The perils of making a counter-offer when time is running out

If you keep negotiating and don't settle with the insurance company of the motorist who caused the accident in which you were hurt, you may yet face more grief, as a case recently decided by the First Court of Appeals illustrates. Kamisha Davis v. Texas Farm Bureau Insurance, No. 01-14-00686-CV (Tex.App.- Houston, July 2, 2015)(Opinion by Justice Higley). 

Following an automobile accident, offers and counteroffers went back and forth between the claimant and the insurer of the other driver, until the statute of limitations had run, with no lawsuit on file. The claimant then wanted to accept the last settlement offer made by the insurer, but had made a Stowers demand for policy limits after receiving the offer from the insurer, which was for less. 

The claimant eventually sued the insurer for refusing to settle and denying the claim in its entirety. The court of appeals held that the Stowers demand for policy limits constituted a counter-offer, and as such, also constituted a rejection of the insurer's then outstanding offer. Since the insurer's offer had been rejected, the claimant could no longer accept it, and the insurer was under no obligation to renew it. Nor was the insurer obligated to accept the counteroffer. Therefore, no contract was formed, and the claimant couldn't pursue a viable cause of action for breach against the insurance company. And since the two-year limitations period had expired, it was too late to file a lawsuit on the original personal injury claim.

In ruling for the insurer, the court of appeals rejected the plaintiff's alternative theory of promissory estoppel, holding that it was not reasonable for a claimant to rely on the insurer's representations in the adversarial context of claim settlement, and that the other elements for a viable promissory estoppel claim were not satisfied either.  
  
The opinion, written by Justice Higley, is worth reading in its entirety because it suggests, though implicitly, how the problem could be avoided (leaving aside the obvious solution of timely filing a lawsuit if a mutually satisfactory settlement of the claim is not promptly reached). 

KAMISHA DAVIS, Appellant,
v.
TEXAS FARM BUREAU INSURANCE, Appellee.

No. 01-14-00686-CV.

Court of Appeals of Texas, First District, Houston.

Opinion issued July 2, 2015.

Panel consists of Chief Justice Radack and Justices Higley and Massengale.

OPINION

LAURA CARTER HIGLEY, Justice.

Kamisha Davis sued Texas Farm Bureau Insurance, asserting several causes of action. The trial court granted summary judgment against Davis in favor Texas Farm Bureau. On appeal, Davis raises two issues in which she asserts that the trial court erred in granting summary judgment on her breach of contract and promissory estoppel claims.

We affirm.

Background

On August 26, 2009, Kamisha Davis was involved in a motor vehicle accident with Texas Farm Bureau's insured. Davis hired attorney Corey Gomel to pursue a personal injury claim arising out of the accident. On April 19, 2011, Gomel sent Texas Farm Bureau a letter, stating that Davis would be willing to settle her personal-injury claims against Texas Farm Bureau's insured for $37,500. Texas Farm Bureau, through its claims adjuster, Jody Roe, made a counter-offer of $10,000 on May 2, 2011.

Gomel, on behalf of Davis, sent a second settlement offer of $22,500 to Texas Farm Bureau on June 9, 2011. On June 10, 2011, Texas Farm Bureau responded that, "[a]fter careful review and evaluation of the information you have submitted, we believe this claim has a value of $12,000.00." Gomel made a counteroffer of $18,000.00 on June 21, 2011. In response, Texas Farm Bureau sent a letter to Gomel on June 30, 2011, again stating that it valued her claim at $12,000.00.

On July 28, 2011, Davis's attorney faxed Texas Farm Bureau a Stowers demand.^[1] The fax cover sheet stated, "We are withdrawing past [June 21] demand. Please see attached."

The Stowers demand informed Texas Farm Bureau that Davis would settle her claims only if Texas Farm Bureau paid her "the limits of your insured's policy." It further stated, "This will be the only correspondence that you will receive prior to us filing suit." The demand also informed Texas Farm Bureau that the offer to settle for the policy limits expired on August 29, 2011.

Davis never filed a personal injury suit against Texas Farm Bureau or the insured. At some point, Davis retained new counsel. On April 12, 2012, Davis's new counsel sent a letter to Texas Farm Bureau, which stated, "We have been retained by Corey Gomel to assist . . . in the prosecution of this matter for Ms. Davis. Please be advised our client, Ms. Kamisha Davis, has given us authorization to accept your final offer of $12,000.00. Please forward settlement documents to the address above."

On April 20, 2012, claims adjuster Roe responded, denying Davis's claim. Roe informed Davis, "Our offer expired on the two year anniversary from the date of accident 8-26-2009; therefore, we are respectfully declining your client's claim."

Davis filed suit against Texas Farm Bureau on April 16, 2013. She alleged as follows:

In an attempt to settle the matter, [Texas Farm Bureau] offered [Davis] $12,000.00 to settle [Davis's] claims on June 10, 2011.^[2] This offer of settlement had neither a designated time period in which [Davis] had to accept the offer, nor did the offer state that it expired on any date or upon any action or inaction of [Davis] or that the offer would otherwise be revoked. [Texas Farm Bureau] never revoked the offer. Furthermore, [Davis] never rejected the offer. . . . On April 13, 2012, [Davis] accepted the offer to settle the case and sent the acceptance letter via fax. On April 20, 2012, [Texas Farm Bureau] denied the offer, stating that the offer expired on the expiration of limitations of the underlying incident. . . . [Davis] relied on the representations made by [Texas Farm Bureau], that being that there was an open ended offer to settle her case for $12,000.00. [Texas Farm Bureau] never revoked the offer to [Davis] until after [Davis] had accepted the offer. . . . [Texas Farm Bureau has] failed to make the offer of settlement good. [Davis] relied on [Texas Farm Bureau's] promise to [Davis's] detriment.

Based on these allegations, Davis asserted claims for breach of contract, promissory estoppel, fraud, and quantum meruit against Texas Farm Bureau.

Texas Farm Bureau moved for traditional summary judgment on Davis's breach-of-contract claim, asserting that Davis's Stowers demand was a rejection of its last $12,000 offer. Texas Farm Bureau argued that, because it offered to settle the dispute for full policy limits, a sum greater than the $12,000 offer, the Stowers demand was a counteroffer. Texas Farm Bureau cited authority for the proposition that a settlement offer does not remain open after a counteroffer has been made. Thus, according to Texas Farm Bureau, Davis could no longer accept the $12,000 offer after she made theStowers demand. It asserted that, without a valid acceptance, no contract had been formed between Texas Farm Bureau and Davis as a matter of law.

