(caption unavailable)

* Local Rule 47.5 provides: "The publication of opinions that
have no precedential value and merely decide particular cases on
the basis of well-settled principles of law imposes needless
expense on the public and burdens on the legal profession."
Pursuant to that Rule, the Court has determined that this opinion
should not be published.
UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________
No. 91-7092
Summary Calendar
__________________
DONALD C. BARDOWELL, ET AL.,
Plaintiffs,
DONALD C. BARDOWELL,
Plaintiff-Appellant,
versus
MUTUAL OF OMAHA INSURANCE
COMPANY,
Defendant-Appellee.
______________________________________________
Appeal from the United States District Court for the
Northern District of Texas
(CA-3-88-096-G)
______________________________________________
(February 5, 1993)
Before GARWOOD, HIGGINBOTHAM, and BARKSDALE, Circuit Judges.*
GARWOOD, Circuit Judge:
Plaintiff-appellant Donald C. Bardowell (Bardowell) sued his
insurer, defendant-appellee Mutual of Omaha Insurance Company

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(Mutual), for benefits alleged to be due under a disability policy,
and for Mutual's allegedly tortious conduct in its denial of
payment and handling of premium withdrawals from his bank account.
Concluding that Bardowell had not shown that his disability was not
within a policy exclusion, and that his tort claims were barred by
the statute of limitations, the district court directed a verdict
for Mutual. We affirm.
Facts and Proceedings Below
Between 1969 and 1974 Bardowell bought ten insurance policies
from Mutual for himself, his wife, and his son. For all of the
policies he arranged an automatic bank draft system of payment,
under which Mutual made monthly deductions from his bank account to
cover the premiums. The policy primarily at issue in this case is
a disability policy for Bardowell. It provided benefits for
illnesses that necessitated confinement, and also limited benefits
for up to three months for nonconfining illnesses. When Bardowell
purchased the policy in August 1969, he had suffered from diabetes
for eight to ten years, and the policy excluded coverage for any
disability arising from diabetes.
Viewed most favorably to Bardowell, the evidence at trial
showed the following facts underlying his suit. In March 1981,
Bardowell began to experience hemorrhaging in his right eye. He
was diagnosed as having vitreous floaters and the beginnings of
cataracts. In the spring of 1982, his vision problems rendered him
unable to drive, and he was forced to close his business on May 31,
1982. On October 4, 1982, he had cataract surgery on his right
eye. The surgery, performed by Dr. Stephen Chambless (Chambless),

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also entailed implantation of an intra-ocular artificial lens.
Bardowell submitted a claim to Mutual on December 1, 1982, for
medical and disability benefits from the surgery and associated
diagnosis and treatment. On the claim form, Bardowell indicated
that the first day he was unable to work because of sickness was
June 5, 1982, and the first day he was again able to do any part of
his work was November 8, 1982. He attached his medical bills, two
of which indicated a diagnosis of diabetic retinopathy in addition
to cataracts. Mutual allowed Bardowell's disability claim to the
extent of forty-two days of benefits for a confining sickness
(September 27 to November 8), and tendered payment before the end
of December.
Bardowell continued to experience problems with his eyes,
however, and within a few weeks after his surgery sought treatment
from a new doctor, Dr. Bruce Taylor (Taylor). In a letter to the
referring physician describing his examination of Bardowell on
November 17, 1982, Taylor stated that Bardowell had "proliferative
diabetic retinopathy and cystoid macular edema in his right eye as
well as background diabetic retinopathy in his left eye."
Bardowell received further treatment, including laser treatment,
from Taylor in 1983. Mutual paid Bardowell for fourteen days of
confining disability in 1983.
On August 7, 1984, Bardowell wrote to Mutual a letter in which
he claimed that he had been disabled for most of the time from
March 5, 1981 to July 31, 1984, and that he was therefore entitled
to additional benefits under his policy. He calculated that he had
been disabled for 990 days during that period (666 with a confining

