Full opinion text
OPINION GRANT, Justice. STATEMENT OF THE CASE Trial Results Crum & Forster, Inc.,- International Insurance Company, United States Fire Insurance Company, North River Insurance Company, and Commonwealth Lloyd’s Insurance Company (the appellants), appeal from a judgment favoring Monsanto Company (Monsanto), awarding Monsanto actual and treble damages, prejudgment interest, and attorneys’ fees in the total amount of $71,048,-070.22, as well as costs and post-judgment interest. Monsanto sued the appellant insurance companies alleging that they had wrongfully obtained and manipulated a financial interest in the Slaughter litigation waged against their insured, Monsanto. In its brief, United States Fire aptly characterized this suit as being “litigation about litigation.” The Parties Monsanto contends that the appellant insurance companies are in reality paper corporations wholly owned and controlled by the Crum & Forster corporation. Monsanto further contends that the appellants took over the plaintiffs’ case in the Slaughter litigation principally by way of a series of Mary Carter agreements and, thereby, violated their legal duty and public policy in attempting to gain financially by suing its own insured. The insurance companies take the position that they are each separate corporate entities, and thus the fact that two of these insurance companies, United States Fire and International, were insurers of Monsanto did not prevent the other companies from obtaining an interest in the plaintiffs’ case against Monsanto. The companies also contend that they had a duty to protect the interests of then* insured, Farm & Home, who actually entered into the Mary Carter agreements in the Slaughter case. Crum & Forster, Inc. is a holding company for several insurance companies. Crum & Forster is not an insurance company and therefore cannot issue insurance policies, nor does it handle subrogation matters or place reinsurance for any of its subsidiaries. Under the Insurance Holding Company System Regulatory Act, insurance companies may share common facilities, management, services, and employees, but they must also maintain separate operating identities. Crum & Forster itself owns 100% of the stock of United States Fire, International, and North River, and another wholly-owned subsidiary of Crum & Forster owns 100% of the stock of Commonwealth Lloyd’s. Monsanto purchased several liability policies from subsidiaries of Crum & Forster, including excess general liability policies from United States Fire and International and environmental impairment liability policies (EIL policies) from International. As a result of the various phases of the Brio Site litigation (discussed in the next section), Monsanto made claims on these policies, but the Crum & Forster subsidiaries rejected all of the claims. United States Fire, North River, and Commonwealth Lloyd’s insured Farm & Home, a codefendant of Monsanto in the Slaughter litigation, under both primary and umbrella policies. The Brio Site During the 1970s, Farm & Home purchased a large tract of land in Harris County and began developing a residential subdivision. Adjoining this property was a chemical reprocessing plant known as the Brio Site that had been utilized by a large number chemical corporations, including Monsanto, since the 1950s. Farm & Home sold lots in the subdivision to various builders who built and sold homes there beginning in 1980. Soon after the Environmental Protection Agency designated the Brio Site as a Superfund site in 1984, three groups of homeowners brought lawsuits against the builders and Farm & Home alleging fraud and deceptive trade practices in an attempt to recover damages for property devaluation and for mental anguish caused by the loss of value in their homes. In chronological order, these suits are known as the Powell suit, the Jones suit, and the Slaughter suit. In each of these cases, the builders and Farm & Home filed third-party actions against the owners of the Brio Site and the more than forty chemical companies that had used the site. The builders also filed cross-claims against Farm & Home for its alleged failure to disclose its knowledge regarding hazardous wastes stored at the Brio Site. The builders also sued Farm & Home for property damage in the Powell case. The jury came back with a verdict that Farm & Home was liable to the builders for the damages, but before the damages phase of the trial could commence, the builders settled with Farm & Home. The Missouri Settlement In 1986, United States Fire, North River, and Commonwealth Lloyd’s brought a declaratory judgment action in a Missouri federal court against its insured, Farm & Home, concerning a dispute over the extent of the responsibility owed by the insurers to pay for Farm & Home’s past and potential future liability in the Brio Site litigation. In 1987, the parties in that dispute settled their differences. Farm & Home agreed to pay its insurers $12.5 million, and the insurers agreed to indemnify Farm & Home in all phases of the Brio Site litigation. The settlement also reaffirmed the insurers’ subrogation rights, although the subrogation interest was limited to the total amount that the insurers had paid or would pay on behalf of Farm & Home in the litigation. After the resolution of the Missouri lawsuit, the insurers provided Farm & Home with a defense in the Brio Site cases utilizing the same law firm which had represented the insurers in the Missouri lawsuit. As a result of the Missouri settlement, Farm & Home no longer had any direct interest in the Brio Site litigation because the Crum & Forster subsidiaries had stepped into its place. In the settlement with the builders in the Powell case, Farm & Home’s insurers, acting in accordance with their subrogation rights, paid over $20 million to the builders and also agreed to indemnify them for all claims made against them in the Brio Site litigation. Thus, the Crum & Forster subsidiary insurance companies assumed all exposure for claims asserted against either the builders or Farm & Home in all pending and future Brio Site cases. The Slaughter Lawsuit In the Slaughter case, which began as an intervention in the Jones case but was severed, Farm & Home signed three Mary Carter agreements, one for each of three groups of plaintiffs, under which the plaintiffs released their claims against Farm & Home and Farm & Home guaranteed the plaintiffs a minimum recovery of $10,320,000. Additionally, Farm & Home gained the right to negotiate settlements with the remaining defendants, provided such settlements were reasonable. Farm & Home’s board of directors reviewed and, at least nominally, approved the agreements, and its insurers funded the agreements. Under the terms of these Mary Carter agreements, any recovery from the remaining defendants would be distributed, with the first $17.2 million going to the plaintiff homeowners, thus reducing Farm & Home’s guarantee amount to zero; the next $3.1 million would go to Farm & Home, i.e., its insurers, to pay for legal expenses, and any additional amounts would be split evenly between the plaintiffs and Farm & Home (its insurers). After the signing of the Mary Carter agreements, the attorneys representing Farm & Home began working with the plaintiffs’ attorneys in pursuing the plaintiffs’ claims. The focus of the plaintiffs’ case then switched from the liability of Farm & Home and the builders to the liability of the