Interpreting An Insurance Policy

Insurance Coverage Issue

July 7, 2015 | Mark S. Humphreys

Benbrook insurance lawyers will find this case interesting. It is from the Western District, Austin Division. The style of the case is, State Farm Mutual Automobile Insurance Company v. Watkins.

State Farm filed this lawsuit to obtain a declaratory judgment that it has no duty to indemnify Defendants Ernest Lynden Watkins III (Mr. Watkins) and Kathy Watkins (Mrs. Watkins) for a separate lawsuit brought in Texas state court (Underlying Suit). In the Underlying Suit, police officer Doff Slade Fisher alleges Ernest Lynden Watkins IV (Watkins IV), the son of Mr. and Mrs. Watkins, negligently operated a vehicle causing bodily injury to Fisher. According to the petition, Officer Fisher was in pursuit of a car owned by Mr. and Mrs. Watkins that had evaded detention during a traffic stop. Fisher alleges Watkins IV was driving the vehicle, and in the processing of pursuing Watkins IV, Fisher crashed his motorcycle and sustained injuries.

According to State Farm, the express language and scope of coverage of the Policy have been implicated by the Underlying Suit. Indeed, State Farm is currently providing a defense in the Underlying Suit, and it does not seek an adjudication of its duty to defend through its declaratory judgment action. Instead, State Farm only requests a declaration the Policy bars any claim for indemnification arising from the Underlying Suit. In other words, State Farm contends the Policy does not provide coverage for the events at issue.

Farming And Ranching Insurance Policies

June 30, 2015 | Mark S. Humphreys

Mineral Wells insurance lawyers are in an agriculture setting and thus are more likely to see insurance situations involving farm and ranch insurance policies. A U.S. District Court case from the Southern District of Texas, Houston Division should be read. It is styled, Mid-Continent Casualty Company v. BFH Mining, Ltd.

Mid-Continent issued an insurance policy (the “Policy”) to BFH covering BFH’s Middleton Ranch located in Fort Bend County, Texas (the “Property”).

Francois Bellon, a potential client of Cathexis, was at the BFH property. While there, he was injured in an accident involving a Polaris RZR all-terrain vehicle (“ATV”) owned by BFH and driven by Sahil Gujral, a Cathexis employee.

Is Smell A Loss Under Your Insurance Policy?

June 13, 2015 | Mark S. Humphreys

Here’s something for Texas insurance lawyers to have in their bag of knowledge. This comes from the “Claims Journal” and is about an opinion in New Hampshire but is relevant to Texas also.

The New Hampshire Supreme Court recently held that a persistent odor could constitute a “physical loss” under a homeowner’s insurance policy as long as the smell distinctly and demonstrably changed the condition of the property. The decision represents an important statement about policy interpretation, defining “physical loss” and applying pollution exclusions.

In the case before the court the insureds owned a condo that they rented to various tenants. Shortly after renting the upstairs unit, a tenant moved out complaining of a cat urine odor which had come through an open plumbing chase from the downstairs unit where another tenant owned multiple cats. After the insureds moved into the unit themselves and noticed the odor, a health inspector advised them to move out temporarily while the units were cleaned. Unfortunately, they could not rid the smell. They were unable to find new tenants and ultimately sold the condo at a significant loss.

Policy Exclusions And City Ordinances

May 31, 2015 | Mark S. Humphreys

Everman insurance lawyers need to be know this 2015, Texas Supreme Court opinion. It is styled, Jaw The Point, L.L.C. v. Lexington Insurance Company.

This insurance dispute involves losses the insured incurred as a result of city ordinances triggered by damage to an apartment complex during Hurricane Ike. The insurance policy covers the costs of complying with city ordinances, but only if the policy covers the property damage that triggers the enforcement of the ordinances. Here, the property damage that triggered the ordinances resulted from both wind, which the policy covers, and flooding, which the policy expressly excludes. The policy’s anti-concurrent-causation clause excludes coverage “for loss or damage caused directly or indirectly by” flooding, “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” Because the evidence conclusively establishes that flood damage triggered the enforcement of the city ordinances and thus “directly or indirectly” caused the insured’s losses, the Court concluded the policy excludes coverage for such losses regardless of the fact that wind damage “contribute[d] concurrently or in any sequence to the loss.” Because the Court agreed with the court of appeals that the policy did not cover the insured’s losses and thus the insured cannot recover for the insurer’s bad faith failure to effectuate a prompt and fair settlement of the claim the case was affirmed.

In July 2007, JAW purchased an apartment complex in Galveston for approximately $5.7 million.Fourteen months later, Hurricane Ike struck the Island and caused substantial damage to The Pointe apartments. Lexington provided the primary coverage.

What Is A “Motor Vehicle” In An Insurance Policy

April 23, 2015 | Mark S. Humphreys

Duncanville insurance lawyers will find that the definitions in insurance policies often have their own meaning. So, what is the definition of “motor vehicle” as it relates to an insurance policy? A 1977, Texas Supreme Court opinion helps. It is styled, Slaughter v. Abilene State School et al.

Slaughter, while an employee of the Abilene State School, was injured when another employee backed a tractor over Slaughter and pinned him between the tractor wheel, the ground and a building.

The trial Court entered judgment for Slaughter and the appeals court reversed.

“User” Of A Vehicle

April 18, 2015 | Mark S. Humphreys

Parker County insurance attorneys need to know how to identify who a “user” is as it relates to someone using a vehicle. A 1997, Dallas Court of Appeals case is helpful. It is styled, American Economy Insurance Company v. United Services Automobile Association. Scott Johnston, herein referred to as Driver was driving a vehicle belonging to his father. Three friends, including Benjamin Ellis, were passengers. The driver and passengers were intoxicated. The vehicle collided with a second car and the Driver, Scott, was killed.

