Edward R. Ferris and Cynthia M. Ferris v. State Farm Lloyds--Appeal from 37th Judicial District Court of Bexar County

No. 04-97-00887-CV
Edward R. FERRIS and Cynthia Ferris,
Appellants
v.
STATE FARM LLOYDS,
Appellee
From the 37th Judicial District Court, Bexar County, Texas
Trial Court No. 96-CI-10271
Honorable David Peeples, Judge Presiding

Opinion by: Phil Hardberger, Chief Justice

Sitting: Phil Hardberger, Chief Justice

Alma L. L pez, Justice

Paul W. Green, Justice

Delivered and Filed: October 28, 1998

REVERSED AND REMANDED

Appellants, Edward R. Ferris and Cynthia Ferris (the "Ferrises"), appeal a summary judgment in favor of appellee, State Farm Lloyds ("State Farm"), in an action involving insurance coverage questions. In their petition, the Ferrises alleged that the policy issued by State Farm insured their home against damages from foundation movement caused by a plumbing leak. On appeal, the Ferrises contend that the trial court erred in concluding that no coverage existed as a matter of law and in granting a summary judgment on their access coverage claims and claims for extra-contractual damages. We agree and reverse the trial court's judgment.

Standard of Review

In order to prevail on summary judgment, the movant must disprove at least one of the essential elements of each of the plaintiff's causes of action. Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991). This burden requires the movant to show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). In determining whether a material fact issue exists to preclude summary judgment, evidence favoring the non-movant is taken as true, and all reasonable inferences are indulged in favor of the non-movant. Id.; see also Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995). Any doubt is resolved in favor of the non-movant. Nixon v. Mr. Property Management Co., 690 S.W.2d at 548-49; see also Doe, 907 S.W.2d at 477.

In this case, the trial court expressly stated the ground on which it granted the motion: no coverage existed as a matter of law. Until the Texas Supreme Court's decision in Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623 (Tex. 1996), when the trial court's judgment specified the basis on which the summary judgment was granted, this court was precluded from considering other grounds, not ruled upon by the trial court, that might have sustained the judgment. In Cates, the Texas Supreme Court stated that this court "should consider all summary judgment grounds which the trial court expressly rules on and the movant preserves for appellate review that are necessary for final disposition of the appeal." Id. at 624. The Court further concluded that this court "may, in the interest of judicial economy, consider other grounds that the movant preserved for review and that the trial court did not rule on." Id.

Coverage

With regard to insurance coverage, the Ferrises contend that the summary judgment was erroneous in two respects. First, the Ferrises contend that the trial court erred in concluding that coverage for foundation damages was excluded under the terms of the policy as a matter of law. Second, the Ferrises contend that the summary judgment was excessive in scope, by including their claim for access coverage which was not properly addressed in the course of the summary judgment proceeding.

With regard to the Ferrises' first contention, State Farm concedes that the trial court's judgment must be reversed based on the Texas Supreme Court's recent holding in Balandran v. Safeco Insurance Co. of America, 972 S.W.2d 738 (Tex. 1998). We agree and reverse the judgment as to the coverage issue.

Although State Farm concedes the coverage issue, it contends that we can affirm that portion of the summary judgment addressing the Ferrises' access coverage claim. State Farm asserts that its summary judgment motion addressed the access claim to the extent it was adequately pled, and it conclusively established that the access claim had been paid. In the Ferrises' response to State Farm's motion for summary judgment, the Ferrises drew a distinction between coverage for access and coverage for repairs. Although the Ferrises asserted that State Farm unconditionally paid $1,664.25 for the cost to access the plumbing leaks under their foundation, there is no stipulation or evidence from which we could determine that the amount paid by State Farm was the total amount owing for all access costs. Therefore, a question of fact remains as to whether State Farm has provided full coverage for the Ferrises' access costs.

Extra-Contractual Damages

With respect to extra-contractual damages, State Farm's summary judgment motion asserted that the Ferrises were not entitled to recover on their extra-contractual claims because such recovery depended upon a valid breach of contract action. In their supplemental brief, State Farm asserts that we can affirm the trial court's judgment as to the extra-contractual claims because Balandran demonstrates the Ferrises' inability to prove "bad faith," which they must show in order to be entitled to extra-contractual recovery. State Farm contends that Balandran confirms that the coverage dispute was valid.

The argument asserted in State Farm's supplemental brief was not presented to the trial court as a ground for summary judgment. In reviewing the trial court's judgment, we may only consider the issues presented to the trial court. See Cates, 927 S.W.2d at 624 (limiting review to grounds presented to trial court); see also City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 674-77 (Tex. 1979); Tex. R. Civ. P. 166a(c) (moving party must show entitlement to judgment as a matter of law on the issues expressly set out in the motion). The only issue regarding liability for extra-contractual claims that was presented to the trial court was the Ferrises' inability to recover for such claims based on the trial court's conclusion that the Ferrises did not have a valid breach of contract action. Because we have determined that the trial court's conclusion regarding the validity of the breach of contract action was erroneous in light of Balandran, the judgment as to extra-contractual claims must also be reversed. State Farm has urged that we proceed in addressing the merits of the extra-contractual claims based on the reasonableness of State Farm's actions. Since State Farm did not move for summary judgment on that basis, it would be premature for this court to address the merits of such an argument.

Conclusion

The judgment of the trial court is reversed, and the cause is remanded for further proceedings consistent with this opinion.

PHIL HARDBERGER,

CHIEF JUSTICE

DO NOT PUBLISH

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