Articles Posted in Claims Handling Process

Here is an opinion issued by a Magistrate Judge from the Western District, Austin Division, which says that the insurer was too late in accepting responsibility for the acts of its agent, the adjuster, when the company accepted responsibility the day before removal was filed.  The case is styled, Robbins Place West Campus, LLC v. Mid-Century Ins. Co. and Jillian Meghan Sherman.

In this case, Robbins had commercial insurance coverage with Mid-Century when Robbins suffered wind and hail damage.  Robbins was unhappy with the way the claim was handled by the adjuster, Sherman, and sued Sherman and Mid-Century in State District Court for various violations of the Texas Insurance Code and breach of contract.

Pursuant to Texas Insurance Code, Section 542A.006, Mid-Century made an election to legal responsibility for Sherman.  The next day, Mid-Century removed the case to this Federal Court.

The Texas Insurance Code, Section 542A, became the law in Texas in September 2017.  The cases involving this law are working their way through the Court system.  This law was recently discussed in a U.S. Southern District, Houston Division opinion styled, Greatland Investment, Inc., a/b/a Southwest Plaza v. Mt. Hawley Insurance Company and Kevin Wilson Mayfield.

Greatland had property insurance with Mt. Hawley when it’s property was damaged in a storm.  Greatland assigned Mayfield to inspect and adjust the claim.  Mayfield found the claim did not fall within Greatland’s policy and Mt. Hawley refused to pay the claim.

On December 3, 2018, Greatland sent a demand letter to Mt. Hawley stating its intent to sue Mt. Hawley and Mayfield and others.  On January 15, 2019, Mt. Hawley responded and notified Greatland that Mt. Hawley was electing to accept liability for all its employees and the adjuster pursuant Texas Insurance Code, Section 542A.006.  On March 1, 2019, Greatland sued Mt. Hawley and Mayfield in Texas state court for breach of contract and Texas Insurance Code violations.

For Insurance Attorneys, here is a case that is important to know and understand.  The case is from the Western District of Texas, San Antonio Division.  It deals with segregation of damages when required under an insurance policy.  The case is styled, Mark Sadovsky v. Nationwide Property and Casualty Insurance Company.

Sadovsky had a home owners policy with Nationwide on April 12, 2016, when he suffered alleged hail and wind storm damage to his home.  On April 20, 2016, he submitted a claim and Nationwide eventually paid the claim and closed the claim.

In the spring of 2017, Sadovsky noticed several neighbors having their roofs repaired.  A neighbors contractor inspected the roof and informed Sadovsky of unrepaired hail damage and informed Sadovsky that the costs of repair would be $68,372.89.

Insurance attorneys know that a requirement of most insurance policies is that an insured give prompt notice to their insurance company of any claim.  This is illustrated in a recent Western District of Texas, San Antonio Division opinion styled, Mark Sadovshy v. Nationwide Property and Casualty Insurance Company.

This lawsuit arises out of a hail and wind damage claim filed by Sadovshy against Nationwide.  Sadovsky sued Nationwide for violations of the Texas Insurance Code and Breach of Contract.  This case is being decided now on a Motion For Summary Judgment filed by Nationwide.

Nationwide claims it is entitled to summary judgment because Sadovsky failed to perform under the insurance contract by timely notifying Nationwide of his claim for damages.

The “Offer of Settlement Rule” is relatively new to Texas law and is codified in the Texas Civil Practice & Remedies Code, Section 42.002.  This rule was discussed to a small degree in a case from the Corpus Christi Court of Appeals.  The case is styled, Israel Salinas and Hilda Salinas v. State Farm Lloyds and Truman Dale Crews.

In June of 2014 the Salinas filed suit against State Farm alleging multiple cause of action resulting from hail storm damage to their home.  On September 14, 2014, State Farm offered the Salinas $29,500 under the Offer of Settlement Rule and the Salinas did not respond to the offer.