chemical companies that had used the Brio Site. Appellants contend that discovery had begun to reveal that Monsanto was the company primarily responsible for the Brio Site hazards. The plaintiffs’ case also began to focus more heavily on the personal injuries allegedly suffered by the homeowners, which could be more lucrative than the property damage claims. United States Fire and International refused to pay on Brio Site related claims under any of the insurance policies that they issued to Monsanto. From October 1989 to February 1990, the Slaughter case was tried to a jury, which returned a take-nothing verdict in favor of Monsanto. The Jury Verdict and Judgment in the Present Case Before the trial of the Slaughter case commenced, Monsanto brought suit in the federal district court in Dallas against the appellants in the present case, alleging the same basic causes of action. Then, during the trial of the Slaughter case, Monsanto agreed to a voluntary dismissal of the federal action and, in the meantime, it filed the action which is now before this Court on appeal. Monsanto sued the appellants in Harrison County alleging a breach of the duty of good faith and fair dealing and violations of Article 21.21 of the Texas Insurance Code. Monsanto originally included Farm & Home as a defendant but later nonsuited them without receiving consideration. Monsanto contended that Crum & Forster and its subsidiaries wrongfully obtained a financial interest in and direct control of litigation waged against their insured, Monsanto, thus violating Article 21.21 and breaching the common-law duty of good faith and fair dealing. At trial, Monsanto offered evidence to establish that Crum & Forster and its subsidiaries had gained control of the Slaughter plaintiffs’ case in an attempt to recoup from Monsanto all of Crum & Forster’s losses in past Brio Site litigation. The jury charge consisted of several groups of questions: Questions 1 through 4 dealt with allegations of misrepresentation and improper claims handling on the part of International with respect to a policy it issued to Monsanto; Questions 5 through 7 dealt with alleged Deceptive Trade Prae-tices-Consumer Protection Act and Insurance Code violations of all five defendants; Question 8 asked whether the insurance companies pursued a joint venture; Question 9 asked whether the corporate identities of the defendants should be disregarded; and Questions 10 through 14 dealt with an alleged breach of the duty of good faith and fair dealing. The jury found in favor of Monsanto on all issues of liability except in answering Question 5(b), and the trial court entered judgment based on the jury’s answers to Questions 5 through 9, i.e., the violations of Article 21.21. The final judgment awarded Monsanto actual and treble damages, prejudgment interest, and attorneys’ fees in the total amount of $71,048,070.22, as well as costs and post-judgment interest. ISSUES ON APPEAL Appellants contend that the judgment of the trial court is in error because (1) Article 21.21 of the Texas Insurance Code does not create a private cause of action through its incorporation of Section 17.46(a) of the DTP A; (2) Monsanto lacked standing to sue; (3) no actionable claim exists for the conduct alleged in jury Questions 5(a) and 5(c); (4) the evidence is legally and factually insufficient to support the finding of liability, of knowing and deceptive conduct, and of the amount of actual damages; (5) the trial court erred in failing to instruct the jury on mitigation; (6) the trial court made numerous evi-dentiary errors, including admitting legal conclusions, admitting evidence that Monsanto would place punitive damages in an environmental trust fund, limiting redirect examination, and excluding evidence of motive, good faith, and Monsanto’s motion for partial summary judgment in the Slaughter case; (7) the appellants were deprived of a fair trial because of the trial court’s inconsistent evi-dentiary rulings; (8) the penalty damages violate the due process guarantees of the United States and Texas Constitutions; (9) jury Questions (and Instructions) 8 on joint venture and 9 on piercing the corporate veils incorrectly stated the law; (10) the trial court erred in letting Monsanto amend its pleadings to include joint venture; (11) the evidence is legally and factually insufficient to support the submission of either Question 8 or Question 9; (12) the court took the jury’s answers to Questions 8 and 9 out of context in forming the judgment; (13) the jury’s answers to Questions 8 and 9 were so vague as to be meaningless and therefore could not be a basis for a judgment against International; (14) the judgment holds International vicariously liable for punitive damages in violation of Texas and federal law; (15) the jury’s responses to Questions 8 and 9 are in irreconcilable conflict; (16) the trial court erred in treating Commonwealth Lloyd’s as a corporation; (17) the court improperly limited International’s closing argument; (18) the trial court improperly awarded attorneys’ fees; and (19) the trial court incorrectly awarded, calculated, and trebled prejudgment interest. Although three separate initial briefs have been filed on behalf of the appellants, each of these briefs adopts the points of error and arguments made in the other two. We shall, therefore, discuss all of the points of error as they apply to all of the appellants. LIABILITY Reaching Unlisted Section 17.46 DTPA Practices Through Article 21.21 of the Insurance Code Monsanto is not a consumer under the DTPA guidelines, and therefore it did not plead directly for relief under Section 17.50 of the DTPA. It instead sought to reach Section 17.46 of the DTPA through Article 21.21, Section 16(a) of the Insurance Code: Any person who has sustained actual damages as a result of another’s engaging in an act or practice declared in Section 4 of this Article or in rules or regulations lawfully adopted by the Board under this Article to be unfair methods of competition or unfair or deceptive acts or practices in the business of insurance or in any practice defined by Section 17.46 of the Business & Commerce Code, as amended, as an unlawful deceptive trade or practice may maintain an action against the person or persons engaging in such acts or practices. Tex.Ins.Code Ann. art. 21.21 (Vernon Supp. 1994). In Vail v. Texas Farm Bureau Mutual Insurance Co., 754 S.W.2d 129 (Tex.1988), the Texas Supreme Court held that Vail could reach Article 21.21, Section 16 of the Insurance Code through Section 17.50(a)(4) of the DTPA. The Supreme Court also declared in Vail that Section 16 of Article 21.21 of the Insurance Code incorporates any unlisted practice that is determined to be false, misleading, or deceptive, which includes any listed or unlisted violation of Section 17.46 of the DTPA. In other words, in Vail, the plaintiff went, from Section 17.50(a)(4) of the DTPA to Article 21.21, Section 16 of the Insurance Code and then back to Section 17.46(a) of the DTPA. In the present case, Monsanto is attempting to go directly from Article 21.21, Section 16 to Section 17.46(a). In the case of Allstate Insurance Co. v. Watson, 876 S.W.2d 145 (Tex.1994), the Supreme Court stated that Article 21.21, Section 16 provides a private cause of action only for any practice specifically defined by Section 17.46 of the DTPA as an unlawful, deceptive trade practice. The Supreme Court then observed that unfair claims settlement