John Davis D/B/A J.D. House of Style v. National Lloyds Insurance Company
01-14-00278-CV
| Tex. App. | Dec 21, 2015Background
- Insurance policy governed by ACV terms with deductible; repairs claimed under Ike related to the policy; jury found repairs but not excess over deductible; court previously held policy was ACV, not RCV; this rehearing response argues policy language and damages support that ruling.
- Policy declarations show both Replacement Cost and Maximum Period of Indemnity marked with “(X)” instructions, indicating binary election; issue centers on interpretive meaning of “(X)”.
- Damages evidence showed repairs cost was less than deductible, so insurer paid nothing under its option to pay value or repair costs; any RCV damages attributed in error would exceed the deductible, which was not paid.
- Extra-contractual claims depend on breach or coverage; insurer argues no breach or no coverage; court’s prior ruling treated deductible as part of coverage and denied extra-contractual recovery.
- Davis seeks reversal and recovery of extra-contractual damages; National Lloyds maintains decision should stand and rehearing denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the (X) instruction unambiguous? | Davis. | National Lloyds. | Unambiguous; (X) denotes applicability of Replacement Cost/Maximum Period. |
| Damages for repairs relate to a different policy (RCV vs ACV) | Davis seeks repair costs. | Damages below deductible; repairs tied to ACV; no payment. | Damages reflect ACV; RCV damages disregardable; no payout beyond deductible. |
| Extra-contractual claims survive without breach/coverage | Extra-contractual claims survive after no breach. | No surviving extra-contractual claims without breach or coverage. | No; extra-contractual claims require breach with damages independent of policy. |
| Whether policy language requires consideration of industry practice for ambiguity | Industry practice could create ambiguity. | (X) is not a term of art; no ambiguity from industry custom. | Industry practice cannot alter clear policy instruction. |
Key Cases Cited
- Provident Am. Ins. Co. v. Castañeda, 988 S.W.2d 189 (Tex. 1998) (explains breach/coverage and damages interplay with deductibles)
- State Farm Lloyds v. Page, 315 S.W.3d 525 (Tex. 2010) (coverage and damages interplay; bad-faith implications when not covered)
- In re Allstate Cnty. Mut. Ins. Co., 447 S.W.3d 497 (Tex. App.—Houston [1st Dist.] 2014) (limits on extra-contractual claims when no contractual breach)