Dallas Fort Worth Insurance Lawyer Blog

Notice Of A Hail Claim Needs To Be Communicated To The Insurance Company ASAP

February 28, 2017 | Mark S. Humphreys

Weatherford insurance lawyers who handle hail claims will tell clients that a hail damage insurance claim needs to be reported to the insurance company as soon as possible. This issue is discussed in a 2016, United States 5th Circuit Court of Appeals opinion. The opinion is styled, Hamilton Properties v. American Insurance Company.

This short but interesting case is a per curiam case. In July 2009, a hailstorm damaged the Dallas Plaza Hotel in Dallas, Texas. The owner, Hamilton Properties, had property and casualty insurance covering the hotel with American Insurance Company (AIC). At the time of the hailstorm, the hotel was no longer in use as a hotel, but still had a few permanent residents. The damage was significant, with evidence suggesting significant roof leakage and destruction of ceiling tiles.

Hamilton did not immediately make a coverage claim. Instead, it waited until November of 2010 before hiring an inspector to look at the damage. Hamilton’s representative then emailed AIC in February of 2011. AIC responded that it was no longer Hamilton’s broker of record and refused to report a claim. Hamilton made a formal claim in October of 2011, which AIC denied due to the amount of time that had passed since the damage, the multiple intervening instances of hail damage (which would not be covered by the policy at issue, since it had expired in September 2009), and an early inspection report by an AIC engineer just a few weeks after the July hailstorm that had found no damage to Hamilton’s property from water or hail. Additionally, AIC asserted that the roof itself was not adequately designed, which suggested the damage may have resulted from a faulty roof.

Insurance Policies – Waiver And Estoppel

February 26, 2017 | Mark S. Humphreys

A problem for Kimble County insurance lawyers is knowing and being able to predict how a Judge will interpret an insurance policy. This topic is discussed in a State Bar of Texas, Insurance Section article. The article is titled, The Tentative Draft Of The Restatement (Third) Of Liability Insurance: How Could It Affect Texas Insurance Law?

Under Section 5 of the Restatement of Insurance (Third), a party may waive a right under the policy if, with actual or constructive knowledge of the right, the party (a) either expressly relinquishes the right or engages in conduct that would reasonably be regarded by the other party as relinquishing the right, and (b) that waiver is communicated to the other party.

Waiver permits the enforcement of terms different from the original contract or bars enforcement of such terms without creating a new contract. A party may waive only terms that benefit it; thus, the insured cannot waive policy conditions. The law of agency determines when the agent’s words or conduct binds the principle and waives its rights. Waiver necessarily requires extrinsic evidence.

Insurance Company Failure To Pay Claim

February 25, 2017 | Mark S. Humphreys

What happens when an insurance does not pay a claim that it was suppose to pay? That issue is dealt with in the Texas Insurance Code by statute and by courts interpreting the statute.

A particularly strict deadline for insurance companies is the requirement in Texas Insurance Code, Section 542.058(a) that the insurance company pay a valid claim within 60 days after receiving all required items requested from the claimant. This means that if the insurance company ultimately loses on the coverage issue and has to pay the claim, then it necessarily has violated the 60 day payment provision and is subject to the 18% damage set forth in Section 542.060(a) and attorney’s fee provisions of the statute. This is true even if the delay on the part of the insurance company was in good faith.

In a 5th Circuit Court of Appeals opinion from 1997, styled, Higginbotham v. State Farm Mutual Automobile Insurance Company, the court held that by rejecting the claim, the insurance company necessarily failed to pay within 60 days, in violation of the statute. As the court put it:

ERISA = No Jury Trial

February 23, 2017 | Mark S. Humphreys

Most people who find themselves in court like to think they are entitled to a jury trial. Claims against ERISA insurance policies is one of those places where a jury trial is not permitted. A recent Southern District, Houston Division opinion illustrates this. The opinion is styled, Deo G. Shanker v. United of Omaha Life Insurance Company.

The attorney for Shanker in this case tried to be creative in asserting a state law declaratory judgment action in order to get a jury trial.

This is an insurance coverage case. Shanker suffered a heart attack and underwent open heart surgery. After the attack, he was unable to perform his routine job duties, including driving, using fine motor skills, lifting medium and large loads, and standing for extended periods of time. Shanker submitted a claim to Omaha for long term disability benefits. After an exchange of documents, Omaha ultimately denied the claim. Shanker sued Omaha alleging Omaha disregarded relevant medical information and improperly denied coverage.

Insurance And Unjust Enrichment

February 21, 2017 | Mark S. Humphreys

Do you own the property that is insured? That is a question that matters in an insurance claim. This is illustrated in a Southern District, Houston Division opinion issued in late 2016. The opinion is styled, Cynthia Banion V. Geovera Specialty Insurance Company and Rick Calvert.

Cynthia sued Geovera to recover policy proceeds for damage to the insured property on a homeowners policy. Geovera counterclaimed, alleging that it had paid Cynthia over $57,000 for the property damage and then discovered that Cynthia never owned the property despite her representation to the contrary on the policy application.

The court dismissed Cynthia’s claim and Geovera filed a motion for summary judgment on its unjust enrichment claim and sought attorney fees and court costs.

Abuse Of Discretion – ERISA

February 19, 2017 | Mark S. Humphreys

Dallas and Fort Worth lawyers who handle ERISA claims need to read this recent Eastern District of Texas, Sherman Division opinion. It is styled, Martha Shindoll v. United of Omaha Life Insurance Company.

