Court of Appeals of Texas, Seventh District, Amarillo
Appeal from the 47th District Court Potter County, Texas
Trial Court No. 102404A, Honorable Dan L. Schaap, Presiding
QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
T. Campbell Justice
Robert and Rebecca MacKeen sued their homeowners insurance
carrier, appellant State Farm Lloyds, for claims of breach of
contract and unfair settlement practices under the Texas
Insurance Code. The case was tried by jury; the verdict
and the judgment of the trial court were for the MacKeens.
State Farm appealed, presenting three issues. Finding error
in the jury charge that was not harmless, we will reverse the
judgment of the trial court and remand the case for a new
MacKeens' property lies outside Amarillo in Potter
County. Improvements include their residence, a separate rent
house, a barn, and storage buildings. These structures
sustained wind and hail damage during a May 2013 storm. The
roof of a shed where the MacKeens stored items of personal
property was blown off, exposing the contents to damage.
State Farm homeowners policy in effect at the time of the
storm provided Coverage A for the dwelling up to $268, 000
and dwelling extensions up to $53, 000. Coverage B under the
policy insured personal property losses up to $201, 000.
Within a day or two of the storm the MacKeens notified State
Farm of their damages.
Farm adjusted the claim, finding the amount payable for
damage to the residence and extensions was less than the
MacKeens' $13, 400 deductible. State Farm accordingly
made no Coverage A payment. The MacKeens claimed losses of
personal property under coverage B.
September 2013, the MacKeens submitted to State Farm a
nine-page estimate of personal property items they valued at
some $52, 000. In late October, at the MacKeens' request,
State Farm sent a second adjuster to inspect the property.
This inspection was interrupted by confrontation between the
adjuster and a roofing contractor brought in by the MacKeens,
and ended after Mr. MacKeen asked the adjuster to leave. The
parties disagree who was responsible for the confrontation.
Some two days later the MacKeens' attorney instructed
State Farm in writing to cease all communications with his
April 2014, the MacKeens filed suit against State Farm and
one of its adjusters alleging breach of the insurance policy,
knowing violations of the Insurance Code, breach of the duty
of good faith and fair dealing, gross negligence, and fraud.
The MacKeens later nonsuited their claims against the
adjuster and the common law torts alleged against State Farm.
2016, State Farm tendered the MacKeens $18, 424.83 for the
depreciated value of all items on their personal property
loss inventory. To that total it added 18% interest required
by Chapter 542 of the Texas Insurance Code. State Farm also
tendered the MacKeens $864.50 for a temporary electrical
repair made on the night of the storm. It added 18% interest
to this amount.
case was tried over a week in November 2016. The
MacKeens' evidence presented State Farm's untimely
payments for personal property and the temporary repair as
breaches of the insurance policy as well as violations of the
Insurance Code. But they sought no breach-of-contract damages
with respect to those items. The alleged policy breach in
dispute, the issue on which the parties presented conflicting
evidence, was whether State Farm had paid all benefits owed
under the policy for damage to the residence and other
structures. The contract damages question submitted to the
jury asked only for findings on the replacement cost values
of the dwelling and dwelling extensions.
end, the MacKeens presented a forensic engineer-architect who
testified to his opinion the cause of damage to the residence
and outbuildings was the May 2013 storm. He testified the
roofs of the residence and the rent house required
replacement and the storage shed would have to be rebuilt.
The MacKeens also presented an estimator in whose opinion the
cost to replace the roof and fence and make interior and
exterior repairs to the residence would exceed $56, 000. He
further said more than $10, 000 would be necessary to replace
the roof and fence and make repairs to the rent house and
over $29, 000 to replace the roof of the storage shed and
repair the other outbuildings.
Farm presented a local roofing contractor and an engineer.
The roofing contractor described the roof of the residence as
"older" with damage that preceded the storm. He
found storm-produced wind damage which he said could be
repaired. As for the rent house, he found no wind or hail
damage. On the corrugated metal roofs of the remaining
outbuildings, other than the storage shed whose roof was
blown off, he found no storm-produced damage. The contractor
generally agreed with State Farm's repair estimate for
the residence. The engineer also found the roof of the
residence did not require replacement but could be repaired.
On the rent house, he found no wind or hail damage. He also
inspected the roofs of the outbuildings. His testimony
indicated none of the roofs, other than the storage shed
roof, required replacement.
jury charge included the following relevant questions,
definitions, and instructions:
You are instructed that the Court has found that State
Farm Lloyds failed to comply with the Homeowners Policy.
[Italics in original]
QUESTION NUMBER 1
What sum of money, if any, if paid now in cash, would fairly
and reasonably compensate the MacKeens for State Farm Lloyds
[sic] failure to ...