GCI CP, LLC v. Stewart Title Guarantee (Tex.App.- Houston [1st Dist.] Apr. 9, 2009)
(insurance coverage dispute, mortgage insurance, title insurance, mechanic's materialman's lien, lien
priority, realty vs personal property, fixtures, insurance policy construction, cross-motions for summary
judgment)
REVERSE TC JUDGMENT AND REMAND CASE TO TC FOR FURTHER PROCEEDINGS:
Opinion by Justice Taft
Before Justices Taft, Bland and Sharp
01-07-00372-CV GCI GP, LLC v. Stewart Title Guaranty
Appeal from 151st District Court of Harris County
Trial Court Judge: Hon. Caroline E. Baker
290 S.W.3d 287 (2009)
GCI GP, LLC, Appellant
v.
STEWART TITLE GUARANTY CO., Appellee.
No. 01-07-00372-CV.
Court of Appeals of Texas, Houston (1st Dist.).
April 9, 2009.
Karen B. Jewell, Lawrence J. Fossi, Fossi & Jewell LLP, Houston, TX, for Appellant.
Charles E. Fitch, Law Office of Charles E. Fitch, P.C., Houston, TX, for Appellee.
Panel consists of Justices TAFT, BLAND, and SHARP.
OPINION
TIM TAFT, Justice.
Appellant, GCI GP, LLC ("Gulf Coast"), appeals a take-nothing judgment rendered against it upon a
traditional motion for summary judgment filed by appellee, Stewart Title Guaranty Company ("Stewart Title").
[1] We determine whether the trial court erred in granting Stewart Title's traditional motion for summary
judgment. We reverse the judgment and remand the cause.
Background
In June 1997, Paul Frame bought a house on River Oaks Boulevard in Houston, Texas, and hired Aspen
Custom Builders ("Aspen") to do renovations on the home. Aspen worked on the house from 1997 to August
2003, when it stopped due to non-payment.
On August 24, 2001, while the renovations were still ongoing, Frame executed a promissory note in the
amount of $4,319,731.39 to Comerica Bank-Texas[2] 289*289 ("Comerica"), secured by a deed of trust to
the land "TOGETHER WITH all the improvements now or hereafter erected on the property, all easements,
appurtenances, and fixtures now or hereafter a part of the property." Comerica purchased a mortgagee
policy of title insurance from Stewart Title on September 26, 2001, with a coverage amount equaling the
original principal amount of the promissary note.
Aspen filed an affidavit claiming a lien on January 23, 2003, a "restated mechanic's lien" on June 10, 2003,
and a "second restated mechanic's lien" on August 19, 2003. In the document filed on August 19, 2003,
Aspen claimed a statutory lien on the land, improvements, and removables, and a constitutional mechanic's
and materialman's lien against the land and improvements, in the amount of $845,000, for the provision of
general construction material and labor to construct improvements to the property from March 2002 through
August 2003.[3]
Frame defaulted on the promissary note, and, on August 12, 2003, Comerica noticed the property for
foreclosure sale to take place on September 2, 2003. Aspen began negotiating with Comerica about their
relative lien priorities and then, on August 29, 2003, filed suit against Frame and Comerica. That same day,
Comerica sold the note and deed of trust to Gulf Coast for $4,000,000. On September 2, 2003, Gulf Coast
went forward with the scheduled foreclosure sale and purchased the property itself for $2,000,000, in the
form of a credit against the outstanding note.