Insurance Coverage Litigation: Panel disagrees on duty to defend

General Star Indemnity Co. v. Gulf Coast Marine Ass'n,
No. 14-06--662-CV (Tex. App. - Houston [14th Dist.] Feb. 14, 2008) (Guzman) (insurance law, duty to defend, indemnify, coverage, eight corners rule)

Before Justices Brock Yates, Fowler and Guzman
General Star Indemnity Co. v. Gulf Coast Marine Associates, Inc.
Appeal from 152nd District Court of Harris County (Judge Kenneth Price Wise)

Disposition: Trial Court judgment affirmed

FROM THE OPINION BY JUSTICE EVA GUZMAN:

In this dispute regarding an insurer's duty to indemnify, we must determine whether the insurer, General Star Indemnity Co. ("General Star"), owed its insured, Gulf Coast Marine Associates, Inc. ("Gulf Coast"), a duty to defend in a suit involving a drill moving operation. In three issues, General Star contends the trial court erred in determining that it owed Gulf Coast a duty to defend because the insurance policy clearly and unambiguously excluded the damages alleged in the underlying petition. Because we conclude General Star owed Gulf Coast a duty to defend, we affirm.

* * *

In sum, we must strictly construe the exclusionary clause against General Star and in favor of Gulf Coast. See Hudson Energy Co., Inc., 811 S.W.2d at 555. Furthermore, any doubts regarding the duty to defend must be resolved in favor of Gulf Coast. See King, 85 S.W.3d at 187; Merchs. Fast Motor Lines, Inc., 939 S.W.2d at 141. Resolving any doubts in favor of the duty to defend and strictly construing this exclusionary clause against General Star, we conclude that the facts alleged in Juniper's petition indicate a potential claim for damages to the well stub or net protector, which falls within the coverage of Gulf Coast's policy. See Merchs. Fast Motor Lines, Inc., 939 S.W.2d at 141; Huffhines, 167 S.W.3d at 497. We therefore conclude that General Star owed Gulf Coast a duty to defend, and we overrule General Star's first and second issues

* * *

We hold that the underlying petition alleged facts from which damage to the "well stub" and "net protector" may be logically inferred. Without regard to Gulf Coast's expert affidavit, we therefore determine that General Star had a duty to defend Gulf Coast in the underlying dispute because these items are not clearly excluded from the policy's coverage. Accordingly, we overrule General Star's issues and affirm the judgment of the trial court.

Dissenting Opinion by Justice Brock Yates

D I S S E N T I N G O P I N I O N

I respectfully disagree with the majority's conclusion that General Star owed Gulf Coast a duty to defend.

Specifically, I disagree with the majority's conclusion that the petition in the underlying lawsuit alleges facts within the scope of coverage of the insurance policy.

The majority is correct that in reviewing a petition under an eight‑corners analysis, we resolve any doubt regarding coverage in favor of the insured. See Nat'l Union Fire Ins., Inc. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997). However, this does not mean that we presume coverage in the absence of statements in the petition creating or disavowing coverage. To the contrary, if a pleading does not allege facts that would create coverage under the policy, an insurer is not legally required to defend the suit against its insured. Id. at 141. Stated conversely, when a pleading only alleges facts excluded by the policy, the insurer has no duty to defend. Fid. & Guar. Ins. Underwriters, Inc. v. McManus, 633 S.W.2d 787, 788 (Tex. 1982). We will not read facts into the pleadings or imagine factual scenarios in order to find covered claims. Merchs. Fast Motor Lines, Inc., 939 S.W.2d at 142.

A fair reading of the Juniper petition reveals that no claim is made for any asserted damage to the well stub or net protector. All references to damages in the petition occur in context of damage to the well itself. The facts section repeatedly alleges damage to the well: "the mat of the jackup rig . . . bent the well," Aremedial operations were required, including installation of a caisson on the well," Athe Gulf Coast mover was warned of potential damage to the well," Athe well stub appeared to be leaning plus or minus 5_ to the southwest, which was later confirmed to be the damage to the well described above," and Adamage to Plaintiff's well was already sustained" (emphasis added). The causes of action section twice claims damage to the well - "the PRIDE ARKANSAS striking Plaintiff's well" and "Plaintiff's well required repairs, restoration and remediation" - but makes no mention of the well stub or net protector.

The damages section details restoration expenses that were asserted earlier in the petition in connection with damage to the well. In reviewing the underlying pleadings, the court must focus on the factual allegations that show the origin of the damages rather than the legal theories alleged. Merchs. Fast Motor Lines, Inc., 939 S.W.2d at 141. Because I do not read Juniper's petition as factually alleging a claim for damage to the well stub, I would reverse the trial court's judgment and render judgment in favor of General Star.

/s/ Leslie B. Yates
Justice

Judgment Affirmed and Majority and Dissenting Opinions filed February 14, 2008.
Panel consists of Justices Yates, Fowler, and Guzman (Guzman, J., majority).

Cancer Insurance: Late notice of claim did not defeat coverage

Applying fresh Texas Supreme Court precedent, Houston Court of Appeals holds that late notice did not prejudice insurance company in case where elderly wife did not know husband had cancer insurance and found out years after he had died, and thus did not release insurer from contractual obligation. Automatic premium payments kept going to insurer after insured's death until policy was discovered.

National Family Life Ins. Co. v. Vann No. 01-06-00245-CV (Tex.App.- Houston [1st Dist.] Feb. 7, 2008)(Alcala) (insurance litigation, sicko law, timeliness of notice of claim, prejudice criterion, test) Opinion by Justice Elsa Alcala
Before Chief Justice Radack, Justices Alcala and Bland
Full style of case: National Family Care Life Insurance Company v. Lelia E. Vann
Trial court: 239th District Court of Brazoria County (Judge Patrick Edward Sebesta)
Disposition: Trial court's judgment against insurer affirmed
Attorney for insurance company, Appellant: Anthony Icenogle, Benjamin S. De Leon
Attorney for Plaintiff-Appellee: Thomas Watson

MEMORANDUM OPINION

This is an insurance policy dispute over the timeliness of the notice of the occurrence. Appellant, National Family Care Life Insurance Company (“National”), appeals from the trial court’s final judgment granting appellee, Lella E. Vann, $26,250 plus interest and attorneys fees. In three issues, National challenges the trial court’s finding that the notice of claim was filed within a reasonable time. Vann asserts that the notice was timely, but also contends that National must show that it was prejudiced by the delay in receiving notice before being excused from its contractual obligation. Assuming that National is correct in its three issues that assert the notice was untimely, we conclude that no evidence shows that it was prejudiced by the delay. We affirm.

Background

Leila’s husband, Thomas, purchased a heart attack and cancer supplemental policy from National on March 25, 1988. The policy paid certain amounts for each day of hospitalization for cancer, upon notification and proof of the illness. Thomas did not tell anyone that he had purchased the policy, and National did not send any statements about the policy, so Leila was unaware of its existence.

Leila and Thomas ran a coffee shop at the Brazoria County Courthouse and the commissary of the Brazoria County jail. Thomas alone handled the financial affairs for the businesses until 1995 or 1996, when an employee took over that responsibility. Thomas, and later the employee, wrote checks and paid bills out of the business bank account, which was a bank account that was separate from the Vanns’ personal account. The automatic bank drafts for the insurance policy were taken from the business bank account. Thomas stopped running these businesses when he was hospitalized.

