Bui v. St. Paul Mercury Insurance

United States Court of Appeals,

Fifth Circuit.

No. 91-4727.

Hung Duc BUI and Richard Lan Bui, Plaintiffs-Appellees, Cross-Appellants,

v.

ST. PAUL MERCURY INSURANCE CO., Defendant-Appellant, Cross-Appellee,

Huey T. Littleton Claim Service of Texas, Inc., Defendant, Cross-Appellee.

Jan. 14, 1993.

Appeal from the United States District Court for the Eastern District of Texas.

Before GOLDBERG, JOLLY, and WIENER, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

St. Paul Insurance Co. ("St. Paul"), the defendant in this case, insured a boat that Hung Duc

Bui and Richard Lan Bui owned. When the boat partially sunk, St. Paul paid $53,000 to the bank

that held the mortgage on the Buis' boat. St. Paul, however, refused to pay the Buis because it
s

investigator, Huey T. Littleton Claims Service of Texas, Inc. ("Littleton"), found that the Buis had

negligently maintained their boat. The Buis sued St. Paul and Littleton claiming, inter alia, that

Littleton negligently investigated their claim and that St. Paul breached its contract with the Buis and

willfully violated its duty of good faith and fair dealing in handling the Buis' claim.

After a full trial, the jury found that St. Paul breached its insurance contract with the Buis.

The jury further found that the St. Paul willfully violated its duty of good faith and fair dealing in

handling the Buis' claims. The jury then awarded the Buis $150,000 in actual damages, $5,000 in

exemplary damages, and $60,000 in attorney's fees. St. Paul now contends that it is entitled to an

offset of $53,000 because of the funds it paid to the bank.

Unfortunately, the offset issue was never properly presented to the jury. It is not clear

whether the $150,000 in damages the jury awarded represents contract damages or whether the it

represents damages that arose because St. Paul willfully violated its duty of good faith and fair

dealing. Because of the way this case was argued to the jury, we cannot say that as a matter of law
St. Paul was entitled to the offset. Given the procedural problems in this case and the way it comes

to us on appeal, we find no reversible error, and consequently, we affirm.

We now turn to the Buis' cross-appeal. The Buis have cross-appealed claiming that the

district court erred when it denied them pre-judgment interest and when it dismissed their claims

against Littleton. The district court denied the Buis pre-judgment interest because the jury awarded

them damages based on the cost of repairing their boat at the time of trial and not the time their boat

was damaged. The district court correctly reasoned that, under these circumstances an award of

pre-judgment interest would be duplicative. Finally, the district court did not err when it dismissed

the Buis' claims against Littleton because Littleton was not a party to the contract and, under the

particular facts of this case, owed no duty to the Buis under Texas law.

AFFIRMED.