REVERSE in part; AFFIRM in part and Opinion Filed May 25, 2022 

S 

In The 

Court of Appeals 

Fifth District of Texas at Dallas 

No. 05-21-00071-CV 

CENTRAL MUTUAL INSURANCE COMPANY, Appellant 

V. 

RELIANCE PROPERTY MANAGEMENT, INC., Appellee 

On Appeal from the 44th Judicial District Court 

Dallas County, Texas 

Trial Court Cause No. DC-18-00856 

MEMORANDUM OPINION 

Before Chief Justice Burns, Justice Schenck, and Justice Partida-Kipness 

Opinion by Chief Justice Burns 

After a jury trial in this insurance coverage dispute, the trial court rendered 

judgment for appellee Reliance Property Management, Inc. on its claim against 

appellant Central Mutual Insurance Company. Central now appeals, alleging the trial 

court erred by denying its motion for directed verdict, by disregarding certain of the 

jury’s answers and failing to disregard others, and by failing to render judgment for 

Central. Concluding that the trial court rendered judgment in accordance with the 

jury’s verdict and the insurance policy’s terms, but that there was no evidence to 

support one element of damages awarded by the jury, we affirm in part and reverse 

and render in part. 
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BACKGROUND

Reliance made a claim for a $220,000 loss under its 2016–17 commercial lines 

insurance policy issued by Central. Central denied the claim, citing certain 

conditions and exclusions in the policy. Reliance sued, seeking damages and 

attorney’s fees for breach of contract, bad faith in an insurance transaction, and 

deceptive trade practices. The case proceeded to a jury trial, where the parties offered 

evidence about the loss and the policy. 

1. The loss

Reliance is a small property management company that manages commercial 

properties. In May 2017, Reliance had three employees: Robert Grunnah, its owner 

and president, Debbie Molitor, its secretary and bookkeeper, and Alex Lilley, a 

property manager. Grunnah and Molitor worked from different office locations, so 

they usually communicated by email. 

On Thursday, May 18, 2017, Molitor received an email that appeared to be 

from Grunnah asking if she could make online wire transfers. The email showed that 

it was sent from Grunnah’s correct email address. It included his usual “signature 

block” bearing his name, address, phone numbers, and the company logo for 

“Younger Partners,” where Grunnah’s office was located. The parties have referred 

to the unknown sender of this and the other relevant emails as “Fake Robert.” 

Over the course of the following week, Fake Robert sent instructions to 

Molitor and Reliance’s bank officers at BB&T Bank to authorize Molitor to make 
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wire transfers for Reliance. Molitor took the steps required by the bank, most notably 

taking physical signature cards to the real Grunnah’s home to be signed. After further 

communications, Fake Robert sent Molitor an invoice for a $220,000 “Investment 

Project” in Hong Kong and instructed Molitor to send a wire transfer to pay it. 

Molitor went in person to the bank and completed a $220,000 wire transfer from 

Reliance’s account on Thursday, May 25, 2017. 

The following day, Molitor received another request from Fake Robert for 

additional transfers. Molitor testified that from the outset, she had been 

uncomfortable with the responsibility of making wire transfers. After consulting 

with Lilley, she called Grunnah to ask about the new request and discovered that 

Grunnah knew nothing about the $220,000 transfer. They immediately contacted the 

bank to attempt to stop the payment or obtain a refund, but were not able to do so. 

Reliance filed a claim with Central under the policy. Central denied Reliance’s 

claim by letter of July 14, 2017, stating that the policy did not cover the loss. 

2. The policy 

Reliance purchased a commercial lines policy from Central for the 2016-17 

policy year. Reliance also paid Central an additional premium for the “Central 

Premier Plus® Property Extensions Coverage Endorsement” (the “Premier Plus 

endorsement”). 

The policy includes a “Special Form” entitled “Causes of Loss” (“Causes of 

Loss form”). Paragraph A of this form defines “Covered Causes of Loss” as “direct 
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physical loss unless the loss is excluded or limited in this policy.” Paragraph B.2.i 

of the Causes of Loss form provides, under “Exclusions,” “We will not pay for loss 

or damage caused by or resulting from any of the following: . . . Voluntary parting 

with any property by you or anyone else to whom you have entrusted the property if 

induced to do so by any fraudulent scheme, trick, device or false pretense.” At trial 

and on appeal, Central has relied on this “Voluntary Parting” exclusion to argue that 

the policy does not cover Reliance’s loss, although its letter denying Reliance’s 

claim made no mention of it. 

