Royal Indem. Co. v. Little Joe's Catfish Inn, Inc.

• Decision Date: 23 June 1982
• Docket Number: No. 16773,16773
• Citation: 636 S.W.2d 530
• Court: Texas Court of Appeals
• Parties: ROYAL INDEMNITY CO., et al., Appellants, v. LITTLE JOE'S CATFISH INN, INC., et al., Appellees.

Page 530

636 S.W.2d 530

ROYAL INDEMNITY CO., et al., Appellants, v. LITTLE JOE'S CATFISH INN, INC., et al., Appellees.

No. 16773.

Court of Appeals of Texas, San Antonio.

June 23, 1982.

Rehearing Denied July 27, 1982.

Thomas H. Crofts, Jr., San Antonio, for appellants.

Sam Bashara, San Antonio, for appellees.

Before KLINGEMAN, BUTTS and CLARK, JJ.

OPINION

KLINGEMAN, Justice.

Appellants, insurance companies, ¹ appeal an adverse verdict and judgment against them imposing contractual liability under six (6) insurance policies for damages to a building and its contents as a result of a fire. The property involved in the fire was located on S. W. Military Highway in San Antonio.

The insurance companies denied coverage on the basis of an accusation that the owner of the property involved had produced the fire by his own act, design, or procurement. Trial was to a jury which resolved that issue adversely to appellants. The trial court rendered judgment on the jury's verdict awarding appellee Southwest Church Builders Pension Trust the sum of $78,825.73 for damage to the building and awarding appellee Little Joe's Catfish Inn (1) $33,579.03 for damage to the contents and (2) $11,400 for business interruption damages. On this appeal appellant appeals only that portion of the judgment awarding (a) the Church Building Trust a recovery of $78,825.73 which amount the jury answered and issued to be the cost to repair the building and (b) Little Joe's Catfish Inn's recovery of $11,400 which the jury found to be loss sustained through rent and salary expenses during the interruption of business.

Appellants assert two "no evidence" points of error. In viewing appellants' no evidence points of error we may consider only that evidence, if any, which viewed in its most favorable light supports the jury's finding and we must disregard all evidence which would lead to a contrary result. Burk Royalty Co. v. Walls, 616 S.W.2d 911 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821, (Tex.1965); Biggers v. Continental Bus Systems, 157 Tex. 351, 303 S.W.2d 359 (1957); Frost National Bank v. Kayton, 526 S.W.2d 654 (Tex.Civ.App.-San Antonio 1975, writ ref'd n. r. e.). ²

Appellants' first point of error asserts that the trial court erred in rendering judgment that appellee Southwest Church Builders Pension Trust recover $78,825.73 because there is no evidence to support the jury answer that such sum was the cost to repair the damages to the building. Appellants, in support of their first point of error, urge that the only evidence offered by appellee Building Trust in the matter of repairs to the building was the expert opinion of Arthur Nichols and an exhibit introduced into evidence as plaintiff's exhibit 7. They assert that the exhibit is a list composed by an estimator who had surveyed the damaged building and listed the items to be repaired, that Nichols was in effect testifying as to values composed by such estimator and that all such evidence was hearsay and lacked any probative value. We do not construe the evidence in the record in accordance with appellants' contention. Arthur Nichols who was called as an expert witness by appellee was an insurance adjustor with over 50 years of experience. For approximately 18 years he had worked as a branch manager and senior adjustor for General Adjustment Bureau who ordinarily represents insurance companies in these types of claims. He had adjusted losses on restaurants on numerous occasions and had extensive experience in adjusting building losses along with a comprehensive knowledge of building costs. For over 18 years he had participated in the adjustment of hundreds of San Antonio buildings. Nichols prepared plaintiff's exhibit 6 which was a detailed list of damages caused to the contents of Little Joe's Catfish Inn and plaintiff's exhibit 7 which was a detailed statement of damage caused to the building involved. He personally inspected the building in question and the detailed specifications contained in Plaintiff's Exhibit 7 are the result of his personal observations.

Both appellants and appellees rely on Moore v. Grantham, 599 S.W.2d 287 (Tex.1980). In Moore, the Supreme Court pointed out that the Court has yet to adopt a rule permitting an expert opinion testimony to be based solely on hearsay, and refused to do so in that case. The Court further stated that courts have applied a more liberal approach in allowing an expert opinion testimony to be based partially on hearsay and partially on personal knowledge and cited a number of cases in support of this position. The Supreme Court then discussed their decision in Slaughter v. Abilene State School, 561 S.W.2d 789 (Tex.1977) and said: "In permitting the doctor's testimony into evidence, we declared our understanding of the state of the law in regard to expert opinion testimony : 'Texas courts have followed the general rule that where it appears a witness' testimony is predicated both upon personal knowledge and hearsay his testimony is admissible.' " 599 S.W.2d at 289 (quoting Slaughter v. Abilene State School, supra.)