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4
illness and 324 with a nonconfining illness). On September 25,
1984, Bardowell had cataract surgery on his left eye.
Bardowell telephoned Mutual numerous times over the next
several months about the status of his August 7 claim, but was not
told anything other than that some of his files were being
retrieved from Mutual's home office. On November 28, 1984, Lynn
Robinson (Robinson) of Mutual visited Bardowell in his home and
brought him a few checks covering medical expenses. Robinson also
informed Bardowell, however, that Bardowell had not substantiated
his disability claim. Robinson offered to pay Bardowell $1,200 as
a settlement, provided Bardowell would cancel all of his policies.
At approximately the same time, Bardowell began to experience
problems with Mutual's withdrawal of premium payments from his bank
account. The difficulties began after he decided in September or
October 1984 to change banks. In accordance with Mutual's
instructions, he sent Mutual a signed authorization card and two
months' premiums. Mutual continued for several months thereafter
to attempt to make draws from the old bank, and the requests were
not honored. Bardowell was charged four hundred dollars by his old
bank as fines for overdrafts. Bardowell called Mutual several
times to alert them to the problem and each time was assured that
the situation would be corrected and that his policies were still
in effect.
On December 4, 1984, Bardowell received a notice from Mutual
saying that the withdrawals from his bank were being returned
unpaid, and that he needed to take action to prevent his policies
from lapsing. When he received a similar notice in February 1985,

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5
he returned it with a note on the bottom stating that Mutual owed
him four hundred dollars and should use that money to cover his
premium payments.
Bardowell did not submit any medical certification of
disability until February 1985. At that time, he wrote Mutual and
attached a letter from Taylor indicating that Bardowell had been
under his care since November 17, 1982, for "cystoid macular edema
and proliferative diabetic retinopathy in the right eye," and that
a cataract was also present in the left eye. Taylor's letter
stated that Bardowell had been unable to work from November 17,
1982, until June 1983 and from March 1984 to September 30, 1984,
and that "[n]onconfinement dates" had been July 1983 to March 1984.
Based on the information in Taylor's letter, Bardowell updated his
August 7 claim, requesting disability benefits for a nonconfining
illness from March to June 1982 and July to March 1984, and
benefits for a confining disability for an additional 727 days
between March 1981 and September 1984. Bardowell's total claim was
$8,439.19.
In February and March 1985, Mutual notified Bardowell on
several occasions that they could not locate the bank authorization
and premium check he had sent to them in October 1984, and that he
would need to resubmit those items in order to continue his
policies, which had been paid only to January. Bardowell did not
comply with this request. A letter from Mutual dated March 15
asked whether, if Mutual did not hear from him within ten days, it
could assume that he no longer desired coverage.
In late March 1985, Mike Nolan (Nolan) of Mutual visited

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Bardowell and offered to settle all of the claims for $5,500 if
Bardowell would return all of his policies. Bardowell declined
this offer. On July 8, 1985, Nolan wrote Bardowell a letter
indicating that the $5,500 offer had been made despite Mutual's
belief that Bardowell had not submitted timely or adequate proof of
his disability, but that the offer was withdrawn as of the date of
the letter. Settlement negotiations continued for another fifteen
months. Mutual offered $6,500 on May 8, 1986, and reopened this
offer on August 20, 1986, after Bardowell increased his demand to
$9,123.
On October 30, 1986, Nolan wrote to Bardowell indicating that
despite their inability to settle the claim, Mutual wanted to pay
all of the benefits that it considered to be due based on the
medical information provided, i.e., Taylor's letter. Noting that
it had already paid disability benefits up to November 8, 1982,
Mutual allowed disability benefits for a confining illness from
November 8, 1982 to June 30, 1983, and from March 1 to September
30, 1984, and allowed the maximum of three months' benefits for a
nonconfining illness from July 1, 1983. Nolan enclosed a check for
$3,539.66.
Bardowell did not cash the check, and, along with his wife and
son, filed suit against Mutual in Texas state court on December 29,
1987. The complaint alleged that Mutual had failed to pay benefits
due under the policy and had negligently or willfully breached the
duty of good faith and fair dealing in its settlement practices and
cancellation of the ten policies. The plaintiffs sought damages
for past and future mental anguish and for loss of reputation in