While hospitalized, Thomas was diagnosed with cancer on November 19, 1998. During his hospitalization, Thomas was unable to communicate verbally with his wife due to a tracheotomy and unable to write due the effects of his medication. He remained hospitalized until his death from cancer on April 16, 1999, leaving behind his wife Leila, who was nearly 80 years of age.
After Thomas’s death, the employee at the coffee shop continued to handle the financial responsibilities for the business until the shop was shut down in late 1999. When the coffee shop shut down, the business records were shipped to Leila’s residence at the end of 1999, but she did nothing with them or the bank statements she received for the business. Leila only used a personal bank account.

In late 2001 or early 2002, Leila’s daughters began, for the first time, to help her with Thomas’s estate, over which Leila was the executor. While one of Leila’s daughters was reviewing the bank statements for the shop, the daughter noticed the automatic monthly drafts taken by National, which had continued to be drafted after Thomas’s death. A search for the insurance policy by Leila’s family resulted in its discovery among the business records for the coffee shop. Leila’s family contacted National about the policy in January 2002, which was almost three years after Thomas died. In response to the call, the insurance company immediately ceased the automatic bank withdrawals. Leila’s family filed a claim form in February 2002. The next month, Leila wrote letters to obtain medical records required by the policy. The official claim form was filed on May 15, 2002 and National denied the claim two weeks later. Leila filed this suit alleging “a violation of the terms of the insurance policy.”

Requirement of Prejudice

The Supreme Court of Texas recently held that “an insured’s failure to timely notify its insurer of a claim or suit does not defeat coverage if the insurer was not prejudiced by the delay.” PAJ, Inc. v. Hanover Ins. Co., 51 Tex. Sup. Ct. J. 302, 2008 WL 109071, at *5 ( Tex. Jan. 11, 2008). The supreme court determined “that only a material breach of the timely notice provision will excuse [the insurer’s] performance under the policy.” Id. at *1. “[A]n immaterial breach does not deprive the insurer of the benefit of the bargain and thus cannot relieve the insurer of the contractual coverage obligation.” Id. A breach of the timely notice provision is not material when the insurer suffers no prejudice from the delay. See id.

The type of the insurance policy—whether occurrence or claims-made—is important in determining whether prejudice must be shown to deny a claim due to untimely notice. See id. at *5 (“The dissent, by focusing on the type of coverage rather than the type of policy, entirely disregards this important distinction.”). The supreme court explains that the Fifth Circuit, in applying Texas insurance law, “aptly describes the critical distinction between ‘occurrence’ policies and ‘claims-made’ policies” as follows:

In the case of an “occurrence” policy, any notice requirement is subsidiary to the event that triggers coverage. Courts have not permitted insurance companies to deny coverage on the basis of untimely notice under an “occurrence” policy unless the company shows actual prejudice from the delay. Id. (citing Matador Petroleum Corp. v. St. Paul Surplus Lines Ins. Co., 174 F.3d 653, 658 (5th Cir. 1999)). In deciding whether prejudice must be shown, a court may also examine whether the notice of the claim was an essential part of the bargained-for exchange. See id.

Whether the notice is a covenant or condition, or exclusion or provision, does not resolve the matter of whether prejudice from lack of timely notice is required. Id. at *2 (describing court’s holding in Hernandez by stating, “Without distinguishing between covenants and conditions or classifying the exclusion as one or the other, we concluded that the insured’s breach of the settlement-without-consent provision was immaterial and thus the insurer could not avoid liability under the policy.”).

Thomas’s policy shows that the notice requirements appear under the section that purports to be requirements of the law. The insurance policy specifically stated,
UNIFORM PROVISIONS (Required by Law)
. . . .
Notice of Claim: Written notice of claim must be given to [National] within 30 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the Insured to [National], or to any authorized agent of [National] with information sufficient to identify the Insured, shall be deemed notice to [National] . . . .
. . . .
Proofs of Loss: Written proof of loss must be furnished to [National] within 90 days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.

By requiring notification of the claim upon the occurrence of hospitalization for cancer, this is an occurrence policy. See id. at *5. Because the notice section appears under the section purporting to be matters required by law, nothing in the policy suggests that the notice provision was an essential part of the bargained-for exchange. See id. Although National disputes that it is required to show prejudice, it does not claim that it suffered prejudice from the delayed claim, and the record undisputedly shows that it continued to take automatic premium deductions from Thomas’s bank account until it received notice of the claim.

We hold that the trial court did not err by concluding that Leila was entitled to payment under the policy, even assuming that notice of the claim was late under the policy, because National did not present any evidence of prejudice due to the late notice. Conclusion
We affirm the trial court’s judgment.

Elsa Alcala
Justice
Panel consists of Chief Justice Radack and Justices Alcala and Bland.

Justice v. State Farm Lloyds (Tex.App. - Houston, 2008)

INSURANCE LAW , COVERAGE DISPUTE , MOLD CLAIM

Justice v. State Farm Lloyds Ins. Co. No. 14-06-00248-CV (Tex.App.- Houston [14th Dist.] Jan. 15, 2008)(Edelman) (Insurance coverage dispute, home owner litigation, falling tree mold damage)
Opinion by Justice Edelman
Before Justices Brock Yates, Edelman and Frost
Larry Justice, Beth Justice and Karen Justice v. State Farm Lloyds Insurance Company and FTI/SEA ConsultingAppeal from 127th District Court of Harris County (Judge Sharolyn P. Wood)
Disposition: Affirmed
Concurring Opinion by Justice Frost, 14-06-00248-CV Larry Justice, Beth Justice and Karen Justice v. State Farm Lloyds Insurance Company and FTI/SEA Consulting

MAJORITY OPINION BY JUSTICE EDELMAN (RETIRED, SITTING BY ASSIGNMENT)

In this insurance coverage dispute, Larry Justice, Beth Justice, and Karen Justice (Athe Justices") appeal a take-nothing summary judgment entered in favor of State Farm Lloyds Insurance Company ("State Farm") and FTI/SEA Consulting (AFTI") on the grounds that their summary judgment evidence raised fact issues on their claims against State Farm and FTI. We affirm.

Background

A tree fell on the Justices’ house in 2000, the Justices made a claim under their State Farm homeowner’s insurance policy (the "policy"), and State Farm paid the claim. In 2001, the Justices discovered mold in the walls of their house and reported the claim to State Farm. State Farm sent the Justices a reservation of rights letter, hired FTI to conduct an industrial hygiene evaluation, and paid the Justices over $137,000 for remediation of their home, alternative living expenses, and cleaning costs on this claim. Thereafter, the Justices filed suit against State Farm and FTI for additional mold damage. State Farm and FTI each filed a motion for summary judgment, which the trial court granted.

Standard of Review

A traditional summary judgment may be granted if the motion and summary judgment evidence show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). A no-evidence motion for summary judgment must be granted unless the nonmovant produces summary judgment evidence raising a genuine issue of material fact on each essential element of the claim for which the motion states there is no evidence. Id. 166a(I).

In reviewing a summary judgment, we review the entire record in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any doubts against the motion. Yancy v. United Surgical Partners Int’l, Inc., 236 S.W.3d 778, 782 (Tex. 2007). Where, as here, the trial court does not specify on which grounds the summary judgment is based, the appealing party must show that it is error to base it on any ground asserted in the motion. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1996).