Aspen promptly amended its suit, naming Gulf Coast as a party. In the suit, Aspen claimed that it had had an
oral contract with Frame to make improvements to the house and that it had delivered materials and
performed labor on the property from June 18, 1997 until August 2003. Aspen asserted that it had a
mechanic's and materialman's lien on the property that commenced on June 18, 1997, the date that Aspen
began construction of improvements to the house. The alleged inception date of Aspen's lien thus pre-dated
the date of Comerica's note and the date of the title policy. Aspen sought:
(1) a declaratory judgment that its lien was superior to Comerica's lien and, therefore, to that of Gulf Coast;
(2) an order of foreclosure on the lien on the property and improvements;
(3) a constructive trust on the proceeds of the foreclosure sale, if it went forward;
and, alternatively, if the trial court found that Comerica's lien on the land and improvements was superior to
Aspen's, then
(4) foreclosure on the fixtures that could be removed without damage, including palm trees, pool equipment,
air conditioning units, electrical control panels, appliances, wine cooler units, a fireplace mantel, decorative
columns, mahogany columns and paneling, custom carved moldings, an elevator, light fixtures, bathtubs or
whirlpools, stained glass domes and panels, window treatments, a steam unit, a dry sauna, water heaters,
safes, cabinets, marble or granite or composite countertops, plumbing valves and fixtures, exterior stone (not
installed), antique entry doors, wrought-iron fencing, landscape plants, carpet in the guest house, and
windows and doors.
290*290 Gulf Coast provided Stewart Title with notice of the Aspen lawsuit by a letter, dated September 16,
2003, in which it demanded that Stewart Title provide indemnification against the claims in the lawsuit and a
defense to Comerica and Gulf Coast. A copy of the amended petition was enclosed. Gulf Coast also stated
that any answer or responsive pleading that it might file while waiting for a response regarding what action
Stewart Title proposed to take was without waiver as to its rights under the policy. Stewart Title acknowledge
receipt of Gulf Coast's letter "inquiring about the ... policy" and requested the completion of a proof-of-loss
form so that it might evaluate the "inquiry."
Gulf Coast, using its own legal counsel, filed an original answer and counterclaim. Stewart Title later provided
counsel to defend Gulf Coast on October 14, 2003, but limited that representation to defending Gulf Coast;
the representation did not include the prosecution of the counterclaim.
On October 23, 2003, the lawyer provided by Stewart Title informed Gulf Coast by letter that it appeared that
Aspen's mechanic's liens as to the property had been extinguished by the foreclosure sale and that a motion
for partial summary judgment could be prepared as to those claims. However, he also wrote that Aspen might
have a claim for "removables," but that there was a question as to whether such a claim was covered by the
policy. He referred Gulf Coast to Stewart Title's representative.
Stewart Title's representative wrote Gulf Coast on October 30, 2003, asking for more information on the
claimed "removables" and affirming that Stewart Title was investigating whether such claim was covered by
the policy and whether it would result in compensable loss. Stewart Title reserved its right to deny coverage
as to the "claim for priority to removables." According to Gulf Coast, Stewart Title also informed it by
telephone that Stewart Title would contribute "zero" to any settlement of the Aspen lawsuit.
On November 17, 2003, Gulf Coast entered into a settlement agreement with Aspen regarding Aspen's liens
against the property and all improvements thereon. Gulf Coast agreed to pay Aspen $300,000, and Aspen
agreed to dismiss its claims against Gulf Coast with prejudice and to execute and to file a release of liens.
Gulf Coast made a separate agreement, with a company affiliated with Aspen, to complete the work on the
house.
On December 30, 2003, Stewart Title sent a letter to Gulf Coast denying coverage. It informed Gulf Coast
that, as there was no longer any claim pending against Gulf Coast's interest in the property because of
Aspen's dismissal with prejudice, Gulf Coast's claim under the policy had been resolved without any loss
being demonstrated. The letter also noted that Stewart Title had not provided written consent to the settling
of the dispute with Aspen and so any loss experienced by Gulf Coast resulting from the settlement was not
covered by the policy.
Gulf Coast then sued Stewart Title, alleging that Stewart Title had breached the insurance contract and its
duty of good faith and fair dealing. Stewart Title filed a traditional motion for summary judgment asserting
that the policy did not cover claims made against an insured by a contractor who furnished and was not paid
for "removables"—improvements that could be removed without causing material damage to land, the pre-
existing improvements, or the improvements themselves. Stewart Title contended that, as a matter of law, the
items that were the subject of Aspen's claims were personal property, not part of the real property described
in the 291*291 policy; those items were therefore not covered by the policy; and Stewart Title thus had no
duty to indemnify Gulf Coast and did not breach the insurance contract or the duty of good faith and fair
dealing.
