Thomas v. State Farm Mut. Auto. Ins. Co., 18248

• Court: Supreme Court of West Virginia
• Writing for the Court: MILLER; Because State Farm's full-time appraiser, Ferlin Basham, was unavailable at the time, the claims representative, Ivan Daniel Adams; McGRAW; WORKMAN
• Citation: 383 S.E.2d 786,181 W.Va. 604
• Parties: Biddie THOMAS, d/b/a Thomas Septic Service v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.
• Docket Number: No. 18248,18248
• Decision Date: 12 July 1989

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383 S.E.2d 786 181 W.Va. 604 Biddie THOMAS, d/b/a Thomas Septic Service
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. No. 18248. Supreme Court of Appeals of
West Virginia. July 12, 1989. Syllabus by the Court

1. "Whenever a policyholder substantially prevails in a property damage suit

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[181 W.Va. 605] against its insurer, the insurer is liable for: (1) the insured's reasonable attorneys' fees in vindicating its claim; (2) the insured's damages for net economic loss caused by the delay in settlement, and [(3)] damages for aggravation and inconvenience." Syllabus Point 1, Hayseeds, Inc. v. State Farm Fire & Casualty Co., 177 W.Va. 323, 352 S.E.2d 73 (1986).

2. The question of whether an insured has substantially prevailed against his insurance company on a property damage claim is determined by the status of the negotiations between the insured and the insurer prior to the institution of the lawsuit. Where the insurance company has offered an amount materially below the damage estimates submitted by the insured, and the jury awards the insured an amount approximating the insured's damage estimates, the insured has substantially prevailed.

Ben B. White, III, Princeton, for State Farm Mut. Auto. Ins. Co.

John P. Anderson, Princeton, for Biddie Thomas.

MILLER, Justice:

This is an appeal from a final order of the Circuit Court of Mercer County, entered April 21, 1987, which denied a motion to set aside a jury verdict in favor of the plaintiff below, Biddie Thomas, for property damage and economic loss resulting from an automobile accident involving a truck used in the plaintiff's business. The defendant, State Farm Mutual Automobile Insurance Company (State Farm), contends that the circuit court erred in allowing the plaintiff to recover consequential damages and in awarding her attorney's fees. We find no error warranting reversal of the circuit court's judgment, and we affirm.

The plaintiff operates a small business under the name of Thomas Septic Service. On June 18, 1986, a truck used in the business was damaged in a collision with a vehicle driven by Joseph Hamer in Mercer County. Both vehicles were insured by State Farm.

The plaintiff's husband, Ralph Thomas, notified State Farm that the truck had been towed to Andy Clark Ford, Inc., the local dealership from which the plaintiff had purchased the truck some six months earlier. Mr. Thomas requested an immediate appraisal of the damage to the vehicle, asserting that delay in effecting repairs would have an adverse effect on the plaintiff's business.

Because State Farm's full-time appraiser, Ferlin Basham, was unavailable at the time, the claims representative, Ivan Daniel Adams, authorized Andy Clark Ford to estimate the cost of repairing the truck.

The Clark Ford estimate, dated June 27, 1986, placed the cost of repairing the truck at $8,200.05. This estimate included the cost of replacing the cab and frame of the truck. It did not include the cost of repairs to a customized tank and pump apparatus that had been installed on the truck by the plaintiff for use in the business. The plaintiff separately supplied State Farm with an estimate for these repairs, prepared by the company that installed the tank and pump apparatus, in the amount of $1,560. Additionally, an estimate was submitted for the cost of painting and relettering the truck in the amount of $471.

Mr. Basham subsequently inspected the plaintiff's vehicle at the request of State Farm and estimated the cost of repairs to the truck at $4,960.72. The principal reason for the lower estimate was Mr. Basham's determination that the vehicle's cab and frame could be repaired and, therefore, did not need to be replaced. The Basham estimate did not take into consideration the cost of repairing the tank and pump apparatus or of painting and relettering the vehicle.

By letter dated July 18, 1986, Mr. Adams, the State Farm representative, advised the plaintiff of the Basham estimate and offered to settle the property damage claim for that amount under the plaintiff's collision coverage. The plaintiff refused these offers of settlement and advised State Farm that she was hiring an attorney to represent her.

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[181 W.Va. 606] In September, 1986, the plaintiff filed suit in the Circuit Court of Mercer County, alleging that State Farm had refused to provide full coverage of her loss under the terms of her insurance policy. The plaintiff sought compensatory damages in the amount of $10,465.50 for property damage to the truck and $359.00 for towing charges, as well as any hidden damage revealed in the course of repairs. In addition, the plaintiff alleged that State Farm had intentionally delayed settling the claim and sought punitive damages, consequential damages for economic loss, inconvenience and annoyance resulting from the loss of use of the vehicle, and attorney's fees pursuant to this Court's decision in Hayseeds, Inc. v. State Farm Fire & Casualty Co., 177 W.Va. 323, 352 S.E.2d 73 (1986). ¹

Trial commenced before a jury on March 26, 1987, and resulted in a verdict in favor of the plaintiff in the amount of $13,213, representing an award of $10,168 for property damage and towing and storage fees, and an award of $3,045 for economic loss. By order dated April 8, 1987, the circuit court found that the plaintiff had substantially prevailed and was, therefore, entitled to attorney's fees equal to one-third of the verdict, or $4,404.30. ² The court entered judgment for the plaintiff, plus 10 percent interest from the date of the order.

State Farm subsequently filed motions to amend its answer, to alter or amend the judgment, and to set aside the judgment. These motions were denied by order of the circuit court dated April 21, 1987.

Thereafter, the parties reached an agreement whereby State Farm would pay to the plaintiff the sum of $11,283.73, representing the jury's verdict for property damage to the truck and towing and storage fees, plus interest from the date of the accident. By order dated July 27, 1987, the circuit court ratified this agreement, leaving only a dispute as to the plaintiff's entitlement to consequential damages and attorney's fees under Hayseeds for resolution by this Court on appeal.

In Hayseeds, Inc. v. State Farm Fire & Casualty Co., supra, the holders of a fire loss policy sued their insurance company to recover the value of a building that had been destroyed by arson. ³ The insurance company had refused to pay the...