COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
NO. 02-11-00437-CV
Fire Insurance Exchange § From the 17th District Court
§ of Tarrant County (17-224686-07) v. § January 31, 2013
Judy Kennedy § 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 COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH
FIRE INSURANCE EXCHANGE APPELLANT
V.
JUDY KENNEDY APPELLEE
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FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY
MEMORANDUM OPINION1
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.
1 See Tex. R. App. P. 47.4.
2 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
3 her breach of the duty of fair dealing claim. The jury also made attorneys’ fees
findings for Judy.2 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.
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.3 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.
2 A copy of the jury’s verdict is attached hereto as Appendix A. 3 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).
4 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.4
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.”);
4 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.
5 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.
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. See
6 Columbia 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. Travelers
7 Indemnity 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
8 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
9 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 $14,477.30.5 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 $3,000.6 Judy explained that her FIE adjuster came to her home
5 Judy forwarded this estimate to FIE and it was in FIE’s claims file. 6 Judy forwarded this estimate to FIE and it was in FIE’s claims file.
10 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.
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
11 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,
12 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.7
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
7 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.
13 (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,
14 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.
15 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.
DELIVERED: January 31, 2013
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