Stewart Title Guar. Co. v. Sterling, C14-87-00309-CV

• Decision Date: 18 May 1989
• Docket Number: No. C14-87-00309-CV,C14-87-00309-CV
• Citation: 772 S.W.2d 242
• Parties: STEWART TITLE GUARANTY COMPANY, Appellant, v. Dawson STERLING, Trustee, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 242

772 S.W.2d 242

STEWART TITLE GUARANTY COMPANY, Appellant, v. Dawson STERLING, Trustee, Appellee.

No. C14-87-00309-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

May 18, 1989.

Eugene J. Pitman, Houston, for appellant.

Thomas T. Hutcheson, Roland M. Chamberlin, Jr., E. John Gorman, Houston, for appellee.

Before JUNELL, SEARS and CANNON, JJ.

OPINION

SEARS, Justice.

Stewart Title Guaranty Company [hereinafter Stewart] complains of a judgment against it in an unfair claims settlement and deceptive trade practices action brought by W. Dawson Sterling, Trustee [hereinafter Sterling]. We affirm the judgment of the trial court.

In July of 1983, Sterling purchased a large tract of land he intended to develop into a residential sub-division. As part of that purchase, Sterling sought to acquire title to three water district lots. His ownership of these lots was essential to ensure his ability to control the water district board of directors, who in turn control the installation of utilities in the development area. Stewart was to supply title insurance for all the property, including the three all-important water district lots.

Prior to closing, Sterling noticed a discrepancy between the Policy Commitment given to him by Stewart and a survey of the property in question. The survey indicated that the three water district lots did not belong to the seller with whom Sterling had been negotiating. Sterling alerted Stewart to this discrepancy. Despite the existence of three recorded general warranty deeds establishing title in persons other than the seller, and the fact that proof of such ownership was actually in Stewart's files, Stewart assured Sterling the lots would be included in the deal.

At the closing, Sterling was repeatedly assured by a Stewart employee, Cameron, that he would be receiving "good and indefeasible title" to all the property, including the critical water district lots. Following those assurances, Sterling proceeded with the closing. Sterling was required to sign a "Waiver of Inspection", which stated that Stewart's policy would except from coverage the rights of parties in possession, "the existence of which does not appear of record." The Policy Commitment Sterling had previously received did not contain such a clause. However, the policy actually issued by Stewart did contain the clause. Significantly, the qualifying language, "the existence of which does not appear of record," which was included in the waiver signed by Sterling, was omitted from the policy issued to him.

When it became clear Sterling's title to the three lots was defective, he filed a claim on his title policy. Stewart denied his claim and sought a declaratory judgment against him. Sterling then filed suit against Stewart; the seller, Equitable; and the seller's attorneys, Butler & Binion. The cases were consolidated and proceeded to trial. After the trial began, Equitable and Butler & Binion settled with Sterling, and the jury was informed of the settlement.

The trial court based its judgment against Stewart on the following jury findings: Stewart had knowingly engaged in an unfair settlement practice that was a producing cause of damage to Sterling; Stewart knowingly engaged in improper trade practice that was also a producing cause of damage to Sterling; Sterling sustained two-hundred thousand dollars in actual damages; and Sterling should receive three-hundred and forty-five thousand dollars in reasonable and necessary attorney's fees.

In its first point of error, Stewart asserts the trial court erred in submitting special issues asking whether Stewart had engaged in unfair claims settlement practice, and whether that conduct was the producing cause of damage to Sterling. Stewart objected to this issue contending there was no evidence, or insufficient evidence to support its submission. Stewart argues no such private cause of action exists and, alternatively that, even if a private cause of action exists, there is no evidence that the conduct occurred with such frequency as to indicate a general business practice.

Stewart is correct in stating TEX.INS.CODE ANN. art. 21.21-2 (Vernon 1981) does not itself create a private cause of action. However, Sterling sought relief under TEX. INS.CODE ANN. art. 21.21, § 16 (Vernon Supp.1989) and TEX.BUS. & COM.CODE ANN. § 17.50 (Vernon 1987). [Sections 17.41--17.826 of the Business and Commerce Code are more commonly referred to as the Deceptive Trade Practices Act, or DTPA].

