Opinion
NO. 02-11-00437-CV
01-31-2013
Fire Insurance Exchange v. Judy Kennedy
From the 17th District Court
of Tarrant County (17-224686-07)
Opinion by Justice Walker
JUDGMENT
This court has considered the record on appeal in this case and holds that there was no error in the trial court's judgment. It is ordered that the judgment of the trial court is affirmed.
It is further ordered that appellant Fire Insurance Exchange shall pay all of the costs of this appeal, for which let execution issue.
SECOND DISTRICT COURT OF APPEALS
By ________________
Justice Sue Walker
NO. 02-11-00437-CV
FIRE INSURANCE EXCHANGE APPELLANT
v.
JUDY KENNEDY APPELLEE
FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY
MEMORANDUM OPINION
See Tex. R. App. P. 47.4.
I. INTRODUCTION
A jury returned a verdict for Appellee Judy Kennedy on her claims against her homeowner's insurance carrier, Appellant Fire Insurance Exchange. The trial court entered judgment on the jury's verdict and FIE perfected this appeal. For the reasons set forth below, we will affirm the trial court's judgment.
II. FACTUAL AND PROCEDURAL BACKGROUND
The facts giving rise to Judy's suit are as follows. Judy testified that she awoke very early on October 10, 2006, to discover water pouring from her ceiling; it was running from a light can and an air conditioning vent. She soon realized that the water was coming from the upstairs bathroom of her home; when she made her way upstairs, the water both downstairs and upstairs was over her feet. The water was dark brown. Judy called her FIE agent and made a claim under her policy with FIE, and she called a plumber. The plumber put in a new commode, and that remedied the leak.
Jennifer Ramirez, the FIE adjuster assigned to Judy's claim, called Judy later that morning and told her that FIE would send someone out to extract the water. Judy suggested that a friend of hers was in the business and could do the water extraction work; Jennifer declined and said Judy had to use FIE's people. Jennifer said that FIE had a vendor and would send someone out. FIE contacted a local "emergency preferred vendor" of water mitigation services named ServiceMaster and sent them to Judy's home that day.
Judy was not satisfied with FIE's handling of her claim, and eventually she filed suit against FIE; she alleged causes of action directly against FIE for its conduct and also alleged that ServiceMaster was FIE's apparent agent and that FIE was liable for any negligence of ServiceMaster under the doctrine of respondeat superior. The case proceeded to a jury trial, and the jury found for Judy and against FIE on Judy's breach of contract claim, her DTPA claim, and her breach of the duty of fair dealing claim. The jury also made attorneys' fees findings for Judy. The jury found that ServiceMaster was the apparent agent of FIE but that ServiceMaster was not negligent. After the trial court entered judgment on the jury's verdict, FIE brought this appeal, raising eleven issues.
A copy of the jury's verdict is attached hereto as Appendix A.
III. NO ABUSE OF DISCRETION IN SUBMISSION OF JURY QUESTIONS 10 AND 11
FIE's second through fifth issues raise various challenges to the submission of questions 10 and 11 in the court's charge. Question 10 asked whether ServiceMaster was the apparent agent of FIE. The jury answered, "Yes." Question 11 was conditioned on a "yes" answer to question 10 and asked whether any negligence of ServiceMaster as apparent agent of FIE proximately caused the occurrence in question. The jury answered, "No." Accordingly, because the jury answered "no" to question 11, it did not reach question 12, submitting damages from any negligence of ServiceMaster. FIE's sixth issue complains that FIE is somehow erroneously being held responsible for ServiceMaster's negligence.
FIE's first issue complains that "[t]here is no evidence, or insufficient evidence, that non-party ServiceMaster was Appellant's apparent agent" as the jury found in question 10. But the jury found in question 11 that ServiceMaster was not negligent, so—as discussed later in this memorandum opinion—the judgment against FIE does not impose any liability on FIE as a result of the jury's apparent agency finding. Because the jury's answer to question 10, even if not supported by legally and factually sufficient evidence, did not, in light of its "no" answer to question 11, cause rendition of an improper judgment, we need not address FIE's first issue. See Tex. R. App. P. 47.1 (requiring appellate court to address only issues necessary to final disposition of an appeal).
