Court Opinion

ID: 9759324
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:12:33.040661+00
Date Added: 2024-06-11T07:29:01.113241
License: Public Domain

BENAVIDES, Justice,
dissenting.
I dissent from the majority’s holding that finds the jury instruction on the bad faith claim proper and, if improper, not reversible error.
Error in a jury charge is reversible when, in light of all the circumstances, the denial of the complaining party’s rights was reasonably calculated to cause and probably did cause the rendition of an improper judgment. Island Recreational Dev. Corp. v. Republic of Texas Savings Assn., 710 S.W.2d 551, 555 (Tex.1986). A charge that gives an incorrect statement of applicable law is reversible error. See Gulf Coast State Bank v. Emenhiser, 562 S.W.2d 449, 453-54 (Tex.1978). When the trial court mis-defines the basic legal standard for a dispositive liability question, the error is likely to cause the rendition of an improper judgment. See Bobbitt v. Weeks, 774 S.W.2d 638, 639 (Tex.1989) (per curiam). Instructions must be tailored to fit the controversy. See Brown v. American Transfer & Storage Co., 601 S.W.2d 931, 937 (Tex.1980). An instruction is improper if it misleads or confuses the jury. See Tex.R.Civ.P. 277.
First, unlike the majority, I believe that the jury instruction was in fact improper. In a cause of action for breach of the duty of good faith and fair dealing, the claimant has the burden to establish:
(1) the absence of a reasonable basis for the denial of a claim or the delay in *912payment of the benefits of the policy, and
(2) that the carrier:
(a) actually knew there was not a reasonable basis for denial or delay, or
(b) should have known, based upon its duty to investigate, that there was not a reasonable basis for the denial or delay.
See Aranda v. Insurance Co. of North America, 748 S.W.2d 210, 213 (Tex.1988). Regarding 2(a) and 2(b), whether there is a reasonable basis for denial is judged by the facts before the insurer at the time the claim is denied. Viles v. Security Nat’l Ins. Co., 788 S.W.2d 566, 567 (Tex.1990).
The trial court tendered the following instruction to the jury:
it must be shown that the insurer had no reasonable basis for denying the claim or delaying payment or the insurer failed to determine whether there was any reasonable basis for the denial or the delay.
Aetna’s tendered instruction follows (emphasis added):
it must be shown that the insurer denied or delayed payment of the claim at a time when it knew it had no reasonable basis for denying the claim or delaying the payment of the claim or the insurer failed to determine whether there was any reasonable basis for the denial or the delay.
The difference between the trial court’s instruction and Aetna’s instruction is underscored. The majority describes this difference in the following manner: “[t]he essential difference between the instructions is that the requested instruction informs the jury that the insurer must have knowledge that Aetna had no reasonable basis for denying the claim.” By such a characterization, the majority falls short of the mark. Aetna’s instruction also differs because it includes a requirement that the jury consider the insurer’s denial from the facts before the insurer at the time of the denial.
As the Viles opinion recognizes, the insurer’s reasonable basis must be viewed from the facts before it at the time of the denial. Otherwise, the carrier could be held liable for a bad faith denial any time the insured ultimately established a right to coverage. Because the evidence at trial showed a substantial difference between the information available at the time of the denial and the information available at the time of trial, the trial court erred in failing to include Aetna’s instruction which would have limited the jury’s review of the reasonable basis to the facts before the insurer at the time of the denial.
To circumvent the error in the trial court’s charge, the majority finds sufficient evidence of the alternative theory, namely, that Aetna should have known that it had no reasonable basis for denial because it failed to properly investigate the claim. Thus, the majority holds that any error in the instruction was not reversible. I disagree.
In its recitation of the facts, the majority relies upon facts not known to Aetna at the time of the denial and concludes that the evidence was sufficient to show that Aetna should have investigated further. Here, we have an insurance carrier that based its denial upon (1) the report of a fire investigator, concluding that the fire was intentionally set; (2) the opinion of the fire chief that the fire was intentionally set; (3) the uncontradicted and admitted statements of its own insured made to several police officers and her son, indicating that the co-insured, her husband, had set the fire; and (4) the inconsistencies in the husband's statements.
Because the jury was not instructed to consider Aetna’s knowledge that it had no reasonable basis for denial or delay and was not instructed to view the facts as they were available to Aetna at the time of the denial or delay, I believe it highly likely that the jury’s finding of bad faith came about by reason of the Davilas’ ultimately establishing at trial a right to coverage under the policy, not by Aetna’s unreasonable denial or delay. Comparing the evidence presented at trial with the instruction in the charge, I would find that the error in the charge was reasonably calculated to cause and probably did cause the rendition of an improper judgment and *913would sustain Aetna’s ninth point of error. See Island Recreational Dev. Corp., 710 S.W.2d at 555.
As previously detailed, Aetna had both an independent fire investigator’s report and the knowledge of the statements made by its own insured, among other things, before it at the time of its denial which indicated that the fire was intentionally set. While conflicting facts on the arson issue might defeat Aetna’s affirmative defense to the contract claim, those same facts in the context of the bad faith claim establish, as a matter of law, that Aetna had a reasonable basis for its denial of the claim. See Fuentes v. Texas Employers’ Ins. Ass’n, 757 S.W.2d 31, 33 (Tex.App.—San Antonio 1988, no writ); Yancy v. Floyd West & Co., 755 S.W.2d 914, 922 (Tex.App.—Fort Worth 1988, writ denied). Therefore, I would also sustain Aetna’s point of error challenging the legal sufficiency of the evidence.
Accordingly, I would reverse the judgment on the breach of good faith and fair dealing claim and remand this cause for further proceedings on the Davilas’ Deceptive Trade Practices Act claim. (See the majority’s discussion of Aetna’s tenth point of error.)