Bad Faith Insurance

Insurance Agent – Misrepresentation

December 20, 2021 | Mark S. Humphreys

Insurance agents misrepresenting the terms and conditions of an insurance policy is a common complaint. Here is a 1994, Texas Supreme Court opinion styled, Celtic Life Insurance Company v. John D. Coats, Jr.

This case presents three issues relating to an insurance company’s liability for its agent’s representations: first, whether the company’s liability depends on its authorization of misrepresentations; second, whether reliance on the representations is an element of recovery; and third, whether the insured’s damages should be trebled when the misrepresentations were not committed “knowingly.”

This blog will focus on the first issue regarding the agents misrepresentations and the liability of insurance company.

Suing Insurance Company Based On Fraud

December 18, 2021 | Mark S. Humphreys

Filing a lawsuit is not as simple as saying the words. One common reason for suing an insurance company is based on allegations of fraud. A 2021, opinion from the Southern District of Texas, Galveston Division, shows that pleading fraud an insurance company has to meet certain criteria or the case will be dismissed. The style of the case is, Smiley Team II, Inc. v. General Star Insurance Company.

Smiley carried commercial property insurance with General Star. A vehicle crashed into Smiley’s covered property and a claim was made. Smiley complains that General Star failed to properly adjust the claim, issuing a payment that substantially undervalued the damages.

Smiley’s First Amended Complaint asserted causes of action for breach of contract and various violations of the Texas Insurance Code and the Texas DTPA.

Requirements To Get Bad Faith In Texas

November 15, 2021 | Mark S. Humphreys

Bad Faith insurance is a frequent topic when a person feels like they have been treated improperly by their insurance company. This issue is discussed in a 2021 opinion from the Eastern District of Texas. The opinion is styled, Aspen Specialty Insurance Company v. Yin Investments USA, LP.

This opinion was issued on competing Motions For Summary Judgment. The only part discussed here deals with the “bad faith” claims at issue.

As stated by the Court, in Texas, insurance companies have a duty to deal fairly and in good faith with an insured in the processing of claims. To succeed on a bad-faith claim, the insured must establish the absence of a reasonable basis for denying or delaying payment of the claim and that the insurer knew, or should have known, that there was no reasonable basis for denying or delaying payment of the claim.

Bad Faith Insurance ?

November 8, 2021 | Mark S. Humphreys

An old Insurance Lawyer once stated about “bad faith” that if you have to have an expert to tell you whether the insurance company acted in bad faith, or not, then there probably not bad faith in whatever the insurance company did.

In 2021, a court in the Western District of Texas, San Antonio Division issued an opinion discussing bad faith. It is styled, Richard Riley v. Safeco Insurance Company of Indiana.

The claim arises out of a claim being asserted by the insured, Riley, against his insurance company, Safeco. The claim is for hail damage to Riley’s metal roof. After a hail storm Riley made a claim for damages and Safeco assigned adjuster Doug Lehr to inspect the claim. Lehr, after his initial inspection retained an engineering firm, Rimkus Consulting, to determine whether the damage to the roof was cosmetic or structural. Rimkus determined the damage was structural.

Bad Faith Insurance Claims Lawyer – Read This

September 25, 2021 | Mark S. Humphreys

Hee is a 2021, opinion dealing with bad faith claims by an insured and the insurance company efforts to dispose of the bad faith claim via summary judgement. The opinion is from the Southern District of Texas, Houston Division, and is styled, GeoVera Specialty Insurance Company v. Sam Walker.

The insured is Walker. The insurance company is GeoVera. Walker suffered wind damage and a subsequent theft claim. There are other issues in the case, but only the bad-faith / extra=contractual issues will be looked at here.

Geovera denied the claim and then sued Walker seeking a declaratory judgment that it did not owe any damages to Walker.

Insurance Lawyers – When Is A Case A Bad Faith Case

September 20, 2021 | Mark S. Humphreys

The question asked in the title is a good question. However, it is a hard question to answer. A 2021, opinion from the Northern District of Texas, Fort Worth Division, lends some insight into how bad faith is analyzed by the courts. The opinion is styled, Cocanougher Asset No. 3, LLC v. Twin City Fire Insurance Company.

The facts of the case can be read in the opinion and will not be rehashed here.