practices are not among the listed items defined by Section 17.46 as unlawful deceptive trade practices. The Supreme Court then asserted that While section 17.46 may not be a complete list of unlawful deceptive trade practices for purposes of asserting claims under the DTPA, art. 21.21 expressly makes actionable those acts or practices that, in fact, are defined in section 17.46 as unlawful deceptive trade practices. Id. at 149 (emphasis added). The court in Watson then added that Vail remains the law as to claims for alleged unfair settlement practices brought by insureds against their insurers. This language must be read in light of the fact that the Watson case does not involve an insurer-insured relationship but is a case in which the court held that a third-party claimant does not have a direct cause of action against an insurer for unfair claims settlement practices under Section 16 of Article 21.21. Watson is a case in which the plaintiff sought to bring an action directly under the Insurance Code and also to reach the unfair claims settlement practice through the DTPA Vail was not an action seeking to reach the DTPA through the Insurance Code but was an action seeking to reach the Insurance Code through the language of the DTPA: [T]he use or employment by any person of an act or practice in violation of Article 21.21, Texas Insurance Code, as amended, or rules or regulations issued by the State Board of Insurance under Article 21.21, Texas Insurance Code, as amended. TexBus. & Com.CodeAnn. § 17.50(a)(4) (Vernon 1987). The language referring to Vail suggests that the holding in Watson is limited to third-party claimants and would not apply to the “special relationship between an insured and the insurer.” The court in Watson goes on to say that nothing in Vail suggests that the extra-contraetual obligation, rights, and remedies of Article 21.21, Section 16 extend to third-party claimants. Based upon the references to Vail, Watson must be viewed as a case determining that an uninsured has no standing for relief under the Insurance Code. The case of Spencer v. Eagle Star Insurance Co. of America, 876 S.W.2d 154 (Tex.1994), did involve an insurer-insured relationship. Spencer, the insured, had recovered from Eagle Star for the company’s “unfair practice in the business of insurance,” which was defined for the jury as “any act or series of acts which is arbitrary, without justification, or takes advantage of a person to the extent that an unjust or inequitable result is obtained.” In Spencer, the Texas Supreme Court found that Article 21.21, Section 16(a) by its express terms did not refer to every such practice imaginable but only to those specified by certain other statutes and regulations and that Article 21.21, Section 4 declares certain listed acts to be unfair methods of competition and unfair and deceptive acts or practices in the business of insurance. Thé Supreme Court in Spencer seems to negate any deceptive practices that are not specified by other statutes or regulations, but then the Court sends the case back for a new-trial because the trial court tried to follow the statute. The Court said that the issue addressed was whether error in the instruction accompanying a jury question on liability for “unfair practice in the business of insurance” made the question immaterial or merely defective. According to the court of appeals’ opinion in Spencer v. Eagle Star Ins. Co., 780 S.W.2d 837 (Tex.App.-Austin 1989), rev’d, 876 S.W.2d 154 the Spencers took the position that they had established liability under three causes of action recognized in Vail: (1) unfair settlement practices under Article 21.21-2; (2) breach of the duty of good faith and fair dealing as an unlisted unfair practice under Board Order 41060 (formerly Board Order 18663); and (3) failure to settle an unlisted deceptive trade practice. All three of these legal theories were disallowed in Watson. If these theories are not available to an insured, then why did the Supreme Court remand the Spencer case for a new trial? If none of these theories are actionable, there would be nothing left to try. The dicta in both Watson and Spencer indicates that the Texas Supreme Court does not interpret the statutes to allow an unlisted provision of the DTPA to be reached through Article 21.21 of the Insurance Code. The holding in Spencer is confusing because the case is remanded for a new trial on some unknown theory. This is also dicta in Watson, which becomes enigmatic when the dicta is interspersed among references applauding Vail as being in all things proper. We shall follow the ratio decidendi of Vail until the Texas Supreme Court tells us that it is not to be followed in a case involving an insured. If we are wrong, the Texas Supreme Court has never hesitated to so state. (Case cites are too numerous to mention and are therefore omitted.) These points of error are overruled. The Claims Under Jury Questions 5(a) and 5(c) The appellants contend that no actionable claims exist for the conduct alleged in jury Questions 5(a) and 5(c). The jury found “yes” to the following: QUESTION 5: Do you find that Defendants United States Fire Insurance Company, Commonwealth Lloyds Insurance Company, and North River Insurance Company engaged in any of the following conduct in connection with the Slaughter litigation and that such conduct was a deceptive act or practice in the business of insurance: (a) Attempting to recover money for Defendants from Monsanto by acquiring a financial interest in, and directing the prosecution of, claims that were being asserted against Monsanto by persons who were not policyholders of Defendants. (c) Directing the prosecution of the Slaughter case in an attempt to adversely affect or defeat Monsanto’s requests for reimbursement under the EIL insurance policy. Article 21.21, Section 16 of the Insurance Code permits recovery by any person who has been injured by another’s engaging in (1) any of the practices declared to be unfair or deceptive by Section 4 of Article 21.21; (2) conduct defined in rules or regulations lawfully adopted by the Board of Insurance under Article 21.21 as unfair methods of competition and unfair or deceptive acts or practices in the business of insurance; or (3) any practice defined by Section 17.46 of the DTPA, as amended, as an unlawful deceptive trade practice. As discussed earlier, the practice involved in the present case is not specifically defined by Section 17.46 of the Business and Commerce Code as an unlawful deceptive trade practice. Neither is this practice declared to be unfair or deceptive by Section 4 of Article 21.21 of the Insurance Code. If, however, the unlisted practices of the DTPA may be reached, then the conduct qualifies. The Texas Department of Insurance promulgated a rule that [(Irrespective of the fact that the improper trade practice is not defined in any other section of these rules and regulations, no person shall engage in this state in any trade practice which is determined pursuant by law to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance. 28 TexAdmin.Code § 21.3(b) (West 1992) (Tex.Dept. of Ins., Unfair Trade Practices Prohibited). The practice involved in the present case has not been determined pursuant to statute to be an unfair method of competition or a deceptive act or practice in the business of insurance, but the practice covered by jury Question 5(a) has been found to be against public policy and as such could be considered an unfair act or practice in the business of insurance. In the case of Beech Aircraft Corp. v. Jinkins, the Supreme Court of Texas clearly set forth the rule that defendants who settle a tort plaintiffs entire claim could not preserve a right to contribution from other alleged tortfeasors who did not participate in the settlement. Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19 (Tex.1987); see also International Proteins Corp. v. Balstom-Purina Co., 744 S.W.2d 932 (Tex.1988). The doctrine that a settling joint tort-feasor may not preserve contribution rights or take assignment of a plaintiffs cause of action to seek reimbursement from nonset-tling tortfeasors applies in the business of insurance — and specifically to liability insurance carriers. Insurance Co. of North America v. Security Ins. Co., 790 S.W.2d 407 (Tex.App.-Houston [1st Dist.] 1990, no writ) (applies to “a settling tortfeasor and those in privity with it”). The appellants correctly contend that they were not all involved in all the agreements in question and that no assignment of the plaintiffs’ causes of action was made to each of them. The Slaughter plaintiffs did retain half of the cause of action so that the three companies involved would not get the entire recovery made on behalf of the plaintiffs. While it is true that this suit was pursued under the name of Farm & Home, in accordance with the Missouri settlement agreement, the three insurance companies would receive any recovery in lieu of Farm & Home. This arrangement violates the principle set forth in the International Proteins Corp. and Beech Aircraft Corp. cases. As the court said in the Beech Aircraft case, “the settling defendant’s unusual posture as surrogate plaintiff, co-defendant and cross-plaintiff will confuse the jury and possibly prejudice the remaining parties.” In the present case, the problem is compounded because the jury is never allowed to know that the appellants are in effect seeking a recovery in the case. In the above cases, the violation of public policy was used as a defense in the action in which the settling joint tortfeasor pursued the plaintiffs cause of action. We find that these cases nevertheless fulfill the requirement of establishing an unfair act in the business of insurance. Thus, if Monsanto was an insured party, it had a cause of action for the conduct set forth in jury Question 5(a). If Monsanto was an insured party, it was owed a duty of good faith and fair dealing. Because recovery under the finding of good faith and fair dealing was not briefed by the parties as an alternative theory found by the jury, we do not address that recovery in this opinion. But it is necessary for us to determine if a duty was owed to Monsanto as an insured in order to determine if there has been a deceptive trade practice. If the appellant insurers owed a duty to Monsanto, an attempt by them to avoid policy coverage by directing and manipulating the prosecution in the Slaughter case would constitute a deceptive trade practice while involved in the business of insurance. The Texas Supreme Court held in Vail that failure of an insurance company to exercise good faith suffices as a requisite determination of an unlisted deceptive trade practice. The appellants additionally contend that the conduct inquired into in Questions 5(a) and 5(c) does not constitute “trade or commerce” under DTPA Section 17.45(6), and thus the alleged conduct cannot violate that section. They point out that DTPA Section 17.45(6) defines the phrase “trade or commerce” as “the advertising, offering for sale, sale, lease, or distribution of any good or service ... and any other article, commodity, or thing of value.” The appellants assert that post-sale conduct of an insurer does not constitute actionable conduct under Section 17.46, citing Rosell v. Farmers Texas County Mut. Ins. Co., 642 S.W.2d 278 (Tex. App.—Texarkana 1982, no writ) (post-sale conduct of insurer held not actionable under DTPA). We disagree. The fact that the defendant’s misrepresentations, breaches, or unconscionable acts occur after the sale of the goods or services will not prevent the plaintiff from being a consumer for purposes of the DTPA. Flenniken v. Longview Bank and Trust Co., 661 S.W.2d 705 (Tex.1983); Hines v. Evergreen Cemetery Assoc., 865 S.W.2d 266 (Tex.App.—Texarkana 1993, no writ). Monsanto’s cause of action in the present suit is based on the incorporation of DTPA Section 17.46 in Article 21.21, Section 16 of the Insurance Code. In Vail, 754 S.W.2d at 135-36, the Texas Supreme Court held that the Vails stated and proved a cause of action for unfair claims settlement practices on three alternative grounds, one of which was through Article 21.21, Section 16 incorporating DTPA Section 17.46. See also Aetna Cas. and Sur. Co. v. Marshall, 724 S.W.2d 770 (Tex.1987) (holding that a cause of action existed for workers’ compensation insurer’s failure to comply with settlement agreement under Article 21.21 and Section 17.46 even though plaintiff was not a consumer under the DTPA). In the next section, we examine whether there was an insurer-insured relationship, and if so, if a duty arose as a result of that relationship, and whether there was evidence showing that such a duty was violated. An Insured Party? To recover under the Insurance Code, Monsanto must show that there was a duty created by an insured-insurer relationship. Allstate Ins. Co. v. Watson, 876 S.W.2d 145 (Tex.1994). The mere fact that there was some type of insurance coverage does not create a duty if the insurance coverage is totally unrelated to the occurrence in question. There must be a connection between the policy coverage and the occurrence in question. CNA Ins. Co. v. Scheffey, 828 S.W.2d 785 (Tex.App.—Texarkana 1992, writ denied); Chaffin v. Transamerican Ins. Co., 731 S.W.2d 728 (Tex.App.—Houston [14th Dist.] 1987, writ ref'd n.r.e.). Monsanto cites Viles v. Security National Insurance Co., 788 S.W.2d 566 (Tex.1990), for the proposition that policy coverage is not required. In Viles, the homeowner’s action for bad faith was not barred by the failure to timely file a proof of loss form as required by the policy. It was, nevertheless, the existence of the policy that established the “special relationship” between the insured and the insurer imposing a duty on the insurer. Monsanto had environmental impairment liability (EIL) policies with International Insurance Company. These policies covered liability for emission, discharge, dispersal, disposal, seepage, release, or escape of any irritant, contaminant, or pollutant. They covered personal injuries, property damage, and damage caused by environmental impairment in connection with the insured’s business. The policy further indemnified for related cleanup and litigation costs. The policies covered $20 million per claim with $40 million aggregate, and also contained a $1 million deductible per claim per provision. The insurer was entitled to take over and conduct the defense of any claim but was not required to do so under the terms of the policy. Monsanto also had excess liability insurance policies with International. These policies indemnified Monsanto for losses and expenses exceeding the amounts covered by underlying insurance. One of the policies excluded pollution-related liability. The others did not contain that exclusion. The policy in evidence as Exhibit 3423 covered amounts of liability over $68 million but was limited to $3 million per occurrence and $12 million annual aggregate. The policy in evidence as Exhibit 3426 covered amounts over $80.5 million and was limited to paying up to $7 million per occurrence and $20 million annual aggregate. The policy in evidence as Exhibit 3429 covered amounts over $80 million and paid up to $5 million per occurrence and up to $20 million annual aggregate. The company has no duty to defend under the policies but could cooperate in a defense. The policies provide for the insurer to indemnify the insured for legal expenses, but in the policy marked Exhibit 3429, this is modified to a proportionate share of the expenses. United States Fire Insurance Company issued an excess liability policy to Monsanto covering the net loss in excess of the amount covered by underlying insurance for damages arising out of hazards covered by the underlying insurance. This policy excludes coverage for damages from contamination or pollution that did not occur suddenly or accidentally. The policies covered amounts over $56 million, paying up to $5 million per occurrence and $22 million annual aggregate. The policy contains no duty to defend on the part of United States Fire. The Texas courts follow the allegations-of-complainant rule in determining a duty to defend under liability policies. Feed Store, Inc. v. Reliance Ins. Co., 774 S.W.2d 73 (Tex.App.—Houston [14th Dist.] 1989, writ denied). The Texas Supreme Court has held that the duty to defend is determined solely from the face of the pleadings and without reference to facts outside the pleadings. Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 24-25 (Tex.1965). Although, as we have stated, there was no duty to defend under the liability policies involved in this case, this rule is appropriate for determining if other duties of the insurer are triggered by the litigation filed against the insured. The allegations-of-complainant rule means that, by looking at the pleadings against the insured, a determination can be made whether these allegations cover an area for which the insured has coverage. The insured does not have to wait until there is a judgment against it to determine whether a duty is owed by the insurance carrier. (Indeed in the present case, the underlying trial found no damages against Monsanto.) In the underlying suit, there were numerous plaintiffs who sought to recover $500,000 per plaintiff couple and $400,000 per single plaintiff, plus $375 million in the aggregate for punitive damages. There is no question that under the terms of these policies, the excess amounts could be reached or the deductible could be satisfied. The nature of the damages alleged was from dumped or spilled hazardous chemicals. There was potential liability coverage for International and United States Fire in the Slaughter lawsuit, and thus, a duty was owed to Monsanto based upon the insurer-insured relationship. In an article entitled Insurance Law (R. Brent Cooper & Michael W. Huddleston, Insurance Law, 44 Sw.L.J. 329, 354-55 (1990)), it is suggested that, when an excess carrier has no duty to defend, there can be no duty of good faith and fair dealing that would support a tort action against the excess carrier, citing Harville v. Twin City Fire Ins. Co., 885 F.2d 276 (5th Cir.1989). In the Harville case, the court found that the only allegation of a lack of good faith and fair dealing was the failure to defend, and under the terms of the policy, the excess insurance carrier had no duty to defend. This case does not stand for the proposition that there are not other duties owed by an excess carrier without a duty to defend, and among these duties is the duty to refrain from activities inconsistent with its relationship with the insured. When a party makes a claim under its own liability policy, that claim is not for the payment of funds but, pursuant to 28 Tex.Admin.Code § 21.201 (West 1988) (Tex. Dept, of Ins., Unfair Claims Settlement Practices Rules), that term also includes the providing of services under the terms of a policy. See R. Brent Cooper & Michael W. Huddleston, Insurance Law, 46 SMU L.Rev. 1541, 1543-44 (1993). These services might include a defense in the suit if the policy so provided. It would certainly include the duty of good faith and fair dealing as an insurer under the policy and a duty to refrain from practices that would be against public policy by the insurance carrier. We find that International and United States Fire owed a duty to Monsanto as insurers. This gave Monsanto standing as an insured under the Insurance Code. To what extent this duty applied to the other appellants will be discussed under “Joint Ventures and Disregarding the Corporate Identities.” SUFFICIENCY OF THE EVIDENCE Standard of Review The appellants contend that the evidence is legally and factually insufficient to support the jury’s answers. In reviewing a legal sufficiency point of error, the court should examine only the evidence and inferences that support the jury’s finding and it should disregard all evidence and inferences to the contrary. Larson v. Cook Consultants, Inc., 690 S.W.2d 567 (Tex.1985). If there is any evidence of probative value which supports the finding then the point of error fails. Holley v. Watts, 629 S.W.2d 694 (Tex.1982). When reviewing a factual sufficiency point of error, the court should examine all of the evidence and set aside the finding only if it goes against the overwhelming weight of the evidence so as to be clearly wrong and manifestly unjust. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951). Sufficiency of the Evidence to Support Jury Finding 5(a) The appellants assert that there is no evidence to establish that the three defendants named in Question 5(a) acquired a financial interest in the Slaughter plaintiffs’ claims against Monsanto; in fact, the insurers of Farm & Home were not even parties to the Slaughter Mary Carter agreements. Through the Missouri settlement agreement the insurers became, in effect, substituted for Farm & Home as the real parties in interest in the Brio Site cases. See Stafford Metal Works, Inc. v. Cook Paint & Varnish Co., 418 F.Supp. 56, 58 (N.D.Tex.1976). The insurers negotiated the Slaughter Mary Carter agreements, expressly providing for Farm & Home to have a stake in the recovery of the Slaughter plaintiffs. Thus, the insurers gained a direct financial interest in the Slaughter plaintiffs’ claims because of their subrogation rights. The Slaughter settlement agreements provided that the homeowners release all of their claims against Farm & Home and the builders. The Question 5 defendants, through their insured Farm & Home, guaranteed to pay the homeowners $10,320,000. The insurance companies, through Farm & Home, received the right to share in the homeowners’ recovery from the other defendants, which was ultimately narrowed down to one defendant: Monsanto. The recovery was to be divided upon the following formula: the landowners were to receive the first $17.2 million, thus reducing the guarantee amount to zero. The next $3.1 million would be paid to the insurance companies to reimburse them for legal fees spent in continuing the Slaughter litigation against Monsanto. The insurance companies and the homeowners were to evenly split any money received over $20.3 million. Crum & Forster, through Farm & Home, acquired the sole authority to settle the claims of the Slaughter plaintiffs and, in essence, received