Larry Justice, Beth Justice and Karen Justice v. State Farm Lloyds Insurance Company and FTI/SEA Consulting

Affirmed and Majority and Concurring Opinions filed January 15, 2008 Affirmed and Majority and Concurring Opinions filed January 15, 2008. In The Fourteenth Court of Appeals ____________ NO. 14-06-00248-CV ____________ LARRY JUSTICE, BETH JUSTICE, AND KAREN JUSTICE, Appellants V. STATE FARM LLOYDS INSURANCE COMPANY AND FTI/SEA CONSULTING, Appellees On Appeal from the 127th District Court Harris County, Texas Trial Court Cause No. 02-22646 C O N C U R R I N G   O P I N I O N I respectfully concur. Breach of Contract Claim Against State Farm[1] The insurance policy in issue (a form of HO-B policy approved in Texas) contains the following exclusion: AWe do not cover loss caused by: rust, rot, mold, or other fungi.@ Appellants claim that even though their insurance policy with State Farm specifically excludes coverage for mold, a provision in the State Farm Adjuster=s Guide provides coverage when any loss proximately results from an original claim that is covered, such as damage from a wind-blown tree.[2] Appellants urge that State Farm=s failure to provide coverage for the mold as a covered loss under the provision in the Adjuster=s Guide amounts to a breach of contract. State Farm moved for summary judgment on the basis that any recovery on the contract claim was barred by the policy=s mold exclusion. A reviewing court generally interprets an insurance policy under the same rules of construction as any other contract, reading all parts of a contract together and viewing the contract in its entirety to give effect to the written expression of the parties= intent.[3] Applying the ordinary rules of contract construction to insurance policies, the reviewing court ascertains the parties= intent by looking only to the four corners of the insurance agreement to see what is actually stated and does not consider what was allegedly meant.[4] When, as in this case, the claim involves a standard form insurance policy approved by a state regulatory agency, the everyday meaning of the words to the general public determines the parties= actual intent.[5] If a court can ascertain only one reasonable meaning of the policy provision, the insurance contract is not ambiguous, and the court will enforce it as written.[6] However, when words in a contract are susceptible to more than one reasonable interpretation, the contract is deemed ambiguous.[7] We determine whether a contract is ambiguous, as a question of law, by examining the entire contract in light of existing circumstances at the time the parties formed the contract.[8] When considering exclusionary provisions of an insurance policy, as in this case, a court Amust adopt the construction . . . urged by the insured as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties= intent.@[9] However, a court will construe a policy exclusion against an insurer and in favor of coverage only when construing a policy provision that is ambiguous.[10] The language in the insurance policy with respect to the mold exclusion is not ambiguous.[11] Considering that unambiguous provision and the language of the entire insurance policy, there is no coverage for appellants= claim.[12] This court cannot consider extrinsic evidence from the Adjuster=s Guide, which is not part of the insurance policy, to override the unambiguous language of the policy.[13] As a result, no provision in the Adjuster=s Guide can change the lack of coverage from the policy.[14] Because the insurance policy does not provide coverage for mold as a matter of law, the trial court correctly granted State Farm=s motion for summary judgement on the breach-of-contract claim.[15] Negligence Claim Against State Farm In overruling appellants= issue regarding their negligence claim against State Farm, the court relies on Higganbotham v. State Farm Mutual Auto Insurance Co., in which the Fifth Circuit held that the insured=s negligence claim failed because the alleged actionable conduct of the insurer was solely its breach of contract and therefore the claim sounded only in contract. 103 F.3d 456, 460 (5th Cir. 1997). Obiter dictum in Higganbotham provides, AIn essence, Texas law does not recognize a cause of action for negligent claims handling.@[16] This dictum is not a holding, but even if it were a holding of the Fifth Circuit, it is not binding upon this court.[17] Additionally, though the majority indicates that Texas law does not allow a negligence claim to be brought in the context of claims handling, this issue is a matter of first impression for both the Texas Supreme Court and this court.[18] Resolution of this issue, however, is not necessary today because appellants have waived their complaint by inadequate briefing. Appellants have not presented a single argument or citation in support of the negligence claim. They have failed to provide legal authorities or analysis in support of the proposition that an employee of State Farm owed or assumed a negligence duty to them.[19] Therefore, appellants= first issue fails on the basis of briefing waiver. /s/ Kem Thompson Frost Justice Judgment rendered and Opinion and Concurring Opinions filed January 15, 2008. Panel consists of Justices Yates, Frost, and Edelman.