ARTFUL REPLEADING TO DEFEAT LIMITATIONS DEFENSE FOUND TO BE ALL WET – FAILURE TO CHALLENGE FLOOD / SURFACE WATER FINDING ON APPEAL SINKS CLAIM
The Houston Court of Appeals recently affirmed summary judgment in favor of an insurer in relation to property damage caused by Hurricane Harvey in 2017. In Sosa v. Auto Club Indemnity Co., 2022 WL 3722396 (Tex.App. – Houston (1st Dist.) September 1, 2022), the insured presented a claim for damages caused by Hurricane Harvey on August 26, 2017. Auto Club investigated the claim and found that the $1,191.96 cost to repair covered roof damage was less than the insured’s deductible and that remaining damage caused by surface and flood water was expressly excluded. So, on September 26, 2017, Auto Club notified the insured of their findings and advised that it was closing the file.
Then on November 11, 2020, over three years later, the insured hired the Dick Law Firm and filed suit alleging significant property damage occurred on August 26, 2017 and alleging breach of contract and other extra-contractual allegations. Auto Club’s answer asserted numerous affirmative defenses, the policy exclusion for flood and surface water damage and that the two year and one day limitations period in the policy barred the claims. Sosa then filed an amended pleading that changed the date of loss from August 26, 2017, to June 28, 2019, attached documents to try to support the new date of loss, and demanded appraisal. This was the live pleading when the court granted summary judgment in favor of the insurer. Auto Club moved for summary judgment on several grounds and argued in part that the only claim reported to Auto Club was the 2017 Hurricane Harvey claim and that the house had two feet of flood water due to flood - an excluded cause of loss. Lastly, the insurer asserted that covered roof damage was less than the insured’s deductible.
The trial court granted Auto Club’s traditional motion for summary judgment and made several findings including that the insured did not demand appraisal or file suit within the applicable limitations period, that Sosa’s “effort to recast the Hurricane Harvey claim [was] prohibited” and that flood and surface water damage were excluded from coverage. And in dismissing all claims, the court impliedly granted summary judgment on any extracontractual claims.
On appeal, the court observed that the insured only challenged three of the four grounds for granting summary judgment in the insurer’s favor, failing to challenge the court’s ruling that the damages claimed were the result of flood or surface water and were not covered or were otherwise excluded by the policy. Accordingly, any other error complained of would be harmless as this unchallenged ground supports summary judgment. Summary judgment in favor of the insurer was affirmed.
Editor’s note: Appellate practice is highly specialized and early engagement of appellate counsel is encouraged to avoid many traps for the unwary. MDJW’s appellate section primarily consists of three board certified appellate lawyers who stand ready to assist in keeping favorable judgments and to help with efforts to overturn unfavorable results.