Dallas Fort Worth Insurance Lawyer Blog

Insurance Company Seeks Reimbursement?

May 9, 2017 | Mark S. Humphreys

The 2000, Texas Supreme Court opinion styled, Texas Association of Counties v. Matagorda County is a type of case not seen too often, but is worth knowing.

Matagorda County had a liability policy with The Texas Association of Counties (TAC) for its law enforcement activities. The policy contained a “jail exclusion” which excluded legal action brought by the county’s jail inmates. Following just such an event, TCA agreed to indemnify and defend Matagorda but twice repeated its right to question coverage and seek reimbursement. TAC settled the case, and brought suit to obtain reimbursement. The trial court in the coverage case ultimately ruled that TAC was entitled to reimbursement of defense and indemnity costs because the underlying liability claims were not covered.

TAC claimed that the policy’s “jail exclusion” clause and Matagorda County’s refusal to reply to TCA’s letters reserving reimbursement rights amounted to create a contractual obligation. The Texas Supreme Court disagreed and held that an insurer’s unilateral reservation of rights letter did not create rights which are not specifically created by the insurance policy. TAC’s reservation letter was a unilateral offer to pay a disputed claim in exchange for the right to later seek reimbursement. The insured’s failure to respond to the insurer’s reservation letter was not construed as an acceptance of the insurer’s reimbursement offer.

Can Coverage Be Expanded By Waiver?

May 7, 2017 | Mark S. Humphreys

What if someone with the insurance company does something to cause you to believe you have coverage that you do not have? Mason County lawyers should read this 2008, Texas Supreme Court opinion. It is styled, Ulico Casualty Company v. APA.

In this case, the court considered what has become known as the “Wilkinson exception” to the general rule that coverage cannot be created by estoppels or waiver. The Wilkinson exception stated that if a carrier undertook to defend an insured without issuing a proper reservation of rights that identified all policy defense then known to the carrier, and the insured was prejudiced, then the carrier was estopped to deny coverage and had waived its policy defenses.

In Ulico, the insured reported a claim after the claims-made-and-reported policy had expired. The carrier mistakenly agreed to defend the insured. The carrier issued two reservation of rights, sent the insured’s counsel litigation guidelines, and stated that Ulico agreed to reimburse the insured for reasonable defense expenses. The attorney submitted his invoice of $635,000.00.

Beneficiary Of Life Insurance Policy May Assert Section 541.060 Claims

May 6, 2017 | Mark S. Humphreys

Irving life insurance lawyers need to know every little aspect of the law in order to properly represent their clients. A 1996, San Antonio Court of Appeals opinion deals with one of these “little” aspects of the law. The opinion is styled, Mendoza v. American National Insurance Company.

Jerry Mendoza purchased a $25,000.00 life insurance policy from American on August 1, 1991. The October premium was not paid. The policy provided for a 31 day grace period. On November 1, 1991, the last day of the grace period, American’s district manager, Sitka, verbally agreed to extend the grace period until November 4, 1991. The policy, however, specifically provided that only American’s president, vice president, or secretary had the authority to extend this time period. Jerry Mendoza died in an automobile accident on November 3, 1991. The premium was never paid. In a prior appeal, this Court affirmed a summary judgment in favor of American on Plaintiff’s breach of contract, negligence and bad faith claims. This appeal concerns the trail court’s granting of summary judgment on Plaintiffs’ claims for intentional infliction of emotional distress, Insurance Code and DTPA violations.

The Court held that in order to qualify as a consumer under the DTPA, a person must seek to acquire goods or services by purchase or lease and those goods or services must form the basis of the complaint. Lack of privity between plaintiff and defendant does not preclude a plaintiff from establishing status. Section 541.060 provides standing to “any person” who has been injured by another’s engaging in an unfair or deceptive act or practice in the business of insurance as declared in the Insurance Code; rules and regulations issued under the Insurance Code or Section 17.46 of the DTPA. Therefore, a plaintiff may assert causes of action under the Insurance Code for violations of Section 17.46 of the DTPA even though the plaintiff is not a “consumer.” Carrion, a named beneficiary of the policy, would clearly be injured as a result of Sitka’s alleged misrepresentations. Therefore, Clarion has standing under the Insurance Code. Mendoza’a mother, in her capacity as representative of the the estate, however, does not have standing to assert Insurance Code or DTPA claims because those claims do not survive Mendoza’s death and his mother is not a “consumer” in her own right.

Who Is Insured Under A Policy

May 4, 2017 | Mark S. Humphreys

Llano County insurance lawyers need to keep up with how the Courts interpret insurance policies. The 5th Circuit issued an opinion worth reading in 2016. It is styled, AIG Specialty Insurance Co. v. Tesoro Corp.

In this case the 5th Circuit had to decide whether a subsidiary not designated as an additional insured under an excess policy, was covered, because the insurer ought to have known the insured intended the subsidiary to be covered.

The facts of this case begins with a refinery, subject to a series of federal and state pollution remediation orders, changing hands twice. First, Tosco Corp. sold the refinery to Unltramar. Tosco indemnified Ultramar $50 million, and Ultramar acquired $100 million in excess insurance coverage from AIG. Then Ultramar sold the refinery to Tesoro, and transferred the policy as well.

Dallas Hail Claims – Making A Proper Pleading Against An Adjuster On Hail Claims

May 2, 2017 | Mark S. Humphreys

For insurance attorneys handling hail damage claims, the Northern District, Dallas Division, issued an opinion worth reading. The opinion is styled, Ronald E. Cohen, et al v. Seneca Insurance Co., Inc., J.S. Held, Inc., Haag Engineering Co., and R. Kean Jenner.

