Court Opinion

ID: 9676142
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:15:58.086575+00
Date Added: 2024-06-11T18:16:44.607769
License: Public Domain

GAMMAGE, Justice,
joined by HIGHTOWER, Justice,
dissenting.
The majority overlooks procedural waiver by defendants in order to reach statutory construction issues, rewrites DTPA and Insurance Code article 21.21 law in ways never conceived before, then misapplies its own new rule. The jury found she had suffered damages from unfair insurance practices. The trial court and court of appeals struggled with the question of how much she should recover. The policy at issue is ambiguous, as we have historically used the term “ambiguity” for insurance policies. The trial court correctly rendered judgment on an instructed verdict for Beaston for the policy amount based on the undisputed facts. And, as to unfair insurance practice recovery, defendants failed to object to the jury charge, which neither segregated nor conditioned the mental anguish damages issue on an additional finding of “knowing” conduct. Defendants were required to object to an improperly conditioned damages issue to preserve error, and their failure waived their eom-plaints about mental anguish as an element of damages absent “knowing” conduct. Even if one reaches the “knowing” issue, however, the version of article 21.21 applicable when the incident occurred did not require “knowing” conduct for mental anguish damages. Even under the majority’s test, however, mental anguish damages are recoverable if they would be part of common law actual damages, and Beaston’s injury of delay and anguish over policy coverage for the death of her husband is most analogous to common law actions allowing mental anguish recovery. The majority misapplies its own test. Because I believe the majority is wrong on each issue, I dissent.
I.
First consider whether Mrs. Beaston is entitled to recover any proceeds from her husband’s life insurance policy. Although it is undisputed, based upon the issue date shown on its face, that her husband’s policy had expired for nonpayment of premium when he died, Mrs. Beaston argues a construction of the policy that keeps it in force because of its dividend-at-death provision. The policy provides, in relevant part:
Accumulations to Avoid Lapse. If a premium has not been paid by the end of its grace period, any available dividend will be used to pay all or part of that premium ....
Annual Dividends. State Farm Life may apportion and pay dividends each year. Any such dividends will be paid at the end of the policy year if all premiums due have been paid....
Dividend at Death. A dividend for the period from, the start of the policy year to the insured’s death will be part of the proceeds.
(Emphasis added.)
The parties do not dispute that Mr. Beaston had not accumulated any dividend following the first year of the policy or that he died *439before its second anniversary. The court accepts State Farm’s argument that the terms of Mr. Beaston’s policy make clear that the payment of any dividend is contingent on the insured’s payment of all premiums due. Since Mr. Beaston had not paid the last premium on his policy prior to the expiration of its grace period, State Farm contends, the terms of the policy are unambiguous that he would not receive any dividend that could be used to cure his unpaid premium. The court thus accepts a reading of the contract favorable to the insurance company, which drafted it. This is not proper.
The trial court held that these policy provisions could reasonably be taken to mean that State Farm would pay Mr. Beaston a dividend at his death, regardless of his arrearag-es, and the court of appeals agreed with that analysis. 861 S.W.2d at 277. The dividend-at-death clause states unconditionally that State Farm will pay a pro-rated dividend to Mr. Beaston upon his demise. The aecumu-lations-to-avoid-lapse provision states with equal certainty that State Farm will use any such dividend to pay all or part of the insured’s unpaid premiums. State Farm was aware of the difference between discretionary or contingent clauses and mandatory provisions. The annual-dividend clause, for example, says State Farm “may” pay dividends each year. State Farm’s choice to not make the payment of a dividend at death expressly contingent on the insured’s timely payment of premiums created an ambiguity that leaves the policy susceptible to two reasonable interpretations. That makes the language “ambiguous” and the court should construe it against the insurer in a manner that favors coverage. See Balderama v. Western Casualty Life Ins. Co., 825 S.W.2d 432, 434 (Tex.1991); National Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991); Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 666 (Tex.1987); Blaylock v. American Guarantee Bank Liab. Ins. Co., 632 S.W.2d 719, 722 (Tex.1982); Ramsay v. Maryland Am. Gen. Ins. Co., 533 S.W.2d 344, 349 (Tex.1976). Construed against State Farm, Mr. Beaston’s policy provides that State Farm would pay him a pro-rata dividend at death and would apply that dividend pro-rata to his unpaid premium. Under this construction, as State Farm concedes, the amount of such a pro-rated dividend would have been sufficient to prevent the policy from lapsing.
