Affirmed and Majority and Dissenting Opinions filed May 10, 2016.




                                    In The

                   Fourteenth Court of Appeals

                             NO. 14-15-00159-CV

                   CHRISTOPHER AUZENNE, Appellant
                                      V.

              GREAT LAKES REINSURANCE, PLC, Appellee

                 On Appeal from the Co Civil Ct at Law No 2
                           Harris County, Texas
                      Trial Court Cause No. 1056133

                     MAJORITY OPINION

      Appellant Christopher Auzenne sued appellee Great Lakes Reinsurance,
PLC for injuries he sustained while on the premises of its insured, Snowflake
Donuts.   The trial court granted Great Lakes’ motion to dismiss, ruling that
Auzenne lacked standing to sue Great Lakes directly without first obtaining a
judgment or settlement determining Snowflake Donuts’ liability. We affirm.
                                      BACKGROUND

      Auzenne alleges the following facts in his petition:      Auzenne went to
Snowflake Donuts on March 8, 2014. He slipped on a large amount of water in the
restroom and fell. He was taken to the emergency room to be treated for low back
pain and muscle spasms. Because of continuing pain and complications, he has
had to seek further medical treatment, incurring over $4,500 in medical expenses.
Snowflake Donuts was insured under a commercial policy with Great Lakes at the
relevant time. Auzenne alleges that Snowflake Donuts’ policy includes a “medical
payments clause” requiring Great Lakes to pay medical expenses of anyone who is
injured on the property regardless of fault. Auzenne sent medical bills and records
to Great Lakes asking to be reimbursed under the insurance policy, but Great
Lakes has not paid Auzenne any money.

      On December 8, 2014, Auzenne sued Great Lakes for breach of contract and
violations of the Texas Insurance Code. Auzenne has not brought a suit against or
entered into a settlement agreement with Snowflake Donuts. Great Lakes filed
simultaneously a motion to dismiss the lawsuit under Texas Rule of Civil
Procedure 91a and its original answer.       Great Lakes argued, inter alia, that
Auzenne lacks standing to bring this suit. Auzenne filed a response to Great
Lakes’ motion to dismiss on February 2, 2015, arguing that as a third-party
beneficiary he has standing to sue without first getting a determination of
Snowflake Donuts’ liability.

      After an oral hearing on February 17, 2015, the trial court signed an order
granting Great Lakes’ motion to dismiss Auzenne’s claims for lack of standing and
awarding $1,000 in attorney’s fees.




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                         ANALYSIS OF AUZENNE’S ISSUE

      On appeal, Auzenne argues that the trial court erred in granting the motion
to dismiss because a third-party beneficiary is not required to obtain a judgment
establishing the insured’s liability before bringing an action directly against the
insurer to recover no-fault medical expenses insurance benefits. In response, Great
Lakes contends that dismissal was proper because Auzenne’s claims are precluded
by Texas’s no-direct-action rule and because he failed to establish his third-party
beneficiary status.

                                   Standard of Review

      Texas Civil Procedure Rule 91a allows a party to move to dismiss a cause of
action on the ground that it has no basis in law or in fact. Tex. R. Civ. P. 91a.1.
As specified in the rule: “A cause of action has no basis in law if the allegations,
taken as true, together with inferences reasonably drawn from them, do not entitle
the claimant to the relief sought. A cause of action has no basis in fact if no
reasonable person could believe the facts pleaded.” Id.

      Determinations of whether a cause of action has any basis in law and in fact
are both legal questions which we review de novo, based on the allegations of the
live petition and any attachments thereto. Weizhong Zheng v. Vacation Network,
Inc., 468 S.W.3d 180, 183 (Tex. App.—Houston [14th Dist.] 2015, pet. denied).
In conducting our review, we must construe the pleadings liberally in favor of the
plaintiff, look to the pleader’s intent, and accept as true the factual allegations in
the pleadings to determine if the cause of action has a basis in law or fact. Id. at
183–84. We apply the fair-notice pleading standard to determine whether the
allegations of the petition are sufficient to allege a cause of action. Id.; Wooley v.
Schaffer, 447 S.W.3d 71, 76 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).
Applying these standards, we turn to Auzenne’s issue on appeal.
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                                         Analysis

      The no-direct-action rule pertains to standing because there is no justiciable
controversy until the liability of the insured has been established. See Farmers Ins.
Exch. v. Rodriguez, 366 S.W.3d 216, 223 (Tex. App.—Houston [14th Dist.] 2012,
pet. denied). But the need for a determination of liability before bringing a direct
action against an insurer, while often referred to as a standing issue, is more
appropriately characterized and analyzed as ripeness. See United Fire Lloyds v.
Tippin ex rel. Tippin, 396 S.W.3d 733, 735–36 (Tex. App.—Houston [14th Dist.]
2013, no pet.). In fact, this court has characterized the issue in direct-action cases
such as this in terms of ripeness rather than standing. See id.; see also Rodriguez,
366 S.W.3d at 222–23.

