Bedford Internet Office Space, LLC v. Texas Insurance Group, Inc.
537 S.W.3d 717
Tex. App.2017Background
- Bedford leased two commercial buildings in June 2011 and, per the lease, asked broker Texas Insurance Group, Inc. (TIG) to obtain insurance; TIG procured a Travelers policy effective June 20, 2011–June 20, 2012.
- The buildings were burglarized twice (Aug/Sept and Oct 2011); Travelers opened claims then denied coverage on Jan. 3, 2012, citing a vacancy exclusion (vacant >60 days).
- Bedford sued Travelers in Sept. 2012 for wrongful denial; that suit was removed to federal court and Travelers won summary judgment; the federal court dismissed the case with prejudice.
- On June 2, 2016, Bedford sued TIG for breach of contract, negligence, negligent misrepresentation, and DTPA and Insurance Code violations, alleging TIG mishandled procurement/coverage.
- TIG moved to dismiss under Texas Rule of Civil Procedure 91a, arguing Bedford’s claims were barred by the applicable statutes of limitations (relying on Johnson & Higgins). The trial court granted the Rule 91a dismissal, and Bedford appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 91a dismissal based on statute of limitations was proper | Bedford: Rule 91a requires the court to decide solely on the plaintiff's pleading; limitations is an affirmative defense and cannot be resolved without looking to defendant's pleadings | TIG: Statute of limitations expired under Johnson & Higgins; dismissal appropriate | Reversed: Court held the trial court erred because statute of limitations is an affirmative defense and resolving it required examining defendant's pleadings, which Rule 91a forbids |
| Whether trial court may consider evidence or other pleadings on Rule 91a motion | Bedford: Trial court may not consider evidence or defendant pleadings; must accept plaintiff allegations as true | TIG: Needed to invoke limitations to bar claims | Held: Rule 91a.6 prohibits considering evidence and limits decision to plaintiff's pleading; trial court improperly looked beyond plaintiff's pleading |
| Whether Rule 91a should be strictly construed given fee-shifting exposure | Bedford: Rule 91a is harsh and must be strictly construed to protect plaintiffs | TIG: Not expressly argued on strict construction | Held: Court emphasized strict construction of Rule 91a because of its harsh, fee-shifting consequences |
| Constitutional challenge to Rule 91a (open courts) | Bedford: Rule 91a violates Texas Constitution open courts provision | TIG: Not detailed here | Not reached: Court reversed on procedural grounds and did not address constitutional challenge |
Key Cases Cited
- Johnson & Higgins of Texas, Inc. v. Kenneco Energy, 962 S.W.2d 507 (Tex. 1998) (limitations on agent’s negligence to procure insurance begins on insurer’s denial)
- Texas Beef Cattle Co. v. Green, 921 S.W.2d 203 (Tex. 1996) (statute of limitations is an affirmative defense)
- Woods v. William M. Mercer, Inc., 769 S.W.2d 515 (Tex. 1988) (party asserting affirmative defense bears burden of pleading and proof)
- MAN Engines & Components, Inc. v. Shows, 434 S.W.3d 132 (Tex. 2014) (failure to plead affirmative defense waives it)
- Bedford Internet Office Space, LLC v. Travelers Cas. Ins. Co., 41 F. Supp. 3d 535 (N.D. Tex. 2014) (federal district court granted summary judgment to insurer on vacancy exclusion)