Menix v. Allstate Indem. Co.

• Decision Date: 25 July 2002
• Docket Number: No. 11-01-00068-CV.,11-01-00068-CV.
• Citation: 83 S.W.3d 877
• Parties: Sharon MENIX, Appellant, v. ALLSTATE INDEMNITY COMPANY, Appellee.
• Court: Texas Court of Appeals

83 S.W.3d 877

Sharon MENIX, Appellant, v. ALLSTATE INDEMNITY COMPANY, Appellee.

No. 11-01-00068-CV.

Court of Appeals of Texas, Eastland.

July 25, 2002.

Rehearing Overruled September 19, 2002.

Charles Hoedebeck, Law Office of Charles L. Hoedebeck, Irving, for appellant.

Gerard Gregoire, John Stilwell & Associates, Julia Pendery, Shawn McCaskill, Godwin Gruber, P.C., Dallas, for appellee.

Panel consists of ARNOT, C.J., and WRIGHT, J., and McCALL, J.

OPINION

TERRY McCALL, Justice.

This is an appeal by Sharon Menix from a judgment in her favor against Allstate Indemnity Company for uninsured/underinsured motorist (UIM) benefits. In four issues, Menix contends that the trial court erred in failing to award her prejudgment interest, to allow her to amend her pleadings for attorney's fees, to award her attorney's fees, and to award her postjudgment interest. We affirm in part, and reverse and remand in part.

Menix sued Tonya Swedlund, the underinsured tortfeasor, and Allstate. After settling with Swedlund for her policy limit of $20,000.00, Menix continued her suit against Allstate for UIM benefits. Prior to a jury trial, Menix and Allstate stipulated that: (1) Swedlund was the sole proximate cause of the automobile accident in which Menix was injured; (2) Swedlund's policy limit of $20,000.00 had been tendered to Menix; (3) Allstate had tendered $2,500.00 in personal injury protection benefits to Menix; and (4) Allstate would be liable for all damages over $22,500.00 up to $42,500.00 (Menix's UIM policy limit was $20,000.00).

The jury awarded actual damages to Menix totaling $27,800.00. After the jury's verdict, Menix requested prejudgment interest and attorney's fees. Allstate objected on the grounds that Menix's pleadings did not contain a request for attorney's fees and that Menix was not entitled to prejudgment interest or attorney's fees as a matter of law. Menix filed a post-trial motion for leave to amend her pleadings to include a request for attorney's fees. The trial court denied Menix's motion and her requests for prejudgment interest and attorney's fees. The trial court's judgment awarded Menix $27,800.00 in damages but allowed Allstate a settlement credit of $22,500.00 for the $20,000.00 paid by Swedlund and the $2,500.00 in personal injury protection benefits paid by Allstate. The trial court thus rendered judgment in favor of Menix for $5,300.00. The judgment also provided that no prejudgment interest or attorney's fees were awarded.

Prejudgment Interest

In her first issue, Menix argues that the trial court erred in refusing to order Allstate to pay prejudgment interest which was within the $20,000.00 UIM benefits limit provided in Menix's automobile policy with Allstate. Two types of prejudgment interest may be involved in a UIM benefits case. We will refer to the first type as Cavnar-type prejudgment interest because of its genesis in Cavnar v. Quality Control Parking, Inc., 696 S.W.2d 549 (Tex.1985). In Cavnar, the court adopted a rule allowing recovery of prejudgment interest on personal injury, wrongful death, and survival actions. The court reasoned that prejudgment interest was due as additional damages from the tortfeasor because the "primary objective of awarding damages in civil actions has always been to compensate the injured plaintiff, rather than to punish the defendant." Id. at 552. Subsequently, the Texas Legislature codified the Cavnar rule. The statutory rule is now found in TEX. FIN. CODE ANN. § 304.102 (Vernon Supp.2002):

A judgment in a wrongful death, personal injury, or property damage case earns prejudgment interest.

The other type of prejudgment interest is based not on the tortfeasor's obligations, but upon the insurance companies' obligations.¹ We will refer to this second type as Henson-type prejudgment interest because it is the type of prejudgment interest that was involved in Henson v. Southern Farm Bureau Casualty Insurance Company, 17 S.W.3d 652 (Tex.2000). The Henson court emphasized the difference between the two types of prejudgment interest:

But Henson conflates two prejudgment interest concepts. There is no doubt that if Henson were recovering directly from Contreras [the tortfeasor], the judgment would include prejudgment interest. 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. But here, Henson is seeking to recover prejudgment interest based not on the tortfeasor's obligations, but upon the insurance companies' obligations. Unlike the relationship between Henson and Contreras, which is that of injured party and tortfeasor, the relationship between Henson and the insurers is that of contracting parties. Consequently, their respective duties are established by the contract.