Gulf Coast also filed a traditional motion for partial summary judgment and a response to Stewart Title's
motion for summary judgment, asserting that the policy insured Gulf Coast against loss or damage sustained
by the lack of priority of Gulf Coast's lien over any mechanic's lien having its inception on or before the date
of the policy. It alternatively argued that, even if the title policy insured only against a lack of priority when a
mechanic's lien was against the real property described by the policy, coverage still existed because
"removables" are not personal property once they are affixed to the land, but are part of the real property.
Gulf Coast asked the trial court to deny Stewart Title's motion for summary judgment and to rule, as a matter
of law, that Stewart Title had breached its contract by refusing to pay Gulf Coast the amount owed under the
title policy.
The trial court signed an order granting Stewart Title's motion for summary judgment and entering a take-
nothing judgment against Gulf Coast.
Standard of Review
In four issues, Gulf Coast contends that the trial court erroneously granted Stewart Title's motion for
summary judgment and erroneously denied Gulf Coast's motion for partial summary judgment. One of Gulf
Coast's four issues is a broad issue questioning whether the trial court erred in entering judgment as a
matter of law against Gulf Coast. Although we recognize that such a broad issue is authorized,[4] an
appellant must nevertheless also present argument and supporting authorities in support of that issue. See
McCoy v. Rogers, 240 S.W.3d 267, 272 (Tex.App.-Houston [1st Dist.] 2007, pet. denied). Consequently, we
review the arguments actually raised and briefed on appeal, but liberally construe them so as "to obtain a
just, fair and equitable adjudication of the rights of the litigants." See TEX.R.APP. P. 38.1(f), 38.9; Sterner v.
Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989); McCoy, 240 S.W.3d at 272.
We review a trial court's decision to grant or to deny a motion for summary judgment de novo. See Tex. Mun.
Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184, 192, 199 (Tex.2007) (citing rule for review of
grant of summary judgment and reviewing denied cross-motion for summary judgment under same
standard). Although a denial of summary judgment is not normally reviewable, we may review such a denial
when both parties move for summary judgment and the trial court grants one motion and denies the other. Id.
at 192. When the trial court's ruling granting one summary judgment motion necessarily denies another
pending motion for summary judgment on the same issue, such as here, we imply the ruling of denial. See
Frank's Int'l, Inc. v. Smith Int'l, Inc., 249 S.W.3d 557, 559 n. 2 (Tex.App.-Houston [1st Dist.] 2008, no pet.). In
our review of such cross-motions, we review the summary judgment evidence presented by each party,
determine all questions presented, and render the judgment that the trial court should have rendered. Tex.
Mun. Power Agency, 253 S.W.3d at 192 (citing Comm'r Court v. Agan, 940 S.W.2d 77, 81 (Tex.1997)).
Under the traditional summary judgment standard, the movant has the burden to show that no genuine
issues of 292*292 material fact exist and that it is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a
(c); Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex.1985). In deciding whether there is a
disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be
taken as true, and every reasonable inference must be indulged in favor of the non-movant and any doubts
resolved in its favor. Nixon, 690 S.W.2d at 548-49. A defendant moving for summary judgment must
conclusively negate at least one essential element of each of the plaintiff's causes of action or conclusively
establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.
1997). If the order granting the summary judgment does not specify the grounds upon which judgment was
rendered, we must affirm the summary judgment if any of the grounds in the summary judgment motion is
meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000).
