Articles Posted in Claims Denial

Here is a 2023 opinion from the Northern District of Texas, Dallas Division worth reading when it comes to determining whether the insurer and the insured have reached a settlement agreement.  The opinion is styled, Brenda Kirby and Gary Kirby v. State Farm Lloyds’, Evan Kingery, and Kimberly Scholes.  The opinion deals with other issues and the facts make a good read along with the legal history.  We will focus on whether or not there was a settlement agreement.

After the lawsuit was filed, Defendant’s filed a motion to enforce a settlement agreement.  For support, State Farm submitted copies of the above referenced e-mail correspondence exchanged by counsel for the parties on January 18, 21, 24, and February 2, 2022. Defendant contends that this correspondence clearly establishes the formation of a binding agreement to settle the claims asserted in this lawsuit under Texas law.

A district court has inherent power to recognize, encourage, and when necessary enforce settlement agreements reached by the parties.  That one party to a suit initially agrees to a settlement but later refuses to execute a formal agreement that recites the terms of the settlement does not preclude a district court from exercising such discretion to enforce a settlement agreement.  Further, the issue of whether such withdrawal by one party is allowed under Texas law is irrelevant to whether a settlement is enforceable.  Unless the party seeking to withdraw can demonstrate that the agreement is invalid under state law at the time it was made or differs materially from any judgment entered enforcing the agreement, a federal court may hold them to their word by incorporating the terms of their agreement into a final judgment.

Here is a 2022, opinion from the Northern District of Texas, Dallas Division.  It is styled, Pasha & Sina, Inc. V. The Travelers Home And Marine Insurance Company, And Doug Salsbury.

This is a commercial policy case.

Plaintiff purchased the policy from Travelers.  Plaintiff attempted to recover from Travelers for damage to the property for roof leaks.  A dispute arose and Plaintiff sued Travelers and Salsbury in State Court alleging causes of action for negligence, negligent misrepresentation, common-law fraud, fraud by nondisclosure, violation of the duty of good faith and fair dealing, and violation of Chapter 542 of the Texas Insurance Code.

Insurance lawyers in the Dallas and Fort Worth need to read this 2022, United States 5th Circuit opinion.  It is styled, Advanced Indicator And Manufacturing, Incorporated v. Acadia Insurance Company; Nicolas Warren.

Advanced asserts it suffered damage to the roof of its building as the result of the storm, Hurricane Harvey.  Advanced submitted a claim to Acadia and Acadia assigned Warren to adjust the claim.  Warren inspected the building and determined that the damage was pre-existing and leaks resulted from deterioration and poor workmanship.    Based on Warren’s report, Acadia denied the claim.

On August 7, 2018, Advanced sued Acadia and Warren in state court, alleging various claims, including breach of contract, common law bad faith, and violations of the Texas Prompt Payment of Claims Act.

As has been discussed at this site many times, insurance companies prefer to litigate insurance claims in the Federal Court system rather than the State or County courts.  However, they have standards they must meet to be able to get a case to Federal Court.  This is discussed in a 2022 opinion from the Northern District of Texas, Dallas Division.  The opinion is styled, Robert Stricklin v. State Farm Lloyds And Angel Hernandez.

This case concerns a dispute over residential property insurance coverage between Stricklin and State Farm.  Plaintiff claims to have suffered damage to his home as the result of a hail and windstorm.  State Farm assigned Hernandez to adjust the claim.  A dispute arose over the extent of covered damage to the property.  Stricklin filed suit in State Court for various violations of law in the Texas Insurance Code and for breach of contract.  State Farm removed the case to Federal Court arguing Hernandez was improperly joined in the lawsuit.

Federal courts are courts of limited jurisdiction.  Thus, courts must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum.   And if the record does not contain sufficient evidence to show that subject matter jurisdiction exists, a federal court does not have jurisdiction over the case.  A defendant may remove a case from state to federal court based on diversity jurisdiction pursuant to 28 U.S.C., Sections 1332(a) and 1441(a).  The party seeking to assert federal jurisdiction has the burden of proving the facts establishing subject-matter jurisdiction by a preponderance of the evidence.  Thus, when a suit is removed based on diversity jurisdiction, the removing party must establish by a preponderance of the evidence that: (1) the amount in controversy exceeds $75,000; and (2) all person on one side of the controversy are citizens of different states than all persons on the other side of the controversy.

Insurance claim denial cases will sometimes need an expert.  When this happens, an insurance lawyer needs to know what is required of an expert and how the courts look at experts.  This issue is discussed in a 2022 opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Laura Atkinson v. Meridian Security Insurance Company.

This case is an insurance dispute regarding a homeowners insurance policy.  The policy holder, Plaintiff Atkinson, is alleged to have suffered hailstorm damage and her insurer is Defendant, Meridian.  Plaintiff named an expert to testify about the improper claims handling by Meridian and Meridian moved to strike the expert.

Meridian first moves to strike the designation and testimony of Plaintiff’s retained expert Gary Johnson, arguing that Johnson’s opinions were not properly disclosed and fail to meet the reliability standards of Federal Rule of Evidence 702.

Lawyers who sue insurance companies need to understand the various legal ways cases end up in State Court or Federal Court.  As has been stated here many times, the insurance companies prefer Federal Court as a play ground for lawsuits.  The reasons are many but what is important to lawyers who sue insurance companies is knowing ways to keep a case out of Federal Court if the case they are handling is one they would prefer to keep in State Court.

A 2022 opinion from the Northern District of Texas, Fort Worth Division, is a case worth reading.  The opinion is styled, Casey and Jared Davis v. Allstate Vehicle And Property Insurance Company and Phillip Butler.

Plaintiffs were insured by Allstate and had a homeowners claim.  The claim was properly submitted and the adjuster assigned to the claim is Butler.  Plaintiffs sued Allstate and Butler alleging various violations of the Texas Insurance Code.  Allstate removed the case to Federal Court asserting that they accepted responsibility for Butler under Texas Insurance Code 542A.  The election of responsibility for Butler was filed in State Court but was removed prior to the State Court ruling on the filing.