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 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.

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.

The above questions get some attention in a 1994, Texas Supreme Court opinion styled, Celtic Life Insurance Co. v. Coats.

The insured’s owner met with a soliciting agent of Celtic to discuss buying insurance.  The owner advised the agent that he wanted a policy providing benefits for psychiatric care equal to or better than the $20,000 coverage provided by the company’s then existing policy.  The owner explained to the agent that the coverage was needed because his oldest son had previously required psychiatric care, and he was concerned that his younger son might well require similar care.  The agent said he understood.  The agent then proposed the purchase of a specific policy written by Celtic with a maximum lifetime hospital benefit of $1,000,000.  However, the agent did not point out that the psychiatric benefits under the policy were limited to $10,000.  The insured’s business manager noticed the $10,000 limit and questioned the agent about its meaning.  The agent assured the business manager that the $10,000 limit applied only to the out-patient psychiatric care.  The policy was purchased.

Subsequently, the owner’s son was admitted to the hospital for psychiatric care.  The insured filed a claim and was assured by the agent that the in-house hospital treatment was covered.  Celtic, however, paid only $10,000 of the $27,000 in medical expenses.

For those insurance lawyers handling flood claims, a Corpus Christi Court of Appeals opinion issued in 2017, is a must read.  It is styled, Housing & Community Services, Inc. and HCS 401, LLC D/B/A Lantana Square Apartments v. Texas Windstorm Insurance Association.

This is an appeal in favor of TWIA

HCS had policies providing coverage with TWIA through December 2012.  On May 15, 2012, HCS sustained damage to covered property and on May 28, 2013, filed two claims with TWIA.  On July 1, 2013, TWIA denied both claims on the grounds that HCS failed to fulfill its duty to file its claim with TWIA within one year of the loss.

Many insurance lawyers representing claimants want to avoid Federal Court due to the procedural rules and the court’s interpretation of those rules.  These rules and their interpretation generally work in favor of the insurance companies which is why insurance companies always want a case in Federal Court and why lawyers representing insureds generally try to avoid Federal Court.

A 2017, opinion discusses some basic Federal Court rules.  The case is styled, Campmed Casualty & Indemnity Company, Inc. v. Specialists on Call, Inc., et al.  The opinion was issued by the Eastern District Court, Sherman Division.

This is an insurance coverage dispute related to whether Campmed is obligated to defend Specialists on Call (SOC) in the underlying litigation.  On December 19, 2016, Campmed filed its motion for leave to amend its complaint.  On December 28, 2016, SOC filed a response.  On January 2, 2017, Another Defendant, Dr. Leonard DaSilva filed a response that adopted and incorporated the entirety of SCO’s response.

Coastal Texans – you have to know your flood insurance policies.  This is perfectly illustrated in a 2016, Southern District, Galveston Division, opinion.  It is styled, Lobeck v. Licatino, et al.

The case was decided on a summary judgment.

In a nutshell, Lobeck bought property that, unknown to her, was located within the boundaries of the Coastal Barrier Resources System (CBRS).  Lobeck’s mortgage loan required her to maintain flood insurance on the property so she innocently procured an NFIP through the Defendants in this case.  The policy was subsequently reissued and then renewed the following year.  During the renewal year Hurricane Ike completely destroyed the building on the property and only then was Lobeck informed that her policy was void and had never afforded overage.  She received nothing for her property damage.  Consequently, Lobeck filed suit alleging that the Defendants knew or should have known that the property was ineligible for flood insurance under the NFIP, that the policy was void when issued, and that the policy offered absolutely no coverage.  According to Lobeck, the express and implicit misrepresentations of the Defendants, upon which she ignorantly, but reasonably relied, caused her losses.

Granbury life insurance lawyers need to read this 1975, Texas Supreme Court opinion.  It is styled, Johnson v. Prudential Insurance Company of America.

This is a suit to collect benefits under a group life insurance policy.  Prudential resisted payment based on their assertion that the deceased willfully deceived the company by her statements made in procuring coverage.  The beneficiary contends that the statements of the insured were inadmissible and could not be considered because copies of the application were not furnished to the insured in compliance with what is now the Texas Insurance Code, Section 705.103.

Ten years before applying for this insurance, Mrs. Johnson, the insured, had her right breast removed because of cancer.  Mrs. Johnson made what she could have regarded as true statements, but they were incomplete and misleading.

How long does an insurance company have to discover and assert the defense of misrepresentation?  This is discussed in a 2008, Amarillo Court of Appeals opinion styled, Myers v. Mega Life and Health Insurance Company.

Myers filed suit based upon an insurance contract issued by Mega Life.  In addition to a declaratory judgment action, Myers sought damages for breach of contract and violations of the Texas Insurance Code.  Mega Life asserted the policy was rescinded due to misrepresentation in the insurance application.

Myers asserted that Texas Insurance Code, Section 705.005 prevents Mega Life from asserting the misrepresentation defense.  This section reads:

The Galveston Court of Appeals issued an opinion in 1938 that is still good law.  The case is styled, Texas State Life Insurance Company v. Freeman Barton.

This is an appeal from a trial to the Judge wherein Texas State was ordered to pay the life insurance proceeds to the beneficiary together with the statutory penalty and attorney fees.

The policy had been issued on Marie Clemons on July 10, 1935, with Barton as beneficiary and Marie having died on November 29, 1935.  (As a side note, this case points out “both of them being negroes,” – makes you wonder about that time in history).

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