In Texas – Potential Recovery – Mental Anguish – Additional Damages – Attorney’s Fees

You live in Grand Prairie, Texas, or Arlington, Fort Worth, Dallas, Weatherford, or anywhere else in Texas and your insurance company does you wrong. What are the remedies against the insurance company?
A prior blog at this site discusses the policy damages that can be recovered under an insurance policy. The policy damages being the actual benefits provided by the policy that the insurance company should have paid or the actual policy benefits themselves. We will discuss three other recoveries here; mental anguish damages, “treble damages” and attorney’s fees.
To be able to recover mental anguish damages when an insurance company violates the Texas Insurance Code, the policyholder must show that the insurance company acted “knowingly.” This is stated in the Texas Supreme Court case, State Farm Life Insurance Company v. Beaston, a 1995 case.
Once it is shown the company acting in a knowing manner, then the policyholder must show “a high degree of mental pain and distress” that is more than mere worry, anxiety, vexation, embarrassment, or anger. This is made clear in the case, Parkway Co. v. Woodruff, a 1994, Texas Supreme Court case. For a judgement for mental anguish damages to be upheld the plaintiff’s must introduce into evidence the nature, duration, and severity of their mental anguish, thus establishing a substantial disruption in the plaintiff’s daily routine. This evidence may come from the claimants’s own testimony, testimony of third parties, or testimony of experts, and must be such as to more likely to provide the factfinder with adequate details to assess mental anguish claims. This is stated in the Texas Supreme Court case, Saenz v. Fidelity & Guarantee Insurance Underwriters, a 1996 case.
Here’s “treble damages.” If the fact finder finds the insurance company acted knowingly, the trier of fact can award not more than three times the amount of actual damages. This is found in Texas Insurance Code, Section 541.152(b). Lawyers commonly refer to this as treble damages. This is a throwback to the days when the DTPA and the Insurance Code both mandated automatic tripling of the plaintiff’s damages. With the current law, treble damages may not be recovered unless the trier of fact finds the defendant acted knowlingly. And now, even when the trier of fact finds the defendant acted knowingly, the amount of additional damages is in the trier of facts discretion.
The other recovery in these insurance cases is attorney’s fees. In the case, Arthur Andersen & Company v. Perry Equipment Corp., the Texas Supreme Court, in 1997, laid out the factors to be considered in awarding attorney’s fees. In saying that fees cannot be awarded based on a percentage basis the Court said these eight factors must be considered:
1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
2) the likelihood that the acceptance of the particular employment will preclude other employment by the attorney;
3) the fee customarily charged in the locality for similar legal services;
4) the amount involved and the results obtained;
5) the time limitations imposed by the client or by the circumstances;
6) the nature and length of the professional relationship with the client;
7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and 8) whether the fee is fixed or contingent on results obtained or uncertainty of collection before the legal services have been rendered.
Depending on the circumstances of the case there are still more types of recovery that can be made in a claim against an insurance company for its improper conduct. An experienced Insurance Law Attorney would be able to discuss these other recoveries. Each case has its own facts and circumstances that need to be looked into.