Ronald ALLISON/Fire Insurance Exchange, Appellants, v. FIRE INSURANCE EXCHANGE, a Member of the Farmers Insurance Group/Mary Melinda Ballard and Ronald Allison, Individually and as Next Friends for Reese Allison, a Minor, Appellees, 98 S.W.3d 227

JAN P. PATTERSON, Justice. In June 2001, a Travis County jury awarded a verdict for over thirty-two million dollars against Fire Insurance Exchange, a member of the Farmers Insurance Group (“FIE”), for its handling of Mary Melinda Ballard’s homeowner’s insurance claims, which began as a single claim for water damage to a hardwood floor and evolved to include mold contamination of the entire house and outbuildings.

FIE contends in eleven issues on appeal that the evidence was legally and factually insufficient to support the jury’s liability findings; the district court erred in denying transfer of venue to Hays County; the evidence was legally and factually insufficient to support the jury’s findings that FIE failed to appoint a competent, independent appraiser and that the appraisal decision was rendered as a result of fraud, accident, or mistake; the district court abused its discretion in numerous evidentiary rulings; there was no evidence of a knowing violation; the punitive damages award is excessive; there was no evidence to support the mental anguish award; there was insufficient evidence to support the attorneys’ fees award; and there was no basis for the statutory penalty under

article 21.55 of the insurance code. See Tex. Ins.Code Ann. art. 21.55, § 6 (West Supp.2003). We recognize the constraints on this Court in its review of this hotly disputed case and the importance of according the proper degree of deference to the fact finder. We have carefully reviewed the entire record. We hew to the record below despite the metamorphosis of the parties’ theories on appeal. We hold that probative evidence supports the district court’s denial of FIE’s motion to transfer venue to Hays County.

We further conclude that the district court did not abuse its discretion in the evidentiary rulings of which FIE complains. We also find sufficient evidence to uphold the jury’s findings that FIE breached its duty of good faith and fair dealing toward Ballard and that FIE committed a Deceptive Trade Practices Act (DTPA) violation. We find insufficient evidence, however, to support the jury’s findings of unconseionability or fraud.

We additionally find insufficient evidence to support the jury’s findings that FIE failed to appoint a competent, independent appraiser or that the appraisal decision was a result of fraud, accident, or mistake. Because the court’s charge specified that findings of either a breach of the duty of good faith and fair dealing or a DTPA violation are sufficient to uphold the jury’s award of actual damages, we affirm the actual damages award in part, in the amount of $4,006,320.72, in addition to prejudgment and postjudgment interest as stated in the final judgment.

We reverse the award of $176,000 for Ballard’s reasonable and necessary costs of the appraisal process. We further conclude that there is no evidence to support the jury’s finding that FIE “knowingly” breached its duty of good faith and fair dealing toward Ballard. Because a finding of a knowing violation is required to uphold punitive and mental anguish damages, we reverse the jury’s awards for these damages and render judgment that Ballard take nothing for punitive and mental anguish damages. We uphold the district court’s award of the

article 21.55 statutory penalty in part and remand the penalty for recalculation in accordance with this opinion. We find sufficient evidence to support the award of attorneys’ fees but cannot say that the amount of the award is reasonable, given our significant reduction of the jury’s damages awards. Therefore, we remand the issue of attorneys’ fees to the district court for further proceedings consistent with this opinion. Ronald Allison, Ballard’s husband, filed a separate appeal, contending that the district court erred in granting FIE’s motion to exclude Allison’s causation experts and in turn granting FIE’s no-evidence motion for partial

summary judgment pertaining to Allison’s personal injury claims. Because we find no error in the district court’s rulings, we affirm the district court’s rulings in granting FIE’s motion to exclude his causation experts and no-evidence motion for partial

summary judgment pertaining to Allison's personal injury claims. Accordingly, we affirm the district court’s judgment dismissing Allison’s personal injury claims. BACKGROUND In 1990, Ballard bought a large house in Dripping Springs, Texas, for $275,000 in a foreclosure sale. The main house was approximately 7,400 square feet, with several outbuildings, including a nanny’s apartment (also referred to as the groundskeeper’s house), a garage, and a barn. In late 1992, Ballard began insuring the house with FIE. The amount of coverage remained steady over the next few years, except for cost-of-living adjustments.

The coverage in late 1998 was $313,000 for the house and $187,800 for the contents. Within a couple of years before the claims at issue, which began in December 1998, the Ballard house had a few plumbing leaks. In 1996 and 1997, Ballard filed two claims for plumbing leaks caused by frozen pipes; FIE paid $60,000 to $70,000 for the 1997 claim. She did not make another claim until December 1998 but continued to have plumbing leaks. In late 1997, Ballard had a toilet leak repaired in the downstairs half bathroom, which required another repair in January 1998.

The leak caused damage to the bathroom carpet pad and wood subflooring, both of which were replaced in February 1998. The same month, Ballard notified Richard Roberts of Double R Floors that some of the boards in the downstairs hardwood floor were warping. Roberts took a moisture reading in the area of warping, which read nineteen to twenty percent. The normal moisture content of hardwood floors is around twelve percent. He then replaced some of the boards. The plumber returned a third time to repair the half bath toilet leak in July 1998.

In August 1998, Ballard notified Roberts of more hardwood floor warping and buckling. He took another moisture measurement, which was seventeen to eighteen percent, then replaced more boards. In October 1998, Ballard called Roberts again to report more hardwood floor damage. The moisture measurement was fifteen to sixteen percent, and Roberts replaced more boards. Roberts examined the floor again in December 1998 and took a moisture reading of fourteen to fifteen percent. At that time, Roberts said that the damage was too extensive to do any more spot repairs.

He recommended that Ballard file a claim under her homeowner’s insurance policy. On December 17, 1998, Ballard filed a claim with FIE for the water damage to the hardwood floor. An outside adjuster inspected the floor on December 22 and at first opined that the damage was caused by foundation settling, which is not covered under the homeowner’s policy. After seeing two areas of water damage, he reconsidered and requested plumbing tests. The claim was assigned to Theresa McConnell, an adjuster in FIE’s Austin foundation claims office, who received the file on December 30, 1998.

McConnell’s original estimate of the claim was around $100,000, and her level of authority was $20,000. On the same day, the Gerloff Company, a plumbing contractor, performed tests at FIE’s request and found no leaks. McConnell contacted Jeff Jackson, a civil engineer, to determine the amount and cause of damage to the hardwood floor. In the meantime, Ballard obtained bids to replace the hardwood floor, ranging from approximately $89,000 to $171,000. The $89,000 bid, from Boatright Floors, increased to $127,950 after Ballard requested that the floor be custom made, not manufactured, as was the original floor.

McConnell and Jackson went to the Ballard home on January 7, 1999, so that Jackson could inspect the damage. Jackson found two sources of moisture, one in the half bathroom and one around the refrigerator. On January 11, McConnell sent a letter to Ballard stating that “complete plumbing tests of your residence were conducted by Gerloff Co., Inc. No leaks were located in the plumbing system of your residence.” On January 12, Jackson requested additional testing of the moisture sources. The additional test showed that the moisture level of the floor was twelve percent.

Ballard sent a letter to McConnell expressing concern that the buckled floors presented a tripping hazard; McConnell suggested temporary repairs while the claim was being investigated, including covering the areas with carpet or replacing the buckled pieces with plywood. Ballard agreed to carpeting the entire floor or replacing the boards in “trouble” areas, but the temporary repairs were never made. McConnell requested an appraisal of the house by an independent appraiser because she was concerned that the house was underinsured. The appraiser valued the house at approximately $749,000.

McConnell notified Ballard of the appraisal, and Ballard requested increased coverage if her current coverage was not adequate. In early March, FIE increased the coverage to $750,000 for the house and $450,000 for the contents. In the meantime, on February 8, McConnell sent a letter to Ballard stating that FIE needed a forty-five-day extension to complete the claim investigation. At approximately this same time, Ballard hired an attorney to represent her.

On February 24, FIE paid Ballard $108,316.50 for accidental water discharge damage to the floor, based on the $127,950 Boatright estimate, less depreciation and the deductible. FIE imposed an underinsurance penalty, paying the depreciated value instead of replacement cost, because the house, recently reappraised, was insured for only $313,000 at the time of the December 1998 claim. On March 4, McConnell and contractors went to the Ballard home to inspect newly discovered damage, which was assigned a new claim number.

