Fifth District Court Affirms Summary Judgment in First-Party Insurance Case
Aug 1, 2022
The Fifth District Court of Appeals affirmed a Motion for Summary Judgment granted in a first-party insurance case. Partners Rick Harmon, Jennifer Kearns and Natalie Tarnosky represented Amtrust Financial Services and secured summary judgment based on an affirmative defense of limitations. Partner Wade Crosnoe and senior attorney Elizabeth Brabb assisted with the appeal.
Plaintiff Knox Mediterranean Foods, Inc. was burgled on June 16, 2016, submitted a claim to Amtrust under their policy, and provided a list of damages and stolen property. On March 15, 2017, Amtrust issued a check to Knox to cover certain itemized stolen or damaged property, along with a letter from an Amtrust claim adjuster stating Amtrust had not received documentation previously requested regarding additional stolen or damaged property. After Amtrust did not receive any of the additional documentation requested, they sent a letter on June 13, 2017, stating that the claim was closed with no additional payments.
On May 20, 2020, Knox filed suit against Amtrust asserting claims for breach of contract, breach of warranty, fraud and misrepresentation, violations of the Texas Deceptive Trade Practices Act, violations of the Texas Insurance Code, bad-faith claim denial and bad-faith insurance practices, and breaches of the duties of good faith and fair dealing. Amtrust asserted several affirmative defenses, including that Knox’s claims were barred by the statute of limitations as set forth in the policy.
Amtrust argued that Knox’s cause of action accrued on June 13, 2017, when Amtrust notified Knox that it was closing the claim.
The trial court granted Amtrust’s Motion for Summary Judgment and ordered Knox take nothing on its claims. Knox appealed.
The Fifth District Court of Appeals first noted there was no dispute that the insurance policy at issue set a limitations period of two years and one day from the date of accrual. The issue on appeal was when the cause of action accrued.
Knox argued its causes of action had not yet accrued even by the time it filed suit because Amtrust’s June 13, 2017 letter was not a written denial of the claim in that the letter included language that indicated Amtrust would consider any additional information provided by the insured. Amtrust argued that neither this language, nor any continued discussions regarding the claim after the June 13, 2017 letter, affected whether the letter was a denial. The Court of Appeals agreed with Amtrust and found that the June 13, 2017 letter stating Amtrust was “closing this claim . . . with no additional payment” was unambiguous and constituted an outright denial of Knox’s claim. Therefore, Knox’s claim had begun to accrue on June 13, 2017, and its lawsuit filed on May 20, 2020, was time-barred.
The Fifth District Court of Appeals affirmed the judgment of the trial court and ordered Amtrust to recover its costs of the appeal from Knox.