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Republic Underwriters Insurance Company v. Mex-Tex3/19/2003
"Oh, but if we could just say what we mean and mean what we say." The dispute before the court involves the interpretation of an insurance policy and the insurer's liability for purportedly failing to abide by it. The players consist of the insured, Mex-Tex, Inc. (Mex-Tex), and the insurer, Republic Underwriters Insurance Company (Republic). The former sued the latter for breach of contract, breach of the duty of good faith and fair dealing, committing unfair claim settlement practices, and failing to settle the claim within statutorily prescribed limits. The damages sought included the sum it believed it was entitled to under the insurance policy, a sum necessary to recompense the corporation's mental anguish, and a statutory penalty of 18% of the amount payable under the policy. The dispute was tried to the court, which body entered judgment for Mex-Tex. As made manifest by its ensuing findings of fact and conclusions of law, the trial court determined that Republic had indeed breached its contract, violated its duty to act in good faith and deal fairly, attempted to fully settle a claim through a partial payment, and failed to comply with statutory time limits in settling the claim.
Republic attempts to overturn or modify the judgment entered against it via eight issues. Through them, it contends that the evidence was insufficient to support the findings of breached contract, of breached duty of good faith, of an improper attempt to enforce a full and final release by making only a partial payment, and of violating art.21.55 of the Texas Insurance Code. Also attacked are the methods by which the trial court calculated 1) the 18% statutory penalty per art. 21.55 of the Insurance Code and 2) prejudgment interest. We review the issues in their logical order and, upon doing so, affirm the judgment.
Background
The circumstances that gave rise to the suit began with a leaking roof atop a mall housing various businesses and retail establishments. It had previously leaked but had undergone repair. Furthermore, Mex-Tex was contemplating its replacement when a hail storm passed through the area on May 25, 1999. This storm further damaged the roof. Oral notice of the claim was forwarded to Republic within a day or so of the occurrence. Thereafter, a question arose as to whether the storm itself caused the damage or whether it pre-existed the squall. Nonetheless, both parties eventually agreed that the roof would be replaced and that the insurance company would pay for it. Yet, that did not end the controversy.
By the time the two parties agreed that the roof should be replaced, Mex-Tex had already replaced it. It believed it needed to be expedient to avoid delay and further injury to its tenants which could arise from other rains; evidence indicated that the Summer of 1999 was quite wet for West Texas. Furthermore, the cost exceeded $200,000. Yet, upon deducting the cost of insulation included in the total expense, Mex-Tex only submitted a claim for $179,000 to Republic. The latter refused to pay that sum because it concluded that it could replace the roof with one of identical make (but new of course) for approximately $145,000. And, therein fomented the dispute presented to the trial court and to us. The trial court concluded that the $179,000 claim fell within the terms of the policy. We are asked to determine if it was right.
Pertinent to the resolution of the dispute are the following provisions of the insurance contract. The first states:
A. LOSS CONDITIONS
The following conditions apply in addition to the Common Policy Conditions and the Commercial Property Conditions.
3. Duties in the Event of Loss
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