Articles Posted in Claims Denial

Insurance lawyers know they have to look at every case as if it will go to trial.

An attorney has to always keep the client informed as a reasonable timeline of events such as the initial paperwork or discovery.  Times when to expect to take depositions and attend a mediation also should be discussed.  It seems like insurance companies have become more likely to spend significant amounts of money to defend first-party insurance cases, resulting in extended litigation.  Further, it is nearly impossible to get to trial on the first trial setting.  Never lead a client to believe the insurance company is likely to settle quickly.  Clients get impatient as time goes by.  Keeping them informed helps relieve the anxiety.

When the insurance company hires an expert, the attorney must know what the opinions of that expert and what they will testify about at trial.  This may make the difference between the expert being your worst nightmare or your best witness.  The cost of the deposition is well worth the money spent.  A lot can be learned about the expert from other attorneys who have confronted and this helps to formulate questions to be asked of the expert.  A good expert deposition can help a case get settled.

Insurance lawyers need a good process for taking on a case.  This includes a good intake sheet and a thorough discussion about the case.

I.  One issue to discuss is the number or prior claims that the client has had in the past.  What repairs were competed?  An insurance company adjuster will use prior claims or lack of repairs to their advantage if possible.  Adjusters have access to this information and will use it fruitfully for themselves.  Having copies of repair receipts and photos are very helpful for the claimant.  Sometimes an expert is needed.

II.  Inspection tends to be the part of a case that has the most varied, and often polarized account of what exactly happened to cause the claim.  The attorney needs to know if the client was present when the property was inspected.  Too many times, the adjuster acted on his own without the claimant being present.  Knowing what the adjuster did can often times help the claim.  It may increase the value of the claim or lessen it.  The insured needs to be sure and point out all the damage the insured is aware of and know whether or not the adjuster looked for other damage

Attorneys handling insurance claim denials and their clients, need to understand some basics about what needs to be done when a claim is denied.

Before reaching the court house steps, in most cases, the parties should consider possible resolutions to avoid trial.  The client may not always have the best facts, or the upper hand in negotiations, but counsel should advise the client of the potential risks and rewards of proceeding toward trial.  Ethically, lawyers have a duty to convey all offers made by the insurance company, and clients should be advised on any potential counterclaim risk, if applicable.  Texas Rule of Civil Procedure 167 may severely affect the way a judgement is handled in the event the case goes to trial and the plaintiff obtains less than what was offered.  The client must understand the risk involved.  In the end, he or she should be comfortable with any decision that is made after receiving full counseling and advice.

There is one of two things that have happened when the parties find themselves at the courthouse ready to pick a jury and present their case.  It is because 1) the plaintiff has overvalued the case, or 2) the defendant has undervalued it.  Preparation in the initial stages of the case can be just as valuable as what you do in the courtroom during trial.

Having an experienced insurance law attorney is vital.  Otherwise you can end up with a situation that occurred in the Eastern District of Texas, Sherman Division.  The case is styled, Mike and Jacqueline Sanchez v. Safeco Insurance of Indiana.

The Sanchez’s filed a Motion to Dismiss Without Prejudice.  In other words, the Sanchez wished to dismiss their lawsuit against Safeco.  However, by filing the motion “without prejudice” would allow them to refiled the lawsuit against Safeco.  For this reason, Safeco contested the motion.

The United States Fifth Circuit Court of Appeals recognizes that as a general rule, motions for voluntary dismissal should be freely granted unless the non-moving party will suffer some plain legal prejudice other than the mere prospect of a second lawsuit.  The primary purpose of Rule 41(a)(2) is to prevent voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative conditions.

Here is a Dallas, Texas opinion that insurance lawyers need to read.  It is from the Dallas Court of Appeals and is styled, American National County Mutual Insurance Company v. Jonathan A. Medina.

On October 30, 2009, Angel Freeman ran a stop sign and crashed into Medina who was riding a motorcycle.  The cycle was totaled and Medina was injured.  Angel had a 1998 Dodge Ram that was listed as a covered vehicle on an ANPAC policy belonging to Paul and Katie Freeman.  Angel is Paul’s sister.

