Opinion ID: 2432517
Heading Depth: 1
Heading Rank: 2

Heading: Common-Law Theories

Text: Transport first argues that it cannot be liable under any theory because it conclusively established that Faircloth suffered no injury as a result of the settlement. Transport contends that it proved as a matter of law that Faircloth is not the biological or adopted child of Judith Kervin. Under the wrongful death statute, Faircloth would not have a claim arising from Judith Kervin's wrongful death because only biological or legally-adopted children of the decedent have standing. See Goss v. Franz, 287 S.W.2d 289, 290 (Tex.Civ.App.Amarillo 1956, writ ref'd). Transport concludes that not only did she suffer no injury, but Faircloth settled a claim to which she had no right, thereby receiving a windfall. While this issue was properly one for the jury, we cannot set aside the jury's verdict for the reason urged by Transport, lack of legally sufficient evidence. Transport learned for the first time during discovery that Faircloth was not the biological child of Judith Kervin, and that there was no record of any adoption proceeding. It attempted to prove Faircloth had no standing under the wrongful death statute, but the trial court granted a motion in limine excluding all evidence that Faircloth was not Judith Kervin's biological or adopted child. The court excluded the evidence because of the so-called picture frame theory, according to which only the facts known to Transport at the time of the settlement were relevant. Consequently, Transport developed by bill of exception an extensive record to show that Faircloth did not have standing to make a claim against Allied Van Lines, Transport's insured. The bill of exceptions included a birth certificate which reflects that Faircloth was born to a woman other than Judith Kervin. Faircloth admitted on the record outside the presence of the jury that she had known since she was very young that she was not Judith Kervin's biological child. She testified that she had always believed that she was adopted. Askins and Caldwell were also examined outside the jury's presence. Both testified that they were concerned that if Transport learned Faircloth could not establish her relation to Judith Kervin, Transport might withdraw its settlement offer. [9] The excluded evidence was unquestionably relevant to the issue of injury. Transport assigned no error to the exclusion of the evidence, however. Its only complaint is that the evidence in the bill of exceptions conclusively established Faircloth's lack of injury. For two reasons, we cannot adopt Transport's argument as grounds for vacating the jury's findings on the common-law claims. First, an appellate court generally may not reverse and render a different judgment based on excluded evidence. J.M. Abott Oil Co. v. San Antonio Brewing Ass'n, 104 Tex. 574, 141 S.W. 517, 517 (1911); see Martin v. Allman, 668 S.W.2d 795, 799 (Tex. App.Dallas 1984, no writ) (holding that a party is entitled to rely on a favorable ruling and need not rebut evidence tendered by an opposing party in a bill of exceptions). Evidence is not conclusive unless it was admitted into evidence, and the opposing party failed to rebut it. Abott, 141 S.W. at 517. If this Court sets aside a verdict based on evidence the jury did not hear, we may not render a contrary judgment. Instead, we must remand for trial in order to give the opposing party an opportunity to impeach the evidence or to respond with rebuttal evidence. [10] Second, even if Transport's evidence about Faircloth had been properly admitted, the standard of review for Transport's legal sufficiency complaint precludes us from considering the evidence. Because Faircloth had the burden to prove injury, the standard of review is whether there was no evidence to support the jury's findings. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983). In considering a no evidence point, we may consider only the evidence supporting the finding and disregard evidence and inferences to the contrary. Weirich v. Weirich, 833 S.W.2d 942, 945 (Tex. 1992). Considering only the evidence which supports the verdict in this case, and disregarding the excluded evidence, we must overrule this legal sufficiency point of error. We turn to consider whether Faircloth established that Transport had a duty and breached it under any theory on which the jury made findings.
