                       In the
                  Court of Appeals
          Second Appellate District of Texas
                   at Fort Worth
                ___________________________
                     No. 02-17-00382-CV
                ___________________________

  CCPA ENTERPRISES, INC. AND RICKEY CONRADT, Appellants

                                 V.

BEDFORD HOSPITALITY INVESTMENTS, LLC D/B/A HOLIDAY INN -
                   BEDFORD, Appellee



             On Appeal from the 348th District Court
                     Tarrant County, Texas
                 Trial Court No. 348-237051-09


            Before Sudderth, C.J.; Kerr and Birdwell, JJ.
              Memorandum Opinion by Justice Kerr
                           MEMORANDUM OPINION

      In this appeal from a bench-trial judgment, CCPA Enterprises, Inc.—a public

insurance adjuster 1 owned by Rickey Conradt––asserts its entitlement to interpleaded

funds as a matter of law based on its client’s eventual settlement with its insurer.

CCPA challenges how the trial court construed the adjusting contract’s payment

provision, contending that the provision entitled CCPA to ten percent of any

settlement that its client, Bedford Hospitality Investments, LLC, ultimately made with

the insurer regardless of the types of damages included in the settlement amount. But

consistent with the trial court’s determination, Bedford Hospitality argues that the

contract entitled CCPA to be paid only if Bedford Hospitality recovered certain types

of policy damages and that CCPA did not conclusively prove that Bedford

Hospitality’s recovery included those types. Because we agree with the trial court’s

construction of the contract, we affirm.

                        I. Factual and Procedural Background

      The trial court signed extensive findings of fact the majority of which CCPA

does not challenge, so we rely extensively on those findings for our background.




      1
       A “public insurance adjuster” is a “person [including a corporation] who . . .
acts on behalf of an insured in negotiating for or effecting the settlement of a claim or
claims for loss or damage under any policy of insurance covering real or personal
property.” Tex. Ins. Code Ann. § 4102.001(3)(A)(i).


                                           2
      A. The hailstorm and claims adjusting immediately following

      Bedford Hospitality, the former owner of a hotel and real property in Bedford,

Texas, purchased an insurance policy from Colony Insurance Company covering

defined types of loss occurring from November 1, 2006, through November 13, 2007.

The policy provided that if Bedford Hospitality incurred a covered loss to the

structure or its business personal property, it could recover actual cash value for the

damaged items, defined generally as the replacement cost minus depreciation. The

policy also included business-interruption coverage (defined in the policy as “business

income”) and coverage for “extra expense.”2 Mold-damage coverage was excluded.

      In April 2007, “severe weather and a catastrophic hail storm” damaged the

hotel’s roof and EIFS 3; additionally, some rooms flooded. Bedford Hospitality filed a

claim with Colony in July 2007. Colony retained an independent adjuster, who

inspected the hotel in August 2007 and estimated the actual cash value of necessary

repairs to be $127,990.10. Colony then issued Bedford Hospitality a check for that

amount. Bedford Hospitality responded by filing a sworn proof of loss seeking an




      2
        The policy defines extra expense from the insured’s perspective as “necessary
expense[] you incur during the ‘period of restoration’ that you would not have
incurred if there had been no direct physical loss or damage to property caused by or
resulting from a Covered Cause of Loss.”
      3
         EIFS is an acronym for exterior insulation and finishing system. Fresh Coat, Inc.
v. K-2, Inc., 318 S.W.3d 893, 895 (Tex. 2010).


                                            3
additional $2,662,890.67 for the storm damage, but Colony rejected it subject to

“further investigations concerning the issue of water penetration through the EIFS.”