After the wreck, a question arose as to who owned the Ram. and whether it was insured by Paul’s policy.  If the truck was not owned by Paul, it could not be covered by the policy.  Paul and Angel both told ANPAC that Paul sold the vehicle to Angel for cash four weeks before the accident, on October 1, 2009, and both gave written statements to ANPAC to that effect.  Angel never put the title into his name.  ANPAC cancelled the policy effective October 1, and refunded premiums paid.  On December 8, 2009, ANPAC  notified Medina of the decision and closed the file.

Most of the time, Courts are happy to have a case dismissed from their docket.  An Eastern District of Texas, Sherman Division, opinion is an exception to that general situation.  The opinion is styled, Mike And Jacqueline Sanchez v. Safeco Insurance Company of Indiana.

The Sanchez’s filed a Motion to Dismiss Without Prejudice and the Court denied the motion.  Here is why.

The Fifth Circuit recognizes that as a general rule, motions for voluntary dismissal should be freely granted unless the non-moving party will suffer some plain legal prejudice other than the mere prospect of a second lawsuit.  The primary purpose of Rule 41(a)(2) is to prevent voluntary dismissals which unfairly affect the other side, and to permit the imposition of curative conditions.

The papers filed in Court have to be proper when suing an insurance company.  A Southern District of Texas, McAllen Division opinion illustrates this rule.  The opinion is styled, Alfredo Murillo Jr., et al v. Allstate Vehicle and Property Insurance Company.

Alfredo suffered damage after a hail and or windstorm and sued Allstate alleging Allstate failed to “cover the true costs of repairs … including but not limited to, repair and/or replacement of the roof and any exterior damage,” and that Allstate “failed to properly adjust the claim and summarily improperly paid the claim.”  Alfredo’s complaint contains no other specific factual allegations beyond general allegations that Allstate’s investigation of the claims was “unreasonable,” and that Allstate “failed to properly scope” Alfredo’s damages, and that Allstate delayed in the payment of the true cost of damages.  In all other respects, Alfredo’s complaint is a form petition that merely restates the legal elements of his claims.

Allstate filed this  motion for partial dismissal pursuant to Federal Rule 12(b)(6) for failure to state a claim for which relief can be granted and Rule 9(b) for failure to plead with particularity.

The statute of limitations is a legal issue that must be taken into account in every case.  This case from the Southern District of Texas, Laredo Division,does a good job of discussing the statute of limitations in insurance cases.  The case is styled, Gilberto Rodriguez v. State Farm Lloyds.

This is an insurance coverage dispute that arose out of a water pipe bursting in Gilberto’s home.  State Farm filed a motion for summary judgement, part of which dealt with the limitations issue.  The Court granted State Farm’s motion.

Here are relevant facts and discussion:

Whether you are talking about life insurance claims, homeowners claims, disability claims, auto claims, or other types of first party claims, policy benefits are the basic recovery allowed for an insurance company breach of the contractual obligations.  An insurer’s refusal to pay the insured’s claim causes damages in at least the amount of the policy benefits wrongfully withheld.  This is supported in the Texas Supreme Court cases, Vail v. Texas Farm Bureau Mutual Insurance Co. and Transportation Insurance Co. v. Moriel.

In addition, the same court stated in Hernandez v. Gulf Group Lloyds, an insured should be able to recover consequential damages that are the foreseeable result of the insurer’s breach of contract.  Numerous cases hold that insurance policies are subject to the same rules as other contracts.  One of the best established rules is that:

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally; i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach.

Seeing if there is liability on the insurance policy is one of the first things an insurance attorney needs to do when meeting with a prospective client.

In 1996, the Texas Supreme Court stated in Liberty Nat’l Fire Ins. Co. v. Akin, that insurance coverage claims and bad faith claims are by their nature independent.  But, in most circumstances, an insured may not prevail on a bad faith claim without first showing that the insurer breached the contract.

In 1998, the Texas Supreme Court stated in Vail v. Texas Farm Bur. Mut. Ins. Co. that contractual liability is not essential to establish extracontractual liability, but it helps.  For example, an insurer that owes policy benefits under the contract may also be found to have acted unfairly in refusing to pay those benefits.