Royal Globe Ins. Co. v. Bar Consultants, Inc., 12716

• Decision Date: 24 May 1978
• Docket Number: No. 12716,12716
• Citation: 566 S.W.2d 724
• Parties: ROYAL GLOBE INSURANCE COMPANY, Appellant, v. BAR CONSULTANTS, INC., Appellee.
• Court: Texas Court of Appeals

Page 724

566 S.W.2d 724

ROYAL GLOBE INSURANCE COMPANY, Appellant, v. BAR CONSULTANTS, INC., Appellee.

No. 12716.

Court of Civil Appeals of Texas,Austin.

May 24, 1978.

Rehearing Denied June 14, 1978.

David M. Moore, Wilson & Grosenheider, Austin, for appellant.

Malcolm Robinson, Hooper, Robinson & Moeller, Austin, for appellee.

PHILLIPS, Chief Justice.

On motion for rehearing, we withdraw our original opinion in this cause filed on March 29, 1978, and substitute the following:

Appellee, Bar Consultants, Inc., as plaintiff below, brought this suit to recover on an insurance policy issued by appellant, Royal Globe Insurance Company. In addition to alleging that the insurance policy in question covered the damages suffered, appellee alleged, in the alternative, a violation of the Deceptive Trade Practices Act ¹ and Article 21.21(4) of the Insurance Code. Appellant denied liability.

Trial was to the court which found that appellant had engaged in deceptive trade practices. After judgment, appellant duly perfected its appeal to this Court.

We affirm the judgment of the trial court.

The record discloses that appellee ran and operated a bar named "The Bucket." In connection with the operation of the bar, appellee purchased an insurance policy from appellant covering the contents thereof. Prior to purchasing the policy, John Barber, III, appellee's president, and Tulley Embrey, the insurance agent who sold appellee the policy, discussed appellee's insurance needs. The problem of vandalism was stressed. The policy extended coverage to the contents of the bar in the event of vandalism and malicious mischief. Limitations were placed in the policy, however, on this type of coverage. After the loss in question, Barber talked to Embrey who allegedly told him that the loss was covered. After an investigation, appellant denied coverage for the loss. As a result, appellee brought this action against appellant.

In its second amended petition, appellee alleged that on two previous occasions under identical policies issued by appellant, it was paid vandalism claims, that appellant never asserted that such policies did not cover the property in question but represented otherwise, and that, therefore, it continued to renew its policy with appellant.

Appellee further alleged that on or about March 5, 1976, when the renewal policy it had purchased was in force, certain individuals caused damage to its property; ² however, an adjuster who investigated the claim represented to appellee that the acts causing the damage were not vandalism and were therefore not covered by the policy.

Thereafter, alleges appellee, after suit was instituted, appellant took the position that the policy did not cover appellee's property within the definition of the vandalism and malicious mischief clauses.

At trial, appellee asserted that the policy covered the damage in question or, in the alternative, that if the policy did not cover such damage, then the representations of appellant regarding coverage and the policy terms were false, deceptive and misleading in violation of Article 21.21(4)(1) of the Insurance Code and Section 17.46 of the Deceptive Trade Practices Act.

As stated above, trial was to the court which resulted in judgment for appellee. The court found that appellant, by its agent's misrepresentation of coverage, when in fact there was no coverage, had violated Section 17.46(12) of the Deceptive Trade Practices Act and that under Article 21.21 of the Insurance Code and Section 17.50 of the Act, appellee was entitled to treble damages, court costs, and attorney's fees.

Appellant is before this Court on ten points of error. The first two points are directed toward the alleged error of the court in granting judgment for appellee because appellee was not entitled to bring a cause of action under either Article 21.21 of the Code or Section 17.50 of the Act.

Article 21.21, Section 16(a) of the Texas Insurance Code provides:

"Sec. 16. Relief Available to Injured Parties. (a) Any person who has been injured by another's engaging . . . in any practice defined by Section 17.46 of the Business and Commerce Code, as amended, as an unlawful deceptive trade practice may maintain an action against the company or companies engaging in such acts or practices." (Emphasis added)

Section 2 of the same article provides in part:

"Sec. 2. Definitions When used in this Act:

"(a) 'Person' shall mean any individual, corporation, association, partnership . . . and any other legal entity engaged in the business of insurance . . ."

The Texas Supreme Court in a recent per curiam opinion disapproved a court of civil appeals' restrictive reading of the definition of "person" as used in Section 16 of Article 21.21 of the Insurance Code. See Ceshker v. Bankers Comm'l Life Ins. Co., 558 S.W.2d 102 (Tex.Civ.App.1977, writ ref'd n. r. e., 21 Tex.Sup.Ct.J. 307, --- S.W.2d ---- (April 8, 1978)). The Court stated, "We disapprove the holding which construed the Code to limit the term 'person' to one who is engaged in the business of insurance." In accordance with this decision, we hold that appellee was entitled to invoke the remedial provisions of Article 21.21 and bring suit thereon, and, as a result, we do not reach the question whether appellee was also entitled to bring a cause of action pursuant to Section 17.50(a) of the Deceptive Trade Practices Act.

Appellant's other points address the issue of whether or not there was any misrepresentation made by appellant and, if so, whether appellee was damaged thereby.

Appellee relies on the following instances of alleged misrepresentations to support its cause of action: (1) immediately prior to the issuance of the initial policy when the problem of vandalism was discussed; (2) when appellant paid allegedly identical claims in...