in Re Brundage Bone Concrete Pumping, Inc.

• Court: Court of Appeals of Texas
• Decided: May 11, 2005
• Docket: 10-05-00211-CV
• Status: Published

Opinion

IN THE

TENTH COURT OF APPEALS

No. 10-05-00211-CV

In re Brundage Bone

Concrete Pumping, Inc.

Original Proceeding

MEMORANDUM  Opinion

      Relator’s petition for writ of mandamus is denied.

TOM GRAY

Chief Justice

Before Chief Justice Gray,

      Justice Vance, and

      Justice Reyna

Petition denied

Memorandum opinion delivered and filed May 11, 2005

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26,286.08

Total Damages

119,988.58

Less: Settlement Credit

(100,000.00)

Less: Credit for PIP benefits paid

N/A

Judgment: Lesser of $20,000 (Collier’s UIM limits) or Total Damages less Credits

$19,988.58

Post-Collier Cases

      In 2000, the Texas Supreme Court addressed the issue of prejudgment interest in the context of UIM coverage in Henson v. Southern Farm Bureau, 17 S.W.3d 652 (Tex. 2000). The Supreme Court held that no contractual obligation to pay under the UIM provisions arose until the jury established the tortfeasor’s liability, i.e., that an insurer cannot breach its duty to pay prior to a jury verdict establishing the tortfeasor’s liability. Id. at 654. However, we do not believe that Henson bars all prejudgment interest, because the Court also said, “And the insurers do not dispute that had the trial court awarded prejudgment interest against the tort defendants, the insurers would be obligated to pay the entire judgment including that portion awarded for prejudgment interest, to the extent of policy limits.” Id. at 653.

      As the Eastland Court of Appeals aptly noted, there are two distinct types of prejudgment interest that may be involved in a UIM case: Cavnar-type and Henson-type. Menix v. Allstate Indem. Co., 83 S.W.3d 877, 879–80 (Tex. App.—Eastland 2002, pet. denied). Menix, the injured plaintiff, sued the underinsured tortfeasor and Allstate, Menix’s UIM insurer. Id. at 879. After settling with the tortfeasor for policy limits of $20,000, she continued her suit against Allstate to recover UIM benefits. Id. Menix’s UIM policy limit was also $20,000. Id. Prior to trial, the parties stipulated: (1) the tortfeasor was the sole proximate cause of the accident; (2) the tortfeasor had paid Menix $20,000; (3) Allstate had paid Menix $2,500 for personal injury protection (PIP) benefits; and (4) Allstate would be liable for all damages between $22,500 and $42,500. Id. After a jury determined Menix’s actual damages were $27,800, she requested prejudgment interest and attorney’s fees. Id. The trial court denied this request, reduced the damage award by the stipulated credits, and rendered judgment for Menix in the amount of $5,300 ($27,800 less $22,500). Id. Menix appealed, among other things, the court’s failure to award prejudgment interest and attorney’s fees. Id.

      The Eastland Court identified two independent types of prejudgment interest that may be involved in a UIM case: Cavnar-type prejudgment interest, which is that amount awarded as damages in a personal injury action, and Henson-type prejudgment interest, which is that amount that could be awarded against an insurer for breach of contract when the insurer fails to pay amounts the insured is legally entitled to recover under a UIM provision. Id. at 879-80. Noting that Menix’s UIM policy limits exceeded the damages found by the jury, the court held that Menix was entitled to the “additional damages of Cavnar-type prejudgment interest” on the jury’s actual damages award, provided that the judgment could not exceed her UIM policy limits. Id. at 880. Thus, the court remanded the case to the trial court to enter a judgment for

Menix for:

Damages found by the jury	$27,800
Plus: Prejudgment Interest, Computed per Johnson & Higgins	PJI
	27,800 + PJI
	(20,000)
Less: Credit for PIP paid	(2,500)
Judgment: Lesser of $20,000 (Menix’s UIM limits) or Total Damages less Credits	Trial court determines

      Following Menix, we conclude that Henson does not bar Cavnar-type prejudgment interest in UIM cases. Thus, based on Collier and Menix, Norris is entitled to judgment for:

	$51,200
Plus: Prejudgment Interest, Computed per Johnson & Higgins
	51,200 + PJI
	(50,000)
	(5,000)
Judgment: Lesser of Norris’s UIM limits or Total Damages less Credits

      If Norris’s total damages exceed the credits allowed to State Farm, he is entitled to a judgment for the difference, not to exceed the UIM limits of his policy. We sustain Norris’s first issue.

ATTORNEY’S FEES

      Following our decision in Allstate Ins. Co. v. Lincoln, we also find that Norris is entitled to attorney’s fees. Allstate Ins. Co. v. Lincoln, 976 S.W.2d 873, 876 (Tex. App.—Waco 1998, no pet.). We sustain issue two.

CONCLUSION

      We reverse the judgment and, because the parties do not agree on the amount of prejudgment interest, remand the cause for a determination by the trial court of the amount of the judgment to be entered in Norris’s favor, including Cavnar-type prejudgment interest, post-judgment interest, and attorney’s fees as found by the jury.

                                                                   BILL VANCE

                                                                   Justice

      Justice Vance, and

      Justice Reyna

      (Chief Justice Gray dissenting)

Judgment reversed and remanded

Opinion delivered and filed April 14, 2004

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