Davis v. Twin City Fire Ins. Co.

• Decision Date: 05 October 1993
• Docket Number: No. 06-92-00031-CV,06-92-00031-CV
• Citation: 865 S.W.2d 231
• Parties: Faith D. DAVIS, Appellant, v. TWIN CITY FIRE INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 231

865 S.W.2d 231

Faith D. DAVIS, Appellant, v. TWIN CITY FIRE INSURANCE COMPANY, Appellee.

No. 06-92-00031-CV.

Court of Appeals of Texas Texarkana.

Oct. 5, 1993.

Rehearing Overruled Nov. 2, 1993.

Dale B. Tillery, Edwards and Tillery, Dallas, for appellant.

P. Michael Jung, Strasburger & Price, Dallas, for appellee.

Before CORNELIUS, C.J., and BLEIL and GRANT, JJ.

OPINION

GRANT, Justice.

Faith Davis sued Twin City Fire Insurance Company because it refused to buy her a hot tub pursuant to a workers' compensation settlement agreement. The trial court entered judgment unfavorable in part to each party and both parties appeal.

ISSUES

Davis contends that the trial court erred (1) in disregarding a jury finding awarding her $100,000 in exemplary damages, (2) in refusing to include prejudgment interest in the judgment, and (3) in concluding that the settlement agreement was ambiguous. Davis also contends that if this court deems a retrial of this case necessary, we should find that the trial court erred in excluding her from viewing certain materials produced by Twin City and viewed by the court in camera and in refusing to admit into evidence proof of Twin City's net worth.

Twin City contends that the award and decision of the Industrial Accident Board bars the present suit and that the jury's exemplary damages finding was excessive.

DISPOSITION

We modify the judgment of the trial court by reinstating the jury's award of exemplary damages, by awarding prejudgment interest, and by modifying the attorney's fees. We affirm the judgment as modified.

FACTS

On October 30, 1986, Faith Davis injured her lower back while lifting a box of files in the course and scope of her employment. As a result of this incident, Davis filed a workers' compensation claim against Twin City, her employer's workers' compensation carrier. In December 1987, the parties entered into a Compromise Settlement Agreement and Release under which Twin City agreed to pay Davis a lump sum of $37,500, in addition to "five years future medical expenses with Dr. Key, or any other mutually agreed upon physician in advance."

In September 1987, Davis received a prescription from Dr. James Key for a "hot tub or jacuzzi for a large body for life." On December 4, three days after the parties signed the settlement agreement, Davis's attorney sent the prescription to Twin City who received it on December 7. The trial court approved the settlement agreement on December 14.

Twin City then sent a letter to Davis's attorney requesting that Dr. Key provide a letter of medical necessity regarding the hot tub and further stating that Twin City would submit the prescription to an orthopedic consultant at Southwestern Medical School. On April 20, 1988, Davis's attorney sent Dr. Key's letter of medical necessity and four estimates for hot tubs to Twin City. On May 10, 1988, Twin City forwarded Dr. Key's letter to the Texas Medical Foundation (TMF), which Twin City had retained to do medical consultation. Twin City then informed Davis that it expected TMF to perform the review. TMF completed its review and sent a letter dated October 27, 1988, to Twin City summarizing the review and supporting the use of the whirlpool for Davis's condition. The two Twin City employees who handled Davis's claim, however, testified that they did not become aware of the results of the review until significantly later.

On October 17, 1988, more than ten months after Twin City received the hot tub prescription, Davis's attorney sent a letter to the Industrial Accident Board (IAB) requesting a pre-hearing conference regarding Twin City's failure to pay for the hot tub. The letter stated that Davis had received no communication from Twin City since May 10. Having received a copy of the letter to the IAB, Twin City employees felt it important that they make a determination regarding the hot tub. Having recently received an orthopedist's review of another patient's file, which questioned the efficacy of using a hot tub to treat a lower back ailment, Twin City preliminarily denied Davis's claim.

On October 28, 1988, Twin City sent a letter to Davis stating that a board certified orthopedist had reviewed the medical necessity for a hot tub, that the orthopedist concluded that an in-ground hot tub was not justified, but that Twin City intended to consult with another orthopedist.