We review a trial court's submission of jury questions under an abuse-of-discretion standard. See Fin. Ins. Co. v. Ragsdale, 166 S.W.3d 922, 926 (Tex. App.—El Paso 2005, no pet.). The trial court must submit a requested question to the jury if the pleadings and any evidence support it. Tex. R. Civ. P. 278; Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex. 1992).
Judy pleaded that ServiceMaster was FIE's apparent agent and that ServiceMaster (and FIE) were negligent. The record before us contains some evidence supporting the submission of question 10 asking whether ServiceMaster was FIE's apparent agent and some evidence supporting the submission of question 11 asking whether ServiceMaster was negligent.Moreover, as pointed out by Judy, even if submission of questions 10 and 11 could be considered erroneous, any error was harmless because the jury answered question 11 in FIE's favor, finding that ServiceMaster was not negligent. See, e.g., City of Brownsville v. Alvarado, 897 S.W.2d 750, 752 (Tex. 1995) ("Submission of an improper jury question can be harmless error if the jury's answers to other questions render the improper question immaterial."); Boatland of Houston, Inc. v. Bailey, 609 S.W.2d 743, 750 (Tex. 1980) (holding that the potentially erroneous submission of defensive theories was harmless error because the jury found for the defendant on independent grounds and the complaining party failed to show how it probably resulted in an improper verdict). Because the pleadings and some evidence supported submission of jury questions 10 and 11, we hold that the trial court did not abuse its discretion by submitting them; and because, in any event, any error in the submission of questions 10 and 11 was harmless in light of the jury's answer to question 11, we overrule FIE's issues two through five.
For example, Judy testified that FIE sent ServiceMaster to her home; that FIE told her she had to use ServiceMaster; and that ServiceMaster reported directly to FIE not to her. Judy's FIE claims adjuster, Jennifer Ramirez, testified that she called ServiceMaster within an hour of receiving Judy's claim; that she was taught in training to call ServiceMaster; that she has never called any other company; that ServiceMaster was an emergency preferred vendor (EPV) for FIE; that FIE has employees who work as EPV coordinators and communicate with the EPVs; and that EPVs submit estimates to the FIE EPV coordinators who either approve or disapprove them.
In its sixth issue and in its reply brief, FIE argues that despite jury's "no" answer to question 11, asking whether ServiceMaster was negligent, the error in submitting questions 10 and 11 cannot be considered harmless here. FIE contends that the jury could have "worked backwards" by erroneously utilizing the definition of "occurrence in question" that was provided in conditionally-submitted question 11 when it answered question 10. According to FIE, the jury could have substituted question 11's definition of "occurrence in question" in place of question 10's use of the undefined phrase "occasion in question" to thereby somehow attribute ServiceMaster's conduct (even though the jury did not find ServiceMaster negligent) to FIE in the preceding questions concerning FIE's liability. But the jury was specifically instructed not to answer question 11 unless it had already answered question 10; unless the record demonstrates otherwise, we must presume that the jury followed the instructions given in the charge. SeeColumbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 861-62 (Tex. 2009). There is nothing in the record supporting FIE's contention that the jury worked backwards—first deliberating on question 11, which was conditionally submitted based on a prior "yes" answer to question 10; then using a definition of a term in question 11 as a substitute for an undefined, different term in question 10; and then somehow using its apparent agency answer in question 10 to work backwards and answer other questions (contained earlier in the charge prior to question 10) concerning FIE's liability (even though those questions asked specifically about FIE's conduct) to erroneously affirmatively answer the prior liability questions against FIE. We overrule FIE's sixth issue.
