Saginaw insurance lawyers need to be able to discuss with their clients the duties the clients have to the insurance company regarding the Prompt Payment of Claims Act.
It boils down to this, a claimant has two duties to the insurance company.
(1) to give the insurer notice of the claim; and (2) to give the insurance company all the items the insurance company reasonable needs to secure proof of final loss.
Fort Worth insurance attorneys will have clients come to them wherein the insurance company is denying a claim. The stated reason for denial is that the policy was cancelled due to late payment. The Austin Court of Appeals ruled on this issue in May 2015. The style of the case is, Plasma Fab, LLC v. Scottsdale Insurance Company.
Plasma Fab, an ornamental iron construction contractor, purchased a general liability policy from Scottsdale in May 2008 and financed payment through premium finance company BankDirect. BankDirect paid all premiums in advance, and Plasma Fab was to make monthly payments to BankDirect. The premium finance agreement gave BankDirect authority to cancel the policy on behalf of Plasma Fab and seek a refund of unearned premiums for nonpayment of premium “after proper notice has been mailed as required by law.” Plasma Fab was chronically late making payments, and twice the policy was cancelled and reinstated. It is the third cancellation that is at issue.
On November 24, 2008, BankDirect prepared a notice of intent to cancel the policy effective December 4, 2008, which was ten days following the date the notice was prepared. However, BankDirect did not mail the notice of intent to cancel to Plasma Fab until the next day, November 25, 2008, so that the stated date of cancellation was only nine days after the date the notice was mailed. On December 4, 2008, after 5:00 p.m., BankDirect mailed a notice of cancellation to Scottsdale effective December 4, 2008.
Benbrook insurance lawyers need to be aware of this case. The reason to be aware of this case is that the case is, as of the date of this post, on appeal to the Texas Supreme Court. Hopefully their decision will put to rest some of the arguments in the Courts of Texas dealing with how to handle “loss of use” issues. The style of this case is, American Alternative Insurance v. Davis. It is from the Waco Court of Appeals.
The crux of this case involves whether a chattel owner should be compensated for measurable loss-of-use damages suffered when the owner’s chattel is totally destroyed and the owner is unable to replace the chattel or obtain a substitute immediately. The dispute arises from an automobile accident on December 29, 2011. At the time of the accident, Davis was driving a wrecker owned by his business, J & D. The only issue submitted to the jury pertained to J & D’s damages for the loss of use of its wrecker.
Davis testified that the wrecker in question was a 2002 Dodge 3500 with an 806 Vulcan wheel-lift unit on the rear. Davis stated that this was J & D’s only wrecker. Davis did not replace the wrecker until the second week of March 2012 because he claimed that he was financially unable to purchase a replacement wrecker. Accordingly, J & D was unable to continue operations for a period of approximately four months.
Irving insurance lawyers wishing to sue for breach of contract in an insurance dispute need to read this Houston Court of Appeals opinion styled, Zatorski v. USAA.
Zatorski owned a high-rise, loft residence in Houston. A kitchen pipe broke and flooded the loft. Zatorski rented a single-family home while the loft was being repaired, and he called USAA to buy a renter’s insurance policy. He spoke with a USAA representative, paid for a one-year renter’s insurance policy over the phone, and did not review the written policy when he received it.
Armed intruders broke into Zatorski’s rental home and stole several firearms and his safe, which contained watches, jewelry, and cash; the items stolen had a total value of over $260,000. Zatorski made a claim against his rental policy for the value of the stolen items, and USAA responded that the policy limits were $1,000 for theft of jewelry, $2,000 for theft of firearms, and $200 for theft of cash. USAA paid Zatorski $4,500, which constituted payment of the policy limits for jewelry, firearms, and cash, plus $1,300 for the loss of the safe.
Insurance lawyers in Aledo Texas will tell you that you need to give notice to your insurance company as soon as possible when you know of a potential claim. The United States 5th Circuit dealt with this notice issue recently in a case styled, Berkley Regional Insurance Company v. Philadelphia Indemnity Insurance Company.