Ballard’s lawyer was present for this meeting and notified FIE in writing on March 11 that he was representing Ballard and that all contact concerning the claims should be with him instead of Ballard. At Ballard’s request, FIE sent a technician to determine if her refrigerator was still leaking; the report showed additional damage behind the refrigerator. In early April, Ballard met Bill Holder, an indoor air quality consultant, on a plane flight. Upon hearing about the damage to Ballard’s house and physical symptoms that her family was having, Holder suggested that she might have a mold problem.

Holder came to the Ballard house on April 5 at Ballard’s insistence to take some air samples. The samples contained mold spores, including a type of mold called stachybotrys, which produces toxins that may cause health problems. On April 7, Ballard’s lawyer sent a letter notifying FIE of the mold findings. Ballard, concerned about possible health effects of the mold, moved with her husband, Ron, and three-year-old son to the nanny’s apartment. FIE’s attorney suggested on April 8 that the parties mediate their dispute.

Meanwhile, Holder met with Ballard, McConnell, and Steve Shelburne, McConnell’s supervisor, on April 13 to discuss the mold findings. At the meeting, Holder explained the possible health effects of mold and that mold grows “exponentially.” FIE sent engineers from Rimkus Consulting to take air samples on April 14. Holder and others returned to the house to conduct tests on April 21. On April 23, Holder told Ballard that, based on the new test results, she and her family immediately needed to move out of the house. Ballard’s family took Holder’s advice and left the house that day, leaving behind their belongings.

They and their nanny moved into the Four Seasons Hotel in Austin, which FIE agreed to pay for until a more permanent location was found. Ballard and her family moved out of the Four Seasons and into a rental home around June 1. Around the same time, FIE paid about $8,000 for a shower leak claim in late April, about $25,000 for damage related to an ice-maker leak claim in late April, and about $45,900 for supplemental damage to walls and sheet rock in early May.

On May 5, Ballard filed suit in Travis County against FIE for breach of contract, deceptive trade practices, breach of the duty of good faith and fair dealing in the claims handling process, and negligence. In preparation for mediation, also in May, Rimkus prepared an estimate to remediate and repair the house and the contents, which totaled $382,000. Ballard’s expert estimated that remediation would cost approximately $1,015,500. The parties proceeded to mediation for three days in late May, which ended unsuccessfully on May 27.

That same day, FIE invoked the appraisal provision of the insurance policy, available if the parties do not agree on valuation of a claim. Under the appraisal provision, both parties were to choose independent appraisers to evaluate the claims. FIE notified Ballard in its May 27 letter that it had designated Peter de la Mora, a structural engineer with extensive experience in the construction industry, as its appraiser. Ballard chose as her appraiser an attorney, who had to resign a few months later because of trial obligations.

Both parties agreed that Michael Schless, a former county-court-at-law judge, would be the “umpire,” as termed in the policy, to whom the appraisers would submit their differences if they failed to agree on the amount of loss. Ballard then chose another attorney, Mike Duffy, as her successor appraiser in November 1999. From May through July 1999, Ballard submitted additional claims for leaks in the roof, two leaks in the water tank room, water damage in the garage and barn, water damage under the kitchen sink, leaks in the nanny’s apartment, loose tiles on the porch, and a fountain leak.

In June, Sandra Clanton replaced Theresa McConnell as the adjuster. On August 30, FIE paid approximately $382,000 for mold remediation and repair of the house and contents. Ballard’s attorney returned the checks on the ground that the payments were based on “invalid” bids. In February 2000, FIE again tendered checks for approximately $382,000, which Ballard’s attorney deposited into the registry of the court. The appraisal process continued for several months, then the appraisers met for four days in November 2000 to determine the amount of loss.

The appraisal decision, issued on November 16, 2000, awarded $1,287,092.72, deducting amounts that FIE had previously paid, for the house, its contents, and additional living expenses. Although both appraisers and the umpire signed the decision, only FIE’s appraiser and the umpire agreed to the amount of the award. On November 18, FIE sent checks for the amount of the appraisal decision to Ballard’s attorney, who again deposited the checks into the registry of the court. Meanwhile, the lawsuit proceeded, with the parties conducting discovery and various hearings.

FIE filed a motion to transfer venue to Hays County, where the house was located, on the ground that venue was mandatory in Hays County because this was a property damage claim. The district court denied the motion to transfer venue in November 1999. FIE later sought to exclude Ronald Allison’s personal injury claims on the ground that the toxic effects of mold were not sufficiently established in the scientific community.

Just before trial, the district court excluded Allison’s claims on the basis that his expert witnesses did not have reliable epidemiological studies about the health effects of exposure to mold. The case proceeded to trial on May 7, 2001. The jury began deliberations on May 30, 2001 and returned a verdict in favor of Ballard the next day.

The jury awarded $2,547,350 to replace the home; $1,154,175 to remediate the home; $2,000,000 to replace the contents of the home; $350,000 for past and future additional living expenses; $176,000 for Ballard’s costs of the appraisal process; $5,000,000 for Ballard’s mental anguish; $12,000,000 in punitive damages; and $8,891,000 for attorneys’ fees. The district court rendered a final judgment on October 30, 2001, for over $33 million, reducing actual damages by $2,045,204.28 (the total amount that FIE had already paid to Ballard on her claims) and including prejudgment interest and a statutory penalty under

article 21.55 of the insurance code on portions of the award. FIE filed motions for new trial, for re-mittitur, and to modify the judgment. The district court denied the motion for remit-titur. The motions for new trial and to modify the judgment were overruled by operation of law. Allison appeals the district court’s rulings concerning the exclusion of his causation expert witnesses. FIE appeals all of the jury’s findings and several district court rulings. ALLISON’S APPEAL In two issues, Allison urges that the district court erred in granting FIE’s Daubert / Robinson motion to exclude causation opinions of expert witnesses and as a result granting FIE’s no-evidence motion for partial

summary judgment as to Allison’s personal injury claims. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993); E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex.1995). FIE’s Motion to Exclude Causation Opinions In his first issue, Allison contends that the district court erred in granting FIE’s motion to exclude causation opinions of expert witnesses.

In Robinson, the Texas Supreme Court held that rule of evidence 702 requires proponents of scientific expert testimony to satisfy the test for admissibility formulated by the United States Supreme Court in Daubert. Tex.R. Evid. 702; Robinson, 923 S.W.2d at 556. A two-part test governs whether expert testimony is admissible: (1) the expert must be qualified, and (2) the testimony must be relevant and based on a reliable foundation. Robinson, 923 S.W.2d at 556. According to this test, the trial judge must act as a “gatekeeper” and decide whether a qualified expert’s testimony is relevant and reliable.

Daubert, 509 U.S. at 589, 113 S.Ct. 2786; Robinson, 923 S.W.2d at 556-57. We review the district court’s ruling under an abuse of discretion standard. Robinson, 923 S.W.2d at 558; Olin Corp. v. Smith, 990 S.W.2d 789, 797 (Tex.App.-Austin 1999, pet. denied). “The court in discharging its duty as gatekeeper must determine how the reliability of particular testimony is to be assessed.” Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 726 (Tex.1998).

In Robinson, the Texas Supreme Court recognized several nonexclusive factors enumerated by the court in Daubert to guide trial courts in acting as gatekeepers to assess the reliability of scientific expert testimony: • the extent to which the theory has been or can be tested; • the extent to which the technique relies upon the subjective

interpretation of the expert; • whether the theory has been subjected to peer review and/or publication; • the technique’s potential rate of error; • whether the underlying theory or technique has been generally accepted as valid by the relevant scientific community; and • the non-judicial uses which have been made of the theory or technique. Robinson, 923 S.W.2d at 557 (citations omitted). A trial court must “focus solely on the validity of principles and methodology underlying the testimony, not the conclusions generated.” North Dallas Diagnostic Ctr. v.

