Westview Drive Investments, LLC and Jack Yetiv v. Landmark American Insurance Co., and King-Phillips Insurance Agency, Inc. AKA Insurtrust Insurance
522 S.W.3d 583
| Tex. App. | 2017Background
- Westview Drive Investments (Westview) bought the mortgage note and foreclosed on Westview Forest Apartments; the property had been insured under a Landmark policy originally issued to TTSF; King-Phillips procured the policy for Landmark.
- An EPI (evidence of property insurance) identified TTSF as the named insured and FirstVal as mortgagee; FirstVal assigned its mortgagee interest and the EPI to Westview.
- A leasing-office fire occurred on Nov. 5, 2008; Westview reported the fire later and sought coverage for building damage, business personal property, business income, accounts receivable, and valuable papers.
- Landmark paid Westview >$334,000 treating Westview as a mortgageholder and denied coverage for business-interruption, accounts-receivable, and many business-personal-property claims; Westview sued Landmark and King-Phillips for breach of contract, fraud, promissory estoppel, negligent misrepresentation, and violations of the DTPA and Texas Insurance Code.
- Trial court: granted Landmark partial summary judgment that Westview was a mortgageholder (not a named insured) and that mortgageholder coverage excluded many claimed items; granted directed verdict for King-Phillips on several claims as time-barred; jury found for defendants on remaining issues.
- Westview appealed various rulings and factual sufficiency; Jack Yetiv (Westview principal) separately appealed sanctions imposed on him for an emailed threat to file bar grievances against opposing counsel during trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of coverage (summary judgment) | Westview: as successor to mortgagee/EPI and via assignment/equity/statute it should receive named-insured coverages (business income, AR, valuable papers) | Landmark: policy unambiguously limited Westview to mortgageholder coverage; no written consent to transfer named-insured rights; equitable-lien theory fails because TTSF no longer held interest at loss | Court: Affirmed — policy unambiguous; Westview was mortgageholder only and mortgageholder coverage excluded those items |
| Statute of limitations / directed verdict on claims vs King-Phillips | Westview: claims (negligent misrep, DTPA, Ins. Code) did not accrue until insurer’s later actions; still arguable that claim was not denied until 2011 | King-Phillips: claims accrued by March 2009 when Landmark/agent communicated denials; two-year limitations expired before suit | Court: Affirmed directed verdict — causes accrued no later than March 2009; time-barred |
| Admission of evidence about Landmark adding FirstVal as named insured on another property | Westview: evidence shows Landmark later added FirstVal as additional named insured on Kingsgate — probative to show lender could become named insured; defendants opened the door | Landmark/King-Phillips: different property/coverage, different carrier contexts; adverse prejudice and relevance outweighed probative value | Court: No abuse of discretion excluding the testimony; evidence irrelevant or prejudicial and would not change outcome |
| Jury charge & factual sufficiency of negative findings (breach, apparent authority, fraud, DTPA/Ins. Code claims) | Westview: charge omissions/errors and overwhelming evidence show Landmark breached, King-Phillips had apparent authority, promissory estoppel, fraud, and unfair practices | Defendants: jury instructions proper; many claims derivative of King-Phillips (some time-barred); record supports defense (policy terms, communications, documentation failures) | Court: Overruled charge errors and factual-sufficiency complaints; jury verdict for defendants upheld |
| Sanctions against Yetiv for email threatening bar grievance | Yetiv: email intended to clear his name, not to gain litigation advantage; sanctions improper and trial court overreached (judicial end-run re disciplinary system) | Defendants/trial court: email threatened discipline to coerce opposing counsel to recant and make statements favorable to Westview; violated ethical rule; court may sanction under inherent power/Canon 3(D) and properly referred matter to State Bar | Court: Affirmed sanctions — court did not abuse discretion; sanctions and referral to disciplinary counsel appropriate |
Key Cases Cited
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (summary-judgment burdens and standards)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (contract interpretation principles)
- RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113 (Tex. 2015) (insurance-policy construction rules)
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (summary-judgment review in insurance cases)
- In re Bennett, 960 S.W.2d 35 (Tex. 1997) (courts’ inherent power to sanction abusive litigation conduct)
- Gaines v. Kelly, 235 S.W.3d 179 (Tex. 2007) (apparent authority analysis)