Transport argues that there was no evidence of fraud or of Faircloth's reliance on fraudulent representations. Transport hired Lindsey & Newsom to investigate the accident and to manage potential liability claims. Lindsey & Newsom assigned Jones to handle the case. During the investigation, Jones concluded that Faircloth and two adult sons were Judith Kervin's children. Jones began the settlement process, as authorized by Transport. During the process, Transport obtained opinions concerning the possible amount of a hypothetical jury award for Judith Kervin's wrongful death. Faircloth's fraud claim primarily arose from the events at a meeting on May 21, 1984, three days after the accident which killed the Kervins. Faircloth recalls that Caldwell, Askins, Jones, Dell Jackson (who was Judith Kervin's 37-year-old son), and others were at the Caldwell home discussing the need to employ Askins to open a guardianship. [11] They also discussed Transport's offer of $250,000 to settle the wrongful death claim and told Faircloth it was a good deal. Jackson testified: Q Okay. And what did they tell Paula about the $250,000? A They said that was the great deal, that wasthat was really topor top dollar, said that was real good for a minor, she was a minor, if she hadn't been a minor, that she wouldn't come out with anything.... An actionable representation is one concerning a material fact; a pure expression of opinion will not support an action for fraud. Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983). In particular, an expression of opinion about monetary value is not a representation of fact which gives rise to an action for fraud. See McCollum v. P/S Invs., Ltd., 764 S.W.2d 252, 254 (Tex.App. Dallas 1988, writ denied); Cravens v. Skinner, 626 S.W.2d 173, 177 (Tex.App.Fort Worth 1981, no writ); Morris v. Leonard, 441 S.W.2d 877, 881 (Tex.App.Fort Worth 1969, writ ref'd n.r.e.), cert. denied, 402 U.S. 974, 91 S.Ct. 1667, 29 L.Ed.2d 139 (1971). Whether a statement is an actionable statement of fact or merely one of opinion often depends on the circumstances in which a statement is made. Among the relevant circumstances are the statement's specificity, the speaker's knowledge, the comparative levels of the speaker's and the hearer's knowledge, and whether the statement relates to the present or the future. See Trenholm, 646 S.W.2d at 930; Safety Cas. Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176, 178 (1939); Angelo Broadcasting, Inc. v. Satellite Music Network, Inc., 836 S.W.2d 726, 733 (Tex.App.Dallas 1992, writ denied), disapproved on other grounds by Hines v. Hash, 843 S.W.2d 464, 469-70 (Tex.1992). A statement of value may be actionable if the speaker knows it is false. Texas Indus. Trust v. Lusk, 312 S.W.2d 324, 326 (Tex.Civ.App. San Antonio 1958, writ ref'd). Faircloth contends that Transport's representative, Jones, gave a false statement of fact about the value of her claim, since Transport had obtained estimates at a higher amount than it offered in settlement. The most specific statement any witness to the May 21st meeting recalled was that the settlement offer was top dollar. No evidence pinpoints the identity of the speaker who may have made that statement. Assuming the speaker was one of Transport's agents, there is no evidence that the statement was a false statement of fact, or that the agent knew it was false when made. When Transport investigated the claim arising from Judith Kervin's death, it sought expert opinions about its potential value. The record contains a note by Transport's claims branch manager, Mike Roggen, dated almost three weeks after the May 21st meeting, reflecting the estimates made by two attorneys assigned to value Faircloth's claim. One expert from Beaumont estimated the case was worth up to $500,000 or more, while another expert from Houston estimated its value at $350,000 to $400,000. Roggen's note also stated that $250,000 was the most realistic estimate of Transport's exposure, based on the opinions of these attorneys, the opinion of the claimant's attorney, and our own thinking. The mere fact that Transport was aware of opinions giving a higher value to Faircloth's claim than it offered to settle with her is no evidence that an opinion by any Transport agent about $250,000 being top dollar was false. Transport could disagree with its consultants about the value of the claim without being guilty of fraud. Unlike the value of tangible property, such as automobiles or real estate, the value of a wrongful death claim is not susceptible to precise calculation. The value of such an unliquidated claim is inherently a matter of opinion. Whether the amount of a settlement offer approximates what a jury would award at trial depends on unpredictable factors such as favorable rulings from the trial court on venue and other legal issues, the jury, the availability and credibility of witnesses, the ability of the attorneys, and so forth. Experts can sincerely disagree about the value of a claim. For example, in the trial of this case, Faircloth's experts testified that the wrongful death claim was