State Farm

Breach of Contract Claim

State Farm moved for summary judgment against the Justices’ claim for breach of contract on the ground, among others, that this claim was barred by the mold exclusion in the policy (the Amold exclusion"). See, e.g., Fiess v. State Farm Lloyds, 202 S.W.3d 744 (Tex. 2006). The Justices contend that the mold exclusion is somehow overcome by a provision of the State Farm Adjuster’s Guide, purportedly stating that if the original claim is covered, such as the damage from a wind blown tree, then any loss that proximately results is therefore covered.[1] However, the Justices’ brief provides no legal authority[2] suggesting that a provision of the Adjusters Guide could be controlling, relevant, or even admissible concerning the meaning or scope of coverage of the policy.[3] Nor does it indicate how such a provision, even if applicable, could overcome an express exclusion in the policy. Therefore, this contention affords no basis for relief, and the Justices’ challenge to the summary judgment against their breach of contract claim is overruled.

Extra-Contractual Claims

State Farm moved for summary judgment against the Justices’ extracontractual claims on the ground, among others, that the absence of policy coverage over a claim (as we concluded in the preceding section) generally precludes liability for common law and statutory bad faith claims. See, e.g., Progressive County Mut. Ins. Co. v. Boyd, 177 S.W.3d 919, 922 (Tex. 2005). Because the Justices’ brief fails to address this ground, we have no basis to conclude that the trial court erred in sustaining it, and the Justices’ challenge to the summary judgment against their extracontractual claims is overruled.

Negligence

The Justices alleged that: (1) State Farm was negligent in failing to identify a part of their house that had been damaged by the tree; and (2) water from subsequent heavy rains entered the house through this damaged area, causing additional mold damage. State Farm moved for summary judgment against this negligence claim on the ground that Texas law does not recognize a cause of action for negligent claim handling. See, e.g., Higganbotham v. State Farm Mut. Auto. Ins. Co., 103 F.2d 456, 460 (5th Cir. 1997). The Justices’ brief asserts that the holding in Higganbotham does not apply to their claim because the adjuster assumed a duty to determine water leaks and the origin of water entry. However, their brief cites no legal authority or evidence supporting the existence of such a duty or explaining how any such negligence would fall outside the scope of claim handling for which Texas recognizes no negligence duty. Accordingly, this contention is without merit, and we overrule the Justices’ first issue, challenging the summary judgment in favor of State Farm.

FTI

FTI was hired by State Farm to perform an industrial hygiene test of the Justices’ house to determine the extent of any mold growth. As relevant to this appeal, the Justices’ sued FTI for negligence in failing to initially detect some of the areas containing mold, causing them to: (1) be without the use of their home and personal items stored there; and (2) incur additional expense.[4] FTI moved for summary judgment on the grounds, among others, that there was no evidence that FTI breached any duty it owed to the Justices or that any breach by FTI proximately caused any of the damages claimed by the Justices.

The Justices’ brief does not address what legal basis establishes that FTI owed a negligence duty to them, and agents of insurance companies generally have no duty to insureds for negligence in investigating claims.[5] In addition, to the extent that FTI was hired by State Farm to identify mold damage that could be covered by the policy, the Justices summary judgment response and brief on appeal do not explain how any negligence by FTI in failing to initially locate the full extent of the mold in their house could have caused them damage if the mold was not covered by the policy in any event, as we have concluded in the preceding section. Because the Justices’ second issue thus affords no basis for relief, it is overruled, and the judgment of the trial court is affirmed.

/s/ Richard H. Edelman
Senior Justice

Judgment rendered and Majority and Concurring Opinions filed January 15, 2008.
Panel consists of Justices Yates, Frost, and Edelman.[6] (Frost, J., concurring).
--------------------------------------------------------------------------------
[1] The Justices do not assert coverage under any "ensuing loss" clause of the policy.
[2] See Tex. R. App. P. 38.1 (h) (requiring appellant’s brief to contain citations to legal authority in support of arguments).
[3] The Justices’ challenges to the summary judgment based on State Farm’s failure to specifically deny coverage and estoppel arising from State Farm’s payments of some of their claims are also unsupported by authority.
[4] Because the Justices do not assign error to the summary judgment against their deceptive trade practice claims against FTI, we do not address those claims.
[5] See Nitzsche v. Teams of Texas, No. 14-07-00876-CV, 2007 WL 925803 at *2 (Tex. App. - Houston [14th Dist.] March 19, 2007, no pet.); Dagley v. Haag Engineering Co., 18 S.W.3d 787, 791 (Tex. App. - Houston [14th Dist. 2000, no pet.); see also Natividad v. Alexsis, Inc., 875 S.W.2d 695, 698 (Tex. 1994).
[6] Senior Justice Richard H. Edelman, sitting by assignment.

Supreme Court reinstates case involving insurance dispute over damage from 2001 Houston flood

Warwick Towers Council of Co-Owners v. Park Warwick LP, No. 07-0384 (Tex. Jan 25, 2008)(per curiam) (insurance law, sufficiency, effectiveness of notice of appeal in insured's name, rather than insurer's)
WARWICK TOWERS COUNCIL OF CO-OWNERS, BY AND THROUGH ST. PAUL FIRE & MARINE INSURANCE COMPANY v. PARK WARWICK, L.P., PARK WARWICK INVESTMENTS, L.L.C., AND PARK HOTEL INVESTMENTS, L.L.C.; from Harris County; 14th district (14-05-00254-CV, 218 S.W.3d 149, 01-11-2007)
Justice Charles Seymore dissented in the court of appeals
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without hearing oral argument, the Texas Supreme Court reverses the Houston court of appeals' judgment and remands the case to that court.

════════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Fourteenth District of Texas
════════════════════════════════════════

PER CURIAM TEX. SUP. CT. OPINION

In this case we decide whether an insurer, asserting rights to subrogation, waived its right to appeal by filing the notice of appeal in its insured’s name. The court of appeals concluded that the insurer could perfect the appeal only in its own name because the underlying judgment denying it subrogation was on grounds that were independent of the insured’s claims. 218 S.W.3d 149, 151. We conclude, however, that the notice of appeal in the insured’s name was a bona fide attempt to invoke the appellate court’s jurisdiction, and, accordingly, we reverse the court of appeals’ judgment and remand the case for consideration of the merits.

The Warwick Hotel is located across the street from the Warwick Towers, a condominium project. The hotel has a flood barrier system at its loading dock entrance to prevent rainwater from entering the building’s basement. The condominium owners assert that the hotel failed to use this system during a severe rain storm in 2001, and, as a result, rainwater invaded the condominium’s basement through an underground tunnel. The condominium owners sued the hotel, asserting claims of negligence, nuisance, and trespass. The condominium’s insurer, St. Paul Fire & Marine Insurance Company, asserted its subrogation rights in the lawsuit, having paid approximately $1 million as the result of water damage.

The hotel filed a motion for partial summary judgment, seeking dismissal of the condominium owner’s nuisance and trespass claims. The hotel also sought dismissal of St. Paul’s subrogation claim, asserting that a subrogation waiver in an easement agreement barred St. Paul’s claim in the case. The trial court agreed with the hotel in all respects, dismissing the nuisance, trespass, and subrogation claims. The condominium owners thereafter settled with the hotel and dismissed their remaining negligence claim with prejudice.