Dewberry, 900 S.W.2d 90, 95 (Tex.App.-Dallas 1995, writ denied). If an expert relies on unreliable foundational data, any opinion drawn from that data is likewise unreliable. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 714 (Tex.1997). We now determine whether the district court abused its discretion in excluding the testimony of Allison’s causation expert witnesses. A reviewing court cannot conclude that a trial court abused its discretion merely because, in the same circumstances, it would have ruled differently or the trial court committed a mere error in judgment. Robinson, 923 S.W.2d at 558.

The test is not whether the facts present an appropriate case for the trial court’s action in the opinion of the reviewing court. Id. Rather, we will gauge an abuse of discretion by whether the trial court acted without reference to any guiding rules or principles. Id. Thus, a trial court enjoys wide latitude in determining whether expert testimony is admissible. See Olin, 990 S.W.2d at 795. Stachybotrys was discovered in the Ballard home in early April 1999. The family moved from the main house to the nanny’s apartment, then moved into a hotel on April 23, 1999, after mold was also discovered in the apartment.

Allison began having increasing problems with concentration and memory in April through July 1999. After seeing several doctors in Austin, Allison was diagnosed with a type of brain damage called toxic encephalopathy. Several medical professionals, including two leading experts in the study of the health effects of molds and mycotoxins, Wayne A. Gordon, Ph.D. and Eckardt Johanning, M.D., agreed that exposure to mold caused Allison’s toxic encephalopathy. Toxic tort cases require proof of both general and specific causation about the effects of the toxic substance.

Havner, 953 S.W.2d at 714. “General causation is whether a substance is capable of causing a particular injury or condition in the general population, while specific causation is whether a substance caused a particular individual’s injury.” Id. One can prove general causation either through experiments to show that a substance is capable of causing a particular injury or by attempting to show that exposure to a substance increases the risk of a particular injury. Id. at 714-15. Specific causation cannot be based on inferred general causation; general causation must be affirmatively proved.

Among the underlying data to support Allison’s proof of general causation was a study by Dr. Gordon and Dr. Johanning of twenty people who were exposed to mold in a building. The district court found that although the experts’ foundational data to prove general causation met the requirements of Daubert and Robinson, the data was unreliable according to the factors discussed in Havner. The question in Havner was whether the experts’ foundational data was sufficiently reliable to show that the drug Ben-dectin caused birth defects.

In Havner, as here, the underlying data included epidemiological studies, which “examine existing populations to determine if there is an association between a disease or condition and a factor suspected of causing that disease or condition.” Id. at 715. The Havner court determined that for an epidemiological study to be a reliable foundation, it must be unbiased in its design, otherwise properly designed, properly executed, and show that exposure to the substance more than doubles the risk of injury. Id. at 717-19.

Another factor for determining if an epidemiological study is reliable is that it must be capable of repetition with the same results ninety-five percent of the time, known as a confidence interval of ninety-five percent. Id. at 723. Allison argues that the district court incorrectly applied Havner because “[t]he decision clearly states that epidemiology is a permissive, not mandatory, type of evidence that a plaintiff may choose in a toxic tort case.” But the Havner court concluded that if an expert relies on epidemiological studies, those studies must meet certain criteria. Id.

Considering the totality of the evidence presented by Allison, a crucial underpinning for the opinions of Allison’s causation experts was an epidemiological study; therefore, the district court appropriately determined that the factors discussed in Havner applied. Dr. Gordon testified in his deposition that calculation of a confidence interval for the results of the study was “premature.” A calculation of the risk factor was also premature. Additionally, Dr. Gordon could not say whether the techniques used were generally accepted.

The epidemiological study on which Allison’s experts relied therefore does not meet the Havner requirement of a ninety-five percent confidence interval, nor does it show that exposure to the substance more than doubles the risk of injury. Id. at 717-18, 722-23. Further, the causation experts’ testimony was not based on a reliable foundation as required by Havner. If an expert relies on unreliable foundational data, any opinion drawn from that data is likewise unreliable. Id. at 714.

Because Allison did not establish a rehable foundation for the admission of general causation evidence, we need not address the evidence relating to specific causation. Therefore, we cannot say that the district court abused its discretion by excluding the testimony of Allison’s causation experts. Accordingly, we overrule Allison’s first issue and uphold the district court’s order excluding the testimony of Allison's causation experts. FIE’s No-Evidence Motion for Partial

Summary Judgment In his second issue, Allison contends that the district court erred in granting FIE’s no-evidence motion for partial

summary judgment as to Allison's personal injury claims. A party seeking a no-evidence

summary judgment must assert that no evidence exists as to one or more of the essential elements of the nonmovant’s claims on which it would have the burden of proof at trial. Holmstrom v. Lee, 26 S.W.3d 526, 530 (Tex.App.-Austin 2000, no pet.). A no-evidence

summary judgment is properly granted if the nonmovant fails to bring forth more than a scintilla of probative evidence to raise a genuine issue of material fact as to an essential element of the nonmovant’s claim on which the nonmovant would have the burden of proof at trial. See Tex.R. Civ. P. 166a(i); Havner, 953 S.W.2d at 711. If the evidence supporting an element rises to a level that would enable reasonable, fair-minded persons to differ in their conclusions, then more than a scintilla of evidence exists. Havner, 953 S.W.2d at 711.

Less than a scintilla of evidence exists when the evidence is “so weak as to do no more than create a mere surmise or suspicion” of fact, and the legal effect is that there is no evidence. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). A no-evidence

summary judgment is essentially a directed verdict granted before trial, to which we apply a legal sufficiency standard of review. Jackson v. Fiesta Mart, 979 S.W.2d 68, 70 (Tex.App.-Austin 1998, no pet.). When, as here, the

summary judgment states the ground or grounds on which the district court based its decision to render

summary judgment, we will affirm the

summary judgment if one of those grounds is meritorious. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993); State Farm Mut. Auto. Ins. Co. v. Nguyen, 920 S.W.2d 409, 410 (TexApp.-Houston [1st Dist.] 1996, no writ). The district court granted the motion based on the exclusion of Allison’s causation experts. Because Allison could no longer prove the essential element of proximate cause in his personal injury claims, the district court properly granted FIE’s no-evidence motion for partial

summary judgment as to Allison’s personal injury claims. Therefore, we overrule Allison’s second issue and affirm the district court’s judgment dismissing Allison's personal injury claims.

FIE’S APPEAL FIE contends in eleven issues, with several sub-issues, that the evidence was legally and factually insufficient to support the jury’s liability findings; the district court erred in denying transfer of venue to Hays County; the evidence was legally and factually insufficient to support the jury’s findings that FIE failed to appoint a competent, independent appraiser and that the appraisal decision was rendered as a result of fraud, accident, or mistake; the district court abused its discretion in numerous evidentiary rulings; there was no evidence of a knowing violation; the punitive damages award is excessive; there was no evidence to support the mental anguish award; there was insufficient evidence to support the attorneys’ fees award; and there was no basis for the statutory penalty under

article 21.55 of the insurance code. We will address the venue issue first, given the emphasis that both parties gave to this issue in their briefs and at oral argument. Venue We must first decide whether venue was appropriate in Travis County, even though the property at issue is located in Hays County. In its fourth issue, FIE contends that the district court erred in denying its motion to transfer venue to Hays County.

Because the civil practice and remedies code allows the interlocutory review of an order denying a motion based on mandatory venue and FIE elected not to seek such review, Ballard urges that FIE waived its right to transfer by foregoing interlocutory review. We reject this position because it is inconsistent with the permissive nature of sections 15.064 and 15.0642. Tex. Civ. Prac. & Rem.Code Ann. §§ 15.064(b), 15.0642 (West 2002) (allowing either an appeal of a venue determination after a trial on the merits or an application for writ of mandamus to enforce a mandatory venue provision).

Ballard brought suit in Travis County on the permissive venue grounds that all or a substantial part of the actions giving rise to the claim occurred there and that FIE’s principal place of business is there. See id. § 15.002(a)(1), (3) (general rule for venue).

Section 15.002 lists several choices for permissive venue and applies to all lawsuits unless a mandatory venue provision or another permissive venue provision applies. See id. § 15.002(a). FIE argues that venue lies in Hays County because the lawsuit is for damage to the Ballard house, which is in Hays County. Asserting that the nature of Ballard’s causes of action is irrelevant, FIE further contends that “[i]f any of Ballard’s causes of actions sought recovery of damage to her home, the trial court had no discretion to deny the motion.” We disagree.

