IN THE SUPREME COURT OF TEXAS

IN THE SUPREME COURT OF TEXAS

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No. 05-0785

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Via Net, U.S. = Delivery=20 Systems, Houston, U.S. Delivery Systems, Inc. and Corporate Express, = Inc.,=20 Petitioners,

TIG Insurance = Company=20

and Safety Lights = Company,=20 Respondents

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On Petition for Review from = the

Court of Appeals for the First = District of=20 Texas

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PER = CURIAM

Nine months=20 after being assured it had been added as an additional insured to a = vendor=92s=20 insurance policy, Safety Lights was denied coverage. After an = unsuccessful suit=20 on the policy, Safety Lights sued its vendor for breaching the promise = to=20 provide additional‑insured coverage.[1] That suit was = filed less=20 than four years after coverage was denied, but more than four years = after the=20 promise to provide coverage was breached. The trial court held the claim = was=20 barred, but the court of appeals reversed as the discovery rule might = make it=20 timely. Because the discovery rule does not apply to this type of claim, = we=20 reverse.

In = early=20 1996, Safety Lights informed its vendors that it would no longer buy = from them=20 unless it was added as an additional insured under their commercial = general=20 liability policies. Via Net agreed to do so, and its insurance broker = issued a=20 certificate of insurance in February 1997 listing Safety Lights as = =93holder=94 and=20 stating that =93holder is added as additional insured re: General = Liability.=94 But=20 the certificate also stated:

THIS=20 CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO = RIGHTS UPON=20 THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER = THE=20 COVERAGE AFFORDED BY THE POLICIES BELOW.

In = fact, Via=20 Net=92s policy with Lumbermens Mutual Casualty Company did not provide = for=20 additional-insured coverage, and no endorsement adding it as an = additional=20 insured was ever issued.

In = June 1997,=20 a Via Net employee named Guy Wright was injured when Safety Lights=92 = employees=20 allegedly dropped a 3000-pound steel plate on his hand. He sued three = weeks=20 later, and Safety Lights requested a defense from Lumbermens three = months later.=20 Pointing to its policy, Lumbermens denied the claim in a letter Safety = Lights=20 received on December 9, 1997.

Safety Lights=20 settled Wright=92s suit in 1999 for $235,000, and sued Lumbermens and = Via Net=92s=20 broker for breach of contract and misrepresentation. A federal district = court=20 dismissed the claim because (1) Lumbermens=92 policy did not provide = coverage for=20 additional insureds, and (2) Safety Lights=92 reliance on the = certificate of=20 insurance was unreasonable as it explicitly did not alter coverage. = See TIG=20 Ins. Co. v. Sedgwick James of Washington, 184 F. Supp. 2d 591, 598, = 604=20 (S.D. Tex. 2001), aff=92d, 276 F.3d 754 (5th Cir. = 2002).

On = December=20 7, 2001 (almost precisely four years after Lumbermens denied coverage), = Safety=20 Lights filed this breach of contract suit against Via Net for failing to = add it=20 as an additional insured. The parties agree that the four-year statute = of=20 limitations applies. See Tex.=20 Civ. Prac. & Rem. Code =A7 16.004(a)(3); Stine v. = Stewart, 80=20 S.W.3d 586, 592 (Tex. 2002). Via Net moved for summary judgment on the = ground=20 that more than four years had elapsed since the alleged breach of = contract, and=20 the trial court granted the motion.

The = court of=20 appeals reversed, finding the discovery rule could defer accrual until = Safety=20 Lights received Lumbermens=92 denial on December 9th. See 178 = S.W.3d 10=20 (Tex. App.=96Houston [1st Dist.] 2005). The court refused to consider = whether the=20 discovery rule might not apply, as that issue was raised not in the = defendants=92=20 motion for summary judgment (which was based on limitations generally) = but in=20 the plaintiffs=92 response and the defendants=92 subsequent reply. = Id.=20 at 16 n.6.