Discussion
Gulf Coast contends that, as a matter of law, the policy provided coverage for Aspen's claims because the
title policy insured the priority of the lien of the insured mortgage over any other liens. Gulf Coast argues that
Aspen's mechanic liens were superior to Gulf Coast's lien; therefore, loss or damage from Aspen's claims
was covered under the title policy, and, consequently, the trial court erred in granting summary judgment
against Gulf Coast on the basis that Aspen's claims were not covered by the policy. Alternatively, Gulf Coast
argues that, even if the policy did not insure the priority of the lien of the insured mortgage over any other
liens, but instead only insured the priority of Gulf Coast's lien over other liens attaching to the real property,
Aspen's claims were nevertheless covered by the policy because the subject items of Aspen's claims were
part of the realty, not personal property. Gulf Coast also asserts that because there was coverage, Stewart
Title breached the policy by refusing to pay for losses sustained by Gulf Coast because of Aspen's claims
and that the trial court should have granted Gulf Coast's motion for partial summary judgment against
Stewart Title.
Stewart Title responds that losses or damages from Aspen's claims were not covered by the policy because
Aspen's claims involved items that could be removed without material damage to the land and improvements,
i.e., "removables," and the that policy covered only claims against the land, not claims regarding personal
property. Implicit is the argument that the policy only insures the priority of the lien of the insured mortgage
against other liens that attach to the land that is subject to the mortgage lien. Stewart Title asserts that
"removables" are personal property, not part of the land as that term is defined in the policy; therefore,
Aspen's claims were not covered by the title policy and Stewart Title had no duty to indemnify Gulf Coast as
to Aspen's claims. Stewart Title also argues that, even assuming that Aspen's claims were covered by the
policy, Gulf Coast was not entitled to a partial summary judgment against Stewart Title because Gulf Coast
failed to show that any loss was suffered under the policy, which Stewart Title argues is a necessary
prerequisite to the duty to indemnify.
A. Construction of the policy
The title insurance policy provided, subject to exclusions, exceptions, and the conditions and stipulations of
the policy, that, as of September 21, 2001, Stewart Title insured Comerica "and each successor in ownership
of the indebtedness secured by the insured mortgage" against loss or 293*293 damage, not exceeding
$4,319,731.39 (the amount of the note), sustained or incurred by the insured by reason of the following:
1. Title to the estate or interest described in Schedule A [fee simple in the River Oaks property] being vested
other than as stated therein;
2. Any defect in or lien or encumbrance on the title;
3. Lack of a right of access to and from the land;
4. The invalidity or unenforceability of the lien of the insured mortgage upon the title;
5. The priority of any lien or encumbrance over the lien of the insured mortgage;
6. Lack of priority of the lien of the insured mortgage over any statutory or constitutional mechanic's,
contractor's, or materialman's lien for labor or material having its inception on or before Date of Policy;
7. The invalidity or unenforceability of an assignment of the insured mortgage provided the assignment is
shown in Schedule A, or the failure of the assignment shown in Schedule A to vest title to the insured
mortgage in the named insured assignee free and clear of all liens;
8. Lack of good and indefeasible title.
The policy also provides that Stewart Title would pay the cost, attorney's fees and expenses incurred in
defense of the title or the lien of the insured mortgage as insured, but only to the extent provided in the
conditions and stipulations. Expressly excluded were "liens ... which resulted in no damage or loss" to the
insured.
We construe an insurance contract by the same rules of construction as other contracts. Am. Motorists Ins.
Co. v. Occidental Chem. Corp., 16 S.W.3d 140, 145 (Tex.App.-Houston [1st Dist.] 2000, pet. denied). Our
primary concern is to ascertain the true intent of the parties. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.
1983). To do so, we must examine and consider the entire contract "in an effort to harmonize and give effect
to all the provisions of the contract so that none will be rendered meaningless." Id. (emphasis in original). If
an insurance contract can be given more than one reasonable interpretation, it is ambiguous, and we adopt
the interpretation that most favors coverage; an intent to exclude coverage must be expressed in "clear and
unambiguous language." Am. Motorists Ins., 16 S.W.3d at 145.
We first note that the enumerated provisions of coverage provide indemnity for losses or damages falling
into three categories: those related to (1) the quality of the title, (2) the exercise of various rights under the
title or lien, and (3) the priority of the lien on the insured mortgage over other liens or encumbrances. There
are two provisions in the insuring clause falling under the last category. The first provision (hereinafter
"paragraph 5") provides coverage for loss or damages caused by reason of
[t]he priority of any lien or encumbrance over the lien of the insured mortgage.