The venue provision that FIE asserts is applicable and mandatory provides that [a]ctions for recovery of real property or an estate or interest in real property, for partition of real property, to remove encumbrances from the title to real property, for recovery of damages to real property, or to quiet title to real property shall be brought in the county in which all or a part of the property is located. Id. § 15.011. When considering venue, we note that the legislature’s use of the word “shall” in a statute generally indicates the mandatory character of the provision. Id. § 15.004; Wichita County v.

Hart, 917 S.W.2d 779, 781 (Tex.1996). Because of the mandatory nature of

section 15.011, we will strictly construe it and will not hold that it applies unless Ballard’s suit falls clearly within one of the categories in the section. See Bennett v. Langdeau, 362 S.W.2d 952, 955 (Tex.1962) (concerning the predecessor to

section 15.011); Maranatha Temple, Inc. v. Enterprise Prods. Co., 833 S.W.2d 736, 739 (Tex.App.-Houston [1st Dist.] 1992, writ denied). A defendant raises the question of proper venue by objecting to a plaintiffs venue choice through a motion to transfer venue. See Tex.R. Civ. P. 86; Wichita County, 917 S.W.2d at 781. That mandatory venue lies in another county provides one ground for a motion to transfer venue. See Tex.R. Civ. P. 86(3)(b).

If a plaintiffs chosen venue rests on a permissive venue statute and the defendant files a meritorious motion to transfer based on a mandatory venue provision, the trial court must grant the motion. See Wichita County, 917 S.W.2d at 781. A trial court’s erroneous denial of a motion to transfer venue requires reversal of the judgment and remand for a new trial. See Tex. Civ. Prac. & Rem.Code Ann. § 15.064(b); Ruiz v. Conoco, Inc., 868 S.W.2d 752, 757 (Tex.1993). In determining whether venue was proper, we review the entire record, including the trial on the merits. Tex. Civ.

Prac. & Rem.Code Ann. § 15.064(b); Ruiz, 868 S.W.2d at 758. If we find probative evidence to support the district court’s determination, even if there is a preponderance of the evidence to the contrary, we will defer to the district court’s determination. Ruiz, 868 S.W.2d at 758.

FIE argued at the hearing on its motion to transfer venue that although Ballard’s case involved multiple causes of action, including breach of contract, deceptive trade practices, breach of the duty of good faith and fair dealing insurance claim, and Allison’s personal injury claims, the dominant purpose of Ballard’s lawsuit was to recover damages to real property. Under this test, a court looks to the dominant purpose of the lawsuit, solely from the facts alleged in the plaintiffs petition, the rights asserted, and the relief sought, to determine whether it falls under a mandatory venue provision.

See Maranatha Temple, 833 S.W.2d at 738. FIE now argues on appeal that the legislature abrogated the dominant-purpose test with the enactment of

section 15.004 of the civil practice and remedies code in 1995. See Tex. Civ. Prac. & Rem.Code Ann. § 15.004 (if lawsuit has two or more claims arising from same transaction or occurrence, with one claim governed by a mandatory venue provision and another governed by a permissive venue provision, the mandatory venue provision controls); see also Marshall v. Mahaffey, 974 S.W.2d 942, 947 (Tex.App.-Beaumont 1998, pet. denied). We agree with FIE’s current position to this extent: If we find the mandatory provision applies but it is in conflict with a permissive rule, the mandatory provision controls. Tex. Civ.

Prac. & Rem.Code Ann. § 15.004; Wichita County, 917 S.W.2d at 781. Upon our review of the record, we conclude that although

section 15.011 is a mandatory venue provision, it does not apply here. FIE argues that the phrase “recovery of damages to real property” is not ambiguous, but is instead “crystal clear.” Because in 1995 the legislature reinstated the clause in

section 15.011, FIE urges that the mandatory venue provision was thereby broadened to include any injury to Ballard’s home. By any reasonable construction, we may not read the provision by the expansive

interpretation that FIE would have us adopt. Even though FIE urges this Court to read “plain and common meaning” into its reading of the statute, accepted principles of construction require that the provision in question be construed in its present context and given a rational meaning. If we were to look at the words “recovery of damages to real property” in isolation, we would concede that the phrase may be sufficiently broad to encompass the expansive reading urged by FIE. But we do not construe statutory phrases in isolation; we read statutes as a whole. Contrary to FIE’s assertion that the nature of the causes of action is irrelevant and that only the remedy sought is relevant,

section 15.011 specifically addresses five types of “actions” relating to “Land” — the title of the

section — that mandate venue in a particular county. The actions are: • for recovery of real property or an estate or interest in real property, • for partition of real property, • to remove encumbrances from the title to real property, • for recovery of damages to real property, or • to quiet title to real property. Tex. Civ. Prac. & Rem.Code Ann. § 15.011. That the word “action” must be read to modify each of these is clear beyond cavil. Thus, we must look to the “true” nature of the action to determine whether the mandatory venue provision applies. Renwar Oil Corp. v.

Lancaster, 276 S.W.2d 774, 775 (Tex.1955); see also Yzaguirre v. KCS Res., Inc., 53 S.W.3d 368, 371 (Tex.2001). Before the addition of the phrase “recovery of damages to real property,” the venue provision applied only when the suit directly involved a question of title to land. See, e.g., Yzaguirre, 53 S.W.3d at 371 (mandatory venue provision does not apply because suit does not involve recovering real property or quieting title); Maranatha Temple, 833 S.W.2d at 738; Scarth v. First Bank & Trust Co., 711 S.W.2d 140, 141-42 (Tex.App.-Amarillo 1986, no writ).

We have been cited to no authority that supports expanding the scope of the provision beyond questions relating to the recovery of real property or affecting title to “land.” Except to make it explicit that the provision in question allows for the recovery of damages in such a suit relating to land, there is no indication that the legislature sought to broaden the provision with the addition of the phrase. That the phrase “for recovery of damages to real property” was sandwiched between “to remove encumbrances from the title” and “to quiet title” further bolsters our reading.

Reading the relevant phrase in its entire context, then, gives support for the more narrow

interpretation. See 1 Scott Brister, et al., Texas Pretrial Practice § 9.34 (2000). Were we to interpret the provision to allow for mandatory venue in all instances in which any damages are sought relating to a dwelling, no matter the nature of the action, we believe we would be extending beyond permissible bounds the statute’s language.

The doctrine of construction, noscitur a sociis — a word is known by the company it keeps — seems particularly apt here to avoid ascribing to one clause a meaning so broad that it is inconsistent with its accompanying clauses, thus giving unintended breadth to the provision as a whole. See County of Harris v.

Eaton, 573 S.W.2d 177, 181 (Tex.1978) (Steakley, J., dissenting) (discussing the maxim of noscitur a sociis: “the meaning of particular terms in a statute may be ascertained by reference to words associated with them in the statute; and that where two or more words of analogous meaning are employed together in a statute, they are understood to be used in their cognate sense, to express the same relations and give color and expression to each other.”).

The phrase must be understood against the background of what the legislature was attempting to accomplish in restoring a damage provision to the section, thereby completing the availability of an array of remedies to actions involving “land.” Ballard brought actions for negligence, negligence per se, breach of contract, deceptive trade practices, and breach of good faith and fair dealing in insurance claims handling, all of which allegedly caused damages to the Ballard house.

Because the suit does not involve recovering real property or quieting title or seeking damages for such loss, the district court correctly concluded that the mandatory venue provisions of

section 15.011 do not apply. We therefore overrule FIE’s fourth issue. Legal and Factual Sufficiency FIE next contends in several issues that the evidence is legally and factually insufficient to support the jury’s findings. We will first address the standards of review for challenges to legal and factual sufficiency.

Challenges to the legal sufficiency of the evidence must be sustained when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla of evidence; or (4) the evidence established conclusively the opposite of a vital fact. See Hawner, 953 S.W.2d at 711.

In reviewing legal sufficiency, we are required to determine whether the proffered evidence as a whole rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. See Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex.1994). If a party is attacking the legal sufficiency of an adverse finding of an issue on which it did not have the burden of proof, the attacking party must demonstrate on appeal that there is no evidence to support the adverse finding. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.1983).

