Claims Handling Process

Vehicle Insurance Policies

March 20, 2014 | Mark S. Humphreys

Insurance law lawyers need to be able to distinguish cases where they can help someone and cases where they cannot. Understanding how courts look at different situations is important. A 1992, Texas Supreme Court is a good case to know. The style of the case is, LeLeaux v. Hampshire-Fannett ISD. Here is some of the relevant information.

Monica LeLeaux, a sixteen-year-old high school junior, hit her head while trying to close the back door of a school bus. She and her mother sued the owner of the bus, the Hamshire-Fannett Independent School District, and the bus driver for damages. The trial court granted summary judgment for defendants.

Monica’s accident occurred on a school band trip, the events of which are summarize here based solely upon Monica’s deposition testimony. She and the other band members had traveled in school buses to another school to compete in a marching contest. Once they finished, Monica and some of her schoolmates, along with the band director, stayed to watch other bands perform. At some point Monica returned to the bus she had ridden to the contest. The bus was parked and empty, and the rear emergency door was open. Monica did not open it, and she does not know who did. She and a friend, J.R. Thompson, sat together on pillows in the rear doorway of the bus, dangling their feet out the back, talking. No one else was in the bus while they were there.

Sending Copies Of Lawsuit Papers To Insurance Company

February 27, 2014 | Mark S. Humphreys

Dallas insurance attorneys will advise a client to immediately turn over to the insurance company any lawsuit papers they receive. A 1978, Texas Supreme Court case illustrates why this should be done. The style of the case is, Weaver v. Hartford Accident and Indemnity Company. Here is some of the relevant information.

This is a suit by a judgment creditor against an insurer to recover under an automobile liability policy on the basis of a judgment secured against an omnibus insured. It is stipulated that the alleged omnibus insured failed to comply with the provision of the policy requiring him to forward to the insurer “every demand, notice, summons, or other process” he received. At issue is whether compliance with this policy provision by the named insured, in forwarding the citation which was served on him, should also be held to operate as compliance by the omnibus insured.

Thomas Enterprises is the named insured on a comprehensive automobile liability insurance policy issued by Hartford. The policy defines an “insured” under the policy to be the named insured and any other person using the vehicle with the permission of the named insured. Clyde Busch was an employee of Thomas Enterprises. While driving one of Thomas’ trucks in September 1969, Busch was involved in an accident with Weaver. Notice of the accident was given to Hartford who made an investigation.

Adjuster Actions That Make Them Liable

February 23, 2014 | Mark S. Humphreys

Insurance attorneys in Grand Prairie know that making the adjuster part of a lawsuit increase the chances that the case will not removed to Federal Court. The United States District Court, McAllen Division issued and opinion in January 2014, wherein the Court remanded a case the insurance company had removed to Federal Court. The style of the case is Rocha v. Geovera Specialty Insurance Company, et al.

Rochas had filed in State Court making specific allegations against the adjuster, Alex Sanchez. Rochas file a motion to remand the case to State Court.

Federal Courts do not have subject matter jurisdiction under 28 U.S.C. § 1332 unless the parties are completely diverse and the amount in controversy exceeds $75,000. In light of the conjunctive requirements of the statute, failure to satisfy the diversity requirement is fatal to subject matter jurisdiction and, therefore, to a successful removal.

Claims Against Adjusters

February 22, 2014 | Mark S. Humphreys

Dallas County insurance attorneys know to make an adjuster part of a lawsuit whenever it is possible to do so. One reason is to make sure the case is fought in Federal Court rather than State Court.

The United States District Court, McAllen Division, issued an opinion recently in the case styled Garza v. Geovera Specialty Insurance Company. Here, Geovera had the case removed to Federal Court. Garza was successful in getting the case remanded to State Court by pointing to specific violations of the Texas Insurance Code committed by the adjuster who is named Kenneth Allen DeMaster.

In the petition filed by Garza, Garza pointed to these actions on the part of DeMaster asserting DeMaster conducted a substandard inspection of Garzas’ property. For example, DeMaster spent a mere forty-five minutes inspecting Garzas’ entire property for hail storm and/or windstorm damages. Furthermore, DeMaster told Garza that, because he believed their damages were low, they would not have insurance coverage if they continued with their claim. DeMaster was neither qualified nor authorized to make coverage determinations. The inadequacy of DeMaster’s inspection is further evidenced by his report, which failed to include all of Garzas’ hail storm and/or windstorm damages noted upon inspection. Moreover, the damages that DeMaster actually included in his report were grossly undervalued. DeMaster also improperly withheld material sales tax and a contractors’ overhead and profit from his estimate, in total contravention of applicable Texas Department of Insurance directives. Ultimately, DeMaster’s estimate did not allow adequate funds to cover the cost of repairs to all the damages sustained. DeMaster’s inadequate investigation was relied upon by GeoVera in this action and resulted in Garzas’ claim being undervalued and underpaid.

Fortuity Doctrine In Insurance

February 16, 2014 | Mark S. Humphreys

Dallas insurance lawyers need to know how the “fortuity doctrine” works in insurance law. The 2001, Dallas Court of Appeals case styled, Scottsdale Insurance Company v. Travis, is a good case to read.

In this case, Scottsdale appealed a summary judgment granted in favor of South Texas Building Services, Inc. (“South Texas”) and Richard R. Robinson, ordering that Scottsdale owed South Texas and Robinson a duty to defend them in a lawsuit filed by William Barrett Travis, Maintenance, Inc., Maintenance of Houston, Inc. (“Maintenance Houston”), and Maintenance of Corpus Christi, Inc. (collectively referred to as “Maintenance”). Scottsdale contends the trial court erred in determining it had a duty to defend South Texas and Robinson because the allegations in the underlying petition arose out of a scheme that predated the inception of Scottsdale’s insurance policy and the original petition did not present claims triggering Scottsdale’s coverage. This court concluded the terms of the policy and the fortuity doctrine excluded coverage and reversed the trial court’s judgment.

