Date: 04-13-2017

Case Style:

Case Number: 01-15-00819-CV

Judge: Michael Massengale

Court: Texas Court of Appeals, First District on Appeal from the 333rd District Court Harris County

Plaintiff's Attorney: Willis Smith

Defendant's Attorney: Harry Miles Klaff

Description: This is an appeal from a take-nothing judgment in favor of German American Farm Mutual Insurance Company on Mark Groba’s claims for breach of contract, violation of the Deceptive Trade Practices Act, and unfair insurance settlement practices. On appeal, Groba challenges the legal and factual sufficiency
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of the evidence to support the jury’s verdict that German American did not violate the terms of an insurance policy by failing to pay for damage allegedly caused by Hurricane Ike.
We affirm.
Background
Appellant Mark Groba owned a duplex in Galena Park, Texas, as an investment property. The duplex was insured by German American for a policy period from April 1, 2008 to April 1, 2009. The policy covered direct physical loss caused by storm, including lightning, windstorm, and hurricane. Hurricane Ike hit the Houston area in September 2008, and five days after the hurricane made landfall, Groba reported to German American that the duplex had sustained “roof and window damage.”
Donald Burklund, the in-house claims adjuster for German American, received Groba’s claim and assigned it to Dana Holbrook, an independent claims adjuster. In addition to working as a claims adjuster, Holbrook had a background in construction, home repair, and contracting. Within one month of the hurricane, Holbrook inspected the duplex, took photographs, and prepared an estimate for repairing property damage. His estimate was based on his experience, observations, photographs, and an analysis performed with Powerclaim estimation software.
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Holbrook concluded that three items required repair due to windstorm damage: the roof, a soffit, and a window. He opined that replacement of the entire roof was not necessary. He estimated a cost of $325 to secure a loose section of the roof with a new fastener and to replace a small section of missing eave metal. He estimated a cost of $75 to secure a soffit that had become loose and a cost of $117 to replace and reglaze a window, which had sustained damage to two of its window panes. Although he observed peeling, discoloration, and warping of plywood siding, he did not estimate a replacement cost due to his determination that the damage was caused by age rather than hurricane damage.
Holbrook’s written estimate reflected the insured’s deductible and recommended a payment of $464. The written estimate incorrectly listed an additional insured and incorrectly identified the street number of the duplex. Burklund struck through and corrected those errors. Holbrook also mistakenly calculated the deductible based on the replacement cost instead of the actual cash value, which is the replacement cost less depreciation. As such, Holbrook had deducted $53.00 instead of $51.70, resulting in an actual cash value payment to Groba of $464.00 instead of $465.30. Burklund corrected this error, crediting an additional $1.30, and within days he mailed a check to Groba.
At trial, Groba testified that after the storm there was debris everywhere, and a fence was lying on the ground. He did not initially report to German American
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that a tree had fallen. When Groba later showed Holbrook the property, he said that a tree had broken a window pane and that the roof was damaged. Groba said that Holbrook measured the roof completely, took photographs, and spent “no more than 20 to 30 minutes” looking at the property. Believing that German American had underestimated the amount of damages attributable to Hurricane Ike, Groba did not cash the $465.30 check, and instead he filed this lawsuit. At trial, he sought approximately $27,000 in damages, plus attorney’s fees.
In support of his damages estimate, Groba presented testimony from Daryl Quinney, a construction expert and investigator. Quinney visited the duplex twice at least six months after the hurricane. In conducting his investigation and making his estimate, he assumed that the damages he observed did not exist before Hurricane Ike, saying: “I was there to do a Hurricane Ike investigation so, therefore, my assumption is those damages resulted from the wind of Hurricane Ike.” His estimate was based on his observations, photographs, and loss estimation software.
At trial, Quinney testified that the roof sustained the following damage due to hurricane-force winds: (1) the roof panels lifted; (2) fasteners came off; and (3) flying debris struck and damaged roof panels, causing six dents in the bottom edge of the panels. He opined that the cause of the roof damage was “wind speed and uplift of Hurricane Ike.” He also opined that the most cost-effective repair
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would be to fully replace the metal roof. He estimated that this would cost $12,400.38. This included the cost to remove a shingle roof which was beneath the later-installed metal roof. Despite having found no water intrusion beneath the metal roof, he expected to find water intrusion that would warrant replacement of part of the roof decking, and he included the cost for that in his estimate as well. In addition, and without knowing if there was any moisture in the attic, he recommended treating the attic with a chemical to prevent the growth of mildew. Quinney also found exterior damages related to a cornice, painted plywood siding, and a damaged window that needed replacement. His total written estimate for repairs, which was admitted into evidence at trial, was $27,934.25. But Quinney’s written estimate was divided into five categories, each with a subtotal, and the sum of the five subtotals was $22,815.71, not $27,934.25:
Estimate Category
Estimate
Mildew repellant attic space
$ 1,909.76
Roof repairs
12,400.38
Cornice and siding
3,513.16
Window
275.03
Contractor costs
4,717.38
Total
$22,815.71
Despite the discrepancies in Quinney’s estimate, Groba’s theory was that German American had not conducted an adequate investigation to determine the full amount of damages caused by Hurricane Ike. Groba argued at trial, as he does
