Farmers Texas County Mutual Insurance Co. v. Floyd Barr

Court of Appeals of Texas·Decided May 23, 2024·No. 09-22-00321-CV·Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

NO. 09-22-00321-CV

FARMERS TEXAS COUNTY MUTUAL INSURANCE CO., Appellant

V.

FLOYD BARR, Appellee

On Appeal from the 284th District Court Montgomery County, Texas

Trial Cause No. 20-06-07141-CV

MEMORANDUM OPINION

In Bocquet v. Herring, the Supreme Court of Texas held that the Declaratory Judgements Act provided the statutory authorization required to support an award of attorney’s fees to the plaintiffs who had prevailed in a declaratory judgment action against the insurance company that covered their vehicle and that denied their claim seeking

damages under the underinsured motorist (UIM) coverage of their policy. 1 Under the Declaratory Judgments Act (UDJA), a trial court’s award of attorney fees is committed to the trial court’s sound discretion, subject to the requirements that the fees that are awarded are reasonable, necessary, equitable and just. 2 Farmers Texas County Mutual Insurance Company (Farmers)

appeals from a judgment in which the trial court awarded Floyd Barr, among other things, $50,000 in attorney’s fees for the services of Barr’s attorney through the trial. Farmers raises one issue in the appeal and complains that “the trial court erred by not applying concepts of fairness given all the circumstances when it awarded attorney’s fees in this UIM case [because it awarded fees] that are not equitable and just.” For the reasons more fully explained below, we are not persuaded that Farmers has shown the trial court’s award constitutes an abuse of discretion based on its argument that the award is not equitable and just.

1Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Tex. Civ. Prac.

& Rem. Code Ann. § 37.009.

2Tex. Civ. Prac. & Rem. Code Ann. § 37.009.

Background

After Barr settled the personal injury claim he had against Pope for $30,000 with the insurance company that insured Pope’s vehicle, Farmers paid Barr $10,000 under the Personal Injury Protection (PIP) coverage of Barr’s auto policy with Farmers. 3 Claiming that he had suffered more than $40,000 in damages in the collision with Pope, Barr filed an underinsured motorist claim under his auto policy with Farmers. Farmers and Barr were subsequently unable to resolve the UIM claim for the gap that Barr alleged existed between the damages Pope caused in the wreck and the $40,000 that Barr had received in total insurance benefits after the wreck—$30,000 paid by the liability insurance carrier for Pope and $10,000 paid by Farmers under the PIP provisions of Barr’s policy.

In June 2020, Barr sued Farmers on a direct-action UIM claim. In the trial court and here, the parties do not dispute that Barr is covered by the policy that Farmers issued to Barr and that the policy includes UIM coverage. Nor is there any dispute that Farmers was entitled to a

3No one disputes that Farmers gave Barr permission to settle his claims against Pope.

credit of $40,000 against any UIM recovery that Barr might ultimately obtain in his direct-action UIM claim against Farmers. In Barr’s direct- action lawsuit against Farmers, Barr sought a determination under the UDJA of his damages from his wreck with Pope, a declaration that the damages fell within the coverage afforded him under his auto policy, and attorney’s fees.

In July 2020, Farmers answered and after that, the parties engaged in discovery for over a year. On December 7, 2021, Farmers offered to settle with Barr for $100,000. The written offer of settlement isn’t in the record, but we assume Farmers offered to settle Barr’s entire UIM claim in return for a full release. Barr rejected Farmers’ offer the day the offer was made. That said, no evidence in the record reveals whether a portion of Farmers’ offer included some amount to account for Farmers’ exposure to the award of attorney’s fees that Farmers had to Barr on Barr’s direct- action UIM claim under the UDJA, since even if attorney’s fees are not part of the damages that Barr could have recovered in a lawsuit against Pope, under the UDJA trial courts are authorized to award attorney’s

fees on claims on which attorney’s fees may be recovered under the UDJA. 4 Barr filed claims against Farmers based on the underinsured motorist portion of his auto policy, claims arising from the rear-end automobile collision that he had with Pope on October 12, 2018. With Farmers’ permission, Barr and Pope’s insurance carrier settled the claims Barr had against Pope for $30,000. Shortly after that, Barr then sued Farmers and sought to recover on his claim under the UIM coverage of his auto policy with Farmers.

In his petition, Barr sought declaratory relief under Chapter 37 of the Texas Civil Practice and Remedies Code. 5 In seeking declaratory relief, Barr asked for findings declaring that: (1) Curtis Pope’s negligence proximately caused the wreck; (2) Pope was underinsured; and (3) Barr was entitled to recover damages from Farmers that resulted from the

4See Allstate v. Irwin, 627 S.W.3d 263, 269-272 (Tex. 2021) (in a

case involving a direct-action UIM claim brought under the UDJA (Civil Practice and Remedies Code Chapter 37), explaining that the UDJA provides the statutory authorization required to award attorney’s fees and holding that the trial court did not abuse its discretion by awarding attorney’s fees).

5Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-.011 (the Uniform

Declaratory Judgments Act).

collision that fell within the coverage afforded under his policy, “specifying the amount of damages, interest and court costs that Defendant FARMERS is obligated to pay.” In addition, Barr’s petition alleges that he was seeking to recover attorney’s fees “as authorized by Chapter 37 of the Texas Civil Practice and Remedies Code[.]” 6 The UIM coverage under Barr’s policy with Farmers shows Barr’s UIM coverage was limited to a maximum amount per occurrence of $500,000.

The parties agreed to bifurcate Barr’s case into two phases, the first of which was to be conducted before a jury so the jury could determine whether Pope was negligent and if so, the amounts Barr was entitled to recover in damages against Pope for the personal injuries and property damages that the accident with Pope caused. The jury phase of the bifurcated proceeding lasted three days. When that phase of the trial concluded, the jury found: (1) that Pope was negligent and that his negligence proximately caused the occurrence; and (2) that Barr suffered various damages which, when added together, totaled $115,000. As Farmers sees it, after accounting for the $30,000 settlement credit from

6See id. § 37.009 (“In any proceeding under this chapter, the court

may award costs and reasonable and necessary attorney’s fees as are equitable and just.”).

Barr’s settlement with Pope and for the $10,000 paid under Barr’s Farmers policy’s coverage for PIP, “the jury verdict resulted in only $75,000 in UIM benefits (aka ‘new money’).”

The trial of Barr’s UDJA claim for attorney’s fees occurred on July 28, 2022, and took one day. Two witnesses testified in the trial: (1) Patrick Scott, the attorney who represented Barr; and (2) Greg Wilkins, an attorney who testified as an expert on attorney’s fees for Farmers. Scott testified that he graduated from law school in 2010 and is licensed to practice law in three states, including Texas. Scott explained that since graduating from law school, he has primarily handled personal injury cases, and he said he began handling personal injury cases in 2011 when he went to work for a firm that did personal injury work. Scott testified that currently, ninety-nine percent of his firm’s cases are personal injury cases or cases involving first-party insurance disputes.

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Farmers Texas County Mutual Insurance Co. v. Floyd Barr, (Tex. Ct. App. 2024).

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