DAVID HITTNER, District Judge.
Pending before the Court is Chubb Custom Insurance Company's Motion for Summary Judgment (Document No. 9). Having considered the motion, submissions, and applicable law, the Court determines the motion should be granted.
This case arises as the result of an insurance coverage dispute between Plaintiff Sterling Equities, Inc. ("Sterling") and Defendant Chubb Custom Insurance Company ("Chubb"). Chubb issued Sterling a commercial property insurance policy (the "Policy") with effective dates from May 1, 2008 to May 1, 2009. On September 13, 2008, Hurricane Ike struck Southeast Texas, causing damage to multiple apartment complexes owned by Sterling and insured under the Policy. Shortly thereafter, Sterling submitted a claim against the Policy for damages to all affected properties, including Champion Village Apartments located at 12811 Greenwood Forest in Houston, Texas (the "Greenwood Property"). Chubb assigned Sterling's claim a claim number 040508094305 (the "Original Claim"). Chubb also assigned its in-house adjuster, Mark Black ("Black"), to inspect Sterling's properties associated with the Original Claim. Subsequently, a dispute arose regarding the extent of coverage under the Policy and the amount of loss sustained by Sterling's properties, including
On July 28, 2009, the parties executed a Confidential Settlement and Release Agreement (the "Release") as to the amount payable for the Original Claim. According to the Release, Chubb agreed to pay Sterling a total of $515,509.00 for losses to three specifically named properties.
In March of 2010, eight months after signing the Release, Sterling hired an independent adjuster to reinspect the loss to the Greenwood Property. Contrary to Black's estimate, Sterling's independent adjuster determined that Hurricane Ike caused damages to the Greenwood Property totaling $1,171,419.10.
On October 25, 2010, Sterling filed the present lawsuit alleging breach of contract and violations of the Texas Insurance Code. Alternatively, Sterling's suit seeks a declaration that the Release does not apply and prays for recovery for all actual, additional, and exemplary damages. Chubb answered the lawsuit and pled release and waiver as an affirmative defense. Chubb now moves for summary judgment contending there are no genuine issues of material fact because the Release extinguishes all causes of action and bars recovery for any and all loss or damage asserted by Sterling in this litigation. Sterling opposes summary judgment and contends that because the Release is ambagious, there are material fact issues as to whether the Release precludes recovery. Accordingly, the Court must determine whether summary judgment is warranted.
Summary judgment is proper when "there is no genuine issue as to any material fact and the movant is entitled to a judgment as a matter of law." FED. R.CIV.P. 56(a). The court must view the evidence in a light most favorable to the nonmovant. Coleman v. Hous. Indep. Sch. Dist., 113 F.3d 528, 533 (5th Cir.1997). Initially, the movant bears the burden of presenting the basis for the motion and the elements of the causes of action upon which the nonmovant will be unable to establish a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant to come forward with specific facts showing there is a genuine issue for trial. See also FED.R.CIV.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). "A dispute about a material fact is `genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956 (5th Cir.1993) (citation omitted).
But the nonmoving party's bare allegations, standing alone, are insufficient to create a material issue of fact and defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
As the moving party, Chubb bears the initial burden of presenting the basis for its motion and the elements of the causes of action upon which Sterling will be unable to establish a genuine issue of material fact. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548. Chubb contends the parties' Release governs this case and precludes Sterling from recovery. Specifically, Chubb contends that: (1) the damages Sterling's independent adjuster uncovered during a reinspection of the Greenwood Property were the result of Hurricane Ike; (2) the Greenwood Property was part of the Original Claim for losses Sterling submitted against the Policy; and (3) because Sterling agreed to release Chubb of any an all liability to the Original Claim and for any damages precipitating from Hurricane Ike, Sterling cannot not now seek to hold Chubb liable for additional damages to the Greenwood Property.
In response, Sterling contends it is not precluded by the Release because the parties did not intend the Release to apply to the Greenwood Property. Sterling asserts that "[t]o effectively release a claim in Texas, the releasing instrument must `mention' the claim to be released," and that "[g]eneral categorical releases are to be narrowly construed." Sterling explains that when Black inspected the Greenwood Property, he assigned the property an individual claim number, 08-01075. Sterling further explains that Black's individual claim number is different from the claim number Chubb assigned to the Original Claim (i.e., 040508094305). Sterling contends that because the Release neither mentions the Greenwood Property nor Black's individual claim number, the Release does not bar Sterling's suit for damages to the Greenwood Property.
Sterling further contends, in the alternative, that the Release is ambiguous because it is open to more than one reasonable interpretation. According to Chubb, the Release encompasses all claims for damages and liability related to the Original Claim and that all future claims for damages precipitating from Hurricane Ike are barred. According to Sterling, the Release allows the possibility of recovery for damages to the Greenwood Property because neither the property itself nor Black's claim number associated with the adjustment of the property was specifically mentioned in the Release.
