party to inspect the roof and address the code upgrade
issues.
Id._,
t
13.
Forman notified plaintiff on September 26,
2016, that plaintiff would be receiving a copy of an engineering
report from the engineer retained by the third party, and a
related invoice from Jeff Eubank Roofing ("JE Roofing"), and
requested that plaintiff forward that information to Forman upon
receipt for the purpose of developing with plaintiff an agreed
scope for the additional improvements required. 2
Id.,
t
14.
On
November 23, 2016, JE Roofing submitted to Forman a code upgrade
bid of $285,798.00
Id.,
t
16.
In December 2016 and January 2017
Forman discussed with JE Roofing the proposed cost of the code
'The "Doc._" reference is to the number assigned to the referenced item on the docket in this
action, No. 4:17-CV-962-A.
2
The email read, in pettinent part: "When you receive a copy of the engineering report and
related invoice ... , please forward me a copy for review so we can develop an agreed scope for the
additional decking required." Id.,~ 14. (emphasis removed).
2
·
upgra d e pro]ec t .
Id
at 4 ,
~-·
~~
1111
18 - 19 •
It was agreed that "the
cost of re-decking the main chapel" would be conducted on a "time
and material" basis,
Id., ,
19.
"due to the uniqueness of the project.•
Forman sent JE Roofing the forms to be used for
tracking time and materials with instructions that in order to
avoid any concerns or misunderstandings, the forms were to be
returned within two days of the applicable activity.
Id.,
,
20.
On February 28, 2017, Forman sent an email to plaintiff that
read:
I have informed the carrier that [the third-party]
has verified that the changes being made to the decking
of the main church for the installment of new tile is
being required and enforced by the city of Fort Worth.
Code upgrade costs are indemnified once incurred when
they fall under this city of FT. Worth enforcement. Due
to the uniqueness of the operation and since it hasn't
been done before, this is why we are tracking the costs
in this way as agreed with JE Roofing.
Id. at 4,
,
22
(emphasis removed).
Plaintiff alleged that before York's approval was given for
the work to begin, JE Roofing had already begun replacing the
roof.
Id. at 5, , 24.
Plaintiff also alleged that the roofing
contractor regularly submitted to York the invoices or forms as
agreed.
Id., , 23.
On April 28, 2017, Plaintiff received an invoice that
included seven weeks of "Extras" charges in the amount of
$582,944.75.
Id.,
, 25.
Plaintiff asked Forman several days
3
later to confirm in writing that the insurance would "provide the
funds for the work required by the engineer."
Id.
On July 11,
2017, plaintiff, through the church's pastor, informed Lexington
"that its prior inquiries about the status of the claim had gone
unresponded to."
Id.,
, 28.
The pastor, in the email he sent to
Lexington "recalled a conversation [the pastor) had with Forman
in which Forman stated that he was 'alarmed at the skyrocketing
costs for the repairs and implied that the church could
potentially be responsible.'"
Id.
The pastor also informed
Lexington at this time that it had not received weekly updates
regarding progress on the re-decking, that plaintiff "endured
increased exposure to the roof and the church itself," and that
plaintiff had instructed JE Roofing to cease work on the roof.
Id., at 5-6, , 28.
JE Roofing charged $864,148.49 in "time and
materials" related to the code upgrade for plaintiff's property.
Id., at5, ,32.
"Defendants failed and refused to pay [p]laintiff an
appropriate amount for losses and damages caused to [p]laintiff's
property by an occurrence covered under their contract .
Id., , 37.
"
Plaintiff was required to take out a loan to pay for
"the extra work" performed by JE Roofing.
Id., ,
33.
Based on these allegations, plaintiff has brought claims
against York for violations of the Texas Insurance Code, namely
4
sections 541.060(a) (1), 541.060(a) (2) (A), 541.060(a) (3), and
541.060(a) (7), for violations of the Texas Deceptive Trade
Practices-Consumer Protection Act
§§
17.41-.63,
("DTPA"), Tex. Bus. & Com. Code
particularly sections 17.45, 17.46, and 17.50, and
for promissory estoppel.
II.
Grounds of the Motion
York moves to dismiss plaintiff's claims against it on the
grounds that
(1) plaintiff failed to allege in its amended
complaint the necessary "who, what, where, when, and how" of
York's purported statutory violations,
(2) plaintiff failed to
allege that plaintiff suffered any extra-contractual damages as a
result of York's actions, and (3) plaintiff's promissory estoppel
claim fails as a matter of law.
III.
Applicable Pleading Standards
Rule 8 (a) (2) of the Federal Rules of Civil Procedure
provides, in a general way,
the applicable standard of pleading.