      In September 2007, Bedford Hospitality 4 contracted with CCPA to adjust the

“loss and damages by hail/wind” on its behalf. In the one-page contract form, which

we reproduce at the end of this opinion, Bedford Hospitality “agree[d] to pay

CCPA . . . ten percent (10%)* plus sales tax if applicable as agreed of the amount as

adjusted of the replacement cost recovered on account of loss on structure, contents,

business interruption, loss of use, [and] extra expense.” [Emphasis added.] Above the

underlined “ten percent” was handwritten, “To be paid 10% over 130,000.00 al[]ready

paid.” Following the description of the payment, the contract identified Bedford

Hospitality’s policy number and Colony as the insurer. Finally, next to an asterisk, the

paragraph concluded, “The total commission payable to CCPA . . . may not exceed

10% of the amount of the insurance settlement. The sales tax is owed to the State of

Texas, not to CCPA . . . .” Handwritten again was “over 130,000.00 al[]ready paid.”

      In late October 2007, the City of Bedford closed the hotel because unsafe

amounts of mold were present indoors.5



      CCPA’s Conradt provided the contract form and identified the insured as “HI
      4

WEST” because he said the Bedford Hospitality representatives told him to do so.
But Bedford Hospitality has not tried to avoid contractual liability for that reason.
      5
       Bedford Hospitality’s lender eventually foreclosed on its lien and sold the hotel
property in July 2009.


                                           4
      B. Colony’s suit for injunctive relief

      Dissatisfied with Colony’s $127,990.10 payment, Bedford Hospitality sought to

invoke the Colony policy’s appraisal procedure. Colony refused, claiming that it was

still investigating the cause of the water intrusion, and sought to inspect the property a

second time. CCPA would not agree. Colony then sued Bedford Hospitality, and the

two agreed to a “preliminary injunction” prohibiting Bedford Hospitality and its

representatives from (1) continuing to pursue appraisal until further court order and

(2) preventing Colony’s access to the hotel property for inspections and testing.

      Conradt later wrote to Colony’s adjuster that he understood that the adjuster

and an engineer had inspected the hotel. He also said that he had declined to attend

that inspection because he thought his presence would be “counterproductive” to the

appraisal process. Although Conradt noted that at that time he was still involved in

adjusting the claim under the CCPA–Bedford Hospitality contract, CCPA did not

perform any additional adjusting services for Bedford Hospitality after November

2007. 6 Colony nonsuited its claims after performing the additional inspections, and

the trial court dismissed Colony’s suit.

      C. Bedford Hospitality’s suit against Colony

      After CCPA had stopped performing any adjusting services, Bedford

Hospitality filed additional claims with Colony for business-personal-property loss

      The trial court found that Conradt and CCPA “abandoned their work on
      6

Bedford’s claim in November 2007.”


                                            5
and business-interruption loss, also related to the water damage. Bedford Hospitality

sued Colony in April 2009 (1) for breach of the insurance policy by failing to pay for

damage to the hotel’s contents and by failing to pay for remediation or rebuilding,

(2) for violations of the Texas Deceptive Trade Practices Act, (3) for violations of the

unfair-settlement-practices prohibitions in the Texas Insurance Code, and (4) for

breach of the duty of good faith and fair dealing. Bedford Hospitality sought damages

recoverable under the policy as well as other types of damages.

      Four years into this second litigation, Bedford Hospitality moved to compel

appraisal, which the trial court granted. Each party appointed an appraiser, and on the

parties’ joint motion the trial court appointed an umpire. Colony’s appraiser and the

umpire agreed to a final appraisal amount on “damages only,” disclaiming any

determination of causation, coverage, depreciation, or “any other legal matter” to be

considered by the trial court in Bedford Hospitality’s suit. The appraisal determination

lists the following damages amounts:

      Building Damages: $ 1,387,383.18

      Mold Remediation: $ 705,362.52

      Business Interruption[:] $ 706,686.48 (24 months at $29,445.27 per month)

      Business Personal Property[:] $ 1,676,339.76

      TOTAL DAMAGES: $ 4,475,771.94




                                           6
      Bedford Hospitality moved for an order accepting the appraisal amounts as

binding. Instead, the trial court set the case for trial but also ordered the parties to

mediation.