St. Paul thereafter filed a notice of appeal in its insured’s name. The notice did not mention St. Paul by name, but a docketing statement, filed on the same day, identified the Appellant as “Warwick Towers Council of Co-Owners by and through St. Paul Fire & Marine Insurance Company.” All other appellate documents were also styled in this manner. The case was briefed and argued to the court on September 29, 2005.

The court subsequently issued its opinion, concluding the merits of the appeal were immaterial because St. Paul had failed to name itself as the appellant in its notice of appeal. 218 S.W.3d at 151-52. One justice wrote separately that St. Paul was entitled to have its issues addressed on the merits. Id. at 152. (Seymore, J., concurring). St. Paul then filed a motion for rehearing and motion to amend its notice of appeal, but the court denied both motions. St. Paul thereupon filed for review in this Court.

When perfecting the appeal, we have repeatedly said “that the factor which determines whether jurisdiction has been conferred on the appellate court is not the form or substance of the bond, certificate or affidavit, but whether the instrument ‘was filed in a bona fide attempt to invoke appellate court jurisdiction.’” Walker v. Blue Water Garden Apartments, 776 S.W.2d 578, 581 (Tex. 1989) (quoting United Ass'n of Journeymen & Apprentices v. Borden, 328 S.W.2d 739, 741 (Tex. 1959)); see also Linwood v. NCNB Tex., 885 S.W.2d 102, 103 (Tex. 1994) (per curiam) (court of appeals has jurisdiction over appeal if party files instrument in bona fide attempt to invoke appellate court's jurisdiction); Grand Prairie Indep. Sch. Dist. v. S. Parts Imp., Inc., 813 S.W.2d 499, 500 (Tex. 1991) (per curiam) (same); Woods Exploration & Producing Co. v. Arkla Equip. Co., 528 S.W.2d 568, 570 (Tex. 1975) (same). We have further said that, “[i]f the appellant timely files a document in a bona fide attempt to invoke the appellate court’s jurisdiction, the court of appeals, on appellant’s motion, must allow the appellant an opportunity to amend or refile the instrument required by law or our Rules to perfect the appeal.” Grand Prairie Indep. Sch. Dist., 813 S.W.2d at 500. Our consistent policy has been to apply rules of procedure liberally to reach the merits of the appeal whenever possible. See, e.g., Verburgt v. Dorner, 959 S.W.2d 615, 616-17 (Tex. 1997); Jamar v. Patterson, 868 S.W.2d 318, 319 (Tex. 1993) (per curiam); Crown Life Ins. Co. v. Estate of Gonzalez, 820 S.W.2d 121, 121-22 (Tex. 1991) (per curiam). The court of appeals here has failed to follow that policy.

St. Paul made a bona fide attempt to appeal by filing the notice of appeal in the name of its insured, and by listing its interest in the docketing statement and other appellate pleadings. See Foster v. Williams, 74 S.W.3d 200, 203 (Tex. App.—Texarkana, 2002, pet. denied) (holding that filing a docketing statement constituted a bona fide attempt to perfect an appeal). The court of appeals accordingly erred in not allowing St. Paul to amend and in not reaching the merits of St. Paul’s appeal. The court of appeals’ judgment is reversed, and, without hearing oral argument, we remand the case to the court of appeals for further consideration. Tex. R. App. P. 59.1.

Opinion delivered: January 25, 2008

Car Insurance: USAA v. Cook (Tex.App.- Houston, Aug. 16, 2007)

USAA County Mutual Insurance Company vs. Hayden P. Cook, No. (Tex.App.- Houston [1st Dist.] Aug. 16, 2007)(Opinion by Justice Jennings)(insurance case law, auto insurance claim denial, attorney's fees)(Before Justices Taft, Jennings and Alcala)
Appeal from 113th District Court of Harris County
Trial court judge: Hon. Patricia Hancock

OPINION BY JUSTICE TERRY JENNINGS

Appellant, USAA County Mutual Insurance Company ("USAA"), challenges the trial court's judgment entered, after a jury trial, in favor of appellee, Hayden P. Cook, in Cook's suit for breach of contract, breach of the duty of good faith and fair dealing, violation of articles 21.21 and 21.55 of the Texas Insurance Code, (1) and attorney's fees. USAA brings nine issues for our review. It contends that the trial court erred in denying its motion for directed verdict and, alternatively, its motion for judgment notwithstanding the verdict, "based on Mr. Cook's judicial admissions and the terms of the insurance policy" as "the accident was caused by a collision, a coverage not purchased by Mr. Cook"; the evidence is legally and factually insufficient to support the jury's finding that "the accident was the result of vandalism"; the trial court erred in admitting evidence of vandalism; and, because "no coverage was owed and no breach of contract established, all of Mr. Cook's extra-contractual claims and claims for attorney's fees fail as a matter of law." USAA also contends that the evidence is legally and factually insufficient to support the jury's finding that USAA breached its extra-contractual duties to Cook "under the Texas Insurance Code or the common law for breach of the duty of good faith and fair dealing"; the jury's findings that "USAA's failure to comply with the insurance policy and its duty of good faith and fair dealing, respectively, were not excused, are wholly unsupported by the great weight of the evidence"; and the evidence is factually insufficient to support the jury's award of attorney's fees.

We affirm.

Factual and Procedural Background

At trial, Cook testified that after purchasing his 1998 Volkswagon Jetta in June 2004, he called USAA and purchased an insurance policy. The original version of the declarations page of the policy stated that the six-month policy was issued on June 8, 2004. An amended declarations page, dated June 25, 2004, demonstrates that in the interim, Cook dropped several coverages, but reflects that Cook retained coverage under "Part A--Liability" for "Bodily Injury" and "Property Damage" and under "Part D--Damage to Your Auto" for "Other than Coll[ision] Loss." Cook paid $70.55 for a six-month term for "other than collision loss" coverage, with a $200 deductible.

Cook further testified that, while looking for a job in Washington, D.C., he and some friends took a break and he drove them to Atlanta, Georgia, to attend a baseball game. On October 8, 2004, on their way back to Washington, D.C., they stopped for lunch at a restaurant in Fayetteville, North Carolina, and Cook parallel parked his car approximately two feet from the rear of a very large sports utility vehicle ("SUV"). Cook and his friends then went into the restaurant and, about forty-five minutes later, they returned to find that Cook's car had been damaged. The hood was "bent up," there was damage to the grill, and the car had been pushed back fifteen feet, no longer in the parking spot where Cook had originally parked it. When he initially parallel parked his car, Cook put the transmission in park. The large SUV in the space immediately in front of his car faced the same direction, and another car was parked right in front of the SUV. Cook explained that the parking lot layout was extremely confined. On one side of the parked cars, there was a three-inch curb with grass, trees, and bushes. When Cook returned to his car, he found that the transmission to his car remained in park, but the car had still been moved back fifteen feet, roughly a full car length. The impact to the hood of the car showed that it was a "direct head-on collision" and not from the side. Only the front grill and hood of the car were damaged. The SUV previously parked in front of Cook's car was no longer there, but there was still a car in the space in front of where the SUV had been parked. A black mark on the top portion of the bumper of Cook's car indicated that the mark was made from a vehicle with a taller bumper, such as the SUV.

