Petitioners Reply Brief

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					                   No. 04-0215
      _____________________________________

                     IN THE
                SUPREME COURT
                   OF TEXAS
      _____________________________________

      DALLAS FIRE INSURANCE COMPANY,
                   Petitioner

                          v.

TEXAS CONTRACTORS SURETY & CASUALTY AGENCY,
        TOM YOUNG and FRED THETFORD,
                   Respondents
        ________________________________

           On Petition for Review from the
     Second Court of Appeals at Fort Worth, Texas
       __________________________________

          PETITIONER’S REPLY BRIEF
       __________________________________

                               Respectfully submitted,

                               SUCHOCKI, BULLARD & CUMMINGS, P.C.
                               Bernard R. Suchocki
                               State Bar No. 19458500
                               Jerry D. Bullard
                               State Bar No. 03323015
                               Scott A. Cummings
                               State Bar No. 00793573
                               One Summit Avenue, Suite 312
                               Fort Worth, Texas 76102
                               (817) 338-0088
                               (817) 338-0408 (fax)

                               ATTORNEYS FOR PETITIONER
                                                TABLE OF CONTENTS


TABLE OF CONTENTS ......................................................................................................... i

INDEX OF AUTHORITIES ................................................................................................. iii

OBJECTIONS TO RESPONDENTS’ STATEMENT OF FACTS ................................. 1

ARGUMENT ............................................................................................................................ 2

         Reply Germane to Issue No. 1:

                  Article 21.21 does not apply to TCSCA’s claim because
                  the dispute does not arise out of the “business of
                  insurance”............................................................................................................... 2

          Reply Germane to Issue No. 2:

                  TCSCA’s claim against Dallas Fire is essentially a
                  breach of contract claim and, therefore, cannot be re-
                  characterized as an article 21.21 cause of action
                  (predicated on a violation of section 17.46(b)(12) of the
                  DTPA) .................................................................................................................. 5

          Reply Germane to Issue No. 3:

                  TCSCA’s claim is based on a dispute over an ambiguous
                  contract term and, therefore, is not actionable under re-
                  characterized as an article 21.21 cause of action
                  (predicated on a violation of section 17.46(b)(12) of the
                  DTPA) .................................................................................................................. 5

                  [Issue Nos. 2 and 3 are grouped together for purposes
                  of argument.]

                  A. This dispute is, in essence, based on an alleged
                  failure to perform a contractual obligation, not on an
                  actionable extra-contractual representation ....................................................... 5


                                                                     i
                 B. This case does not involve more than a “mere breach
                 of contract” claim so as to subject Dallas Fire to extra-
                 contractual liability.............................................................................................. 8

                 C. TCSCA’s cited authority is inapposite......................................................... 9

          Reply Germane to Issue No. 5:

                 Assuming for purposes of argument that TCSCA’s
                 article 21.21 claim is actionable, Dallas Fire would still
                 be entitled to judgment as a matter of law because the
                 claim is barred by limitation. ........................................................................... 11

CONCLUSION....................................................................................................................... 13

PRAYER FOR RELIEF ....................................................................................................... 14

CERTIFICATE OF SERVICE ........................................................................................... 14




                                                                 ii
                                         INDEX OF AUTHORITIES


CASE LAW

Ashford Development, Inc. v. USLife Real Estate Services,
      661 S.W.2d 933 (Tex. 1983)...................................................................................... 6, 8

Bass, et al. v. City of Dallas, et al.,
       34 S.W.3d 1 (Tex. App. – Amarillo 2000, n.p.h.) ........................................................ 7

Cecil v. Smith,
       804 S.W.2d 509 (Tex. 1991) ................................................................................... 5

Crawford, et al. v. Ace Sign, Inc.,
      917 S.W.2d 12 (Tex. 1996)............................................................................................ 6

D.S.A., Inc. v. Hillsboro ISD,
       975 S.W.2d 1 (Tex. App. – Waco 1997),
       rev’d on other grounds, 973 S.W.2d 662 (Tex. 1998) .......................................... 10

Fletcher v. Edwards,
      26 S.W.3d 66 (Tex. App. – Waco 2000, pet. denied) ............................................. 8

Formosa Plastics Corp. USA v. Presidio Eng’rs and Contractors, Inc.,
      960 S.W.2d 41 (Tex. 1998) ................................................................................ 8, 9

Holloway v. Dannenmaier,
      581 S.W.2d 765 (Tex. Civ. App. – Fort Worth 1979, writ dism’d)........................ 8

Howard, et al. v. Fiesta Texas Show Park, Inc., et al.,
     980 S.W.2d 716 (Tex. App. – San Antonio 1998, n.p.h.) ..................................... 12

Jim Walter Homes, Inc. v. Reed,
      711 S.W.2d 617 (Tex. 1986)......................................................................................... 7

Kuehnhoefer v. Welch,
     893 S.W.2d 689 (Tex. App. – Texarkana 1995, writ denied) ................................. 9




                                                             iii
La Sara Grain Company, et al. v. First National Bank of Mercedes,
      673 S.W.2d 558 (Tex.1984) .................................................................................... 8

Moreno, et al. v. Sterling Drug, Inc.,
      787 S.W.2d 348 (Tex. 1990) ................................................................................ 11

Muckelroy v. Richardson ISD, et al.,
     884 S.W.2d 825 (Tex. App. – Dallas 1994, writ denied)...................................... 12

Munawar v. Cadle Co.,
     2 S.W.3d 12 (Tex. App. – Corpus Christi 1999, pet. denied) ............................... 10

Mytel International, Inc. v. Turbo Refrigerating Co.,
      689 S.W.2d 315 (Tex.App.- Fort Worth 1985, no writ).......................................... 12

Petri v. Gatlin,
       997 F.Supp. 956 (N.D. Ill. 1997)..................................................................... 10, 11

Schindler v. Austwell Farmers Coop.,
      841 S.W.2d 853 (Tex. 1992) ................................................................................... 8

Southwestern Bell Telephone Company v. DeLanney,
     809 S.W.2d 493 (Tex. 1991)............................................................................................. 7

Woods v. William M. Mercer, Inc., et al.,
     769 S.W.2d 515 (Tex. 1989)........................................................................................ 12


STATUTES

TEX. INS. CODE ANN. article 21.21 §16(d)....................................................................... 11

RULES

TEX. R. APP. P. 55.2(g) ....................................................................................................... 1




                                                               iv
                                  No. 04-0215
                     _____________________________________

                                    IN THE
                               SUPREME COURT
                                  OF TEXAS
                     _____________________________________

                      DALLAS FIRE INSURANCE COMPANY,
                                   Petitioner

                                          v.

            TEXAS CONTRACTORS SURETY & CASUALTY AGENCY,
                    TOM YOUNG and FRED THETFORD,
                               Respondents
                    ________________________________

TO THE HONORABLE SUPREME COURT:

      Pursuant to Texas Rule of Appellate Procedure 55.4, Petitioner DALLAS FIRE

INSURANCE COMPANY (hereinafter “Dallas Fire”) submits this reply to the brief on

the merits filed by Respondents TEXAS CONTRACTORS SURETY & CASUALTY

AGENCY, TOM YOUNG and FRED THETFORD (hereinafter collectively referred to

as “TCSCA”) and, in support thereof, would respectfully show the Court as follows:

         OBJECTIONS TO RESPONDENTS’ STATEMENT OF FACTS

      Texas Rule of Appellate Procedure 55.2(g) specifically states that the “statement

of facts” portion of a brief “must state concisely and without argument the facts and

procedural background pertinent to the issues or points presented.” TEX. R. APP. P.

55.2(g). However, Respondents’ statement of facts goes beyond those parameters and is


                                           1
impermissibly laced with argumentative and conclusory statements.              For example,

TCSCA’s “Statement of Facts” represents that:

       • “Unallocated loss adjustment expenses” included amounts for the salary and
         the company car of its president, Michael Milam, and that Dallas Fire could
         unilaterally inflate those items to reduce TCSCA’s commissions. See
         Respondents’ Brief on the Merits at p. 5, n. 3.

       • Dallas Fire, by including “unallocated loss adjustment expenses” in TCSCA’s
         fee calculation, “retaliated against” TCSCA for moving its business to a
         Treasury listed surety company. See Respondents’ Brief on the Merits at p. 6.

By making these assertions in the statement of facts, TCSCA appears to be suggesting

that the statements represent undisputed facts in this case. In reality, they are not “facts,”

but arguments and conclusions advanced by TCSCA based on its interpretation of

evidence introduced at trial. Consequently, Dallas Fire objects to TCSCA’s “Statement

of Facts.”

                                         ARGUMENT

Reply Germane to Issue No. 1:

       Article 21.21 does not apply to TCSCA, a surety bond agency who did not sell
       insurance policies, adjust claims, or otherwise involve itself in insurance matters,
       because TCSCA was not involved in the “business of insurance” and this dispute
       does not arise out of the “business of insurance.”

       TCSCA claims this case involves the “business of insurance” so as to permit

recovery under article 21.21 of the Texas Insurance Code even though the suit actually

derives from a fee dispute arising out of TCSCA’s relationship with Dallas Fire as a surety

bond agent. TCSCA sold only contract surety bonds, bid bonds, and performance bonds for

Dallas Fire. [CR (Vol. 1) 7-15; RR Vol. 3, pp. 59-70, 122-125]. TCSCA never sold or
                                              2
issued insurance policies, nor did it handle or adjust claims filed by an insured. [CR (Vol.

1) 7-15; RR Vol. 3, p. 226; Vol. 4, p. 76; Vol. 5, p. 94].     In fact, under the terms of the

contract in issue, TCSCA was only authorized to “solicit” or “bind and execute” contract

surety bonds for Dallas Fire, to wit:

       I.     AUTHORITY AND RESPONSIBILITY OF AGENT

              A. The Agent is an independent contractor, not an employee of the
                 Company, subject to the requirements imposed by law and the
                 terms of this Agreement, and the underwriting rules and
                 regulations of the Company, is authorized to:

                   1. Solicit, receive, and transmit to the Company proposals for
                      insurance contracts, including surety bonds, for which a
                      commission is specified herein.

                   2. Bind and Execute:

                          a. Insurance Contracts, other than surety bonds, for those
                             classes designated herein. Unless otherwise specifically
                             indicated, the authority applies to all subclassifactions
                             within the designated class.

                          b. Surety bonds, when specifically authorized by the
                             Company.


       [CR (Vol. 1) 8; Plaintiff’s Trial Exhibit 2 at p. 2 (emphasis added).]

                                                  ***

              AMENDMENT NO. 1.

              It is hereby understood and agreed that Article I, Section A-2, is
              deleted and amended to read:




                                              3
                      2. Bind and execute:

                             a. Contract Surety Bonds in amounts not to exceed
                                $2,000,000 as respects to any single risk; $4,000,000
                                in aggregate as respects any single contractor.

                             b. Power of Attorney in behalf of the Company as
                                respects Contract Surety Bonds.

       [CR (Vol. 1) 11; Plaintiff’s Trial Exhibit 3 (emphasis added).]

The only commissions that TCSCA received under the Agency-Company Agreement were

for surety bonds that it produced and underwrote. [CR (Vol. 1) 14; Plaintiff’s Trial Exhibit

7]. TCSCA never issued or underwrote an insurance policy for Dallas Fire, or otherwise

engaged in any activities relating to insurance policies.

       TCSCA cannot be classified as a “person” for article 21.21 purposes since it was not

“engaged in the business of insurance.” Moreover, this dispute does not arise out of the

“business of insurance” because it does not involve the sale or servicing of insurance

policies, representations concerning insurance policies or insurance coverage, or the

handling or adjustment of insurance claims. This case is simply about a dispute over an

ambiguous term in a fee agreement pertaining to contract surety bonds. It does not fall

within any legislative or judicial definition of “business of insurance” so as to trigger the

application of article 21.21.1 Accordingly, TCSCA’s article 21.21 claim must fail.

1
  TCSCA appears to suggest that Dallas Fire submitted a jury question at the close of evidence as
to whether TCSCA’s claim arose from the “business of insurance.” See Respondents’ Brief on
the Merits at pp. 7, 12 n.4. However, in response to the Court’s pre-trial request, Dallas Fire
submitted several questions and instructions before trial based on what evidence it anticipated
would be introduced at trial, including a “business of insurance” question and an accompanying
instruction. At the close of evidence, and after no evidence was introduced to support a claim
                                                4
Reply Germane to Issue Nos. 2 and 3:

       TCSCA’s claim against Dallas Fire is essentially a breach of contract claim and,
       therefore, cannot be re-characterized as an article 21.21cause of action (predicated
       on a violation of section 17.46(b)(12) of the DTPA).

       TCSCA’s claim is based on a dispute over an ambiguous contract term and,
       therefore, is not actionable under re-characterized as an article 21.21 cause of
       action (predicated on a violation of section 17.46(b)(12) of the DTPA).

        [Issue Nos. 2 and 3 are grouped together for purposes of argument.]

A.     This dispute is, in essence, based on an alleged failure to perform a contractual
       obligation, not on an actionable extra-contractual representation

       Regardless of how TCSCA tries to characterize its claim, it is a fee dispute arising

out of competing interpretations of a contract term. This case was originally filed as a

breach of contract action in which TCSCA alleged that Dallas Fire breached an Agency-

Company Agreement by calculating TCSCA’s contingency fee in a manner contrary to the

agreement. [CR (Vol. 1) 2-6]. It wasn’t until approximately two (2) years later that

TCSCA amended its pleadings to include an article 21.21 claim. [CR (Vol. 2) 237-244].

The article 21.21 allegations were identical to the breach of contract allegations—i.e.,

Dallas Fire violated the DTPA by failing to abide by the terms of their agreement after

TCSCA began performing under the contract. Id. Specifically, TCSCA alleged:

       “After Plaintiff began its performance of the contracts at issue in this suit,
       Defendant expressly represented to Plaintiff that the Contingent Profit
       Commission calculation included the direct cost of adjusting claims through
       its commission calculations for the years 1994 through 1995. No mention


under article 21.21 or that this case involved the “business of insurance,” Dallas Fire moved for
directed verdict as to TCSCA’s article 21.21 claim, thereby preserving error on the issue. See
Cecil v. Smith, 804 S.W.2d 509, 510-11 (Tex. 1991).
                                                 5
       was ever made of including “unallocated loss adjustment expense” in those
       calculations. As a result of Defendant’s representations and actions
       calculating the Contingent Profit Commission for the first two years of the
       contracts, Plaintiff continued to procure construction bond business from its
       clients for the benefit of Defendant.

                                           *****

       Defendant’s acts and practices in calculating the Contingent Profit
       Commission due to Plaintiff constitutes an unfair and deceptive act or practice
       in the business of insurance under Texas Insurance Code Art. 21.21, Section
       4(2) and under Texas Deceptive Trade Practices Act Section 17.46(b)(12).”

       [CR (Vol. 2) pp. 241-242].

The article 21.21 allegations were precisely the same as those contained in TCSCA’s live

pleadings at the time of trial. [CR (Vol. 4) 579-580].

       The procedural history of this cause confirms that TCSCA’s complaint is, in reality,

based on an alleged failure to perform under a contract. Although TCSCA has attempted to

re-characterize its claim as an article 21.21 violation, the article 21.21 claim is predicated on

the same conduct upon which TCSCA based its breach of contract claim. [CR (Vol. 2) 239-

240; (Vol. 4) 577-579]. As the legal authority set forth in Dallas Fire’s brief on the merits

states, Texas law forbids such practices. See e.g., Crawford, et al. v. Ace Sign, Inc., 917

S.W.2d 12, 15 (Tex. 1996)(“…failure to fulfill a promise is actionable only under a breach

of contract theory and not under the DTPA”); Ashford Development, Inc. v. USLife Real

Estate Services, 661 S.W.2d 933, 935 (Tex. 1983)(“An allegation of a mere breach of

contract, without more, does not constitute a ‘false, misleading or deceptive act’ in violation

of the DTPA”).

                                               6
       This Court has recognized that “tort obligations are in general obligations that are

imposed by law—apart from and independent of promises made and therefore apart from

the manifested intention of the parties—to avoid injury to others.” Southwestern Bell

Telephone Company v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991)(quoting W. KEETON,

D. DOBBS, R. KEETON & D. OWEN, PROSSER AND KEETON ON THE LAW OF

TORTS §92 at 655 (5th Ed. 1984)). When a party “must prove the contents of its contract

and must rely on the duties created therein, the action is ‘in substance an action on the

contract…’” Bass v. City of Dallas, 34 S.W.3d 1, 9 (Tex. App. – Amarillo 2000, n.p.h.),

citing Southwestern Bell Telephone Company v. DeLanney, 809 S.W.2d 493, 494 (Tex.

1991)(Gonzalez, J., concurring)(quoting Bernard Johnson, Inc. v. Continental Constructors,

Inc., 630 S.W.2d 365, 368 (Tex. App. – Austin 1982, writ ref’d n.r.e.)(emphasis in original).

Also, when the alleged injury involves only economic loss to the subject matter of an

agreement, the action “sounds in contract alone.” Jim Walter Homes, Inc. v. Reed, 711

S.W.2d 617, 618 (Tex. 1986); Bass, 34 S.W.3d at 9.

       Again, this case involves a disagreement between a surety bond agent and a surety

company over the manner in which the agent’s commission should be calculated under a

written agreement between them. In order to resolve the dispute, the parties were required

to “prove the contents of [their] contract and … rely on the duties created therein” with

respect to the manner in which TCSCA’s contingency fee should be calculated. Further, the

damages claimed by TCSCA involved only economic losses (i.e., lost commissions). [CR

(Vol. 5) 835]. Under Texas law, this case is clearly an action based in contract only.
                                              7
B.     This case does not involve more than a “mere breach of contract” claim so as to
       subject Dallas Fire to extra-contractual liability.

       As Dallas Fire indicated in its brief on the merits, an allegation of a mere breach of

contract, “without more,” does not give rise to an extra-contractual claim. La Sara Grain

Company, et al. v. First National Bank of Mercedes, 673 S.W.2d 558, 565 (Tex.1984);

Ashford Development, Inc., 661 S.W.2d at 935; Holloway v. Dannenmaier, 581 S.W.2d

765, 767 (Tex. Civ. App. – Fort Worth 1979, writ dism’d)(“Usually mere failure to later

perform a promise does not constitute misrepresentation.”). In an apparent attempt to

avoid this precedent, TCSCA tries to show that this is case is more than a “mere breach

of contract” case by re-characterizing the contract claim as something akin to a fraudulent

inducement cause of action.2 See Respondents’ Brief on the Merits at pp. 20-21.

       TCSCA has not alleged fraudulent inducement, nor is there any evidence to

suggest that the Agency-Company Agreement was procured by fraud. Even if TCSCA

attempted to assert such a claim, TCSCA would still have to show that Dallas Fire made

representations with the intent to deceive and with no intention of performing as

represented in order to prevail.       Formosa Plastics, 960 S.W.2d at 48; Schindler v.

Austwell Farmers Coop., 841 S.W.2d 853, 854 (Tex. 1992)(per curiam). At least one

appellate court has indicated that this intent requirement would also apply to DTPA based

2
  The elements of fraudulent inducement are the same as those for fraud. See Formosa Plastics
Corp. USA v. Presidio Eng’rs and Contractors, Inc., 960 S.W.2d 41, 46-48 (Tex. 1998);
Fletcher v. Edwards, 26 S.W.3d 66, 77 (Tex. App. – Waco 2000, pet. denied). A fraud claim
requires: (1) knowing misrepresentation or reckless representation of a material fact, or the
failure to disclose material facts when under a duty to disclose; (2) the intent to induce action or

                                                 8
claims. Kuehnhoefer v. Welch, 893 S.W.2d 689, 693 (Tex. App. – Texarkana 1995, writ

denied)(“…suffice it to conclude that failing to perform a future promise does not

constitute a misrepresentation that violates the DTPA, unless it can be shown at the time

the promise was made the promissor had no intentions of fulfilling the promise.”).

       Dallas Fire denies that any misrepresentations occurred concerning the meaning of

the term “loss adjustment,” that Dallas Fire breached the Agency-Company Agreement, or

that TCSCA was damaged because of any alleged misrepresentation. Moreover, TCSCA

has not alleged fraudulent inducement, nor is there any evidence to support a theory that

the Agency-Company Agreement was procured by fraud.                 There is also absolutely no

evidence to support the notion that, at the time Dallas Fire entered into the Agency-

Company Agreement, it had no intent to perform under the agreement.

