State Farm Fire and Cas. Ins. Co. v. Vandiver

• Citation: 970 S.W.2d 731
• Decision Date: 03 June 1998
• Docket Number: No. 10-96-092-CV,10-96-092-CV
• Parties: STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Appellant, v. Sandra Sue VANDIVER, Appellee.
• Court: Court of Appeals of Texas

Page 731

970 S.W.2d 731

STATE FARM FIRE AND CASUALTY INSURANCE COMPANY, Appellant, v. Sandra Sue VANDIVER, Appellee.

No. 10-96-092-CV.

Court of Appeals of Texas Waco.

June 3, 1998.

Anne Gardner, Lori R. Thomas, J. Wade Birdwell, Shannon, Gracey, Ratliff & Miller, L.L.P., Fort Worth, for appellant.

Ronald D. Wren, Bedford, for appellee.

Before DAVIS, C.J., and CUMMINGS and VANCE, JJ.

OPINION

DAVIS, Chief Justice.

Appellee Sandra Sue Vandiver brought suit against Appellant State Farm Fire & Casualty Insurance Company ("State Farm") seeking recovery for damages which resulted from the destruction of her home by a fire for which State Farm denied coverage. Vandiver alleged breach of contract, breach of the duty of good faith and fair dealing, unfair claims settlement practices, DTPA violations, and violations of orders of the State Board of Insurance. A jury found in Vandiver's favor, and the court entered judgment in accordance with the verdict.

I. APPELLATE POINTS

State Farm presents twenty-six points of error. In seventeen of these points, State Farm claims that the trial court erred by:

• directing a verdict against State Farm on its arson defense and on Vandiver's breach of contract cause of action;

• overruling State Farm's motion for new trial because an arson finding would preclude Vandiver's recovery on any theories alleged as a matter of law;

• submitting a defective question on the issue of whether State Farm breached its duty of good faith and fair dealing because the question did not require the jury to also find that State Farm knew or should have known that it had no reasonable basis to deny the claim;

• submitting questions (and refusing to disregard the jury's findings) on alleged unlisted unfair claims settlement practices because no such causes of action exist under the Texas Insurance Code, Texas insurance regulations, or the Deceptive Trade Practices Act (two points);

• refusing to disregard the jury's finding of damages for mental anguish because it is immaterial and because no questions were submitted on proximate cause;

• awarding prejudgment interest for mental anguish damages and trebling such damages because such damages are not supported by the evidence;

• overruling State Farm's objection to the definition of the term "knowingly" submitted to the jury in the court's charge;

• trebling Vandiver's damages because the jury failed to find that State Farm acted knowingly, with malice, or with gross negligence (two points);

• trebling damages in violation of State Farm's procedural and substantive due process rights and the excessive fines prohibitions of the federal and state constitutions;

• awarding attorney's fees to Vandiver because such fees are based on jury findings which must be set aside;

• impermissibly commenting on the weight of the evidence;

• trebling Vandiver's contract damages;

• trebling prejudgment interest awarded to Vandiver;

• calculating the prejudgment interest on incorrect interest rates and accrual dates; and

• taxing a co-defendant's costs against State Farm.

State Farm alleges in eight points that the evidence is legally and/or factually insufficient to support the jury's verdict. In one other point, State Farm argues that we must reverse and remand this cause for a new trial because the court reporter cannot provide the parties "a complete and accurate statement of facts."

II. FACTUAL BACKGROUND

Vandiver owned a home in Ellis County on six acres of land. State Farm insured the property under a standard farm and ranch owner's policy. A fire consumed Vandiver's home on April 23, 1988. State Farm's investigation revealed that the fire had an incendiary origin. Its investigation led it to conclude that Vandiver had either set the house on fire or directed someone to set it on fire. For this reason, State Farm denied Vandiver's claim. Vandiver filed suit after State Farm denied her claim.

III. THE "LOST" RECORD

State Farm's first point avers that State Farm is entitled to a new trial because the court reporter failed to record a portion of the trial proceedings. State Farm has presented this same contention previously in a motion requesting reversal and remand due to the allegedly "lost" record. We denied the motion in a published interlocutory order. See State Farm Fire & Cas. Ins. Co. v. Vandiver, 941 S.W.2d 343 (Tex.App--Waco 1997, order). State Farm cites no additional authorities in its brief to support its contention that it is entitled to a new trial. Accordingly, we overrule the first point.

IV. THE DIRECTED VERDICT

State Farm argues in its second point that the court erred in directing a verdict against State Farm on its arson defense and on Vandiver's breach of contract claim. State Farm's sixth point contends that the court erred in overruling its motion for new trial premised on the court's directed verdict. We will consider the two parts of the directed verdict separately.