After Cook and his friends took note of the damage, they asked around for witnesses, but no one
saw what caused the damage. The group of friends noticed video surveillance cameras near the restaurant, but learned that the cameras were only decoys. They called the local police department and, at the scene, told an officer what happened and that there were no witnesses to the incident.

After returning to Washington, D.C., Cook read his insurance policy. Part D of the policy states,

A. We will pay for direct and accidental loss to your covered auto, including its equipment less any applicable deduction shown in the Declarations. However, we will pay for loss caused by collision only if the Declarations indicate that Collision Coverage is provided.
B. "Collision" means the upset, or collision with another object of your covered auto. However, loss caused by the following are not considered "collision":
1. Missiles or falling objects;
2. Fire;
3. Theft or larceny;
4. Explosion or earthquake;
5. Windstorm;
6. Hail, water or flood;
7. Malicious mischief or vandalism;
8. Riot or civil commotion;
9. Contact with bird or animal; or
10. Breakage of glass.

If breakage of glass is caused by a collision or if loss is caused by contact with a bird or animal, you may elect to have it considered a loss caused by collision.

The policy does not define the term "vandalism."

Based on his reading of the policy, Cook thought that the damage to his car was caused by "vandalism," and, on October 21, 2004, Cook called USAA to make a claim under the policy. Cook took his car to be inspected by Larry O'Hara, whom USAA had requested, and he estimated that it would cost $2,126.56 to repair the damage. USAA subsequently denied Cook's claim for damages on the ground that the damage to his automobile was not covered by the policy.

Tracy Huggins, a claims adjuster for USAA, testified that USAA denied the claim because "it was a collision loss and unfortunately, there was no collision coverage on the policy for this loss."

Huggins explained that she tried to get all of the information available. In her view, Cook only told her the facts that he wanted her to know. For example, Cook did not tell her whether there were any passengers present in his car. Huggins noted that although most people call in their claim within one or two days of an incident, Cook waited approximately two weeks to report his claim.

Huggins further testified that Cook reported the loss as "vandalism" and that "vandalism is covered under comprehensive coverage." In her conversation with Cook, his "main point was that because the car was moved back 15 feet, it was obviously struck in a willful, intentional way." When Huggins asked Cook what caused the damage to the car, he told her, "I don't know." Huggins put Cook "on notice that [because] he didn't carry collision coverage on the policy, it didn't look like we were going to be able to issue payment for his damage." Cook "understood there was no collision [coverage] but he persisted on having it covered under comprehensive."

At the conclusion of the trial, the jury found that USAA failed to comply with the insurance policy, found that the failure to comply with the policy was not excused, and awarded actual damages to Cook in the amount of $1,926.56. The jury also found that USAA failed to comply with its duty of good faith and fair dealing, found that the failure to comply with the duty of good faith and fair dealing was not excused, and awarded damages of $1,926.56. The jury further found that USAA engaged in unfair and deceptive acts or practices and awarded damages of $1,926.56, but found that USAA did not engage in such conduct knowingly. Finally, the jury awarded reasonable and necessary attorney's fees to Cook in the amount of $23,310 for preparation and trial, $15,000 for an appeal to the Texas Courts of Appeals, and $15,000 for an appeal to the Texas Supreme Court. The trial court entered judgment awarding Cook $1,926.56 plus pre-judgment and post-judgment interest, and the attorney's fees.

Legal and Factual Sufficiency

In its first issue, USAA argues that the trial court erred in denying its motion for directed verdict and, alternatively, its motion for judgment notwithstanding the verdict, "based on Mr. Cook's judicial admissions and the terms of the insurance policy because the accident was caused by a collision, a coverage not purchased by Mr. Cook." In its third and fourth issues, USAA argues that the evidence is legally and factually insufficient to support the jury's finding that the damage to Cook's car was caused by vandalism and that USAA breached its policy because at most, "Cook offered evidence that his car was damaged and pushed back fifteen feet." In its eighth issue, USAA argues that the jury's finding that USAA was not excused from complying with the policy "based on Mr. Cook's conduct" is against the great weight and preponderance of the evidence.

Standard of Review

We will sustain a legal sufficiency or "no-evidence" challenge if the record shows one of the following: (1) a complete absence of evidence of a vital fact, (2) rules of law or evidence bar the court 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 scintilla, or (4) the evidence conclusively establishes the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). In conducting a legal sufficiency review of the evidence, a court must consider evidence in the light most favorable to the verdict and indulge every reasonable inference that would support it. Id. at 822. If the evidence allows only one inference, neither jurors nor the reviewing court may disregard it. Id. However, if the evidence at trial would enable reasonable and fair-minded people to differ in their conclusions, then jurors must be allowed to do so. Id. A reviewing court cannot substitute its judgment for that of the trier-of-fact, so long as the evidence falls within this zone of reasonable disagreement. Id.

Our review of the factual sufficiency of the evidence requires us to consider, weigh, and examine all of the evidence that supports or contradicts the jury's determination. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We may set aside the verdict only if the evidence that supports the jury's finding is so contrary to the overwhelming weight of the evidence as to be clearly wrong or unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

Terms of the Policy

In its first issue, USAA contends that this case should have been "resolved on the policy coverages Mr. Cook, himself chose to purchase," asserting that in his answers to requests for admission, and at trial, Cook admitted that the damage was the result of a "collision" and that the policy issued by USAA did not provide collision coverage.

As noted above, the amended declarations page of the policy provides that Cook purchased coverage under "Part A--Liability" for "Bodily Injury" and "Property Damage." Cook also purchased coverage under "Part D--Damage to Your Auto" for "Other than Coll[ision] Loss," which contained a $200 deductible. Although the policy provides that USAA "will pay for direct and accidental loss to your covered auto, including its equipment less any applicable deduction shown in the Declarations," the policy does not further describe or define what constitutes an "other than collision loss."

In its briefing, USAA asserts that Cook could "treat the loss as either a collision or non-collision loss" only "if the loss resulted from damages caused by a bird or animal" and that the policy "did not permit an insured to treat vandalism as either vandalism or collision." USAA argues that "the policy, as a matter of law, quite simply said that vandalism was not a covered collision loss" and, if interpreted otherwise, "coverage would equally be owed for collisions involving missiles, falling objects, explosion, flood, or riot." USAA further argues that such an "interpretation of the insurance policy is patently absurd." In other words, the ten listed items, including vandalism, "were exclusions to collision coverage not grants of coverage." However, at oral argument, USAA abandoned this argument and conceded that a loss caused by vandalism would in fact be covered under Cook's policy. USAA also agreed that one could use a car to intentionally collide with another car to cause damage, resulting in an act of vandalism.