The Texas Supreme Court has permitted litigants to incorporate the article 21.21-2 definitions of unfair claims settlement into actions for damages brought under article 21.21, § 16 and section 17.50 of the DTPA. Vail v. Texas Farm Bureau Mutual Insurance Co., 754 S.W.2d 129 (Tex.1988). Further, the Vail court held proof of frequency of the unfair activity was not a requisite element of any of the acts defined in article 21.21-2. Vail, 754 S.W.2d at 134. The Texas Supreme Court said article 21.21, § 16 of the Insurance Code makes actionable any violation of section 17.46 of the DTPA, and article 21.21 incorporates any practice determined to be false, misleading, or deceptive. Vail, 754 S.W.2d at 135.

Accordingly, Sterling brought a cognizable action against Stewart, and in light of Vail, Stewart's complaints as to the lack of evidence establishing frequency of misconduct are inapposite. So long as there was some evidence to support Sterling's claim of unfair settlement practice, submission of special issues number five and six was proper. Brown v. Goldstein, 685 S.W.2d 640, 641 (Tex.1985); Garza v. Alviar, 395 S.W.2d 821, 824 (Tex.1965).

Special issue number five read as follows:

Do you find from a preponderance of the evidence that Stewart Title Guaranty Co. engaged in any unfair claims settlement practice with respect to Dawson Sterling?

Answer "Yes" or "No."

ANSWER: Y[es]

You are instructed that the term "unfair claims settlement practice" is defined as any one of the following acts or omissions:

(a) Misrepresenting to W. Dawson Sterling pertinent facts or policy provisions relating to coverages at issue.

(b) Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become clear.

(c) Compelling W. Dawson Sterling to institute suit to recover amounts due under his policy by offering substantially less than the amounts ultimately recovered in suit brought by him.

(d) Failing to provide promptly to W. Dawson a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of the claim.

Stewart also contends there was no evidence to support submission of the related issue as to whether the conduct was the producing cause of Sterling's damages. Though Stewart also contends the evidence was insufficient to support submission of the issues, such a contention is inapplicable and will not be addressed. Brown, 685 S.W.2d at 641.

Although there was ample evidence from Stewart's own employees to support submission of the unfair settlement practice issue, Sterling's testimony also raised the issue. He testified at length as to misrepresentations made by Stewart concerning the title he would receive and the title insurance coverage guaranteed. It was for the jury, as trier of the facts, to decide the weight to attach to his testimony. Rego v. Brannon, 682 S.W.2d 677, 680 (Tex.App.--Houston [14th Dist.] 1984, writ ref'd n.r.e.) Thus, solely on the basis of Sterling's testimony, the trial court was correct in submitting the issue to the jury.

Next, Stewart challenges the factual sufficiency of the evidence to support the jury's affirmative findings on special issues five and six. When reviewing questions of factual sufficiency, we must consider and weigh all the evidence, both in support of and contrary to the challenged findings. The jury's findings must be upheld unless we find the evidence is so weak, or the finding is so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986); In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951). We may not substitute our opinion for that of the trier of fact merely because we might have reached a different conclusion. Benoit v. Wilson, 150 Tex. 273, 239 S.W.2d 792, 896 (1951); Thomas v. Wooten, 650 S.W.2d 499, 501 (Tex.App.--Houston [14th Dist.] 1983, writ ref'd n.r.e.). Further, the jury as the trier of the facts is the sole judge of the credibility of the witnesses and the weight to be given to their testimony. Rego, 682 S.W.2d at 680.

The record before this court is filled with evidence from which the jury could have determined Stewart engaged in the kind of acts or omissions defined in special issue number five. Stewart's own employees testified to the following: Sterling was falsely told at the closing he was getting indefeasible title to the property, including the three water district lots; Stewart's title examiner overlooked numerous documents showing record title which preclude Sterling's ownership of the water district lots; evidence of the true record title was actually in Stewart's own files, including copies of recorded warranty deeds to the three water district lots; the exception language in the waiver of inspection signed by Sterling and the language in the policy actually issued differed significantly; and the policy exception on which Stewart based its denial of Sterling's claim was not in accordance with the language required by the Board of Insurance. Further, Stewart's vice-president and claims counsel testified that the policy was illegal because it attempted to exclude coverage for title defects not disclosed to Stewart in writing, even if the defects were disclosed by public records. According to policy forms promulgated by the State Board of Insurance, Stewart could only exclude from coverage those defects ...