Dallas Fort Worth Insurance Lawyer Blog

Pre-Suit Demands In Insurance

October 16, 2016 | Mark S. Humphreys

Mineral Wells insurance lawyers know that when making a pre-suit demand on an insurance company that making an excessive demand can be more harm than good. This is discussed in a Houston Court of Appeals [1st Dist.] opinion released in August 2016. The case is styled, United Services Automobile Association v. Hayes. The opinion is over 50 pages long and discusses various issues on appeal but one of those issues deals with excessive pre-suit demands.

Texas law holds that a creditor who make an excessive demand upon a debtor is not entitled to attorney’s fees for subsequent litigation required to recover the debt, even if it prevails in its suit. A demand is not excessive simply because it is greater than the amount eventually awarded by the fact finder. However, a claim for an amount greater than that which a jury later determines is actually due may indeed be some evidence of an excessive demand. Nevertheless, it cannot be the only criterion for determination, especially where the amount due is un-liquidated.

The dispositive question in determining whether a demand is excessive is whether the claimant acted unreasonably or in bad faith. Further, application of the excessive demand doctrine is limited to situations in which a creditor has refused a tender of the amount actually due or has clearly indicated to the debtor that such a tender would be refused.

Suing The Agent When A Claim Is Denied

October 15, 2016 | Mark S. Humphreys

Insurance lawyers in the Dallas and Fort Worth area know that insurance companies prefer to litigate cases in Federal Court while the opposite is true for lawyers representing an insured. A recent Northern District, Dallas Division case deals with suing the agent in Federal Court. The case is styled, B&B Car Wash and Mini Storage v. State Automotive Mutual Insurance Company, Jennifer Caldwell, and Danny Duncan d/b/a Duncan Insurance Agency.

This is a case about State Auto allegedly denying coverage for B&B’s wind and hail damaged storage facility. B&B owns a car wash, five storage buildings, and an RV shed. B&B purchased a State Auto policy from agents Jennifer Caldwell and Danny Duncan. The parties dispute the extent of coverage provided by that policy. B&B says it covers the entire complex and the defendants disagree.

After B&B filed its complaint, State Auto removed the case to Federal Court, arguing that, because B&B is a Texas citizen and State Auto is an Ohio citizen, complete diversity exists, and thus, federal jurisdiction. The next day, B&B amended its complaint to add Caldwell and Duncan as additional defendants, based on the fact that they sold the policy in question. Thus, because Caldwell and Duncan are both Texas residents, B&B filed a motion to remand the case to State Court since diversity jurisdiction no longer existed.

Insurance Agent Involved In Fraud

October 13, 2016 | Mark S. Humphreys

Insurance law attorneys can tell war stories about situations where an insurance agent has been caught stealing from customers. This was recently highlighted in an August 29, 2016, article published by the Insurance Journal. The article is titled “California Insurance Agent Nabbed For Fraud Scheme Involving 100-Plus Policies.”

Vicki Lee McGinley, 58, a licensed insurance agent in California, was arrested by the Kern County Sheriff’s department on seven counts of identity theft and seven counts of insurance fraud after allegedly misrepresenting policy and premium information to clients resulting in losses to her employers and increased premiums for her clients.

The California Department of Insurance Investigation Division began an investigation after receiving a complaint from McGinley’s previous employer.

Life Insurance Lawsuit

October 11, 2016 | Mark S. Humphreys

Life insurance lawyers will try to avoid what happened in an opinion from the Southern District of Texas in 2016. The opinion is styled, Hendrix v. Wal-Mart Stores.

Kimberly Hendrix sued Wal-Mart Stores, Inc., Associates Health and Welfare Plan, and The Prudential Insurance Company of America because they denied her claim under her late husband’s employer-sponsored life insurance.

Randy Hendrix worked for Wal-Mart until July 11, 2012, when he retired. On August 27, he died of a heart attack. His life was insured by a group policy that was sponsored by Wal-Mart. Hendrix filed a claim under the policy and Prudential denied the claim.

False Statements By Insurance Company

October 9, 2016 | Mark S. Humphreys

A Houston Division opinion discusses how to properly plead a lawsuit when an insurance company makes false statements. The opinion is styled, Mt. Olive Missionary Baptist Church v. Underwriters at Lloyds.