IV. COVERED DAMAGES WERE SEGREGATED BY EVIDENCE,
BY CHARGE INSTRUCTIONS, AND BY UNCHALLENGED JURY FINDING
In its ninth issue, FIE argues that Judy "failed to segregate her covered damages from her non-covered damages under the Doctrine of Concurrent Causation." In its tenth issue, FIE argues that the trial court erred by denying FIE's no-evidence motion for summary judgment and its motion for directed verdict—both asserting that no evidence existed that the damages or problems caused by ServiceMaster's substandard remediation efforts were covered damages under Judy's homeowner's policy.
Under the doctrine of concurrent causation, where covered and noncovered perils combine to create a loss, the insured is entitled to recover only that portion of the damage caused solely by the covered peril. TravelersIndemnity Co. v. McKillip, 469 S.W.2d 160, 163 (Tex. 1971); Wallis v. United Servs. Auto. Ass'n, 2 S.W.3d 300, 302-03 (Tex. App.—San Antonio 1999, pet. denied). The doctrine of concurrent causation is not an affirmative defense or an avoidance issue; rather, it is a rule embodying the basic principle that insureds are not entitled to recover under their insurance policies unless they prove their damage is covered by the policy. Wallis, 2 S.W.3d at 303.
Although FIE contends that Judy failed to segregate covered damages from uncovered damages, question 2 of the court's charge authorized the jury to award damages only for a covered peril, and FIE fails to challenge on appeal the legal or factual sufficiency of the evidence to support the jury's finding in response to question 2 that the repair costs to Judy's residence was $42,000. The jury was instructed in connection with question 2 that "repair costs" "means reasonable and necessary costs of repair to the residence, caused solely by a covered peril, with material of like kind and quality, with proper deduction for depreciation." [Emphasis added.] Judy's expert, Herschel Postert, who has been employed as a multi-lines claims adjuster for twenty-four years, used a software program called Xactimate that is used by FIE and other insurers to estimate losses and calculated that the cost to repair Judy's home from the water damage was $51,930. In closing argument, Judy's attorney asked the jury to deduct $4,800 from Postert's $51,930 figure for mold damages included in that total; the jury awarded $42,000. Judy asked the jury to also award $150,000 for the additional damages to her home resulting from the negligence of ServiceMaster, but the jury declined to find ServiceMaster negligent. Thus, the jury specifically awarded $42,000 in damages to Judy as a result of damages caused solely by a covered peril. FIE does not challenge the legal or factual sufficiency of the evidence to support the jury's finding that $42,000 was the cost to repair Judy's home for damages caused by a covered peril. And the evidence, including Postert's testimony, supports this finding. Thus, this unchallenged finding is binding upon us on appeal. See, e.g., Bedford v. Moore, 166 S.W.3d 454, 466 (Tex. App.—Fort Worth 2005, no pet.) (Cayce, C.J., concurring) (stating that an unchallenged jury finding is binding on appellants); Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex. App.—Dallas 1993, writ denied) (same); see also McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex. 1986) (unchallenged finding of fact is binding on appellants).
We overrule FIE's ninth issue contending that Judy failed to segregate covered damages from uncovered damages. We overrule FIE's tenth issue complaining of the trial court's failure to grant a no-evidence motion for summary judgment and a directed verdict on this basis, to the extent FIE's tenth issue presents anything for our review.