This is a case of an insurance claim denial after a wind and hail storm in Dallas County. The adjuster, Jenner, was the only non-diverse defendant. The lawsuit for denial of policy benefits was filed in Dallas County Court and removed to Federal Court by the other defendants claiming that Jenner was improperly joined in an effort to defeat diversity jurisdiction. Cohen filed a Motion to Remand based on his assertion that Jenner was not improperly joined.

The sole issue in this case is whether the joinder of Jenner was proper under Texas law. If the court finds a reasonable basis to predict that Plaintiffs can potentially recover on one of the causes of action asserted against Jenner, the court must remand the entire case.

House Fire Claims

April 30, 2017 | Mark S. Humphreys

House fire claims being denied is a regular part of doing for insurance law lawyers. “The Tribune” published a story in March titled, Tracking Phones: Insurers Deny Claims Based On Doubtful Data. Here is what the story tells us.

It took Jaclyn Bentley nearly three years to prove she didn’t burn her house down for the insurance money, allegations she and her lawyer say were born of the junk practice of analyzing cellphone tower data.

She was camping with her husband and co-workers at least 17 miles from her Iowa home in May 2014 when it burned down, she says. An investigator for State Farm Fire said cell tower data showed Bentley’s phone was 5 to 12 miles from the campsite in the direction of her home just after the fire was reported – the suggestion being she could have been heading back to camp after starting the blaze.

Value Of A Claim

April 29, 2017 | Mark S. Humphreys

A Texas Hill Country Insurance Lawyer will need to be able to discuss the value of a claim with a new client. This discussion needs to be had along with a discussion of what court the case will be fought. The Eastern District, Sherman Division, issued an opinion on how Federal Courts look at the value of a claim. The opinion is styled, Tommy Wilson v. Allstate Insurance Company.

Tommy Wilson (Plaintiff) sued Allstate (Defendant) in County Court for losses under a homeowners policy. Defendant caused the case to be removed to Federal Court based on diversity and the amount in controversy, stating the amount in controversy exceeds $75,000.00, which is the Federal Court minimal jurisdictional limits pursuant to 28 U.S.C., Section 1332(a).

Plaintiff argued that the amount in controversy was less than $75,000.00 and points to the following allegations regarding the amount in controversy alleged in his petition:

Prompt Pay And Appraisal

April 27, 2017 | Mark S. Humphreys

Llano County insurance lawyers need to know how the Prompt Payment of Claims Act works in situations where an appraisal clause is invoked. An example is found in a Western District, Austin Division opinion styled, Thomas Cheski v. Safeco Insurance Company of Indiana.

On April 10, 2016, Cheski experienced severe weather, which damaged his home. Cheski submitted a claim to Safeco. On April 13, 2016, Safeco initially assessed the damage at a value less than the deductible. Cheski requested a re-inspection and following the re-inspection, Safeco reassessed the claim at a value of $10,363.13 and issued payment of June 9, 2016. Cheski continued to disagree and Safeco invoked appraisal on June 28, 2016. On November 11, 2016, through the appraisal process, Cheski’s and Safeco’s appraisers agreed the amount of loss was $11,844.13 and Safeco issued payment for the difference on December 9, 2016.

Cheski sued Safeco alleging various violations of the Texas Insurance Code and Texas DTPA in addition to violation of the Prompt Payment of Claims Act and breach of contract. Safeco contends its payment following the appraisal process precludes Cheski’s causes of action and moved for summary judgment.

Hail Damage And Lawsuits

April 25, 2017 | Mark S. Humphreys

Hail damage lawsuits can be tough when in Federal Court. Special attention has to be given to the way the lawsuit is drafted. This is illustrated in a 2017, opinion issued by the Northern District, Dallas Division. The case is styled, McKinney Square Properties No. 1 Ltd. v. Seneca Insurance Company, Inc.

McKinney filed a lawsuit against Seneca alleging hail storm damage that occurred about June 9, 2015. McKinney alleges they filed a claim as soon as possible after the storm when a leak was detected. Seneca denied the claim.

McKinney alleges that Seneca refused to provide the names of the individuals who inspected the property, a copy of the engineering report, and Seneca negligently damaged roof tiles during the inspection of the property.

Life Insurance – Taking Delivery

April 23, 2017 | Mark S. Humphreys

Texas Hill Country life insurance lawyers will tell you that a life insurance policy has to be read carefully. This even means that the initial application has to also be read very carefully. This is illustrated in a 1999, San Antonio Court of Appeals opinion. The opinion is styled, Carolyn Noseff v. Tower Life Insurance Company, et al.

Mr. Noseff applied through an agent for a life insurance policy with Tower Life Insurance Company. He died before the policy was delivered. It is undisputed that delivery of the policy and collection of the first premium was a valid condition precedent to the policy’s going into effect. His wife sued alleging that Tower Life failed to use ordinary care in delivery of the policy. Tower Life moved for summary judgment, which was granted. Mrs. Noseff, the wife of Mr. Noseff, filed this appeal.

This San Antonio Court of Appeals affirmed the summary judgment in favor of Tower Life. The policy stated that it would not take effect until “the policy is delivered to the owner and the first full premium is accepted by the Company while the proposed Insured is alive …”. There is no question that Noseff died without taking delivery of the policy, and signing off on the policy amendments. While Texas courts have long recognized that an insurance agent owes a duty to a client at the inception of coverage, Texas does not recognize a claim against an insurance company for failure to deliver an insurance policy. The cases relied upon to establish that an insurance agent can be liable to an insurance applicant if the agent fails to follow through on the promised performance does not pertain to the insurance company’s liability. An agent or broker undertakes to procure insurance for another is paid therefore.