Articles Posted in Claims Denial

Claims involving property losses usually do not require expert testimony.  But, if they do require expert testimony, it is important for an insurance lawyer to know how present the expert.  This is illustrated in the 2019, opinion from the Southern District of Texas, Corpus Christi Division, styled, Mt Hawley Insurance Company v. TFP Properties III LLC.

Mt. Hawley filed this lawsuit against TFP asserting it had paid all sums owing under the commercial policy at issue.  After the lawsuit was filed, Mt. Hawley filed a motion to exclude the testimony of TFP’s property evaluation expert.

The courts are to act as gatekeepers by making preliminary assessment of whether the reasoning or methodology underlying an experts testimony can be properly applied to the facts at issue in the case.  Testimony that is based purely on the ipse dixit of the expert is not allowed.  The court’s determination regarding the admissibility of the expert evidence is subject to an abuse of discretion standard.

Have we ever mentioned that the insurance companies prefer to fight cases in federal court rather than state court?  And that insurance lawyers representing people who have a claim against their insurance company would prefer to litigate the case in state court?

Here’s a case dealing with the $75,000 pleading requirement to have a case heard in federal court.  The case is from the Southern District of Texas, Houston Division, and is styled, Fernando Abascal v. United Property & Casualty Insurance Company.

Fernando filed suit in state court against United after United partially denied his claim for damage resulting from Hurricane Harvey.  In his pleadings, Fernando stated that he “will never ask, receive, or take a judgment for any amount exceeding $75,000.  United removed the case to federal court arguing that Fernando’s statement does not qualify as a binding stipulation and that Fernando’s demonstrates that the amount in controversy exceeds $75,000.00.

The Western District of Texas, San Antonio Division, issued an opinion on July 1, 2019, discussing the handling of under-insured motorist (UIM) claims and how they are handled by the courts.  The case is styled, Laura Lee Green v. Allstate Fire And Casualty Insurance Company.

Green sued Allstate for UIM benefits under breach of contract theories of law among other causes of action and Allstate filed a motion to dismiss.

Green was involved in an accident with Shana Dorsey who was alleged to be under-insured and Green then made a claim against Allstate for UIM benefits.  It is alleged that Allstate failed to make an offer of settlement, failed to provide a reasonable explanation of the basis for denying Green’s claim, refused to affirm or deny coverage within a reasonable time, refused to pay Green’s claim without conducting a proper investigation, and refusing to pay the claim after liability had become reasonably clear.

Lawyers handling insurance claims run into situations where damages that have occurred to property have to be segregated.  This happens most often in the context of hail and wind damage to property.  The U.S. District Court Northern District of Texas, Dallas Division, issued an opinion that does a good job of discussing how the courts are to look at these situations.  The case is styled, Generation Trade, Inc. v. Ohio Security Insurance Company.

In this case, Generation bought the subject property in 2014, and had it covered by Ohio ever since.  In July 2017, Simon, the owner of the property, observed hail damage and promptly reported the damage to Ohio.  Ohio inspected the roof and acknowledged there was hail damage but after reviewing hail events over a period of time was unable to determine when the loss occurred.

This property was originally built in 1981 and was covered with a 24 gauge metal roof except for a small portion of the roof that was installed in May of 2016, that had 26 gauge roofing.

Lawyers who handle National Flood Insurance Program claims, otherwise known as the National Flood Insurance Act of 1968 (NFIA) need to understand the difference between NFIA claims and other insurance claims.  One of the big differences is the shortened statute of limitations that applies to NFIA claims.

This is illustrated in a U.S. Fifth Circuit Court of Appeals opinion styled, Al Cohen v. Allstate Insurance Company; Rachael G. Ray.

NFIA was created to make flood insurance available on reasonable terms and to reduce fiscal pressure on federal flood relief efforts.  NFIA established the National Flood Insurance Program (NFIP) , which allows private insurance companies such as Allstate, to issue insurance policies on behalf of the federal government.  These companies are called Write Your Own (WYO) carriers.

When insurance lawyers know of a defendant who could be named in a lawsuit, they need to sue that defendant immediately.  Waiting until after a non-diverse defendant has removed the case to Federal Court may be waiting too long.  This is illustrated in the Southern District of Texas, Houston Division, opinion styled, Ali Duhaly v. The Cincinnati Insurance Company.

Duhaly sued Cincinnati in State Court alleging Cincinnati was liable for injuries incurred in a car wreck with Broderick Williams.  But, in the lawsuit Duhaly did not sue Williams until after the case was removed to Federal Court.  Cincinnati alleges the attempt to sue Williams after removal is only an attempt to defeat diversity jurisdiction.

Federal Rule of Civil Procedure 15(a) states that the court should freely give leave to amend when justice so requires.  But this is not automatic.  The Fifth Circuit has said that when a party seeks to amend to add a new, non-diverse party, the amendment should be closely scrutinized.

In situations where the insurance company is denying a claim based on their allegation that the claim involves arson, Insurance Lawyers would want to be aware of this decision from the Tyler Court of Appeals.  The opinion is styled In Re: United Fire Lloyds, Relator.  This is a writ of mandamus case.

The insured, Inner Pipe Pipeline, LLC, owned a Commercial Property, Commercial Auto, and Inland Marine policy issued by Lloyds.  Inner Pipe’s property was damaged by fire and filed a claim with Lloyds.

Lloyds alleges that Inner Pipe’s owner, Edward Dailey, intentionally set the fire and had the motive, opportunity and means to set the fire, and there is substantial evidence linking Dailey to the fire, thus rendering coverage by Lloyds, void.

For lawyers who handle claims against insurance companies, here is a case regarding a claim against a homeowners policy and a water leak.  The case is from the Western District of Texas, San Antonio Division.  The case is styled, William Burman v. State Farm Lloyds.  It is a partial summary judgment case.

Burman had a homeowners policy of insurance with State Farm.  Burman experienced a water leak and filed a claim.  State Farm retained an engineer, Lara, to determine whether the leak caused the foundation to move.  Lara’s report stated “that the observed foundation movements are primarily the result of seasonal moisture changes, and vegetation effects.  Also, that a line identified by American Leak Detection was leaking and exacerbated the foundation movements in an isolated area of the residence.

The area effected by the leak was paid for by State Farm but the claim for other areas was denied asserting the foundation problems predated the leak and the leak damage did not warrant underpinning.

Insurance attorney need to stay current on the ways the Judges interpret the law and how that law is applied to the facts in a case.

When dealing with insurance contracts and the “covered and non-covered cause of loss” issue, this 2019, Northern District of Texas, Dallas Division opinion is worth reading.  It is styled, 2223 Lombardy Warehouse, LLC, et al. v. Mount Vernon Fire Insurance Company.

The policy language at issue in this case read: