Thompson v. M & B CONST. CORP. Thompson v. M & B CONST. CORP., 585 F. Supp. 561 (N.D. Tex., 1984)

Copy Citation

585 F. Supp. 561

W. F. THOMPSON, Plaintiff, v. M & B CONSTRUCTION CORPORATION and American Economy Insurance Company, Defendants, v. CITY OF DALLAS, Third-Party Defendant.

Ci v. A. No. 3-83-0926-H.

United States District Court, N.D. Texas, Dallas Division.

May 17, 1984.

585 F. Supp. 562

         Fred S. Stradley, Richard Shore, Stradley, Schmidt, Stephens & Wright, Jeffrey S. Lynch, Vial, Hamilton, Koch, Tubb & Knox, Dallas, Tex for defendants.

        Kent S. Hofmeister, Terrence Welch, Asst. City Attys City of Dallas, Dallas, Tex for third-party defendant.

        Richard L. Arnold, Michael Sean Quinn, Robins, Zelle, Larson & Kaplan, Dallas, Tex for plaintiff.

        ORDER

        SANDERS, District Judge.

        This case is before the Court on Defendant American Economy Insurance Company's ("American Economy") Motion for Partial Summary Judgment, and Brief in Support, filed March 29, 1984; and Plaintiff's Response, filed May 14, 1984. For the following reasons, the Court is of the opinion that American Economy's Motion should be GRANTED.

        Plaintiff W. F. Thompson ("Thompson") brings this case against Defendants M & B Construction ("M & B") and American Economy seeking to recover property damages sustained by Thompson when a commercial building owned by him partially collapsed on or about March 1, 1982. Thompson alleges that M & B negligently caused the collapse by removing the lateral support to the building during construction of a City of Dallas water pipeline in a street close to the building. Thompson alleges that his property insurance carrier, American Economy, breached its contract of insurance subjecting American Economy to liability up to the policy limits. Thompson also alleges that American Economy breached an implied covenant of good faith and fair dealing in adjusting the loss, and Thompson seeks $500, 000 in exemplary damages under this claim.

        American Economy has moved for partial summary judgment pursuant to Fed. R. Ci v. P. 56, asserting that Thompson's claim for exemplary damages under a bad faith/unfair dealing theory is not a cause of action under Texas law. Accordingly, American Economy asserts that there are no material fact questions and that it is entitled to judgment as a matter of law on Thompson's exemplary damages claim. As Thompson correctly points out, since American Economy has failed to make any factual showing through submission of affidavits or otherwise, the Court should evaluate American Economy's Motion as one for judgment on the pleadings. Thus, Thompson's claim for exemplary damages should survive American Economy's Motion unless, taking as fact all of Thompson's allegations, Thompson has not pleaded a claim for which relief could be granted.

        Thompson's Allegation

        Paragraph 17 of Thompson's Complaint states:

        The Texas Supreme Court has recently held that exemplary damages are not allowed for breach of contract. Amoco Production

585 F. Supp. 563

        Thus, Thompson may not recover exemplary damages for breach of contract. However, Thompson has specifically pleaded that American Economy breached its duty to deal fairly and in good faith arising from its contract with Thompson. As recently as last year, the Texas Supreme Court rejected the notion that all contracts in Texas have an implied duty of good faith and fair dealing. English v. Fischer, 660 S.W.2d 521 522 (Tex. 1983). English v. Fischer involved a suit by a homeowner against the mortgagee for failure to turn over the proceeds of a fire insurance policy in order to aid the homeowner in rebuilding after the fire. The Texas Supreme Court in Fischer stated:

        In a concurring opinion, Justice Spears stated that while he agreed an implied duty of good faith and fair dealing did not apply to the facts in the Fischer case, he pointed out several cases in which Texas courts have recognized an implied duty of good faith and fair dealing in contractual dealings. See cases cited in English v. Fischer, 660 S.W.2d at 524 (Spears, J concurring).

        However, as Justice Spears acknowledged, the "common thread among cases in which courts have read a duty of good faith and fair dealing into contractual transactions is a special relationship between the parties to the contract. That special relationship either arises from the element of trust . . or has been imposed by the courts because of an imbalance of bargaining power. " The Court is of the opinion that even were Justice Spears' comments binding precedent in Texas, no such relationship is alleged in this case to support the adoption of an implied good faith/fair dealing tort.

        Thompson contends that English v. Fischer rejects only the California version of a good faith and fair dealing tort in contractual relations. Thompson also points out that English v. Fischer facts are somewhat different from this case. However, this Court cannot, especially in the face of the clear and recent rejection of a general good faith and fair dealing cause of action by the Texas Supreme Court, anticipate Texas courts' adoption of such a cause of action as it relates to this proceeding. Thompson has not presented the Court with authoritative precedent recognizing such a cause of action under the circumstances involved in his claims. And, while English v. Fischer does not strictly

585 F. Supp. 564

        There appears to be no basis under Texas law for Thompson's claim for exemplary damages based on an implied duty of good faith and fair dealing in American Economy's insurance policy. Accordingly, American Economy's Motion is hereby GRANTED, and Thompson's claim for exemplary damages for breach of a duty of good faith and fair dealing under the American Economy insurance policy is hereby DISMISSED.

        SO ORDERED.