The case went to trial.  The jury found that State Farm breached the contract with the Salinas and awarded the Salinas $10,500 for breach of contract and $10,500 as punishment due to the knowing and intentional conduct of State Farm.  The Judge signed a judgment awarding those amounts plus, $9,066.82 as prejudgment interest, $10,500 for attorney fees, and $8,097.05 for costs of court, for a total of $38,163.87.

One of the responsibilities for an insured who has a claim is to promptly report the claim to his insurance company.  This is illustrated in this 2019, Southern District of Texas, Houston Division, opinion styled, Bobwhite Rentals, LLC v. National Liability & Fire Insurance Company.

This is a summary judgment case in favor of National.

One of Bobwhite’s customers had property destroyed by a fire on March 6, 2015, while the property was on Bobwhite’s premises.  Bobwhite reported the fire to its insurance broker the same day.On April 30, 2015, Bobwhite paid $50,000 to settle the customer’s claim.  Over a year later, the fire and the damage to the customer’s property was reported to National.  National issued a reservation of rights letter on July 14, 2016 and began its investigation of the claim and on November 1, 2017, denied the claim saying:

Filing a proof of loss as part of a claim is very basic to all insurance claims.  This issue was a topic in a recent Fifth Circuit opinion styled, Andre Yanez v. American Strategic Insurance Coporation; E-Ins., L.L.C.; FKS Insurance Services, L.L.C.

The lower court granted the insurers motion for summary judgment based on Yanez not submitting a proof-of loss form as required by the federal flood program policy.

This claim arose out of storm in 2016, causing flood damage to Yanez’s property.  Yanez filed a claim and adjusters were assigned to the claim.  Yanez completed a flood field survey and filed a proof-of-loss and was paid for the 2016 flood consistent with the proof-of-loss that was filed.

Here is a Northern District of Texas, Fort Worth Division opinion issued by Justice Reed O’Conner.  This opinion echoes similar opinions being issued in the Federal Courts in Texas.  The style of this case is, Twanya Braden v. Allstate Vehicle and Property Insurance Company.

Braden reported a claim for hail and windstorm damage to her house to Allstate.  A dispute arose as to the damages amount and appraisers set the amount of loss at $9,005.92.  Allstate had made a previous payment and after taking into account the deductible, Allstate paid the balance.

Allstate moved for summary judgment based on the claim having been properly paid pursuant to the appraisal amount and thus, there were no other issues for the Court to decide.

When a Plaintiff sues an insurance company in State Court, the insurance company is usually going to do everything it can to have the case removed to Federal Court.  Plaintiffs normally lose this fight over which court the case will be litigated.

Here is a case where the Plaintiff won the fight and primarily because of mistakes the insurance company lawyers made.  The case is from the Southern District of Texas, Houston Division.  It is styled, Jade Freeman v. State Farm Mutual Automobile Insurance Company ….

Freeman filed the case in State Court on February 21, 2018, suing State Farm.  On October 9, 2018, plaintiff filed her first amended petition adding Progressive as an additional defendant.  The lawsuit arose out of an auto accident and State Farm and Progressive were sued for breach of contract and violations of the Texas Insurance Code.  On November 20, 2018, Progressive filed its Removal Petition in this Court.  Freeman timely filed its Motion to Remand.

Most people do not know what an anti-assignment clause in an insurance policy means.  This issue is discussed in a 2018, opinion from the 14th Court of Appeals.  The opinion is styled, Safeco Insurance Company of America v. Clear Vision Windshield Repair, LLC.

This case concerns anti-assignment clauses in insurance policies.  Clear Vision repaired chips in the windshields of Safeco’s insureds.  Safeco recently refused to pay invoices for the windshield repairs on four of Safeco’s insureds.  The insureds had assigned the claim to Clear Vision for payment and Safeco denied the payments relying on the anti-assignment clause in the policies at issue.

The trial court ruled in favor of Clear Vision and that ruing was upheld on appeal by this Court.