This case involves an insurance claim, controlled by Texas law for this diversity action, arising from an injury sustained on the property of Towers of Town Lake Condominiums. Towers, in an attempt to satisfy the notice requirements of an umbrella insurance policy with Philadelphia, sent notice of the claim to the broker of that policy. The core of the dispute is whether this notice satisfied the requirements of the umbrella policy, and, if not, whether Philadelphia was prejudiced as a result. Finding notice to the broker insufficient and Philadelphia prejudiced, the district court granted summary judgment in favor of Philadelphia. This Court affirmed that decision.
In 2004, Venus Rouhani (Rouhani) sued Towers in Texas state court for injuries she sustained at Towers, and a jury awarded her $1,654,663.50 plus interest and costs (totaling $2,167,300.30) in 2006. The damages were covered by a $1,000,000 primary policy issued by Nautilus Insurance Company (Nautilus) and a $20,000,000 umbrella policy (Umbrella Policy) issued by Philadelphia. Nautilus tendered its policy limits plus interest in the amount of $1,457,561.41 to satisfy the judgment, but Philadelphia refused to pay the remainder of the judgment, arguing that Towers failed to give Philadelphia notice of Rouhani’s claim until after the verdict was rendered.
Mansfield attorneys handling hail damage claims can tell you that the insurance companies are always trying to have lawsuits in Federal Court rather than State Court. Here is another opinion on that issue from the US Court, Northern District, Dallas Division. The style of this case is Ocotillo Real Estate Investments I, LLC, v. Lexington Insurance Company, et al.
This action arises from an insurance claim Ocotillo submitted to Tudor Insurance and Lexington Insurance Company regarding property loss from hail. Ocotillo filed suit against Defendants in state court. Ocotillo alleged claims for violations of the Texas Insurance Code, violations of the Texas Deceptive Trade Practices Act, breach of contract, and negligence. The carriers removed the state court action to Federal Court. Ocotillo moved to remand.
A defendant may remove a state court action to federal court if he establishes the federal court’s original jurisdiction over the action. It is the defendant’s burden to establish the existence of federal jurisdiction. Thus, to remove a case, a defendant must show that the action either arises under federal law or satisfies the requirements of diversity under 28 U.S.C. § 1441(b). Because removal raises significant federalism concerns, the removal statute is strictly construed and any doubt as to the propriety of removal should be resolved in favor of remand. A district court must remand a case if, at any time before final judgment, it appears that the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c).
Burleson lawyers handling hail damage claims will know that insurance companies try to get cases into Federal Court. The US District Court, Northern District of Texas, Dallas Division issued an opinion in a case, illustrative of this tactic. The style of the case is, Tudor Insurance Company, et al. v. Ocotillo Real Estate Investments I, LLC.
This is declaratory judgment action in which Tudor and Lexington Insurance Company seek a declaration that they have no duty to provide coverage to Ocotillo for losses resulting from alleged hail damage to Ocotillo’s property. In its motion to dismiss, Ocotillo argues that because it has filed a state court action that will resolve all issue between the parties, the Court should abstain from considering this case.
Ocotillo filed the State Court Action on August 1, 2014. In the State Court Action, Ocotillo alleges claims against Carriers and additional defendants for violations of the Texas Insurance Code, violations of the Texas Deceptive Trade Practices Act, breach of contract, and negligence. Carriers timely removed the State Court Action. By separate order of this date, the Court denied the motion to remand on the grounds that Ocotillo had improperly joined in-state defendants.
Dallas insurance lawyers handling storm damage claims need to dread a recent opinion from the US District Court, Southern Division Texas, Houston Division. The opinion is styled, Nasti v. State Farm Lloyds, et al.
