The First Court docket of Appeals in Houston affirmed an evaluation that concerned math and utility of the Texas Insurance coverage Code. In Jones v. Allstate Car & Property Insurance coverage Firm, 2022 Tex. App. LEXIS 8896 (Tex. App.—Houston [1st Dist.] Dec. 6, 2022, no pet.), the policyholder appealed a take-nothing judgment in favor of the insurer in a dispute over a partial denial of a owners declare. The policyholder sued her insurer for breach of contract, violation of the Texas Insurance coverage Code, and breach of the obligation of fine religion and truthful dealing. At trial, the jury discovered that the insurer didn’t adjust to the coverage, engaged in unfair and misleading commerce practices, and didn’t adjust to the obligation of fine religion and truthful dealing. The jury discovered that $6,935 would pretty and fairly compensate the policyholder for the insurer’s conduct. The jury additionally discovered that the policyholder incurred $27,000 in cheap and vital legal professional’s charges.
The trial court docket accepted the jury’s findings, however rendered a take-nothing judgment in favor of the insurer and awarded the insurer its prices. The trial court docket reasoned that the insurer had already paid $4,670.67 on the policyholder’s declare. The trial court docket additionally famous {that a} deductible of $3,040 utilized to the policyholder’s declare. As a result of these quantities, when mixed, exceeded the damages discovered by the jury, the trial court docket ordered that the policyholder was not entitled to any damages or different reduction.
On enchantment, the policyholder asserted that Texas Insurance coverage Code §541.152(a)(1) entitled her to an award of legal professional’s charges. The statute gives {that a} prevailing plaintiff might acquire “the quantity of precise damages, plus prices and cheap and vital legal professional’s charges.” The court docket of appeals assumed with out deciding that such language mandated an award of legal professional’s charges. The court docket of appeals surveyed authorities and held {that a} plaintiff should acquire a judgment in her favor and be awarded one thing, both financial or equitable, to qualify as a prevailing occasion. Conversely, the court docket of appeals famous {that a} defendant that secured a take-nothing judgment is a prevailing occasion.
The court docket of appeals additionally mentioned disputes over the usual of assessment and the reporter’s document which might be past the scope of this weblog submit.
The policyholder conceded within the court docket of appeals that the trial court docket was right in not awarding damages on account of offsets. However, she argued that she had prevailed as a result of she obtained favorable jury findings. She emphasised a public coverage argument, that an award of legal professional’s charges was vital underneath the Texas Insurance coverage Code to punish insurers for wrongdoing and shield customers.
The court docket of appeals rejected the policyholder’s argument. The court docket of appeals famous pressure between Texas authorities relating to whether or not full offsets of jury awards precluded legal professional’s charges awards. The court docket of appeals distinguished these authorities that will have allowed an award of legal professional’s charges by noting that they concerned claims and counter-claims, in contrast to the moment case. Surveying authorities, the court docket of appeals handled the pretrial insurance coverage funds like pretrial settlement funds. The court docket of appeals opined that the insurer thus paid the total quantity it owed to the policyholder on her claims earlier than the trial even started. This meant that the policyholder didn’t prevail and can’t recuperate her legal professional’s charges.
The court docket of appeals hinted that the result might need been totally different if the insurer had asserted the affirmative protection of offset and if the jury cost had been offered and determined otherwise. In any occasion, Jones underscores how essential it’s for either side to precisely and realistically consider their circumstances earlier than continuing to trial. Additional, even when the court docket of appeals had allowed an award of legal professional’s charges, it might not have allowed an award of $27,000 on a restoration of $6,935.
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