Blanco West Properties, L.L.C. v. Arch Specialty I ( 2019 )

Case: 18-20745 Document: 00515043733 Page: 1 Date Filed: 07/22/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 18-20745
Fifth Circuit
FILED
Summary Calendar July 22, 2019
Lyle W. Cayce
BLANCO WEST PROPERTIES, L.L.C., Clerk
Plaintiff - Appellant
v.
ARCH SPECIALTY INSURANCE COMPANY,
Defendant - Appellee
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:18-CV-897
Before JONES, COSTA, and OLDHAM, Circuit Judges.
PER CURIAM:*
This case is a contract dispute between the owner of a shopping center
(Blanco West) and an insurance company. The roof of the commercial property,
located in San Antonio, was damaged in a hail storm in April 2016. Blanco
West’s owner, who lives in Houston, did not discover the damage until October
2017 and did not file a claim until November 2017. The insurance company
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 18-20745 Document: 00515043733 Page: 2 Date Filed: 07/22/2019
No. 18-20745
denied the claim because the parties’ insurance contract contained an
endorsement that explicitly required hail-related claims to be brought within
one year. The district court, in a comprehensive opinion discussing Texas and
Fifth Circuit precedent, granted summary judgment to the insurer. We affirm.
On appeal, Blanco West contends that an insurance company must show
that it has been prejudiced by an insured’s failure to file a claim within the
express reporting period specified by an endorsement to the insurance contract
before it can deny coverage for the claim.
The commercial property coverage of the policy reflects that Arch’s policy
covered windstorm and hail damage “subject to all the terms of this Policy.”
Originally, the insured’s duty under this coverage was to provide “prompt
notice” of any loss or damage, but the Windstorm or Hail Loss Conditions
Amendment was an endorsement that provided “THIS ENDORSEMENT
CHANGES THE POLICY, PLEASE READ IT CAREFULLY.” Stating that
this was “agreed,” the amended policy language stated: “In addition to your
obligation to provide us with prompt notice of loss or damage, with respect to
any claim wherein notice of the claim is reported to us more than one year after
the reported date of loss or damage, this policy shall not provide coverage for
such claims.” (Emphasis added).
Blanco West is correct that case law has required insurers to show
prejudice following the insured’s breach of general provisions requiring notice
of loss or damage “as soon as practicable” (and variations thereof). In this
instance, however, shifting the burden is not required. Here, the parties signed
a very specific endorsement to a commercial insurance policy that required
Blanco West to submit claims for losses “caused by or resulting from windstorm
or hail” within one year. Although no opinion issued by the Supreme Court of
Texas speaks to the specific facts in this case, the district court conducted a
thorough review of Texas insurance cases and concluded as follows:
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Case: 18-20745 Document: 00515043733 Page: 3 Date Filed: 07/22/2019
No. 18-20745
“The Endorsement provides that the Policy ‘shall not provide coverage’
for claims that are reported to Arch more than one year after the date of loss
or damage. Unlike provisions requiring ‘prompt notice’ or notice ‘as soon as
practicable,’ the Endorsement’s one-year notice provision establishes a specific
deadline for notice. The Court views this as a significant distinction between
the notice provision in the Endorsement and the general ‘prompt’ or ‘as soon
as practicable’ notice provisions in PAJ [Inc. v. The Hanover Ins. Co.,
243 S.W.3d 630 (Tex. 2008)] and Prodigy [Comms. Corp. v. Agric. Excess &
Surplus Ins. Co., 288 S.W.3d 374 (Tex. 2009)] that the Texas Supreme Court
held require a showing of prejudice.” See also Matador Petrol. Corp. v. St. Paul
Surplus Lines Ins. Co., 174 F.3d 653, 659 (5th Cir. 1999) (court upholds 30-day
notice provision in a commercial policy endorsement, stating that under the
plain language of the endorsement, the insured “received what it bargained
for…, with premiums presumably reduced to reflect the limited coverage….”).
After careful review of the parties’ briefs, case law, and pertinent
portions of the record, this court AFFIRMS the judgment for substantially the
reasons articulated in the district court’s opinion.
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