In reviewing a no-evidence issue, we are to consider only the evidence favoring the finding, disregarding all direct and circumstantial evidence to the contrary. Lenz v. Lenz, 79 S.W.3d 10, 13 (Tex.2002); Continental Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex.1996). When reviewing a challenge to the factual sufficiency of the evidence, we must consider, weigh, and examine all of the evidence in the record. See Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989).

If a party is attacking the factual sufficiency of an adverse finding on an issue to which the other party has the burden of proof, the attacking party must demonstrate that there is insufficient evidence to support the adverse finding. See Westech Eng’g, Inc. v. Clearwater Constructors, Inc., 835 S.W.2d 190, 196 (Tex.App.-Austin 1992, no writ). In reviewing a factual insufficiency of the evidence challenge, we must first consider all of the evidence that supports and is contrary to the jury’s determination. See Plas-Tex, 772 S.W.2d at 445.

We should set aside the verdict only if the evidence that supports the jury finding is so weak as to be clearly wrong and manifestly unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). We may not reverse merely because we conclude that the evidence preponderates toward an affirmative answer. See Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex.1988). To assist with the analysis of FIE’s legal and factual sufficiency chai-lenges, we will summarize FIE’s acts of which Ballard complains.

The Complained-of Acts Although the trial was long and the arguments complex, each of Ballard’s causes of action revolve around the following core of complained-of acts: 1.Plumbing test As part of FIE’s insurance code violation, Ballard complains that Theresa McConnell misrepresented to her that “complete” plumbing tests had been performed on the house even though McConnell “secretly” thought that there might be other leaks. In December 1998, Ballard reported a claim that her hardwood floor was water-damaged.

FIE retained the Gerloff Company, a plumbing contractor, to determine whether there was an ongoing leak causing the floor to remain wet. On January 11, 1999, McConnell forwarded a copy of the Gerloff report to Ballard. The report described the procedures employed and time taken to test the building drain piping, domestic water piping, and air conditioning condensate lines, and further stated that no shower pan test was conducted. Enclosing a copy of the plumbing test results, McConnell represented in a cover letter that “[c]omplete plumbing tests of your residence were performed. ...

No leaks were located in the plumbing system of your residence.” A Gerloff plumber testified that the tests were complete according to his company’s procedures. He testified that he was asked to do a complete test and that it was a “complete test of the plumbing system, going by our procedures.” The tests were complete in the context of the leaks that existed on December 30, 1998, when the testing was done. McConnell’s concerns about the possibility of additional leaks were not secret.

Despite the report that no leaks were found, she contacted Jeff Jackson, a civil engineer, to determine the amount and cause of damage to the hardwood floor. In her cover letter enclosing the Gerloff report, McConnell stated that Jackson had been retained in the investigation of the claim and the “cause of the problem” continued. 2.

Completion-of-claim letter McConnell wrote a letter to Ballard on February 8 saying that FIE required a forty-five-day extension because “[t]he additional time is needed to complete our claim investigation.” McConnell admitted at trial that FIE had all of the information that it needed to evaluate the claim but that she needed the additional time to obtain the authority from supervisors to pay the claim because she did not have that level of authority. FIE paid the claim on February 24, 1999, less than three weeks after McConnell’s letter. 3.

Refusal to pay claim/failure to promptly pay Ballard also argues that FIE violated the insurance code because FIE admitted that as of May 17, 1999, it had obtained all of the information it needed to pay for remediation of the house. She urges that FIE tendered insufficient and untimely payments.

Because of FIE’s piecemeal payments and intentional delays in paying her claims after it had all of the information it needed on May 17, 1999, Ballard contends that FIE refused to pay the claims without conducting a reasonable investigation of the claims and that it failed to attempt in good faith to effectuate a prompt, fair, and equitable settlement of the claims when its liability had become reasonably clear. FIE paid the first claim for hardwood floor damage on February 24, 1999. It based the payment on a bid from Boat-right Floors, less depreciation and the deductible.

FIE paid the depreciated value instead of replacement cost because the house was underinsured. Ballard immediately claimed that this was a partial payment because she thought the Boatright bid was too low. Thereafter, Ballard began submitting other claims. Within the next couple of months, she submitted a claim for a shower leak, ice maker leak, and supplemental damage to sheet rock and walls. FIE paid all of these claims, which Ballard again accepted as partial payments.

Nevertheless, Ballard contends that because of the completion-of-claim letter, plumbing test letter, and FIE’s invocation of the appraisal provision, full payment of these claims and other pending claims was delayed. 4. Denial of coverage Ballard argues that FIE tried to deny the hardwood floor damage claim under an exclusion in the policy for foundation problems. The first adjuster to handle the claim was Sean Dollery, who visited the home on December 22,1998.

Although his initial reaction was that foundation settling might be the cause of the hardwood floor damage, he changed his mind after seeing the water damage to the floor.

In response to her attorney’s question — “About how long did he talk to you about this being a slab settling problem?” — Ballard testified: “Until Richard Roberts got there [that day] and started pulling up boards that showed the migration of water.” Dol-lery stopped suggesting that it was a slab-settling problem “about 20 minutes after Richard Roberts had pulled up some boards.” From then on, FIE handled the hardwood floor damage as a covered claim. 5.

Sham and fraudulent bids Ballard complains that FIE intentionally paid her inadequate sums based on sham and fraudulent bids FIE received from contractors who subsequently refused to perform the work for the amount of the bids. These contractors were then retained by FIE as its experts in this litigation. FIE obtained bids from many contractors during the course of handling the claims and paid the claims according to its own valuation, assisted by the bids. FIE based the hardwood floor claim payment on a bid from Boatright Floors, which was the lowest bid that it received.

Ballard contends that the payment was invalid because the Boatright bid was only good for thirty days and had expired by the time that FIE made the payment on February 24, 1999. FIE counters that it did not receive the bid until February 5, just a few weeks before it made payment. After mold was discovered in the Ballard home, FIE hired Rimkus Consulting to prepare a remediation bid. Because Rimkus had no experience in the relatively new field of mold remediation, its engineers talked with Ballard’s consultants to find out more about the process.

The remediation bid that Rimkus submitted in preparation for mediation was considerably less than the bid from Ballard’s experts. Ballard also contends that FIE based its August 1999 payments on expired bids, because two companies that had made bids would not do the work for Ballard at the prices they had quoted to FIE. But by that time they had been retained as FIE’s expert witnesses. Ballard further contends that de la Mora’s estimates during the appraisal process were not based on like kind and quality.

De la Mora testified that he determined like kind and quality replacement costs during the appraisal process. One of the contractors who submitted a bid to de la Mora also testified that he prepared his bid based on like kind and quality materials. 6.Invocation of the appraisal provision Ballard urges four complaints concerning FIE’s invocation of the appraisal provision: (

i) the mere invocation of the provision was a breach of its duty of good faith and fair dealing because it was intended for the purposes of delay and to gain leverage in negotiations; (ii) FIE deliberately appointed an appraiser who was not independent or competent; (iii) FIE refused to include all of the pending claims in the appraisal; and (iv) FIE intentionally withheld estimates and information from its own appraiser. Under Ballard’s standard form homeowner’s insurance policy, either party may request an appraisal if it becomes apparent that the parties cannot agree on the value of a claim or claims.

FIE’s employees testified that they invoke the appraisal provision rarely, only if it is apparent that the parties cannot agree on the appraised value. FIE asserted the provision here after an attempt to settle at mediation failed, although it was apparent long before then that Ballard and FIE did not agree about the value of her claims. Peter de la Mora, a structural engineer who was FIE’s appraiser, had a business relationship with FIE before working on this appraisal. However, he has never been an employee of FIE.

Further, FIE instructed de la Mora to determine costs on his own, not from any figures that FIE had. He had no restriction on receiving assistance from outside experts. He had years of experience in the homebuilding industry. The letter invoking the appraisal provision listed three of the five claims that were pending as of late May 1999. Ballard testified that she asked FIE to include all of the claims in the appraisal but that FIE did not want to do that, suggesting the appraisal did not cover all of her claims.

De la Mora testified that although the appraisal did not include all of the claim numbers, the fact that the appraisal covered the entire house encompassed all of claims.

