Articles Posted in Claims Handling Process

Dallas insurance lawyers will have potential clients come and ask questions dealing with their stolen vehicle and how the insurance company is handling the claim. The Dallas Court of Appeals issued a 2008, opinion that is worth knowing about. The case is styled Ysasaga v. Nationwide. Here is the relevant information from that case.

On March 2, 2002, Ysasaga reported that his 2001 Chevrolet Corvette had been stolen in Dallas and filed an insurance claim with Nationwide. Ysasaga subsequently initiated the Insurance lawsuit against Nationwide. In the Insurance Case, Ysasaga sought the recovery of damages arising out of the theft of the Corvette, including policy benefits and extra-contractual damages. Ysasaga claimed the Corvette was valued at $49,200. On March 4, 2004, the parties entered into a settlement agreement. Pursuant to the settlement, Ysasaga signed a release of all claims ” which arise out of the facts alleged and situation described in [the Insurance Case].” In consideration of the release, Nationwide paid Ysasaga $110,000. From these settlement proceeds, $34,281.09 was paid to Ysasaga and First State Bank for the release of the lien on the vehicle and $75,718.91 was paid to Ysasaga and his attorneys. As provided in the release, the Insurance Case was dismissed. Despite the payment to Ysasaga and the release of the lien, title to the vehicle was never formally transferred to Nationwide.

In June 2005, the vehicle was recovered in Mexico. Nationwide informed Ysasaga of the vehicle’s recovery and requested Ysasaga’s endorsement of the certificate of title. In response, on August 9, 2005, Ysasaga initiated a Conversion Case and asserted Nationwide had converted the vehicle.

Grand Prairie insurance lawyers need to be able to explain to clients what happens when an insurance company pays a claim. There may be several things that happen. One of those things is that the insurance carrier has a subrogation claim to all amounts paid by the insurance carrier. A 2009, San Antonio Court of Appeals opinion helps explain how this sometimes works. The style of the case is, Bay Rock Operating Company v. St. Paul Surplus Lines Insurance Company. Here is some relevant information from that case.

The facts in this case are that the insured hired Bay Rock to design and drill a well. The insured had blowout insurance through St. Paul. The policy had a subrogation provision in it entitling St. Paul to contractual subrogation to all claims if it paid anything under the policy. Bay Rock performed negligently, and there was a blow out. The insured filed a claim which St. Paul eventually paid. The St. Paul brought a subrogation claim against Bay Rock. At trial, the jury found Bay Rock 51% liable. Bay Rock then filed this appeal.

On appeal, Bay Rock argued that St. Paul did not prove that the amount paid under the policy was covered by the policy and, therefore, St. Paul did not prove its entitlement to subrogation. This Court of Appeals held that St. Paul was suing under contractual, not equitable, subrogation. The Policy states in relevant part, … upon reimbursement hereunder to the Insured of any loss … St. Paul is subrogated to all the Insured’s rights of recovery against any other person … who may be liable for such loss …. Therefore, under the plain terms of the contract, St. Paul’s right to subrogation arose upon payment of any loss. Once St. Paul paid the money to insured, it had a contractual right to step into the shoes of the insured and initiate the suit against Bay Rock as subrogee of the insured. Under the law of subrogation, based on its contractual subrogation right, St. Paul stepped into the shoes of its insured, and obtained their insureds’ right to sue Bay Rock for negligently causing the blowout, subject to any defenses Bay Rock could assert against the insured. Therefore, St. Paul was correct that, upon convincing the trial court that it had a contractual subrogation right as a matter of law, it only had to prove the elements of its negligence claim to the jury. Thus, the ruling in favor of St. Paul was upheld.

Arlington insurance lawyers will tell a client that a claim needs to be made to the insurance company as soon as the client knows of the claim. This is illustrated in a 1998, United States, Northern District of Texas case. The style of the opinion is, Chicago Insurance Company v. Western World Insurance Company. Here is some of the relevant information from that case.

Two residents of Avalon Place, a nursing home, were injured during their stay there. The residents left Avalon Place before May, 1995. They sued Avalon Place. Avalon Place gave notice to Chicago Insurance on September 7, 1995. Avalon Place did not notify Western World until May 8, 1996, eleven months later. The Chicago Insurance policy was an “occurrence” policy covering claims arising from occurrences during the period between June 28, 1995 and June 28, 1996. The Western World policy was a “claims made” policy that covered claims made against Avalon Place during the period from June 28, 1994 to June 28, 1995. This policy required Avalon to notify Western World “as soon as practicable” of any “occurrence” that could result in a claim and to notify Western World “as soon as practicable” of any claim made against it. Chicago Insurance and Western World settled the underlying claims and reserved their rights to litigate coverage between themselves. They each filed a declaratory judgment action seeking this Court to declare whether their policies covered liability incurred by a mutual insured and whether the parties were liable to one another for costs incurred in defending and settling that liability.