the right to control the prosecution for the Slaughter plaintiffs. The appellants take the position that the Slaughter plaintiffs’ claims were neither purchased nor assigned, but in the next sentence of their brief they admit that “these three insurers [United States Fire, North River, and Commonwealth Lloyd’s] might have ultimately benefited from a recovery in Slaughter.” This, the appellants contend, is not evidence that these three insurance companies acquired a financial interest in the Slaughter plaintiffs’ claims. Semantic quibbling aside, the bottom line was that the three insurance companies could profit if the plaintiffs obtained a large judgment against Monsanto. The appellants contend that an insurance company has a right and a duty to pursue and defend claims on behalf of its insured, Farm & Home. The appellants, however, have cited no cases in which the insurer of a defendant in a case had the duty to take the role of a plaintiff who was not its insured to proceed against another defendant. The appellants additionally contend that the jury had no basis on which to find that the Slaughter claims were asserted by persons who were not policyholders of the defendants. The appellants raised the defensive theory below that their actions in the Slaughter litigation was for the purpose of protecting their insured Farm & Home, but we find no place where they have raised a defensive theory that they were also protecting the plaintiffs in that litigation as their insureds. They cannot now argue for the first time on appeal that there was some duty owed to the plaintiffs because of some unmentioned insurance policy coverage. See Perry v. Brooks, 808 S.W.2d 227 (Tex.App.—Houston [14th Dist.] 1991, no writ). Furthermore, the appellants have not explained what duty of protection they owed to the plaintiffs as insureds that required them to reap a benefit from the plaintiffs’ recovery and to take control of the Slaughter litigation. Sufficiency of the Evidence Regarding Control of the Litigation The appellants next attack the sufficiency of the evidence to establish that the three defendants named in jury Question 5, United States Fire, North River, and Commonwealth Lloyd’s, directed the prosecution of the Slaughter plaintiffs’ claims against Monsanto and that the attorneys were in actuality agents of the defendants. The appellants suggest that it was Farm & Home’s attorneys and the attorneys representing the Slaughter plaintiffs who actually conducted the litigation. In the Missouri lawsuit between Farm & Home and its insurers, the defendants named in Question 5 were represented by the Niew-ald-Waldeek law firm. Under the Missouri settlement agreement, the Question 5 defendants had the authority to hire a law firm to handle Farm & Home’s part in the Brio Site litigation, including the negotiation and drafting of the Slaughter Mary Carter agreements. Through Farm & Home’s participation in the Mary Carter agreements, the insurance companies gained the authority to hire counsel to control the plaintiffs’ case, and the Niewald-Waldeek firm was hired for that purpose. For its representation of Farm & Home’s interests, Crum & Forster, the parent corporation of the insurance companies, paid Niewald-Waldeek several million dollars before and after the Mary Carter agreements were signed. Furthermore, Mike Waldeck, a name partner in the firm, testified that Brad Rich, a vice-president of each of the appellants, depended on him to handle and manage the Brio Site litigation. The hiring of attorneys to conduct litigation is a general practice by officers of the corporation. See Bankers’ Trust Co. v. Cooper, Merrill & Lumpkin, 179 S.W. 541 (Tex.Civ.App.—Amarillo 1915, no writ). The evidence shows that Rich made the policy decisions concerning the direction of the litigation, and the attorneys carried out the decisions made by Rich. The Question 5 defendants allowed Rich to supervise the litigation in such a way that, if actual authority did not exist, there was apparent authority.' Furthermore, the evidence shows that the Question 5 defendants were willing to accept the benefits of such representation (see footnote 15) and met the obligations under both the Missouri settlement agreement and the Mary Carter agreements. Lynn Ewing, Farm & Home’s corporate secretary and general counsel, testified that Farm & Home had no choice in accepting Niewald-Waldeck’s representation and had no involvement in directing the firm’s efforts ostensibly undertaken on its behalf. He said that he thought Brad Rich was directing the litigation. He also suggested that after Farm & Home signed the Missouri agreement, it was out of the litigation and Crum & Forster had the right to control Farm & Home’s position on the matter in all respects. As to Farm & Home’s entering into the Mary Carter agreements, Ewing testified that Farm & Home had no involvement in drafting or negotiating the agreements, and Farm & Home was obligated to accept the agreements based on the terms of the Missouri agreement. He further testified that no one at Farm & Home was ever asked for any input or to approve of the Mary Carter agreements. Waldeck testified that Rich participated in the plan to pursue the Mary Carter agreements, and Rich testified that he was involved in the agreement negotiations and approved the agreements before they were signed. The Mary Carter agreements gave Farm & Home, whose ease was being handled by Niewald-Waldeek under the direction of Rich, the sole authority to settle with what they called the “waste-generators,” including Monsanto. Robert Marett, the Slaughter plaintiffs’ original attorney, stated that he understood from Waldeck that the Mary Carter agreements had been entered into because Rich felt it was time to “get off the fence” and take the posture that people were injured in the Southbend subdivision by the Brio Site hazard. Marett further testified that he disagreed with lawyers from Niewald-Waldeek on whether to take the position that Farm & Home did nothing wrong in Southbend and that it was all Monsanto’s fault, but the Niewald-Waldeek firm continued those positions. Marett also stated that after the Mary Carter agreements were signed, Niew-ald-Waldeck prepared all of the amended petitions, took all the depositions, selected and retained all of the expert witnesses, and conducted all of the direct and cross-examinations. Based on all the foregoing, we find that the evidence is sufficient to support the conclusion that agents of the defendants named in Question 5 controlled the prosecution of the Slaughter plaintiffs’ claims against Monsanto. Based on the jury’s findings on joint venture and disregarding the corporate identities, it is clear that the jury believed the evidence that showed that all of the appellants were working in concert and that the acts of Crum & Forster also constituted the acts of the three named insurance companies in Question 5. Thus, the points of error on sufficiency of the evidence regarding the control of the litigation are overruled. The Omission of a Jury Question on Agency The appellants argue under the sufficiency points of error that the trial court erred in not submitting a separate jury question inquiring whether an agency relationship existed between the defendants named in Question 5 and the attorneys who actually conducted the plaintiffs’ case in the Slaughter litigation. But the appellants have waived any error on this issue by failing