The Houston [14th] Court of Appeals has upheld a punitive damages award in a defamation case arising from a business split between insurance agents.
Leonard Amell, Sabrina Amell, and Leonard R. Amell Insurance Agency v. William Van Pelt and Kimberly Van Pelt and The Van Pelt Agency (No. 14-24-00297-CV; November 25, 2025) arose from a fallout between the owner of an insurance agency and two of his agents who left to start their own business. The relationship between the Amells and Van Pelts began when the Van Pelts were looking to get back into the insurance industry after failing at the bookselling business. According to recorded phone calls and testimony at trial, Amell offered Van Pelt a position at the Amell Insurance Agency, with the understanding that if Van Pelt wished to begin his own agency with his wife, he would be able to transfer the book of business he planned to build while with the Amells. There was no mention of a non-compete provision in the contract they eventually signed. Van Pelt worked for Amell Insurance from 2017 to 2020. In January 2020 Van Pelt let Amell know in January 2020 that he was leaving to start Van Pelt Insurance.
In February 2020, Amell sent out emails to carrier representatives, with whom Van Pelt intended to conduct future business, which described Van Pelt as dishonest, unethical, and unprofessional. The emails stated that Van Pelt was acting outside of their original agreement of employment. Amell also sent emails directly to Van Pelt’s clients which said any further business conducted with Van Pelt would be a complicit violation of his agreement with Amell Insurance. Additionally, the emails asked clients to forward any communication from Van Pelt to Amell Insurance. Fed up with this treatment, the Van Pelts and their new agency sued Amell for defamation. At the close of trial, the trial court found that Amell had defamed the Van Pelts and awarded $141,140.62 in loss of reputation damages to Van Pelt on his claim and the same amount of punitive damages. Amell appealed.
In an opinion by Justice Wilson, the court of appeals affirmed. Amell argued that there was legally and factually insufficient evidence to support the judgment on both liability and damages. He contended that statements about contractual rights and Van Pelt’s ethics and professionalism were not defamatory. The court looked through the emails and cited previous conversations between Amell and Van Pelt before they went into business together. It found that the emails sent out to customers and carriers were misleading, considering that Amell agreed that Van Pelt would eventually begin his own agency and take his client list with him. The court determined that a reasonable factfinder could conclude that the emails mischaracterized and misrepresented Van Pelt’s actions and conveyed a false and defamatory message. The court also found the statements made about Van Pelt’s character and conduct in the emails fell under defamation which would injure one’s occupation, and noted that Amell agreed that “reputation is paramount” in the insurance business. It thus found that the trial judge reasonably concluded that Amell’s statements constituted defamation per se.
Amell further contended that all statements made about Bill were “entirely true or at least substantially true.” However, the court noted that Amell failed to plead the affirmative defense of truth, necessary in defamation cases not involving public figures, media defendants, or matters of public concern Instead, Amell only asserted a general denial, relieving the trial court’s judgment of the “need to be supported by any quantum of sufficient evidence of fault and malice, over and above the presumption [of falsity] provided the court.” And even if Van Pelt had to prove Amell’s degree of fault, the court of appeals would have reached the same conclusion. Since Amell was aware when drafting the defamatory emails that Van Pelt was not violating any contractual obligations and that Amell agreed with Van Pelt’s plan to start his own agency, it would not have been unreasonable for the court to find actual malice.
Amell likewise challenged the legal and factual sufficiency of the evidence supporting the award of general damages, arguing that the trial court improperly used Van Pelt’s 1099 compensation while he worked for Amell Insurance to come up with the $141,000 number. The court disagreed and held that the award was reasonable and supported by factually sufficient evidence. As to the punitive damages award, the court found that Amell’s conduct rose to the level of reckless disregard for the truth or falsity of the statements he made to clients in an attempt to smear Van Pelt and deprive him of business, i.e., that Van Pelt proved by clear and convincing evidence that Amell’s conduct evidenced “a specific intent to cause substantial harm or injury to the claimant.” § 41.007(7), CPRC (definition of “malice”). The court thus affirmed the punitive damages award to Van Pelt.
TCJL Legal Intern Haden Knobloch researched and prepared the first draft of this article.
