Bad Faith Insurance

Going For Bad Faith

November 1, 2016 | Mark S. Humphreys

Garner insurance lawyers who know insurance law, know that actually prevailing in a bad faith claim is difficult. Getting the insurance company to pay what they should is not hard but getting the extra money for bad faith in Texas is difficult because of the way Texas Courts interpret the law. An Appeals Court in Corpus Christi was making it easier in a 2016 opinion styled, In Re State Farm Lloyds. This is a mandamus opinion dealing with discovery issues.

Angelica Gongora’s home was damaged in hailstorms. She submitted a claim with State Farm. The adjuster, Sylvia Garza, inspected Gongora’s home and asserted that the damage did not exceed the deductible and therefore did not pay the claim. Gongora sued State Farm stating that Garza failed to include all of the damages in her estimate and that Garza grossly undervalued the damages and failed to include adequate funds in the estimate to cover the costs of repairs.

Gongora subsequently invoked the appraisal clause in her homeowner’s policy and the appraisal came back at more than ten times the amount Garza had estimated. State Farm paid the appraisal amount. In the lawsuit Gongora propounded discovery to State Farm seeking production of:

State Farm And Bad Faith Insurance

October 20, 2016 | Mark S. Humphreys

Dallas and Fort Worth insurance lawyers know all too well the games some insurance companies play to beat the system. That knowledge has taken on new meaning after reading this story from BloomBerg. The story is titled, State Farm Faces Suit Over Claims It Bankrolled Judge.

Some customers of State Farm Mutual Automobile Insurance Co. claim the company conspired to help elect an Illinois Supreme Court justice candidate so he could vote to throw out a $1 billion award against the company. Now they will be able to bring their case as a group.

A federal judge on Sept. 16 ruled that 4.7 million State Farm policyholders can band together to sue the insurer for allegedly lying about its efforts to financially back Lloyd Karmeier for a seat on Illinois’ highest court. Customers contend in their class-action lawsuit that State Farm defrauded them by secretly bankrolling Karmeier’s 2004 campaign. In exchange, they allege, Karmeier provided a key appellate vote against upholding the $1 billion verdict in a case over the use of generic parts in car repairs.

Bad Faith Claims And Mental Anguish Damages

August 28, 2016 | Mark S. Humphreys

A 1998, Dallas Court of Appeals case is a good read for lawyers wanting to recover mental anguish damages in bad faith insurance cases. The case is styled, State Farm Lloyds v Johns.

Johns house was built in 1964. Johns moved in to her house in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door misalignment, significant cracks in the interior walls and a slope on the floor. Repairmen later discovered two plumbing leaks under the house. Johns made a claim for foundation damage alleging that the plumbing leaks caused the soil underneath the house to expand resulting in upheaval of the foundation, thereby damaging the structure. State Farm concluded that John’s foundation problems were not cause by the plumbing leaks, but rather asserted that the damage occurred from natural soil movement common to north Texas. State Farm’s homeowners policy excludes damage caused by ordinary settlement. Based on the exclusion, State Farm denied the claim.

Johns filed suit against State Farm alleging wrongful denial of her claim, violations of the Texas Insurance Code, and violations of the Texas Deceptive Trade Practices Act. The trial court rendered judgment on the verdict in favor of Johns based on the DTPA and Insurance Code claim. State Farm appealed.

“Knowing” Conduct By Insurance Company

August 27, 2016 | Mark S. Humphreys

A 1998, Dallas Court of Appeals case is a good read for lawyers handling bad faith insurance cases. The case is styled, State Farm Lloyds v Johns.

Johns house was built in 1964. Johns moved in to her house in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door misalignment, significant cracks in the interior walls and a slope on the floor. Repairmen later discovered two plumbing leaks under the house. Johns made a claim for foundation damage alleging that the plumbing leaks caused the soil underneath the house to expand resulting in upheaval of the foundation, thereby damaging the structure. State Farm concluded that John’s foundation problems were not cause by the plumbing leaks, but rather asserted that the damage occurred from natural soil movement common to north Texas. State Farm’s homeowners policy excludes damage caused by ordinary settlement. Based on the exclusion, State Farm denied the claim.

Johns filed suit against State Farm alleging wrongful denial of her claim, violations of the Texas Insurance Code, and violations of the Texas Deceptive Trade Practices Act. The trial court rendered judgment on the verdict in favor of Johns based on the DTPA and Insurance Code claim. State Farm appealed.

First Party Claim vs Third Party Claim

August 14, 2016 | Mark S. Humphreys

Oak Cliff insurance lawyers need to understand the difference between a first party claim and a third party claim. A 1996 Beaumont Court of Appeals opinion may help. The case is styled, Rumley v. Allstate Indemnity Co.

