CYPRESS TEXAS LLOYDS PROPERTY AND CASUALTY INSURANCE CO v. FRED CARRINGTON (2011)

MEMORANDUM OPINION

Cypress Texas Lloyds Property and Casualty Insurance Company (“Cypress”) appeals from the trial court's judgment awarding damages to Fred Carrington on his breach of contract claim.   In a single issue, Cypress contends the trial court erred in denying its motion for judgment notwithstanding the verdict because there is no evidence to support the jury's finding that Cypress failed to comply with the terms of the policy.   We decide this issue against Cypress and affirm the trial court's judgment.   Because the law to be applied in this case is well settled, we issue this memorandum opinion.   See Tex.R.App. P. 47.4.

Background

Carrington had a homeowner's insurance policy issued by Cypress.   He sustained a loss to his home when the hot water heater ruptured on September 11, 2005.   After Carrington filed a claim with Cypress, they settled.   The insurance policy required Cypress to pay a loss claim within five business days after it notifies the insurer that it will pay a claim.

By two separate letters dated October 27, 2005, Cypress notified Carrington that Cypress agreed to pay the claim.   CSC, a vendor of Cypress, printed and mailed three settlement checks by regular U.S. mail to Carrington.   The checks were dated October 28, 2005 and were properly addressed to Carrington at his home address.   The issued checks were in the amounts of $22,274.37, $3,840, and $2,240 as specified in one of the letters from Cypress agreeing to pay the claim.   Subsequently, a fourth check in the amount of $1,058 for depreciation taken on the personal property was mailed to Carrington in the same manner.   Carrington received this check and it was not at issue at trial.   On November 14, 2005, Carrington contacted Corey Holder, an independent adjuster working for Cypress, regarding the status of the checks.   Holder stated the checks had been mailed.   Carrington told him the checks had not been received.   Holder tried to stop payment on the checks, but they had already been deposited at a bank in Dallas.¹  On December 16, 2005, Carrington filed a report with the Grand Prairie Police Department that the checks had been stolen.   Then, Carrington contacted Cypress and asked that the checks be reissued because they had been stolen.   Cypress refused to reissue the checks.

Carrington sued Cypress alleging a claim for breach of contract among others.   The case was tried to a jury.   Holder testified that, according to his notes, the fourth check was mailed on November 7, 2005, more than five days after the agreement to pay the claim.   He testified further that the other three checks should have been mailed on October 27, 2005.   However, Holder did not have knowledge of when the checks were actually mailed.   Also at trial, the evidence showed one of the stolen checks listed Washington Mutual as a co-payee.   Thomas Bamesberger, claims management specialist for Cypress, testified that Cypress did receive from Carrington a copy of a release of lien showing that Washington Mutual was no longer the mortgagee of Carrington's house.   He admitted that Cypress erred in listing Washington Mutual as a co-payee on the check.   Holder acknowledged that Carrington faxed the release of lien to him and agreed with Bamesberger that it was an error to list Washington Mutual as a co-payee.   The jury returned a verdict in favor of Carrington.   Cypress filed a motion for judgment notwithstanding the verdict.   The trial court denied the motion and rendered judgment on the jury verdict awarding damages for breach of contract.   This appeal timely followed.

Standard of Review

A judgment notwithstanding the verdict is proper when the evidence is conclusive and one party is entitled to judgment as a matter of law, or a legal principle precludes recovery.  Tiller v. McLure, 121 S.W.3d 709, 713 (Tex.2003) (per curiam);  John Masek Corp. v. Davis, 848 S.W.2d 170, 173 (Tex.App.—Houston [1st Dist.] 1992, writ denied).   We review challenges to a trial court's rulings on motions for JNOV under the same legal sufficiency test applied to appellate no evidence challenges.  City of Keller v. Wilson, 168 S.W.3d 802, 822–23, 827 (Tex.2005);  Mauricio v. Castro, 287 S.W.3d 476, 478–79 (Tex.App.—Dallas 2009, no pet.).   In our legal sufficiency review, we consider the evidence in the light most favorable to the fact finding and indulge every reasonable inference that would support it.  City of Keller, 168 S.W.3d at 822.   We credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not.   Id. at 827.   If more than a scintilla of probative evidence supports the finding, the legal sufficiency challenge fails.  Coastal Transp.   Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233–34 (Tex.2004).   More than a scintilla of evidence exists when the evidence “rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.”   Transp.  Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex.1994).   In contrast, evidence that is “so weak as to do no more than create a mere surmise or suspicion of its existence” is no more than a scintilla and thus, no evidence.   Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex.2004) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983)).

Discussion

In its sole issue, Cypress contends the trial court abused its discretion in denying its JNOV motion

because the evidence is legally insufficient to support the jury's answer to question one.   Question one in the jury charge asked “Did Cypress Texas Lloyds Property and Casualty Insurance Company fail to comply with the terms of the insurance policy at issue in this suit?”   The jury answered “Yes.” Specifically, Cypress contends that by placing the properly addressed checks in the mail which were then presented to and honored by a bank, it satisfied its obligation under the policy.   Carrington contends there is evidence to support the jury's answer because Cypress did not pay the claim within five days of its agreement to pay and it erroneously included Washington Mutual, a mortgage company, as a payee on one of the checks after Carrington submitted proof that his home was no longer subject to a mortgage.

Although the three stolen checks were dated October 28, 2005, there is evidence that at least one check was mailed more than five business days after Cypress agreed to pay the claim on October 27, 2005 and there is no evidence as to when the other checks were actually mailed.   Moreover, Holder and Bamesberger testified that Cypress made a mistake in listing Washington Mutual as a co-payee on one of the stolen checks.   Accordingly, there is some evidence to support the jury's answer that Cypress failed to comply with the terms of the insurance policy.   On this record and based upon the specific question asked of the jury, we conclude the evidence is legally sufficient to support the jury's answer that Cypress failed to comply with the terms of the policy.   Accordingly, we decide against Cypress on its single issue and affirm the trial court's judgment.

090753F.P05

FOOTNOTES

FN1. The checks for $3,840 and $2,240 were deposited on November 7, 2005.   The check for $22,274.37 was deposited on November 9, 2005..  FN1. The checks for $3,840 and $2,240 were deposited on November 7, 2005.   The check for $22,274.37 was deposited on November 9, 2005.

PER CURIAM