[20] (J. Edelman, majority). [1] As to appellants= claims of breach of contract, negligence, and extra-contractual loss against State Farm, appellants provide no analysis or citations to the record or legal authorities. Therefore, appellants have waived these issues. See Tex. R. App. P. 38.1(h); San Saba Energy, L.P. v. Crawford, 171 S.W.3d 323, 338 (Tex. App.CHouston [14 Dist.] 2005, no pet.) (holding that, even though courts interpret briefing requirements reasonably and liberally, parties asserting error on appeal still must put forth some specific argument and analysis citing the record and authorities in support of the parties= argument). However, under binding precedent, courts cannot resolve all of the issues in an appeal based on briefing waiver. See Tex. R. App. P. 44.3 (AA court of appeals must not affirm or reverse a judgment or dismiss an appeal for formal defects or irregularities in appellate procedure without allowing a reasonable time to correct or amend the defects or irregularities.@); Inpetco, Inc. v. Texas American Bank/Houston, N.A., 729 S.W.2d 300, 300 (Tex. 1987) (per curiam) (stating that, under predecessor to Rule 44.3, a court of appeals cannot overrule all issues and affirm trial court=s judgment based only on briefing waiver); Elder v. Bro, 809 S.W.2d 799, 802 (Tex. App.CHouston [14th Dist.] 1991, writ denied) (holding that appellate courts may overrule some of appellant=s issues based on briefing waiver, but must not overrule all of them based on briefing waiver). For this reason, it is appropriate to reach the merits of appellants= issue as to the breach-of-contract claim against State Farm. [2] The State Farm Adjuster=s Guide provides general guidelines for its claims representatives. Among these guidelines is a provision that if an original claim is covered by the policy (in this case the damage from the wind-blown tree), then any loss proximately resulting from the original claim is covered. However, the Adjuster=s Guide contains additional guidelines specifically devoted to AWater Losses Involving Mold,@ which provide that the ensuing discussion is based on certain policy language of a Homeowners Form FP-7955 and that Aother state-specific Homeowners policies may have different language that may affect these coverage interpretations.@ This case does not involve Homeowners Form FP-7955, and the Adjuster=s Guide is not specific to Texas. This case involves a distinct Texas standard form HO-B policy prescribed by the Texas Department of Insurance. The Adjuster=s Guide specifically limits its analysis to considering Awhether the loss qualifies under the insuring agreement and conditions and whether any exclusions apply.@ [3] Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 740B41 (Tex. 1998). [4] Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006); Williams Consolidated I, Ltd./BSI Holdings, Inc. v. TIG Ins. Co., 230 S.W.3d 895, 902 (Tex. App.CHouston [14th Dist.] 2007, no pet.); Esquivel v. Murray Guard, Inc., 992 S.W.2d 536, 544 (Tex. App.CHouston [14th Dist.] 1999, pet. denied). [5] Fiess, 202 S.W.3d at 746; Progressive County Mut. Ins. Co. v. Sink, 107 S.W.3d 547, 551 (Tex. 2003). [6] Fiess, 202 S.W.3d at 746; State Farm Fire & Cas. Co. v. Vaughan, 968 S.W.2d 931, 933 (Tex. 1998). [7] Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). [8] Id at 464. [9] Fiess, 202 S.W.3d at 746 (stating that, when there is more than one reasonable interpretation of an exclusionary provision, it should be construed in favor of the insured as long as such construction is not unreasonable); Balandran, 972 S.W.2d at 741. [10] Fiess, 202 S.W.3d at 746. [11] See id. at 748. [12] See id. (considering the insurance policy in its entirety, a policy provision is unambiguous in setting forth, AWe do not cover loss caused by mold@); Lundstrom v. United Services Auto. Ass=n-CIC, 192 S.W.3d 78, 91 (Tex. App.CHouston [14th Dist.] 2006, pet. denied) (presuming without deciding that even if the mold were a covered loss under the policy, the mold is not covered under an Aensuing loss@ exception within the policy). As correctly noted by the majority, appellants do not assert coverage under any Aensuing loss@ exception to the policy. See ante p.3, n.1. Appellants, in response to State Farm=s motion for summary judgement, conceded that A[t]he >ensuing loss= provision of the policy has nothing to do with this claim.@ [13] See Fiess, 202 S.W.3d at 747; Nat=l Union Fire Ins. Co. of Pittsburgh v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex. 1995). [14] See Fiess, 202 S.W.3d at 747. [15] See Esquivel, 992 S.W.2d at 544 (concluding summary judgment is appropriate when a case involves interpretation of an unambiguous contract). [16] Higganbotham, 103 F.3d at 460. [17] Penrod Drilling Corp. v. Williams, 868 S.W.2d 294, 295 (Tex. 1993) (holding that court of appeals erred in considering itself bound by Fifth Circuit precedents). [18] Some courts of appeals have concluded that negligence claims can sometimes be asserted in the claims-handling context. See St. Paul Surplus Lines Ins. Co. v. Dal-Worth Tank Co., Inc., 917 S.W.2d 29, 53B54 (Tex. App.CAmarillo 1995); aff=d in part and rev=d in part on other grounds, 974 S.W.2d 51 (Tex. 1998) (per curiam). [19] See Tex. R. App. P. 38.1(h) (AThe brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record.@); San Saba Energy, L.P., 171 S.W.3d at 338 (holding that parties asserting error on appeal must put forth some specific argument and analysis citing the record and authorities in support of the parties= argument); Wright v. Greenberg, 2 S.W.2d 666, 673 (Tex. App.CHouston [14th Dist.] 1999, pet. denied) (AA point of error not supported by authority is waived.@). [20] Senior Justice Richard H. Edelman, sitting by assignment.