Cook did testify that he believed that the damage to his car was the result of a large SUV "colliding" with the front-end of his car. However, our examination of the insurance policy in question does not reveal that the terms "collision" and "vandalism" are mutually exclusive. It is undisputed that Cook did not purchase "collision" coverage, which the policy defines as "the upset, or collision with another object of your covered auto." However, the policy specifically provides that loss caused by "malicious mischief or vandalism" is not considered a "collision."
In its charge, the trial court instructed the jury that "vandalism" means "the willful or malicious destruction of public or private property" and that "malice" means "the intent, with or without cause, or reason, to commit an unlawful act that will result in injury to another or others." "Vandalism" is commonly defined as an "action involving deliberate destruction of or damage to
public or private property." The New Oxford American Dictionary 1868 (1st ed. 2001).

"Collision" is defined as "an instance of one moving object or person striking violently against another." Id. at 336. In most instances, acts of vandalism involve causing an object, be it a baseball bat or a car, to collide with another object to deliberately cause damage. Thus, the real issue here is whether the damage to Cook's car was caused by a deliberate as opposed to a negligent act.

As discussed more fully below, Cook presented evidence that the damage caused to his car was the result of a willful or malicious act, not a negligent act. Accordingly, we hold that Cook's "judicial admissions and the terms of the insurance policy" do not establish, as a matter of law, that the damage to Cook's car resulted from a non-covered "collision" and not from "vandalism."

We overrule USAA's first issue.

Result of "Vandalism"

In its third and fourth issues, in support of its argument that the evidence is legally and factually insufficient to support the jury's finding that the damage to Cook's car was the result of vandalism, USAA asserts that Cook "could not confirm that the SUV he originally saw caused the collision, or that the car originally parked in front of the SUV was the same" and that the "police reported it as a hit and run." It also asserts that Cook's "evidence consisted o[f] his lone surmise, and a remarkably unreasonable surmise, that a person in a large, and presumably expensive, SUV, would intentionally ram his vehicle into [Cook's] Jetta for fun or sport." USAA also argues that because the "competing inferences" of a negligent hit-and-run and an act of intentional vandalism are "equal inferences," the jury's finding that USAA failed to comply with the insurance policy cannot survive a sufficiency challenge.

USAA directs our attention to Rich v. United Mutual Fire Insurance Company as persuasive authority. See 102 N.E.2d 431 (Mass. 1951). In Rich, evidence was presented that the insured parked his automobile in front of his house with the automobile headed downgrade, its left front wheel turned up against the curb, and the emergency break activated. Id. at 432.

Approximately two and one-half hours later, the insured heard a door slam and was told by a young boy that the automobile was at the bottom of the hill smashed against a tree. Id. The automobile was found in a damaged condition down the hill with the brake activated, against a tree, approximately three-hundred feet from where it had been parked. Id. The insured's policy provided that the insurer agreed to pay for loss of or damage to the automobile "except loss caused by collision of the automobile with another object." Id. The policy also provided that "loss caused by . . . theft . . . [or] vandalism . . . shall not be deemed loss caused by collision." Id.

After stating that the terms "theft" and "vandalism" were to be given the meaning attributed to them in common use, the court opined that vandalism, as used in the policy in question, referred to "such wanton and malicious acts as are intended to damage or destroy the property insured." Id. The court held that the evidence would not warrant a finding by the jury that the insured's automobile collided with the tree by reason of either theft or vandalism. Id. The court reasoned that "[i]t could be found that the automobile had been caused to move from its position by reason of human intervention," but "there was no greater probability that the force which caused the automobile to move was applied intentionally by a thief of [sic] vandal than, for example, by some negligent act of the operator of another automobile or the act of a child in play." Id. Thus, the cause of the damage to the automobile would be a "matter of speculation, conjecture, and surmise." Id.

Here, although there were no eyewitnesses to the incident in question, Cook presented evidence that upon entering the restaurant, he left the transmission in park; a large SUV was parallel parked approximately two feet in front of Cook's car, with the SUV's rear bumper facing Cook's front bumper; another car was parallel parked immediately in front of the SUV; and the parking lot was very confined. After returning to his car approximately forty-five minutes later, Cook observed that his car was moved fifteen feet from where he initially parked the car; the transmission was still in park; the front grill and hood of Cook's car were damaged, a black mark was above Cook's front bumper, a piece of plastic debris from Cook's car was on the ground; and the damage to Cook's car appeared to have resulted from a "head-on" impact. Also, Larry O'Hara, the USAA appraiser, told Cook that he did not feel that the damage to Cook's car was "accidental."

In the instant case, in contrast to Rich, the jury could have reasonably concluded that, based on the dimensions of the parking lot, the driver of the SUV parallel parked immediately in front of Cook's car willfully or maliciously caused the damage to Cook's car by ramming the SUV into the car. Given the fact that Cook's car, with the parking brake activated, was physically moved approximately fifteen feet, no other conclusion appears reasonable. This evidence does not reveal "a single vehicular collision" that was the result of negligence, as USAA contends, but rather a deliberate act akin to road rage. As such, the occurrence of mere negligence or accident cannot be equally inferred. Accordingly, we hold that the evidence is legally and factually sufficient to support the jury's implied finding that the damage to Cook's car was the result of vandalism and its express finding that USAA failed to comply with the insurance policy.
We overrule USAA's third and fourth issues.

Excuse from Performance

In its eighth issue, USAA asserts that, under the policy, Cook owed a duty to cooperate with USAA by promptly notifying USAA of how the incident occurred and the names and addresses of any witnesses. USAA contends that Cook breached this duty to cooperate by (1) concealing or otherwise making false representations "to USAA in reporting his claim by never once mentioning the accident was the result of a collision" and (2) not identifying "any of the men with him as potential witnesses until his deposition was taken in this litigation, long after his [claim] was denied."

When a party attacks the factual sufficiency of an adverse finding on an issue on which it has the burden of proof, it must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).

It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance. Mustang Pipeline Co., Inc. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 196 (Tex. 2004). However, an insured's actions will not operate to discharge the insurer's obligations under the policy unless the insurer is actually prejudiced or deprived of a valid defense by the actions of the insured. See McGuire v. Commercial Union Ins. Co. of New York, 431 S.W.2d 347, 353 (Tex. 1968).

Here, in a conclusory sentence, USAA alleges that it "was prejudiced by Mr. Cook's breach." However, there is no evidence in the record and USAA provides no guidance to this Court as to how it detrimentally relied on any alleged misrepresentations made by Cook. In fact, this Court has held that there is legally and factually sufficient evidence to support the jury's implied finding of "vandalism." Accordingly, we hold that the jury's finding that USAA was not excused based on Cook's conduct is not against the great weight and preponderance of the evidence.
We overrule USAA's eighth issue.

Erroneous Admission of Evidence

In its second issue, USAA argues that, "based on Mr. Cook's judicial admissions," the trial court erred in admitting evidence of vandalism. In response, Cook asserts that "evidence of vandalism came in at trial without objection."