Id. at 653.

In Henson, the jury found that Contreras was solely responsible for the collision and fixed Henson's damages at $133,842.13, far in excess of the UIM benefits of $45,000.00 available to Henson. Because the damages already exceeded the $45,000.00 UIM benefits limit, there was no reason to calculate the additional damages of Cavnar-type prejudgment interest. Henson was seeking the $45,000.00 policy limit plus additional prejudgment interest. Prejudgment interest in Henson could only be sought based on an obligation of the insurance company other than its contractual obligation to pay UIM benefits for damages caused by the tortfeasor which were above the tortfeasor's insurance policy limits and within the insured's UIM benefits limit.

As opposed to the facts in Henson, Menix's policy limit for UIM benefits exceeded the amount of actual damages the jury found that Swedlund, the tortfeasor, caused. The supreme court has reaffirmed that Cavnar-type prejudgment interest is to be viewed "as additional damages." Columbia Hospital Corporation of Houston v. Moore, 45 Tex. Sup.Ct. J. 957, 958 (June 27, 2002); Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 528-29 (Tex.1998). Menix's insurance policy with Allstate provided coverage as follows:

We [Allstate] will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured/underinsured motor vehicle because of bodily injuries. (Emphasis added)

We find that Menix was entitled to the additional damages of Cavnar-type prejudgment interest on the $27,800.00 to the extent that such additional damages do not exceed Menix's UIM policy limit of $20,000.00. We sustain Menix's first issue.

Attorney's Fees

In her second issue, Menix argues that the trial court erred in denying her postverdict motion for leave to amend her pleadings to include a request for attorney's fees. Her amended pleading based the request for attorney's fees on TEX. CIV. PRAC. & REM. CODE ANN. § 38.001 et seq. (Vernon 1997) and on TEX. INS. CODE ANN. art. 21.55 (Vernon Pamph. Supp.2002). Allstate filed a motion in opposition to Menix's post-verdict request for leave to amend her pleadings and filed a written objection to Menix's request for attorney's fees. Allstate claimed that Menix had failed to request attorney's fees in her pleadings, that Allstate had timely objected to the omission, and that attorney's fees were unavailable to Menix as a matter of law. The trial court ruled that Menix could put on evidence of attorney's fees. Allstate then stipulated to the reasonableness of the fees but emphasized its position that Menix was not entitled to attorney's fees.

A trial court's denial of leave to file a post-verdict amended pleading is reviewed under an abuse of discretion standard. Wal-Mart Stores, Inc. v. McKenzie, 997 S.W.2d 278, 280 (Tex.1999). Under TEX.R.CIV.P. 63 and 66, a trial court has no discretion to refuse an amendment unless (1) the opposing party presents evidence of surprise or prejudice, or (2) the amendment contains the assertion of a new cause of action or defense and, thus, is prejudicial on its face, and the opposing party objects to the amendment. Greenhalgh v. Service Lloyds Insurance Company, 787 S.W.2d 938, 939 (Tex.1990); Hardin v. Hardin, 597 S.W.2d 347 (Tex.1980); Resolution Trust Corporation v. Cook, 840 S.W.2d 42, 46 (Tex.App.-Amarillo 1992, writ den'd); Whole Foods Market South-west L.P. v. Tijerina, 979 S.W.2d 768 (Tex.App.-Houston [14th Dist.] 1998, pet'n den'd). The burden of showing prejudice or surprise rests on the party resisting the amendment. Greenhalgh v. Service Lloyds Insurance Company, supra at 939. Allstate contends that it was not required to offer evidence to demonstrate how it was prejudiced or surprised because Menix's proposed amended pleading containing the new claim for attorney's fees was prejudicial on its face, and Allstate objected to the amendment. Greenhalgh v. Service Lloyds Insurance Company, supra; Hardin v. Hardin, supra. We agree.

When an amended pleading is prejudicial on its face and the trial court denied leave to file the amended pleading, the burden shifts to the party who offered the amended pleading to clearly demonstrate on appeal that the trial court abused its discretion. Hardin v. Hardin, supra at 349-50; Favor v. Hochheim Prairie Farm Mutual Insurance Association, 939 S.W.2d 180, 181-82 (Tex.App.-San Antonio 1996, writ den'd). Menix's amended pleading was prejudicial on its face. It set forth a new claim, one for attorney's fees, and based that claim on TEX. CIV. PRAC. & REM. CODE § 38.001 et seq. and TEX. INS. CODE art. 21.55. Prior to the jury verdict, Menix's pleadings gave no notice that Menix would claim attorney's fees. The burden shifted to Menix on appeal to clearly demonstrate that the trial court abused its discretion in denying leave to file the amended pleading. Menix has failed to clearly prove an abuse of discretion. Therefore, this court is "obligated to presume the trial court...