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7
the community. Although the complaint also alleged damages in the
form of medical expenses, Bardowell made clear at trial that the
only policy under which he was claiming benefits was the disability
policy.
Mutual removed to federal court based on diversity of
citizenship and answered the complaint by, inter alia, raising the
defense that Bardowell's disability resulted from diabetes and
therefore fell within the policy exclusion.
The case was tried before a jury on September 3-4, 1991. At
the conclusion of Bardowell's case, the district court granted
Mutual's motion for a directed verdict, holding: (1) that because
it was undisputed that the policies were renewable on a month-by-
month basis at the option of the company, there were no damages
from Mutual's alleged negligence in allowing the policies to lapse;
(2) that there was no competent record evidence on which a
reasonable jury could conclude that Bardowell's disability arose
from any condition other than diabetes; and (3) that Bardowell's
tort claims were barred by a two-year statute of limitations.
Bardowell brings this appeal.
Discussion
This Court reviews the grant of a motion for directed verdict
by applying the same test as the district court: the directed
verdict will be upheld if, but only if, after considering all of
the evidence in the light most favorable to the nonmoving party,
and drawing therefrom all reasonable inferences in the nonmovant's
favor, this Court believes that a reasonable jury could not arrive
at a contrary decision. White v. Walker, 950 F.2d 972, 977 (5th

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8
Cir. 1991) (per curiam); Boeing Co. v. Shipman, 411 F.2d 365, 374
(5th Cir. 1969) (en banc).
We conclude that the district court was correct in directing
a verdict in favor of Mutual on Bardowell's claim for nonpayment of
benefits. Under Texas law, when an insurer pleads a policy
exclusion as a defense, the plaintiff suing on the policy has the
burden of showing that the exclusion does not apply. Sherman v.
Provident American Insurance Co., 421 S.W.2d 652, 654 (Tex. 1967);
American Home Assurance Co. v. Brandt, 778 S.W.2d 141, 143 (Tex.
App.--Texarkana 1989, writ denied); Southern Insurance Co./Zale
Indemnity Co. v. Progressive County Mutual Insurance Co., 708
S.W.2d 549, 551 (Tex. App.--Houston [1st Dist.] 1986, writ ref'd
n.r.e.).
Mutual specifically raised the issue of the diabetes exclusion
in its original answer and in a pretrial motion for partial summary
judgment, and also included it in a list of contested issues of
fact in a joint pretrial order. Nevertheless, Bardowell did not
present any evidence during his case in chief to negate the
possibility that diabetes caused his illnesses. As discussed
above, the documentation supporting his 1982 and 1983 disability
claims refers to one condition that was plainly related to
diabetes--proliferative diabetic retinopathy--and to two other
conditions for which there was no indication whether or not they
were associated with diabetes--cystoid macular edema and cataracts.
Because Mutual had expressly raised the diabetes exclusion as a
defense, it was incumbent upon Bardowell to offer some evidence
that his cystoid macular edema and cataracts were not attributable