Shindoll had an ERISA plan through her employer that provided short and long term disability benefits. In 2005, Shindoll was diagnosed with fibromyalgia and Chronic Fatigue Syndrome (CFS). She continued working but in 2010, her condition worsened. In November 2012, her doctor, Kippels, ordered her off work. In June 2013, Shindoll obtained a Vocational Analysis from a Dr. Hansen, who opined that she was completely disabled. Shindoll applied for and received short term disability which was denied. She appealed and submitted to an IME with a Dr. Daniel. Daniel found she was completely disabled due to medication overdose syndrome. United approved the short term benefits in October 2013. The next month, Daniel issued an addendum to his initial analysis, stating Shindoll did not suffer from any cognitive dysfunction or physical functional impairment.

After exhausting short term benefits, Shindoll began receiving long term benefits. In November 2014, United submitted Shindoll’s file for additional IME testing. A peer review doctor, Dr. Raff, supplied a psychiatric and psychological peer review report that stated Shindoll did not have an impairing condition. A second peer review doctor, Dr. Sartin, issued an infectious disease peer review report that found no cause for Shindoll’s symptoms and he disagreed with the diagnosis of any infectious disease. In December of 2014, United’s doctor, Dr. Reeder, sent a letter to Kippels that set forth a review of Shindoll’s medical records, the IME, and peer reviews. Reeder concluded that Shindoll suffers from an anxiety disorder and somatoform symptoms but no physical or cognitive impairment.

Interpreting An Insurance Policy

February 18, 2017 | Mark S. Humphreys

One of the first things Dallas and Fort Worth insurance lawyers want to do in an insurance case is to read the policy. The next thing would be to know how the courts interpret policies. A recent article from the State Bar of Texas, Insurance Section, is a must read for insurance attorneys. The article discusses proposed changes to the Restatement (Third) of Insurance Liability. Here is a short exert from the 12 page article.

A. General principle — plain meaning is the preferred interpretation.

Under Section 2, policy interpretation is the process to determine the meaning of policy terms; enforcement is determined by other substantive law. Absent other law to the contrary, the ordinary rules of contract interpretation apply.

How Relevant Is a Misrepresentation

February 16, 2017 | Mark S. Humphreys

As most Llano insurance lawyers can tell someone, the answer to the titled questions is: It Depends!

A 1976, Waco Court of Appeals opinion gives some guidance on an answer. The case is styled, Westchester Fire Insurance Company v. English.

Posing as husband and wife when in fact they were not married, Reaves Hickey and Carolyn Meadows purchased a frame house and two lots from Fannie English. English conveyed the property to Hickey and wife Carolyn. by warranty deed with a vendor’s lien note. These documents were executed in front of and notarized by Westchester agent, Kenneth Logan. At closing Logan issued a standard homeowners policy on the house and contents. The premiums were paid and accepted by Westchester. A few months later and contents were destroyed in a fire. Westchester failed to make cover the claim, a lawsuit was filed, and prior to trial Westchester learned for the first time that Hickey and Meadows were not married.

Insurance Application Misrepresentations And Their Importance

February 14, 2017 | Mark S. Humphreys

Mason Texas insurance attorneys need to know a few basics about insurance law when discussing potential cases and the surrounding facts with a client.

To begin with – When is a representation in an insurance application important? According to a line of cases, including (1) a 2014 federal case styled, Weidner v. Nationwide Property & Casualty Insurance Company, (2) a 1995 Houston Court of Appeals [1st Dist.] styled, Darby v. Jefferson Life Insurance Company, (3) a 1965 Austin Court of Appeals case styled, Manhatten Life Insurance Company v. Harkrider, a “representation is material if it actually induces the insurance company to assume the risk.”

According to a 1976 Waco Court of Appeals opinion styled, Westchester Fire Insurance Company v. English, the insurer must show that it was induced to assume the risk by the misrepresentation. According to the Texas Insurance Code, Section 705.004(c), this determination is a question of fact — the very language of the statute makes that “fact” clear. (It is a question of fact whether a misrepresentation made in the application for the policy or in the policy itself was material to the risk or contributed to the contingency or event on which the policy became due and payable.) This is backed up by case law in a 1985 Corpus Christi Court of Appeals opinion styled, Carter v. Service Life & Casualty Insurance Company, holding that the statute provides the materiality of any false representation is a question of fact.

Homeowners Insurance – Accident Or Intentional?

February 12, 2017 | Mark S. Humphreys

Lawyers in Mason Texas who handle insurance claims know that many accidents are covered by a persons’ homeowners insurance. But, intentional acts are not covered. The Claims Journal published an article discussing this issue in January 2017. The title of the article is, No Homeowner Liability Coverage For an Insured’s Negligent Assault, Even If Insured Was Intoxicated.

Nicholas Fiocchi sued Ronald Zatyco for assaulting him after a verbal argument between them at a bar earlier the same evening. Fiocchi’s complaint attempted by artful pleading to capture Zatyco’s parents’ homeowners coverage, alleging that the assault was made “negligently” and “without provocation,” but offering no other factual detail. In fact, the complaint was limited to just four paragraphs and, significantly, did not allege that Zatyco consumed any alcohol, was intoxicated or in any way cognitively impaired at the time of the assault.

Zatyco asked his parents’ homeowners insurer, Nationwide Property & Casualty, to defend and indemnify him against Fiocchi’s claim. Nationwide defended Zatyco under a reservation of rights but refused to agree to indemnify him. Instead, Nationwide brought its own lawsuit against Zatyco federal court to support a denial of all coverage for the claim.