This is an insurance case arising from alleged storm damage to Nasti’s home which State Farm has filed a motion for summary judgment regarding. After the storm, Nasti was approached by Manley of Mac Roofing, who was offering free roof inspections to storm victims in the neighborhood. Both of Nasti’s neighbors on each side already had roofs replaced because of the storm. Nasti reported his claim to State Farm and requested an inspection with Mr. Manley present. State Farm adjuster Stewart Brown inspected Nasti’s roof and reported: “Reviewed 30yr fiberglass shingles for wind and hail damage with Mac’s Roofing present…. I did find damage that would be consistant w/ wind damage to the back left slope…. Inspected interior gameroom /entry and dining room and found water damage to ceilings.” Brown estimated the covered damage to be $3,107.54, less than the deductible of $6,584.00. Nasti requested a reinspection with a different adjuster. State Farm adjuster Dwight Johnson inspected Nasti’s roof and reported: “I inspected the roof with the contractor. My inspection revealed no evidence of storm related damage to the roof system…. The Shingle is a heavier 40 year shingle.” Despite finding no storm damage, Johnson did not alter Brown’s estimate of $3,107.54 damage. Nasti’s expert adjuster Shannon Kimmel inspected Nasti’s roof and reported:
I have visited Mr. Nasti’s home and inspected the damage to his roof. There is no question that Mr. Nasti’s roof was damaged by the severe wind and hail storm that hit The Woodlands, Texas, in June 2012…. I have adjusted thousands of these types of claims for various insurance companies, including State Farm…. In my opinion and based on my extensive experience as a former State Farm adjuster, inspections by Stewart Brown and Dwight Johnson were inadequate and unreasonable…. Photographs in the claim file clearly prove up covered damages resulting from wind and hail…. Mr. Brown’s and Mr. Johnson’s inspections and Mr. Brown’s damage estimate that was essentially rubber- stamped by Mr. Johnson-despite the fact that his findings contradicted Mr. Brown’s estimate-underestimated and/ or ignored obvious covered damaged [sic] that a reasonable adjuster, acting in good faith, would not have ignored.
Mansfield insurance lawyers will tell their clients that a proof of loss must be submitted in a timely manner for losses. A 2015, US Southern District, Galveston Division opinion re-interates this point. The style of the case is, Fennelly v.Texas Farmers Insurance Company.
Following flood damage to his property caused by Hurricane Ike, Fennelly submitted two timely Proofs of Loss to Farmers, his insurer under a Standard Flood Insurance Policy issued through the National Flood Insurance Program. In response, Farmers paid Fennelly about $78,000,000. On August 9, 2009, the FEMA-extended deadline for filing a POL expired. On January 11, 2011, Fennelly filed his third POL for about $112,000.00 more in benefits. Farmers adjusted this claim and approved it in the amount of only about $7,000,000. On January 20, 2011, the adjuster’s supplemental report was sent to FEMA with a waiver request. On January 21, 2011, FEMA approved a waiver for the amount of the loss and scope of the damages outlined in the adjuster’s report. On January 25, 2011, Farmers sent Fennelly a letter informing him that it had approved the $7,000.00 supplemental amount, had rejected the remaining $105,000.00 of his claim and was “reserving all rights and defenses under the policy”; the supplemental settlement check was enclosed. On March 15, 2011, Fennelly demanded an appraisal of the remainder of his claim, but Farmers denied his request on March 22, 2011, because, in its opinion, its disagreement with the scope of damages claimed by Fennelly made an appraisal inappropriate. On January 24, 2012, Fennelly sued Farmers in an effort to recover the remainder of his POL under the policy.
The sole, dispositive issue in this case is whether, as Fennelly argues, FEMA expressly waived any challenge to the entirety of his third POL or whether FEMA’s waiver was, as Farmers argues, limited to only the $7,000.00 portion of the POL approved by Farmers’s adjuster. This Court agreed with Farmers.
Irving insurance lawyers will see situations where someone has “excess insurance.” There are many variables that can result from these situations. A 2000, Texas Supreme Court case styled, Keck, Mahin & Cate v. National Union Fire Insurance Company, is an opinion to read to see one of the variables.
Granada Food Corp. held one million in primary insurance issued by the Insurance Company of North America as well as nine million in excess insurance issued by National Union. Wolf Point Shrimp Farm, a supplier, sued Granada and the Keck law firm was hired to defend the company. The supplier demanded $3.6 million to settle the lawsuit, but North America, National Union, and Keck were unwilling to settle.
Errors by Keck and the insurance companies compromised Granada’s defense before trial. Shortly before trial, Granada executed a release of malpractice claims against Keck in exchange for Keck’s forgiveness of Granada’s unpaid fees stemming from unrelated matters. On the first day of trial North America tendered its policy limits. National Union then took over the defense and ultimately settled for seven million.
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