worth at least one million dollars, but the jury proved them wrong by returning a verdict valuing Faircloth's claim at about $160,000. Her experts were mistaken in their opinion of the value of the claim, not knowingly deceptive or guilty of false statements. Likewise, the views expressed about the adequacy of Transport's $250,000 settlement offer were opinions only, and there is no evidence Transport knew that they were false. An opinion also may be treated as an actionable statement of fact when the opinion is based on or buttressed with false facts. Trenholm, 646 S.W.2d at 930-31. In Trenholm, a developer induced homebuilders to purchase property next to a trailer park that had a depressing effect on the value of the neighborhood. The developer falsely stated that the trailer park had been sold and that the tenants had been given notice their leases would not be renewed. The developer opined that the trailer park would be gone in a matter of months. The court held that the misstatements of fact were so intertwined with the developer's statement of opinion that the entire statement amounted to a false representation of fact. Id. at 931. In the present case, there are no comparable representations. There is no evidence that Transport buttressed its opinion about the value of Faircloth's settlement offer with false facts. There is no allegation that, for example, Transport falsely stated that it had settled similar claims for comparable amounts or that it misrepresented facts concerning the Kervins' accident. Superior knowledge by one party may also provide the occasion for fraud. A court may consider a false opinion of value as an actionable statement of fact if it is made by one who should know another party is justifiably relying on the speaker's superior knowledge. See Safety Cas. Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176, 178 (1939). Missing in this case is evidence that Transport knew Faircloth was relying on its supposedly superior knowledge. Faircloth may have been unsophisticated in financial matters, but any settlement had to be accepted on her behalf by Caldwell, her guardian, on the advice of Askins, Faircloth's attorney, and upon approval by the probate court. Thus, in this case Faircloth was not justifiably relying on Transport's superior knowledge. The theory of superior knowledge will not support the jury's finding of fraud. We conclude that there is no evidence supporting the jury's finding of fraud. Before leaving the issue, however, we address some arguments made in Justice Hightower's concurring and dissenting opinion. The concurring and dissenting opinion's reliance on McGee, to conclude that representations of value are actionable, is not warranted. McGee is clearly distinguishable from this case. In McGee, an insurer offered to settle an injured worker's compensation claim for an amount the insurer had calculated on the basis of partial disability. The insurer represented that the settlement offer was the best the worker could receive. However, the insurer knew that the employee was totally disabled, and knew the law relating to total disability and partial disability and the method of determining and computing the amount of compensation to be paid. Id. at 179. Thus, the insurer's statement was shown to be a knowing misrepresentation of the actual value of the claim, which was a precisely ascertainable amount. By contrast, the opinion that Transport's $250,000 offer was top dollar related to an unliquidated claim, the value of which was not subject to exact calculation. The concurring and dissenting opinion also contends that Transport discouraged Faircloth from seeking competent counsel to preserve her ignorance about the true value of her claim. Contrary to this assertion, there is no evidence that Transport ever said that it was unnecessary or inadvisable for Faircloth to consult a lawyer, that it had a desire to settle before Faircloth obtained legal counsel, or that it discouraged a friendly suit. The argument is that Transport encouraged Faircloth to retain Askins to represent her even though Transport considered him an incompetent attorney, thereby exacerbating Faircloth's vulnerability to deception. However, the evidence does not support these inferences. Although Transport's claims branch manager, Roggen, testified that he did not consider Askins a top gun, his testimony indicated no more than a belief that Askins was not the Tom Cruise of Texas trial attorneys. This is not evidence that Roggen or anyone else at Transport considered Askins incompetent. Moreover, Roggen also stated that he thought Askins was a capable lawyer whose foremost objective was to serve Faircloth's best interests. The concurring and dissenting opinion's position, taken to its logical conclusion, would lead to absurd results. The necessary implication from its reasoning is that a party must refuse to settle with unsophisticated claimants if their lawyer is not a top gun to avoid later claims of fraud. We will not embrace a holding that disqualifies the vast majority of well-qualified lawyers from handling settlements.