V. SUFFICIENT EVIDENCE EXISTS SUPPORTING JURY FINDING
THAT FIE BREACHED ITS CONTRACT WITH JUDY
In its eighth issue, FIE asserts that the evidence is legally and factually insufficient to support the jury's finding that FIE failed to comply with the insurance policy. Judy's homeowner's insurance policy with FIE required FIE to indemnify Judy for the losses caused by sudden and accidental discharge of water. Judy testified extensively concerning the damage to her home from the sudden and accidental discharge of water from her upstairs toilet on October 10, 2006. She explained that dark brown water "was pouring" through the ceiling, from a light can and an air conditioner vent. Using a diagram of her home, Judy described the damage to the upstairs bathroom, to her office, to a bedroom, and to the downstairs living room. Judy testified concerning furniture that was ruined because of the water discharge, specifically a desk and a sectional couch. She testified that her carpet was ruined. Judy said that immediately after the damage, she obtained an estimate from Carpet One for the replacement of her carpet for $14,477.30. She testified that the wallpaper was peeling off the wall in the bathroom where the leak occurred. Judy explained that in the rooms adjacent to the bathroom where the leak occurred, she could see water soaked into the walls; "the sheetrock was soaking it up." When asked how she knew that the water was soaking into the walls, Judy said that she knew because her FIE adjuster had pointed it out to her. Immediately after the damage, Judy obtained an estimate to have the wallpaper and border in the bathroom pulled down and to have new wallpaper installed, and the estimate, including the cost of new wallpaper, was $3,000. Judy explained that her FIE adjuster came to her home and saw all of this damage. On cross-examination, Judy identified buckling in her living room ceiling that "existed at the time of the claim" and a large brown water stain on her ceiling. In response to Judy's claim on her FIE homeowner's policy, FIE paid ServiceMaster $1,299.46 to place fans and a dehumidifier in Judy's home to dry out the carpet, to replace portions of the carpet pad, and to put the same carpet back down. FIE also issued Judy several checks totaling about $1,000 for the remainder of the damage to her home and personal property.
Judy forwarded this estimate to FIE and it was in FIE's claims file.
Judy forwarded this estimate to FIE and it was in FIE's claims file.
The jury found in response to question 1 that FIE had failed to comply with the insurance policy; the jury was instructed in question 1 that FIE "is not required to pay for any damages that are not attributable solely to a peril covered under its policy." We may sustain a legal sufficiency challenge only when (1) the record discloses a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998), cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362-63 (1960). In determining whether there is legally sufficient evidence to support the finding under review, we must consider evidence favorable to the finding if a reasonable factfinder could and disregard evidence contrary to the finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005). When reviewing an assertion that the evidence is factually insufficient to support a finding, we set aside the finding only if, after considering and weighing all of the evidence in the record pertinent to that finding, we determine that the credible evidence supporting the finding is so weak, or so contrary to the overwhelming weight of all the evidence, that the answer should be set aside and a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh'g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).
Considering the evidence favorable to the jury's finding that FIE failed to comply with its contract with Judy because a reasonable factfinder could and disregarding any contrary evidence because a reasonable factfinder could, the evidence is legally sufficient to support the jury's finding that FIE breached its contract with Judy. And considering and weighing all evidence in the record, the evidence that FIE breached its contract with Judy is not so weak or the contrary evidence so overwhelming that the jury's finding should be set aside, so the evidence is factually sufficient to support the jury's finding that FIE breached its contract with Judy. See, e.g., In re Universal Underwriters of Tex. Ins. Co., 345 S.W.3d 404, 406 (Tex. 2011) (dealing with insured's suit against insurer for breach of contract by underpayment of claim); State Farm Lloyds v. Fitzgerald, No. 03-99-00177-CV, 2000 WL 1125217, at *5 (Tex. App.—Austin Aug. 10, 2000, no pet.) (not designated for publication) (upholding jury verdict against insurer on homeowner's policy claim based on breach of contract by underpaying claim for costs of repair). We overrule FIE's eighth issue.
In light of our disposition of FIE's eighth and ninth issues, we need not separately address FIE's seventh issue, asserting that "[t]he trial court erred in entering a judgment against [FIE], because the insurance policy does not cover damages arising out of a service vendor's failure to perform its contractual duties." That is, as set forth above in connection with FIE's eighth issue, judgment was entered against FIE on the jury's legally and factually sufficient finding that FIE breached its contract with Judy; the judgment against FIE was not based on any breach of contract by ServiceMaster, and as set forth in connection with FIE's ninth issue, the damages awarded by the jury do not include any damages for an uncovered peril. Thus, our disposition of FIE's eighth and ninth issues likewise dispose of FIE's seventh issue. We overrule FIE's seventh issue.
