COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
FIRE & CASUALTY INSURANCE )
COMPANY OF CONNECTICUT, ) No. 08-01-00277-CV
)
Appellant, ) Appeal from
)
v. ) 191st District Court
)
BUSLEASE, INC., ) of Dallas County, Texas
)
Appellee. ) (TC# DV99-05308-J)
O P I N I O N
Fire & Casualty Insurance Company of Connecticut (F & C) appeals from a judgment entered in favor of BusLease, Inc. (BusLease) following a jury trial. We affirm.
FACTUAL SUMMARY
In 1995, Allstate Coaches, Inc. entered into a security agreement with MCI Acceptance Corporation for the purchase of a motor coach. Allstate assigned the Security Agreement to BusLease. Pursuant to the security agreement, Allstate was required to maintain casualty insurance on the motor coach and BusLease was designated a loss payee for any loss to the motor coach. Allstate purchased a business insurance policy with F & C providing collision coverage for property damage to the motor coach.
On June 21, 1998, the motor coach sustained substantial property damage as the result of a collision with a tractor trailer in Robstown, Texas. A few days later, Allstate forwarded to F & C an automobile loss notice and made a property damage claim. By letter dated August 17, 1998, BusLease informed F & C that it retained all rights as loss payee and expressed its understanding that any check made for repair would be payable to BusLease and Allstate. At about the same time, F & C obtained an appraisal of the repair cost through an adjuster employed by its policy administrator, GAB Robins. The adjuster estimated the repair cost at $67,368 subject to the final invoice cost of parts from the Dina Bus Company in Mexico City.[1] In October 1998, BusLease contacted F & C to inquire about the claim but received no information. In November 1998, F & C issued a check payable to both Allstate and BusLease in the amount of $66,368 (estimated repair cost less deductible) and delivered it to Allstate. Allstate, however, steadfastly refused to endorse the check or turn it over to BusLease. For reasons unrelated to the accident, Allstate also failed to pay the balance owed under the security agreement. Accordingly, BusLease repossessed the motor coach in December 1998. BusLease subsequently informed F & C in December 1998 and again in February 1999 that it had repossessed the wrecked motor coach and that Allstate had refused to endorse the check. It demanded that F & C stop payment on the prior check and reissue a check for $66,368 made payable solely to BusLease since Allstate was no longer entitled to the insurance proceeds. F & C did not respond to this letter.
During the entire time it had corresponded with F & C about this matter, BusLease had not been provided with a copy of the estimate obtained by F & C nor did its representatives understand that F & C intended that the $66,368 check tendered to Allstate would be the entire payment made for repairs. In fact, BusLease=s representatives believed that the check represented only a partial payment. In an effort to facilitate the repair of the motor coach, BusLease obtained an estimate for repairs in the amount of $130,496.32 from Blitz Bus & Truck in Chicago, Illinois, and forwarded this estimate to F & C in June 1999. F & C did not contact BusLease to discuss this estimate. Allstate later signed a release authorizing F & C to make any payments under the policy direct to BusLease. BusLease filed suit against F & C on July 13, 1999 for breach of the insurance policy. In February 2000, F & C hired an expert witness, Peter Paluzzi, and instructed him to inspect the motor coach. Paluzzi determined the reasonable and necessary cost to repair the motor coach to be $95,196.32. Following Paluzzi=s inspection, F & C informed BusLease that it agreed with the earlier estimate provided by Blitz with the exception of the estimated labor hours. On February 28, 2000, F & C forwarded a check in the amount of $66,368 payable solely to BusLease. Three months later, it forwarded a second check in the amount of $28,828.32, representing the difference between the first check and the estimate provided by Paluzzi. The actual cost to repair the vehicle was $125,317, a difference of $30,120.68 between the amount tendered by F & C and the actual cost of repairs.
The jury determined that F & C failed to comply with its agreement to timely pay the reasonable and necessary cost of repairs to the motor coach. It found that the reasonable and necessary cost of repairs was $110,000, approximately $15,000 more than F & C tendered and $15,000 less than the actual cost of repairs. The jury also awarded BusLease attorney=s fees in the amount of $125,000 for preparation and trial, plus additional attorney=s fees in the event of appeal. Finally, the jury found that BusLease=s demand to F & C for payment of sums related to the cost to repair the motor coach was not excessive at the time it was made. The trial court entered judgment in accordance with the jury=s verdict.