The second (hereinafter "paragraph 6") provides coverage for losses or damages caused by reason of the
[l]ack of priority of the lien of the insured mortgage over any statutory or constitutional mechanic's,
contractor's, or materialman's lien for labor or material having its inception on or before Date of Policy[.]
Gulf Coast directs our attention to paragraph 5 and argues that it demonstrates that the title policy insured
the priority of the mortgage lien over any other lien. Gulf Coast then argues that Aspen's liens 294*294 were
superior to Gulf Coast's lien, to the extent that the improvements made by Aspen could be removed without
material injury to the land and pre-existing improvements or to the improvements themselves. See First Nat'l
Bank v. Whirlpool Corp., 517 S.W.2d 262, 269 (Tex.1974). Therefore, according to Gulf Coast, because
Aspen's liens as to removable improvements were superior to Gulf Coast's lien, Stewart Title was required to
indemnify Gulf Coast for any loss or damage arising from the priority of Aspen's liens.
Stewart Title's posture is that losses or damages arising out of Aspen's mechanic's liens were not covered by
the policy because the liens were to items that could be removed, i.e., "removables," and therefore not "a
claim to the land that was insured," but a claim to "items of personal property."[5] Stewart Title's implicit
position is that the policy insures the priority of the mortgage lien only over other liens that attach to the land.
Stewart Title's argument is premised on its contention that the title policy affords coverage only "for risks and
claims `against the land that is insured.'" Its basis for this contention is a clause in Schedule "A" to the policy
that provides that "[t]he estate or interest in the land that is insured as encumbered by the insured mortgage
is: FEE SIMPLE," and the conditions and stipulations of the policy, which define land, in relative part, as "the
land described or referred to in Schedule A, and improvements affixed thereto that by law constitute real
property." According to Stewart Title, if the "risk [or] claim" is not "against the land," as land is defined in the
policy, there is no coverage.
Although we agree that the paragraphs of the insuring clause must be read in light of Schedule A and the
conditions and stipulations, we disagree that such provisions require us to read the insuring clause so as to
limit coverage of loss or damage to "risks and claims `against the land that is insured.'" Such a narrow
interpretation is unsupported by the plain language of the policy. Neither the conditions and stipulations nor
the insuring clause limits coverage exclusively to loss or damage by reason of "risk and claims `against the
land that is insured.'" Rather, the paragraphs of the insuring clause provide eight specific circumstances
against which Stewart Title would indemnify loss or damage. These involve claims against the title ("the land
that is insured"), but also situations related to the exercise of various rights under the title or lien and
disputes related to the priority of the lien of the insured mortgage over other liens or encumbrances. The
salient question as to this last area of coverage is whether the other lien has priority over the lien of the
insured mortgage. If the other lien has priority, the policy clearly provides indemnity for any losses or
damages arising therefrom.
Paragraph 5 deals generally with claims made by holders of any liens, mechanic's or other types, which are
superior to the lien of the insured mortgage, such as those that pre-date the recording of the mortgage lien.
Paragraph 6, however, specifically addresses superior mechanic's liens 295*295 that have an inception date
[6] on or prior to the date of the policy, not the date of the mortgage lien. This is significant because it
provides for coverage for mechanic's liens whose inception date is subsequent to the date of the mortgage
lien, but prior to the date of the policy.
In general, mechanic's liens whose inception is subsequent to the date of a deed-of-trust lien will be
subordinate to the deed-of-trust lien. See Diversified Mortgage v. Lloyd D. Blaylock General Contractor, Inc.,
576 S.W.2d 794, 806 (Tex. 1978). However, Texas statutes and case law provide that mechanic's liens
whose inception date is subsequent to the recording of a deed-of-trust lien will, nevertheless, have priority
over the prior recorded deed-of-trust lien in one narrow instance.
Under Texas Property Code section 53.123, entitled "Priority of Mechanic's Lien over other Liens,"
a mechanic's lien attaches to the house, building, improvements, or railroad property in preference to any
prior lien, encumbrance, or mortgage on the land on which it is located, and the person may have the house,
building, improvement, or any piece of the railroad property sold separately .... [however t]he mechanic's lien
does not affect any lien, encumbrance, or mortgage on the land or improvement at the time of the inception
of the mechanic's lien, and the holder of the lien, encumbrance, or mortgage need not be made a party to a
suit to foreclose the mechanic's lien.
TEX. PROP.CODE ANN. § 53.123(a),(b) (Vernon 2007). The Texas Supreme Court has reconciled the
apparently contradictory language that appears in section 53.123 by holding that such language grants a
priority to a mechanic's lien on improvements over a prior lien, encumbrance, or mortgage on the land when
the improvements made could be removed without material injury to the land and pre-existing improvements
or to the improvements themselves. Whirlpool Corp., 517 S.W.2d at 269 (dealing with predecessor statute).
A statutory mechanic's lien may only attach to land and items that have become annexed to land, such as
improvements (including fixtures),[7] not to chattel. See TEX. PROP.CODE ANN. § 53.022 (Vernon 2007);
Whirlpool Corp., 517 S.W.2d at 266 (holding that statutory mechanic's lien was meant to encompass "realty
and such personal property as has been incorporated or consumed in the construction or repair thereof or
delivered for such purposes"). However, chattels that have been incorporated into the realty become
"fixtures" and are subject to a statutory mechanic's lien. Whirlpool Corp., 517 S.W.2d at 266-67. A statutory
mechanic's lien may therefore attach to items that have become fixtures and such lien will be superior to a
prior deed-of-trust lien when the fixtures can be removed without material injury to the land and pre-existing
improvements or to the fixtures themselves.[8] See id. at 269.
296*296 Paragraph 6 of the insuring clause covers loss or damage arising from "a statutory or constitutional
mechanic's, contractor's, or materialman's lien for labor or material" having its inception (statutorily defined in
section 53.124(a)) on or before the date of the policy, when such lien has priority over the lien of the insured
mortgage (as provided for by the language of section 53.123 and its interpretation by Texas courts). Such a
"mechanic's lien" will have priority over any prior lien, including a "lien of the insured mortgage," when the
"mechanic's lien" is on improvements (including fixtures) that can be removed without material injury to the
land and pre-existing improvements or to the improvements themselves, i.e., "removable improvements." See
Whirlpool Corp., 517 S.W.2d at 269; see also TEX. PROP.CODE ANN. § 53.123. Thus, paragraph 6 is
specifically meant to provide indemnity for loss or damage arising from a "mechanic's lien" on "removable
improvements" that had its inception on or before the date of the policy.
To interpret the insuring clause of the policy so as to exclude coverage when an asserted mechanic's lien is
on removable improvements would render paragraph 6 superfluous and meaningless. The only circumstance
under which a prior-in-time "lien of the insured mortgage" would "lack... priority ... over any [`mechanic's lien']
having its inception on or before [the] Date of [the title] Policy" is when the "mechanic's lien" is on removable
improvements. See Whirlpool Corp., 517 S.W.2d at 269; see also TEX. PROP.CODE ANN. § 53.123. We will
not interpret the policy so as to nullify specific coverage provided in a distinct insuring paragraph, thus
rendering the language in such paragraph meaningless, in the absence of "clear and unambiguous
language" in the policy expressing an intent to exclude such coverage.[9] See Coker, 650 S.W.2d at 393;
Am. Motorists Ins., 16 S.W.3d at 145.
Accordingly, we conclude that the title policy, pursuant to section 6 and within the extent of its provisions,
provides indemnity for losses or damages resulting from mechanic's liens on removable improvements.
B. Stewart Title's motion for summary judgment
By its first and third issues, Gulf Coast argues that the trial court erred in rendering summary judgment for
Stewart Title. Both Gulf Coast and Stewart Title agree that Aspen's claims included a lien on "removables."
