Dallas insurance lawyers are probably already aware of some of the penalties and remedies available when an insurance company violates the Texas Prompt Payment of Claims Act.
Section 542.061, should be known and read by all insurance attorneys. It says:
“The remedies provided by this subchapter are in addition to any other remedy or provision provided by law or at common law.”
The Texarkana Court of Appeals issued an opinion in 1997, that illustrates this section of the Prompt Pay Act. The style of the case is, Bekins Moving & Storage Co. v. Williams. Here is some relevant information about the Bekins case.
In June of 1991, Jean Williams hired Bekins to move her household belongings from Dallas to her new home in Quitman. Bekins subcontracted the actual moving of her property, which included an antique square piano and a large amount of china, crystal, and other fragile items, to Melvin & Benny’s Movers, a smaller local mover. The movers dropped, broke, cracked, and otherwise damaged various pieces of Williams’ property. She tried to get Bekins to pay for the damage, but was unsuccessful. Bekins did make an offer to settle that was substantially below her claim, and she refused to accept. She eventually filed suit against Bekins. A jury found in her favor under multiple theories of law, one of which was for violations of the Prompt Payment of Claims Act. Bekins appealed on 27 points of error. Only the parts dealing with “cumulative remedies” are discussed here.
Bekins contended that the trial court erred by awarding treble damages based on the $14,000.00 award made for violations of the Prompt Pay Act. The damages were not trebled under the Prompt Pay Act, which does not provide for such, but under the “bad faith statutes” which provides for a recovery of treble damages if the jury finds that the acts were knowingly committed. Bekins argued that because the Prompt Pay Act does not provide for trebling, the award was improper. Williams responded by noting that the Act specifically provides that remedies under that section are not exclusive, and she argues that the “bad faith statutes” allows insureds to seek redress for violations of unfair settlement practices.
The Court notes there is no language that either explicitly or implicitly provides that a recovery under the Act is restricted to the damages provided by that article. Indeed, the quoted language of the article suggests otherwise, as it is cumulative of other remedies. Further, Section 542.054, says, “This subchapter shall be liberally construed to promote the prompt payment of insurance claims.”
In this case, Williams was entitled to the multiple theories of recovery but there was some modification to the trebling of the damages that were subject to the 18% penalty. It is important to seek an experienced Insurance Law Attorney for a better understanding of how the remedies work and are applied to the various facts of each case.
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