Additionally, the amendment to the appraisal decision stated that because “some of the claim numbers may have been improperly included, and [ojthers may have been improperly excluded,” “the Appraisal Decision was intended to be a comprehensive statement” of the cost to remediate or replace the house, its contents, the groundskeeper’s house, plus additional living expenses, “considering only those claims which were properly subject to the appraisal.” 7. Underinsurance The amount of insurance on the Ballard home was tied to the county tax appraisal, not the resale value of the house.

In 1996, Ballard’s agent told her that the insurance coverage was insufficient to cover the full value of the home. She replied that she wanted to keep the insurance at the value of the tax appraisal, then signed a form rejecting an increase in coverage. The amount of insurance on the home when Ballard filed the hardwood damage claim was $313,000. McConnell, concerned that the house might be underinsured, requested a property appraisal in January 1999. After seeing that the appraised resale value was approximately $750,000, Ballard requested an increase in her insurance coverage.

Because this increase did not occur until after the payment of the first claim, FIE imposed an underinsurance penalty on its payment of the hardwood floor claim. It paid Ballard for the actual cash value of the floor, deducting depreciation, instead of paying the full replacement value. Ballard contends that FIE thus misrepresented that her policy covered replacement costs. 8. Reservation-of-rights letter On December 30,1998, FIE sent a standard form homeowner’s policy reservation-of-rights letter, which restated exclusions from the policy that might apply.

Insurance companies must assert a reservation of rights or risk waiving any coverage defenses that they may have. See, e.g., State Farm Lloyds v. Borum, 53 S.W.3d 877, 892 (Tex.App.-Dallas 2001, pet. denied). The fact that the form letter contained inapplicable exclusions for damage by “waves” and “earthquake” is inconsequential. Furthermore, there was no evidence of any connection between this letter and how FIE handled Ballard’s claims, and coverage was not at issue. Having summarized FIE’s acts of which Ballard complains, we now turn to FIE’s legal and factual sufficiency challenges to the jury’s findings.

Breach of Duty of Good Faith and Fair Dealing FIE urges in its first issue that the evidence is legally and factually insufficient to support the jury’s finding that it breached its duty of good faith and fair dealing toward Ballard. FIE further contends that the evidence is legally and factually insufficient to support a finding that its alleged breach caused damages to Ballard. We disagree. Some evidence supports the jury’s finding that FIE breached its duty of good faith and fair dealing and that the breach caused damages to Ballard.

An insurer breaches its duty of good faith and fair dealing by denying or delaying payment of a claim when “the insurer’s liability has become reasonably clear.” Tex. Ins.Code Ann. art. 21.21, § 4(10)(a)(ii) (West Supp.2003); Universe Life Ins. Co. v. Giles, 950 S.W.2d 48, 55 (Tex.1997); id. at 69 (Hecht, J., concurring). “Liability for payment of a claim is reasonably clear when it is no longer fairly debatable.” Giles, 950 S.W.2d at 69 (Hecht, J., concurring). The statutory standard and common-law standard for breach of the duty of good faith and fair dealing are identical. Mid-Century Ins. Co. v.

Boyte, 80 S.W.3d 546, 549 (Tex.2002) (citing Giles, 950 S.W.2d at 55; id. at 69 (Hecht, J., concurring)). Evidence establishing only a bona fide coverage dispute does not demonstrate breach of the duty of good faith and fair dealing. Provident Am. Ins. Co. v. Castaneda, 988 S.W.2d 189, 193 (Tex.1998); State Farm Lloyds v. Nicolau, 951 S.W.2d 444, 448 (Tex.1997); Moriel, 879 S.W.2d at 17. The issue of the breach of the duty of good faith and fair dealing “focuses not on whether the claim was valid but on the reasonableness of the insurer’s conduct” in handling the claim. Lyons v. Millers Cas. Ins.

Co., 866 S.W.2d 597, 601 (Tex.1993). Reasonableness is determined using an objective standard of whether a reasonable insurer under similar circumstances would have delayed or denied payment of the claim. Aranda v. Insurance Co. of N. Am., 748 S.W.2d 210, 213 (Tex.1988). Whether an insurer breached its duty of good faith and fair dealing is a fact issue. Giles, 950 S.W.2d at 56. Moreover, the question of whether an insurer’s conduct is reasonable in the face of acknowledged liability is one peculiarly tailored to the province of the jury. See id.

In determining whether the evidence is legally sufficient to support a judgment for breach of the duty of good faith and fair dealing, we resolve all conflicts in the evidence and draw all inferences in favor of the jury’s findings. Id. at 51. There is some evidence from which a jury could find that FIE failed to attempt in good faith to effectuate prompt, fair, and equitable settlement of claims after its liability had become reasonably clear. See Tex. Ins.Code Ann. art. 21.21, § 4(10)(a)(ii); Giles, 950 S.W.2d at 56. FIE does not challenge that its liability was reasonably clear.

Its liability was only “fairly debatable” for a brief time, when FIE’s outside investigator, Sean Dol-lery, expressed his preliminary view that the claim might not be covered. See Giles, 950 S.W.2d at 69 (Hecht, J., concurring). Ballard contends that FIE, after its liability had become reasonably clear, delayed payment of the hardwood floor claim through its plumbing test and completion-of-claim letters.

She further contends that FIE breached its duty of good faith and fair dealing toward her by invoking the appraisal provision in May 1999, when at the same time it had all of the information that it needed to pay for remediation of the home. She argues that waiting for payment of her claims during the eighteen-month appraisal process allowed mold to spread and cause irreparable damage to the house. While Ballard alleges that other acts are part of the pattern of acts that violated

article 21.21, these are the primary acts of which she complains. Some evidence shows that McConnell’s lack of authority or experience in handling claims of this magnitude caused delays in processing the claims. McConnell knew on the first day she received the claim that estimates to replace the hardwood floor were over $100,000. She had a level of authority only to pay claims up to $20,000 and had never worked on a claim this large. Additionally, McConnell testified that she had sufficient information that liability was reasonably clear on the hardwood floor claim as of February 1, 1999.

Yet she wrote the February 8 letter to Ballard, stating that FIE required a forty-five-day extension because “[t]he additional time is needed to complete our claim investigation.” McConnell admitted at trial that FIE had all of the information that it needed to evaluate the claim but that she needed the additional time to obtain the authority from supervisors to pay the claim because she did not have that level of authority. A jury could have found that she misrepresented to Ballard why she needed more time to handle the claim.

Ballard argues also that McConnell made a misrepresentation in the “complete plumbing test” letter, when in fact not all plumbing had been tested. Both McConnell and a plumber with the Gerloff Company testified that the term “complete plumbing test” is not literally true, because the standard industry test runs through underground systems only, not any pipes above the first floor. Although McConnell correctly characterized the test that Gerloff performed, the jury could have reasonably concluded that this statement was a misrepresentation.

Other evidence called into question FIE’s good faith handling of the claims. Ballard testified that although she “begged” to remove the wood floor because it was a tripping hazard, McConnell told her that she would “jeopardize coverage” if she removed the floor. McConnell testified that Ballard could have removed the floor at any time after payment of the $108,000 to replace the floor. Ballard countered that she did not want to remove the floor with the claim investigation ongoing for months, even after she received the $108,000 payment.

She testified that she did not remove the floor “[bjecause [FIE] kept calling for inspections. And if I had torn up the floor, there would be nothing there for them to inspect.” As part of the pattern of mishandling and delay in handling her claims, Ballard also testified that FIE’s large number of inspections were designed to harass and cause further delay. McConnell countered that the inspections were necessary to determine the cause of the water damage and because Ballard kept submitting claims for new damage.

The jury, as the trier of fact in this case, could have chosen to believe Ballard instead of McConnell. A jury judges the credibility of witnesses and the weight given their testimony. Ford v. Panhandle & Santa Fe Ry. Co., 151 Tex. 538, 252 S.W.2d 561, 563 (1952); Trinity Indus., Inc. v. Ashland, Inc., 53 S.W.3d 852, 862 (Tex.App.-Austin 2001, pet. denied). It is the jury’s province “to resolve conflicts and inconsistencies ... in the testimony of different witnesses.” Ford, 252 S.W.2d at 563. Further, Ballard presented some evidence of a pattern of failure to promptly pay that caused further damage to the house.