Here is some factual background.

Total Loss Of Vehicle

January 30, 2014 | Mark S. Humphreys

Mineral Wells insurance attorneys need to be able to discuss with clients who have wrecked their car, how an insurance company decides whether or not a car is a total loss or should be repaired.

When and whether a vehicle involved in a collision is considered to be “totaled” for first-party insurance purposes is an issue of great angst and confusion for most consumers. We hear horror stories about older, functioning automobiles being “totaled” simply because the frame is bent or other seemingly minor and hidden damage occurs. Even insurance professionals can get turned around navigating the maze of rules and regulations regarding the act of “totaling” a vehicle under a policy. But it needn’t be all that complicated.

Typically, cars are considered to be “totaled” when the cost to repair the vehicle is higher than the actual cash value (ACV) of the vehicle. Practically speaking, however, it is not always practical to repair a vehicle, even if the cost of repair is less than its ACV. A vehicle worth $4,000 requiring $3,000 in repairs might be considered “totaled” by an insurer even though the cost of repair is less than its value before the accident. Insurance companies will typically consider such a vehicle to be a total loss, even though the repairs are only 75 percent of ACV.

Providing Notice Of Claim To Insurance Company

December 1, 2013 | Mark S. Humphreys

Fort Worth insurance lawyers need to tell their clients to immediately report it to their insurance company when they are served with lawsuit papers. A 1995, Texas Supreme Court case styled, Harwell v. State Farm illustrates why.

Here is some of the relevant information from the Harwell opinion.

On December 5, 1986, Tammy D. Hubbard and Eric Christopher Leatherman were in an automobile accident. The collision killed Hubbard and seriously injured Leatherman. Hubbard was insured by State Farm under her mother’s policy.

Uninsured Motorist Claim And Prompt Payment

November 26, 2013 | Mark S. Humphreys

Arlington attorneys who handle uninsured and underinsured cases need to be aware of this decision issued by the United States District Court, Houston Division. The decision was issued in September 2013, and is styled, Terry v. Safeco Insurance Company of America. Here is some of the relevant information.

The Terrys were involved in a car accident with an uninsured driver. In a letter from counsel dated November 20, 2009, the Terrys demanded benefits under their UM coverage. This letter stated that “Mr. Terry was willing to settle his claim for $20,000.00 and Ms. Terry was willing to settle her claim for $35,000.00.” The letter stated that the demands were “for an unconditional release of any further liability related to the incident made the basis of this potential lawsuit” and cautioned that the “offer would remain open for a period of ten days from” receipt. The letter also stated that “all written offers would be reviewed” with the Terrys but warned that “any written offer which is less than the latest written demand should be considered rejected in advance for the purposes of calculating prejudgment interest.”

In a letter dated December 4, 2009, Safeco acknowledged receipt and stated that the “demand to settle Jack Terry’s Uninsured Motorist Bodily Injury (UMBI) claim for $20,000 … must be declined and the demand to settle Mary Eden Terry’s UMBI claim for $35,000 must be declined.” After asserting that Jack Terry was 15% at fault for the accident and summarizing the Terrys’ medical bills, Safeco’s letter stated: Considering the negligence on Mr.Terry’s part and the PIP offset of $2,500 (previously paid) and the reasonable net medical bills of $5,408.92, my offer to settle Mr. Terry’s UMBI claim is $6,300.

Loss Of Consortium

October 26, 2013 | Mark S. Humphreys

Mineral Wells insurance lawyers need to know how a “loss of consortium” claim works as it regards insurance.

The 1987 Texas Supreme Court opinion styled McGovern v. Williams helps a person to understand how this type of claim. Here is some relevant information.

This cause concerns the liability of an insurance company under an automobile liability policy. Robert McGovern and wife, Ella Jo, sued respondent Linda Kay Williams for damages arising out of an automobile accident. Mr. McGovern sued for personal injuries and Mrs. McGovern, who was not involved in the accident, sued for loss of consortium. Respondent State Farm Insurance Company, the insurer for Ms. Williams, intervened and tendered $10,000 as full payment of its policy limits. The trial court determined that $10,000 was the applicable policy limit and, after accepting the tender, released and discharged State Farm from any further liability. Ms. Williams’ insurance policy with State Farm insured Ms. Williams to the extent of $10,000 per person and $20,000 per occurrence for bodily injury claims. State Farm tendered $10,000 pursuant to the “per person” policy limit. Mrs. McGovern disputed the amount of the tender, contending that she and Mr. McGovern were each entitled to $10,000 in insurance proceeds and that State Farm’s obligation was $20,000. The trial court held State Farm was not obligated to pay the damages sustained by Mr. and Mrs. McGovern in excess of the $10,000 limit. The trial court accordingly accepted State Farm’s tender of $10,000 and released State Farm from any further liability. The trial court also rendered judgment against Ms. Williams in favor of Mrs. McGovern for $10,000.

Insured’s Fixing Problems

October 6, 2013 | Mark S. Humphreys

Texas insurance attorneys will find this news from the Texas Supreme Court helpful in advising clients how to proceed in situations where a condition exists and can get worse over time.

The news is from The Southeast Texas Record and the title of the article is, “Texas SC: Insurer Must Pay Homebuilder For Costs Of Voluntary Remediation.”

Here is what the article tells us.