Articles Posted in Claims Denial

Insurance lawyers want to help their clients as much as possible in any given case.  The U.S. Western District Texas, San Antonio Division, issued an opinion regarding recovery of attorney fees in an insurance case.  The opinion is a 2018, opinion styled, Jesus Agredano; Margaret Agredano v. State Farm Lloyd’s.

This case will be discussed in three blogs with each blog discussing the Courts ruling regarding attorney fees in insurance cases.

The Agredanos prevailed at trial on their breach of contract claim against State Farm.  The remaining question was whether or not they were entitled to seek attorney’s fees.

Insurance lawyers will testify that one of the biggest reasons they see for denial of coverage is the insurance company allegation that there was one or more misrepresentations in the policy application.

This issue is discussed in the 1969, San Antonio Court of Appeals opinion styled, The Prudential Insurance Company of America v. Ignacia Torres et ux.

This lawsuit, a declaratory judgment action, is asking the court to rescind and cancel a policy due to misrepresentations in the policy application.

Most insurance lawyers know that one way an insurance company tries to get away with refusing to pay on an insurance policy is to rescind the policy.  According to a 1931, Amarillo Court of Appeals opinion styled, Forrester v. Southland Life Ins. Co., the general principle is, prior to a loss an insurance company has the right to rescind the policy procured through mutual mistake or fraud.

As stated by the  Texas Supreme Court in a 1980 opinion styled Mayes v. Massachusetts Mut. Life Ins. Co., an insurance company may rescind a policy based on the insured’s misrepresentation, if the insurance company pleads and proves the following elements:

1.  the making of the misrepresentation;

A 2017, opinion styled, Carrillo Funeral Directors, Inc. v. Ohio Security Insurance Company, et al, is another example of incorrect pleadings against an adjuster.  The case is from the Northern District, Dallas Division.

Carrillo suffered hail damage and made a claim against its insurer Ohio.  There was an under payment of the claim and Carrillo sued Ohio and the adjuster John Horvath for violations of the Texas Insurance Code, in State District Court.  Ohio timely removed the case to Federal Court asserting that Horvath was improperly joined in the lawsuit in an effort by Carrillo to defeat diversity jurisdiction.

28 U.S.C. section 1441(a) permits the removal of any civil action brought in a State court of which the district courts of the United States have original jurisdiction.  But only if the action could have been originally filed in federal court.  However, the removal statute must be strictly construed because removal jurisdiction raises significant federalism concerns.  As a result, any doubt as to the propriety of removal should be resolved in favor of remand.

What if it can be proved that the insurance company was wrong in denying coverage of a claim when a third party is suing the insured?

A June 2017, Texas Supreme Court opinion addresses this issue in the case styled, Great American Insurance Co. v. Hamel.  The issue in this case was, what constitutes a full adversarial trial.

In Texas, when someone is being sued and the person being sued cannot get their insurance company to provide a defense and pay the claim, and the person being sued believes his insurance company should be providing a defense and paying the claim, then when a judgment is taken against him, he can assign the claim he has against his insurance company to the person who sued him and obtained a judgment.

Here is a summary judgment case from the Eastern District, Sherman Division, where one of the causes of action is, negligent claims handling.  The case is styled, Yoram Avneri v. Hartford Fire Insurance Company.

Here, the Court had previously denied Hartford’s motion for summary judgement but is now reconsidering the ruling.  After the reconsideration the Court withdrew its previous ruling and granted it in part and denied in part.

Avneri suffered hail and wind storm damage at his property in Denton, Texas, that was insured through a Hartford policy.  Avneri submitted the claim which was denied by Hartford based on their assertion that the damage, if any, did not exceed the policy deductible.  Avneri filed suit in State Court and Hartford removed the case to Federal Court where it filed its motion.

Relevant to Texas Insurance Law is a case reported on by the Cook County Record, an Illinois publication.

A Judge’s ruling in a traffic crash personal injury case could cost the insurance company, Liberty Mutual, $4.5 million, even though the policy at the heart of the case is supposedly capped at $25,000.

The judgement issued in this case is currently stayed pending an appeal at the U.S. Court of Appeals for the Seventh Circuit.