It requires that a complaint contain "a short and plain statement
of the claim showing that the pleader is entitled to relief,"
Fed. R. Civ. P. S(a) (2),
"in order to give the defendant fair
notice of what the claim is and the grounds upon which it rests,"
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
5
(2007)
(internal
quotation marks and ellipsis omitted).
Although a complaint need
not contain detailed factual allegations, the •showing•
contemplated by Rule 8 requires the plaintiff to do more than
simply allege legal conclusions or recite the elements of a cause
of action.
Twombly, 550 U.S. at 555 & n.3.
Thus, while a court
must accept all of the factual allegations in the complaint as
true,
it need not credit bare legal conclusions that are
unsupported by any factual underpinnings.
556 U.S. 662, 679
(2009)
See Ashcroft v. Igbal,
("While legal conclusions can provide
the framework of a complaint, they must be supported by factual
allegations.") .
Moreover, to survive a Rule 12(b) (6) motion to dismiss for
failure to state a claim, the facts pleaded must allow the court
to infer that the plaintiff's right to relief is plausible.
Iqbal, 556 U.S. at 678.
To allege a plausible right to relief,
the facts pleaded must suggest liability; allegations that are
merely consistent with unlawful conduct are insufficient.
Id~
In other words, where the facts pleaded do no more than permit
the court to infer the possibility of misconduct, the complaint
has not shown that the pleader is entitled to relief.
679.
Id. at
"Determining whether a complaint states a plausible claim
for relief . .
.
[isl a context-specific task that requires the
6
reviewing court to draw on its judicial experience and common
sense."
Id.
Rule 9(b) of the Federal Rules of Civil Procedure sets forth
the heightened pleading standard imposed for fraud claims: "In
alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake."
The Fifth
Circuit requires a party asserting fraud to "specify the
statements contended to be fraudulent,
identify the speaker,
state when and where the statements were made, and explain why
the statements were fraudulent."
Hermann Holdings, Ltd. v.
Lucent Techs .. Inc., 302 F.3d 552, 564-65 (5th Cir. 2002)
(internal quotations and citations omitted).
Succinctly stated,
Rule 9(b) requires a party to identify in its pleading "the who,
what, when, where, and how" of the events constituting the
purported fraud.
Dorsey v. Portfolio Eguities,
333, 339 (5th Cir. 2008).
Inc., 540 F.3d
Claims alleging violations of the
Texas Insurance Code are subject to the requirements of Rule
9(b).
742
Frith v. Guardian Life Ins. Co. of Am.,
9 F. Supp. 2d 734,
(S.D. Tex. 1998), as are claims alleging violations of the
DTPA.
Id. at 742-43; see also Berry v. Indianapolis Life Ins.
Co., 608 F. Supp. 2d 785, 800
(N.D. Tex. Mar. 11, 2009).
7
IV.
Analysis
A.
Texas Insurance Code Claims
Plaintiff's amended complaint alleged several violations by
York of section 541.060 of the Texas Insurance Code.
To the
extent that plaintiff alleged that York violated section
541. 060 (a) (2) (A),
(a) (3), and (a) (7), this court and others have
routinely held that liability under these provisions cannot be
imposed on adjusters, and instead applies to the insurer itself.
McClelland v. Chubb Lloyd's Ins. Co., No. 5:16-CV-00108, 2016 WL
5791206, at *3
(W.D. Tex. Sept. 30, 2016); Lopez v. United Prop.
& Cas. Ins. Co., 197 F. Supp. 3d 944, 950 (S.D. Tex. July 11,
2016); Meritt Buffalo Events Ctr., L.L.C. v. Cent. Mut. Ins. Co.,
No. 3:15-CV-3741-D, 2016 WL 931217, at *4
(N.D. Tex. Mar. 11,
2016); Mainali Corp. v. Covington Specialty Ins. Co., No. 3:15CV-1087-D, 2015 WL 5098047, at *3
(N.D. Tex. Aug. 31, 2015).
Because York was the adjuster retained by Lexington to adjust
plaintiff's claims, rather than the insurer, such claims against
York must fail.
Plaintiff next alleged that York violated section
541. 060 (a) (1) by "misrepresent [ing] material facts or policy
provisions related to coverage.•
Doc. 19 at 13, '
81.
In the
context of section 541.060 claims, a misrepresentation is
8
actionable if it is both specific and affirmative.
Metro Hosp.
Partners, Ltd. v. Lexington Ins. Co., 84 F.Supp.3d 553, 573
Tex. 2015).
(S.D.
