Dallas insurance lawyers know the ways the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) interact with each other and how to use both to help clients who are being jerked around by an insurance company.
Texas Insurance Code, Section 541.151, says that a person who sustains damages by someone engaging in the business of insurance can bring an action against that other person for any act specifically enumerated in Section 17.46(b) of the Texas DTPA.
The DTPA provides a cause of action for conduct defined in the “laundry list” of Section 17.46(b). The most useful prohibitions for insurance cases found in the subparagraphs to this provision are:
(2) Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not have;
(12) Representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law; and (24) The failure to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed.
These prohibitions are the same whether the plaintiff sues under the Insurance Code or the DTPA.
Here is an example from a 1987, Texas Supreme Court case. It is styled, Aetna Casualty & Surety Company v. Marshall.
In the case, a workers compensation carrier settled a claim by entering into a judgment agreeing to pay the worker’s future medical expenses. Later the carrier kept relying on an erroneous copy of the settlement agreement to deny claims for these expenses. The court held the insurer liable for misrepresenting the benefits under the agreement, which the court held was precisely the type of conduct prohibited by the DTPA, Section 17.46(b)(5).
The interplay of the DTPA and the Texas Insurance Code help an experienced Insurance Law Attorney maximize justice for his client.
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