Articles Posted in Commercial Policies

Business people in Bedford, Colleyville, Grand Prairie, Arlington, Hurst, Euless, Fort Worth, or anywhere else in Texas will sometimes have mistakes in their commercial insurance policy. How do courts look at these situations?

The United States District Court, Northern District of Texas, Dallas Division, issued an opinion on a case May 26, 2010, where this was the issue. The opinion was issued by Judge Ed Kinkeade. The style of the case is Park Place Motorcars Mid Cities Ltd., and Park Place Motorcars of Texas, Inc. v. Affiliated FM Insurance Company.

The facts in this case are this: Park Place Motorcars Mid Cities Ltd. and Park Place Motorcars of Texas, Inc. (Park Place) operate a Mercedes dealership in Bedford, Texas, selling new and used vehicles. Park Place insured its motor vehicle inventory through two policies — a “dealer open lot” policy and a “floored” policy, both of which were provided by other insurance companies. Affiliated FM Insurance Company (FM) provided coverage to Park Place for physical loss or damage to insured property and for business interruption loss for such insured property, subject to all policy terms, conditions, limitations and exclusions (the “Policy”).

Commercial insurance policies are commonly issued to business people in the Dallas, Fort Worth area, and through out the state. Even business owners in Grand Praire, Arlington, or out in Weatherford, will have one of these policies. When a claim is made, there is often times a dispute as to the coverage provided in the policy.

The Court of Appeals of Texas, Houston (14th Dist.), decided a case on May 20, 2010, that does a pretty thorough job going thru an analysis of how these cases are looked at by the courts. The decision was handed down by Chief Justice, Adele Hedges. The style of the case is Essex Insurance Company v. Eldridge Land, L.L.C.

Some of the facts are that Eldridge Land L.L.C. (Eldridge) owned a vacant building. They had purchased a commercial property insurance policy from Essex Insurance Company (Essex). The policy contained a clause providing for damage “caused by or resulting from theft,” and an exception to the theft damage exclusion for “damage caused by the breaking in or exiting of burglars.” The relevant language was:

What about a school district located in Grand Prairie, Arlington, Fort Worth, Weatherford, or somewhere else in Texas? Does that make a difference when deciding how to interpret an insurance policy? The answer is no, but here is a case involving a commercial policy purchased by a school district contractor.

The United States District Court, Northern District, Dallas Division, recently had to decide whether a commercial policy purchased by contractors of the Quinlan Independent School District (QUID) were liable in a claim made by the QISD against one of its contractors. The style of the case is Employers Mutual Casualty Company et al. v. Northern Insurance Company. This case was decided on March 11, 2010, by Senior District Judge, A. Joe Fish.

Dates are relevant in this case. In April 1998, QISD hired DalMac Construction Company (DalMac) to be the general contractor in charge of constructing Ford High School. DalMac hired C. Watts as its “dirt work” subcontractor on the project. QISD took possession of the school in August 1999. Beginning immediately and continuing over the next several years, QISD experienced problems with the building and eventually brought suit against DalMac. In turn, DalMac brought suit against various subcontractors, including C. Watts. C. Watts tendered the defense of the lawsuit to Employers Mutual Casualty Company (Employers). Employers policies went into effect on November 1, 1999. Employers agreed to defend C. Watts in the lawsuit but did so under a reservation of rights. Employers conceded they may have some liability in the lawsuit but that Northern Insurance Company (Northern), which had a policy in effect from November 1, 1998, to November 1, 1999, also had liability under their policy.

Most businesses in Grand Prairie, Arlington, Fort Worth, Dallas, or Weatherford, are going to have insurance policies to cover losses. In addition to the regular liability policy they will also have an “umbrella” policy. An umbrella policy is an insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. It is sometimes also called an excess insurance policy.

The United States Court of Appeals for the Fifth Circuit, ruled on a case on March 25, 2010, that dealt with an umbrella policy. The style of the case is, Delta Seaboard Well Serv’s Inc. v. American Int’l Specialty Lines Ins. Co.

Delta Seaboard Well Serv’s, Inc. (Delta) is an oil and gas well serving company that plugs non-productive wells for operating companies. In 2003, Delta contracted with Fort Apache Energy, Inc. to plug a well. Sometime after plugging the well Fort Apache discovered that the gas pressure at the wellhead had not “bled off”, a fact finding that would have required Delta to cease its plugging operation. Fort Apache sued Delta for negligently plugging the hole when there was still recoverable reserves in the hole.

What if you are a business owner in Arlington, Grand Prairie, Weatherford, Fort Worth, Dallas, or somewhere else in Texas, and your business is shut down for a while? How does your commercial policy help you with lost income?

This was the question in the case, Catlin Syndicate Limited v. Imperial Palace of Mississippi, Inc; Imperial Palace of Mississippi, LLC. This case was decided by the United States District Court for the Southern District of Mississippi. The date of its decision is March 15, 2010.

Catlin Syndicate Limited (Catlin) is an insurer. They insured the casino operator Imperial Palace of Mississippi (Imperial). As the result of damage caused by hurricane Katrina, Imperial suffered a business interruption. Imperial was shut down for several months. When Imperial reopened it made much greater revenue than before the hurricane because many of the nearby casinos remained closed, and people had fewer gambling choices. Catlin agreed to pay Imperial’s claim but there was a dispute as to how the business interruption loss should be calculated.