Cruz v. Andrews Restoration, Inc.

364 S.W.3d 817, 55 Tex. Sup. Ct. J. 608, 2012 WL 1370851, 2012 Tex. LEXIS 341
CourtTexas Supreme Court
DecidedApril 20, 2012
DocketNo. 10-0995
StatusPublished
Cited by146 cases

This text of 364 S.W.3d 817 (Cruz v. Andrews Restoration, Inc.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cruz v. Andrews Restoration, Inc., 364 S.W.3d 817, 55 Tex. Sup. Ct. J. 608, 2012 WL 1370851, 2012 Tex. LEXIS 341 (Tex. 2012).

Opinion

Chief Justice JEFFERSON

delivered the opinion of the Court.

A series of storms caused extensive damage to a Dallas home. This led to meetings, inspections, evaluations, negotiations, and, ultimately, litigation between the homeowner, its insurer, and the company hired to restore the home. A jury found in the restoration company’s favor, and the trial court rendered judgment against the homeowner and its insurer, jointly and severally. The court of appeals affirmed in part and reversed in part. Because we disagree with part of the court of appeals’ analysis, we affirm in part and reverse and remand in part the court of appeals’ judgment.

I. Background

This case has a lengthy factual and procedural history, much of which is irrelevant to the three questions before us today. One question presents a challenge to the legal sufficiency of the evidence supporting a jury finding in Andrews Restoration, Inc. d/b/a Protech Services’ favor.1 We review the evidence in the light most favorable to the verdict, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex.2005). We summarize the facts in that light.

A. The facts

Dr. Erwin Cruz insured his Dallas home through Chubb Lloyd’s Insurance Company of Texas. There were several structures on the property: the home, a cabana, and two garages, one of which had been converted to a wine cellar. After a March 2001 storm, Cruz discovered that multiple roof leaks caused significant water damage throughout the house. Cruz contacted Rudy Martinez, Protech’s president, who inspected the home. Cruz signed Pro-tech’s work authorization and assignment of insurance benefits, and Protech arranged for mold testing through Afram International. Afram’s tests revealed dangerously high levels of mold. Cruz’s wife and infant daughter became ill, and, in April, their physician advised that if they did not move out of the house immediately, they could suffer severe medical consequences. The family moved into an apartment the next month.

Protech extracted standing water and removed, cleaned, and stored most of the home’s contents. Chubb authorized Pro-tech to perform these services and verbally agreed to pay for them. William Marx, Chubb’s adjuster, visited the Cruz home in May and met with Cruz, Adam Hardison (Cruz’s attorney), and Martinez. Marx advised that Chubb would conclude its investigation and make a decision on Cruz’s claim within thirty days.

When no decision had been reached by July, Hardison wrote Marx, urging Chubb [820]*820to decide how to proceed with the claim. The letter noted that Hardison had called Marx several times asking when Chubb might complete its investigation, and that “[ejach time, [Marx] advised that [he was] waiting to hear back from [his] engineers.” The letter mentioned the “extreme financial burden” Cruz faced while awaiting Chubb’s decision and asked for a prompt resolution. In August, Chubb agreed that Cruz’s claims were covered under the policy, but left the damage claim unsettled.

Later that year, with no decision from Chubb, Cruz’s representatives (including Protech) advised Chubb that remediating the mold and restoring the home would likely be more expensive than demolishing and rebuilding. Hardison told Chubb that Cruz would prefer demolition to restoration. His letter noted that the claim had been ongoing since March, and that “[t]he time has come to reach a decision on how to proceed.” But the claim remained open. Cruz formally demanded policy limits in January 2002.

At the end of January, Chubb responded:

Please be advised that the [policy limits] demand is neither accepted nor rejected at this time. Although the investigation of the claim as of this date has identified water and ensuing mold damage in some areas, there is no evidence the building, other structure(s), and or contents are a “total loss” and thus require consideration of payment of the respective policy limits. Further investigation, evaluation, and adjustment activities are required to support a claim under the terms and conditions of the policy of insurance.
In order to move forward with the adjustment of the claim, I propose that we hire a contractor to evaluate and estimate the reconstruction cost of the projected damages resulting from remediation activities to the residence and other structure(s). These estimates could then be used to support the building claim in the adjustment process.

Around the same time, Marx and Hardi-son met to discuss the claim.2 Chubb wanted to perform further testing, and it hired David Gregg, a construction expert, to estimate remediation and restoration costs. Chubb agreed it would complete its evaluation by the end of February 2002, but it failed to do so. Hardison testified that even though Chubb decided in January to do additional testing, it took eleven months to complete those tests.

Meanwhile, in April, Gregg recommended first controlling the home’s humidity levels — the same recommendation Af-ram made based on tests it conducted earlier that year. Protech provided a de-humidification cost estimate, which Marx believed was high, but Chubb did not obtain any other estimates. Protech’s expert testified that Protech’s charges were in line with industry standards. Hardison urged Marx to make a decision and emphasized that any additional testing would merely “reconfirm what had been confirmed almost six months earlier.”

In early June, Cruz authorized Protech to begin dehumidification. Later that month, Martinez, Hardison, and Marx met, and Marx promised Protech that Chubb would pay for Protech’s services. According to Hardison, Chubb decided to have Protech dehumidify the home so that Chubb would have two options available: either remediate or declare the residence a total loss. Cruz and Hardison were disappointed with Chubb’s decision to control [821]*821the humidity, because the cost of remediation could exceed Cruz’s policy limits.

Dehumidification worked, at least initially. By December, the mold levels had been substantially reduced. Because the roof was never repaired, however, water still entered the house when it rained, requiring additional dehumidification. Chubb paid only a portion of Protech’s invoices. Martinez retained a lawyer, who sent a March 3, 2003 letter to Marx demanding payment. In response, Chubb paid Proteeh $250,000. This was the last payment Chubb made to Proteeh. In June 2003, with Cruz’s claim still unresolved, Hardison instructed Proteeh to stop dehumidifying the home and to remove its equipment. Protech’s outstanding invoices totalled $705,548.02.

The reason for the delay in resolving the claim is unclear. There was evidence that Marx was preoccupied with other claims. There was also evidence that Chubb continually sought additional testing and then postponed its performance. Although Marx testified that he authorized a roof repair, Cruz’s attorney testified that the offer was never communicated to him, and the roof was never repaired. Chubb ultimately tendered policy limits in November 2003. The home was demolished two years later.

B. The lawsuit

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Bluebook (online)
364 S.W.3d 817, 55 Tex. Sup. Ct. J. 608, 2012 WL 1370851, 2012 Tex. LEXIS 341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cruz-v-andrews-restoration-inc-tex-2012.