The Premier Plus endorsement specifically provides that it modifies the 

Causes of Loss form, among other coverages. The endorsement also states that 

“Coverage is amended by the following changes to Additional Coverages, Coverage 

Extensions, Condition[s] and Exclusions. All other Limitations, Conditions and 

Exclusions apply.” In paragraph A.6.b, “Exclusions,” the Premier Plus endorsement 

states that the listed exclusions “are added as respects the Crime Coverage provided 

by this endorsement” “[i]n addition to the Exclusions in Causes of Loss–Special 

Form.” 

The Premier Plus endorsement adds “Crime Coverages,” including coverages 

for “Forgery or Alteration,” “Computer and Funds Transfer Fraud,” and “Fraudulent 

Impersonation,” among others. The Premier Plus endorsement’s “Forgery or 

Alteration” coverage paragraph provides in part: 
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2) a) We will pay for loss resulting directly from “forgery”1

 or 

alteration of checks, drafts, promissory notes, or similar written 

promises, orders or directions to pay a sum certain in “money” 

that are: 

i) Made or drawn by or drawn upon you; or 

ii) Made or drawn by one acting as your agent; 

 or that are purported to have been so made or drawn. 

“Forgery” is defined in the Premier Plus endorsement as “the signing of the 

name of another person or organization with intent to deceive . . . .” 

3. The trial 

Molitor and Grunnah testified at trial about the events leading to the funds 

transfer and Reliance’s subsequent communications with Central. William R. 

Hamm, a claims adjuster, testified on Central’s behalf about Central’s denial of the 

claim. Hamm was responsible for investigating the claim, but he did not interview 

either Molitor or Grunnah to determine what happened. Although Reliance had 

contacted both the police and the FBI, Hamm did not attempt to learn the scope or 

result of any law enforcement investigation. Hamm testified that he made his 

coverage decision based solely on one conversation with Lilley and a copy of a 

written timeline Molitor had prepared at the time she learned of the fraud. He 

admitted that when he wrote the letter to Reliance denying the claim, he did not 

consider or mention the Voluntary Parting exclusion. He confirmed his belief that 

Reliance was the victim of a crime and that no one at Reliance was involved in 

1

 Terms in quotes are defined elsewhere in the policy. 
 –6– 

perpetrating the fraud. And he testified that “[a]s we sit here today, there is a loss of 

$220,000.” 

Both parties moved for directed verdict on the Voluntary Parting exclusion. 

Central argued the exclusion applied to preclude any coverage under the Premier 

Plus endorsement. Reliance argued the opposite, that the Voluntary Parting 

exclusion did not apply to any of the coverages in the Premier Plus endorsement. 

The trial court denied the parties’ motions for directed verdict and submitted 

the case to the jury. 

4. The verdict

The trial court’s charge included 15 questions. The jury’s answers to 

Questions 4, 5, 6, 7, 8, and 9 are at issue in this appeal. The jury found: 

Question 4: Reliance suffered a loss resulting directly from “forgery,” 

Question 5: Reliance’s loss resulted from the voluntary parting with property 

induced by a fraudulent scheme, 

Question 6: Central did not fail to pay the amount owed for losses under the 

policy, 

Question 7: Not answered; the question inquired about the amount of damages 

resulting from Central’s failure to pay, but the jury did not answer it because 

it was conditioned on an affirmative finding in response to Question 6, 

Question 8: Central failed to comply with its duty of good faith and fair 

dealing to Reliance, and 

Question 9: $25,000 would fairly and reasonably compensate Reliance for 

Central’s failure to comply with its duty of good faith and fair dealing. 
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5. The judgment 

Both parties moved for judgment based on the jury’s favorable findings and 

requested the trial court to disregard the unfavorable findings. After a hearing, the 

trial court rendered judgment for Reliance in the principal amount of $220,000. The 

trial court also awarded Reliance the $25,000 in damages found by the jury in 

response to Question 9, as well as amounts for attorney’s fees and interest. 

This appeal followed. 