SUFFICIENCY OF THE EVIDENCE
On appeal, F & C does not challenge the jury=s finding that it breached the insurance policy or the jury=s assessment of damages resulting from the breach, nor does it challenge the reasonableness of the attorney=s fees awarded by the jury. Instead, its argument is limited to the sufficiency of the evidence supporting the jury=s determination that BusLease did not make an excessive demand. In Issue One, F & C contends that BusLease=s demand for payment was excessive as a matter of law, and therefore, BusLease is not entitled to recover attorney=s fees. Alternatively, F & C argues in its second issue that the jury=s finding is against the great weight and preponderance of the evidence.
Impact of Excessive Demand on Recovery of Attorney=s Fees
When a party seeks to recover attorney=s fees under Section 38.001(8) of the Civil Practice and Remedies Code, the claimant is obligated to present the claim to the opposing party. Tex.Civ.Prac.&Rem.Code Ann. '' 38.001(8), 38.002 (Vernon 1997). If payment is made within thirty days after presentment of the claim, attorney=s fees are not recoverable. Tex.Civ.Prac.&Rem.Code Ann. ' 38.002. The purpose of this presentation requirement is to allow the party against whom a claim has been asserted an opportunity to pay a claim without incurring an obligation to pay the attorney=s fees of the claimant. See France v. American Indem. Co., 648 S.W.2d 283, 285-86 (Tex. 1983). While no particular form of presentment is required, France, 648 S.W.2d at 286, presentment is improper if the claimant=s demand is excessive. Wayne v. A.V.A. Vending, Inc., 52 S.W.3d 412, 418 (Tex.App.‑-Corpus Christi 2001, pet. denied). If the claiming party makes an unreasonable demand, the other party should not be forced to pay the demand or else risk suffering the claimant=s attorney=s fees. Id.
In considering whether a demand is excessive, the dollar amount is not by itself indicative. Id. A demand is not excessive merely because it is greater than what is later determined at trial to be due. Aetna Casualty & Surety v. Wild, 944 S.W.2d 37, 39 (Tex.App.‑-Amarillo 1997, writ denied); Pennington v. Gurkoff, 899 S.W.2d 767, 772 (Tex.App.‑‑Fort Worth 1995, writ denied). The dispositive inquiry for determining whether a demand is excessive is whether the claimant acted unreasonably or in bad faith. Wayne, 52 S.W.3d at 418; Staff Industries, Inc. v. Hallmark Contracting, Inc. , 846 S.W.2d 542, 548 (Tex.App.--Corpus Christi 1993, no writ). F & C concedes that it had the burden at trial to establish that BusLease=s demand was excessive.
Standard of Review -- Matter of Law
When attacking the legal sufficiency of the evidence to support an adverse finding on an issue for which it had the burden of proof, i.e., challenging the trial court=s finding as a matter of law, the appellant must demonstrate on appeal that the evidence conclusively established all the vital facts in support of the issue. Sterner v. Marathon Oil Company, 767 S.W.2d 686, 690 (Tex. 1989); Elias v. Mr. Yamaha, Inc., 33 S.W.3d 54, 59 (Tex.App.‑-El Paso 2000, no pet.). A party attempting to overcome an adverse fact‑finding as a matter of law must surmount two hurdles. Sterner, 767 S.W.2d at 690; Elias, 33 S.W.3d at 59. First, the record must be examined for evidence that supports the finding, while ignoring all evidence to the contrary. Sterner, 767 S.W.2d at 690; Elias, 33 S.W.3d at 59. Second, if there is no evidence to support the finding, then the entire record must be examined to see if the contrary proposition is established as a matter of law. Sterner, 767 S.W.2d at 690; Elias, 33 S.W.3d at 59. Only if the contrary position is conclusively established will the point of error be sustained. Elias, 33 S.W.3d at 59.
Application of the Law to the Facts
By its demand and suit, BusLease sought to recover $130,496.32 from F & C. The jury found that the reasonable and necessary cost of repair was $110,000. This disparity between the amount demanded and the amount awarded at trial does not, standing alone, establish an excessive demand. See Wild, 944 S.W.2d at 39. Instead, we must examine whether BusLease=s demand was unreasonable or made in bad faith.
F & C=s argument that the demand is excessive is centered on evidence reflecting that the original estimate included repair items amounting to $11,500 which were not related to the accident in question. F & C makes much of admissions by BusLease at trial that the original estimate had mistakenly included these amounts. It also alleges that BusLease did not ask Blitz for a breakdown of accident and non-accident related repairs until approximately one year after it made demand and filed suit. These arguments, of course, take into account evidence that is contrary to the jury=s finding and will not be considered in our review under the first prong of the Sterner analysis.
