Tex. Windstorm Ins. Ass'n v. James

CourtCourt of Appeals of Texas
Docket NumberNUMBER 13-17-00401-CV
Decision Date20 August 2020


NUMBER 13-17-00401-CV


August 20, 2020

On appeal from the 60th District Court of Jefferson County, Texas.


Before Chief Justice Contreras and Justices Benavides and Perkes
Memorandum Opinion by Justice Perkes1

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Appellees David James and Sue James sued appellants Texas Windstorm Insurance Association (TWIA), Brush Country Claims, Ltd. (Brush Country), and David Gutierrez, for breach of contract and multiple violations of the Texas Insurance Code in connection with the handling of Hurricane Rita claims. The jury found in favor of the Jameses on several of their causes of action.

By seventeen issues, which we have reordered and consolidated, appellants argue: (1) conflicting answers to jury questions negate coverage under the policy; (2) there was no evidence of reasonable access, proof of loss, inventory of damaged personal property, or additional living expenses (ALE); (3) there was legally insufficient evidence that the loss reported was covered under the policy; (4)-(7) there was no evidence, and alternatively, factually insufficient evidence, of liability under the insurance code; (8) "no evidence supports reasonable and necessary attorney's fees"; (9) the Jameses failed to properly segregate their attorney's fees; (10) the Jameses' excessive presuit demand precludes award of attorney's fees, and the trial court erred when it failed to provide an instruction on presuit demand; (11) the trial court erroneously instructed the jury on comingled valid and invalid theories; (12) the trial court refused to submit an instruction on spoliation; (13) the trial court admitted irrelevant and prejudicial evidence at trial; (14) Sue has no standing to recover; (15) the Jameses are not entitled to prejudgment interest for periods of delay they caused; (16) the insurance code precludes recovery; and (17) the Jameses cannot recover against Brush Country or Gutierrez. We reverse and render in part and affirm in part.

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The Jameses took out a home insurance policy on two properties in Groves, Texas (herein, the Berry and Garfield properties), through TWIA. The Jameses initially resided together at the Berry property and purchased the Garfield property in 2003 intending to "flip" it. Soon after, the couple separated, and David began living at the Garfield property as his primary residence.

On September 24, 2005, Hurricane Rita struck. Three days later, the Jameses' insurance agent, Mike Bedair, submitted an insurance claim for the Garfield property on their behalf. TWIA assigned the claim to its contracted adjuster, Brush Country, to investigate. On January 29, 2007, TWIA closed the claim, and the Jameses received a claim check for $13,650.81 for only roofing and siding repairs despite claiming interior and exterior dwelling losses in excess of $80,000.

At trial, the parties provided competing testimony of what transpired between September 2005 and January 2007, disputing the fulfillment of insured and insurer duties as prescribed by the Jameses' TWIA policy.

A. The Jameses' Witnesses

1. Mike Bedair

Bedair, the Jameses' insurance agent, was the first individual to see the Garfield property after the storm. Like the Jameses, Bedair evacuated the area before the hurricane made landfall. Bedair returned one day later to inspect his clients' properties. "All I remember is there was damage," said Bedair of the Garfield home. "Seemed like there was roof damage." Bedair testified that the front and back door of the residence had been blown wide open, but he did not enter the home to inspect for further damage.

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Bedair filed a claim on the Jameses' behalf. While he received the notice of claim acknowledgment and assignment from TWIA on September 29, 2005, Bedair denied that TWIA ever sent a proof of loss request and accompanied form within a fifteen-day period, as required by the Jameses' policy. Bedair said he was also never notified by appellants that the Jameses had been non-compliant with any policy terms.

On cross-examination, Bedair was questioned regarding letters sent from Brush Country to the Jameses indicating Brush Country was having difficulty communicating with the Jameses. While Bedair confirmed receipt of the letters, he denied taking any action and did not confirm whether the Jameses independently received the letters.

