Dallas Fort Worth Insurance Lawyer Blog

Suing The Adjuster

April 4, 2017 | Mark S. Humphreys

A 2017, opinion from the Northern District, Dallas Division, is an example of how not to sue an adjuster to keep a case out of Federal Court. The opinion is styled, Hutchins Warehouse Limited Partners, v. American Automobile Insurance Company, et al.

Hutchins sued American and their adjuster in State Court after their claim for benefits was not properly paid. The allegations against the adjuster, McMillan, were that he made numerous errors in his estimate, which resulted in American underpaying and partially denying Hutchins’s claims.

28 U.S.C., 1441(a) permits the removal of any civil action brought in a state court of which the district courts of the United States have original jurisdiction. The statute allows a defendant to remove a state court action to federal court only if the action could have originally been filed in federal court.

Fort Worth Homeowners Hail Claims

April 2, 2017 | Mark S. Humphreys

The Fort Worth Court of Appeals issued an opinion in February 2017, that is good reading for insurance lawyers. It essentially points out in a case, what was not done correctly. The opinion is styled, Seim v. Allstate Texas Lloyds.

This is claim against a homeowners policy issued by Allstate to the Seims. It is an appeal from a summary judgment in favor of Allstate. The Allstate policy provided coverage on the Seims home for the period April 27, 2013, through April 27, 2014. On or about August 28, 2013, the Seims notified Allstate of damage that had occurred earlier in August. The property was inspected on or about September 10. The adjuster, Scott, testified in deposition that the Seims’ property had some interior water damage, but the roof did not have any wind or hail damage. Scott further testified that in order for the interior water damage to be covered under the Seims’ policy, “there had to be an opening in the roof caused by wind or hail … and the Seims did not have that. The claim was denied by Allstate and a few months later the Seims sued Allstate for insurance code violations and breach of contract.

In the pleading filed by the Seims, they claimed damage was caused by storms in 2013, April 2007, April 2008, and May 2012. In their lasted amended pleading, references to the 2007, 2008, and 2012, storms was removed.

Underinsured Motorist Claim

April 1, 2017 | Mark S. Humphreys

Most insurance lawyers know this – – that a first party uninsured motorist claim cannot litigate bad faith until there has been a resolution to the uninsured motorist (UM) part of the claim. This is illustrated in the February 2017, opinion from the 14th Court of Appeals styled, In Re Allstate County Mutual Insurance Company.

Allstate was sued for UM benefits and at the same time sued for extra-contractual bad faith claims. The Judge in the case would not sever and abate the extra-contractual causes of action from the UM claim and this mandamus action resulted.

The real party in interest, Alexa St. Julian was involved in an automobile accident with an uninsured driver. Alexa was unable to reach a settlement with Allstate, who had made a settlement offer, and the lawsuit resulted. Allstate sought for the UM claim to severed and abated from the extra-contractual claims.

Here Is Why You Need An Insurance Lawyer

March 30, 2017 | Mark S. Humphreys

An article ran in February 2017, that explains why people need experienced insurance lawyers to help with their insurance claims. The article is titled, State Can’t Help With Most Unpaid Insurance Claims.

The Texas Department of Insurance claims it can help resolve complaints against insurance companies and boasts of helping Texas consumers get millions of dollars in unpaid claims every year. However, a KXAN Investigation finds that only happens in certain situations and most of the time the state has no power to do anything at all, leaving you—the consumer—without much recourse.

In the spring of 2013, a storm swept through pummeling hail down on Carol Fredenburg’s house. A roofing contractor told her the roof needed replacing but when she filed a claim with State Farm, they told her the damage only affected part of her roof and they would not pay for the entire roof to be replaced. They estimated her repairs at $7,600, with a $2,841 deductible.

Does An Insurance Agent Have To Discuss Exclusions In A Policy?

March 28, 2017 | Mark S. Humphreys

The above question comes up more often than it should. The short answer is no. A 2000, San Antonio Court of Appeals case styled, Nwaigwe v. Prudential Property & Casualty Insurance Company, discusses the agent’s responsibility.

Moses Nwaigwe sued Prudentail and its agent, William Eckert for failing to disclose a policy exclusion that the company used to deny a claim. Prudential’s argument is that Eckert did not misrepresent the terms of the policy and that it had no duty to tell Moses about the exclusionary clause. The court granted summary judgment in favor of Prudential and Eckert.

Moses purchased a fire insurance policy from Prudential to insure an occupied rental property. The policy was renewed two times, but Moses never received a copy of the policy.

Insurance Company Insolvency

March 26, 2017 | Mark S. Humphreys

All insurance lawyers need to know what happens to a claim when an insurance company becomes insolvent. Insolvency to an insurance company is the same as bankruptcy to other companies and individuals. So what effect is this to policy holders?