On January 25, 1989, Twin City sent Davis a letter in which it unequivocally denied her claim. The letter stated that an orthopedist had reviewed Davis's medical file and rejected the hot tub treatment as not medically necessary. The actual review of Davis's file by the TMF orthopedist supported the use of a hot tub for treating her lower back, stating that "it would be reasonable to attempt use of a portable whirlpool for treatment of this patient's back problem. However, if inadequate depth of water due to the size of the tub or patient, then a larger tub may be necessary." TMF dated its review October 27, 1988, but the Twin City employees in charge of Davis's claim testified that they did not become aware of the review until after Davis filed suit. Although a Twin City employee testified that Davis's claim was rejected in part because it was believed that she wanted an in-ground unit, Davis never requested an in-ground unit, and Twin City did not suggest an alternative in either of its denial letters. One of the employees further testified that after becoming aware of the TMF review, Twin City offered Davis $150 to purchase an over-the-tub whirlpool unit. The evidence indicates that Davis requires a stand-alone hot tub to obtain the desired results from the treatment. Twin City produced no evidence at trial suggesting that it ever attempted to correct the inaccuracies in the January 25 letter--despite the fact that, as the Twin City supervisor in charge of Davis's file testified, the letter was "not accurate at all."

On March 6, 1988, the IAB denied Davis's claim stating that the evidence submitted failed to bring Davis within the provisions of the Texas Workers' Compensation Act because the bill for the hot tub had not accrued. Davis then filed suit against Twin City alleging fraud, rescission of contract, breach of contract, intentional and negligent infliction of emotional distress, insurance code and Deceptive Trade Practices Act violations, failure to pay workers' compensation benefits, and a breach of the duty of good faith and fair dealing.

The jury returned answers indicating (1) that Twin City engaged in unfair or deceptive acts or practices, (2) that Twin City failed to deal fairly and in good faith, (3) that Twin City did not commit this conduct knowingly, (4) that the parties did not agree to hold Twin City responsible only for reasonable and necessary medical expenses, (5) that Twin City failed to pay reasonable and necessary medical expenses, (6) that Davis did not detrimentally rely on material misrepresentations made by Twin City in entering into the settlement agreement, (7) that actual damages amounted to $3,500, (8) that Twin City acted with conscious indifference toward Davis, (9) that Twin City did not commit fraud, (10) that Twin City did not intentionally inflict emotional distress upon Davis, (11) that Twin City's conduct was not a producing cause of any physical pain or mental anguish suffered by Davis, (12) that Twin City's conduct was not a proximate cause of any physical pain or mental anguish, (13) that Davis should receive no money for any physical pain or mental anguish she suffered, (14) that Twin City should be assessed $100,000 in exemplary damages, (15) that a reasonable fee for Davis's attorney was 33% of her recovery, (16) that Davis brought suit within twenty days after giving notice of intent to appeal the denial of her claim by the IAB, and (17) that Twin City's failure to comply with the settlement agreement was not excused.

After the jury returned its verdict, Twin City made a motion for judgment notwithstanding the verdict or, in the alternative, a motion to disregard certain jury findings. The trial court granted the motion to disregard jury findings and did not award exemplary damages in the judgment. The court rendered judgment for Davis for $3,500, plus a 12% penalty under TEX.REV.CIV.STAT.ANN. art. 8307, § 5a Repealed by Act of Dec. 12, 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01(10) to (12), 1989 Tex.Gen.Laws 114 (current version at TEX.REV.CIV.STAT.ANN. art. 8308-6.45 (Vernon Supp.1993)), plus a 33% attorney's fee, plus post-judgment interest.

TIMELY FILING

Twin City contends in a cross-point of error that the record contains no evidence to support the jury's finding that Davis brought suit within twenty days after giving notice of her intent to appeal the IAB award and decision as required by the Workers' Compensation Act. This requirement is mandatory and jurisdictional. Standard Fire Ins. Co. v. LaCoke, 585 S.W.2d 678, 680 (Tex.1979). Timely filing is presumed unless denied by verified pleadings. TEX.R.CIV.P. 93(13)(e). Twin City filed a verified denial of Davis's timely filing.

Davis gave notice of intent to appeal on March 22, 1989, and she filed her Plaintiff's Original Petition on April 7, within twenty days after the notice of intent to appeal. In order to constitute a timely filing of an appeal from an IAB award, Davis's pleading must have set forth the specifics of the IAB award appealed from and it must have specified the identity of the appellee. Ealey v. Insurance Co. of North America, 660 S.W.2d 50, 52-3 (Tex.1983).

Twin City contends that because Davis did not have her petition entered into evidence the record reveals that no evidence went before the jury on which it could have based a finding of timely filing. This point is irrelevant, however, since the issue of timely filing attacks the very jurisdiction of the court, and the trial court should have addressed the issue as a matter of law with no jury submission. See ...