General

Insurance Companies Duty To Defend Lawsuit In Texas

January 31, 2010 | Mark S. Humphreys

The United States Court of Appeals for the Fifth Circuit, decided another case this month dealing with the duty of an insurance company to defend a lawsuit filed against one of its insureds. The decision on this case was handed down by the court on January 4, 2010. The case was an appeal from the United States District Court for the Southern District of Texas. The Fifth Circuit, located in Louisiana, handles appeals that would arise out of Dallas, Fort Worth, Arlington, Grand Prairie, small towns like Weatherford, and all other places in Texas.

In the opening paragraph of the decision the court makes the following statement, “We have occasion once again to take up the seemingly simple task of determining whether an insurance company owes a duty to defend an underlying liability lawsuit, and because the insurer in this case indeed has such a duty, it is also an occasion to again remind: when in doubt, defend.” As stated in this blog in the past, the courts draw a distinction between the obligation of an insurance company to defend an insured who has been sued and the obligation of an insurance company to pay a claim.

The case at issue here is styled, Essex Insurance Company v. Hines. The policy was a “Commercial General Liability Coverage” and another one called a “Commercial Property Coverge” policy. The facts here are relevant to deciding the existence or lack there of, as it relates to coverage in the wording in the policy. What Essex was failing to see was how Texas law applies in the difference between the duty to defend and the duty to pay under a policy of insurance.

Another Chinese Drywall Case

January 30, 2010 | Mark S. Humphreys

Lucky for the homeowners in the Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and surrounding areas, the Chinese drywall cases are a non-issue. But for many of the people along the Texas Gulf Coast and other Gulf Coast areas, it is a major and expensive problem.
WCI Communities is a homebuilder in the Southeastern United States. They had to file bankruptcy in 2009 because of issues related to Chinese drywall. This situation is discussed in the Insurance Journal. The article in the Insurance Journal is titled “WCI Chinese Drywall Trust Files Suit Against 14 Insurers”. The WCI Drywall Trust was formed in July 2009, after the bankruptcy of the homebuilder WCI Communities and its subsidiaries. Its purpose is to assume liability for claims alleging harm from Chinese drywall installed in homes built by WCI. More than 700 homeowners may seek recovery through the Trust.
The Trust filed suit against 14 insurance companies in the United States District Court, Eastern District of Louisiana, seeking indemnification for losses arising from claims for the development and sale of homes allegedly containing defective Chinese manufactured drywall.

An Appeal From A Louisiana District Court Ruling

January 29, 2010 | Mark S. Humphreys

The following case was decided in Louisiana. It is relevant for two reasons. One is, Texas courts will look to other courts and their rulings for guidance on cases. The second reason, is the United States Court of Appeals for the Fifth Circuit is the Federal Court most Texas case will end up being appealed to when the case is in Federal Court.

The case is Stephen Williams; Vanessa Williams v. Allstate Indemnity Company. In this case the William’s home suffered a serious property damage loss during Hurricane Katrina. The William’s home was insured under a homeowners’ policy issued by Allstate that provided $123,000 in coverage for the primary structure, $12,300 in coverage for other structures, and $61,500 in coverage for the home’s contents.

The William’s reported the loss on August 31, 2005 and Allstate inspected the property on October 17, 2005 and ultimately paid the William’s a total of $134,762.43. These payments were made at various times until the last was paid in March 2007. The William’s sued for the full policy limits. The trial level court ruled for Allstate and this appeal was filed.

Appraisal In Insurance Texas Insurance Disputes

January 28, 2010 | Mark S. Humphreys

A lot of insurance contracts have written into them an appraisal clause or paragraph. Whether you bought the policy in Grand Prairie, Arlington, Dallas, Fort Worth, or out in Weatherford, Texas, you could be forced to submit to an appraisal process if the insurance company insists on enforcing that portion of the insurance contract.

A recent case, JM Walker, LLC v. Acadia Insurance Company, is an example of how these situations are sometimes handle. Each case would be different depending on the wording of the appraisal provision in the contract and the facts of the case.

In this case, Walker was the owner of five building in North Richland Hills, Texas. The roofs of the building suffered damage from a hailstorm. Walker submitted a claim to Acadia, but Acadia denied coverage after its adjuster determined that the roofs did not need to be replaced and that the damage that did exist, was less than the $5,000 deductible that applied in the case.

Corporation Changing Retirees Insurance Plan

January 22, 2010 | Mark S. Humphreys

Very few people doubt that the face of America is changing in that more and more companies are changing the way benefits are provided to employees. The automotive industry is probably the biggest example of this change. Along with the automotive companies themselves, the changes effect all the companies that are intertwined with the big auto companies.

But it is not just the automotive companies. The same is happening in the airline industry, other transportation companies, and all phases of manufacturing. These changes include changes to wages, health care, retirement, and other benefits.

NewPage Corporation is a company that makes paper products. The Dayton Daily News recently ran an article wherein it reports on a change being made by NewPage in the way it handles health-care benfits for its premiums as it relates to their retirees.