to raise it in an appropriate point of error on appeal. See Tex.RApp.P. 74; Perry v. Brooks, 808 S.W.2d 227. We do point out that the trial court instructed the jury on agency in both the general instructions to the charge and again in the instructions following Question 5, but the appellants objected to the court’s failure to give the jury a question specifically asking whether an agency relationship existed between the defendants listed in Question 5 and the attorneys controlling the Slaughter litigation. Sufficiency of the Evidence to Support Jury Finding 5(c) The appellants also contend that there is no evidence or insufficient evidence to support the trial court’s submission of or the jury’s response to Question 5(c). Question 5(c) inquired into whether the appellants manipulated the Slaughter litigation in an attempt to defeat Monsanto’s reimbursement rights under the EIL policy issued to Monsanto by International. The appellants contend that there is no evidence to establish that it was the three defendants mentioned in Question 5(c) who pushed the statutory violation claims made by the Slaughter plaintiffs. They contend that the statutory violation claims were first made against Monsanto by the Slaughter plaintiffs nearly two years before the signing of the Mary Carter agreements. The success of Question 5(e), according to the appellants, depended entirely on inferences drawn from the existence of the Mary Carter agreements, but that such inferences are without probative value because the claims predated the agreements. See Briones v. Levine’s Dep’t Store, Inc., 446 S.W.2d 7,10 (Tex.1969). There is ample evidence in the record to support the jury’s answer to Question 5(c). The EIL policy issued by International excludes coverage for liability resulting from “Environmental Impairment arising out of the Insured’s noncomplianee with any valid and applicable statute, regulation or written instruction relating to Environmental Impairment issued by competent authority.” After the defendants named in Question 5 took control of the Slaughter plaintiffs’ case, they amended the pleadings to add a number of claims for alleged violations of various statutes and regulations by Monsanto in its waste disposal practices. The original attorney for the plaintiffs, Robert Marett, testified that he had no intention of asserting statutory violation claims against Monsanto. Monsanto contends that the jury could have easily compared the pleading prepared by Marett with the pleading prepared by Niew-ald-Waldeck, the firm hired by the Question 5 defendants to represent the plaintiffs in Slaughter, and conclude that it was the Question 5 defendants who were behind the addition of the statutory violations in the pleadings. Prior to the takeover of the Brio Site litigation, there was one section (XXVIII) of the plaintiffs’ pleadings in the Slaughter litigation that alleged a violation of statutory duty by the defendants in that litigation. This section alleged that the owners and operators of the Brio Site violated their statutory duty to create, operate, and maintain this waste site in a manner which was safe to the surrounding environments. They further alleged that the waste generators and waste transporters violated their statutory duty to store or dispose of hazardous chemical substances in facilities which were safe to surrounding environments (plaintiffs’ seventh amended original petition). After the Question 5 defendants took over the litigation, they filed plaintiffs’ eighth amended original petition. This pleading stressed the statutory violations, including allegations that the defendants had violated the Texas Clean Air Act of 1965, as amended, Article 4477-5, Vernon’s Annotated Civil Statutes; the Texas Water Quality Act, Article 7621d, as amended, Vernon’s Annotated Civil Statutes; and Orders Number 67-5, 69-52, 70-0220-1, 70-0529-7, 70-0828-5, 71-0820-18, 75-1125-1, and 77-0303-8, of the Texas Water Quality Board implementing the Act, 25 T.AC. §§ 325.1, et seq.; 31 T.A.C. § 335.4; Chapter 26 of the Texas Administrative Code; the Texas Solid Waste Disposal Act; and the Solid Waste Act of 1965. They further contended that the defendants had violated implementing orders and regulations under these Acts, including Regulations II, III, and V of the Texas Air Control Board. In this petition it was also alleged that the defendants had violated the Federal Water Pollution Control Act and its implementing regulations. The new Slaughter pleading clearly placed considerably more emphasis on statutory violations after the Question 5 defendants took over. Shortly after the statutory violations were added to the plaintiffs’ pleadings in Slaughter, the appellant companies involved in the Delaware lawsuit, in which coverage of Monsanto for its Brio Site losses was disputed, answered against Monsanto’s pleadings and asserted as a defense that Monsanto violated the same statutory provisions cited by the Slaughter plaintiffs. We find the evidence legally and factually sufficient to support the jury’s finding that the appellants attempted to manipulate the Slaughter litigation to defeat any reimbursement rights Monsanto might have under the EIL policy issued by International. Sufficiency of the Evidence to Support the Finding of Knowing Conduct Question 7 asked the jury whether the defendants knowingly engaged in the deceptive conduct that the jury found the defendants committed in their finding in Question 5. The trial court defined knowingly, for the purposes of Question 7, as actual awareness of the deception of the conduct in question. The appellants contend that the record is without any evidence to support the jury’s affirmative answer to Question 7. The appellants further contend that, since no judicial, legislative, or administrative source had previously defined the conduct undertaken by the appellants in the present case as illegal or wrongful, they could not have known that the conduct could be deceptive. The appellants were charged with knowledge under existing case law that they were violating public policy by seeking damages in the shoes of the plaintiffs against a nonset-tling defendant. See International Proteins v. Ralston-Purina Co., 744 S.W.2d 932, 934 (Tex.1988); Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 819 (Tex.1984); Beech Aircraft Corp. v. Jinkins, 698 S.W.2d 722, 727 (Tex.App.—Houston [1st Dist.] 1985), aff'd, 739 S.W.2d 19, 22 (Tex.1987). They also knew that in effect, by the agreements they prepared, they were purchasing a financial interest in the Slaughter plaintiffs’ claims when they entered into the Mary Carter agreements with the plaintiffs, and they were aware of the inherently deceptive nature of such agreements because of the numerous cases which had criticized the deceptive nature of such agreements. They were also aware of the changes made in the pleadings of the Slaughter case after they took over the litigation and were aware of the exclusion in the policy issued by International. The liability claim manual provided by the Crum & Forster organization, under the heading “Mary Carter Agreements Disapproved,” contains the following statement: “The Mary Carter Agreement is inherently inequitable and misleading to court and jury and the insurance industry should refrain from the use of such agreement.” However, the manual was revised in 1990, and there is no showing that this information was in the manual at the time of the Slaughter litigation. The conduct of the appellants under both jury findings was a clear-cut conflict of interest. Conflicts of interest have long been recognized in the legal community. It is possible even within a single entity to set up what is sometimes referred to as a Chinese wall to prevent the flow of information internally between the different sections or departments presenting the conflict of interest. See InterFirst Bank Dallas, N.A v. Risser, 739 S.W.2d 882, 903 (Tex.App.