ISSUES

In six issues, Central contends the trial court erred by (1) failing to grant 

Central’s motion for directed verdict; (2) disregarding the jury’s answer to Question 

No. 5 that addressed the Voluntary Parting exclusion in the policy; (3) disregarding 

the jury’s answer to Question No. 6 that Central did not fail to pay the amount owed 

for losses under the insurance policy; (4) failing to render judgment for Central in 

accordance with the jury’s answer to Question No. 7 awarding no breach of contract 

damages; (5) failing to disregard the jury’s answer to Question No. 4, the Forgery 

coverage question, and (6) failing to disregard the jury’s answers to Question Nos. 

8 and 9 regarding common law bad faith, and rendering judgment for Reliance on 

those claims. 

STANDARDS OF REVIEW

In reviewing the grant or denial of a motion for directed verdict or a motion 

for judgment notwithstanding the verdict (JNOV), we apply the standards for 

assessing the legal sufficiency of the evidence. Helping Hands Home Care, Inc. v. 
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Home Health of Tarrant Cty., Inc., 393 S.W.3d 492, 515 (Tex. App.—Dallas 2013, 

pet. denied) (citing City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005)). A 

trial court properly denies a motion for directed verdict and a motion for JNOV if, 

looking at all the evidence in the light most favorable to the challenged fact or the 

jury’s finding, a reasonable trier of fact could have formed a firm belief or conviction 

that the fact or finding was true. Id.

A directed verdict for a defendant may be proper when (1) a plaintiff fails to 

present evidence raising a fact issue essential to the plaintiff’s right to recover, or 

(2) if the plaintiff either admits or the evidence conclusively establishes a defense to 

the plaintiff’s cause of action. Mauricio v. Castro, 287 S.W.3d 476, 479 (Tex. 

App.—Dallas 2009, no pet.). 

We review a trial court’s grant of a judgment notwithstanding the verdict 

under a no-evidence standard, examining whether any evidence supports the jury’s 

findings. Gharda USA, Inc. v. Control Sols., Inc., 464 S.W.3d 338, 347 (Tex. 2015). 

In Gharda USA, Inc., the supreme court explained: 

No evidence exists when there is: 

(a) a complete absence of evidence of a vital fact; (b) the court is barred 

by rules of law or of evidence from giving weight to the only evidence 

offered to prove a vital fact; (c) the evidence offered to prove a vital 

fact is no more than a mere scintilla; (d) the evidence establishes 

conclusively the opposite of the vital fact. 

More than a scintilla of evidence exists when the evidence supporting 

the finding rises to a level that would enable reasonable and fair-minded 

people to differ in their conclusions. When determining whether any 

evidence supports a judgment, we are limited to reviewing only the 
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evidence tending to support the jury’s verdict and must disregard all 

evidence to the contrary. We view the evidence and possible inferences 

in the light most favorable to the verdict. If more than a scintilla of 

evidence supports the verdict, it must be upheld. 

Id. (citations and quotation marks omitted). 

In Texas, insurance policies are construed according to the ordinary rules of 

contract construction. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 

(Tex. 2003). In applying these rules, our primary concern is to ascertain the parties’ 

intent as expressed in the language of the policy. Kelley–Coppedge, Inc. v. 

Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). If an insurance contract uses 

unambiguous language, we will construe it as a matter of law and enforce it as 

written. In re Deepwater Horizon, 470 S.W.3d 452, 464 (Tex. 2015); see also TIG 

Ins. Co. v. N. Am. Van Lines, Inc., 170 S.W.3d 264, 268 (Tex. App.—Dallas 2005, 

no pet.) (“If the contract can be given an exact or certain legal interpretation, it is not 

ambiguous, and we must interpret the insurance policy’s meaning and intent from 

its four corners.”). When possible, we must harmonize all of the provisions with 

reference to the entire agreement; no single provision should be read as controlling. 

Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). 

Whether policy language is ambiguous is a question of law. Schaefer, 124 

S.W.3d at 157. Ambiguity does not arise simply because the parties offer conflicting 

interpretations; rather, ambiguity exists only when the contract is susceptible of two 

or more reasonable interpretations. Id. Moreover, ambiguity must be evident from 

the policy itself; it cannot be created by introducing parol evidence of intent. Fiess 
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v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex. 2006). “If a contract of insurance 

is susceptible of more than one reasonable interpretation, we must resolve the 

uncertainty by adopting the construction that most favors to the insured.” Nat’l 

Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W.2d 552, 555 

(Tex. 1991). As the supreme court recently explained, “If the parties offer reasonable 

but conflicting interpretations, we adopt the construction that favors coverage.” 