Commercial Insurance Policy In Texas And Insurance Company Duty

January 20, 2010 | Mark S. Humphreys

The Supreme Court of Texas issued an opinion on a case on December 11, 2009, that will make insurance companies who have issued commercial policies, to take a second look before denying a claim in certain situations.

The case involved here is titled, D.R. Horton-Texas, LTD. v. Markel International Insurance Company, LTD. This case came out of the Texas Court of Appeals in Houston. It could have been a case arising out of the Dallas or Fort Worth or surrounding areas like Arlington, Grand Praire, or Irving.

In this case, a couple, the Holmes, purchased a home from the builder, D.R. Horton-Texas, LTD. Defects in construction were discovered and as a result of these defects, mold had infested the home. The Holmes sued Horton, saying Horton was responsible for the problems Holmes was experiencing. It appeared ,a sub-contractor, Ramirez, was the person who caused the problems. Ramirez had an insurance policy from Markel International Insurance Company, LTD. Horton sought coverage from Markel, based on the Ramirez policy wherein Horton was an additional insured. Markel refused to get involved and Horton eventually settled the case, then sought reimbursement of defense costs and the settlement payment from Horton, the result of which was this lawsuit.

Hurricane Ike Claims And National Flood Insurance

January 19, 2010 | Mark S. Humphreys

For those of us living in the Dallas, Fort Worth, Arlington, and Grand Prairie areas of Texas, National Flood Insurance programs are not usually an issue. But this type of insurance is available and sold in Dallas, Tarrant, Parker, and other counties throughout the State of Texas. Knowing a little bit about these programs is helpful and will put you more in the drivers seat when talking with your insurance agent when considering buying this type of insurance.

As with a lot of Federally controlled programs, the consumer is limited in his available remedies when he is mis-treated by the companies administering these programs. The Houston Chronicle ran a story recently giving an example of how these Federal Flood Insurance programs can be nightmares for the consumers involved. The article is titled “Ike Case HIts A New Obstacle”, and illustrates some of the problems homeowners experience when making a claim for coverage.

When there is a dispute, the insurance adjuster will try to get the homeowner to agree to going to arbitration as a way to settle the insurance dispute. Most people will jump at this option thinking to themselves that this will result in a quick settlement and save time and money, including attorneys fees. It turns out that the arbitration process is not necessarily quick nor cheap.

Drywall Cases Probably Do Not Affect Dallas Or Fort Worth Texas

January 17, 2010 | Mark S. Humphreys

The Chinese drywall cases that have been in the news the last year or so, are primarily affecting home owners along the Gulf Coast. If you live in Texas you are not likely to be affected by the claims resulting from these defective drywalls. Especially if you live in the crowded Dallas and Fort Worth areas. However if you live in areas such as Louisiana and Mississippi, these cases are attracting a lot of attention.

The Times-Picayune recently ran a story that addressed the drywall cases that have been causing problems since the hurricanes in recent years. This story informs its readers that New Orleans Saints coach Sean Payton is the lead plaintiff in a 591-page class action Chinese drywall suit. The company being sued is Knauf Plasterboard Tainjin Co. Ltd., a Chinese company manufacturing company producing the drywall.

The drywall at issue in this case is supposedly causing homes to corrode and making people sick. In the context of homeowners insurance, a lot of insurance companies are refusing coverage for the losses caused by this drywall being installed in the homes.

Texas Insurance Rate Info

January 16, 2010 | Mark S. Humphreys

The Texas Department of Insurance has recently released the Commissioners Order regarding State Farm Homeowners rate reduction and refund fight.

This order is the result of a re-hearing . The original reduction order was first issued in 2003, but was remanded by the Third Court of Appeals in Texas in 2008 to the Texas Department of Insurance for further proceedings due to their finding that a portion of the underlying law enacted in 2003 was unconstitutional.

The total amount of the refund, including interest, is estimated to be about $310 million. Individual amounts will vary among policyholders, with differences based, in large part, on the length of time with the company and the amount of premium paid to State Farm. Further information regarding refunds or premium credits to policyholders, both current and former, will be made available pending any appeal of the order.

Insurance Debate

December 11, 2009 | Mark S. Humphreys

This blog does not try to spend time on the health care debate occurring on the National scene. Rather the focus here is to make people aware of their rights as they relate to their dealings with insurance companies and why they need an experience Insurance Law Attorney when faced with a problem when dealing with an insurance company. The occassional news item is thrown in when it relates to a large number of people, some of whom may be in Texas.

Recent articles on the Chinese drywall, sold by Knauf Plasterboard Tianjin, affecting many residents along the Gulf Coast pointed out that new construction and remodeling done after hurricanes hit the areas on the Gulf Coast have left many homeowners in rough financial situations. This is because many insurance companies refuse to cover the losses resulting from using this drywall.

One recent article points out that the deadline for involvement in a national class action lawsuit against Knauf Plasterboard Tianjin expired on December 2. This lawsuit involves about 35,000 Florida homes where about 30 percent of the installations of this drywall are believed to have occurred.