Judge Melody Wilkinson of Tarrant County’s 17th District Court has signed a $265,866 final judgment in favor of plaintiff Judy Kennedy — more than five times the amount Kennedy originally sought from her insurer, Fire Insurance Exchange.

The July 22 judgment caps a legal battle that began in 2007 for Stephen W. Boyd, whose client, Kennedy, had asked Fire Insurance Exchange to pay her $42,000 for water damages she alleged were covered under her homeowner’s policy. Given the 18 percent annual prejudgment interest, the four-year-long case will pay off for Kennedy. “Where else can you make that kind of return these days?” Boyd jokes.

Over the past decade, Boyd of Stephen W. Boyd & Associates in San Antonio, says he has tried hundreds of water-damage claims against residential insurance companies. But he says such claims, once his bread and butter, are few and far between these days. About six years ago, in response to an increased number of costly mold-related claims, insurance companies began barring water damage coverage in their homeowners’ policies, Boyd notes. “This may be the last one,” he says of Kennedy’s case.

In her Oct. 6, 2009, third amended complaint, Kennedy alleged she had reported structural and cosmetic water damage to Fire Insurance Exchange agents, who then “failed to answer any of Plaintiff’s questions truthfully, and instead deliberately misled her and misrepresented facts to her.” Kennedy sued the insurer, alleging breach of contract and violations of the Texas Insurance Code and the Deceptive Trade Practices Act, among other things.

In its Dec. 16, 2010, fourth amended original answer, Fire Insurance Exchange denied the allegations and alleged Kennedy’s claims were not covered under her policy and that she had failed to comply with the after-loss duties required in her policy.

The first trial in Judy Kennedy v. Fire Insurance Exchange ended in a mistrial, but the second trial ended June 16 with a jury verdict in Kennedy’s favor. In her final judgment, Wilkinson awarded Kennedy $42,000 in damages for Fire Insurance Exchange’s failure to comply with the terms of the contract; $42,000 in damages for the defendant’s knowing violation of Chapter 541 of the Texas Insurance Code (which establishes unfair methods of competition); $10,000 for the defendant’s breach of good faith and fair dealing; $12,566 in prejudgment interest; and $129,320 in attorney’s fees and up to another $30,000 for appellate legal fees.

Steven A. Springer of Dallas’ Fee, Smith, Sharp & Vitullo, who represents Fire Insurance Exchange, says his client plans to appeal the judgment on the basis that the court allowed the jury to hear evidence of mold damage, which was not covered by the policy.

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