The majority reaches its contrary conclusion through its new-found device to avoid ambiguity, applying “rules of construction” as in Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132 (Tex.1994). Unlike the insurance policy in Forbau, however, the policy at issue here does not contain any provision that, with reference to an external event, resolves its ambiguity. It appears that the majority now interprets Forbau as overruling all our insurance ambiguity precedents, although in Forbau the majority claimed otherwise. The gymnastics utilized to conclude ambiguity is not ambiguous, at bottom amount to reading a provision into the contract that is not there to provide that all dividends and accumulations are not payable after a lapse, even upon death, at which occurrence the policy states expressly they are payable. Therefore, no ambiguity!
II.
Assuming our traditional rules dealing with ambiguities in insurance contracts were applied and the policy were construed in Beaston’s favor, State Farm and Heaton waived their complaint that “mental anguish” damages required a “knowingly” finding. The jury’s affirmative finding to question one, a general article 21.21 violation, was one of five conditions which if the jury answered “Yes” to any one, required the jury to answer the damages question. State Farm made no objection that the damages issue was improperly conditioned because the general article 21.21 liability question, and possibly some of the other four questions requiring the jury to answer on damages, would also require a “knowing” finding. Neither did State Farm object that the damages question used the wrong measure of damages because the mental anguish element was improper absent an express “knowing” finding. And State Farm did not object to the damages question because it contained an element of damages — mental anguish — not supported by some of the liability theories pre*440sented (no “knowing” violation). No objection appears in the record which would give the trial court or opposing counsel notice of the complaint about mental anguish as an element of damages.
Rule 272 expressly provides that all parties must have adequate opportunity to review and object to any defects in the charge, and “[a]ll objections not so presented shall be considered as waived.” Tex.R.Civ.P. 272. Rule 274 contains additional waiver provisions. This court has long held that Rule 272, with or independent of Rule 274, is a broad waiver provision defeating complaints about what the jury found or the form or substance of the jury questions. Cogburn v. Harbour, 657 S.W.2d 432, 432 (Tex.1983); Edwards v. Strong, 213 S.W.2d 979, 981 (Tex.1948); Wilson v. King, 311 S.W.2d 957, 958-59 (Tex.Civ.App.—Austin 1958, writ ref'd). In particular, we have expressly approved the statement of the reason for the rule given in Wilson:
The purpose of the Rules requiring a party to except to the charge is to give the Trial Court an opportunity to correct any errors, to the end that the ease may be fairly submitted, and all defects in the manner of submission of special issues were waived by failing to except thereto. [Citations omitted.]
Id. at 959. Here neither the trial court nor Beaston’s counsel had the opportunity to change the conditional submission structure of the court’s charge, because State Farm made no objection before the verdict. This is precisely what Rules 272 and 274 are intended to prevent.
The failure to object to the conditional submission of the damages issue waives error as to form and substance of the submission. Wilgus v. Bond, 730 S.W.2d 670, 672 (Tex.1987); Matthews v. Candlewood Builders, Inc., 685 S.W.2d 649, 650 (Tex.1985); Strauss v. LaMark, 366 S.W.2d 555, 557 (Tex.1963); AAA Air Conditioning & Mfg. Corp. of Tex. v. Barr, 186 S.W.2d 825, 826-27 (Tex.Civ.App.—Dallas 1945, writ ref'd); Republic Bankers Life Ins. Co. v. Coffey, 490 S.W.2d 231, 233 (Tex.Civ.App.—Amarillo 1973, writ ref'd n.r.e.); Bell v. Aetna Cas. & Sur. Co., 394 S.W.2d 830, 833-34 (Tex.Civ.App.— Houston [1st Dist.] 1965, writ ref'd n.r.e.). The failure to object that the damages issue includes improper elements or is based on the wrong measure of damages waives error as to the form and substance of the damages issue. See Tom Benson Chevrolet, Inc. v. Alvarado, 636 S.W.2d 815, 822-23 (Tex.App.—San Antonio 1982, writ ref'd n.r.e.); Traylor v. Gray, 547 S.W.2d 644, 658 (Tex.Civ.App.—Corpus Christi 1977, writ ref'd n.r.e.); McCreless Properties, Ltd. v. F.W. Woolworth Co., 533 S.W.2d 863, 867 (Tex.Civ.App.—San Antonio 1976, writ ref'd n.r.e.).