Requests for admissions are governed by rule 198 of the Texas Rules of Civil Procedure. See Tex. R. Civ. P. 198. In a pending action, a "matter admitted under this rule is conclusively established as to the party making the admission unless the court permits the party to withdraw or amend the admission." Tex. R. Civ. P. 198.3. An admission once admitted, deemed or otherwise, is a judicial admission, and a party may not then introduce testimony to controvert it. Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989). However, a party relying upon an opponent's pleadings as judicial admissions of fact must protect the record by objecting to the introduction of controverting evidence and to the submission of any issue bearing on the facts admitted. Id.; Houston First Am. Sav. v. Musick, 650 S.W.2d 764, 769 (Tex. 1983). A party waives the right to rely upon an opponent's admissions unless objection is made to the introduction of evidence contrary to those admissions. Marshall, 767 S.W.2d at 700.
Here, USAA did not object to Cook's repeated testimony that the damage to his car was the result of an act of "vandalism." Thus, USAA has waived its right to rely upon any admissions which were controverted by testimony admitted at trial without objection. See id.; Musick, 650 S.W.2d at 768-69.

We overrule USAA's second issue.

Attorney's Fees

In its ninth issue, USAA argues that the jury's award of trial and appellate attorney's fees in the amount of $23,310 and $30,000, (2) respectively, is excessive because there is factually insufficient evidence that such fees were reasonable or necessary.

Factors that a factfinder should consider when determining the reasonableness of a fee include: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly; (2) the likelihood that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered. Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997) (citing Tex. Disciplinary R. Prof'l Conduct 1.04). Attorney's fees must bear some reasonable relationship to the amount in controversy. Cordova v. Sw. Bell Yellow Pages, Inc., 148 S.W.3d 441, 448 (Tex. App.--El Paso 2004, no pet.). But, the amount of damages awarded is only one factor in determining the reasonableness of a fee award. Id.

At trial, in regard to attorney's fees, Tom Cook ("the senior Cook"), Hayden Cook's attorney and father, testified that he moved to Houston in 1974 after graduating from law school at the University of Texas and is licensed to practice law in all state and federal courts in Texas. At the time of trial, he was retired, but formerly was a partner at the law firm of Bracewell & Giuliani, where he practiced civil litigation for twenty-nine years. The senior Cook's time log reflected that he spent 127.4 hours working on the case prior to trial. He estimated, based on a three-day trial and the time associated with post-trial motions and hearings through the entry of final judgment, twenty-eight hours for trial, but instructed the jury that he now felt the trial would only take two days to complete, and therefore the jury should subtract eight hours from the original twenty-eight hour estimate. The senior Cook testified that for a case of this size, a reasonable rate was $150 per hour, as opposed to the $400 per hour rate he charged at his former law firm. In addition, he estimated the reasonable and necessary attorney's fees for him to handle an appeal to the Texas Courts of Appeals at $15,000, and another $15,000 should the case be appealed to the Texas Supreme Court. He also spent one hour, not reflected in his time log, comparing Cook's policy to the language quoted by Tracy Huggins in her letter denying coverage. The senior Cook further testified that "[m]ost of the time was spent responding to motions that [USAA] filed with this Judge and [he] had to answer all those various motions for summary judgment that were all denied."

Here, Cook's attorney testified that he calculated his fees based upon a rate of $150 per hour. Additionally, much of his time was spent preparing and responding to requests for admissions and interrogatories, two depositions, USAA's motions for summary judgment, directed verdict, judgment notwithstanding the verdict, and new trial. Although USAA argues that the aggregate amount of attorney's fees sought is excessive, it presented no evidence that a rate of $150 per hour for a Houston trial attorney is unreasonable. Mindful that the case involved approximately a $2,000 claim under the policy and the amount awarded for attorney's fees greatly exceeds the amount of actual damages, we cannot say, given the amount of time invested in the case by Cook's attorney, that the attorney's fees awarded are excessive or unreasonable. Accordingly, we hold that the evidence is factually sufficient to support the jury's award of trial and appellate attorney's fees.

We overrule USAA's ninth issue.

Extra-Contractual Claims

In its fifth, sixth, and seventh issues, USAA argues that because no coverage was owed to Cook, all of his "extra-contractual claims and claims for attorney's fees fail as a matter of law" and that the evidence is legally and factually insufficient to support the jury's finding "that USAA breached extra-contractual duties to Mr. Cook under the Texas Insurance Code or the common law for the breach of the duty of good faith and fair dealing." However, the jury did not award Cook any damages above and beyond his actual damages of $1,926.56 for USAA's denial of his insurance claim. Having held that the evidence is legally and factually sufficient to support the jury's finding that USAA failed to comply with the insurance policy, factually sufficient to support the jury's finding that USAA's failure to comply was not excused, and factually sufficient to support its award of attorney's fees, we need not reach USAA's fifth, sixth, and seventh issues.

Conclusion

We affirm the judgment of the trial court.

Terry Jennings
Justice

Panel consists of Justices Taft, Jennings, and Alcala.

1. See Tex. Ins. Code Ann. arts. 21.21, 21.55, repealed by Act of May 22, 2003, 78th Leg., R.S., ch. 1274, § 26(a)(1), 2003 Tex. Gen. Laws 3611, 4138 (current version at Tex. Ins. Code Ann. §§ 541.001 et seq., 542.001 et seq. (Vernon Supp. 2006)).

2. The jury awarded $15,000 contingent on an appeal to the Texas Courts of Appeals, and another $15,000 contingent on an appeal to the Texas Supreme Court.

Justices Frost and Edelman Part Ways on Standing Issue

Panel divided on nonparty law firm's standing to pursue breach of settlement and attorney's fee claim

Yasuda Fire and Marine Insurance Company of America v. Criaco (Tex.App.- Houston [14th Dist.] Jun. 7, 2007)(Frost)(standing))(auto-PI, UIM coverage, workers comp, standing, attorneys fees)
Dissenting Opinion by Justice Edelman Yasuda Fire and Marine Ins. Co. of America v. Criaco (Standing)

In this appeal stemming from the settlement of claims arising from a car wreck involving a plaintiff injured in the course and scope of his employment, the panel split on the issue on whether the law firm that handled the insurance claims had standing to pursue attorneys fees for recovery of the workers compensation lien. Justice Richard Edelman forcefully argues that the law firm, which was neither a party, nor a beneficiary of the settlement agreement that was allegedly breached, was jurisdictionally barred from pursuing its claim for lack of standing, and that the trial court's judgment should be vacated for want of subject matter jurisdiction. The panel's majority, however, in an opinion written by Justice Frost, finds in favor of jurisdiction, reverses the trial court's judgment, and renders a take-nothing judgment on the merits.

Disposition: Reversed and Rendered
Majority Opinion by Justice Frost
Dissenting Opinion by Justice Edelman
Panel members: Justices Anderson, Edelman and Frost
Appellate cause no: 14-05-00851-CV
Style: Yasuda Fire and Marine Insurance Company of America, Sompo Japan Insurance Co. of America v. Miller Criaco D/B/A Criaco & Corteguera
Trial court: 405th District Court of Galveston County (Judge Wayne J. Mallia)

Legal lingo: standing, attorneys fees, PI-Auto, UIM coverage, insurance, workers compensation, enforceability of Rule 11 agreement, absence of express merger clause, breach of settlement agreement and release