      Much like standing, ripeness implicates subject-matter jurisdiction and
emphasizes the need for a concrete injury for a justiciable claim to be presented.
Patterson v. Planned Parenthood of Houston, 971 S.W.2d 439, 442 (Tex. 1998).
Standing focuses on who may bring an action, while ripeness examines when that
action may be brought. Id. In evaluating ripeness, we consider whether, when the
lawsuit was filed, the facts were sufficiently developed so that an injury has
occurred or is likely to occur, rather than being contingent or remote. Robinson v.
Parker, 353 S.W.3d 753, 755 (Tex. 2011). “A case is not ripe when its resolution
depends on contingent or hypothetical facts, or upon events that have not yet come
to pass.” Patterson, 971 S.W.2d at 443 (emphasis added). Though a claim need
not be ripe at the time of filing, the party must demonstrate a reasonable likelihood
that the claim will soon ripen. Robinson, 353 S.W.3d at 755. If the party has not
demonstrated that the case is likely to soon ripen, it must be dismissed. Id.

      In Texas, an injured party generally has no direct claim against the
tortfeasor’s insurer until the insured tortfeasor is determined liable to the tort

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claimant.   Angus Chem. Co. v. IMC Fertilizer, Inc., 939 S.W.2d 138, 138
(Tex.1997) (per curiam); State Farm Cty. Mut. Ins. Co. of Tex. v. Ollis, 768
S.W.2d 722, 723 (Tex.1989) (per curiam); Great Am. Ins. Co. v. Murray, 437
S.W.2d 264, 265 (Tex.1969). Moreover, an injured party does not have a ripe
breach-of-contract claim against an insurer until that final determination of the
insured’s liability has been secured. Tippin, 396 S.W.3d at 736. Regardless of the
nature of the relief sought, a suit brought directly against an insurer before liability
has been determined is subject to dismissal. See In re Essex, 450 S.W.3d 524,
526–28 (Tex. 2014) (per curiam) (reversing the denial of a Rule 91a motion to
dismiss where claim was precluded by the no-direct-action rule).

      It is undisputed that when the trial court granted Great Lakes’ motion to
dismiss Auzenne’s claims, Snowflake Donuts’ obligation to pay damages to
Auzenne had not been established by final judgment or agreement.               In fact,
Auzenne has not even sued Snowflake Donuts. Auzenne’s claims against Great
Lakes were not ripe when the trial court dismissed, and Auzenne did not
demonstrate any likelihood that they would soon ripen. See Tippin, 396 S.W.3d at
735–36; see also Farias v. Allstate Ins. Co., 13-10-00071-CV, 2011 WL 2175220,
at *4 (Tex. App.—Corpus Christi 2011, pet. denied) (mem. op.).

      Auzenne tries to distinguish the no-direct-action cases by arguing that claims
under a medical payments coverage clause should be treated differently. However,
Texas has consistently refused to make exceptions based on the types of claims
brought or the status of the parties bringing them. In re Essex, 450 S.W.3d at 527
(stating that the policy reasons for the no-direct-action rule apply regardless of
whether the plaintiff is seeking declaratory relief or money damages from the
insurer); Ohio Cas. Ins. Co. v. Time Warner Entm’t Co., L.P., 244 S.W.3d 885,
888–89 (Tex. App.—Dallas 2008, pet. denied) (holding that an additional insured

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under a policy could not sue the insurer for policy proceeds before the insured’s
liability to the entity was determined by judgment or settlement); Rumley v.
Allstate Indem. Co., 924 S.W.2d 448, 450 (Tex. App.—Beaumont 1996, no writ)
(holding that a named insured acting as a third-party claimant did not have
standing to assert extra-contractual and statutory claims against the insurer for
denying and delaying payment of her claim). There is no authority indicating that
the medical payments coverage clause negates the applicability of the general rule
that has been applied consistently in our jurisprudence. 1

