State Farm Lloyds v. Mower ( 1993 )

COHEN, Justice,

dissenting opinion on motions for rehearing¹.

I agree that State Farm’s seventh point of error should be sustained, but I would also sustain State Farm’s fourth point of error and hold there is no evidence that State Farm breached the duty of good faith and fair dealing. Thus, I would render judgment that the Mowers take nothing from State Farm on their bad faith claim.

State Farm’s alleged bad faith was refusing to pay $175,000 for a “total loss,” even though the two repair bids averaged approximately half that amount. The Mowers presented no evidence showing how much more than State Farm’s $90,000 offer it would have cost to construct a guaranteed slab. Absent some proof that constructing a guaranteed slab would have cost an additional $85,000 (the difference between the $175,000 face value of the insurance policy and State Farm’s offer of $90,000), I see no evidence that State Farm acted in bad faith by refusing to offer $175,000.

As the majority holds, both foundations and garages are, as a matter of law, parts of the insured structure. Every contractor who bid proposed to use those remnants to rebuild. No witness stated the remnants were unusable. How, then, can it be said that State Farm acted in bad faith by proposing to use the remnants?

A building is a “total loss” if a reasonable uninsured owner, desiring to rebuild, would not have used the remnants to restore the building. Glens Falls Ins. Co. v. Peters, 386 S.W.2d 529, 531 (Tex.1965). State Farm apparently believed that a reasonable uninsured owner would use the remnants. All the evidence suggests there was a reasonable basis for this belief, even though it was also to State Farm’s economic advantage to hold that belief. The Mowers believed the opposite, even though it was clearly to their economic advantage to hold that belief. Every disagreement between an insurer and an insured, however, is not evidence of bad faith. Given the unanimous judgment of the contractors to use the remnants to rebuild, I believe State Farm’s action was reasonable, as a matter of law, even if the jury found it to be erroneous. There is plenty of evidence here of a good faith disagreement, but I see none of bad faith disagreement. To the majority’s conclusion that this reasonable disagreement constitutes legally and factually sufficient evidence of bad faith, I respectfully dissent.

On original submission, I joined the majority’s decision to overrule point of error one, which held there was legally and factually sufficient evidence of “total loss.” Upon reconsideration, I would sustain it. No witness stated that a reasonable uninsured owner would not have used the remnants to rebuild. Every contractor who testified would have used them. Although neither contractor would have guaranteed the foundation, both would have used it. An unguaranteed foundation is not worthless; it is just worth less than a guaranteed foundation. Nevertheless, I concede that the jury could have concluded that a reasonable owner would not have used the foundation to rebuild because it was not good enough to guarantee. A reasonable uninsured owner could refuse to accept such a foundation. Thus, if the foundation were the only remnant in question, I would still vote to overrule point one. There is another remnant, however, the garage. Nobody testified the garage could not be used to rebuild or that it could not be guaranteed. Thus, there is uncontradicted expert testimony that the garage could be used and none that it could not. In my opinion, that constitutes conclusive evidence that the structure was not a “total loss.” See Mack v. Moore, 669 S.W.2d 415, 418-19 (Tex.App.—Houston [1st Dist.] 1984, no writ) (expert testimony that is uncontradicted, unimpeached, and consistent may be given conclusive effect on a subject on which the jury must be guided by testimony of experts.)

I would sustain points of error one and four and render judgment that appellees recover the amount of the higher bid (Hud-nall’s), $88,139.00.

1 . My opinion of December 9, 1993 is withdrawn, and this is substituted for it.