Articles Posted in Bad Faith Insurance

Mineral Wells insurance lawyers and all insurance lawyers who keep up with what is happening in bad faith litigation will find this article interesting. It is from the Claims Journal and is titled, Going on the Offensive in Defending Bad Faith Claims. I do not agree with this article but here is what it says.

Insurance bad faith claims are one of the most contentious and hardest fought types of lawsuits in all of civil litigation. In particular, a great deal of time, effort and costs are expended by insurers in the defense of bad faith lawsuits. And in most cases, more time and money is spent by the insurer in the discovery stage of a bad faith lawsuit than in any other phase of the litigation. One of the unique aspects of bad faith litigation is the extraordinary lengths that claimants will go to force insurers to defend arduous, burdensome and seemingly endless written discovery requests, a maneuver that is geared specifically at gaining leverage and compelling a settlement out of the insurer. Over time, insurers have become quite adept at effectively defending against these discovery tactics.

However, perhaps the most overlooked aspect to bad faith litigation defense is the insurer’s own written discovery requests. As part of an effective, comprehensive litigation plan, the implementation of an offensive, aggressive discovery strategy involving the insurer’s own written discovery requests can turn the tables on a claimant and serve as a vital tool in limiting or, ideally, completely disposing of a wide variety of bad faith claims early in the litigation process.

Insurance lawyers in the Dallas and Fort Worth areas who are honest and straight forward with their clients, will let them know up front that winning a case on allegations of “bad faith” are an up hill fight. The Texas Supreme Court and the various appellant courts look negatively on bad faith claims. This is illustrated in the 1993 case, State Farm Lloyd’s v. Nicolau. It is important to realize there are still cases wherein bad faith allegations can win, but it is equally important that the facts of each case have to be carefully scrutinized and discussed before one should believe they can prevail on a bad faith claim.

Here is a little about the Nicolau case. The part from the dissent has to be calculated in discussing a case.

This is a suit against a homeowner’s insurer alleging malicious bad faith, etc., for refusing to pay the full amount of a claim. A jury found for Mr. and Mrs. Nicolau on various contractual, tort and statutory theories, also finding actual and punitive damages. The trial court rendered judgment n.o.v. on all claims except breach of contract. On appeal, the 13th Court of Appeals in Corpus Christi reinstated the jury’s findings and rendered judgment against State Farm (including punitive damages). Held: judgment of Court of Appeals reversed in part and judgment rendered striking the exemplary damages (because there was no legally sufficient evidence of malice); judgment of was affirmed insofar as it awarded Mr. and Mrs. Nicolau actual damages for State Farm’s bad faith.

Insurance lawyers keeping up with insurance news will find a recent Texas Tribune article interesting. The title is, “Emails: Prosecutors Got Texas Mutual Great Publicity.”

The article says that Travis County prosecutors say the money they get each year from a large insurance company to prosecute workers’ compensation fraud helps both consumers and businesses by holding down premiums and maintaining a stable market for employers.

But behind the scenes, top officials in the district attorney’s office are highlighting other benefits: They say they’re generating a lot of money and good PR for Texas Mutual Insurance Company.

Kennedale insurance lawyers need to read this recent opinion from the United States District Court, Dallas Division. It is styled, Renee Davis and Reginald Davis v. State Farm Lloyds and Leah Suzanne McGee.

This is a case that was filed in State Court against State Farm and the agent, McGee, and removed to Federal Court by the Defendants based on Federal diversity jurisdiction. Davis sought to have the case remanded to the State Court. This court denied that request. There are more than a couple issues in this case but the part dealing with misrepresentation by the agent is what will be discussed.

Davis alleges that their insured property was damaged but that State Farm “failed to pay the full proceeds of the policy” and failed to settle the claim in an adequate and timely manner. With respect to the insurance agent McGee, Davis alleged that McGee “constantly assured Plaintiffs that they were adequately insured even though a reasonable and prudent insurance agent would testify otherwise.” They further allege that McGee “misrepresented to Plaintiffs that the insured person was covered by such peril although State Farm denied such coverage.” It thus appears that Davis claim they have been wrongfully denied full coverage for the damages sustained to their property, although there is no information as to the event that caused the damage, the nature or extent of the damage, and the circumstances underlying State Farm’s alleged denial of full coverage. As a result Davis sued McGee for negligent misrepresentation, among other causes.