"The misrepresentation must be about the details of
a policy, not the facts giving rise to a claim for coverage.•
Messersmith v. Nationwide Mut. Fire Ins. Co., 10 F.Supp.3d 721,
724
(N.D. Tex. 2014).
Plaintiff does not identify which specific facts give rise
to this purported violation, or which policy provision York
misrepresented.
Instead, plaintiff relies on the previously
listed factual allegations, leaving the court and defendants to
speculate as to which specific facts might give rise to any
liability under 541. 060 (a) (1).
In other words, plaintiff has not
alleged such a claim with the specificity required by Rule 9.
Because plaintiff failed to clearly identify the requisite "who,
what, when, where, and how• of any purported violation related to
any of the statements it alleges York, or York through Forman,
made, such claim should be dismissed.
Dorsey,
540 F.3d at 339.
Moreover, none of the statements alleged by plaintiff, if
the court were to guess which of York's statements was intended
to support plaintiff's section 541. 060 (a) (1) claim, involves the
details of the policy.
Messersmith, 10 F.Supp.3d at 724
(defendant must represent that plaintiff "would receive a
particular kind of policy that it did not receive" or "denied
9
coverage against loss under specific circumstances that it
previously had represented would be covered.").
Finally, to the extent that plaintiff seeks from York
damages outside regular policy benefits, plaintiff's section
541.060(a) (1) claim fails for the additional reason that "[t]here
can be no recovery for extra-contractual damages for mishandling
claims unless the complained of actions or omissions caused
injury independent of those that would have resulted from a
wrongful denial of policy benefits.•
Parkans Intern. LLC v.
Zurich Ins. Co., 299 F.3d 514, 519 (5th Cir. 2002).
Plaintiff
has not alleged that the proximate cause of its alleged damages
was the manner in which York investigated its claim.
Mital
Hospital, Inc. v. Evanston Ins. Co., No. 4:16-CV-893, 2016 WL
7165976, at *4
(N.D. Tex. Dec. 6, 2016) (citing Provident Am.
Co. v. Castaneda,
Ins.
988 S.W.2d 189, 198-99 (Tex. 1998)).
Thus, plaintiff has not stated a claim against York for
violations of
B.
§
541.060 of the Texas Insurance Code.
Deceptive Trade Practices Act Claims
Plaintiff's complaint next alleged claims against York for
violations of the DTPA.
The DPTA provides recourse to consumers
who are victims of "[f]alse, misleading, or deceptive acts or
practices in the conduct of any trade or commerce• to recover for
such clams.
Tex. Bus. & Com. Code
10
§
17.46(a).
The elements of a
DTPA claim are:
"(1) the plaintiff is a consumer;
defendant engaged in false,
(2) the
misleading, or deceptive acts; and
(3) these acts constituted a producing cause of the consumer's
damages" .
466, 468
Hugh Symons Group, plc v. Motorola,
(5th Cir. 2002).
Inc. , 2 92 F. 3d
Claims under the DTPA are subject to
the heightened pleading requirements of Rule 9(b).
Indianapolis Life Ins. Co.,
608 F. Supp. 2d 785, 800
Berry v.
(N.D. Tex.
Mar. 11, 2009).
Plaintiff specifically alleged that plaintiff violated
sections 17.46(b) (7) and (b) (12), and section 17.SO(a) (4) by:
a.
[Representing] that [York's] services were of a
particular standard, quality, or grade, when they
were of another.
b
[Representing] that an agreement confers or
involves rights, remedies, or obligations which it
does not have or involve.
c.
[Employing] an act or practice in violation of the
Texas Insurance Code, Chapter 541, as more
specifically enumerated in Section VII, above.
Doc. 19 at 13, ,, 87-89.
These statements, taken together,
demonstrate another instance where plaintiff has failed to point
to the specific factual allegations supporting its claims.
Plaintiff merely cited the statutory language and left it up to
the court's and the defendants' imagination as to what factual
allegations support plaintiff's claims.
Plaintiff's attempt to
cross-reference or incorporate by reference section VII of the
11
amended complaint fairs no better, as that section of the amended
complaint consists solely of conclusory allegations against
Lexington.
Plaintiff has not identified the "who, what, when,
where, and how• of the purported violations.
339.
Dorsey, 540 F.3d at
Even speculating which facts might apply, the court finds
that plaintiff has failed to state any claim against York.
C.
Promissory Estoppel Claim
Plaintiff finally urges the court in its amended complaint
that "York is estopped from claiming that Plaintiff is not
entitled to proceeds that were expended to bring Plaintiff's roof
into compliance with City of Fort Worth Building Codes.•
at 14,
~
Doc. 19
93.