      Bedford Hospitality and Colony eventually settled the suit for $4,750,000. The

written settlement agreement acknowledged that Bedford Hospitality had alleged loss

under the policy as well as extracontractual claims and that the parties disputed the

amount of loss on all claims, including the extracontractual ones. The settlement

agreement also recited that Colony denied “any and all liability in connection with”

Bedford Hospitality’s suit and that the parties were settling “to avoid further time,

expense, and the uncertainties of litigation.” The settlement obligated Colony to pay

Bedford Hospitality $4,275,000 and to interplead an additional $475,000 into the trial

court’s registry for a potential claim by CCPA, 7 in exchange for Bedford Hospitality’s

release of all claims against Colony. But the agreement did not allocate a specific

amount to any one damages category. The settlement agreement stated that it was “a

final compromise of disputed claims and losses, not an admission of the existence of

coverage by [Colony] . . . [,] an admission of liability [by Colony,] or an admission of

any other fact or contention of law” by Colony. Bedford Hospitality also “den[ied]

and refute[d] the validity of any claims made by CCPA . . . or . . . Conradt.”



      7
        Neither CCPA nor Bedford Hospitality disputes that Colony wanted to
interplead ten percent of the total settlement.


                                            7
      D. CCPA’s and Bedford Hospitality’s claims to the interpleaded funds

      After Colony served CCPA with its petition in interpleader, CCPA and Conradt

asserted their entitlement to the interpleaded funds claiming, among other things, that

Bedford Hospitality had breached the adjusting contract and that they were entitled to

recover in quantum meruit. Bedford Hospitality asserted a competing entitlement to

the interpleaded funds and counterclaimed for declaratory relief, breach of contract,

chapter 10 sanctions, fraudulent inducement, and fraud. See Tex. Civ. Prac. & Rem.

Code Ann. §§ 10.001–.006. The trial court granted summary judgment for Bedford

Hospitality on Conradt’s breach-of-contract claim, and CCPA and Conradt nonsuited

their quantum meruit claims before trial. Thus, only CCPA’s and Bedford

Hospitality’s dueling breach-of-contract claims and Bedford Hospitality’s claims for

sanctions, fraudulent inducement, fraud, and declaratory judgment went to trial.

      The trial judge determined that Bedford Hospitality did not owe CCPA under

the adjusting contract unless Bedford Hospitality had “[r]ecover[ed] . . . [r]eplacement

[c]ost amounts as adjusted on account of loss on structure, contents, business

interruption, loss of use, or extra expense . . . from Colony.” The judge also

determined that

   • “because there was insufficient evidence of ‘the amount as adjusted of the

      [r]eplacement [c]ost recovered on account of loss on structure, contents,

      business interruption, loss of use, or extra expense,’” neither Bedford

      Hospitality nor CCPA breached the adjusting contract, and

                                           8
   • neither the appraisal nor the settlement agreement between Colony and

       Bedford Hospitality provided “sufficient evidence of the amount of recovery

       provided by the plain words of the [c]ontract.”

       Accordingly, the trial court awarded the interpleaded funds to Bedford

Hospitality. Although Conradt and CCPA both appealed the final judgment, only

CCPA requests relief: that we reverse the trial court’s judgment on its breach-of-

contract claim and render judgment that CCPA is entitled to the interpleaded funds.

                                   II. No Briefing Waiver

       As a preliminary matter, Bedford Hospitality contends that CCPA waived all its

appellate complaints because it did not challenge the trial court’s findings of fact in

the trial court and raised “only . . . very limited challenges to specific” fact-findings

and conclusions on appeal. But because this was a nonjury trial, CCPA can challenge

the sufficiency of certain findings for the first time on appeal. See Tex. R. App. P.

33.1(d). That CCPA does not challenge each of the trial court’s findings does not

mean that it waived its right to challenge the specific findings pertinent to its

complaints. See id. In any event, one of the primary findings CCPA challenges on

appeal––that Bedford Hospitality’s recovery attributable to certain types of losses was

a prerequisite to its payment obligations under the contract––is a conclusion of law

rather than a specific fact-finding. See Walden v. Affiliated Comput. Servs., Inc., 97 S.W.3d

303, 326 (Tex. App.––Houston [14th Dist.] 2003, pet. denied). Thus, that “finding” is

not binding on this court or on CCPA. See, e.g., BMC Software Belgium, N.V. v.

