Barnes v. Western Alliance Ins. Co.
| Decision Date | 16 December 1992 |
| Docket Number | No. 2-92-034-CV,2-92-034-CV |
| Citation | 844 S.W.2d 264 |
| Parties | W. Ray BARNES, Barnes Maintenance Co., Inc., W.R.B. Properties, and Softline Services, Intervenor, Appellants, v. WESTERN ALLIANCE INSURANCE COMPANY, Appellee. |
| Court | Texas Court of Appeals |
W. Ray Barnes, Barnes Maintenance Company, and W.R.B. Properties (Barnes) brought this action against Western Alliance Insurance Company (Western) to enforce an insurance appraisal award. Softline Services (Softline) intervened in the suit, asserting its right to 20% of the gross damages Barnes recovered from Western, pursuant to a contract between Barnes and Softline that antedated this proceeding. Barnes claimed that the roofs of two of his buildings were hail-damaged on March 1, 1988. Barnes filed a claim for this alleged loss with Western. Barnes and Western could not agree on the amount of the loss, so Barnes, through Softline, 1 demanded that an appraisal be made and an award given based on that appraisal, pursuant to a provision in the insurance contract between Barnes and Western. The insurance contract provided as follows:
Appraisal. In case the insured and this Company shall fail to agree as to the actual cash value or the amount of loss, then, on the written demand of either, each shall select a competent and disinterested appraiser and notify the other of the appraiser selected within twenty days of such demand. The appraisers shall first select a competent and disinterested umpire; and failing for fifteen days to agree upon such umpire, then, on request of the insured or this Company, such umpire shall be selected by a judge of a district court of a judicial district where the loss occurred. The appraisers shall then appraise the loss, stating separately actual cash value and loss to each item; and, failing to agree, shall submit their differences only to the umpire. An award in writing, so itemized, of any two when filed with this Company, shall determine the amount of actual cash value and loss. Each appraiser shall be paid by the party selecting him and the expenses of appraisal and umpire shall be paid by the parties equally.
When Loss Payable. The amount of loss for which this Company may be liable shall be payable sixty days after proof of loss, as herein provided, is received by this Company and ascertainment of the loss is made either by agreement between the insured and this Company expressed in writing or by the filing with this Company of an [appraisal] award as herein provided.
Barnes appointed Gene E. Thayer, Sr. (Thayer) as his appraiser, and Western selected Dennis Olsovsky (Olsovsky). Thayer and Olsovsky were unable to agree on an umpire, so Judge Brotherton, of the 30th District Court of Wichita County, appointed Joseph E. Ashmore, Jr. (Ashmore) as umpire. Thayer and Olsovsky submitted their differences as to the actual cash value of the loss in writing to Ashmore. Ashmore and Thayer signed an appraisal award for $402,978.08 on June 6, 1990. Olsovsky did not sign the award. Western failed to challenge or pay the award sixty days after it was rendered, whereupon Barnes instituted this suit. Softline intervened in the suit on July 29, 1991.
Following a trial on the merits, the jury found that Barnes had suffered hail damage in the amount of $67,834.89 and that the appraisal award should be set aside because of fraud, accident, or mistake. The jury also found that Western had knowingly violated the Texas Insurance Code and the Deceptive Trade Practices-Consumer Protection Act.
The trial court denied Barnes' and Softline's motions for judgment non obstante veredicto to disregard the jury's finding on the damages issue and rendered judgment for Barnes for actual and treble damages, attorneys' fees, and pre- and postjudgment interest. The judgment also provided for Softline to recover 20% of Barnes' actual damages and prejudgment interest.
We affirm in part and reverse and render in part.
Texas courts have long held that appraisal awards made pursuant to the provisions of an insurance contract are binding and enforceable. Standard Fire Ins. Co. v. Fraiman, 514 S.W.2d 343, 344-45 (Tex.Civ.App.--Houston [14th Dist.] 1974, no writ). Every reasonable presumption will be indulged to sustain an appraisal award, and the burden of proof lies on the party seeking to avoid the award. Continental Ins. Co. v. Guerson, 93 S.W.2d 591, 594 (Tex.Civ.App.--San Antonio 1936, writ dism'd). An award entered by appraisers and an umpire can be disregarded in only two instances: (1) if the award was made without authority; or (2) if the award was made as the result of fraud, accident, or mistake. See Fisch v. Transcontinental Ins. Co., 356 S.W.2d 186, 190 (Tex.Civ.App.--Houston 1962, writ ref'd n.r.e.); Guerson, 93 S.W.2d at 594.
Western contended at trial that the appraisal award was the result of fraud, accident, or mistake. The trial court allowed Western to submit that issue to the jury in the form of Jury Question 14.
Jury Question No. 14 asked:
Do you find from a preponderance of the evidence that the [appraisal] award should be set aside because of fraud, accident, or mistake?
Answer "Yes" or "No."
ANSWER: Yes
You are instructed that "fraud" means:
(1) that a material representation was made; (2) that it was false; (3) that when the speaker made it, he knew it was false or made it recklessly without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by the party; (5) that the party acted in reliance upon it; and (6) that he thereby suffered injury.
You are instructed that "accident" means an unexpected, unforseen [sic] or undesigned happening or consequence from either a known or unknown cause.
You are hereby instructed that "mistake" means a situation where the appraisers and umpire were laboring under a mistake of fact by which their appraisal award was made to operate in a way they did not intend, such that the award does not speak the intention of the appraisers and umpire, or where the error resulting in the award is so great as to be indicative of gross partiality, undue influence, or corruption.
Jury Question No. 10 asked:
[F]rom a preponderance of the evidence[, w]hat sum of money, if paid now in cash, would fairly and reasonably compensate W. Ray Barnes for his damages, if any, for the storm, hail, and resulting damage to the insured buildings from the occurrence in question?
....
Answer in dollars and cents for damages, if any.
Because the jury answered Question 14 in the affirmative, the trial court based Barnes' damages on the jury's answer to Question 10 rather than on the appraisal award.
In their first two points of error, Barnes and Softline each complain that the jury's affirmative finding in response to Question 14 was supported by no evidence or insufficient evidence. 2 In point of error three, Barnes contends that he was entitled to specific performance of the appraisal award as a matter of law, and Softline asserts that the trial court should have based damages on the appraisal award as a matter of law, rather than on the jury's answer to Question 10.
In determining a "no evidence" point, we are to consider only the evidence and inferences that tend to support the finding of the jury and disregard all evidence and inferences to the contrary. See Sherman v. First Nat'l Bank, 760 S.W.2d 240, 242 (Tex.1988) (per curiam); Larson v. Cook Consultants, Inc., 690 S.W.2d 567, 568 (Tex.1985) (per curiam); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661-62 (1951) (per curiam). If there is any evidence of probative force to support the finding of the jury, the point must be overruled and the finding upheld. In re King's Estate, 244 S.W.2d at 661-62.
The record reveals numerous instances in which Barnes admitted in open court that he had previously lied about the hail damage to the roof and about the repair costs. Barnes testified at trial as follows:
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