The wife, Joyce Rumley, sustained personal injuries in a one car vehicle accident in which her husband, Wilburn Rumley, was the driver. Mrs. Rumley filed a claim for benefits under their insurer, Allstate. Allstate paid PIP benefits but refused to pay liability because the policy contained a family member exclusion. At the time the Texas Supreme Court had granted writ of error but had not yet issued an opinion in National County Mutual Ins. Co. v. Johnson. In that decision, the Texas Supreme Court invalidated the family member exclusion. Wife sued Allstate and Ted Pate, a senior staff claims representative for Allstate, for breach of duty of good faith and fair dealing, violations of the Texas Insurance Code, and violations of the Texas DTPA.

Allstate filed a Motion for Summary Judgement on the grounds that Wife’s claim was a third-party claim for which Defendants owed no duty of good faith and fair dealing; there was a reasonable basis for denying the claim in that the family member exclusion was an unsettled issue of law; and there was no special or contractual privity between Pate and Rumley. The trial court granted summary judgment and wife appealed.

Punitive Damages In Insurance Cases

August 7, 2016 | Mark S. Humphreys

Insurance attorneys in Weatherford can tell you that an insurance company will often times mistreat their customers. The question would be, does the conduct arise to the level as to allow punitive damages and if so, how do you know that and what are the punitive damages.

Their are a couple places in the Texas Insurance Code to look for answers. The first place is under “definitions” which is found in Section 541.002.

(1) “Knowingly” means actual awareness of the falsity, unfairness, or deceptiveness of the act or practice on which a claim for damages under Subchapter D is based. Actual awareness may be inferred if objective manifestations indicate that a person acted with actual awareness.

Bad Faith Insurance Law In Texas

August 2, 2016 | Mark S. Humphreys

Insurance attorneys in Dallas can tell you where the relevant laws to be used in insurance bad faith cases can be found. One place is the Texas Insurance Code.

Here is a starter.

Sec. 541.002. DEFINITIONS. In this chapter:

Tornado Damage And Appraisal Award

June 18, 2016 | Mark S. Humphreys

Dallas County insurance attorneys see tornado claims. Here is a case resulting from a tornado claim. It is from the Dallas Court of Appeals. It is styled, Halton v. American Risk Insurance Company, et al.

This is an appeal from an adverse summary judgment granted in favor or American. The parties dispute whether American properly and fully paid an appraisal award to repair damage to Halton’s home that was damaged by a tornado. This Court reversed the summary judgment.

The Halton’s home was damaged and American paid damages totaling $42,083.87. After the lawsuit was filed an umpire was hired to appraise the loss. The lose was determined to be $180,273.92 in replacement cost and $163,613.92 in actual cash value. The Halton’s deductible was $1,631.89. American issued additional checks totaling $102,548.04.

Bad Faith State Farm

May 28, 2016 | Mark S. Humphreys

Here is a case that discusses bad faith accusations against State Farm. Insurance attorneys need to read the case. It is from 14th Court of Appeals. The style of the case is, State Farm Lloyds v. Candelario Fuentes and Maria Fuentes. The facts are set out here.

Hurricane Ike struck the Gulf Coast on September 12 and 13, 2008. The Fuenteses evacuated prior to the storm. When the Fuenteses returned home, they discovered that a tree had fallen through their roof over their master bedroom. Their home sustained exterior damage. According to the Fuenteses, their home also sustained interior damage from water leaking into their bedroom, as well as into their bathroom and laundry room.

On September 22, 2008, the Fuenteses’ daughter reported an insurance claim to State Farm for her primarily Spanish-speaking parents. State Farm assigned adjuster Dustin Namirr, who inspected the Fuenteses’ home on November 12, 2008. Namirr allowed for total replacement of the roof and covered damage to a backyard shed, the fence, a window, and a screen. Namirr inspected the interior of the home with the Fuenteses. The Fuenteses pointed out several areas of interior water damage from Hurricane Ike. Namirr’s log entry and notes do not mention an interior inspection, and he destroyed the two or three photos he took of the home’s interior. Namirr claimed that, based on his inspection, he determined that the interior damage was not caused by Hurricane Ike. He went to his truck, printed out an estimate of damages in English, and provided the Fuenteses with a check for $4988.63 for the exterior damage, as well as a check for $350 in “food loss.” State Farm closed its file on the same day. The Fuenteses did not receive any written explanation for State Farm’s denial of the claim for interior damage.

Claims For Bad Faith Insurance

March 24, 2016 | Mark S. Humphreys

Colleyville insurance lawyers handling bad faith claims need to read this U. S. Southern District, McAllen Division, opinion. The case is styled, Mark Dizdar, at al, vs. State Farm Lloyds, et al.

The claim arises from hail and storm damage sustained to Dizdar’s property on March 29, 2012. Shortly after the storm, Dizdar reported the claim to State Farm. Thereafter, Wallis inspected the property on behalf of State Farm on June 23, 2012, estimating the loss to the property at $1,096.76. On the same day, State Farm issued a check for $199.16, after applying depreciation and deductible.

On July 19, State Farm received an estimate from Dizdar’s contractor alleging that the damages totaled at least $24,000. Shortly thereafter, Dizdar requested a re-inspection of the property. On August 18, 2012, a subsequent inspection by Wallis resulted in an additional payment of $49.79. State Farm then closed the claim file.