       Additionally, Auzenne asserts that the trial court erred in not taking as true
his alleged third-party beneficiary status.2 Even taking as true the allegation that
Snowflake Donuts’ policy includes a clause obligating Great Lakes to pay medical
expenses to any party who sustains an injury on the premises regardless of fault,
Auzenne has not overcome the bar to direct actions against the insurer. Courts
presume that parties contract only for their own benefit, and benefits to third
parties are merely incidental unless the parties entered into the contract directly for
the third party’s benefit. Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002). Here,
the policy is not in the record, and there is nothing to show the policy names
Auzenne or that Auzenne was contemplated when Snowflake Donuts and Great
Lakes entered into the insurance contract so that Auzenne could bring a claim
       1
          Auzenne urges us to look to a Seventh Circuit case interpreting and applying Indiana
law allowing a direct action without a prior liability determination. See Donald v. Liberty Mut.
Ins. Co., 18 F.3d 474 (7th Cir. 1994). In Donald, the federal court held that a plaintiff injured on
an insured’s premises was a third-party beneficiary under the insured’s commercial insurance
policy and had the right to enforce the no-fault medical payment provision of the commercial
insurance policy. Id. at 481. The court interpreted Indiana’s direct-action prohibition to apply to
tort claims but not breach-of-contract claims. Id. at 479. Texas makes no such distinction.
       2
         While Rule 91a requires courts to take all factual allegations in the pleadings as true,
legal conclusions need not be taken as true. Wooley, 447 S.W.3d at 75; City of Austin v. Liberty
Mut. Ins., 431 S.W.3d 817, 826 (Tex. App.—Austin 2014, no pet.). Auzenne’s assertion that he
has third-party beneficiary status is a legal conclusion the court is not required to take as true
when evaluating his pleading.

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directly against Great Lakes. See MCI Telecomms. Corp. v. Tex. Utils. Elec. Co.,
995 S.W.2d 647, 651 (Tex. 1999) (stating that it is not enough that a third party
benefits incidentally by the performance of a contract, that the contracting parties
must have negotiated the provision with the third party expressly in mind, and that
“[a] court will not create a third-party beneficiary contract by implication”). Cf.
Farias, 2011 WL 2175220, at *3–4 (finding that the plaintiff was not a third-party
beneficiary when the policy and medical payments coverage clause did not
specifically name plaintiff or indicate he was contemplated when the contract was
formed). Like with other insurance provisions, medical payments coverage clauses
have been interpreted to neither confer third-party beneficiary status nor allow
strangers to the contract to enforce the contract through direct claims. See Farias,
2011 WL 2175220, at *3–4.          Auzenne’s allegation concerning the medical
payments coverage clause does not overcome the strong presumption against
conferring third-party beneficiary status. See id.

      Furthermore, even if we assume Auzenne is a third-party beneficiary to the
contract, Auzenne’s “rights” under such contract must have ripened into
enforceable rights. See Sun Oil Co. v. Emp’rs Cas. Co., 550 S.W.2d 348, 349
(Tex. Civ. App.—Dallas 1977, no writ) (“The right of a third-party beneficiary to
enforce a contract is a question of substantive law, and even if the policy were
deemed to inure to the benefit of an injured third-party, that would not
automatically entitle appellant to enforce its provisions at this time.”) (citations
omitted); Ollis, 768 S.W.2d at 723 (“[An injured third party] cannot enforce the
policy directly against the insurer until it has been established, by judgment or
agreement, that the insured has a legal obligation to pay damages to the injured
party.”). Until Snowflake Donuts’ obligation to Auzenne is established by final
judgment or settlement, Auzenne has no ripe claim to bring against the insurers as


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a third-party beneficiary.   See Tippin, 396 S.W.3d at 736; Farias, 2011 WL
2175220, at *4.

                                    CONCLUSION

      Because Auzenne’s pleading does not present claims with any basis in law
or fact, we overrule his issue and affirm the trial court’s order granting Great
Lakes’ motion to dismiss. See Weizhong, 468 S.W.3d at 186–87.




                                      /s/       Ken Wise
                                                Justice



Panel consists of Justices McCally, Wise, and Jamison. (Jamison, J., dissenting.)




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