Dillon Gage, Inc. of Dallas v. Certain Underwriters at Lloyds Subscribing to Policy 

No. EE1701590, 636 S.W.3d 640, 643 (Tex. 2021). 

DISCUSSION

1. Voluntary Parting exclusion (Issues 1 and 2) 

Central argues that the Voluntary Parting exclusion applies and is 

unambiguous. Consequently, Central contends the trial court erred by denying its 

motion for directed verdict based on the exclusion, submitting the question to the 

jury, then disregarding the jury’s “Yes” answer to Question 5. Although a question 

about this exclusion was submitted to the jury, the interpretation of the policy 

language is a question of law. See Tex. Farm Bureau Mut. Ins. Co. v. Sturrock, 146 

S.W.3d 123, 126 (Tex. 2004) (courts construe unambiguous policy language as a 

matter of law). A jury’s finding on a question of law may be deemed immaterial and 

disregarded. Spencer v. Eagle Star Ins. Co. of America, 876 S.W.2d 154, 157 (Tex. 

1994). 
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The applicable coverage form in the policy is the “Commercial Property 

Coverage Part” that includes the “Building and Personal Property Coverage Form” 

(“BPP Coverage Form”), the Causes of Loss form where the Voluntary Parting 

exclusion is found, and the Premier Plus endorsement that amends the policy to add 

“Crime Coverage,” including coverage for “Forgery or Alteration.” The express 

language of the exclusion is “Voluntary parting with any property by you or anyone 

else to whom you have entrusted the property if induced to do so by any fraudulent 

scheme, trick, device or false pretense.” 

There is no specific reference to the Voluntary Parting exclusion in the 

Premier Plus endorsement. Instead, Central relies on general language in the Premier 

Plus endorsement that “All other Limitations, Conditions and Exclusions apply.” 

Immediately before this language, however, the Premier Plus endorsement expressly 

states that it modifies the Causes of Loss form, where the Voluntary Parting 

exclusion is found. 

Citing this Court’s opinion in Mesa Operating Co. v. California Union 

Insurance Co., 986 S.W.2d 749 (Tex. App.—Dallas 1999, pet. denied), Central 

argues that because the Premier Plus endorsement references the limitations, 

conditions, and exclusions in the “main policy,” the Voluntary Parting exclusion 

must be applied to the Premier Plus coverages. As we explained in that case, 

however, 
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Endorsements to a policy generally supersede and control over 

conflicting printed terms within the main policy. Often, endorsements 

are issued to add coverages that would otherwise be excluded. Yet, an 

endorsement cannot be read apart from the main policy, and the added 

provisions will only supersede the previous terms to the extent they are 

truly in conflict. The policy and endorsement should be construed 

together unless they are so much in conflict that they cannot be 

reconciled. 

Id. at 754 (internal citations omitted). Applying this analysis, we reached differing 

conclusions on whether two coverage provisions in an endorsement superseded 

exclusions in the main policy. See id. at 754–55. Where the provisions could not be 

reconciled, we concluded the endorsement superseded the policy and provided 

coverage. Id. 

In Morris James LLP v. Continental Casualty Co., a case cited by Reliance, 

the court concluded that a “False Pretense Exclusion” and a “Forgery and Alteration 

Endorsement”—provisions similar to the Voluntary Parting exclusion and the 

forgery coverage here—were clear and unambiguous standing alone, but were 

ambiguous when read together. 928 F. Supp. 2d 816, 824–25 (D. Del. 2013). Morris 

James, a law firm, had been drawn into a scam involving its acceptance of a 

counterfeit check that it deposited in its bank account. It then wired the funds to a 

third party at the scammer’s direction See id. at 819. Morris James filed a claim with 

Continental under its business property insurance policy after it was unable to 

recover the funds. Id. Continental denied the claim and Morris James sued. Id. 

Both parties filed motions for summary judgment regarding coverage of 

Morris James’s claim under the policy. Id. at 818. The False Pretense Exclusion in 
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the policy provided that Continental would not pay for loss or damage “caused by 

or resulting from . . . voluntary parting with any property . . . if induced to do so by 

any fraudulent scheme, trick, device or false pretense.” Id. at 820. The Forgery and 

Alteration Endorsement provided coverage “for loss resulting directly from 

‘forgery’ or alteration of checks, drafts, promissory notes, or similar written 

promises, orders or directions to pay a sum certain in money . . . .” Id. 