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1 With its motion for partial summary judgment, Mutual
attached deposition testimony from Chambless and Taylor. This
deposition testimony of Taylor states that cystoid macular edema
can be caused by either diabetes or cataracts, that he had not
made a conclusive determination in Bardowell's case, because both
potential causes had been present, and that he had no opinion on
whether Bardowell's cataracts were caused by his diabetes. The
referenced Chambless deposition testimony states that he thought
in Bardowell's case that the macular edema was more likely than
not attributable to his diabetes, but noted that Taylor was in a
better position to judge, and that Chambless thought the odds
were very high that Bardowell's cataracts were caused by
diabetes.
In his brief to this Court, Bardowell relies on this
deposition testimony by Taylor to argue that a factual question
existed as to whether his cystoid macular edema was caused by
diabetes or simply by incomplete healing after cataract surgery.
However, these depositions were never offered into evidence at
trial, so they were not among the evidence to be considered by
the court in passing on the motion for directed verdict.
9
to his diabetes. Because there is no evidence in the trial record
addressing this question in any manner, the district court
correctly concluded that no rational jury could find that Bardowell
had carried his burden.1
The district court was also correct in concluding that
Bardowell's extra-contractual claims were barred by the applicable
statutes of limitations. The following summary of these claims was
contained in the joint pretrial order:
"Plaintiffs have brought this action for the unfair
practice of the defendant in the handling of plaintiffs'
insurance claim by engaging in unreasonable and
unjustified delays in paying plaintiffs' losses, by
making repeated unreasonable demands for information
which had already been furnished to the defendant, and by
failing to use due diligence in attempting to determine
the nature of Donald C. Bardowell's loss and by failing
to deal in good faith with the plaintiffs regarding their
insurance claims. In addition, plaintiffs have brought
this action alleging that defendant engaged in an unfair
act of [sic] practice in the handling of and the
cancellation of plaintiffs' insurance policies,
approximately ten policies, by failing to use due
diligence in obtaining proper bank authorizations for the

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2 Bardowell suggests in his brief to this Court that his claim
may be treated as one for common-law fraud subject to a four-year
limitations period. However, a theory of common-law fraud was
never advanced to the court below.
10
prompt payment of plaintiffs' premiums to the defendant
and by making repeated unreasonable demands for
information from the plaintiffs, and by failing to use
due diligence in attempting to ascertain the reason that
the premiums were not being paid."
In addition to the common-law tort of a breach of the covenant of
good faith and fair dealing, Bardowell apparently alleged
violations of the Texas Deceptive Trade Practices Act, Tex. Bus. &
Com. Code § 17.41 et seq. (Vernon 1987), and article 21.21 of the
Texas Insurance Code. All of these claims are subject to two-year
statutes of limitations. See Tex. Bus. & Com. Code § 17.565
(Vernon 1987); Tex. Ins. Code Ann. art. 21.21, § 16(d) (Vernon
Supp. 1992); Tex. Civ. Prac. & Rem. Code § 16.003(a) (Vernon
1986).2
Bardowell does not contend to this Court that Mutual's actions
in attempting to settle the dispute tolled the statutes or
triggered the 180-day extension statutorily authorized in Tex. Bus.
& Com. Code § 17.565 and Tex. Ins. Code Ann. art. 21.21, § 16(d).
Rather, his sole contention is that his cause of action accrued
within two years of his filing suit on December 29, 1987.
Relying on Alvarez v. American General Fire and Casualty Co.,
757 S.W.2d 156 (Tex. App.--Corpus Christi 1988, no writ), he argues
that his cause of action accrued when his claim was finally denied,
and that a rational jury could have concluded that this occurred on
October 30, 1986. However, the holding of Alvarez, which was a
contract suit rather than a tort suit, was that the plaintiff's