Faircloth's final argument is that Transport took advantage of her naivete by conspiring with Caldwell, a guardian it thought disloyal to his charge, and Askins, an attorney it thought corrupt. Faircloth's conspiracy theory is that Transport colluded with Caldwell and Askins to get her to settle for less than her claim was worth. Civil conspiracy requires a meeting of the minds between two or more persons to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means. Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). When viewing meager circumstantial evidence, if circumstances are consistent with either of two facts and nothing shows that one is more probable than the other, neither fact can be inferred. $56,700 in U.S. Currency v. State, 730 S.W.2d 659, 662 (Tex.1987). Circumstantial evidence may be used to establish any material fact, but it must constitute more than mere suspicion. Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex.1993). As we said in Browning-Ferris, some suspicion linked to other suspicion produces only more suspicion, which is not the same as some evidence. Id. at 927. It was incumbent on Faircloth to establish the elements of civil conspiracy. Having applied the principles of $56,700 and Browning-Ferris to the record in this case, we conclude that she did not as a matter of law. The evidence shows: 1) Jones met Caldwell and Faircloth the day of the accident or the next day. Jones recommended attorneys to Caldwell to represent Faircloth, but Askins was not among those she recommended. 2) Caldwell initially contacted Askins as a referral from one of his acquaintances. Caldwell hired Askins because he was willing to petition the probate court for a temporary guardianship which could be accomplished within a few days. 3) Once Caldwell was appointed guardian, he drew on the amounts invested for Faircloth at a rate of $750 per month for her support. 4) Askins acknowledged that he had never handled a wrongful death claim such as Faircloth's claim, that he did not independently investigate the accident, and that he needed money. 5) On one occasion, Caldwell telephoned Jones to ask her to explain the difference between a structured settlement and payment in a lump sum. 6) The only other evidence of contact between Jones and Caldwell or Askins was the May 21st meeting at Caldwell's home. Roggen then took over negotiations for the settlement, which the probate court approved within three weeks of the accident. The deficiency in Faircloth's conspiracy argument is the lack of evidence to connect Transport with Caldwell's or Askins' conduct in any legally cognizable way. On these facts alone, no inference can arise that Transport was a conspirator with Caldwell or Askins. No evidence shows that Transport was aware of Askins' financial situation, or that Caldwell may have planned to profit improperly from Faircloth's guardianship by charging her for her support. There is no evidence that Transport committed, or was aware of, any unlawful act. In short, no evidence or any inference from it makes a conspiracy conclusion more probable than not. We conclude that there is no evidence of civil conspiracy that would justify attributing to Transport the misconduct, if any, of Caldwell or Askins.
Faircloth contends that Transport owed her a duty comparable to the commonlaw duty an insurance company owes its insured. See Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165 (Tex.1987). Alternatively, she asserts that Jones established a confidential relationship with Faircloth by her attitude and representations. Faircloth obtained findings that Transport did not act in good faith and that the defendants breached a fiduciary duty owed her. Both theories depend on whether a special relationship arose between Transport and Faircloth. This Court has held that an insurer owes an insured a duty of good faith and fair dealing because of the special relationship arising out of the insurance contract. Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 212 (Tex.1988). However, the Court has not squarely ruled on whether an insurer's duty of good faith and fair dealing extends to a third-party claimant. See Allstate Ins. Co. v. Watson, 876 S.W.2d 145, 150 (Tex.1994) (holding that an insurer owes no duty of good faith to third-party claimants under the Insurance Code, without reaching the question of a possible common-law duty). Identifying a source of such a duty is problematic. As this Court stated in Watson: A third party claimant has no contract with the insurer or the insured, has not paid any premiums, has no legal relationship with the insurer, and in short, has no basis upon which to expect or demand the benefit of ... extra-contractual obligations imposed on insurers. Id. at 149. An insured's interests are adverse to third-party claimants. Id. In this case, Faircloth's interests were adverse to Allied Van Lines, and Transport's duty of good faith and fair dealing ran to Allied, its insured. Transport owed a duty to its insured to defend the claim, and if warranted by the facts, to settle the claim consistent with the insured's best interests. American Physicians Ins. Exchange v. Garcia, 876 S.W.2d 842, 846-47 (Tex.1994) (noting the insurer's duty to settle); American Centennial Ins. Co. v. Canal Ins. Co., 843 S.W.2d 480, 482 (Tex.1992) (identifying an insurer's duties to investigate claims, defend at trial, and negotiate settlement); Ranger County Mut. Ins. Co. v. Guin, 723 S.W.2d 656, 658 (Tex.1987) (stating the insurer's duty to put the insured's interests on par with its own). For policy reasons, we do not require insurance companies to perform duties for third-party claimants that are coextensive and conflicting with the duties they owe their insureds. Watson, 876 S.W.2d at 150. Owing such duties to third parties would necessarily compromise the duties the insurer owes to its insured. Id. In the case before us, no compelling facts suggest a special relationship existed to warrant imposing on Transport a duty of good faith and fair dealing owed to the third-party claimant, Faircloth. There was likewise no special relationship between Transport and Faircloth to justify imposing a fiduciary duty on Transport. A fiduciary or confidential relationship may arise from circumstances of the particular case, but it must exist prior to, and apart from, the agreement made the basis of the suit. Consolidated Gas & Equip. Co. v. Thompson, 405 S.W.2d 333, 336-37 (Tex. 1966). Faircloth had no dealings with Transport except as a claimant against Transport's insured. Faircloth, Caldwell, or Askins had no reason to place a high degree of trust in Transport. Therefore, no special relationship arose before or during the settlement negotiations which could give rise to fiduciary duties. There was no relationship at all except for the settlement agreement made the basis of the present suit.