—Texarkana 1987, no writ). There was no indication that the appellants in the present case sought to maintain such separation. The evidence suggests they acted in total concert with not so much as a two-strand barbed-wire fence between the insurer of Monsanto and the parties controlling the litigation against Monsanto. While it is true that the Texas Supreme Court decision outlawing Mary Carter agreements had no retroactive effect, such agreements had been condemned in prior opinions. Furthermore, the Mary Carter agreements involved in the Slaughter litigation went far beyond the usual Mary Carter agreements in that the defendants could actually profit by the recovery of the plaintiffs, not just lessen their own liability. We find the evidence to be legally and factually sufficient to support the jury’s finding of knowing conduct. These points of error are overruled. Deceptive Conduct The appellants also contend that there is no evidence, or alternatively insufficient evidence, establishing that the conduct inquired of in Question 5(a) was deceptive. The appellants say that because the alleged acts were previously disclosed they could not have fit the trial court’s definition of deceptive conduct as “acts that have the tendency to deceive.” The appellants further support their position with the fact that the insurance relationship between Farm & Home and the three defendants named in Question 5 was disclosed to Monsanto because Monsanto knew that the three defendants were insurers of Farm & Home and that the insurance policies contained standard subrogation provisions. Appellants further state that the Missouri settlement agreement was disclosed to Monsanto because its existence was revealed in a 1987 press release and in an article in the St. Louis Dispatch, a major newspaper in the. city in which Monsanto’s headquarters is located, and because the agreement was filed with the Securities and Exchange Commission, thus making it available to the public. Additionally, the appellants suggest that Monsanto received notice of the Mary Carter agreements in 1988, when Farm & Home furnished Monsanto with copies of the agreements. They maintain that Monsanto used these agreements in the Slaughter case by revealing their existence to the jury, thus escaping liability in the Slaughter trial. The Mary Carter agreements, however, do not reveal any of the appellants to have been parties to those agreements or to have had any part in the negotiation of those instruments. Monsanto explains that it first began to piece together the real picture of the appellants’ activities when it came across the Missouri settlement agreement after it was filed with the Securities and Exchange Commission. According to Monsanto, the press release that revealed the signing of the Missouri settlement agreement was not sufficient to give Monsanto notice of the appellants’ financial interests and control in the Slaughter case, because those interests were created a year later in May 1988 with the signing of the Mary Carter agreements. The press release does not even mention the appellants by name or reveal any significant terms of the Missouri settlement agreement apart from the money paid by Farm & Home to its insurers. In August 1989, two months prior to the commencement of trial in the present case, Monsanto filed a federal suit against the appellants alleging essentially the same causes of action as it has in the present case. The complaint in this federal suit demonstrates that Monsanto was aware of the appellants’ conduct in Slaughter at least by August 1989. Monsanto takes the position that the appellants’ conduct in the prosecution of the Slaughter case was deceptive and violative of Texas law in that the appellants disguised the true facts of their role in the plaintiffs’ case. In other words, Monsanto contends that, even if the relevant documents were disclosed, the documents themselves do not reveal the appellants’ financial interests in and direct control of the Slaughter litigation. The Missouri settlement agreement and the Mary Carter agreements are not themselves inherently deceptive. But Monsanto contends, and the jury apparently found, that they were an integral part of a greater scheme of deception. As discussed above, the evidence supports the finding that the appellants, through Crum & Forster, controlled the litigation for Farm & Home and the plaintiffs in the Slaughter ease. They were involved in negotiating the Mary Carter agreements, they were willing to accept any benefits derived from the litigation, and they and their agents generally supervised and controlled the litigation. The fact that Monsanto discovered the depth of the appellants’ involvement before the Slaughter trial actually commenced does not negate the deceptive nature of the conduct. The evidence is legally and factually sufficient to support the jury’s finding that the defendants named in Question 5 engaged in deceptive conduct. These points of error are overruled. The Proper Measurement of Damages Question 6 of the jury charge asked what sum of money would compensate Monsanto for the injury that resulted from the deceptive acts which the jury found in Question 5 that the defendants had committed. In the instruction accompanying Question 6, the trial court informed the jury that it could consider attorneys’ fees, expenses, and related costs of litigation which Monsanto expended in defending the Slaughter litigation after May 18, 1988, the date on which the Mary Carter agreements were signed. The appellants contend that the trial court erred in submitting Question 6 to the jury and in forming a judgment based on the jury’s answer to that question. The appellants first contend that the trial court’s submission of Question 6 was erroneous as a matter of law. Under the Insurance Code and the DTPA, actual damages means those damages available at common law. Kish v. Van Note, 692 S.W.2d 463, 466 (Tex.1986); Frank B. Hall & Co. v. Beach, Inc., 733 S.W.2d 251, 265 (Tex.App.—Corpus Christi 1987, writ ref'd n.r.e.). Under the common law of Texas, attorneys’ fees are not recoverable in the absence of a specific statutory or contractual provision. New Amsterdam Casualty Co. v. Texas Industries, 414 S.W.2d 914, 915 (Tex.1967). The appellants contend that because Monsanto has not pointed to any specific statutory or contractual authority authorizing the recovery of attorneys’ fees in a case of this nature, the trial court erred in awarding Monsanto the attorneys’ fees that it expended in the defense of the Slaughter litigation. In Baja Energy, Inc. v. Ball, 669 S.W.2d 836, 838-39 (Tex.App.—Eastland 1984, no writ), the Eastland Court of Appeals explained that several courts have allowed recovery for attorneys’ fees and other litigation expenses of a previous suit when the plaintiff in the present suit was required to prosecute or defend the previous suit as a consequence of a wrongful act of the defendant. See also Texoma AG-Products v. Hartfor