C.     TCSCA’s cited authority is inapposite

       Dallas Fire concedes that Texas law permits a party to pursue a DTPA-based

remedy when the dispute amounts to more than a “mere breach of contract.” However,

that principle of law does not apply here because this is actually a contract dispute.

        TCSCA relies on the Texas cases of Munawar v. Cadle and D.S.A., Inc. v.

Hillsboro ISD, and an Illinois U.S. District Court case (Petri v. Gatlin), to support its

argument that this dispute involves more than an alleged contract breach. However,




inaction; (3) reasonable reliance on the misrepresentation or omission; and, (4) injury due to such
reliance. See Formosa Plastics, 960 S.W.2d at 46.
                                                 9
TCSCA’s reliance on those cases is misplaced because each one is distinguishable on the

facts.

         For example, Munawar v. Cadle involved an alleged violation of             section

17.46(b)(23) of the DTPA arising from a failure to disclose the third-party ownership of

business equipment involved in the sale of real property—a duty separate and apart from

any contractual obligation. Munawar v. Cadle Co., 2 S.W.3d 12, 19 (Tex.App.- Corpus

Christi 1999, pet. denied). This case does not involve an alleged violation of section

17.46(b)(23), nor does it involve any alleged representations that were separate and

distinct from the contract in issue.

         In D.S.A., Inc. v. Hillsboro ISD, the dispute involved representations in which

D.S.A., Inc. promised to “carry out its contractual duties above-and-beyond what was

later indicated in the contract.” D.S.A., Inc. v. Hillsboro ISD, 975 S.W.2d 1, 16 (Tex.

App. – Waco 1997), rev’d on other grounds, 973 S.W.2d 662 (Tex. 1998). In the case at

bar, Dallas Fire did not make any representations that went “above-and-beyond” the

obligations allegedly imposed by the Agency-Company Agreement.                Instead, the

representations that TCSCA attributes to Dallas Fire (assuming for purposes of argument

that they were ever made) are best characterized as an attempt to describe ambiguous

contractual terms.

         In Petri v. Gatlin, a utility supplier allegedly made representations to customers

that, by purchasing gas through the supplier, they would receive gas at a discounted price.

Petri v. Gatlin, 997 F.Supp. 956, 961 (N.D. Ill. 1997).         The representations were
                                             10
contained in brochures and in the contract itself. Id. at 962. The customers claimed the

statements were known to be false at the time the contract was signed, and that such

statements were intended to induce them into the contract.             Id. at 972.    Petri is

distinguishable from this case because there is absolutely no evidence that Dallas Fire

made representations (either outside the contract or within the contract itself) that were

known to be false at the time the representations were allegedly made.

       In summary, the basis of TCSCA’s claim is simple. TCSCA contends that Dallas

Fire breached the Agency-Company Agreement by failing to calculate its contingency fee

in accordance with the agreement. The jury found that no breach occurred. Now,

TCSCA seeks to recover the contingency fee by re-characterizing its breach of contract

claim as an extra-contractual claim-- a proposition that is contrary to well-settled Texas law.

Reply Germane to Issue No. 5

       Assuming for purposes of argument that TCSCA’s article 21.21 claim is actionable,
       Dallas Fire would still be entitled to judgment as a matter of law because the
       claim is barred by limitations.

       With respect to Dallas Fire’s limitations defense, TCSCA contends that Dallas

Fire somehow waived any complaint as to the timeliness of the article 21.21 claim or,

alternatively, that the article 21.21 claim was timely filed under §16.068 of the Texas

Civil Practice & Remedies Code. However, this contention is without merit.

       The statute of limitations for an article 21.21 cause of action is two years. See

TEX. INS. CODE ANN. article 21.21 §16(d). The determination of when a cause of action

accrues for limitations purposes is a question of law. Moreno, et al. v. Sterling Drug,
                                              11
Inc., 787 S.W.2d 348, 351 (Tex. 1990); Howard, et al. v. Fiesta Texas Show Park, Inc., et

al., 980 S.W.2d 716, 719 (Tex. App. – San Antonio 1998, n.p.h.); Muckelroy v.