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VI. FIE WAIVED SEGREGATION OBJECTION; SUFFICIENT EVIDENCE EXISTS
SUPPORTING JURY'S VERDICT ON JUDY'S ATTORNEYS' FEES
In its eleventh issue, FIE claims that the evidence is legally or factually insufficient to prove that Judy's reasonable attorneys' fees through the time of trial were $129,320. FIE's sole challenges to the sufficiency of the evidence are its contention that Judy failed to segregate her fees between fees incurred in prosecuting Judy's breach of contract claim, which are recoverable, and fees incurred in prosecuting Judy's extra-contractual claims, which are not recoverable, and its contention that fees incurred in connection with a prior trial in the case that ended in a mistrial are not recoverable.
Texas law prohibits recovery of attorney's fees unless authorized by statute or contract. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310 (Tex. 2006). If any attorney's fees relate solely to claims for which fees are not recoverable, a claimant must segregate recoverable from unrecoverable fees. Id. at 313. "Intertwined facts do not make tort fees recoverable; it is only when discrete legal services advance both a recoverable and unrecoverable claim that they are so intertwined that they need not be segregated." Id. at 313-14. But, if no objection is made to a failure to segregate attorney's fees either at the time evidence of attorney's fees is presented or to the jury charge, the error is waived. Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 389 (Tex. 1997); Hruska v. First State Bank, 747 S.W.2d 783, 785 (Tex. 1988); Morales v. Rice, No. 08-10-00318-CV, 2012 WL 2499004, at *6 (Tex. App.—El Paso June 29, 2012, no pet. h.); Wagner v. Edlund, 229 S.W.3d 870, 875 (Tex. App.—Dallas 2007, pet. denied); Cullins v. Foster, 171 S.W.3d 521, 535-36 (Tex. App.—Houston [14th Dist.] 2005, pet. denied); see also Ogden v. Ryals, No. 14-10-01052-CV, 2012 WL 3016856, at *4 (Tex. App.—Houston [14th Dist.] July 24, 2012, no pet.) (mem. op.).
FIE did not object to Judy's expert testimony on attorneys' fees. FIE did not object to question 9, the attorneys' fees question, which did not require the jury to segregate fees. FIE did not object to the admission of Judy's exhibit showing the tasks performed and the time spent by her attorneys in prosecuting her case against FIE. And FIE did not raise the segregation issue in any postverdict motion. Because FIE failed to raise its segregation complaint in any way in the trial court, it has waived its segregation complaint on appeal. See, e.g., Green Int'l, Inc., 951 S.W.2d at 389; Hruska, 747 S.W.2d at 785; Morales, 2012 WL 2499004, at *6; see also Tex. R. App. P. 33.1(a)(1)(A) (requiring party, to preserve a complaint for appellate review, to present to the trial court a timely request, objection, or motion "with sufficient specificity to make the trial court aware of the complaint, unless the specific grounds were apparent from the context").
FIE cites no authority for the proposition that the attorneys' fees Judy incurred in this case as a result of the first trial that ended in a mistrial are not recoverable. The law appears to be to the contrary. See Keller Indus., Inc. v. Reeves, 656 S.W.2d 221, 228 (Tex. App.—Austin 1983, writ ref'd n.r.e.) (rejecting the appellant's argument that the trial court erred by awarding attorneys' fees "for work done preparatory to and during a mistrial preceding the trial of this cause which is now on appeal"). And, again, FIE failed to raise any complaint in the trial court that the jury should not consider the fees Judy incurred when the first trial of this case ended in a mistrial. See Tex. R. App. P. 33.1(a)(1)(A). Thus, we hold that FIE waived this complaint on appeal.
We overrule FIE's eleventh issue.
VII. CONCLUSION
Having overruled FIE's second through eleventh issues and having determined that we need not address FIE's first issue, we affirm the trial court's judgment.
SUE WALKER
JUSTICE
PANEL: DAUPHINOT, WALKER, and MEIER, JJ.