After concluding that the scammer’s counterfeit check fell within the policy’s 

definition of “forgery,” the court turned to the False Pretense Exclusion and found 

that it also applied: “Therefore, there is no serious dispute that, in addition to 

resulting from a forged instrument, the scam was a fraud which induced plaintiff to 

voluntarily part with $176,750, within the language of the False Pretense Exclusion.” 

Id. at 823–24. The court then reasoned that because the loss fell within the plain 

meaning of both the forgery and false pretense provisions, the question “whether the 

loss is covered or excluded by the Policy hinges on which provision is interpreted to 

prevail, or “trump,” the other when the Policy is interpreted as a whole.” Id. at 824. 

The court found the policy to be ambiguous when the provisions were read together 

because the policy was unclear about the application of the exclusions to the 

coverages provided in the endorsements. See id. at 825. The court concluded that 

because the policy’s language was ambiguous, the policy “should be interpreted in 

favor of the insured because the insurer is in control of the process of articulating 

the terms.” Id. 
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Similarly here, we conclude that the Voluntary Parting provision’s exclusion 

of losses in which the insured was “induced . . . by any fraudulent scheme, trick, 

device or false pretense” cannot be reconciled with the Premier Plus endorsement’s 

express coverage of loss from fraud-based crimes such as forgery, defined as “the 

signing of the name of another person or organization with intent to deceive.” The 

Premier Plus endorsement’s express statement that it modifies the Causes of Loss 

form (where the Voluntary Parting exclusion is found) is followed only by a general 

statement that “[a]ll other Limitations, Conditions and Exclusions apply.” If this 

non-specific language is read to require exclusion of all losses induced “by any 

fraudulent scheme, trick, device or false pretense,” then the crime coverages offered 

in the endorsement would not apply to losses from fraud-based crimes, despite the 

policy’s definitions of those crimes as involving “intent to deceive” or “fraudulent” 

conduct. 

As in Mesa Operating Co. and Morris James, we conclude that because the 

Voluntary Parting provision cannot be reconciled with the Premier Plus 

endorsement, the Premier Plus endorsement’s language controls. See Mesa 

Operating Co., 986 S.W.2d at 754–55; Morris James, 928 F. Supp. 2d at 822, 825; 

see also Dillon Gage, Inc. of Dallas, 636 S.W.3d at 643 (if parties offer reasonable 

but conflicting interpretations, court adopts construction that favors coverage).2 We 

2

 Given this conclusion, we need not consider the parties’ additional arguments regarding whether the 

Voluntary Parting exclusion applies to “Money” as defined in the Premier Plus endorsement. Further, 
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conclude the trial court did not err by denying Central’s motion for directed verdict 

based on the Voluntary Parting exclusion and by disregarding the jury’s “Yes” 

answer to Question 5 of the jury charge. See Helping Hands Home Care, Inc., 393 

S.W.3d at 515 (standard of review for directed verdict); Spencer, 876 S.W.2d at 157 

(standards for disregard of jury’s answer). We decide Central’s first two issues 

against it. 

2. Forgery provision of Premier Plus endorsement (Issue 5) 

Question 4 of the jury charge addressed forgery, tracking the Premier Plus 

endorsement’s language: 

Did Reliance suffer a loss resulting directly from “forgery” or alteration 

of checks, drafts, promissory notes, or similar written promises, orders 

or directions to pay a sum certain in “money” that are: 

i) Made or drawn by or drawn upon Reliance; or 

ii) Made or drawn by one acting as Reliance’s agent, or that are 

purported to have been so made or drawn. 

Answer “Yes” or “No”. 

Answer: Yes 

Central argues that the trial court should have disregarded the jury’s answer 

to Question 4 because there was no evidence presented at trial to support it. Central 

contends the Premier Plus endorsement’s forgery coverage is limited to forgery of 

because we have not construed the Voluntary Parting exclusion to preclude coverage for any portion of 

Reliance’s loss, we need not address Central’s arguments regarding concurrent causation. Cf. Dallas Nat’l 

Ins. Co. v. Calitex Corp., 458 S.W.3d 210, 222–23 (Tex. App.—Dallas 2015, no pet.) (under concurrent 

causation doctrine, “when covered and non-covered perils combine to create a loss, the insured is entitled 

to recover that portion of the damage caused solely by the covered peril”). 
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negotiable instruments and did not include the fraudulent emails and invoices in 

question here. Central cites several cases from other jurisdictions in support of its 

argument that “a fraudulent email instructing the insured to wire money is not a 

financial instrument as required for coverage under the forgery coverage.” See, e.g., 

Midlothian Enters., Inc. v. Owners Ins. Co., 439 F. Supp. 3d 737, 743 (E.D. Va. 

