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Insurance attorneys in Fort Worth would want to know what is in the insurance company claims file when they are involved in a lawsuit with an insurance company.

When extra-contractual lawsuits are filed, there is often a pitched battle over discovery wherein the insured seeks to prove his case by showing deficiencies or omissions in the claim file. Many attorneys on both sides of the docket maintain that bad faith cases are won and lost in discovery. Typically, the claim file is not discoverable in a simple contract case, but it is discoverable in an extra-contractual case, up to the date suit is anticipated.

Texas Rules of Civil Procedure 166b(3)(d) provides certain communications between a party’s agents, employees and representatives, when made after the occurrence upon which the suit is based, and in anticipation of litigation, are privileged and exempt from discovery. The party claiming the privilege has the burden of producing evidence to establish its applicability to the materials sought to be protected and must prove the evidence was acquired and developed in anticipation of litigation. In other words, the privilege may be invoked if the documents were prepared after a lawsuit has been filed or if there is good cause to believe suit is likely. The mere fact that one party has hired an attorney is not sufficient to place the other party in anticipation of litigation; there must be some objective manifestation of the intention to bring suit. The proof required to sustain the privilege must be specific and detailed and is set forth in the Texas Supreme Court in Peeples v. Fourth Court of Appeals. In Peeples the court stated:

Experienced insurance law attorneys know at least part of the answer to the above question. In that regard, a 1994, Texas Supreme Court case is helpful to read. It is styled, Allstate v. Watson. Here is the relevant information.

Watson was injured in a car accident. The driver of the other car was Townley, an insured under an automobile liability policy issued by Allstate. Watson filed suit against Townley alleging that Townley was negligent and that his negligence was a proximate cause of the accident and her injuries. In the same action, Watson also sued Allstate under the current Insurance Code, Section 541.060(a)(2) for alleged unfair claim settlement practices in failing to attempt in good faith to effectuate prompt settlement of her claims where liability had become reasonably clear and in denying or unreasonably delaying payment of her claim. Watson also alleged that Allstate’s conduct violated 28 Tex. Admin. Code Section 21.3 (Board Order 18663) and section 17.46 of the Texas Deceptive Trade Practices (DTPA), thereby giving rise to her cause of action under Texas Insurance Code, Section 541.060(a)(2). In addition to her claim under Section 541.060, Watson alleged violations of the DTPA, breach of contract, breach of the duty of good faith and fair dealing, and sought a declaratory judgment that Watson was an intended third party beneficiary of the Allstate liability policy.

On Allstate’s motion, the trial court severed the claims against Allstate, struck Watson’s pleadings as to Allstate for failure to state a claim, and granted Allstate’s motion for summary judgment.

Dallas and Fort Worth insurance attorneys will find this article interesting. It is from the Insurance Journal. Here is what it tells us.

Most uninsured motorists in the U.S. are responsible, safe drivers who simply cannot afford to purchase liability coverage with their income but who still need to drive for their work, according to a consumer advocacy group.

The Consumer Federation of America (CFA) recommended that instead of cracking down on such motorists with harsh penalties, a better policy would be to find ways to provide more affordable insurance and lower the minimum liability limits for safe, uninsured drivers who have lower income.

Most Texas insurance lawyers already know what a recent Texas Watch poll tells us. Here are some of the results of the poll.

A statewide public opinion survey of 603 voters reveals widespread public support for protecting the right of a policyholder to hire an attorney to pursue their interests when they believe an insurance company hasunfairly denied, delayed or underpaid a legitimate claim. The survey was sponsored by Texas Watch, an Austin-based consumer advocacy group, and conducted by Hill Research Consultants, a nationally respected Republican opinion-research firm. In the field March 21-25,2013, and using a 25% “cell-phone only” household sample, results have a margin of error of +4.0%. To avoid biasing results, particular care was taken in crafting the survey questionnaire to objectively describe thecurrent legislative climate and regulatory structure, fairly represent both insurance-industry and consumer-rights positions, and rotate the order of questions and arguments presented. Key findings include intense voter agreement–across political, ideological and geographic lines–that…

•Insurance companies “routinely” deny or under pay legitimate claims and unnecessarily delay legal proceedings in the hope policyholders will simply give up before receiving what they are due–78% agree, 55% “strongly”

Force-place insurance is a very mis-understood type of insurance. What most people do not understand that force-place insurance protects the mortgage owner only. A homeowner does not have his own interests protected.

Reuters ran an article on February 6, 2014, titled, “Citi T Pay $110 mln in a Lawsuit Over Force-placed Insurance.” Here is what it tells us.

Citigroup Inc has agreed to pay $110 million to thousands of homeowners who were forcibly charged expensive property insurance premiums, a court filing showed, as several U.S. banks and insurers were criticized by regulators over such practices.

Insurance attorneys need to know legal issues that will help their clients.

Two common defenses relied upon to prevent an insurance company from avoiding coverage when a judgment has been entered against their insured are “estoppel” and “waiver.” While both theories have been applied by courts to avoid forfeiture of a policy, they normally cannot be applied to change, re-write, or enlarge the risks covered by a policy. This was told us by the Texas Supreme Court in the 2008, case styled, Ulico Casualty Co. v. Allied Pilots Association, and other cases. Stated in a different way, neither waiver nor estoppel can be invoked to bring a non-covered loss within coverage of a policy so as to supply coverage where none exists.

To distinguish between estoppel and waiver, it has been explained that “Waiver presupposes full knowledge of existing rights, while estoppel arises where, by fault of one, another had been induced to change his position for the worse.” This was discussed in another Texas Supreme Court case. It was Massachusetts Bonding and Insurance Co. v. Orkin Extermination Co., Inc., decided in 1967.

Attorneys handling insurance law will want to keep up with how the courts are interpreting insurance exclusions. The Austin American Statesman ran an article in January 2014 that is interesting reading. Here is what it tells us.

The Texas Supreme Court issued a key ruling Friday that should boost consumer confidence in the liability insurance coverage that builders and general contractors carry.

Writing for the court, Justice Phil Johnson denied an insurance company’s attempt to avoid paying a claim based on language found in most commercial general liability insurance policies. The court’s decision was one of the most anticipated insurance cases in the country because Texas decisions often influence other courts across the nation, said Randy Maniloff, an insurance law expert at the White and Williams law firm in Philadelphia.

Attorneys working in the area of insurance law need to keep up with events happening in the insurance field. The Insurance Journal ran an article recently that may be of interest to some. Here is what it tells us.

The Texas Windstorm Insurance Association (TWIA) announced it has released to a litigator what it calls “potentially offensive” emails as part of discovery in a lawsuit against the insurer brought on behalf of the Brownsville Independent School District.

The lawsuit was filed by a Houston-based attorney over claims from Hurricane Dolly, which made landfall in South Texas in 2008. The attorney has alleged that TWIA employees had used racist language in emails to disparage Hispanics, Arabs and African-American.

Trial attorneys are probably aware of a general decline in the number of cases going to trial in Texas.

Judge Patrick Higginbotham of the U.S. Court of Appeals for the Fifth Circuit has warned a group of lawyers and federal judges that civil jury trials are headed for extinction.

Judge Higginbotham has said “There are certain elites in this country who don’t trust juries.” And “The future of our jury system is very much in danger.”