The Court ruled that Western World’s “claims made” policy does not cover the claims at issue because the insured did not give notice “as soon as practicable.” The Chicago Insurance policy does not cover the claims because they occurred before the effective date of the Chicago Insurance policy. Therefore, Western World has no right to seek reimbursement from Chicago Insurance, and Chicago Insurance has no right to seek reimbursement from Western World.

Most Garland insurance law lawyers can tell you how important the “consent to settle” provision is in an insurance policy. This provision is addressed in a 2006, 5th Circuit Court of Appeals opinion. It is styled, Motiva Enterprises, LLC v. St. Paul and Marine Insurance Company. Here is what it says.

Motiva settled an action brought against it for damages without notice to National Union, its insurer, and without obtaining National Union’s consent. Motiva sued National Union to recover the amount Motiva paid in settlement, contending that it had no obligation to comply with the condition in the policy to obtain its insurer’s consent to settle because National Union refused to tender an unqualified defense to Motiva. This Court agreed with the district court that National Union’s tender of a defense with a reservation of rights to later deny coverage did not excuse Motiva’s breach of the consent-to-settle clause. The Court also conclude that National Union suffered prejudice as a matter of law and had no obligation to reimburse Motiva for the settlement.

A sulfuric acid storage tank exploded at Motiva’s Delaware refinery, killing one employee and injuring several others. Motiva had approximately $250 million in liability insurance which Motiva contended covered its liability for injuries and litigation costs related to the explosion. The policy contained standard “consent-to-settle” and “cooperation” clauses. The consent-to-settle clause required National Union’s advance consent to any settlements that it would be funding, and the cooperation clause required Motiva to cooperate with National Union in the investigation, settlement, and defense of claims.

Dallas insurance lawyers need to be able to discuss with a client when insurance is going to cover a loss. This may seem easy at first but that is not always the case. The Texas Supreme Court issued an opinion on this issue in 1963, in a case styled, Smith v. Eagle Star Insurance Company. Here is some of the information from that case.

This is a suit to recover on a fire insurance policy for the loss of a house brought by Smith against Eagle Star Insurance Company, Ltd. Judgment was for Smith in the trial court.

Both parties filed motions for summary judgment in the trial court. The trial court granted Smith’s motion for summary judgment and denied Eagle Star who appealed.

Arlington insurance lawyers need to understand what an “insurable interest” is when it comes to making a claim. A 1999, Austin Court of Appeals opinion gives some guidance about this issue. The style of the opinion is, Valdez v. Colonial County Mutual Insurance Company. Here is some of the relevant information from the case.

Valdez purchased an insurance policy from Colonial. The Colonial policy was a standard Texas automobile insurance policy which insured Valdez 1992 Plymouth. Later, Valdez sold and transferred title of the vehicle to his adult son, Rene. Rene obtained new financing for the vehicle and Valdez notified Colonial that Mercantile Bank was the new lienholder of the automobile. Valdez however did not notify Colonial of the change of title to his son, Rene. But, Colonial’s change form did not request that information.

Rene worked in Mexico City and left the car with Valdez who continued to use the vehicle and pay the policy premiums. Valdez renewed the policy. More than a year after Rene bought the car, the vehicle was stolen while parked outside Valdez’s residence. Valdez filed a claim that Colonial refused to honor. Colonial filed suit seeking a declaratory judgment that Valdez did not have an insurable interest in the stolen vehicle and that Colonial had no insurance coverage obligations under an automobile insurance policy issued to Valdez. The trial court granted summary judgment in favor of Colonial. This appeal followed.

Dallas and Fort Worth insurance lawyers need to be able to explain to clients the different responsibilities insurance company’s have regarding settling cases. A 1999, U.S. 5th Circuit case is worth reading. The style of the case is, Travelers v. Citgo Petroleum. Here is what it says.

Travelers issued three polices to Wright Petroleum: a business auto policy, an umbrella policy, and a general liability policy. Citgo had a franchise agreement with Wright. Citgo was made an “additional insured” to each policy. The business auto policy provided that the carrier could investigate and settle any claim and its duty to defend or settle ended when the limits of coverage had been exhausted by payments of judgments or settlements.

In October 1992, one of Wright’s tanker trucks and an automobile collided. The tanker allegedly ran a red light at an intersection. Both drivers were killed. The tanker was carrying petroleum products for Citgo, as well as several other oil companies.