2020) (email directing the insured to wire funds was not a “Covered Instrument” 

under the forgery or alteration endorsement of the insured’s policy because it was 

not a negotiable instrument); see also RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 

113, 118 (Tex. 2015) (“When construing an insurance policy, we are mindful of 

other courts’ interpretations of policy language that is identical or very similar to the 

policy language at issue.”). 

Reliance, in turn, relies on cases from other jurisdictions interpreting similar 

policy language and concluding that forgery coverage applied. See, e.g., Ad Advert. 

Design, Inc. v. Sentinel Ins. Co. Ltd., 344 F. Supp. 3d 1175, 1183 (D. Mont. 2018) 

(four emails directing the insured to transfer funds to a specified account by wire 

transfer constituted a “direction[ ] to pay a sum certain in money” covered under the 

policy’s forgery provision). Reliance also cites Great American Insurance Company 

v. AFS/IBEX Financial Services, Inc., 612 F.3d 800 (5th Cir. 2010), in support of its 

argument that forgery coverage is not limited to negotiable instruments. See id. at 

804–05 (giving the term “forgery” in an insurance policy its “plain, ordinary 
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meaning” rather than its interpretation in the “commercial paper context” under the 

UCC).3

As Central argues, more courts have reached the conclusion that forged emails 

or other false wire transfer authorizations or instructions are not negotiable 

instruments and consequently are excluded from forgery coverage. See, e.g., Ryeco, 

LLC v. Selective Ins. Co., 539 F. Supp. 3d 399, 405–08 (E.D. Pa. 2021) (collecting 

cases and distinguishing Ad Advertising as an “outlier”). But neither party has cited 

binding authority that requires us to reach either conclusion. Consequently, we turn 

to the policy language and consider its application to the facts before us. 

Here, the forgery or alteration coverage in the Premier Plus endorsement 

includes “loss resulting directly from ‘forgery’ or alteration of checks, drafts, 

promissory notes, or similar written promises, orders or directions to pay a sum 

certain in ‘money’ that are . . . Made or drawn by or drawn upon you . . . .” “Forgery” 

is defined as “the signing of the name of another person or organization with intent 

to deceive,” and “signatures that are produced or reproduced electronically, 

mechanically, or by other means” are treated “the same as handwritten signatures.” 

Although negotiable instruments such as checks, drafts, and promissory notes are 

3

 But as Central points out, the same court previously held that because forged invoices “were not made, 

drawn by, or drawn upon [the insured] as those terms are used in the commercial paper context or under 

the Uniform Commercial Code,” there was no coverage under the insured’s crime policy. See Travelers 

Cas. & Sur. Co. of Am. v. Baptist Health Sys., 313 F.3d 295, 299 (5th Cir. 2002) (citing Parkans Int’l LLC 

v. Zurich Ins. Co., 299 F.3d 514, 517 (5th Cir. 2002)). 
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specifically included, the forgery coverage also includes “similar written promises, 

orders or directions to pay a sum certain in ‘money,’” and the provision does not 

include the word “negotiable.” We conclude that this language is broad enough to 

encompass the fraudulent emails and wire transfer instructions directing Molitor to 

pay the $220,000 to a specific party in Hong Kong. See In re Deepwater Horizon, 

470 S.W.3d at 464 (court gives insurance policy’s words their ordinary and generally 

accepted meaning unless the policy indicates the parties intended the language to 

impart a technical or different meaning). 

In sum, evidence admitted at trial showed that an unknown party with intent 

to deceive used Grunnah’s email address and signature block to order or direct 

Molitor to pay a sum certain in money by wire transfer, a “loss resulting directly 

from ‘forgery’” as defined in the policy. Consequently, we conclude there was 

evidence to support the jury’s answer to Question 4, and the trial court did not err by 

denying Central’s motion to disregard it. We decide Central’s fifth issue against it. 