But = a=20 defendant=92s motion for summary judgment based on limitations need not = negate the=20 discovery rule unless the plaintiff has pleaded it. See In re Estate = of=20 Matejek, 960 S.W.2d 650, 651 (Tex. 1997) (per curiam); Woods v. = William=20 Mercer, Inc., 769 S.W.2d 515, 517‑18 (Tex. 1988). Here, Safety = Lights never=20 did. Defendants are not required to guess what unpleaded claims might = apply and=20 negate them. See SmithKline Beecham Corp. v. Doe, 903 S.W.2d 347, = 355=20 (Tex. 1995) (=93A defendant need not, however, show that the plaintiff = cannot=20 succeed on any theory conceivable in order to obtain summary judgment; = he is=20 only required to meet the plaintiff=92s case as pleaded.=94) (internal = quotation=20 omitted).

When Safety=20 Lights asserted the discovery rule for the first time in its summary = judgment=20 response, Via Net had two choices: it could object that the discovery = rule had=20 not been pleaded, or it could respond on the merits and try the issue by = consent. See Roark v. Stallworth Oil and Gas, Inc., 813 S.W.2d = 492, 495=20 (Tex. 1991). By choosing the latter course, the discovery rule=92s = applicability=20 was placed squarely before the trial and appellate courts. See = Tex. R. Civ. P. 166a(c) = (=93Issues not=20 expressly presented to the trial court by written motion, answer = or=20 other response shall not be considered on appeal as grounds for=20 reversal.=94) (emphasis added); see also Stiles v. Resolution Trust = Corp.,=20 867 S.W.2d 24, 26 (Tex. 1993) (=93[W]e hold that a summary judgment = cannot be=20 affirmed on grounds not expressly set out in the motion or = response.=94)=20 (emphasis added). The court of appeals erred in holding otherwise.

Having=20 determined that the issue was properly raised, we turn to whether the = discovery=20 rule applies to contract claims like the one asserted here. Normally a = cause of=20 action accrues when a wrongful act causes some legal injury. See S.V. = v.=20 R.V., 933 S.W.2d 1, 4 (Tex. 1996). But accrual may be deferred if = =93the=20 nature of the injury incurred is inherently undiscoverable and the = evidence of=20 injury is objectively verifiable.=94 Computer Assocs. Int=92l, Inc. = v. Altai,=20 Inc., 918 S.W.2d 453, 456 (Tex. 1996). The Legislature has adopted = the=20 discovery rule in some cases. See, e.g., Tex. Bus. & Com. Code = =A7=A7 17.565=20 (deceptive trade practices), 24.010(b)(1) (fraudulent transfer claims by = spouse,=20 minor, or ward); Tex. Civ. = Prac. &=20 Rem. Code =A7=A7 16.010(a) (misappropriation of trade secrets), = 110.007(a)=20 (burden on religious freedom), 143.001(b) (harmful access by computer),=20 171.088(b) (vacating arbitration award); Tex. Rev. Civ. Stat. art. = 581-33(H)(2)=20 (untruth or omission in securities sales). But it has specifically = rejected the=20 discovery rule in others, including contract cases involving the sale of = goods.=20 See Tex. Bus. & = Com. Code=20 =A7 2.725(b). While the Legislature=92s silence on accrual in = most cases=20 leaves that question to the courts, we have restricted the discovery = rule to=20 exceptional cases to avoid defeating the purposes behind the limitations = statutes. See S.V., 933 S.W.2d at 25 (noting that applications of = the=20 discovery rule =93should be few and narrowly drawn=94); Computer = Assocs., 918=20 S.W.2d at 456, 457 (noting that discovery rule is =93a very limited = exception to=20 statutes of limitations=94 that applies =93in certain limited = circumstances=94). Via=20 Net does not contest that a failure to add a third party as an = additional=20 insured is objectively verifiable. But it does argue that such a failure = is not=20 inherently undiscoverable. =93An injury is inherently undiscoverable if = it is, by=20 its nature, unlikely to be discovered within the prescribed limitations = period=20 despite due diligence.=94 Wagner & Brown, Ltd. v. Horwood, 58 = S.W.3d=20 732, 734-35 (Tex. 2001). This legal question is decided on a categorical = rather=20 than case-specific basis; the focus is on whether a type of = injury rather=20 than a particular injury was discoverable. Id. at = 736;=20 Apex Towing Co. v. Tolin, 41 S.W.3d 118, 122 (Tex. 2001).