                                             9
Marchand, 83 S.W.3d 789, 795 (Tex. 2002). CCPA has thus not forfeited its appellate

complaints.

              III.   CCPA Did Not Prove Its Entitlement to Payment on
                       Its Contract with Bedford Hospitality

       In its first of four issues, CCPA argues that the trial court erred by awarding

Bedford Hospitality the interpleaded funds because the evidence shows that Bedford

Hospitality breached the contract as a matter of law and also conclusively establishes

the amount of CCPA’s damages. CCPA argues in its second issue that the trial court

misinterpreted the contract as requiring it to show that Bedford Hospitality must have

recovered from Colony amounts attributable to structural loss, personal-property loss,

business interruption, loss of use, or extra expense before CCPA earned its

commission. CCPA primarily contends that the contract entitled it to be paid a

percentage of “any insurance settlement” between Bedford Hospitality and CCPA

over $130,000 regardless of what types of damages the settlement amount comprised.

       In these first two issues, CCPA challenges the trial court’s construction of the

contract’s terms, a question of law if those terms are unambiguous. MCI Telecomm.

Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650–51 (Tex. 1999); Rubinstein v. Lucchese,

Inc., 497 S.W.3d 615, 625 (Tex. App.—Fort Worth 2016, no pet.). Neither CCPA nor

Bedford Hospitality contends that the contract’s terms are ambiguous.

      Our goal in interpreting a contract is to ascertain the parties’ true intent as

expressed by the plain language they used. See Great Am. Ins. v. Primo, 512 S.W.3d 890,



                                            10
893 (Tex. 2017). We examine the entire agreement to try to harmonize and give effect

to all contractual provisions so that none will be meaningless. MCI Telecomms.,

995 S.W.2d at 652. In doing so, we give a contract term its plain and ordinary meaning

unless the contract indicates the parties intended to give it a different meaning. Reeder

v. Wood Cty. Energy, LLC, 395 S.W.3d 789, 794–95 (Tex. 2012).

      CCPA contends that the contract’s plain language entitles it as a matter of law

to ten percent of any insurance settlement recovered by Bedford Hospitality, no

matter the types of damages involved. But the contract refers to a general “insurance

settlement” only in the section limiting CCPA’s commission to ten percent of “the

insurance settlement.”8 In contrast, the sentence discussing payment and assigning a

commission amount to CCPA is specific: CCPA’s percentage commission must be

calculated on “the amount . . . of the replacement cost recovered[9] on account of[10]

loss on structure, contents, business interruption, loss of use, [and] extra expense.”11



      8
       This limitation is required by law. See Tex. Ins. Code Ann. § 4102.104(a).
      9
        Black’s Law Dictionary defines “recover” as “[t]o get back or regain in full or
in equivalence”; “[t]o obtain (relief) by judgment or other legal process”; “[t]o obtain
(a judgment) in one’s favor”; “[t]o obtain damages or other relief; [or] to succeed in a
lawsuit or other legal proceeding.” Recover, Black’s Law Dictionary (10th ed. 2014).
      10
           “On account of” is a term of ordinary meaning and common usage that is
synonymous with “because of,” “attributable to,” or “by reason of.” Southland Life Ins.
v. Slagle, 346 S.W.2d 627, 628 (Tex. App.––Waco 1961, writ ref’d).

       CCPA even states in its brief that Bedford Hospitality “agreed to pay CCPA
      11

based upon the amount it recovered of the final determination of replacement cost

                                           11
Thus, to be able to show an earned commission, CCPA had to show (1) that it

adjusted Bedford Hospitality’s claim, (2) that Bedford Hospitality “recovered” on that

claim, and (3) that the recovery was “on account of” the listed types of loss. We need

not address CCPA’s arguments regarding the trial court’s findings and conclusions as

to (1) and (2) because CCPA did not prove (3), that Bedford Hospitality recovered

any amount from Colony attributable to the listed types of loss.