The case before us falls in the category of Slaughter and is distinguishable from Moore. In Moore, Ms. Grantham was unable to continue working in the area of interior design because of her injury. In an effort to meet her burden of proof in relation to her loss of future earning capacity, Ms. Grantham called Dr. Carl Hanson as her expert witness. Dr. Hanson was qualified as an expert in vocational rehabilitation, but despite his qualifications in vocational rehabilitation, he admitted that he had no personal knowledge of or contact with the profession of interior design. Dr. Hanson also admitted he had no personal knowledge of the wage scale in the interior design field. Thus his opinion about her earning potential was based solely upon hearsay without personal knowledge. The Supreme Court held that it was error for the trial court to admit such testimony concerning Ms. Grantham's earning capacity in the field of interior design, in which he had no personal knowledge.

Mr. Nichols who prepared plaintiff's exhibit 7 gave the following testimony:

Q: Have you had experience with adjusting losses to buildings before, construction costs and that sort of thing?

A: Yes, extensively.

Q: How many buildings would you say you have participated in the cost adjustment or appraisal of in, say, over the last 18 years?

A: Hundreds.

Q: Let me show you what has been marked as Plaintiff's Exhibit 7, and I will ask you if you can identify that information.

A: Yes. Again this is in my own handwriting.

Q: And did you personally go and inspect the premises in order to come up with these detailed specifications?

A: Yes, I did.

Q: Based on your experience, based upon your contact with estimators, the two estimators, do you have an opinion as to whether the figures contained on Plaintiff's Exhibit 7 represent the cost to repair the damage to the building located at 7050 Southwest Military Drive resulting from the fires of March 17 and March 21, 1976 with material of a like kind and quality and within a reasonable period of time after the loss?

First of all, do you have an opinion?

A: Yes, I do....

Q: Would you tell the judge-you have told us you have an opinion. Would you tell the Court and the jury what the opinion is based on?

A: It is based on experience, plus the opinion of an expert.

Q: Would that be more than one expert?

A: It's two.

Q: Would you tell the jury, then, in your opinion, whether or not the figures contained on Plaintiff's Exhibit 7 represent the fair cost to repair the damage to the building located at 7050 Southwest Military Drive as a result of the fires on March 17 and March 21 with materials of a like kind and quality and within a reasonable time after the loss?

A: I believe that to be correct.

MR. BASHARA: Again, we move the admission of Plaintiff's 7 into evidence, your Honor.

MR. BALL: Same objection, your Honor, that is, no proper predicate has been laid and the Exhibit is based on hearsay.

THE COURT: Again I will ask the witness is this Exhibit 7 that has been tendered to the Court also based on your experience?

THE WITNESS: It is, your Honor.

THE COURT: Of how many years?

THE WITNESS: Fifty. Fifty some odd.

THE COURT: Overruled. Proceed.

A markedly similar case to the one before us is United States Fire Ins. Co. v. Stricklin, 556 S.W.2d 575 (Tex.Civ.App-Dallas 1977, writ ref'd n.r.e.) where an expert opinion of an independent insurance adjustor was permitted into evidence, the court said:

Every expert's opinion is, necessarily, in most instances, based in part upon hearsay in that some data obtained from various sources is necessarily hearsay. Specifically, here, Crawford testified to having used "cost guides that are accepted by various area contractors" and telephone conversations with contractors. Although the knowledge obtained in this manner is hearsay, it is one way that an expert on repair costs can keep current on construction costs. This method is perfectly permissible. Since Crawford's credentials as an expert were unchallenged and since any such expert must in part utilize hearsay as a basis for the opinion, the trial court should have admitted the evidence. The better view is to admit the testimony in such a situation, thus leaving to the jury the weight to be given the opinion rather than excluding it.... Here, Crawford's opinion was also based upon "facts" obtained from his personal observation of the damage and from his personal knowledge of repair costs. We conclude, therefore, that an expert's opinion is admissible notwithstanding that it may have been based in part on hearsay information.

556 S.W.2d at 580. See also State v. Oakley, 163 Tex. 463, 356 S.W.2d 909 (1962); Norris v. Lancaster, 280 S.W. 574, 476 (Tex.Comm'n App. 1926,...