Stewart Title's motion for summary judgment was premised entirely on its contention that it had negated an
essential element of each of Gulf Coast's claims by establishing that the policy did not cover losses or
damages arising out of the assertion of mechanic's liens attaching to "removables." Because the policy did,
in fact, cover mechanic's liens attaching to removable improvements (including fixtures), the trial court could
not grant a summary judgment on Stewart Title's sole ground.[10]
297*297 We sustain Gulf Coast's first and third issues and reverse the trial court's take-nothing summary
judgment against Gulf Coast.
C. Gulf Coast's motion for partial summary judgment
In its second and fourth issues, Gulf Coast asserts that the trial court erred in not granting its motion for
partial summary judgment seeking a finding that Stewart Title breached its contract by not paying for losses
sustained by Gulf Coast by reason of the priority of Aspen's lien. This issue has not been briefed separately
from the coverage issue, apart from arguments regarding loss. We therefore decline to address issues two
and four and remand the case for further proceedings without addressing the merits of Gulf Coast's motion
for partial summary judgment, except insofar as we have resolved the legal question of coverage of a
mechanic's lien on removable improvements under the policy. See TEX.R.APP. P. 38.1(i).
Conclusion
We reverse the judgment of the trial court and remand this cause for further proceedings.
[1] The judgment in this cause was rendered against Gulf Coast Interests, Inc. Appellant GCI GP, LLC, represents, without
contradiction, that it is the successor by merger to Gulf Coast Interests, Inc., and it perfected the appeal in this cause.
[2] Comerica Bank-Texas later became Comerica Bank.
[3] Aspen also included language stating that the second restated mechanic's lien did not constitute a waiver of the January
23, 2003 affidavit or the lien filed June 10, 2003.
[4] See Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex.1970).
[5] Actually, Aspen asserted liens against the land and improvements for its work and materials and only asserted a lien
against the "removables" as an alternative argument if the trial court did not find that its lien against the land and
improvements was superior to that of Comerica and Gulf Coast. Therefore, Aspen actually made "a claim against the land."
Stewart Title's motion for summary judgment, however, discussed only Aspen's claimed lien against removables, and Gulf
Coast did not contend that the motion for summary judgment did not address the asserted liens against the land and
improvements. Accordingly we do not discuss Aspen's other claimed liens.
[6] Under Texas Property Code section 53.124(a), the time of inception of a mechanic's lien, for the purposes of section
53.123, is "the commencement of improvements or delivery of materials to the land on which the improvements are to be
located and on which the materials are to be used." TEX. PROP.CODE ANN. § 53.124(a) (Vernon 2007).
[7] The class of "improvements" is broader than that the class of "fixtures," which it incorporates, but both share the
characteristic of requiring annexation to realty. See Reames v. Hawthorne-Seving, Inc., 949 S.W.2d 758, 761 (Tex.App.-Dallas
1997, pet. denied).
[8] The fact that an improvement that is a fixture is "removable"—that is, can be removed without material damage to the land,
pre-existing improvements, or the fixture itself— does not preclude it from being a fixture for the purposes of the attachment of
a mechanic's lien and the priority of a mechanic's lien over a deed-of-trust lien. See First Nat'l Bank v. Whirlpool Corp., 517 S.
W.2d 262, 266, 269 (Tex. 1974) (holding that dishwashers and disposals were "fixtures," and so subject to a mechanic's lien,
and further holding that, because they could be removed without damage to land, pre-existing improvements, or the fixtures
themselves, mechanic's lien on them had priority over prior deed-of-trust lien).
[9] The policy includes a "Schedule B," providing exceptions from coverage. There is no exception in Schedule B for
mechanic's liens involving removable improvements.
[10] Given the procedural posture of the case, we cannot, and do not, decide whether Gulf Coast was entitled to indemnity for
losses and damages arising from Aspen's claims or to what extent Aspen's claims involved removable improvements
(including fixtures).