Stewart Title Guaranty Co. v. Aiello

911 S.W.2d 463, 1995 WL 615217
CourtCourt of Appeals of Texas
DecidedDecember 14, 1995
Docket08-93-00289-CV
StatusPublished
Cited by22 cases

This text of 911 S.W.2d 463 (Stewart Title Guaranty Co. v. Aiello) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stewart Title Guaranty Co. v. Aiello, 911 S.W.2d 463, 1995 WL 615217 (Tex. Ct. App. 1995).

Opinion

*467 OPINION

LARSEN, Justice.

We withdraw our original opinion of December 22, 1994 and substitute this opinion in its place.

This appeal stems from a lawsuit against a title insurer by its insured, following the insurer’s delayed payment under an agreed judgment. The primary issue in this case is whether an insurer’s duty of good faith and fair dealing survives entry of an agreed judgment. We find that here the duty did survive. We affirm in part and reverse in part.

PROCEDURAL BACKGROUND

Roger and Evelyn Aiello sued Stewart Title Guaranty Company and others claiming that Stewart delayed in paying an agreed judgment. The basis of the underlying judgment was a cloud on the title of the Aiello’s home, insured by Stewart Title. The title company had been recalcitrant in the underlying litigation, the trial court finally striking its pleadings as a discovery sanction. 1 On the courthouse steps, the parties reached an agreement settling their dispute. The subject of this appeal is the breach of the agreed judgment stemming from that settlement.

The Aiellos alleged several causes of action in their second suit against several defendants: breach of the duty of good faith and fair dealing, violations of the Texas Deceptive Trade Practices Act (DTPA) and Article 21.21 of the Texas Insurance Code (Article 21.21), breach of contract, negligence, and gross negligence. Stewart counterclaimed for breach of contract and attorney’s fees based on the same agreed judgment, alleging the Aiellos had breached by refusing to deliver a deed for some fourteen months after it had paid the principal amount of the judgment. The trial court granted final summary judgment in favor of all defendants except Stewart, and granted Stewart partial summary judgment on all but the breach of the good faith duty and breach of contract claims for acts occurring after signing of the agreed judgment. These claims were tried to a jury which found for the Aiellos on the breach of the good faith duty and breach of contract and for Stewart on its breach of contract counterclaim.

The trial court awarded the Aiellos $26,847 as the amounts due under the agreed judgment, $23,734.60 as actual damages in this cause, $200,000 as exemplary damages, and attorney’s fees. Although it gave Stewart a credit for $10,000 damages for Aiellos’ breach, the trial court refused to award Stewart any amount for attorney’s fees. Stewart appeals the trial court’s ruling on ten points of error alleging, among other things, that the trial court’s application of the duty of good faith and fair dealing to this agreed judgment was incorrect as a matter of law. The Aiellos cross-appeal on seven points of error.

FACTS

The dispute between the Aiellos and Stewart Title began when the Aiellos discovered a municipal utility easement on their property upon which their house encroached two feet. The title policy issued by Stewart failed to describe this defect. Nevertheless, Stewart refused to pay the Aiello’s claim for the diminished value of their land. In October 1986, the Aiellos brought suit against Stewart alleging that the insurance company had breached a title insurance policy issued to the Aiellos and also alleging various violations of the Texas Insurance Code. On the day the first suit was set for trial, February 29, 1988, the parties settled. Their agreement was dictated into the record, and an agreed judgment signed by the court on April 11, 1988. That judgment, which incorporated the oral recitation of the parties’ agreement, read:

On the 29th day of February, 1988, came on to be heard the above-styled and - numbered civil action, and EVELYN S. AIELLO, Plaintiff, appeared in person and by attorney of record and announced ready for trial and Defendant, STEWART TITLE GUARANTY COMPANY, appeared through its attorney of record and announced ready for trial and the case proceeded to trial.
*468 After lengthy negotiations, on March 1, 1988, the following Compromise Settlement was announced in open Court:
MR. MITCHELL: ‘Stewart Title Guaranty Company has agreed to purchase the residence owned by the plaintiffs. I believe the correct property description is Lot 7, Block 12 of Virginia Court, a subdivision in West University — the City of West University in Harris County, Texas.’ MR. STEIN: ‘2627 Amherst Street.’
MR. MITCHELL: ‘The purchase price of the property is going to be $280,000.00. Stewart Title Guaranty Company will receive a $1,000 credit at the closing and the net proceeds to be paid to the Plaintiffs in this action is $279,000.00. Stewart Title Guaranty Company will take title in the name of a nominee at Stewart Title Guaranty Company’s choice because title will not vest as a result of the closing in Stewart Title Guaranty Company itself.’ [Emphasis added.]
‘The plaintiffs are to receive an additional $40,000.00 from Stewart Title Guaranty Company, payable by check to be received at the closing but not to be transferred to the plaintiffs in the closing itself.’
MR. STEIN: ‘Is it agreeable that that could be a cashier’s cheek.’
MR. MITCHELL: “Well, do you have a problem with Stewart’s check?’
MR. STEIN: “Well, I may. Let’s just do it by cashier’s check since most closings have that as a consideration.’
MR. MITCHELL: “Well, that’s why I said $40,000.00 will be paid to you at closing but out of the closing. In other words, the $40,000.00 is not going to flow through the escrow account of the title company.’
MR. STEIN: “We don’t necessarily have to put all of this on the record but considering the fact that my clients are presently residing in Singapore, they will have to wait here for the closing. I would appreciate the opportunity of transferring funds immediately by cashier’s check rather than waiting for some type of bank draft or other legal instrument to clear an account.
That’s why I’m requesting that it be done by cashier’s cheek.’
MR. MITCHELL: “Well, that’s acceptable.’
It appearing to the Court that judgment should be rendered upon this Compromise Settlement in favor of the Plaintiffs and against the Defendant, it is, therefore,
ORDERED, ADJUDGED and DECREED by the Court that Plaintiffs, ROGER N. and EVELYN S. AIELLO, recover from Defendant STEWART TITLE GUARANTY COMPANY $319,-000.00. Upon payment of such sum by cashier’s check, Plaintiffs will deed over to the nominee of Stewart Title Guaranty Company’s choice certain property described as Lot 7, Block 12 of Virginia Court a subdivision in the City of West University in Harris County, Texas, further described as 2627 Amherst Street.
All costs of Court expended or incurred in this cause are hereby adjudged against Defendant STEWART TITLE GUARANTY COMPANY.

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Bluebook (online)
911 S.W.2d 463, 1995 WL 615217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stewart-title-guaranty-co-v-aiello-texapp-1995.