The jury heard evidence that FIE had all of the information that it needed to pay the hardwood floor claim in early February but did not pay the claim until three weeks later. Further, Ballard contended that every payment from FIE was insufficient to pay for the damage, leading to further delays that caused the mold to spread. The jury heard additional evidence that although McConnell admitted that FIE had all of the information that it needed to pay for remediation of the house as of May 17, 1999, FIE instead invoked the appraisal provision after it failed to settle the claims at mediation.

During the appraisal process, which lasted eighteen months, nothing was done to remediate the mold in Ballard’s house. The mold continued to grow. This was some evidence from which the jury could have determined that FIE delayed in paying the claims and that the delay caused further damage to Ballard’s house. An appellate court may not substitute its judgment when a jury’s finding is grounded in sufficient evidence. Trinity Indus., 53 S.W.3d at 862-63. We are required by the standards and scope of review to credit verdicts grounded on probative evidence.

Further, the legislature requires us to “liberally construe!]”

article 21.21. Tex. Ins.Code Ann art. 21.21, § 1(b) (West Supp.2003) (“This

Article shall be liberally construed and applied to promote its underlying purposes as set forth in this section.”); see also Rocor Int'l, Inc. v. National Union Fire Ins. Co., 77 S.W.3d 253, 260 (Tex.2002); Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 384 (Tex.2000). Viewing the evidence in the light most favorable to Ballard, we hold that there is some evidence to support the jury’s finding that FIE failed to attempt in good faith to effectuate a prompt, fair, and equitable settlement of Ballard’s claims after its liability had become reasonably clear and that this failure caused damages to Ballard. See Tex.

Ins.Code Ann art. 21.21, § 4(10)(a)(ii). Weighing all of the evidence, we cannot say that it is so weak as to be clearly wrong or manifestly unjust. Cain, 709 S.W.2d at 176. Accordingly, FIE’s legal and factual sufficiency challenges to the breach of the duty of good faith and fair dealing finding must fail. We overrule FIE’s first issue. Even if we were to apply the standard for breach of the duty of good faith and fair dealing set forth in Aranda v.

Insurance Co. of North America — that FIE had no reasonable basis for delaying payment of the benefits of the policy and that it knew or should have known that it had no reasonable basis for delaying payment — the evidence would support the finding. See 748 S.W.2d at 213. Because the court’s charge specified that a finding of a breach of the duty of good faith and fair dealing is sufficient to uphold the jury’s award of actual damages, we affirm the actual damages award in part, in the amount of $4,006,320.72, in addition to prejudgment and postjudgment interest as stated in the final judgment.

This amount takes into account the reduction in the final judgment for the $2,045,204.28 that FIE had previously paid to Ballard, information that the court’s charge did not present to the jury. Elsewhere in the opinion, we will discuss the $176,000 award for Ballard’s reasonable and necessary costs of the appraisal process. DTPA Violation, Unconscionability, and Fraud FIE contends in its second issue that the evidence is legally and factually insufficient to support the jury’s findings that FIE engaged in deceptive trade practices, unconscionable conduct, and fraudulent conduct.

Ballard counters that FIE waived this argument because it did not properly brief this issue. See Tex.R.App. P. 38.1(h). Because FIE’s argument on this issue is grounded in its lengthy discussion that it did not breach its duty of good faith and fair dealing, we find that FIE sufficiently briefed this issue for the Court.

The jury found that FIE violated the DTPA by engaging in a false, misleading, or deceptive act or practice by (1) representing that services had or would have characteristics or benefits that they did not have, (2) representing that services are or will be of a particular standard or quality when they were of another, (8) representing that an agreement confers or involves rights, remedies, or obligations that it did not have or involve, or (4) representing that work or services have been performed, when the work or services were not performed. See Tex. Bus. & Com.

Code Ann. § 17.46(b)(5), (7), (12), (22) (West 2002). Ballard contends that the plumbing test letter was a misrepresentation about work performed. We agree that this is some evidence to support the jury’s finding of a DTPA violation. The jury may have reasonably concluded that McConnell’s characterization of the test was a misrepresentation of work performed. Additionally, the jury could have concluded from the evidence that Ballard’s reliance on the plumbing test letter caused further damages to the house.

Viewing the evidence in the light most favorable to Ballard, the evidence is legally sufficient to support the jury’s finding that FIE committed a DTPA violation. Weighing all of the evidence, we cannot say that it is so weak as to be clearly wrong or manifestly unjust. Cain, 709 S.W.2d at 176. We overrule this part of FIE’s second issue and affirm the jury’s finding that FIE committed a DTPA violation.

The jury also found that FIE engaged in an unconscionable action or course of action, which is “an act or practice that, to a consumer’s detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.” Tex. Bus. & Com.Code Ann. § 17.45(5)(A) (West 2002). “Gross,” as used in this section, means “glaringly noticeable, flagrant, complete and unmitigated.” Nicolau, 951 S.W.2d at 451. Ballard’s sole contention in this regard is that any misrepresentation by FIE equates with unconscionable conduct.

That is not the law. “[N]ot every misrepresentation of fact, even an intentional one, constitutes unconscionable conduct.” Latham v. Castillo, 972 S.W.2d 66, 72 (Tex.1998). The test is whether the consumer was taken advantage of to a grossly unfair degree. Id. The record does not provide support to satisfy this test. Having reviewed the record, we find no evidence to support the finding that FIE engaged in an unconscionable action or course of action. The jury further found that FIE committed fraud against Ballard.

A fraud cause of action requires: (1) a material misrepresentation, (2) that was either known to be false when made or was asserted without knowledge of its truth, (3) that was intended to be acted upon, (4) that was relied upon, and (5) that caused injury. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex.2001). Ballard makes no citation to the record to support her fraud claim, nor does she point to any actions that might have been fraudulent. In our review of the record, we find no evidence to support this claim.

Having found sufficient evidence to support the jury’s finding of a DTPA violation, but no evidence to support the jury’s findings of unconscionability and fraud, we overrule FIE’s legal and factual sufficiency challenge to the DTPA violation finding and sustain FIE’s challenges to the unconscio-nability and fraud findings. Therefore, we affirm the jury’s finding that FIE committed a DTPA violation. The court’s charge specified that a finding of a DTPA violation is sufficient to uphold the jury’s award of actual damages.

Based on this finding, we affirm the actual damages in the amount of $4,006,320.72, in addition to prejudgment and postjudgment interest as stated in the final judgment. We reverse the jury’s findings that FIE engaged in unconscionable and fraudulent conduct and render judgment that Ballard take nothing on her claims for unconscionability and fraud.

Appraisal Decision FIE contends in its third issue that Ballard is bound by the appraisal decision because the evidence is legally and factually insufficient to support the jury findings that the appraisal was the result of fraud, accident, or mistake and that the appraiser was not competent and independent. FIE further contends that Ballard waived any complaints about de la Mora because she did not challenge him as the appraiser until after the appraisal decision was made. An appraisal decision made pursuant to the provisions of an insurance contract is binding and enforceable. Wells v.

American States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex.App.-Dallas 1996, writ denied). Every reasonable presumption will be indulged to sustain an appraisal decision. Providence Lloyds Ins. Co. v. Crystal City Indep. Sch. Dist., 877 S.W.2d 872, 875 (Tex.App.-San Antonio 1994, no writ). An award may be set aside in three instances: when it was (1) made without authority; (2) the result of fraud, accident, or mistake; or (3) not made in substantial compliance with the terms of the contract. Wells, 919 S.W.2d at 683; Providence Lloyds, 877 S.W.2d at 875-76.

Ballard’s homeowner’s insurance policy, a standard form policy promulgated by the Texas Department of Insurance, contains an appraisal clause. Under this clause, either party may invoke an appraisal if the party disagrees about the value of a claim or claims. Each party then hires its own appraiser. If the two appraisers cannot agree on the value, they select an umpire, or a district judge will appoint one if the appraisers cannot agree on an umpire. A decision signed by any two of the three is binding as to the value of the claim.

FIE invoked the appraisal provision on May 27, 1999, the day that the parties failed to reach a settlement at mediation. FIE chose as its appraiser Peter de la Mora, a structural engineer who had performed appraisals for FIE approximately four or five times. Ballard chose an attorney as her appraiser, who had to resign a few months later because of trial obligations. Both parties agreed that Michael Schless, a former county court at law judge, would be the umpire. Ballard then chose another attorney, Mike Duffy, as her successor appraiser in November 1999.

