*Senior Circuit Judge of the Second Circuit, sitting by designation. 

United States Court of Appeals,

Fifth Circuit.

No. 92-2665.

Georganne ROBINSON, Plaintiff-Appellant,

v.

STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellee.

Feb. 3, 1994.

Appeal from the United States District Court for the Southern District of Texas.

Before VAN GRAAFEILAND,* SMITH and WIENER, Circuit Judges.

VAN GRAAFEILAND, Circuit Judge:

Georganne Robinson, who secured a judgment against State FarmFire & CasualtyCompany

("State Farm") for a fire loss covered by a State Farm policy, appeals from the district court's

direction of a verdict in favor of State Farm on all of Robinson's non-contractual claims and its

summary dismissal of her cause of action for alleged negligent claim handling. Robinson also

challenges variousinterlocutoryorders, a post-trialmotion for a new trial based on the district judge's

failure to recuse himself, and the district court's calculation of attorney's fees that were included in

the judgment. We affirm in part and remand in part.

Robinson is a homeowner who at the time of the incidents involved herein wasinsured under

a Texas standard homeowner's policy issued by State Farm. Robinson's home was heavily damaged

by two separate fires which occurred within a six-month period of time. The losses resulting from

the first fire were paid. In calculating her losses from the second fire, Robinson arrived at a total

figure of $164,395.54. This included $57,803.86 for structural damage, $73,871.68 for damage to

the contents, and $32,720.00 for additional living expenses. State Farm's calculations produced

figures of $15,539.02 for the structure and $10,722.00 for the contents. In addition, State Farm

claimed a credit of $20,595.69 against the demand for additional living expensesfor payments it had

made, directly or indirectly, to Robinson. Following a jury trial, final judgment was entered in
Robinson's favor in the amount of $34,363.29 plus $25,000.00 in attorney's fees.

Looking at the foregoing summary of the parties' contentions, one is led to wonder why the

district court's docket sheet contains more than one hundred entries and why the case took six days

to try. At the attorney's fee hearing, the district judge commented that the case was "over-worked,"

"over-prepared," and "over-done." After reading the record and Robinson's heavily-footnoted 40-

page appellant brief and 21-page reply brief in which nine alleged errors of the trial court are

discussed, we are inclined to agree. This overkill is the result of the efforts of Robinson's attorney

to prove a breach of State Farm's common law duty of good faith and fair dealing, as created in

Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165, 167 (Tex.1987), and a violation of

the interrelated provisions of sections 17.46 and 17.50 of the Texas Deceptive Trade Practices Act

and Article 21 of the Texas Insurance Code.

 In Arnold, supra, the Texas Supreme Court held that insurers must deal fairly and in good

faith with their insured in the processing and payment of claims. 725 S.W.2d at 167. In Aranda v.

Insurance Co. of North Am., 748 S.W.2d 210 (Tex.1988), the Texas Supreme Court enlarged on the

elements of this claim, stating that in order to prevail on a claim for the breach of the duty of good

faith and fair dealing an insured must show:

(1) the absence of a reasonable basis for denying or delaying payment of the benefits

of the policy and (2) that the [insurer] knew or should have known that there was not a

reasonable basis for denying the claim or delaying payment of the claim.

Id. at 213. In defining the specific elements of this common law claim, the Aranda court also stated

that, under its test, insurers "maintain the right to deny invalid or questionable claims and will not be

subject to liability for an erroneous denial of a claim." Id. In other words, the existence of a "bona

fide controversy is a sufficient reason for failure of an insurer to make a prompt payment of a loss

claim." St. Paul Lloyd's Ins. Co. v. Fong Chun Huang, 808 S.W.2d 524, 526 (Tex.App.—Houston

[1st Dist.] 1991, writ denied). See also St. Paul Guardian Ins. Co. v. Luker, 801 S.W.2d 614, 618

(Tex.App.—Texarkana 1990, no writ); Dixon v. State Farm Fire &Casualty Co., 799 F.Supp. 691,

694 (S.D.Tex.1992).