"Although promissory estoppel is normally a defensive
theory,
it is an available cause of action to a promisee who
relied to his detriment on an otherwise unenforceable promise.•
Frost Crushed Stone Co., Inc. v. Odell Greer Constr. Co., 110
S.W.3d 41, 44
(Tex. App.-Waco 2002, no pet.) (citing Wheeler v.
White, 398 S.W.2d 93,
96-97
(Tex. 1965)).
of a promissory estoppel claim are:
The requisite elements
( 1) a promise,
foreseeability of reliance thereon by the promiser,
(2)
(3)
substantial reliance by the promisee to his detriment.
MetroplexCore, L.L.C. v. Parsons Transp.,
12
Inc.,
743 F.3d 964,
977
(5th cir. 2014); see also English v. Fischer, 660 S.W.2d 521, 524
(Tex. 1983); Frost Crushed Stone Co.,
Inc., 110 S.W.3d at 44.
To support its promissory estoppel claim, plaintiff alleges
that (1) York worked directly with JE Roofing to the exclusion of
plaintiff,
(2) plaintiff relied on York to adjust the claim
properly and to monitor the costs associated with roof
replacement,
(3) York •promised to prepare and present an 'agreed
scope'" for plaintiff's roof repair,
(4) York knew or should have
known plaintiff would rely on this promise,
(5) plaintiff relied
to its detriment on York's promise, and (6)
such reliance was the
producing cause of plaintiff's damages.
Doc. 19 at 14,
~~
93-95.
York argues that plaintiff "has not sufficiently alleged a
'definite, unconditional promise' by York," "has
[]
failed to
allege that it substantially relied on any promise by York, much
less that its reliance was both reasonable and justified,• or
that plaintiff materially changed its position in reliance on
York's promise.
Doc. 21 at 15-16.
York further challenges
plaintiff's pleadings on the grounds that, among other things,
plaintiff is attempting to use promissory estoppel "despite the
presence of related contractual agreements."
Id. at 16.
A promissory estoppel claim requires a "definite,
unconditional promise," Elite Center for Minimal Invasive
Surgery, LLC v. Health Care Serv. Corp., 221 F.Supp.3d 853, 863
13
(S.D. Tex. 2016), that is "sufficiently specific and definite so
that it would be reasonable and justified for the promisee to
rely on it.•
Davis v. Tex. Farm. Bureau Ins., 470 S.W.3d 97, 108
(Tex. App.-Houston [1st Dist.]
2015, no pet.).
And, the
promisee's reliance on the promise must be "reasonable and
justified."
Addicks Servs., Inc. v. GGP-Bridqeland, LP, 596 F.3d
286, 300 (5th Cir. 2010).
Having reviewed plaintiff's pleadings, the court is
satisfied that plaintiff has failed to state an affirmative
promissory estoppel claim against York.
The only promise
plaintiff alleges in its amended complaint that York made to it
was that York would "prepare and present an 'agreed scope'" for
plaintiff's roof repair.
Doc. 19 at 14,
,
94.
Apparently, this
"promise" was made when Forman sent an email stating,
"When you
receive a copy of the engineering report and related invoice from
Jeff Eubank Roofing, please forward me a copy for review so we
can develop an agreed scope for the additional decking required."
Doc. 19 at 4, , 14; supra at 2 n. 2.
Such statement is too vague
and indefinite to constitute a promise to satisfy plaintiff's
pleading requirement on this claim.
Elite Center for Minimal
Invasive Surgery, LLC, 221 F.Supp.3d at 863.
And, the remaining
elements of the promissory estoppel claim have been alleged in a
conclusory manner, without factual underpinnings to support them.
14
Plaintiff also urges in its response to York's motion that
paragraphs 20,
21, 22, at 25 of the amended complaint allege
promises York made to plaintiff.
Doc. 23 at 9.
However, a
review of plaintiff's amended complaint does not point to any of
these statements as promises supporting its promissory estoppel
claim against York.
Even if it did, plaintiff has not alleged
that it relied on those statements to its detriment, nor that
such reliance was foreseeable by defendant.
For these reasons, the court finds that plaintiff has failed
to plead a promissory estoppel claim.
v.
Order
Therefore,
for the foregoing reasons,
The court ORDERS that the motion of York be, and is hereby,
granted, and plaintiff's claims against York be, and are hereby,
dismissed.
The court further ORDERS that from this point forward,
the
style of this case shall read "University Baptist Church of Fort
Worth, Plaintiff, v. Lexington Insurance Company, Defendant."
The court determines that there is no just reason for delay
in, and hereby directs, entry of final judgment as to the
15
dismissal of plaintiff's claims against York.
SIGNED May 16, 2018
16
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