JENNIFER CAUGHEY, Justice.
Appellant Kenneth Dortch sued his former employer, appellee Boxer Property Management Corporation, after Boxer's long-term disability insurance carrier, Reliance, denied Dortch benefits under its plan. Reliance concluded that, in 2010 (when Dortch suffered an on-the-job injury), Dortch was not covered under its policy. In 2015, Dortch sued Boxer for breach of contract, promissory estoppel, and violations of the Texas Insurance Code and Deceptive Trade Practices Act (DTPA), arguing that Boxer was liable for his lost benefits because it failed to enroll him and remit premiums to Reliance to ensure his coverage. Boxer sought summary judgment on numerous grounds, and the trial court granted Boxer summary judgment. We affirm.
On April 1, 2010, Dortch was injured while working as a security guard for Boxer. At the time, Dortch was covered by and received worker's compensation benefits in connection with the injury. Dortch contends that he "should also have been covered by short term disability insurance and long term disability insurance with Reliance Standard Life Insurance Company."
Boxer terminated Dortch's employment in June 2010.
Soon thereafter, Dortch sought short-term disability benefits. In an August 2010 letter, Reliance denied Dortch's claim for short-term disability benefits because his "condition was work related and therefore excluded from coverage by the disability carrier under the terms of the short term disability contract."
In that same 2010 letter, Reliance informed Dortch that, if he intended to seek long-term disability benefits, he had to make a request and submit certain materials. The letter stated that if Dortch did not do so, Reliance would assume that he did not want to pursue any such benefits.
Dortch did not respond or otherwise request long-term disability benefits in 2010. Nor did he do so in 2011 or 2012.
In August 2013, Dortch sought long-term disability benefits from Reliance.
In February 2015 (long after the parties became embroiled in litigation against one another on other claims), Dortch sued Boxer arguing that Boxer breached an alleged agreement between the parties by failing to pay Reliance premiums for Dortch's long-term disability insurance. Alternatively, Dortch asserted that Boxer was liable under the doctrine of promissory estoppel. Dortch argued that Boxer "promised to pay the long term disability premiums" and that he "justifiably relied upon [Boxer's] promise to do so" to his detriment. Dortch thus contends that Boxer "is estopped from denying [Dortch] the disability benefits from [Boxer] for [Dortch's] disability under the terms of the long term disability policy."
Dortch also argued that Boxer misrepresented that it "paid the long term disability insurer the long term disability insurance premiums deducted from [Dortch's] paychecks." He asserted that Boxer "acted as an agent in agreeing to withhold the premiums from [his] paycheck and [to] pay them to the insurer, and thus is liable to [Dortch] for misrepresenting insurance coverage to" him.
Boxer moved for traditional summary judgment on Dortch's claims, arguing (among other things) that all of Dortch's claims were barred by the relevant statutes of limitations. Boxer also moved for no evidence summary judgment on each of Dortch's claims. Boxer explained that it "offered a voluntary, employee-paid (with no employer contribution) long-term disability policy through Reliance . . . for benefit/calendar years 2009-2010." Dortch "elected long-term disability insurance in 2009" and "was enrolled in such insurance and premiums were withheld from his paycheck in 2009." Dortch "elected to continue his long-term disability coverage for calendar/benefit year 2010 during open enrollment; however due to a clerical error of unknown origin, [Dortch] was not re-enrolled in long-term disability insurance for 2010." "No premiums or deductions were withheld from [Dortch's] paycheck for long-term disability insurance in 2010."
Without specifying its reasons, the trial court granted Boxer summary judgment on all of Dortch's claims. Dortch moved to set aside the trial court's order. The trial court denied Dortch's motion, and Dortch appeals.
Dortch argues that the trial court erred in granting Boxer summary judgment because he established a fact issue on each of his claims.
We review a trial court's summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). If a trial court grants summary judgment without specifying the grounds for granting the motion, we uphold the trial court's judgment if any of the grounds are meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.-Houston [1st Dist.] 2005, pet. denied). We take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
When reviewing a traditional summary judgment, we must determine whether the movant met its burden to establish that (1) no genuine issue of material fact exists and (2) the movant is entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215-16 (Tex. 2003). To prevail on a no evidence motion for summary judgment, the movant must establish that there is no evidence to support an essential element of the nonmovant's claim on which the nonmovant would have the burden of proof at trial. See TEX. R. CIV. P. 166a(i); Hahn v. Love, 321 S.W.3d 517, 523-24 (Tex. App.-Houston [1st Dist.] 2009, pet. denied). The burden then shifts to the nonmovant to present evidence raising a genuine issue of material fact as to each of the elements specified in the motion. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).
Boxer moved for traditional summary judgment, alleging that the applicable statutes of limitations barred Dortch's claims as a matter of law. With regard to Dortch's breach of contract and promissory estoppel claims, we agree.
Breach of contract and promissory estoppel claims are both subject to four-year statutes of limitations. TEX. CIV. PRAC. & REM. CODE §§ 16.004(a)(3), 16.051; Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 203 (Tex. 2011) (breach of contract); Ambulatory Infusion Therapy Specialist, Inc. v. N. Am. Adm'rs, Inc., 262 S.W.3d 107, 119 (Tex. App.-Houston [1st Dist.] 2008, no pet.) (breach of contract and promissory estoppel). A plaintiff must bring his claim within four years of when the cause of action accrues.
A defendant moving for summary judgment on the affirmative defense of limitations must conclusively establish the elements of that defense. Schlumberger Tech. Corp. v. Pasko, 544 S.W.3d 830, 833 (Tex. 2018) (per curiam). This includes conclusively establishing when the cause of action accrued. Id. at 833-34. When a plaintiff pleads the discovery rule, the defendant moving for summary judgment on limitations must also negate the rule. Id. at 834. Defendants may do this by establishing either that (1) the discovery rule does not apply or, (2) if the rule applies, the summary judgment evidence negates it. Id.
The legal injury rule dictates that a cause of action ordinarily accrues when "a wrongful act causes a legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred." Id. (quoting Sw. Energy Prod. Co. v. Berry-Helfand, 491 S.W.3d 699, 721 (Tex. 2016)). Absent some exception, injuries that arise or develop after the legal injury are deemed to have accrued on the same date as the legal injury that caused them. Id.; see also S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996).
To avoid unjust or "shocking results," Texas courts have recognized an exception to this principle: the discovery rule. Schlumberger Tech., 544 S.W.3d at 834. When it applies, the discovery rule delays a cause of action's accrual until the plaintiff "knew or in the exercise of reasonable diligence should have known of the wrongful act and resulting injury." Id. (quoting S.V., 933 S.W.2d at 4). Where the Legislature has not expressly adopted the discovery rule, the Texas Supreme Court has "restricted the discovery rule to exceptional cases to avoid defeating the purposes behind the limitations statutes." Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006) (per curiam).
The discovery rule applies only in those cases in which "the nature of the injury incurred is inherently undiscoverable and the evidence of injury is objectively verifiable." S.V., 933 S.W.2d at 6 (quoting Comput. Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 456 (Tex. 1996)). An injury is inherently undiscoverable if it is, by its nature, unlikely to be discovered within the prescribed limitations period despite due diligence. See Via Net, 211 S.W.3d at 313-14 (the focus is on whether a type of injury rather than a particular injury was discoverable); Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 735 (Tex. 2001) ("[W]e determine whether an injury is inherently undiscoverable on a categorical basis because such an approach `brings predictability and consistency to the jurisprudence.'") (quoting Apex Towing Co. v. Tolin, 41 S.W.3d 118, 122 (Tex. 2001)).
The discovery rule does not apply to Dortch's breach of contract and promissory estoppel claims, which are barred by the respective statutes of limitations.