The Texas Insurance Code and the Deceptive Trade Practices Act are in large measure
statutory fleshings-out of the already existing, common law requirements. Among an insurer's

practices specifically condemned by the Code is "Compelling policyholders to institute suits to

recover amounts due under its policies by offering substantially less than the amounts ultimately

recovered in suits brought by them." Unfair Claim Settlement Practices Rules $ .003(5). Because

Robinson placessubstantialreliance on this provision, we dispose of it before addressing the general

issue of good faith and reasonableness. As above stated, the judgment below was for $34,363.29.

State Farm's offer was $26,261.02 and Robinson's demand was $164,395.54. Assuming for the sake

of argument that State Farm's offer was "substantially less" than the amount ofthe judgment, this was

not what compelled Robinson to institute suit. Rather, it was Robinson's greatly excessive demand.

There was nothing for the jury to consider on this issue, and the district court correctly rejected

Robinson's claim based on Rule .003(5).

Robinson's general contentions of bad faith are equally without merit. State Farm based its

payment offers on estimates prepared by an experienced insurance adjuster and also by two

contractors who had prepared estimates on the first fire. It thus had a reasonable basis for its offers

and had no reason to doubt that it had a reasonable basis. Because a bona fide dispute then existed

as to the amount of Robinson's loss, there can be no claim of bad faith on State Farm's part.

Robinson's only argument in support of her contention that State Farm acted unreasonably

wasthat State Farmallegedly used an improper method of calculating the combined damage fromthe

two fires by assessing the damagesseparately and paying the total of the two assessments. Robinson

contends that State Farm should have calculated the amount owed her for the damage caused by the

second fire by valuing the total loss, then subtracting out the first fire payments and treating the

difference asthe second fire loss. This method of calculation would have to be based on assumptions

that paymentsfor the first loss were accurate and not limited in amount by policy limitations, and that

all of the damage disclosed after the second fire was caused by the two fires and nothing else,

assumptions that are unwarranted in the instant case. State Farm's offers were based on estimates

prepared by an experienced adjuster and two contractors. Needless to say, their figures were much

closer to the amounts actually awarded than were Robinson's. There was no evidence upon which
a jury could make a finding of bad faith or unreasonableness, and the district court did not err in

directing a verdict in favor of State Farm on these issues.

The district court likewise did not err in summarily dismissing Robinson's claim that State

Farm was negligent in its handling of Robinson's claim. See United Services Automobile Ass'n v.

Pennington, 810 S.W.2d 777, 783-84 (Tex.App.—San Antonio 1991, writ denied).

Robinson'ssubsidiarycontentionsrequire little comment. Her claim that District Judge Black

should have recused himself because he was a State Farm policyholder borders on the trivial. In the

first place, Robinson was informed of this fact before the trial commenced and did not seek recusal

until after the trial was over. See United States v. York, 888 F.2d 1050, 1055-56 (5th Cir.1989).

Secondly, because the outcome ofthe instant proceeding would not have so substantiallyaffected the

value of Judge Black's interest as a policyholder to require his recusal if State Farm were a mutual

company, see 28 U.S.C. § 455(d)(4)(iii), it certainly would not require his recusal if, as was the fact,

State Farm was a stock company. We find nothing in Judge Black's conduct and rulings to warrant

a charge of bias. See Phillips v. Joint LegislativeCommittee on Performance &Expenditure Review,

637 F.2d 1014, 1019-21 (5thCir.1981), cert. denied, 456 U.S. 960, 102 S.Ct. 2035, 72 L.Ed.2d 483

(1982).

We discern no prejudicial abuse of discretion in any of the eight evidentiary rulings that

Robinson challenged. See Harrell v. DCS Equip. Leasing Corp., 951 F.2d 1453, 1464 (5th

Cir.1992). At the outset, we note that some o f the evidence claimed to have been improperly

excluded was in fact not excluded, or was rejected because it was not proper rebuttal evidence. See

Cates v. Sears Roebuck & Co., 928 F.2d 679, 685 (5th Cir.1991). Furthermore, the district judge

quite properly attempted to limit the proof to the dispo sitive issues in the case and to exclude

evidence whose probative value was not outweighed by its tendency to delay the trial or

prejudiciously obfuscate the issues. To the extent, if any, that there was error, it was harmless error

that did not deprive Robinson of a fair trial.