3. Findings on amount owed for losses (Issues 3 and 4) 

Central’s third and fourth issues address Questions 6 and 7 of the jury’s 

verdict. In response to Question 6, the jury answered “no,” finding that Central did 

not fail to pay the amount owed for losses under the insurance policy. Question 7, 

inquiring about damages for Central’s failure to pay, was dependent on a “yes” 

answer to Question 6. The jury followed the instruction and did not answer Question 

7. Central argues that the trial court committed reversible error by disregarding the 
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jury’s “no” answer to Question 6 and by failing to render judgment in Central’s favor 

when the jury did not award Reliance any damages in response to Question 7. 

“‘A trial court may disregard a jury finding only if it is unsupported by 

evidence . . . or if the issue is immaterial.’” USAA Tex. Lloyds Co. v. Menchaca, 545 

S.W.3d 479, 505 (Tex. 2018) (quoting Spencer, 876 S.W.2d at 157). A jury answer 

is immaterial when the question should not have been submitted, or when it was 

properly submitted but has been rendered immaterial by other findings. Id. at 506. 

Further, “[t]he trial court need not submit jury questions on undisputed facts.” 

European Crossroads’ Shopping Ctr., Ltd. v. Criswell, 910 S.W.2d 45, 56 (Tex. 

App.—Dallas 1995, writ denied); see also Menchaca, 545 S.W.3d at 501 (“A 

breach-of-contract claim can involve any one or more of numerous discrete issues, 

but the jury need only be asked and instructed about those the parties actually 

dispute, and on which the pleadings and evidence actually raise an issue.” [internal 

quotation omitted]). 

Central argues that the breach of contract question was properly submitted 

because of the numerous factual disputes that the jury was asked to resolve, 

including application of two other crime coverages to the loss. But the trial court’s 

judgment rests on the jury’s finding in response to Question 4—that Reliance 

suffered a loss resulting directly from forgery—establishing Central’s liability under 

the policy despite the jury’s resolution of factual disputes in Central’s favor on other 
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coverages. Consequently, even if Question 6 was properly submitted, the answer 

was rendered immaterial by the jury’s affirmative answer to Question 4. 

Because we have concluded that Reliance’s loss was covered under Central’s 

policy and because both the amount of the loss and Central’s failure to pay it are 

undisputed,4

 we conclude the trial court did not err by disregarding the jury’s answer 

to Question 6 or by rendering judgment for Reliance in the amount of its loss. We 

decide Central’s sixth and seventh issues against it. 

4. Damages for bad faith (Issue 6) 

In its sixth issue, Central argues the trial court erred by failing to disregard the 

jury’s answers to Questions 8 and 9, the common law bad faith questions, and 

awarding Reliance judgment for the $25,000 found by the jury in response to 

Question 9. 

Central contends that under Menchaca, “an insured may not recover any extracontractual damages if the insured is not entitled to any benefits under the insurance 

policy.” See Menchaca, 545 S.W.3d at 490 (stating the “general rule . . . that an 

insured cannot recover policy benefits for an insurer’s statutory violation if the 

insured does not have a right to those benefits under the policy”). But because we 

have concluded that the trial court correctly awarded policy benefits to Reliance, 

4

 Central contends the amount of Reliance’s loss was not established as a matter of law because “some 

of the funds transferred by Molitor belonged to third parties, not Reliance.” There was no evidence, 

however, that the transferred funds were not in Reliance’s control or that any party other than Reliance 

suffered any portion of the loss. In sum, Reliance pleaded and offered proof that it suffered damages of 

$220,000 as a result of the fraud. 
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Menchaca’s holding does not preclude recovery of extra-contractual damages in this 

case. 

We also conclude there was evidence to support the jury’s “yes” answer to 

Question 8. In Question 8, the jury was instructed that “[a]n insurer fails to comply 

with its duty of good faith and fair dealing by”: 

 Failing to attempt in good faith to effectuate a prompt, fair, and 

equitable settlement of a claim when the insurer’s liability has 

become reasonably clear 

or 

 Refusing to pay a claim without conducting a reasonable 

investigation of the claim 

 or 

 Canceling an insurance policy without a reasonable basis. 

Reliance offered evidence that Central failed to interview Molitor and Grunnah, did 

not attempt to learn the scope or result of any law enforcement investigation, based 

its coverage decision on limited information, and gave Reliance inconsistent 

information about the basis for its denial. Further, Central did not rely on the 

Voluntary Parting exclusion as a reason for denying the claim.5

 This is some 

evidence to support the jury’s finding in response to Question 8. See Tanner v. 