Absent an exception, Dortch's causes of action for breach of contract and promissory estoppel accrued "when a wrongful act cause[d him] some legal injury." See S.V., 933 S.W.2d at 4; see also Schlumberger, 544 S.W.3d at 834 (a cause of action generally accrues when "a wrongful act causes a legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred"). With regard to Dortch's breach of contract and promissory estoppel claims, the alleged "wrongful act" occurred in January 2010, when Boxer failed to enroll Dortch in a long-term disability insurance plan (and, relatedly, failed to pay premiums on that plan). Dortch's claims accrued at that time. See Gillespie v. Univ. of Tex. Health Sci. Ctr. at Hous., No. 14-01-00201-CV, 2002 WL 1163002, at *4 (Tex. App.-Houston [14th Dist.] May 30, 2002, no pet.) (not designated for publication) (employee's claims against his employer for loss of his retirement benefits accrued when employer failed to implement their alleged agreement for it to deduct and pay premiums to retirement plan—not years later when his grievance was denied or when benefits were not paid). The statute of limitations for Dortch's breach of contract and promissory estoppel claims thus expired in January 2014.
Dortch contends that the discovery rule applies to toll this timing. It does not.
For the discovery rule to apply, Dortch's injury must be both "inherently undiscoverable and objectively verifiable." See S.V., 933 S.W.2d at 15. Boxer does not dispute that the injury was objectively verifiable. Thus, the discovery rule's application turns on whether Dortch's injury was "inherently undiscoverable."
An injury is inherently undiscoverable if it is, by its nature, unlikely to be discovered within the prescribed limitations period despite due diligence. Via Net, 211 S.W.3d at 313. Whether Dortch's injury was "inherently undiscoverable" is a "legal question [that] is decided on a categorical rather than case-specific basis; the focus is on whether a type of injury rather than a particular injury was discoverable." Id. at 314 (emphasis in original).
The Texas Supreme Court's decision in Via Net v. TIG Insurance Company is instructive. There, Via Net's customer, Safety Lights, demanded that Via Net add it as an additional insured under Via Net's insurance policy. Id. at 312. Via Net agreed to do so, and its insurance broker issued a certificate of insurance listing Safety Lights as "holder" and stating that "holder is added as additional insured re: General Liability." Id. But the certificate also stated that it was "issued as a matter of information only and confer[red] no rights upon the certificate holder." Id. In reality, Via Net's insurance policy with Lumbermens Mutual Casualty Co. did not provide for additional-insured coverage, and Lumbermens issued no endorsement adding Safety Lights as an additional insured. Id. A few years later, an employee of Via Net was injured while delivering a steel plate to Safety Lights. Id. He sued Safety Lights, and Safety Lights requested a defense from Lumbermens. Id. Pointing to its policy, Lumbermens denied the claim. Id. Almost four years later, Safety Lights filed a breach of contract suit against Via Net for failing to add it as an additional insured. Id. The Via Net Court concluded that the claim was time-barred. Safety Lights' claim accrued when Via Net breached its promise to provide coverage—not when coverage was later denied. Id. at 313-15.
Pertinent here, the Texas Supreme Court held that the discovery rule did not apply because, as a contracting party, Safety Lights had a duty to use due diligence to protect its own interests and verify performance of the contract. Id. at 314. The Court explained that "[d]ue diligence may include asking a contract partner for information needed to verify contractual performance." Id. "If a contracting party responds to such a request with false information, accrual may be delayed for fraudulent concealment. But failing to even ask for such information is not due diligence." Id. at at 314-15 (noting that the court was not holding that "the discovery rule can never apply to breach of contract claims. . . . Some contract breaches may be inherently undiscoverable and objectively verifiable. But those cases should be rare, as diligent contracting parties should generally discover any breach during the relatively long four-year limitations period provided for such claims." (internal citations omitted)). The Court emphasized that "Safety Lights learned of the breach within a few months after it occurred"—within the applicable statute of limitations. Id. at 314.
That reasoning applies here. As in Via Net, the type of injury at issue in this case—not being enrolled in a long-term disability insurance plan (despite an alleged contract or promise)—is not inherently undiscoverable within four years. Rather, viewed in a categorical sense, as the Texas Supreme Court has instructed, an employee who acts with due diligence would likely discover the alleged injury (the company's failure to enroll the employee in the plan) during the relatively long four-year limitations period. See id. at 314-15.