       CCPA contends that the appraisal determination established a “binding

value”12 for the disputed amounts due under the policy and thus controls the

determination of “replacement cost recovered” under its (separate) contract with

Bedford Hospitality. But even assuming that the appraisal process was proper under

the Colony insurance policy, the appraisal award would have been binding only

between Colony and Bedford Hospitality and only as to the value of covered property

or the amount of covered loss. See Ortiz v. State Farm Lloyds, No. 17-1048,

2019 WL 2710032, at *4 (Tex. June 28, 2019) (reciting that “appraisal awards do not

serve to establish a party’s liability (or lack thereof)”; thus, “[i]t simply does not follow

that an appraisal award demonstrates that an insurer breached by failing to pay the


value of five specific categories of damages––structure, contents, business
interruption, loss of use, and extra expense, plus the applicable sales tax.”
       12
         CCPA cites authority governing an appraisal award’s effect as between the
insured and insurer, but nothing holding that an appraisal award inures to a third
party’s or public adjuster’s benefit. Here, the adjusting contract is silent about the
effect of any appraisal determination between Bedford Hospitality and Colony.


                                             12
covered loss”). In the policy and in its litigation with Bedford Hospitality, Colony

expressly reserved its right to deny the claim despite the existence of an appraisal

award. Thus, neither the existence of an appraisal nor the fact that Bedford

Hospitality advocated that it was entitled to recover under its insurance policy for at

least that amount determines whether Bedford Hospitality actually “recovered”

amounts attributable to the types of losses determined by the appraisal panel. 13

      CCPA also argues that because Bedford Hospitality settled for more than the

appraisal amounts, the settlement amount necessarily included amounts attributable to

the appraisal. But that is not necessarily so. Colony adamantly disclaimed any liability

under the policy, and the settlement agreement’s recitals pointed to the need to

prevent spending further time and expense in litigation. 14 Colony might have used the

appraisal amount to evaluate its potential exposure if the case were to go to trial, but

the fact that it settled for more than the appraisal determination is not conclusive

evidence that the total settlement amount included payment for the delineated types

      13
         Likewise, Bedford Hospitality did not judicially admit that CCPA had met its
burden to prove that with respect to the adjusting contract, Bedford Hospitality had
actually recovered (as opposed to merely sought) amounts attributable to structural
loss, personal-property loss, business-interruption loss, lost profits, and extra expense.
See Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001)
(acknowledging binding effect of “clear and unequivocal” assertion of fact not
pleaded in the alternative).
      14
         Bedford Hospitality’s principal testified that Bedford Hospitality had
“suffered losses . . . of over $10 million,” that the litigation with Colony “was just
settled so everybody could move on,” and that the “settlement had nothing to do with
the appraisal award [and] . . . nothing to do with the appraisal.”


                                           13
of covered loss under the policy that were needed to trigger CCPA’s contractual right

to payment.

       Because we hold that the trial court correctly interpreted the contract as

requiring a recovery for certain categories of covered claims under the policy––and

because the settlement agreement indicates that it did not include amounts due under

the policy––we overrule CCPA’s first and second issues. Moreover, because our

disposition of these two issues forecloses CCPA’s entitlement to relief even if we were

to sustain its third issue, we need not address it. See Tex. R. App. P. 47.1.

                                  IV.    Burden of Proof

       CCPA asserts in its fourth issue that the trial court should have placed on

Bedford Hospitality the burden of proving the amounts composing the settlement-

agreement total rather than requiring CCPA to prove that the Bedford Hospitality–

Colony settlement agreement evinced the amounts required for CCPA to prove its

commission under the adjusting contract. But when multiple parties claim

interpleaded funds, each claimant must prove its own claim to the funds and its

“relative priority as to all other claimants.” Branch v. Monumental Life Ins., 422 S.W.3d

919, 923 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (quoting Northshore Bank v.

