State Farm Lloyds v. Nicolau

in which CORNYN, ENOCH, BAKER and ABBOTT, Justices, join.

This cause presents several questions about an insurer’s liability for extracontrac-tual damages. The court of appeals upheld jury findings of bad faith and malice, allowing the insureds to recover both mental anguish and exemplary damages. 869 S.W.2d 543. We agree that some evidence supports the jury’s finding that the insurer violated its duty of good faith and fair dealing. In addition, we hold that there is no evidence that the insurer acted unconscionably or with malice. Because the latter holding eliminates the Nicolaus’ recovery…