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11
cause of action accrued when the insurer denied coverage rather
than at the time of the accident giving rise to the claim. Id. at
158. It did not involve an insurer's initial denial of a claim
followed by efforts to settle the dispute, and thus offers no
support for Bardowell's suggested distinction between initial and
final denial.
The Texas Supreme Court, however, recently did provide
guidance on this question that is adverse to Bardowell's position.
In Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826 (Tex. 1990),
the insurer refused on September 5, 1984, to verify coverage for
Murray's medical treatment, but admitted on March 15, 1985, that
its refusal had been unwarranted and reinstated coverage
retroactively. In her suit against the insurer alleging a breach
of the duty of good faith and fair dealing, Murray contended that
because the underlying claim on the policy was not finally resolved
until March 15, 1985, her tort cause of action for bad-faith
handling of that policy did not accrue until that date. The Texas
Supreme Court rejected that view, holding instead that the statute
of limitations commences "when the wrongful act occurs resulting in
some damage to the plaintiff," i.e., at the moment that the insurer
should pay a claim but fails to do so. Id. at 828. The Court
grounded its holding in the basic principle that "a cause of action
generally accrues at the time when facts come into existence which
authorize a claimant to seek a judicial remedy." Id. The Court
noted that although where there is no outright denial of a claim
the exact date of accrual may be a difficult factual question, id.
at 828 n.2, Murray's position was untenable because it would imply

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3 We consider the holding and reasoning of Izaguirre v. Texas
Employers' Insurance Association, 749 S.W.2d 550, 555-56 (Tex.
App.--Corpus Christi 1988, writ denied), to be inconsistent with
the Texas Supreme Court's pronouncements in Murray and thus to no
longer be persuasive authority. In Izaguirre, the court held
that an insurer's actions in contesting a workers' compensation
claim before the Industrial Accident Board constituted a
"continuous injury" that prevented the tort cause of action from
accruing until the insurer's bad-faith conduct ceased about
twenty months after its initial denial of payment. Id. at 556.
The Izaguirre court relied on the limitations analysis of Arnold
v. National County Mutual Fire Insurance Co., 725 S.W.2d 165
(Tex. 1987), which the Texas Supreme Court expressly modified in
Murray. See Murray, 800 S.W.2d at 829; see also Tectonic Realty,
812 S.W.2d at 654 (noting that characterization of an insurer's
persistent refusal to pay as a "continuing tort" for purposes of
the statute of limitations "would conflict with Murray").
12
that if the insurer never admitted coverage, the contract claim
would never be "finally resolved" so as to start the running of the
statute on the tort claim. Id. at 828. See also Tectonic Realty
Investment Co. v. CNA Lloyd's of Texas Insurance Co., 812 S.W.2d
647, 652-55 (Tex. App.--Dallas 1991, writ denied) (action for
breach of duty of good faith and fair dealing and for violation of
Tex. Ins. Code Ann. art. 21.21 accrued when policyholder received
insurer's letter rejecting policyholder's proof of loss).3
Applying those principles to the present case, we regard it as
inescapable that all of the conduct described in the above summary
and forming the basis for Bardowell's extra-contractual claims was
known to him well before December 1985. On November 28, 1984,
Bardowell knew that Mutual was denying his disability claim unless
he produced further documentation. By late March 1985, when Nolan
visited Bardowell, Mutual had clearly expressed its unwillingness
to pay more than $5,500 even after Bardowell submitted Taylor's
letter. From that time forward, Mutual only increased its offer,

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without any further submission of documentation by Bardowell.
Whatever "unreasonable demands for information," and failures to
use due diligence Mutual could have been guilty of were or should
have been apparent to Bardowell no later than March 1985.
Similarly, with regard to Mutual's handling of the bank
authorizations, Mutual had by March 15, 1985, informed Bardowell
that he would have to submit additional authorizations and premium
payments to prevent the policies from lapsing as of January 1985.
Insofar as the record shows, Mutual did nothing after that date
other than adhere to its position of March 15. Bardowell admitted
at trial that he knew on March 28, 1985, that the policies had
lapsed. Therefore, the alleged wrongfulness of Mutual's actions
was fully evident by the end of March 1985 at the latest--more than
two and a half years before Bardowell filed suit. No reasonable
jury could find under the principles of Murray that Bardowell's
tort claims accrued on December 27, 1985, or later.
Conclusion
Because we conclude that Bardowell's challenges to the
directed verdict are unavailing, the judgment of the district court
is
AFFIRMED.

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