Insurance attorneys need to know the law in Texas as it relates to the responsibility an insurance company owes to its insureds and liability coverage. The Insurance Journal published an article in July 2015, that discusses a Louisiana case but has applicability to Texas law.

The Louisiana Supreme Court recently ruled that an insurer can be liable for bad faith failure to settle even if it never receives a firm settlement offer and also that an insurer can be found liable for misrepresenting or failing to disclose “pertinent” facts to the insured.

The Court ruled in response to two certified questions from the U.S. 5th Circuit Court of Appeals, so its ruling wasn’t applied to the underlying facts in the case.

Grand Prairie insurance lawyers need to be aware of the opinions issued by the appeals courts dealing with bad faith issues. The Dallas Court of Appeals issued an opinion on June 30, 2015, that discusses bad faith in insurance cases. The style of the opinion is, Bruce E. Bernstien v Safeco Insurance Company of Illinois.

This is Berstine’s appeal of a summary judgement in favor of Safeco.

Bernstien had an automobile insurance policy from Safeco to provide insurance coverage for his Porsche. The Porsche was damaged in an accident, and Bernstien notified Safeco. Safeco acknowledged the Porsche was covered by the insurance policy, but disagreed with Bernstien about the amount of money Safeco should pay Bernstien for the Porsche. The dispute was submitted to an appraiser, who concluded the value of the Porsche was $4,900 plus tax, title, and license. Nine days after the date of the appraisal award, Safeco sent a letter to Bernstien enclosing a check for $5,287.05. The letter stated Safeco was not applying Bernstien’s $1,000 deductible nor deducting money for the salvage value of the car.

Dallas insurance lawyers will all have tales of people who lost cases they might have otherwise won if only they had hired an experienced Insurance Law Attorney. This is illustrated in a Dallas Court of Appeals case styled, Marqueth Wilson v. Colonial County Mutual Insurance Company. Please understand that even with an attorney Wilson may have lost this case but here they did not even stand a chance.

According to Wilson’s original petition, on June 24, 2012, he was driving on Scyene Road in Dallas when an object fell off of the car traveling in front of him. The object hit his car, causing property damage. He further alleged the impact of “hopping the curb” caused bodily injury to his lower back, neck, shoulders, and legs.

At the time of the incident, his insurance policy included uninsured motorist, underinsured motorist, comprehensive and collision coverage, rental reimbursement, and personal injury protection (“PIP”). Wilson alleged that despite giving Colonial the opportunity to honor his policy, the insurance company refused; therefore, he filed suit for breach of contract, negligence, bad faith, and private nuisance.

Benbrook insurance lawyers need to know who can properly be a plaintiff in a lawsuit against an insurance company. In order to sue an insurance company, the plaintiff must have “standing.”

A 1996, 5th Circuit Court of Appeals opinion states that an intended beneficiary under a policy of insurance has standing to sue under the Texas Insurance Code statutes. After reviewing Texas cases and other 5th Circuit cases, the court concluded that “if the Texas Supreme Court were presented with the question before us it would hold that standing under (Section 541) is satisfied by not only those who can establish privity of contract or reliance on a representation of the insurer, but also by those who can establish that they were an intended third party beneficiary of the insurance contract.” The court set out the standards under Texas law for third party beneficiary status:

(a) the claimant was not privy to the written agreement between the insured and insurer;

Arlington insurance lawyers need to be able to answer the above question when someone comes into their office with a complaint. Simply put, standing means the legal right to be in court on a case.

Texas Insurance Code, Section 541.151 grants a cause of action to a person who sustains actual damages caused by another person engaging in any unfair insurance practice or deceptive trade practices.

The Texas Supreme Court in a 2000, case stated the law that to assert a cause of action a plaintiff must be: (1) a “person” as defined by the statute; or (2) injured by another’s unfair or deceptive acts.