Twin City filed a motion for summary judgement on the bad faith allegations of the plaintiff. In deciding the motion in favor of the plaintiff, the court explained how these situations are analyzed.

Bad Faith Claim – Attorney Fees

September 13, 2021 | Mark S. Humphreys

Insurance lawyers are frequently asked, “Can you make the insurance company pay my attorney fees?”

Here is a case from the Southern District of Texas, Houston Division. The case is styled, Shane and Shannon Richardson v. Liberty Insurance Co.

Most case, over 98%, get resolved short of a trial. Some cases get dismissed for legal reasons soon after the lawsuit is filed or at the Motion for Summary Judgment stage of the case. The others reach a settlement. When a case is settled, the insurance company really doesn’t care how the settlement money is applied. They are going to pay a certain sum of money and how that money gets distributed, i.e., actual damages, exemplary damages, interest, court costs, or attorney fees is not really important to them.

Hail Damage Claims

July 31, 2021 | Mark S. Humphreys

Here is an interesting case dealing with hail damage. This is a 2021, case from the San Antonio Court of Appeals. It is styled, Allstate Vehicle And Property Insurance Company v. Peter Reininger. The opinion is an appeal from a jury trial in favor of Reininger.

The opinion is lengthy and discusses several legal issues. However, the facts of the case are pointed out here because the facts are similar to situations many other homeowners face themselves.

Reininger’s home had previously been covered by a policy issued by Liberty Mutual and that policy covered cosmetic hail damage to his metal roof. When Reininger began looking for a new policy in 2015, he contacted Justin Losoya, an Allstate agent. Reininger told Losoya he wanted a policy that was “apples to apples” with his Liberty Mutual policy, and Losoya stated Allstate could provide that. Reininger also asked Losoya, “If I have any bad weather, hail or any type of hail and it damaged my roof, am I covered?” Losoya answered, “Yes, sir, Mr. Reininger, you are. You pay a 1 percent deductible.” Losoya did not mention any exclusions on coverage for the roof, and Reininger did not make any further inquiries about exclusions.

Bad Faith Insurance – Multiple Inspections

June 5, 2021 | Mark S. Humphreys

There are many actions or inactions an insurance can be accused of that may amount to bad faith. One of those is discussed in a 2021 opinion from the Northern District of Texas, Sherman Division. The opinion is styled, Deanne M. Hinson v. State Farm Lloyds.

A Magistrate Judge was assigned to hear a Motion for Summary Judgment on the case. The Magistrate Judge ruled in favor of State Farm and Hinson appealed that ruling to the sitting Judge. The sitting Judge affirmed the finding of the Magistrate.

This is a hail damage claim that was originally filed in State Court and then removed to Federal Court. The Magistrate ruled in favor of State Farm on all of Hinson’s causes of action. Hinson is appealing the decision as to one cause of action only.

Bad Faith Insurance Claim – Breach Of Contract

May 24, 2021 | Mark S. Humphreys

An argument that insurance companies make in many “bad faith” claims is that there can be no bad faith unless or until there is a breach of the insurance contract. To reach the level of bad faith insurance, most of the time there has to be a breach of the insurance contract – but not all the time.

The Dallas Court of Appeals says there it is not necessary to have a breach of the insurance contract for there to be a bad faith claim. And the Court backs up his decision by citing the Texas Supreme Court. The opinion is styled, In Re Allstate Fire And Casualty Insurance Company and Latina Foster.

Before the Court are relators’ petition for writ of mandamus, real party’s response, and relators’ reply to the response. Relators contend they are entitled to mandamus relief because the trial court abused its discretion by denying their special exceptions complaining about real party’s failure to plead a claim for breach of contract, and by failing to quash relator Latina Foster’s deposition because it is premature. Entitlement to mandamus relief requires relators to show both that the trial court clearly abused its discretion and that relators have no adequate appellate remedy. Although the Court questions the scope of the identified deposition topics, based on relators’ arguments and the record, we conclude relators have failed to show a clear abuse of discretion. Further, in light of the Texas Supreme Court’s recent opinion in, In re State Farm Mutual Automobile Insurance Co., from Mar. 19, 2021, the trial court did not abuse its discretion by denying relators’ special exceptions. In that opinion the Texas Supreme Court concluded the insurer was not required to plead a breach of contract claim to recover for extra-contractual claims.