=93It is=20 well‑settled law that a breach of contract claim accrues when the = contract is=20 breached.=94 Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). We = have=20 twice refused to apply the discovery rule to defer accrual until a = breach of=20 contract is discovered. See Wagner & Brown, 58 S.W.3d at 737; = HECI=20 Exploration Co. v. Neel, 982 S.W.2d 881, 888 (Tex. 1998). In both = cases,=20 royalty owners argued the discovery rule should apply because due = diligence did=20 not require that they verify information or payments received from their = lessees. We disagreed, holding that the duties the law imposes on = lessees =93do=20 not dispense with the need for royalty owners to exercise due diligence = in=20 enforcing their contractual rights, express or implied, within the = statutory=20 limitations period.=94 HECI, 982 S.W.2d at 887; see also = Wagner &=20 Brown, 58 S.W.3d at 737.

Contracting=20 parties are generally not fiduciaries. See Schlumberger Tech. Corp. = v.=20 Swanson, 959 S.W.2d 171, 177 (Tex. 1997). Thus, due diligence = requires that=20 each protect its own interests. See Barfield v. Howard M. Smith Co. = of=20 Amarillo, 426 S.W.2d 834, 840 (Tex. 1968) (=93As a party to arm=92s = length=20 business transactions, respondent had a duty to use ordinary care for = the=20 protection of its own interests=94). Due diligence may include asking a = contract=20 partner for information needed to verify contractual performance. See = Wagner=20 & Brown, 58 S.W.3d at 736; HECI, 982 S.W.2d at 886. If a=20 contracting party responds to such a request with false information, = accrual may=20 be delayed for fraudulent concealment. Wagner & Brown, 58 = S.W.3d at=20 737; HECI, 982 S.W.2d at 886. But failing to even ask for such=20 information is not due diligence. See Wagner & Brown, 58 = S.W.3d at=20 736; HECI, 982 S.W.2d at 886.

Safety Lights=20 argues that it acted diligently by obtaining a certificate of insurance = listing=20 it as an additional insured. But the certificate warned that it = conferred no=20 rights and was limited by the underlying policy. Safety Lights argues, = with some=20 force, that there is little use for certificates of insurance if = contracting=20 parties must verify them by reviewing the full policy. But the purpose = of such=20 certificates is more general, =93acknowledging that an insurance policy = has been=20 written, and setting forth in general terms what the policy covers.=94 = Black=92s Law Dictionary 240 = (8th ed.=20 2004). Given the numerous limitations and exclusions that often encumber = such=20 policies, those who take such certificates at face value do so at their = own=20 risk.

Moreover, in=20 this case Safety Lights learned of the breach within a few months after = it=20 occurred. While the facts of this specific case do not govern the = categorical=20 inquiry, they are not atypical. Additional-insured status under a = general=20 liability policy generally provides coverage for personal injury and = property=20 damage claims, most of which must be brought within two years of injury. = See=20 Tex. Civ. Prac. & Rem. = Code=20 =A7 16.003. Accordingly, unless no claims are filed for a long = time, breach=20 will generally be discovered within four years.

We = do not=20 hold today that the discovery rule can never apply to breach of contract = claims.=20 Our attempts to bring predictability and consistency to discovery rule=20 jurisprudence have focused on types of injury, not causes of action. = See,=20 e.g., Pustejovsky v. Rapid‑American Corp., 35 S.W.3d 643, 653 = (Tex. 2000);=20 HECI, 982 S.W.2d at 886; Childs v. Haussecker, 974 S.W.2d = 31, 38=20 (Tex. 1998); Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, = 531 (Tex.=20 1997). Some contract breaches may be inherently undiscoverable and = objectively=20 verifiable. But those cases should be rare, as diligent contracting = parties=20 should generally discover any breach during the relatively long = four-year=20 limitations period provided for such claims.

Accordingly,=20 we hold that the discovery rule is inapplicable to defer accrual of the = claim=20 asserted here. We grant Via Net=92s petition for review, and without = hearing oral=20 argument, we reverse the court of appeals=92 judgment and render = judgment that=20 Safety Lights take nothing. See Tex. R. App. P. 59.1.

OPINION=20 DELIVERED: December 22, 2006