The occupants of the second car brought suit against the Father, alleging that the vehicle had crossed the center line while traveling at an excessive rate of speed. The plaintiffs also alleged that the three passengers had encouraged, aided and abetted the Driver’s negligent acts and reckless driving, and that the passengers’ occupancy of the vehicle constituted a “use” of the vehicle.

The Father was insured by USAA. Ellis was insured by AEIC. When the Passenger was served with lawsuit papers, the complaint was delivered to an AEIC agent with a request for defense. AEIC wrote to USAA requesting that USAA assume the defense. USAA refused stating that there was doubt whether the Passenger qualified as a permissive “user” of the Johnstone vehicle. AEIC assumed the Passenger’s defense. The plaintiffs settled their claim against the Passenger and the Passenger executed a general release in favor of USAA in return for $11,000.00 in payment. Plaintiffs then dismissed their lawsuit against the Passenger with prejudice. AEIC wrote to USAA requesting reimbursement for defense costs. USAA refused.

Insurance Non-Assignment Clauses

April 16, 2015 | Mark S. Humphreys

Arlington insurance attorneys need to be aware of non-assignment clauses in insurance contracts. The 2005, Dallas Court of Appeals case, Hoffman v. St. Paul Guardian Insurance Company opinion is a good case to read.

This is an appeal from a take-nothing summary judgment in a dispute arising out of the denial of an insurance claim. Hoffman through its successor in interest and assignee of insurance proceeds, Dallas Medical Holdings, Ltd., sued St. Paul after St. Paul denied an insurance claim for alleged plumbing leak damages to a medical clinic building that occurred when Hoffman owned the building. This Court affirmed the ruling.

In November 1999, Hoffman filed a claim under its commercial property insurance policy with St. Paul for damages to Hoffman’s clinic building allegedly caused by plumbing leaks. In January 2000, while the insurance claim was pending, Hoffman sold the clinic building and other items to Dallas Medical Holdings, Ltd. The contract for sale provided that, ” . . . if a claim has been made by Seller against any insurance carried on the Property, . . . Seller will assign any rights Seller has under such policy to Purchaser at Closing.” The contract further provided, “Seller agrees to assign to Purchaser at Closing all rights of Seller in and to the insurance policy or policies carried by Seller to provide insurance protection of the Property.”

Mineral Wells Home Owners Claim

March 15, 2015 | Mark S. Humphreys

Mineral Wells insurance attorneys probably already know about this case. It is an Eastland Court of Appeals case styled, Spurlock v Beacon Lloyds Insurance Company.

This case involves the interpretation of a homeowner’s insurance policy. The Court had to construe a policy to determine if coverage exists for a personal property loss alleged to have occurred after the death of the named insured. Kelly Spurlock, as legal representative for the Estate of J.O. Spurlock, brought suit against Beacon to recover proceeds under a homeowner’s insurance policy for the loss of personal property that was allegedly stolen from a residence.

J.O. Spurlock owned and lived in a house in Mineral Wells, Texas, that he insured with Beacon. The policy was effective from May 31, 2008, to May 31, 2009. The “RESIDENCE PREMISES/DWELLING” listed in the declarations page of the policy was identified by the legal description of J.O. Spurlock’s house. The street address of the house was 704 Cedar in Mineral Wells. The policy provided dwelling coverage and personal property coverage.

ERISA And Contributing To Impairment

March 12, 2015 | Mark S. Humphreys

North Richland Hills insurance lawyers who handle ERISA claims need to read the 2015, 5th Circuit Court of Appeals opinion styled, George v. Reliance Standard Life Insurance Company. There are a couple of issues in the case but only the issue in the title above will be discussed here.

George served as an Army helicopter pilot. In 1985 George was injured in a helicopter crash, and doctors were forced to amputate one of his legs at the knee. George retired in 1987. After retiring, George began flying helicopters for PHI, Inc. PHI purchased a long-term disability insurance policy for George from Reliance (“RSL”). George flew for PHI for more than twenty years. But in 2008 he began experiencing severe pain at the site of his amputation, which prevented him from safely wearing his prosthetic limb. As a result, he was no longer able to operate the foot controls of a helicopter, and he was forced to retire from flying. George filed a claim for long-term disability benefits with RSL.

The Policy contains two definitions of “Totally Disabled” and “Total Disability,” which apply during different time periods. The Policy also contains a relevant limitation provision (the “Exclusion Clause”). The Exclusion Clause provides that “Monthly Benefits for Total Disability caused by or contributed to by mental or nervous disorders will not be payable beyond an aggregate lifetime maximum duration of twenty-four (24) months.” The Policy defines “Mental or Nervous Disorders” to include “anxiety disorders” and “mental illness.”

Insurance And Maintaining Vehicle

February 3, 2015 | Mark S. Humphreys

Fort Worth insurance lawyers need to be able to understand when coverage is afforded under a policy and when it is not. A 1994, Dallas Court of Appeals case is a good opinion to know about. It is styled, Nationwide Property & Casualty v. McFarland. Here is the relevant information from that case.

Nationwide and McFarland both filed motions for summary judgment. After a hearing, the trial court granted McFarland’s motion and denied Nationwide’s. In this appeal Nationwide argued the trial court erred in granting summary judgment for McFarland and denying Nationwide’s motion because Mashewske was not a “covered person” under the policy. This Appeals Court disagreed and upheld the trial court ruling.

McFarland was working underneath his Toyota. The car was sitting up on jacks. While McFarland was underneath the car, Mashewske got in the car to see if it would start. When Mashewske shifted the car into neutral, it rolled backward, fell off the jacks, and landed on McFarland. McFarland sustained injuries from the accident.