Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
appeal from the 92nd District Court of Hidalgo County, Texas.
Chief Justice Contreras and Justices Longoria and Perkes
L. LONGORIA, JUSTICE
Israel and Hilda Salinas sued appellee State Farm Lloyds
("State Farm") for breach of their insurance
contract. Judgment was entered in favor of the Salinases.
After an ex parte hearing at which the Salinases were not
present, the trial court issued a modified final judgment
that reduced the Salinases' award to zero. By two issues
which we combine into one, the Salinases argue that the trial
court erred in holding an ex parte hearing. We affirm.
April of 2012, the Salinases' house was hit by a
hailstorm. In June of 2014, the Salinases filed suit against
State Farm, alleging multiple causes of action, including
breach of contract and unconscionable conduct. More
specifically, the Salinases asserted that State Farm took
advantage of their lack of knowledge in construction and
insurance claims processes, misrepresented losses covered
under the policy, and failed to promptly and reasonably
investigate and pay the amount covered under the policy. On
September 16, 2014, State Farm offered the Salinases a
settlement of $25, 900. See Tex. Civ. Prac. &
Rem. Code Ann. § 42.002 (West, Westlaw through 2017 1st
C.S.); Tex.R.Civ.P. 167.1. State Farm's settlement offer
expired without a response from the Salinases.
case proceeded to jury trial in June of 2017. The jury
returned a verdict in favor of the Salinases. The jury found
that State Farm breached the insurance contract it had with
the Salinases and awarded the Salinases $10, 500 for the
breach of contract. The jury also found that State Farm had
engaged in unconscionable conduct under the Texas Deceptive
Trade Practices Act and awarded the Salinases $10, 500 for
the unconscionable conduct. The final judgment, as signed by
the trial court in September of 2017, ordered that the
Salinases be awarded $10, 500 for State Farm's breach of
contract, $9, 066.82 for prejudgment interest, $10, 500 for
necessary and reasonable attorney's fees, and $8, 097.05
for "costs of court," for a total of $38, 163.87.
October 10, 2017, State Farm filed a motion to modify the
final judgment, arguing that application of Rule 167 required
the court to enter a take-nothing judgment for the Salinases.
See Tex. R. Civ. P. 167.4 (setting forth conditions
for when litigation costs may be awarded to the offeror of a
settlement offer). According to State Farm, its settlement
offer "triggered an offset that exceeds [the
Salinases'] monetary recovery at trial" because the
final amount that the Salinases were awarded was less than
eighty percent of what State Farm originally offered to the
Salinases as a settlement. See id. The Salinases
never filed a response to State Farm's motion to modify.
trial court originally set the motion to modify to be heard
on November 14, 2017. However, the trial court was
unavailable on that day and reset the hearing for November
21, 2017. On that day, the judge's father-in-law passed
away so the hearing was rescheduled for December 5, 2017. On
that day, the hearing on the motion to modify was held before
an associate judge, who ultimately decided that the original
judge would be in a better position to rule on the matter.
Both parties were present and were informed that the motion
to modify would likely be heard on submission. However, on
December 6, 2017, the trial court informed the parties that
the trial court was going to reset the motion to modify
hearing for December 11, 2017. The Salinases' counsel
informed the trial court that he would be unavailable in
person because he was being deposed in a federal case that
day for his role as a trustee for Texas Southmost College.
The trial court informed counsel for the Salinases that the
trial court would hear the motion by telephone sometime
between 8:15 a.m. and 8:30 a.m. Counsel for the Salinases
agreed to appear via telephone for the hearing. Around 8:30
a.m. on December 11, 2017, the Salinases' counsel called
the court; he was informed the trial court had not arrived
yet but that counsel would be called to participate in the
hearing by 9:00 a.m. The Salinases' counsel did not
receive a call from the trial court; instead, in the
afternoon, State Farm's counsel called the Salinases'
counsel to tell him that the trial court heard the motion to
modify without him or the Salinases present.
trial court signed a modified final judgment on December 11,
2017, which reduced the Salinases' award to zero and
explained the trial court's reasoning for the
modification as follows:
The "total damages" found by the jury on
Plaintiffs' breach of contract claim total $10, 500. The
monetary damages awarded for Plaintiffs' claim that State
Farm engaged in unconscionable conduct are for the same
amount ($10, 500). As these identical amounts are damages for
the same injury, pursuant to the one-satisfaction rule,
Plaintiffs may recover damages under either of the legal
theories under which damages are sought, but not under both.
Thus, the amount of actual damages recoverable pursuant to
the jury's verdict is $10, 500. Because attorney's
fees are allowable under Plaintiffs' breach of contract
theory, the Court finds that Plaintiffs should recover under
this theory rather than the "unconscionable
conduct" theory. The applicable Policy deductible for
Plaintiff's claims was $1, 566.00, which reduces
Plaintiffs' recoverable damages under breach of contract
to $8, 934.00.
Plaintiffs' attorney's fees incurred prior to the
October 4, 2014 expiration of Defendant's settlement
offer were $3, 150.00
. . .
Pursuant to Insurance Code Chapter 542, interest at a rate of
18% per annum would be payable on the amount due Plaintiffs
under their breach of contract claim. Plaintiffs contend that
such interest should be calculated from September 19, 2012.
Interest from that date ...