Companies that write insurance policies in the State of Texas are heavily regulated, and the Legislature has provided numerous safeguards to protect the public against insurance company insolvency. This can be seen by looking at the Texas Insurance Code, Chapter 462 and in the Texas Transportation Code, Section 643.105. In connection with these statutory safeguards, Texas Insurance Code, Section 1952.102 lists and defines the definition of “uninsured motorist” to include a vehicle for which the liability carrier is or becomes insolvent. As an adjunct to this requirement, the Texas Property and Casualty Insurance Act provides further protection for the public against failure of licensed insurance companies as a result insolvency.

The Act creates a Guaranty Association for the purpose of paying unpaid claims, including those of third-party liability claimants that arise out of and are within the insured’s coverage, but not in excess of the insured’s applicable policy limits. This limitation can be found in Texas Insurance Code, Section 462.201. According to Section 462.213, covered claims are limited to $300,000.00 in value.

Llano County Property Owners – When Is A Fence Part Of Your Home

March 25, 2017 | Mark S. Humphreys

The Insurance Journal published an article on an opinion issued by the Texas Supreme Court that will have an impact on all property owners in the State of Texas. The title of the article is, Texas High Court Sides With Policyholder In Ike Damaged Property Case.

When is a fence a “dwelling” structure for insurance coverage purposes and when is it an “other structure?”

The Texas Supreme Court, relying on disputed language in a Liberty Mutual homeowners policy, found that a fence is a covered dwelling structure when it is attached to the home.

Can Someone In Fort Worth Sue An Insurance Company

March 23, 2017 | Mark S. Humphreys

To sue an insurance company, a person must have “standing.”

Texas is not a direct action state. In other words, when Fred and Ted collide in their cars, the resulting lawsuit is styled Fred vs Ted, and their respective liability insurers are not named parties. Fred can’t sue Ted’s insurer; he has to sue Ted. Because of the lack of privity between a liability insurer and a third-party claimant, an insurer had no duty to a third party to settle a claim brought against its insured until the insured’s liability has been established. This was made clear by the Texas Supreme Court in 1997, in a case styled, Farmers Texas County Mutual Insurance Co. v. Griffin. Indeed, until the liability of the insured is judicially established, a third-party plaintiff does not have standing to bring a direct action against the insurer to recover for the liability of the insured. For further guidance there is more case law.

This rule of law is so well ingrained in the jurisprudence of the State that it is embodied within the Texas Rules of Civil Procedure. Rule 51(b) regarding the Joinder of Claims and Remedies provides:

Fort Worth – Delay In Paying Claim

March 21, 2017 | Mark S. Humphreys

The Fort Worth Court of Appeals delivered an opinion in 2006, that is relevant to all insurance lawyers in Texas. The case has to do with who can assert a claim under the Texas Prompt Payment of Claims Act. The opinion is styled, American National Fire Insurance Company v. Hammer Trucking, Inc.

In November 2006, the Fort Worth Court of Appeals held that the Prompt Payment of Claims Act doe not apply to an indemnity claim against an excess carrier for payments made to settle a liability claim. In so holding, the Court stated that this Act only applies to first party claims between the insurance company and their customer. However, the Texas Supreme Court recently held, in response to a certified question from the Fifth Federal Circuit on a CGL case, that the Prompt Payment of Claims Act applied to the insurance company’s obligation to pay third party claims.

The prompt-payment statute provides that an insurer, who is “liable for a claim under an insurance policy” and who does not promptly respond to, or pay, the claim as the statute required, is liable to the policyholder or beneficiary not only for the amount of the claim, but also for interest on the amount of the claim at the rate of eighteen percent a year as damages, together with reasonable attorney’s fees pursuant to Texas Insurance Code, Section 542.060(a). “Claim” is defined as “a first party claim made by an insured or policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary.” This is found in Texas Insurance Code, Section 542.051(2). The statute does not separately define “a first party claim,” and Texas cases are divided as to its meaning.

Life Insurance And Citizenship Status And ERISA

March 19, 2017 | Mark S. Humphreys

Llano life insurance agents need to know about this case from the United States 5th Circuit. It is a 2011 opinion styled, Araceli Medina Garcia v. American United Life Insurance Company.

Araceli’s husband, Salvador, died in a car accident. He had a policy with American through his employer. The policy was an ERISA plan. American’s plan administrator denied Araceli’s claim for benefits because Salvador was living illegally in the U.S. Araceli filed a lawsuit seeking benefits. On Salvador’s policy enrollment form he indicated his date of birth and social security number.

When Araceli made a claim for benefits, she submitted a proof of death form, her Mexican identification card, and Salvador’s death certificate, identifying his date of birth as above and his place of birth as Mexico City and the above social security number. No documents reflected Salvador being a U.S. citizen. American was then sent Araceli’s alien registration card and a copy of Salvador’s I-9 form, which was expired.