Susan Bobo v. Elezebeth Varughese
507 S.W.3d 817
Tex. App.2016Background
- Passenger Susan Bobo sued driver Elezebeth Varughese after a July 18, 2012 car crash; jury awarded Bobo $40,358.21 for past pain and medical expenses.
- Bobo’s counsel sent a July 27, 2012 letter of representation to GEICO and later a December 6, 2012 demand for settlement with itemized medical specials.
- Varughese served a Rule 167 settlement offer on August 19, 2014 for $55,000 (including attorney fees, costs, and interest recoverable as of the offer); Bobo did not accept.
- Trial court initially awarded prejudgment interest beginning January 23, 2013 (180 days after the July 27 letter), then modified judgment to start prejudgment interest June 15, 2013 (180 days after the December 6 demand), reducing interest awarded.
- Trial court awarded Varughese post-rejection litigation costs under Rule 167, offset those costs against Bobo’s judgment, and entered a take-nothing judgment for Varughese.
- On appeal Bobo challenged the start date for prejudgment interest and argued prejudgment interest must be included when comparing the judgment to the Rule 167 offer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether July 27, 2012 letter constituted written notice triggering §304.104 prejudgment interest 180‑day clock | Bobo: July 27 letter is sufficient notice; prejudgment interest accrues from Jan 26/23, 2013 | Varughese: court should rely on later demand (Dec 6, 2012) / not trigger earlier accrual | Court holds July 27 letter did constitute written notice under §304.104; trial court erred in using June 15, 2013 but letter is notice. |
| Correct start date and amount of prejudgment interest | Bobo: interest from 180 days after July 27 letter → larger interest award | Varughese: later start date and trial court calculation are correct; or error is immaterial | Court finds trial court miscalculated prejudgment interest (used June 15, 2013) — error but not reversible given Rule 167 analysis. |
| Whether prejudgment interest is included in Rule 167.4 comparison of "judgment" vs offer | Bobo: prejudgment interest should be included because Rule 167 and §42.004 refer to judgment to be awarded | Varughese: prejudgment interest should not be included; or if included, trial court calculated correctly; alternatively federal Rule 68 approach applies | Court holds that "judgment"/"award" in Rule 167.4/§42.004 refers to the damages awarded by the factfinder (the verdict), not prejudgment interest; prejudgment interest is excluded from the Rule 167 comparison. |
| Whether exclusion of prejudgment interest changes outcome under Rule 167 cost‑shifting | Bobo: including correct interest would push recovery above 80% threshold | Varughese: even if interest considered, it would not reach 80%; or interest not included so irrelevant | Court concludes excluding prejudgment interest makes any error harmless; Rule 167 costs award and take‑nothing result affirmed. |
Key Cases Cited
- Bevers v. Soule, 909 S.W.2d 599 (Tex. App.—Fort Worth 1995) (letter to insurer plus medical authorization constituted notice of claim for prejudgment interest purposes)
- Toshiba Machine Co. v. SPM Flow Control, Inc., 180 S.W.3d 761 (Tex. App.—Fort Worth 2005) (distinguishes letters that demand payment for existing liability from letters that seek cure to avoid future claims)
- K Mart Corp. v. Rhyne, 932 S.W.2d 140 (Tex. App.—Texarkana 1996) (treats similar correspondence as triggering prejudgment interest statute)
- Nat’l Freight, Inc. v. Snyder, 191 S.W.3d 416 (Tex. App.—Eastland 2006) (relies on Bevers in finding attorney’s letter sufficient as notice of claim)