In reply, Chubb contends that Sterling's interpretation of the Release fails to consider the Release as a whole. Chubb notes that while the release states "[t]his settlement includes all coverages for the specified premises with claimed damages
Having considered the parties contentions, the Court is faced with the issue of whether the Release precludes Sterling from pursuing its lawsuit to recover damages to the Greenwood Property. Under Texas law, "a release surrenders legal rights or obligation between the parties to an agreement." Dresser Indus., Inc. v. Page Petroleum, Inc., et al., 853 S.W.2d 505, 508 (Tex.1993) (citing Cox v. Robison, 105 Tex. 426, 150 S.W. 1149, 1155 (Tex.1912)). A release "operates to extinguish the claim or cause of action as effectively as would a prior judgment between the parties and is an absolute bar to any right of action on the released matter." Id. (citing Hart v. Traders & Gen. Ins. Co., 144 Tex. 146, 189 S.W.2d 493, 494 (1945)). In order to be effective, "the releasing instrument must `mention' the claim to be released." Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex.1991). Additionally, "an agreement not to sue can be construed as a release and may be properly pled as a defense." Dicker v. Lomas & Nettleton Fin. Corp., 576 S.W.2d 672, 675 (Tex.Civ.App.-Texarkana 1978, writ ref'd n.r.e.).
Further, under Texas law, releases are subject to the rules of contract interpretation. Williams v. Glash, 789 S.W.2d 261, 264 (Tex.1990) (citing Loy v. Kuykendall, 347 S.W.2d 726, 728 (Tex.Civ. App.-San Antonio 1961, writ ref'd n.r.e.) ("A release is a contract and the construction thereof is governed by the general rules relating to construction of contracts")). The Supreme Court of Texas has recognized that contract terms are given their plain, ordinary, and generally accepted meanings, and that a contract should be construed as a whole in an effort to give effect to all of its provisions. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex.2005). Giving effect to all contractual provisions ensures that none will be rendered meaningless. Tex. Indus., Inc. v. Factory Mut. Ins. Co., 486 F.3d 844, 846 (5th Cir.2007). If language is worded so that it can be given a certain or definite legal meaning or interpretation, it is not ambiguous and is construed as a matter of law. Id.
Ambiguities may exist only if the contractual language is uncertain and doubtful or if it is susceptible to two or more reasonable interpretations. Grimes v. Andrews, 997 S.W.2d 877, 882 (Tex. App.-Waco 1999, no pet.). The fact that the parties offer differing interpretations of the contract, however, does not, of itself, create ambiguity. Tex. Indus., 486 F.3d at 846. A determination of contractual ambiguity is a matter of law for the court to decide by looking at the contract as a whole in light of the circumstances present when the contract was entered. Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983).
Under the RECITALS section of the Release, paragraph 1 indicates that Sterling made a claim under the Policy for damages to its properties as a result of events precipitated by Hurricane Ike. The claim was identified by Chubb with claim number 040508094305, which the Court has in turn defined in this Order as the
Under the AFFIRMATIVE COVENANTS section of the Release, paragraph 1 states that "[t]his settlement includes all coverages for the specified premises with claimed damages as a result of Hurricane Ike." Paragraph 1 goes on to list, and identify by address, three premises.
This language contains two main clauses separated by the conjunctive "and." The first clause is a broad mutual release and discharge of all liability or claims "arising out of, flowing from or in any way connected with the loss(es) related to the [Original] Claim." The second clause is a covenant whereby Sterling promises "not to make further claim for any loss or damage to real ... property ... or for any other loss covered under any first party coverage provided by the Policy as a result of events precipitated by Hurricane Ike." The Court finds that these two clauses can be given a definite legal interpretation and that they are dispositive on the issue of whether the Release precludes Sterling's suit.
First, it is undisputed that the Greenwood Property was one of Sterling's many properties covered under the Policy. Chubb's summary judgment evidence indicates that the Greenwood Property was also part of Sterling's Original Claim submitted against the Policy.
Second, it is undisputed that Sterling's independent adjuster conducted an investigation eight months after the execution of the Release, and that the independent adjuster had determined Hurricane Ike caused damages to the Greenwood Property totaling $1,171,419.10. By suing Chubb for breach of contract and for violations of the Texas Insurance Code, Sterling seeks to recoup "loss or damage to real ... property ... as a result of events precipitated by Hurricane Ike," which is exactly what Sterling covenanted not to do in the Release. Thus, the Court finds that the Release bars Sterling's suit.
Construing the Release as a whole, the Court finds the Release broadly releases Chubb from liability and damages with respect to the Original Claim, which includes the Greenwood Property. Accordingly, Sterling is precluded from pursuing its present causes of action, and Chubb is entitled to summary judgment.
Based on the foregoing, the Court hereby
ORDERS that Chubb Custom Insurance Company's Motion for Summary Judgment (Document No. 9) is GRANTED.
This is a FINAL JUDGMENT.