5

 Central cites Republic Insurance Co. v. Stoker, 903 S.W.2d 338, 341 (Tex. 1995), for the proposition 

that an insurer is not precluded from defending a claim based on a reason that was not given for denying 

the claim. In Stoker, the court described the dispositive question as “whether, based upon the facts existing 

at the time of the denial, a reasonable insurer would have denied the claim.” Id. at 340. Here, in determining 

the dispositive question under Stoker, the jury could consider Central’s conduct in denying the claim based 

on one set of reasons but defending the lawsuit based on a new and different reason. We also note that in 

Stoker, in contrast to this case, the plaintiffs’ claims were not covered by the policy. See id. 
 –22– 

Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex. 2009) (“We will uphold 

a jury’s finding if more than a scintilla of competent evidence supports it.”). 

We agree with Central, however, that Reliance did not offer any evidence to 

support the jury’s $25,000 damage award. “A claim for bad-faith conduct that 

breaches the common-law duty can potentially result in three types of damages: 

(1) benefit of the bargain damages for an accompanying breach of contract claim, 

(2) compensatory damages for the tort of bad faith, and (3) punitive damages for 

intentional, malicious, fraudulent, or grossly negligent conduct.” Menchaca, 545 

S.W.3d at 488 n.11 (internal quotations and citations omitted). 

Citing evidence of “Central’s complete lack of investigation, in addition to its 

everchanging reasons for denying coverage,” Reliance offers two possible grounds 

for the jury’s award: (1) “to compensate Reliance for the time and expense it 

incurred trying to force Central to investigate its claim” and (2) “for the mental 

anguish Debbie Molitor, Reliance’s primary employee, suffered as a result of 

Central’s denial of Reliance’s claim without conducting any meaningful 

investigation.” But Reliance did not offer any evidence to support an amount of 

damages for either of these grounds, and in any event, Molitor is not a plaintiff in 

this case and did not assert a cause of action against Central for damages. Further, 

the trial court awarded attorney’s fees to Reliance in addition to the jury’s award of 

bad faith damages, compensating Reliance for the time and expense incurred by its 

attorneys in pursuing its claim at trial and on appeal. 
 –23– 

We conclude there is no evidence to support the jury’s award of $25,000 in 

response to Question 9. Consequently, we sustain Central’s sixth issue and reverse 

the portion of the judgment awarding Reliance $25,000 in damages for Central’s 

failure to comply with its duty of good faith and fair dealing. 

CONCLUSION

We reverse the portion of the judgment awarding Reliance $25,000 in 

damages for Central’s failure to comply with its duty of good faith and fair dealing. 

In all other respects, the trial court’s judgment is affirmed. 

210071F.P05 

 

/Robert D. Burns, III/

ROBERT D. BURNS, III 

CHIEF JUSTICE 
 –24– 

S 

Court of Appeals 

Fifth District of Texas at Dallas 

JUDGMENT 

CENTRAL MUTUAL INSURANCE 

COMPANY, Appellant 

No. 05-21-00071-CV V. 

RELIANCE PROPERTY 

MANAGEMENT, INC., Appellee 

 On Appeal from the 44th Judicial 

District Court, Dallas County, Texas 

Trial Court Cause No. DC-18-00856. 

Opinion delivered by Chief Justice 

Burns. Justices Schenck and PartidaKipness participating. 

 In accordance with this Court’s opinion of this date, the judgment of the trial 

court is AFFIRMED in part and REVERSED in part. We REVERSE the award of 

$25,000 in damages to appellee Reliance Property Management, Inc. in paragraph 2 

of the trial court’s judgment. Judgment is RENDERED that appellee Reliance 

Property Management, Inc. take nothing on its claim for breach of the duty of good 

faith and fair dealing. In all other respects, the trial court’s judgment is AFFIRMED. 

 It is ORDERED that appellee Reliance Property Management, Inc. recover 

its costs of this appeal and the amount of the judgment as affirmed from appellant 

Central Mutual Insurance Company and from the cash deposit in lieu of cost bond. 

After all costs have been paid, the clerk of the Dallas court is directed to release the 

balance, if any, of the cash deposit to Central Mutual Insurance Company. 

Judgment entered May 25, 2022