The majority errs in even reaching the “knowingly” issue because State Farm failed to object and thereby waived any complaint that the mental anguish element of damages had to be conditioned upon or required a finding of knowing conduct.
III.
The majority asserts that “[i]n DTPA cases that do not involve personal injury, we have required a threshold finding of a culpable mental state as one of the prerequisites for mental anguish damages.” 907 S.W.2d at 436. This misses the point of those cases, that mental anguish damages are recoverable only if the DTPA violation proved is analogous to a common law action allowing recovery of such mental anguish damages. This court has held that mental anguish is a common law element of damages in a large variety of circumstances not limited to physical injury or culpable mental state. Here the Insurance Code violation found by the jury is closely analogous to instances where the common law allows mental anguish recovery, because a central purpose of the interest protected by the Code is to avoid mental harm to the beneficiary.
Under the DTPA, the term “actual damages” means those damages that are recoverable under the common law. Brown v. American Transfer & Storage Co., 601 S.W.2d 931, 939 (Tex.1980). Article 21.21 likewise provides for the recovery of “actual damages.” The threshold question is whether mental anguish damages are appropriate under the common law for the actionable conduct found by the jury. Only if mental anguish is not a common law element of *441damages must we look to exceptions allowing mental anguish damages, such as proof of willful or grossly negligent conduct. See, e.g., Luna v. North Star Dodge Sales, Inc., 667 S.W.2d 115 (Tex.1984); Duncan v. Luke Johnson Ford, Inc., 603 S.W.2d 777 (Tex.1980).
The jury found State Farm engaged in unfair and deceptive acts prohibited by article 21.21. The jury further found mental anguish damages from the unfair and deceptive acts. The “unfair and deceptive acts” question was a broad submission. If there is any evidence that some specific conduct for which mental anguish damages are recoverable supported that broad finding,1 the court of appeals’ rendition of judgment on the jury verdict must be affirmed. Prudential Ins. Co. v. Jefferson Assocs., 896 S.W.2d 156, 160 (Tex.1995); Brown v. American Transfer & Storage Co., 601 S.W.2d 931, 937-38 (Tex.1980).
The evidence considered favorably to Terri Beaston, for whom the jury answered the broad question affirmatively, supports the conclusion that Heaton, as State Farm’s agent acting with the capacity to deceive the average consumer, faded to suggest changing from whole life to term insurance. The circumstances known to Heaton would objectively make one realize that his failure to make known the term life option would cause emotional distress to Terri Beaston while the couple struggled to pay the higher whole life premiums. Moreover, in the event of David Beaston’s death, the purported lapse in coverage because of nonpayment of the higher premium would cause emotional distress associated with his death. Heaton was informed Terri would suffer heightened emotional distress associated with his death because of the financial strain of losing his income, something she abnormally feared.
There was evidence that Terri had an exaggerated fear of being unable to pay creditors in the event of David’s death. The young couple had a life insurance policy before but let it lapse because of financial problems, which caused Terri great distress. She insisted that David obtain new life insurance coverage.
Ted Heaton was the agent who promised to take care of the Beastons’ insurance needs. The Beastons did not have a clear understanding of the difference between term and whole life; they did not realize that term was much less expensive for the same coverage. Heaton could have suggested they exchange their whole life policies for the more affordable term, but he admitted he never even suggested the possibility to them. Heaton knew the Beastons’ financial problems began in June 1983. He was in frequent contact with them about their late premium payments. He knew that Terri Beaston was “adamant” about keeping the policies in force. Terri was the one who made payments on both policies whenever she could, and Heaton knew she was doing everything she could to pay the premiums.
There was evidence that Heaton’s failure to suggest the term option was an unfair practice under article 21.21. State Farm’s own training manual informed Heaton that term was suitable for young couples who lacked the means to purchase whole life. The manual states that term insurance provides good protection until the policyholder can afford whole life. The testimony was that from mid-1983 up to the day David died, the Beastons fit the description of people for whom term insurance was well suited, and Heaton knew it. Heaton admitted that he would normally advise someone of this choice between term and whole life, but did not do so in this case. Terri Beaston testified that given a choice, she would have switched. If the Beastons had switched to any of the three term conversion policies State Farm offered, the premiums they actually paid for the whole life would have been more than sufficient to pay for term coverage through the date of David’s death.
