HARRIS COUNTY COURT DISMISSES INSURANCE CLAIMS ASSERTED BY PLAINTIFFS WHO WERE DEEMED NOT TO BE BENEFICIARIES OF THE INSURANCE CONTRACT

August 15, 2011

Harris County District Judge Mike Miller granted summary judgment to USAA in a homeowner’s policy dispute against plaintiffs represented by The Mostyn Firm in Schramm, et al v. USAA Texas Lloyd’s Company, et al, Cause No. 2009-33822 (August 2011).  Plaintiffs filed suit for breach of contract, insurance code violations and fraud against an insurer claiming they had standing as future owners of an insured property by virtue of a contract for deed.  Plaintiffs argued they had equitable title and an insurable interest in the property so as to render them third-party beneficiaries under the insurance contract between the seller and the insurer.  However, despite having possession of the property, the Court agreed with the insurer and found the plaintiffs were not third-party beneficiaries since there was no intention on the part of the insurer that plaintiffs benefit under the policy.  The insurer further argued since Plaintiffs lacked standing to bring suit under breach of contract theories their claims for Insurance Code violations and bad faith were also without merit.  The Court granted the insurer’s motion for summary judgment for lack of standing as well as its no evidence motion for summary judgment on fraud claims prior to any depositions on the basis that Plaintiffs were unable to identify a single representation upon which they detrimentally relied. Plaintiffs’ suit was dismissed in its entirety.

Editor’s Note:  MDJW congratulates USAA on this victory in an interesting dispute, involving novel theories of recovery.  MDJW attorneys Chris Martin, Andrew Scott, and Tanya Dugas represented USAA in this matter.