Mt. Olive alleges a storm caused damage to the Church including damage to the roof, HVAC, windows, exterior, interior, ceilings, furnishings, and more. After the storm a claim was filed under its insurance policy. A third party adjuster, Herring, was assigned to investigate and adjust the claim. Mt. Olive alleges that Herring failed to perform a thorough investigation of the claim, failed to prepare any estimates reflecting wind damage, and misrepresented that there was no damage to the Church. The claim was denied.

Mt. Olive sued in state court and the case was removed to federal court.

Uninsured/Underinsured Litigation

October 8, 2016 | Mark S. Humphreys

Lawsuits involving claims for uninsured/underinsured (UIM) benefits are in their own little category for the way the courts handle them. This is illustrated in a 2016, Tyler Court of Appeals opinion titled, In Re: AAA Texas County Mutual Insurance Company.

Vehicles driven by Thomas Jackson and Patricia Tompkins collided. Jackson filed a claim for UIM benefits with AAA. He later filed a lawsuit against AAA for breach of the insurance contract, violations of the DTPA, the Texas Insurance Code, and breach of duty of good faith and fair dealing. AAA filed a motion to sever and abate the extracontractual claims and the just denied the motion. This Mandamus action resulted.

AAA argued the judge abused his discretion in not allowing the case to be severed and abated.

Grand Prairie Insurance Lawyers Will See Total Loss Cases

October 6, 2016 | Mark S. Humphreys

Total loss cases dealing with automobiles have certain rules that apply. A Dallas Court of Appeals case discusses this issue. The opinion is styled, Sunny Letot v. United Services Automobile Association. There are multiple issues in this case but the opinion dealing with the total loss of an automobile is something many people will have the occasion to see.

The opinion is an appeal from a summary judgment in favor of USAA. The part of the opinion dealing with total loss was reversed by this appeals court.

Letot was involved in a wreck that resulted in the total loss of her vintage 1983 Mercedes. Letot was offered $2,494.02 by USAA which was rejected. However, USAA still mailed a check for that amount and the check was returned. The same day the check was mailed, USAA sent TxDoT a letter informing them the vehicle had been totaled. Letot had the vehicle scrapped to avoid incurring further storage fees. USAA later filed a report with TxDoT stating the initial report was filed in error.

Inter-pleader Actions

October 4, 2016 | Mark S. Humphreys

Life insurance lawyers need to read this 5th Circuit opinion. The case is styled, Jackson National Life Insurance Company v. Lance Dobbins, et al.

Inter-pleaders are cases where the insurance company knows they owe life insurance proceeds to someone but they are unsure who to pay because there are competing claims to the funds. As a result the insurance company files a lawsuit asking the court to distribute the funds and as part of this process the insurance company asks that money be withheld to compensate them for the costs and attorney fees associated with filing the inter-pleader.

Generally stated, the purpose of an inter-pleader action is to protect a stakeholder from liability when faced with the threat of multiple inconsistent claims to a single fund. It does this by allowing the stakeholder to tender the contested funds to the court in lieu of defending against multiple possible lawsuits. An inter-pleader action allows the stakeholder to pay the money in dispute into court, withdraw from the proceedings, and leave the claimants to litigate between themselves their entitlement to the funds.

Specific Acts Of Adjuster Have To Be Detailed

September 22, 2016 | Mark S. Humphreys

When an insurance attorney is representing someone suing an adjuster, there have to be specific acts alleged against the adjuster and those acts have to be detailed. This is illustrated in a Southern District, Houston Division opinion. The opinion is styled, Gregory Young v. Travelers Personal Security Insurance Company and Robert Finley.

This a hail / storm damage claim wherein Young was insured by Travelers and the adjuster assigned to the claim was Finley.

The case was filed in State Court but Travelers had the case removed to Federal Court alleging that Finley was improperly joined in the case in order to defeat diversity jurisdiction. Travelers claims that the allegations against Finley do not meet pleadings standards and thus Finley should be dismissed and the Federal Court has jurisdiction over the case.

Suing Adjusters In Hail Claims

September 20, 2016 | Mark S. Humphreys

Insurance lawyers in Irving who sue for hail claims need to know the best ways to stay out of Federal Court, unless of course that is where they want to be.

This is illustrated in a Sherman Division case styled, Lillian Elizondo v. Metropolitan Lloyds Insurance Company of Texas, Tailored Adjustment Services, Inc. and Brad Conrad.

This is a dispute that arises out of a claim for hail and wind storm damages sustained by Plaintiff, Elizondo. The insurer is Metropolitan. The adjuster is Conrad who worked for Tailored.