Bad Faith Insurance

Dallas insurance lawyers handling bad faith claims need to read this 2015 opinion from the Beaumont Court of Appeals. It is styled, National Lloyds Insurance Company v. Latosha A. Lewis.
Lloyds appealed the trial court’s judgment in favor of Lewis following a jury trial. In seven appellate issues, Lloyds challenged (1) the legal sufficiency of the evidence supporting the jury’s findings regarding causation, damages for mental anguish, breach of contract, and breach of the DTPA, and exemplary damages, (2) the trial court’s inclusion in the charge of an instruction regarding waiver and its refusal to include an instruction on spoliation, (3) and the trial court’s rendition of a judgment that allegedly failed to force Lewis to make an election of remedies. This Court affirmed the trial court’s judgment as modified.
The facts of this case are long and detailed and need to be read for a good example of what the courts deem to be bad faith. In the case, this court upheld an award of mental anguish damages to Lewis because of the conduct of Lloyds in handling her claim for damage.
Lloyds argues that the evidence was legally insufficient to support the jury’s award of $10,000 to Lewis for mental anguish. To prevail on a mental anguish claim, a plaintiff must present direct evidence of the nature, duration, and severity of her mental anguish, and prove a substantial disruption in her daily routine. Plaintiff’s evidence must demonstrate more than worry, anxiety, vexation, embarrassment, or anger. Courts should closely scrutinize awards of mental anguish damages. While the impossibility of precisely evaluating mental anguish requires that juries be given a measure of discretion, such discretion is limited, and the amount awarded must fairly and reasonably compensate for the loss.
As discussed above, Lewis testified that after Hurricane Ike damaged her home, she felt “horrible” and she cried when it rained. Lewis also described the “horrible” feeling of having her children tell her it was raining inside the house. In addition, Lewis introduced evidence that her home was partially uninhabitable from when Hurricane Ike struck in September 2008 until she moved out in the middle of 2011 for the home to be demolished, and that Lloyds denied her claim for the damage to her roof. The jury was responsible for drawing reasonable inferences from basic facts to ultimate facts. In a case involving wrongful denial of fire insurance benefits courts have found that evidence was sufficient because the jury could infer mental anguish from such circumstances as the unrepaired condition of plaintiffs’ home, their shortage of clothes and furniture, and their living conditions. This Court concluded that Lewis introduced legally sufficient evidence of the nature, duration, and severity of her mental anguish, as well as a disruption in her routine, to support the modest award of $10,000.