Dallas Fort Worth Insurance Lawyer Blog

Hail Claims And Federal Court

November 15, 2016 | Mark S. Humphreys

As has been stated here many times, insurance companies prefer to litigate cases in Federal Court, whereas, attorneys representing claimants prefer to litigate cases in State Court. The Northern District, Dallas Division, issued an opinion wherein the fight over which court a case would be heard was the subject of a Motion to Remove and Motion to Remand. The case is styled, Ministerio International Lirios Del Valle v. State Farm Lloyds, et al.

Plaintiff sued State Farm and the adjuster Galvan. The purpose of suing Galvan was to keep the case out of Federal Court. State Farm alleges Galvan was improperly joined to defeat diversity jurisdiction.

The 5th Circuit recently held that, when deciding whether a defendant has been improperly joined, a federal court must apply the federal pleadings standard. This standard requires the plaintiff to plead enough facts to state a claim to relief that is plausible on its face. A claim has factual plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Where the well pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged — but it has not shown — that the pleader is entitled to relief. Although the pleading standard Rule 8 announces does not require detailed factual allegations, it demands more than labels and conclusions. And a formulaic recitation of the elements of a cause of action will not do.

Suing The Adjuster Has To Be Done Correctly

November 13, 2016 | Mark S. Humphreys

The Western District, San Antonio Division issued an opinion in the case styled, McClelland v. Chubb Lloyd’s Insurance Company of Texas and Robert Pritchard.

The McClellands suffered a loss to their home and Chubb sent adjuster Pritchard to evaluate and adjust the loss. The McClellands did not like the result and sued Chubb and Pritchard in State Court. Chubb and Pritchard had the case removed to Federal Court.

Pursuant to 28 U.S.C., Section 1441, defendants may remove to the appropriate district court any action in which the district courts have original jurisdiction. Under Section 1332, district courts have original jurisdiction in diversity actions between citizens of different states that involve an amount in controversy exceeding $75,000. District courts are prohibited from exercising jurisdiction when a party has been improperly or collusively joined to manufacture federal diversity jurisdiction. Improper joinder may be established by (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.

Life Insurance And Interpleader

November 12, 2016 | Mark S. Humphreys

Life insurance lawyers will have potential new clients call up and say they have been served with legal papers. These papers will state a life insurance company has death benefits they want to pay but the life insurance company is unsure who to pay the benefits to and so, they are interpleading the life insurance proceeds into the court, notifying people who have a possible interest in the benefits and letting the court and parties decide who is entitled to the proceeds.

A Western District, San Antonio Division opinion styled, Erika Sanchez v. Prudential, sheds some light on this subject.

Following the death of the insured, the OSGLI received three different SGLI Election and Certificates form the U.S. Army Reserves. One certificate dated June4, 2011, designates the insured’s sisters, Middleton and Vial, as co-beneficiaries of the Death Benefit. The June 2011 Certificate bears the insured’s electronic signature and indicates that it was received and/or accepted by the appropriate branch of service. A second Certificate, dated August 6, 2011, designates Sanchez, the insured’s estranged wife, as a primary beneficiary of 75% of the Death Benefit and Middleton as the primary beneficiary of 25% of the Death Benefit. The August 2011 Certificate also named Vial as a secondary beneficiary. However, there is no indication that the August 2011 Certificate was submitted, received, and/or accepted by the applicable branch of service. The final Certificate, dated September 30, 1975, designates Sanchez as the sole primary beneficiary of the Death Benefit. The Sanchez Certificate bears what purports to be the Insured’s signature; however the Insured’s date of birth is listed as the date he signed the Sanchez Certificate. Richard Teniente, the Insured’s Army Reserve Unit Administrator, is listed as the personnel clerk who allegedly completed the Sanchez Certificate. However, Mr. Teniente states in a letter that he is unable to validate the Sanchez Certificate because it appears to have been altered.

Underinsured Claim And Consent

November 10, 2016 | Mark S. Humphreys

Garner and Brock insurance lawyers who handle underinsured claims need to read this opinion from the Fifth Circuit Court of Appeals. The opinion is styled, Gaspar Gonzalez v. Philadelphia Indemnity Insurance Company.

Gonzalez sued Philadelphia for underinsured motorist benefits after Philadelphia refused to pay the benefits because Gonzalez failed to follow the requirements in an endorsement to his policy. The endorsement expressly excluded “any claim settled without Philadelphia’s consent,” unless the “insured” gave Philadelphia “prompt written notice” of any “tentative settlement” and Philadephia “advanced payment to the ‘insured’ in an amount equal to the tentative settlement within 30 days after receipt of notification.”

Gonzalez had settled the case with the responsible third party for their limits of $25,000 prior to Gonzalez seeking underinsured benefits from Philadelphia. Gonzalez filed suit against Philadelphia for breach of the insurance contract in State Court and Philadelphia removed the case to Federal Court.