2. Troy Caldwell

Caldwell, the Jameses' church friend and neighbor, lived down the street from the Berry property. Two days after the storm, he returned to town to check on his own home and ended up viewing "half a dozen" other homes belonging to friends and family. Caldwell testified he immediately became "alarmed" upon driving up to the Garfield property because it appeared as if "somebody had kicked the [front] door down." Caldwell said he grabbed his pistol before he entered the house. "[I]t was just [i]n absolute shambles. . . . As I cautiously walked around . . . , I noticed that the back door had been blown completely out of the jamb," said Caldwell. The walls appeared "filthy" and gray, and Caldwell stated, "I distinctly remember the whole inside of the house just being literally torn all to pieces, furniture and all. I ke[pt] going back to the cabinets because as I passed through[,] I was like[,] [']Dear, God. Man, how did this all happen?[']"

Caldwell said it did not occur to him to take photographs. He testified he was focused on surveying the properties, securing them if necessary, and reporting back to

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the homeowners. Caldwell said he nailed the back door into the frame and shut the front door before he left the premises.

3. Sue James

Sue testified that by September 2005, her relationship with her husband "had deteriorated quite a bit," and the couple were no longer residing in the Berry home together. David was "working on" and "staying at" Garfield, which she described as an older two-bedroom, one bath home.

Before the hurricane hit, Sue evacuated to central Texas. She returned to Groves "[s]omewhere around the middle of October . . . just for the day" to check on the two properties. Sue testified that the front door of the Garfield home, although closed, "wasn't latched" shut. "You could just push the door and go on in." Meanwhile, the back door "had been blown off and had been nailed back just enough to keep it in the frame." The walls were wet, and the home smelled of mold, she said.

Seven months after the storm, with their TWIA claim still unresolved and fearing worsening damage to the residence, Sue said she and David began "tearing into the house, taking down sheetrock, [and] taking out insulation." Before "gut[ting] the house," the Jameses took photographs of the home's interior and exterior. Sue testified she created an inventory list of damaged personal property, developed the film they took, and electronically saved the photographs onto a C.D. "I took that C.D., along with hard copy pictures, and put it in the envelope, along with my inventory list. And I mailed it to TWIA. I did not send it certified." The Jameses sought reimbursement of $20,000 for the inventoried damages. Sue said they did not save any copies of what was mailed.

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On cross-examination, Sue conceded that in addition to having no saved photographs of the interior damage, the couple did not keep receipts or invoices for any living expenses incurred or repairs completed. Sue explained that several people from the community had volunteered their time to assist in repairing the home and much of the materials had been donated.

4. David James

David testified his initial contact with the first adjuster assigned to their claim, Gutierrez, was uneventful and respectful. The two men agreed to meet in November 2005, one month after the storm. On the eve of the scheduled November meeting, however, David said he was approved for a loan to purchase a trailer for temporary housing. The nearest available trailer in his price range was located in Austin and required pick-up on the same date as David's previously scheduled appointment with Gutierrez. David testified that he immediately contacted Gutierrez to reschedule, but the conversation quickly deteriorated. Gutierrez was "screaming so loud" that Sue was able to "hear every word he [was] saying."2 David said the conversation concluded after he was told by Gutierrez, "'Well, I'll just put you at the end of December or later,' just as nasty as he could say it." "I had done everything I could [sic] tell him. We can't lose her job.3 . . . We would have lost everything again," said David of forgoing the opportunity to buy the trailer and have stable housing once more. Up until then, David said he had been living out of a hotel.

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After David purchased the trailer, he returned to Groves and parked the trailer on the Garfield lot. According to David, at some unspecified point, Gutierrez arrived unannounced on the property. Although it was not notated in Gutierrez's work logs admitted at trial, David said Gutierrez called him, told him he was "outside," and demanded to be shown the home. David testified he suffered from back problems and had recently "got[ten] hurt trying to get th[e] refrigerator out of the house." He was unable to get out of bed and asked Gutierrez to proceed into the Garfield residence without him. David said he offered to provide Gutierrez with written permission to inspect the property alone, but Gutierrez declined. David testified:

I said[,] 'Well, the house is open. Go ahead. Look at everything you need to do.' [He said,] 'No, I have to have you with me.' And this is[,] like[,] I just got slapped, you know. Why does he need me? There's nothing I can do . . . So, I said[,] 'Go ahead. Just push the door. It's already open.' . . . And he says 'No, I have to see the roof'—no—'see the

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