The failure to offer the term option, given the surrounding circumstances, is most analogous to torts which recognize emotional harm as an element of common law damages, because emotional harm is the natural result of such wrongful conduct associated with the death of a spouse or family member. This court early recognized this principle in *442Stuart v. Western Union Telegram Co., 18 S.W. 351, 353 (Tex.1885), in which the court refused to limit the recovery to the fifty cents paid for the telegram sent but not delivered to inform that a family member was dying. The court instead allowed the $2,500 emotional injury damages found by the jury, stating that “[t]he wrongdoer knows he is doing this damage when he afflicts the mind by withholding the message of mortal illness ... injury to the feelings is actual damage ... the natural result of the wrongful act.”2
The court also has reviewed judgments for emotional injury for mishandling of a corpse. See, e.g., Clark v. Smith, 494 S.W.2d 192 (Tex.Civ.App.—Dallas 1973, writ ref'd n.r.e.); Classen v. Benfer, 144 S.W.2d 633, 635 (Tex.Civ.App.—San Antonio 1940, writ dism’d jdgmt correct). The court expressly cited these two holdings with approval, and has held expressly that emotional distress damages are allowed for wrongful death, because it is the “natural result” of this class of torts where the “nature of the torts assures that the claimants will suffer mental injury.” See Moore v. Lillebo, 722 S.W.2d 683, 685 (Tex.1986).
State Farm does argue that all these cases are distinguishable and not properly analogous because they all involve “knowing” conduct, which the jury here expressly was not asked and did not find. The argument is incorrect. In Stuart the wrongful failure to deliver the telegram was committed negligently, not knowingly. What was “knowing” was that the emotional harm would follow if the act was not done, whether the omission itself was negligent or knowing. Likewise, in Classen the reinterment of the bodies into the new cemetery was performed negligently, resulting in the loss of a body. What was “knowing” was that emotional damages would surely result if one negligently lost the remains of a family member. In Moore v. Lillebo, the wrongful death was the result of negligence. What was “knowing” was that emotional harm would result from such negligence. We said that emotional reaction is the natural by-product of wrongful death, that it “destroys any pre-existing family relationship,” and that for wrongful death emotional harm is usually the “principal element” of damages for surviving relatives. Moore v. Lillebo, 722 S.W.2d at 685.3
The evidence here is equally strong that Terri Beaston had communicated her “adamant” concern, in Heaton’s own words, to keep the insurance policies in effect because ( of her expressed great fear of financial hardship in the event of David’s death. State Farm’s mere claim that the policy had lapsed caused additional psychic trauma to Beaston following David’s death. That this would occur during Beaston’s grief over her husband’s death was clearly “known” to Heaton and State Farm, and it was the natural result of their negligent failure to offer the term option to the Beastons. I would hold that under the evidence and jury findings of this case, emotional harm is an element of common law damages and recoverable regardless of whether the wrongful conduct was knowing.
For the foregoing reasons, I dissent.

. Consistent, of course, with the other express jury flndmgs.

. In those jurisdictions recognizing a “wrongful conception” or “wrongful pregnancy” cause of action, emotional distress is a principal element of damages precisely because it is the natural result of the wrongful conduct. See, e.g., Boone v. Mullendore, 416 So.2d 718 (Ala.1982); Custodio v. Bauer, 251 Cal.App.2d 303, 59 Cal Rptr. 463 (1st Dist.1967); Bushman v. Burns Clinic Med. Ctr., 83 Mich.App. 453, 268 N.W.2d 683 (1978); Weintraub v. Brown, 98 App.Div.2d 339, 470 N.Y.S.2d 634 (2d Dept.1983); Jean-Charles v. Planned Parenthood Asso., 99 App.Div.2d 542, 471 N.Y.S.2d 622 (2d Dept.1984); Smith v. Gore, 728 S.W.2d 738 (Tenn.1987); C.S. v. Nielson, 767 P.2d 504 (Utah 1988); James G. v. Caserta, 175 W.Va. 406, 332 S.E.2d 872 (1985).

. These cases cannot properly be called “culpable mental state” cases, but the majority does not tell us how they fall into its newly-defined limitations. Are these precedents also overruled?