Read The Policy!

November 8, 2016 | Mark S. Humphreys

The Houston Division, Southern District issued an opinion on September 10, 2016, styled AXA Art America’s Corporation V. Public Storage that serves as a good example how a person has to read what they are signing. AXA’s contract with Public Storage is similar to what happens in many insurance contracts.

AXA had almost $850,000 of art work stolen from a storage unit controlled by Public Storage. AXA sued Public Storage for the loss and Public Storage moved to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

The lease agreement contains this section – “Use of Premises and Property and Compliance With Law,” which reads:

Hire A Grand Prairie Insurance Lawyer

November 6, 2016 | Mark S. Humphreys

Whether the attorney is in Grand Prairie or Dallas or Fort Worth or wherever, you need an attorney who knows insurance law and will fight the insurance companies. An insured starts out with the cards stacked against him as is illustrated in a Washington Post story titled, Drinks, Junkets and Jobs: How the Insurance Industry Courts State Commissioners.

When the Arkansas insurance commissioner weighed the merits of a hospital’s billing complaint against United Healthcare, her interactions with one of the nation’s largest health insurers extended far beyond her department’s hearing room.

During months of deliberations, Commissioner Julie Benafield Bowman met repeatedly with United Healthcare lawyers and lobbyists over lunch and drinks at venues such as the Country Club of Little Rock.

Filling Out Policy Application

November 5, 2016 | Mark S. Humphreys

Springtown insurance lawyers know about the importance of an insurance policy being correctly filled out. This was illustrated in a 2016 opinion out of the Southern District, Houston Division, styled, Perfit Vision, et al v. Mount Vernon Fire Insurance Company.

John Luong owed a portion of Eyewear Express and in 2013, Eyewear bought a store and renamed it Perfit Vision. Mount Vernon issued Loung a one-year casualty policy beginning coverage on Feb. 21, 2014.

Luong reported to Mount Vernon that the store had been burglarized on March 8-9. Mount Vernon denied the claim.

Segregating Damages In Hail Storm

November 3, 2016 | Mark S. Humphreys

Attorneys who handle hail damage claims have to know the law discussed in this Northern District, Dallas Division opinion. The opinion is styled, One Way Investments, Inc. vs. Century Surety Company, et al.

This is a summary judgment case for breach of contract. One Way had property insurance with Century and made a claim for damages alleged to have happen in a severe hail storm that caused significant damage to the roof and appurtenances and interior of One Way’s property.

Century’s adjuster estimated the cost of repairs to be $2,372.43, which was less than the amount of One Way’s deductible and resulted in One Way filing this lawsuit.

Going For Bad Faith

November 1, 2016 | Mark S. Humphreys

Garner insurance lawyers who know insurance law, know that actually prevailing in a bad faith claim is difficult. Getting the insurance company to pay what they should is not hard but getting the extra money for bad faith in Texas is difficult because of the way Texas Courts interpret the law. An Appeals Court in Corpus Christi was making it easier in a 2016 opinion styled, In Re State Farm Lloyds. This is a mandamus opinion dealing with discovery issues.

Angelica Gongora’s home was damaged in hailstorms. She submitted a claim with State Farm. The adjuster, Sylvia Garza, inspected Gongora’s home and asserted that the damage did not exceed the deductible and therefore did not pay the claim. Gongora sued State Farm stating that Garza failed to include all of the damages in her estimate and that Garza grossly undervalued the damages and failed to include adequate funds in the estimate to cover the costs of repairs.

Gongora subsequently invoked the appraisal clause in her homeowner’s policy and the appraisal came back at more than ten times the amount Garza had estimated. State Farm paid the appraisal amount. In the lawsuit Gongora propounded discovery to State Farm seeking production of:

Cooperating With Insurance Company Investigation

October 30, 2016 | Mark S. Humphreys

Insurance lawyers know to tell their clients to cooperate with their insurance company investigation of a claim. Failure to cooperate can void the coverage. This issue was litigated in a Southern District, Houston Division case styled, Rosie’s Chicken & Waffles Restaurant, et al v. Acceptance Indemnity Company.

In a jury trial, the jury answered questions 1 and 2 in favor of Rosie’s, finding that the entire fire at their business was not the cause of arson attributable to its owners or employees. The jury also found by inference that Acceptance failed to establish its defense that the premises did not have a working smoke alarm at the time of the fire. The jury in questions 4 and 5 went on to find that the owner failed to provide financial information relating to the daily business transacted at Rosie’s business location and that her failure to provide financial documents prejudiced Acceptance.

This Court found that the jury’s answers to questions 4 and 5 are irrelevant in light of their answers to questions 1 and 2.