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on appeal, that this failure led to the inadequate offer of $465.30. Groba relied on testimony from Holbrook and Burklund to support his argument.
By the time of his trial testimony, more than five years had elapsed since Holbrook had inspected Groba’s home and prepared the estimate. He testified that he did not remember how much time he spent at the Groba home or if he spoke to Groba before the inspection. He did not remember if he looked at the wood exterior of the house, specifically the chipped paint, the entire roof, or the location of Groba’s air conditioning. He did not know whether, on the day of the inspection, he inspected Groba’s duplex first, or how many houses he inspected that day. He also did not know if he looked to see if the felt under Groba’s satellite dish was damaged.
Burklund testified that he did not adjust Groba’s Hurricane Ike claim, although he had been to the duplex once to inspect it for purposes of underwriting a policy renewal. Burklund never had adjusted or inspected a hurricane claim personally, but he had adjusted other property claims involving damage resulting from high winds. He looked at photographs of the damage to Groba’s property, and he believed the damage was not consistent with windstorm damage.
Burklund testified that German American has never taken the position that damage caused by windstorm or hurricane should not be paid. He testified that German American paid Groba for the damages determined to be associated with
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Hurricane Ike: to repair the roof, to secure the soffit, and to reglaze a window. German American took 10% depreciation ($13) for replacement of two glass window panes, in accordance with the insurance policy. On cross-examination, Burklund was asked if he was aware that Hurricane Ike blew over a tree that had been in the front yard of the house, and he testified that he had never before heard that and Groba had never made a claim about it.
German American contended that its investigation was sufficiently thorough to identify the damage caused by Hurricane Ike. It presented expert-witness testimony at trial to support its theory that it already had offered to pay Groba all he was owed under the policy. John McReynolds, a construction consultant, inspected the duplex twice, reviewed Holbrook’s report and photographs, and looked at photographs of the exterior of the house from 2003. He prepared an investigation report, and he testified at trial. He testified that there was no damage caused by Hurricane Ike that was not accounted for by Holbrook’s estimate.
Specifically, McReynolds testified that the damage caused by Hurricane Ike was limited to a section of the roof that was “peeling up . . . near the satellite dish,” “a piece of soffit . . . that was dropped down a little bit,” “a little piece of missing drip edge along the edge of the roof,” and “a broken window [pane] near the door that was cracked and taped up.” He did not find any evidence of water intrusion or rot. He testified that the six dents on the roof were not caused by windblown
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debris. Rather, he explained that the mostly symmetrical pattern of the dents suggested that they were caused by stacking of roof panels during transportation. He pointed out that there was no damage to the satellite dish or to a plastic angel hanging on the side of the house, both of which were in locations which Groba contended had been seriously impacted by the storm. He testified that the plywood siding was not damaged by Hurricane Ike. Rather, he explained that the damage was due to aging and wear and tear. However, he recommended replacement of the siding, saying it “may be impractical to paint and repair.”
The trial court submitted to a jury liability questions on Groba’s theories of breach of contract, violation of the Deceptive Trade Practices Act, and violation of the Insurance Code. See TEX. BUS. & COM. CODE § 17.50 (“Relief for Consumers”); TEX. INS. CODE § 541.060 (“Unfair Settlement Practices”). The questions on the statutory theories were predicated on an affirmative answer to the breach-of-contract question. Groba made no objection to the court’s charge. The jury answered “no” to the breach-of-contract question, and the trial court entered a take-nothing judgment in favor of German American. Groba filed a motion for new trial, challenging the legal and factual sufficiency of the jury’s verdict. The motion was overruled by the operation of law, and Groba appealed.
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Analysis
In a single issue, Groba challenges the legal and factual sufficiency of the evidence to support the jury’s verdict on his breach-of-contract claim.
When an appellant challenges the legal sufficiency of an adverse finding on an issue on which he had the burden of proof, he must demonstrate on appeal that the evidence established, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). When the appellant challenges the factual sufficiency of an adverse finding on an issue on which he had the burden of proof, he must demonstrate on appeal that the adverse finding was against the great weight and preponderance of the evidence. Id. at 242. As a court of appeals, we must consider and weigh all of the evidence, and we “can set aside a verdict only if the evidence is so weak or if the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust.” Id. The jury is the sole of judge of the credibility of the witnesses and may credit one witness over another. City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005). We assume the jury resolved conflicts in the evidence in a manner consistent with its verdict. Id. at 820.
Groba’s theory at trial was that German American failed to conduct an objective and reasonable investigation, and this failure resulted in an estimate and payment that was far below the actual damages sustained due to Hurricane Ike.
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Similarly, on appeal, Groba focuses his argument on the reasonableness of the investigation conducted by German American. The court’s charge asked: “Did German American Farm Mutual Insurance Company fail to comply with the terms of its insurance policy with Mark Groba by failing to pay for damage to the Groba property, if any, caused by Hurricane Ike?”