Commercial Credit Corp., 668 S.W.2d 787, 789 (Tex. App.—Houston [14th Dist.] 1984,

writ ref’d n.r.e.)); McBryde v. Curry, 914 S.W.2d 616, 620 (Tex. App.––Texarkana 1995,

writ denied). Additionally, as a breach-of-contract plaintiff, it was on CCPA to prove

the damage amount for a breach. Dan Dilts Constr., Inc. v. Weeks, No. 02-17-00373-CV,

                                            14
2018 WL 5668530, at *4–5 (Tex. App.—Fort Worth Nov. 1, 2018, no pet.) (mem.

op.) (holding that independent adjuster had to prove the amount of the insured’s

recovery as defined in the adjusting contract so that the court could calculate the

adjuster’s commission).

       CCPA additionally contends that all settling litigants must, in their settlement

agreements, segregate and allocate specific amounts to each category of damages at

issue in the suit, citing Mobil Oil Co. v. Ellender, 968 S.W.2d 917, 928 (Tex. 1998), and

its progeny. But those cases are inapposite: they relate to the burden to allocate

settlement amounts among multiple litigants for purposes of receiving a future

settlement credit. See Tex. Civ. Prac. & Rem. Code Ann. §§ 33.001–.004; Mobil Oil,

968 S.W.2d at 928; see also In re Xerox Corp., 555 S.W.3d 518, 523 (Tex. 2018) (orig.

proceeding) (“Chapter 33 requires the trier of fact to determine the percentage of

responsibility of each claimant, defendant, settling person, and any responsible third

party who has been designated in compliance with the statute.”). CCPA has provided

no authority, nor have we found any, that obligates an insured, when settling all claims

against its insurer, to segregate and allocate specific amounts to each category of

damages at issue simply because the insured had contracted with a public adjuster

(especially when the adjusting contract did not obligate the insured to do so).

       CCPA also relies on authority holding that the insured has the burden of proof

to invalidate the appraisal, but this authority is also inapposite because it applies solely

to suits between the insured and insurer. See, e.g., Franco v. Slavonic Mut. Fire Ins. Ass’n,

                                             15
154 S.W.3d 777, 786 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (“The effect of

an appraisal provision is to estop one party from contesting the issue of damages in a

suit on the insurance contract, leaving only the question of liability for the court.”

(emphasis added)).

      Finally, CCPA argues that Bedford Hospitality should not have been allowed to

settle with Colony in a way that kept CCPA from proving its entitlement to recover

under the contract; according to CCPA, Bedford Hospitality “attempted to

circumvent this contractual obligation” by entering into the unsegregated settlement.

CCPA warns that saddling public adjusters with this “impossible burden” allows an

insured client such as Bedford Hospitality to intentionally avoid its obligations under

the adjusting contract.

      But it was Conradt who provided Bedford Hospitality with the adjusting

contract for CCPA; he drafted it, and he had his counsel review it.15 Although

Conradt testified that he understood the contract’s payment provision to mean that

Bedford Hospitality was to “pay [CCPA] ten percent of what [Bedford Hospitality]

got over $130,000,” that is not how the contract was written. The contract did not

obligate Bedford Hospitality to slice and dice any settlement it might enter into with

Colony so that particular amounts could be tied to the language of CCPA’s contract.

      15
        Conradt equivocated when asked whether he had submitted the contract form
to the commissioner of insurance as Texas law requires. See Tex. Ins. Code
Ann. § 4102.103(a) (requiring public adjuster to enter into written contract with
insured “on a form approved by the commissioner” of insurance).


                                          16
CCPA’s proposed solution—that once it proved that Bedford Hospitality had settled

the claim for some nonspecific amount, the burden should have shifted to Bedford

Hospitality to segregate and allocate the amount represented by the settlement––

would not only require us to impermissibly rewrite the contract, it would improperly

place the burden of proof on a defendant accused of contractual breach to disprove

that the plaintiff suffered damages.

      We therefore overrule CCPA’s fourth issue.

                                       V. Conclusion

      Because we have overruled CCPA’s dispositive issues, we affirm the trial

court’s judgment.




                                                       /s/ Elizabeth Kerr
                                                       Elizabeth Kerr
                                                       Justice

Delivered: October 31, 2019




                                           17
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