Limiting our review to the evidence supporting the jury=s finding, there is some evidence showing that BusLease acted reasonably in relying on the Blitz estimate and forwarding it to F & C. Based upon its prior dealings with Blitz and the company=s good reputation, BusLease knew Blitz to be an expert in the field of motor coach repair. In its cover letter to BusLease, Blitz characterized the attachment as an Aestimate for accident repairs.@ Under these circumstances, BusLease had no reason to believe that the estimate included non-accident related repairs and it did not independently analyze each item on the estimate before forwarding it to F & C. Instead BusLease=s representatives relied on Blitz=s letter and the attached estimate. Further, BusLease=s representatives did not have any expectation that the actual cost of repairs would correspond exactly to the estimate. After the actual repair cost had been established, BusLease forwarded a revised invoice to counsel for F & C. Despite the erroneous inclusion of the non-accident related repair items in the estimate and BusLease=s failure to detect the error earlier, there is no evidence to show that BusLease acted in bad faith or unreasonably by forwarding the Blitz estimate to F & C. See Denta Rama, Inc. v. Lavastone Indus. of Central Texas, Inc., 597 S.W.2d 507, 510 (Tex.Civ.App.--Dallas 1980, no writ)(where subcontractor=s demand was too high because of mistaken belief regarding manner in which rock veneer had been installed, but subcontractor corrected its mistakes at trial, the demand was not excessive because there was no evidence of bad faith). See also Staff Industries, 846 S.W.2d at 548 (subcontractor=s claim against general contractor for $99,524.45 was not excessive so as to deny attorney=s fees to subcontractor following recovery of $55,119.71, where there was no evidence of unreasonableness or bad faith on part of subcontractor in claiming higher measure). Because there is some evidence supporting the jury=s determination that BusLease did not act unreasonably or in bad faith in forwarding to F & C the initial estimate, F & C has failed to clear the first hurdle on appeal. It is therefore unnecessary to proceed to the second part of the analysis. Issue One is overruled.
Standard of Review -- Against Great Weight and Preponderance
In Issue Two, F & C challenges the factual sufficiency of the evidence supporting the excessive damages issue. When a party attacks the factual sufficiency of an adverse finding on an issue upon which that party had the burden of proof, he or she must demonstrate that the adverse finding is against the great weight and preponderance of the evidence. Dow Chemical Company v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Cruz v. Paso Del Norte Health Foundation, 44 S.W.3d 622, 629 (Tex.App.‑-El Paso 2001, pet. denied). We consider and weigh all of the evidence and set aside the verdict only if the evidence is so weak or the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Dow Chemical, 46 S.W.3d at 242; Cruz, 44 S.W.3d at 629.
Application of the Law to the Facts
In passing on this contention, we consider F & C=s arguments regarding the erroneous inclusion in the estimate of the non-accident related repair items and BusLease=s failure to independently review the estimate prior to forwarding it to F & C. As we have detailed above, however, other evidence showed that BusLease acted reasonably in relying on the Blitz estimate given its past dealings with the company and its good reputation in the industry. BusLease had no notice until after it filed suit that the estimate included non-accident related repairs and there is no evidence to show that it had knowledge of this fact from some other source so that it could be said that BusLease acted in bad faith or unreasonably in forwarding the estimate to F & C. Prior to the time it obtained the estimate from Blitz and forwarded the estimate to F & C, BusLease had not been provided with a copy of the estimate performed by F & C=s adjuster. Thus, it could not be said that BusLease was put on notice by the disparity in the two estimates that it should conduct an independent review of the Blitz estimate before forwarding it to F & C. After the motor coach had been repaired, BusLease forwarded a revised invoice to counsel for F & C. We conclude that the jury=s determination that BusLease acted neither unreasonably nor in bad faith in presenting its claim to F & C is supported by factually sufficient evidence. See Denta Rama, 597 S.W.2d at 510. Issue Two is overruled. Having overruled Issues One and Two, we affirm the judgment of the trial court.
June 13, 2002
ANN CRAWFORD McCLURE, Justice
Before Panel No. 4
Barajas, C.J., Larsen, and McClure, JJ.
(Do Not Publish)
[1] The adjuster noted that it was not possible to obtain parts prices from Dina absent an actual order and cash advance.