 The district court did not err in denying Robinson's belated motion to amend her complaint

by adding two adjusters and an agent as additional defendants, thus divesting the district court of
diversity jurisdiction and permitting Robinson to seek a remand to state court. Further justification

for this ruling can be found in the apparent unlikelihood that Robinson had any claims against the

named individuals. See Ayoub v. Baggett, 820 F.Supp. 298 (S.D.Tex.1993). Similarly, the district

court did not err in refusing to permit Robinson to amend her complaint to include claims arising out

of the first fire. Final payment of all claims arising out of the first fire had been made on June 20,

1989, more than two years prior to the motion to amend.

A district court's rulings on discovery motions are largely discretionary and will be reviewed

only when they are arbitrary or clearly unreasonable. Mayo v. Tri-Bell Indus., Inc., 787 F.2d 1007,

1012 (5th Cir.1986). The district court weighed Robinson's demands against the evidence already

produced and the issues being litigated, and decided that further discovery was unnecessary and

largely irrelevant. There was no prejudicial error here.

Having disposed ofRobinson'smeritless claims of error, we now come to her two contentions

that have some substance: (1) the computations that the district court made in transposing the jury's

verdict into the judgment and (2) the procedure followed by the court in determining the attorney's

fee.

THE JUDGMENT

The jury was not asked to render a general verdict. Instead, by means of special

interrogatories it was asked to determine the losses for damage to the dwelling and the contents and

to state the amount of additional living expenses to which Robinson was entitled. The judge

instructed the jury that when he got the jury's dollar values he would sit down with the lawyers,

because there were deductions and policy limits to be considered. He told the jury not to be

concerned with amounts that had been paid "because we can deduct that." The jury computed the

losses for damage to the structure at $22,500.00 and to the contents at $26,000.00. It computed

additional living expenses to be $37,112.00. In adjusting the figure for additional living expenses,

the court deducted $4,392.00 because the jury's award was that much in excess of the policy limits.

An additional $20,595.69 was deducted because it already had been paid. According to the record,

between the rendition of the verdict and the entry of judgment, State Farm sent Robinson a check for
$26,261.02, the amount of its damage computation. The $34,363.29 judgment is the difference

between that payment and the redacted jury award.

We have no problem with the result thus reached. We are satisfied, however, that the

judgment contains an error in its direction for the computation of interest. State Farm did not make

a valid unconditional tender of the $26,261.02 until shortly before judgment was entered. See

Murphy v. Travelers Ins. Co., 534 F.2d 1155, 1164-65 (5th Cir.1976). Accordingly, in addition to

the amount of prejudgment interest directed to be computed in the judgment, Robinson was entitled

to prejudgment interest on the $26,261.02 up until the date it was paid. The judgment should be

amended accordingly.

ATTORNEY'S FEES

In determining whether the district court properly calculated attorney's fees, we need not

answer the as-yet unanswered question whether state or federal law controls the calculation of fees

as distinguished from their entitlement. See Powell v. Old Southern Life Ins. Co., 780 F.2d 1265,

1267-68 (5th Cir.1986). This is because the Texas courts look to many of the same factors as do the

federal courts in making attorney-fee awards. See Atlantic Richfield Co. v. Manges, 702 F.2d 85,

87 (5th Cir.1983). The district court below received evidence relating to a number of these factors

but then, after stating that plaintiff's attorney had "built this case far out of proportion," continued

"I'm going to award a reasonable amount of attorney's fees solely because I want Ms. Robinson to

have the amount that she would have gotten if she had settled this case many years ago. I'm going

to award 25,000 dollars in attorney's fees." Whether we look to federal or state law for guidance,

this was not an adequate explanation concerning the appropriateness of the award. Accordingly, the

award of attorney's fees must be vacated and the matter remanded to the district court for a more

adequate explanation of the result reached. In making this remand, we do not imply that the

$25,000.00 figure is not a proper one. On the present record, we are not in a position to say.

CONCLUSION

We AFFIRM the judgment appealed from in all respects except for the above discussed

provision for computing prejudgment interest and the award of attorney's fees. As to the interest
award, we direct that the computation of prejudgment interest should include interest on $26,261.02.

As to the award of attorney's fees, we REMAND for a further and more complete statement by the

district court as to how it arrived at the figure of $25,000.00.

No costs to either side on this appeal.