Wallis v. United Serv. Auto. Ass'n

• Decision Date: 10 February 1999
• Docket Number: No. 04-97-00803-CV,04-97-00803-CV
• Citation: 2 S.W.3d 300
• Parties: (Tex.App.-San Antonio 1999) Cecil WALLIS and Darlene Wallis, Appellants v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellee
• Court: Texas Court of Appeals

Page 300

2 S.W.3d 300 (Tex.App.-San Antonio 1999)

Cecil WALLIS and Darlene Wallis, Appellants v. UNITED SERVICES AUTOMOBILE ASSOCIATION, Appellee

No. 04-97-00803-CV

In the Fourth Court of Appeals San Antonio

February 10, 1999

Rehearing Overruled June 29, 1999

From the 131st Judicial District Court, Bexar County, Texas

Trial Court No. 94-CI-14067

Honorable Peter Michael Curry, Judge Presiding

AFFIRMED

Sitting: Tom Rickhoff, Justice, Catherine Stone, Justice, Paul W. Green, Justice

Opinion by: Catherine Stone, Justice

This insurance dispute arises from United Services Automobile Association's (hereinafter "USAA") denial of Cecil and Darlene Wallis' claim for foundation damage to their home. Following denial of a claim under their homeowner's policy,¹ the Wallises sued USAA for breach of contract, fraud, negligence, bad faith, and violations of the DTPA and Insurance Code. A jury found in favor of the Wallises on their breach of contract claim, but determined that USAA had not acted in bad faith or violated its statutory duties in denying the claim. Both parties moved for judgment, with the trial court granting USAA's motion for judgment notwithstanding the verdict. Because the jury's finding on the amount of damage caused solely by plumbing leaks is not supported by legally sufficient evidence, we affirm the trial court's judgment. The following discussion is limited to that issue.

Factual and Procedural History

In the spring of 1993, the Wallises noticed evidence of foundation damage in their home. Suspecting such damage was caused by a plumbing leak, the Wallises filed a claim under their homeowner's policy. Through its investigation, USAA determined that the foundation damage was caused by a combination of several excluded perils under the Wallises' policy, including settlement, poor surface drainage, the topography of the lot, and surrounding vegetation. Plumbing leaks, which are covered perils, were also detected; however, based on soil testing and continued earth settlement following repair of the Wallises' plumbing system, USAA concluded that the leaks were negligible and had not caused or contributed to the complained-of damage. USAA believed improper compaction of the fill dirt upon which the Wallises' foundation rests was the primary source of the problem. Elevation tests indicated that the Wallises' home, which was built upon a sloping lot, had settled as much as fifteen inches on the low end of the hill where soil was placed to create a plane for the foundation. In short, USAA's investigation revealed that the Wallises' home was sliding down the lot. Experts for the Wallises did not refute USAA's evidence regarding the excluded perils. They did, however, challenge the conclusion drawn regarding the effect of the plumbing leaks, and claimed instead that the leaks could not be excluded as a contributing cause of the damage.

At trial, the jury was asked to determine whether "earthquake, landslide, or earth movement," perils excluded under exclusion k of the policy, caused the Wallises' damage. The jury was also charged under question two of the charge with determining whether "accidental discharge, leakage, or overflow of water from within a plumbing system" contributed to the Wallises' damage. The jury answered both questions affirmatively and, under question three, found that thirty-five percent of the Wallises' damage was caused by plumbing leaks.

Both parties moved for judgment. In its motion for judgment notwithstanding the verdict, USAA asserted its entitlement to judgment on the following grounds: (1) damage caused by earthquake, landslide, or earth movement is an excluded peril under exclusion k of the policy, for which there is no exception; (2) damage to the dwelling caused by plumbing leaks is an excluded peril under exclusion h of the policy; and (3) even if damage caused by a plumbing leak is covered, the Wallises failed to produce any evidence to demonstrate what portion of the loss was caused solely by the plumbing leak. The trial court disregarded the jury's answer to question two, granted USAA's motion for judgment notwithstanding the verdict, and entered a take-nothing judgment in favor of USAA.

Standard of Review

A judgment notwithstanding the verdict is properly entered only when a directed verdict would have been proper. Tex. R. Civ. P. 301; Eubanks v. Winn, 420 S.W.2d 698, 701 (Tex. 1967); Farias v. Laredo Nat'l Bank, 955 S.W.2d 328, 333 (Tex. App.--San Antonio 1997, pet. denied). When there is no evidence upon which a jury could base its findings, the trial court must direct a verdict. ITT Consumer Fin. Corp. v. Tovar, 932 S.W.2d 147, 160 (Tex. App.--El Paso 1996, writ denied). We review the record in the light most favorable to the jury's findings, considering only the evidence and inferences which support them and rejecting the evidence and inferences to the contrary. Navarette v. Temple I.S.D., 706 S.W.2d 308, 309 (Tex. 1986). Affirmance of the trial court's judgment is proper if it is supported by any ground asserted in the motion for judgment notwithstanding the verdict, even if the trial court's assigned rationale for granting the motion is erroneous. Cf. Kelly v. Diocese of Corpus Christi, 832 S.W.2d 88,

90 (Tex. App.--Corpus Christi 1992, writ dism'd w.o.j.) (reviewing directed verdict); Prather v. McNally, 757 S.W.2d 124, 126 (Tex. App.--Dallas 1988, no writ) (reviewing directed verdict).

Concurrent Causes Doctrine

Texas recognizes the doctrine of concurrent causes. This doctrine provides that when, as in the instant case, covered and non-covered perils combine to create a loss, the insured is entitled to recover only that portion of the damage caused solely by the covered peril(s). Travelers Indem. Co. v. McKillip, 469 S.W.2d 160, 163 (Tex. 1971); Paulson v. Fire Ins. Exch., 393 S.W.2d 316, 319 (Tex. 1965); Warrilow v. Norrell, 791 S.W.2d 515, 527 (Tex. App.--Corpus Christi 1989, writ denied). To this end, the insured must present some evidence upon which the jury can allocate the damage attributable to the covered peril. Lyons v. Millers Casualty Ins. Co. of Texas, 866 S.W.2d 597, 601 (Tex. 1993) (citing Paulson, 393 S.W.2d at 319).

The Wallises contend that the insured's burden to segregate damages has been legislatively overruled by article 21.58 of the Texas Insurance Code. Pursuant to article 21.58, USAA had the burden to establish what part of the Wallises' damage was caused by an excluded peril. The Wallises contend that USAA failed to satisfy its statutorily-mandated burden of proof, and that the trial court thus erred in disregarding the jury's answer to question two. Alternatively, the Wallises argue that the issue of allocation is immaterial because the evidence introduced at trial was that the entire house needed to be repaired. We reject these contentions.

Article 21.58 (b) of the Insurance Code provides that:

In any suit to recover under an insurance contract, the insurer has the burden of proof as to any avoidance or affirmative defense that must be affirmatively pleaded under the Texas Rules of Civil Procedure. Any language of exclusion in the policy and any exception to coverage claimed by the insurer constitutes an avoidance or an affirmative defense.

Tex. Ins. Code Ann. art. 21.58...