This breach-of-contract question did not ask if German American failed to comply with the terms of the insurance policy by failing to conduct an objective and reasonable investigation, but by failing to pay for damage caused by Hurricane Ike. On appeal, in the absence of an objection to the court’s charge, we evaluate the sufficiency of the evidence in light of the court’s charge as given to the jury. Osterberg v. Peca, 12 S.W.3d 31, 55 (Tex. 2000). Because Groba did not object to the court’s charge, our review of the sufficiency of the evidence is limited to whether the evidence was legally and factually sufficient to support the jury’s determination that German American did not fail to comply with the terms of the insurance policy by failing to pay for damage caused by Hurricane Ike. That is, regardless of the reasonableness of the investigation, Groba can obtain reversal only by showing as a matter of law or by the great weight and preponderance of the evidence that he actually sustained hurricane- or windstorm-related damages in excess of the amount that German American already paid.
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Groba first argues that the evidence was insufficient because the testimony of his expert witness, Quinney, was contrary to the jury’s verdict. Quinney, who had conducted thousands of hurricane-related home inspections, testified that the cost to repair the duplex properly was $27,934.24, which included replacement of the roof. He testified that the roof panels could be removed in “three hours,” the roof could be replaced “the same day,” and the replacement would be “more cost effective” at $12,400.38 as opposed to repairing the roof for $325.
Quinney’s estimate included amounts not included in German American’s adjustment of Groba’s claim. Quinney included $1,909.76 for prophylactic mildew repellant, despite finding no evidence of moisture intrusion into the attic space. Likewise, he included general contractor costs in the amount of $4,717.38 to accommodate charges associated with “any construction job . . . no matter how large or how small.” He testified that contractor costs could include “clean-up costs, demolition fees and trash removal” and “a temporary toilet.” Both German American’s adjustment and Quinney’s estimate accounted for replacement of a soffit, but Quinney’s estimate also included replacement of wood siding. Quinney testified that the wood siding was damaged by hurricane winds that caused it to pull away from the building.
The jury was not obliged to accept Quinney’s testimony. The jury also heard testimony from the insurer’s adjuster, Holbrook, and construction expert,
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McReynolds. Holbrook testified that replacement of the roof was not necessary because the unsecured portion of the roof could be secured with a fastener. He also testified that the siding, while weathered, was not damaged by Hurricane Ike. McReynolds agreed about both the roof and the siding. He also pointed out that other items associated with the house and in close proximity to the siding were completely unharmed, such as the satellite dish and a decorative plastic angel, despite Groba’s theory that the wind was strong enough to pull siding off the side of the house.
The jury was also free to consider the other evidence that was admitted at trial, including photographs, reports, and estimates. This included the estimate from Quinney detailing the costs of repair or replacement of the various items that he determined were damaged due to Hurricane Ike. The jury could have determined that there was a mathematical discrepancy between the total of the individual categories of estimates ($22,815.71) and the grand total of repairs and replacements that Quinney included in his written estimate ($27,934.25).
The jury as factfinder must resolve conflicting and inconsistent evidence, determine the credibility of the witnesses, and assess the weight of the evidence. See City of Keller, 168 S.W.3d at 819; Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003). In this case, the jury could have chosen to disbelieve Quinney and reject his opinions and estimate, resolving the inconsistencies
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between his estimate and German American’s adjustment of Groba’s claim in favor of the insurer. We may not disturb the jury’s credibility determination on appeal. Golden Eagle Archery, 116 S.W.3d at 761. We hold that the evidence is not legally or factually insufficient merely because the jury’s verdict conflicts with Quinney’s testimony.
In his brief, Groba spends several pages quoting portions of Holbrook’s deposition in which he could not recall or did not remember aspects of his investigation. Groba also notes that Burklund formed an opinion that certain damage to the duplex was not caused by windstorm solely by looking at pictures. Groba appears to argue that the great weight and preponderance of the evidence shows that German American’s investigation was inadequate. But nothing in this argument shows that Groba actually sustained hurricane- or windstorm-related damages in excess of the amount that German American already paid. This is the measure of evidentiary sufficiency on appeal because we must evaluate the sufficiency of the evidence in light of the court’s charge. See Osterberg, 12 S.W.3d at 55. German American found that the roof, a soffit, and a window were damaged, and it promptly paid in accordance with the policy and its adjustment of the claim. Groba’s argument that the investigation was inadequate because Holbrook’s memory faded or Burklund relied upon a photograph did not prove as a matter of
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law or show by the great weight and preponderance of the evidence that German American failed to pay for damages caused by Hurricane Ike.
Conclusion
Groba had the burden of proof at trial, and on appeal he has not shown as a matter of law or by the great weight and preponderance of the evidence that German American failed to pay for damages caused by Hurricane Ike. We overrule Groba’s issue.

Outcome: We affirm the judgment of the trial court.

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