Interpreting An Insurance Policy

Permission To Use Car And Insurance Law

June 24, 2010 | Mark S. Humphreys

If you live in Grand Prairie, Arlington, Fort Worth, Mansfield, Duncanville, De Soto, Hurst, Euless, Bedford, Aledo, Azle, Weatherford, or anywhere else in Texas and a friend or acquaintance uses your car and has a wreck is there coverage? This posting and the two following will show what has happened in three previous cases.

In 1966, the Texas Supreme Court, in the case, Royal Endemnity Company v. H.E. Abbott & Sons, Inc., had this question before them in a case.

In this case, a 1961 pickup truck owned by Jack Herring and driven by George K. Landers ran into and damaged a building owned by H.E. Abbott & Sons, Inc. The truck was insured by a liability policy issued by Royal Indemnity Company. The insurance policy with Royal had a clause extending coverage to anyone operating the truck with Herring’s implied permission. In the lawsuit, Abbott obtained a judgment against Landers then sued Royal to enforce its judgment.

Mistake In A commercial Insurance Policy

June 10, 2010 | Mark S. Humphreys

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”).

Interpreting Policy Language In Texas

June 6, 2010 | Mark S. Humphreys

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:

Named Driver Exclusions In Automobile Policies In Texas

May 24, 2010 | Mark S. Humphreys

Auto policy holders in Grand Prairie, Arlington, Fort Worth, Mansfield, Azle, Dallas, Weatherford, or any other city in Texas would want to know what all that “stuff” in their auto policy means. One part that is pretty easy to explain is the “Named Driver Exclusion.” This is other times called the “515-A Exclusion” or “515-A Endorsement”.

The normal automobile insurance policy is going to have a part that reads, “You agree that none of the insurance coverage afforded by this policy shall apply while ______________ is operating your covered auto or any other motor vehicle. These exclusions and endorsements are legal in insurance contracts. The language used is partly governed by laws published in the Texas Insurance Code. See Sections 1952.051 et al and Sections 2301.001 et al. As for the “Named Driver Exclusion”, it is legal and is intended to give policy holders the option to exclude from coverage drivers who, by virtue of their driving history or other factors, are deemed high risk drivers. This category of drivers would include drivers who have been convicted of violating the Driving While Intoxicated laws found in the Texas Penal Code, drivers with too many moving violations, too many wrecks, and other high risk drivers such as teenagers who have just got their license. It is important to realize that almost all of these drivers can get insurance but the cost of the insurance is much higher than what other drivers must pay.

The Texas Corpus Christ Court of Appeals decided a case in 1996 that is often cited for the validity of the Named Driver Exclusion. The style of the case is, Janie Zamora, Pete Zamora, Jesus Toc, and Gracie Vela v. Dairyland County Mutual Insurance Company. In this case the excluded driver was Gracie Vela, who was driving Jesus Toc’s vehicle. She had a wreck with the Zamoras causing them injury. In this case, the court upheld the validity of the exclusion and discussed the reasons for its validity.

“Standing” To Sue For Bad Faith

May 16, 2010 | Mark S. Humphreys

Who has “standing” to sue an insuance company for bad faith. Does someone living in Grand Prairie, Arlington, Mansfield, Keller, Colleyville, Fort Worth or Dallas?

USLegal defines “standing” this way:

Standing is the ability of a party to bring a lawsuit in court based upon their stake in the outcome. A party seeking to demonstrate standing must be able to show the court sufficient connection to and harm from the law or action challenged. Otherwise, the court will rule that you “lack standing” to bring the suit and dismiss your case.

Auto Coverage In Texas And Gun Racks

May 5, 2010 | Mark S. Humphreys

What if you are a “good ole boy” in Weatherford, Texas? Or for that matter, in Arlington, Grand Prairie, Fort Worth, or Dallas, and you have a gun rack in your vehicle. In the gun rack you have a loaded firearm. Next, the firearm is accidently discharged. Will your insurance company cover the resulting damages to others? The answer is a lawyerly answer for you: It depends.

Here is an interesting case issued by the Texas Supreme Court. This case discusses how the facts should be analysed to see if coverge will exist. The case, decided in 1999, is styled, Mid-Century Insurance Company of Texas, a division of The Farmers Insurance Group of Companies, v. Richard Tanner. The cite is, 997 S.W.2d 153.

The question for the court to decide in this case was whether the underinsured motorist provision of a standard Texas personal auto policy covers the insured’s bodily injuries resulting from the unintentional discharge of a shotgun on a gun rack in a pickup truck parked nearby. The answer, in this case, depended on whether, within the meaning of the policy, the injuries resulted from “an accident” “arising out of” the “use” of the truck.

Texas Homeowners Policy And Running A Business From Home

April 28, 2010 | Mark S. Humphreys

Pretend a couple in Grand Prairie, Fort Worth, Arlington, Dallas, Weatherford, or anywhere else in Texas is running a business out of their home and someone gets injured as a result of that business activity. Does a normal Texas homeowners insurance policy cover any claim that may be made?

As a general rule the answer is no. The normal Texas howeowners policy includes a “business pursuits exclusion.” This means that incidents arising out the course of that business are excluded from coverage under the insurance policy. There are exceptions to this general rule mainly because the Texas Department of Insurance, several years ago started letting insurance companies write their own policies. Prior to this the policys were standard and followed recommendations from the state. Now, each company writes their own policy and so, there are differences between one policy and the other that now exist. Plus, homeowners can buy endorsements to cover their business pursuits that they are pursueing from their home.

The normal / typical homeowners policy excludes coverage for “bodily injury or property damage arising out of or in connection with a business engaged in by an insured.” This is articulated in the case, State Farm Fire & Casualty Company v. Vaughan. This case was decided by the Texas Supreme Court in 1998, and is still good law. Here, State Farm Fire & Casualty Company challenged a claim being made by Vaughan and the court ruled in favor of State Farm, on this business exclusion policy language.

Insurance Appraisal Clauses In Texas

April 22, 2010 | Mark S. Humphreys

Lightning strikes a home in Grand Prairie, or Arlington, Fort Worth, Dallas, or out in Weatherford. The lightning damages electronic equipment. The homeowner calls his insurance company to make a claim. Then the insurance company invokes an appraisal clause in the insurance contract. What does this mean?

This is what happened in the case, Steven Woodward, et al, v. Liberty Mutual Insurance Company. This case was decided by the United States District Court, N.D. Texas, Dallas Division on March 26, 2010. The Judge was the Honorable, A. Joe Fish. In this lawsuit, Liberty Mutual Insurance Company (Liberty) filed papers with the Court for an order to be issued to compel appraisal and to stay the Court actions in this matter pending the completion of appraisal. Judge Fish granted the motion and ordered the parties to complete the appraisal process.

In this case, the appraisal clause required each side to select a competent, independent appraiser, notify the other side who had been chosen and if the appraisers did not agree to choose an umpire to settle the matter.

Interpreting A Commercial Insurance Policy Issued In Texas

April 14, 2010 | Mark S. Humphreys

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.

A Texas Unbrella Policy

April 13, 2010 | Mark S. Humphreys

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.