Richardson ISD, et al., 884 S.W.2d 825, 829 (Tex. App. – Dallas 1994, writ denied).

Whether a claim is barred by limitations becomes a factual issue only when the

complainant seeks to avoid application of the limitations bar. See Woods v. William M.

Mercer, Inc., 769 S.W.2d 515, 518 (Tex. 1989). The party seeking to avoid the effects of

limitations must affirmatively raise avoidance in the pleadings or it will be waived. Id.

Moreover, the burden of proving avoidance and securing findings on that issue is on the

party seeking to avoid limitations. Id.

       TCSCA claims that Dallas Fire had the burden to prove limitations and to request a

jury question on that issue. See Respondents’ Brief on the Merits at pp. 27-28. In support

of that contention, TCSCA relies on this Court’s decision in Mytel International, Inc. v.

Turbo Refrigerating Company. Id. However, the Mytel International case was decided

three years before this Court issued its decision in Woods, which effectively overruled the

limitations holding in Mytel International.        If TCSCA wanted to avoid the effect of

limitations in this case, it was required to follow the precedent established in Woods. This it

did not do.

       Based on the pleadings filed by TCSCA, the article 21.21 claim against Dallas Fire

would have accrued, if at all, in late 1996 or early 1997. [CR (Vol. 2) 220-236, 237-244;

RR Vol. 4, p. 42]. The evidence introduced at trial indicated that January 21, 1997 was the

date on which TCSCA discovered the facts upon which its article 21.21 claims were
                                              12
ultimately based. [RR Vol. 4, p. 42]. Therefore, the evidence conclusively demonstrated

that TCSCA had until January 21, 1999 to file an article 21.21 cause of action (assuming

any such claim existed). By waiting until March 24, 2000 to file its article 21.21 claim,

TCSCA failed to bring its article 21.21 claim in a timely manner, thus rendering the claim

barred by limitations.

       Moreover, TCSCA’s claim that Section 16.068 of the Texas Civil Practices &

Remedies Code saves its article 21.21 claim must also fail. TCSCA did not file any

pleadings invoking the “discovery rule” or Section 16.068 as a means of avoiding

limitations [CR (Vol. 4) 575-593; 594-613], nor did it introduce evidence at trial or

otherwise request a jury question seeking to avoid the limitations bar. TCSCA has waived

any argument that its article 21.21 claim was not barred by limitations.

                                       CONCLUSION

       The trial court’s entry of judgment with respect to TCSCA’s article 21.21 cause of

action, and the court of appeals’ decision to affirm that judgment, were erroneous given that

the claim asserted by TCSCA does not arise from the “business of insurance” for article

21.21 purposes. Even if this Court held that this dispute does involve the “business of

insurance,” TCSCA is still precluded from asserting an extra-contractual article 21.21 claim

because this case is, at best, a dispute governed only by contractual principles.




                                              13
                                  PRAYER FOR RELIEF

       For all the foregoing reasons, and the reasons set forth in Petitioner’s Brief on the

Merits, Dallas Fire respectfully requests that this Court grant its petition for review, reverse

the trial court’s judgment and judgment of the court of appeals with respect to Respondents’

article 21.21 claims, and render judgment that Respondents take nothing.

                                                   Respectfully submitted,

                                                   SUCHOCKI, BULLARD & CUMMINGS, P.C.
                                                   One Summit Avenue, Suite 312
                                                   Fort Worth, Texas 76102
                                                   (817) 338-0088
                                                   (817) 338-0408 (fax)


                                                   By______________________________
                                                        Bernard R. Suchocki
                                                        State Bar No. 19458500
                                                        Jerry D. Bullard
                                                        State Bar No. 03323015

                                                   ATTORNEYS FOR PETITIONER



                              CERTIFICATE OF SERVICE

       On August 13, 2004, a true and correct copy of this document was mailed to each
attorney of record listed below, pursuant to Texas Rules of Appellate Procedure 9.5.:

Mr. James Lanter
LANTER WESTERMANN, P.C.
226 Bailey Avenue, Suite 100
Fort Worth, Texas 76107

                                                   ______________________________
                                                   Jerry D. Bullard
                                              14

				
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