This is not the rare case in which the discovery rule should nonetheless apply. The record shows that Dortch actually discovered the alleged injury during the "relatively long four-year limitations period provided for such claims," when Reliance notified him, in September 2013, that he was not covered under the policy. See id. at 315; see also Baleares Link Express, S.L. v. GE Engine Servs.-Dall., L.P., 335 S.W.3d 833, 838 (Tex. App.-Dallas 2011, no pet.) ("[T]he evidence establishes that the plaintiff actually discovered its injury within the limitations period. Under such circumstances, it would be particularly inappropriate for us to conclude that the type of injury in question satisfies the `inherently undiscoverable' prong of the test for applicability of the discovery rule."). Dortch and Boxer had already been engaged in other litigation, in which Dortch was represented by counsel. Dortch could have brought his breach of contract and promissory estoppel claims during the applicable limitations period, but he did not do so. He instead brought these claims nearly a year-and-a-half later, after the limitations period had expired. These facts do not present the "rare" case when the discovery rule should apply.
Boxer established its statute of limitations defense as to Dortch's breach of contract and promissory estoppel claims as a matter of law, and the trial court did not err in granting summary judgment on that basis.
Dortch also challenges summary judgment on his claims for violations of the DTPA and Texas Insurance Code, asserting that he presented evidence that Boxer engaged in false, misleading, or deceptive acts relating to the withholding of premiums for long-term disability insurance. We disagree.
"The DTPA grants consumers a cause of action for false, misleading, or deceptive acts or practices." Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996) (citing TEX. BUS. & COM. CODE § 17.50(a)(1)). To prevail under the DTPA on the kind of claim that he raises, Dortch must show that:
TEX. BUS. & COM. CODE § 17.50(a).
Dortch also brings a claim under Subchapter B of Insurance Code Chapter 541, which prohibits unfair competition, false advertising, misrepresentations about insurance policies, and unfair settlement practices. TEX. INS. CODE §§ 541.051-541.061. To establish a claim under chapter 541 of the Texas Insurance Code, Dortch must show that:
TEX. INS. CODE §§ 541.002; 541.151; Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 383 (Tex. 2000).
Insurance Code section 541.061 provides that:
TEX. INS. CODE § 541.061.
"Generally, to prevail on a misrepresentation claim under the Insurance Code or the DTPA, an insurance policyholder must identify a specific misrepresentation upon which he relied." Zatorski v. USAA Tex. Lloyd's Co., No. 01-13-01002-CV, 2015 WL 456474, at *2 (Tex. App.-Houston [1st Dist.] Feb. 3, 2015, no pet.) (mem. op.). "In the absence of some specific misrepresentation by the insurer or agent about the insurance, a policyholder's mistaken belief about the scope or availability of coverage is not generally actionable under the DTPA." Choucroun v. Sol L. Wisenberg Ins. Agency-Life & Health Div., Inc., No. 01-03-00637-CV, 2004 WL 2823147, at *6 (Tex. App.-Houston [1st Dist.] Dec. 9, 2004, no pet.) (mem. op.) (quoting Sledge v. Mullin, 927 S.W.2d 89, 94 (Tex. App.-Fort Worth 1996, no writ.)). "For the same reason, a claim based solely on mistaken belief would fail under the Insurance Code." Id.
In its summary judgment motion, Boxer argued that there was no evidence that it "engaged in false, misleading or deceptive acts relating to withholding of premiums for long-term disability insurance." In his response, Dortch contended that he "is entitled to additional damages authorized by the Texas Insurance Code for [Boxer] misrepresenting to [him] that [it] paid the long-term disability insurer the long-term disability insurance premiums deducted from plaintiff's paychecks." He also asserted that Boxer was liable to him "under the DTPA for [its] unconscionable actions or courses of action concerning the lack of 2010 disability coverage, misrepresenting the 2010 disability coverage, and failing to disclose how defendant would not be covered for the year[ ] 2010."
Assuming that the DTPA and Insurance Code are applicable here, Dortch did not cite any evidence in support of his contentions that Boxer engaged in false, misleading, or deceptive acts supporting a claim under the DTPA or Insurance Code. Nor did Dortch identify any specific act or representation that was false, misleading, or deceptive. Dortch offered no evidence of any actionable oral or written misrepresentation made by Boxer that long-term disability insurance premiums were deducted from his 2010 paychecks.
We overrule Dortch's issues.
We affirm the judgment of the trial court and dismiss any pending motions as moot.