Over the course of the next year, the appraisers gathered estimates for remediation and replacement of the Ballard house. In November 2000, de la Mora, Duffy, and Schless worked for four days to determine the appraisal decision. They met at the Ballard house with various experts, then de la Mora and Duffy discussed their proposals with Schless. On November 16, 2000, they issued an appraisal decision in the amount of $1,287,092.72, which took into account payments that FIE had already made to Ballard. Both appraisers and Schless signed the decision, but Duffy, Ballard’s appraiser, disputed the amount of the award.

Under the terms of the insurance policy, the appraisal decision was binding because two of the three agreed on the amount. FIE then sent checks to Ballard’s attorney for the amount of the appraisal decision.

De la Mora and Schless issued an amendment to the appraisal decision on January 30, 2001, to reflect the intent of the decision to be a “comprehensive statement of the actual cash value to replace or remediate the structure of the residence and the groundskeeper’s house, the contents of the residence, and the alternative living expenses, considering only those claims that were properly subject to the appraisal.” Duffy did not participate in the amendment because he no longer had authority to act on behalf of Ballard.

We "will first address FIE’s preliminary issue that Ballard waived her right to challenge de la Mora as FIE’s appraiser because she did not raise the issue until after the appraisal decision was made. Having learned from de la Mora’s deposition, taken soon before the appraisal decision, that he had previously done work for FIE, Ballard contended in an amended petition that the appraisal decision should be set aside. She claimed that FIE breached the insurance contract by selecting an appraiser who was neither competent nor independent.

The effect of an appraisal decision is to estop one party from contesting the issue of the value of damages in a suit on the insurance contract. Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 797-98 (Tex.App.-Amarillo 1995, writ denied). As with other affirmative defenses, it is the defendant’s burden to raise the issue of estoppel, Tex.R. Civ. P. 94, which FIE did in an amended answer. Ballard has arguably waived any challenge because she did not oppose FIE’s appraiser until after determination of the appraisal.

We will nevertheless address FIE’s legal and factual sufficiency challenges to the jury’s findings concerning the appraisal. FIE argues in a sub-issue concerning the appraisal that the evidence is legally and factually insufficient to support the finding that the appraisal decision was rendered as a result of fraud, accident, or mistake. In question seven of the charge, the jury was instructed that fraud means in part that a material misrepresentation was made and that the speaker made the misrepresentation with the intent that the other party act on it.

Ballard contends that the jury had sufficient evidence to find fraud because the appraiser intentionally prevented Ballard from receiving like kind and quality replacement, failed to use available price and quality information, intentionally excluded items from the appraisal process, and based his calculations on fraudulent bids from unqualified contractors. There is no evidence in the record to support these contentions.

For example, although Ballard claims that de la Mora intentionally prevented her from receiving like kind and quality replacement, de la Mora testified that he determined like kind and quality replacement costs during the appraisal process. One of the contractors who submitted a bid to de la Mora also testified that he prepared his bid based on like kind and quality materials. Despite the allegation, we find no evidence from which a reasonable jury could infer that the appraiser intentionally prevented Ballard from receiving like kind and quality replacement.

The evidence also does not show that anyone intentionally excluded items from the appraisal. At oral argument, Ballard contended that she wanted to submit “everything” in the appraisal but that FIE refused. Although Ballard made fourteen separate claims between December 1998 and August 1999, she had only submitted five claims by the time the appraisal process began in May 1999. FIE’s May 27, 1999 letter listed only three of those five claims, but de la Mora testified that because the entire house had to be remediated, it did not matter which claim numbers were included.

Additionally, the amendment to the appraisal decision stated that the decision “was intended to be a comprehensive statement” of the cost to remediate or replace the house, its contents, and the groundskeeper’s house, plus additional living expenses. There is no evidence that de la Mora or FIE intended to exclude items from the appraisal. Likewise, de la Mora’s reliance on bids from contractors that he chose does not rise to the level of fraud.

Ballard opposed the bids because some of the contractors had done previous work for FIE and because some of the contractors, such as the mold remediation company, had never submitted bids for work of this magnitude. A lack of experience does not equate with making material misrepresentations in a bid. Given that mold claims were still relatively novel in April 1999, when mold was discovered in Ballard’s house, it is not surprising that the contractors had little experience in the area of mold remediation.

Ballard objects to the bids solicited by de la Mora in part because she does not agree with the valuation of the repair and replacement costs. “[A] finding of disparity, even gross disparity, between an appraisal award and the cost of repair, cannot support a finding of bias or partiality without additional evidence.” Hennessey, 895 S.W.2d at 799. Ballard fails to cite to any additional evidence. Based on our review of the record, we cannot find any evidence from which a reasonable jury could infer that the appraisal decision was rendered as a result of fraud.

Ballard argues that the appraisal decision was also rendered as a result of mistake because it listed “alternative living expenses” instead of “additional living expenses” for the costs of Ballard’s family living away from their house. The jury was instructed that “mistake” means a situation in which the appraisers were operating under a mistake of fact such that their award does not speak to their intention or that the error in the award is so great that it shows gross partiality, undue influence, or corruption. Here, the “mistake” about which Ballard complains is similar to a clerical error.

De la Mora testified that the term “alternative living expenses” was intended to be the same as “additional living expenses” and that the mere difference in wording did not affect the appraisal process. A clerical error that does not affect the intention of the appraisers cannot support a finding of mistake. See Providence Lloyds, 877 S.W.2d at 878 (column labeled “court award” instead of “agreed award” did not constitute a mistake). Based on our review of the record, we cannot find sufficient evidence to support a finding that the appraisal was rendered as a result of mistake.

Viewing the evidence in the light most favorable to Ballard, the evidence is legally insufficient to support the jury’s finding that the appraisal decision was the result of fraud, accident, or mistake. Weighing all of the evidence, the evidence is also factually insufficient to support the jury’s finding that the appraisal decision was the result of fraud, accident, or mistake. We therefore sustain FIE’s sub-issue, reverse the jury’s finding, and render judgment on this finding in favor of FIE.

FIE contends in its second sub-issue concerning the appraisal that the evidence is legally and factually insufficient to support the finding that FIE failed to appoint a competent, independent appraiser. We agree. Ballard attempted to prove lack of independence because de la Mora had a pre-existing business relationship with FIE. However, Ballard presented no evidence that FIE influenced or exercised control over de la Mora. There is no evidence that de la Mora ever was an employee of FIE or had a financial interest in the claims.

Instead, Ballard’s evidence shows an arm’s-length business relationship between FIE and de la Mora, which was fully disclosed before the appraisal decision. Ballard presented evidence that: de la Mora’s company performed twenty to twenty-five percent of its work for FIE and eighty percent of its work overall for insurance companies; de la Mora had performed four or five appraisals for FIE before the Ballard appraisal; and that de la Mora had worked with FIE’s attorney ten times since 1996. The showing of a pre-existing relationship, without more, does not support a finding of lack of independence. Gardner v.

State Farm Lloyds, 76 S.W.3d 140, 143 (Tex.App.-Houston [1st Dist.] 2002, no pet.). De la Mora has never been an employee of FIE. Further, FIE instructed de la Mora to determine costs on his own, not from any figures that FIE provided. FIE never told him how to estimate the costs. He had no restriction on receiving assistance from outside experts.

As an independent contractor, de la Mora amply demonstrated that despite his previous business dealings with FIE, he exercised independent judgment in the appraisal process; Ballard has directed us to no evidence to the contrary, and we cannot find any support for her position in the record. Ballard attempted to prove lack of competence on the ground that de la Mora had no experience with molds or mold remediation. The evidence shows, however, that de la Mora was competent as an appraiser.

He has a degree in civil engineering, is a registered professional engineer, has thirty-three years of experience in structural engineering, and has built hundreds of houses, including houses comparable to the Ballard house. Because he had no experience with mold remediation, he retained mold experts to assist him with the remediation estimate. This was no different than Ballard’s appraiser, an attorney, retaining mold experts to assist him with his estimates. Viewing the evidence in the light most favorable to Ballard, we con

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