When considering the propriety of a directed verdict, we examine the record for any probative evidence which raises a fact issue on the question presented. Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex.1994). We view the evidence in the light most favorable to the party against whom the court directed the verdict, disregarding any contrary evidence and inferences. Id.; White v. Southwestern Bell Tel. Co., 651 S.W.2d 260, 262 (Tex.1983); If the record contains any conflicting probative evidence on the issue, the issue should be submitted to the jury. Id.

A. THE ARSON DEFENSE

To establish the affirmative defense of arson, an insurer bears the burden of proving by a preponderance of the evidence that the insured set the fire or caused it to be set. State Farm Lloyds, Inc. v. Polasek, 847 S.W.2d 279, 282 (Tex.App.--San Antonio 1992, writ denied); accord Chubb Lloyds Ins. Co. v. Kizer, 943 S.W.2d 946, 949 (Tex.App.--Fort Worth 1997, writ denied). Generally, the insurer must rely on circumstantial evidence to prove the defense. See Polasek, 847 S.W.2d at 282; Garrett v. Standard Fire Ins. Co., 541 S.W.2d 635, 638 (Tex.Civ.App.--Beaumont 1976, writ ref'd n.r.e.).

The crime of arson, being in defiance of law, is ordinarily conceived in secrecy and executed in such a manner as to avoid detection and exposure; and proof of such an unlawful enterprise must, in the very nature of things, be made by circumstances, and every circumstance which tends to cast light upon the incident is legitimate and proper.

Id.

In order to establish the affirmative defense, the insurer must offer evidence:

(1) the fire had an incendiary origin;

(2) the insured had a motive to set the fire or cause it to be set; and

(3) the insured had an opportunity to set the fire or other circumstances linking the insured to the fire.

See Polasek, 847 S.W.2d at 282; Johnson v. Garza, 884 S.W.2d 831, 834-35 (Tex.App.--Austin 1994, writ denied).

When we review the record for probative circumstantial evidence of these elements, we examine the totality of the circumstances rather than viewing each piece of evidence in isolation. Felker v. Petrolon, Inc., 929 S.W.2d 460, 464 (Tex.App.--Houston [1st Dist.] 1996, writ denied). We consider the totality of the circumstances to determine whether they "point to the ultimate fact sought to be established with such a degree of certainty as to make the conclusion reasonably probable." Bufkin v. Texas Farm Bureau Mut. Ins. Co., 658 S.W.2d 317, 320 (Tex.App.--Tyler 1983, no writ) (citing Benoit v. Wilson, 150 Tex. 273, 282, 239 S.W.2d 792, 797 (1951)); accord Felker, 929 S.W.2d at 463-64. So long as the inferences arising from the circumstantial evidence are not equally consistent with the nonexistence of the ultimate fact, some probative evidence exists in the record to support the ultimate fact. Felker, 929 S.W.2d at 463-64; see also Tubelite v. Risica & Sons, Inc., 819 S.W.2d 801, 805 (Tex.1991).

Any evidence has probative value if it contributes to the proof of an issue. A single factor standing alone may be insufficient, but when joined by other factors constituting a significant whole, the combination can justify a conclusion. To sustain a finding of fact based upon circumstantial evidence, it is not necessary to exclude beyond suspicion every other possible inference that could be drawn from the facts shown. It is necessary to show only that one conclusion or inference is more probable than any other.

Felker, 929 S.W.2d at 464 (citing Brinegar v. Porterfield, 705 S.W.2d 236, 238-39 (Tex.App.--Texarkana), aff'd, 719 S.W.2d 558 (Tex.1986)) (other citations omitted).

The parties do not dispute that the fire which consumed Vandiver's home had an incendiary origin. Thus, we limit our inquiry to the latter two elements of the affirmative defense.

1. Motive

We first examine the record for any probative evidence tending to show that Vandiver had some motive to set her house on fire. The record reveals significant evidence that Vandiver was experiencing financial stress at the time of the fire. She had a horse-raising business which was not making a profit. Vandiver had used this business to write off expenses from her federal income taxes for a number of years. The year of the fire was the last year she would be able to deduct her expenses due to business losses. See 26 U.S.C.A. § 183(d) (West Supp.1998).

The record contains some probative evidence that Vandiver's monthly expenses at the time of the fire exceeded her income. State Farm's analysis of her bank records revealed that she had a negative cash flow of almost $3,000 in the eight months prior to the fire with additional bank charges assessed for checks which were returned because of insufficient funds. Vandiver had less than $500 in her accounts the month before the fire.

Vandiver lived with a man who did not have steady employment. She assisted him in his child support obligations, for which he was more than $27,000 in arrears. She provided him a vehicle for which she made...