Dallas Fort Worth Insurance Lawyer Blog

Covered Claims

September 8, 2016 | Mark S. Humphreys

Here’s one for an insurance lawyer to answer – What if I sell my house to someone and in the disclosure documents I fail to list many of the problems with the house? What if the buyers of the house sue me for fraud and negligent misrepresentations? Does my homeowners policy protect me when I am sued and does the policy cover any judgment that may be taken against me?

This is exactly what happened in a 2005 Northern District case, the opinion is styled, Allstate Texas Lloyd’s v. Meyers.

The plaintiff’s purchased a home from the sellers who were covered under the insurer’s standard form homeowners’ policy. After the buyers moved into the home, they learned that the house, pool and deck had various defects and that the sellers had known of and intentionally concealed those defects from the buyers. The buyers sued the sellers asserting claims of fraud and negligent misrepresentations seeking mental anguish and economic damages associated with the cost of purchasing the defective home and for repairs to it. The insurer initiated this declaratory judgment action seeking a determination that it had no duty to defend or indemnify the sellers.

Excluded Drivers And Named Driver Policies

September 6, 2016 | Mark S. Humphreys

Excluded drivers and Named Driver auto policies are the last thing someone wants to find out about the driver who caused the wreck. Here is some law that is helpful to know when an insurance company tells you the driver was not covered under the policy.

A starting point is the Texas Transportation Code, Section 601.076. This is contained in the Texas Driver Responsibility Act. Sec. 601.076. REQUIRED TERMS: OWNER’S POLICY. An owner’s motor vehicle liability insurance policy must:

(1) cover each motor vehicle for which coverage is to be granted under the policy; and (2) pay, on behalf of the named insured or another person who, as insured, uses a covered motor vehicle with the express or implied permission of the named insured, amounts the insured becomes obligated to pay as damages arising out of the ownership, maintenance, or use of the motor vehicle in the United States or Canada, subject to the amounts, excluding interest and costs, and exclusions of Section 601.072.

Can You Trust Insurance Company Claims Reports?

September 4, 2016 | Mark S. Humphreys

Insurance attorneys in the Dallas / Fort Worth area know to be suspicious of reports from insurance companies but even a story that recently ran in the New York Times was surprising. The story is titled, Long Island Company Charged In Insurance Scheme After Hurricane Sandy.

A Long Island engineering company and one of its former executives were charged on Monday in a scheme to minimize insurance payments to homeowners whose residences were damaged by Hurricane Sandy in 2012.

In a 50-count indictment, Eric T. Schneiderman, the New York attorney general, accused the company, GEB Hi-Rise Engineering, of Uniondale, N.Y., and Matthew Pappalardo, a former director, of forging documents and engaging in illegal business practices. The government said they had altered engineering reports that had been used to assess the structural damage to homes caused by the storm.

Insurance Court Fights

September 3, 2016 | Mark S. Humphreys

Sometimes the fights put up by insurance companies seem unnecessary. It is nice when a court agrees. This was the case in a Southern District, Houston Division case. It is styled, Houston Granite & Marble Ctr., LLC v. Mesa Underwriters Specialty Ins. Co.

Houston sued Mesa in State Court and Mesa had the case removed to Federal Court over an insurance coverage dispute. Houston, soon thereafter, filed a motion for non-suit without prejudice because its president had recently undergone triple by-pass heart surgery and would be unable to respond to discovery or assist in prosecuting the case, plus, the president is a material witness in the case.

Mesa responded by stating there must be conditions placed on the non-suit. One, that Mesa be reimbursed for expenses it had incurred including attorney fees. Two, that any re-filing of the lawsuit be in the Southern District of Texas. Three, that upon re-filing, Granite fully comply with Mesa’s requests for production and answer interrogatories.

Life Settlements

September 1, 2016 | Mark S. Humphreys

Life insurance lawyers in Dallas and Fort Worth might have a situation where someone sells their life insurance policy to a third party. This situation is discussed in a National Law Review article titled, Life Settlement Disclosure Legislation.

What are an insurer’s duties to insureds about disclosing the possibility of a life settlement? At least three recent cases have addressed an insurer’s duty to inform insureds about the existence and availability of life settlements. Moreover, a handful of states have already enacted legislation requiring insurers to inform insureds about the possibility of a life settlement.

With respect to legislation, a handful of states have enacted various versions of the NCOIL Life Insurance Consumer Disclosure Model Law (the “NCOIL Model Law”), requiring insurers to inform policy owners of alternatives to the lapse or surrender of a policy. While the disclosure statutes are similar in requiring notification of alternatives to the lapse or surrender of policies, the legislative framework is not uniform. This presents a potential legal minefield for insurers. Some states require disclosure and others do not, but even within those states that require disclosure, the triggers for disclosure and disclosure requirements themselves differ.

Can I Buy Someone Else’s Life Insurance Policy?

August 30, 2016 | Mark S. Humphreys

Weatherford life insurance lawyers, this writer included, have represented clients trying to recover proceeds from a life insurance policy purchased by third parties. The answer is yes. WealthManagement.com purchased an article discussing this issue. It is titled, Facilitating Life Settlements.

As growing numbers of aging baby boomers turn to their advisors to help them achieve their retirement and estate planning objectives, many estate attorneys are faced with decisions regarding life insurance policies purchased that are no longer relevant. Life settlements have steadily gained greater recognition as a vital financial planning tool. Yet, some estate attorneys may be hesitant to recommend them until they gain deeper insight into the “inner workings” of what they view as a nascent industry with a still-maturing regulatory environment.

Based on our experience, estate attorneys have three priorities relating to life settlements.

Bad Faith Claims And Mental Anguish Damages

August 28, 2016 | Mark S. Humphreys

A 1998, Dallas Court of Appeals case is a good read for lawyers wanting to recover mental anguish damages in bad faith insurance cases. The case is styled, State Farm Lloyds v Johns.

Johns house was built in 1964. Johns moved in to her house in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door misalignment, significant cracks in the interior walls and a slope on the floor. Repairmen later discovered two plumbing leaks under the house. Johns made a claim for foundation damage alleging that the plumbing leaks caused the soil underneath the house to expand resulting in upheaval of the foundation, thereby damaging the structure. State Farm concluded that John’s foundation problems were not cause by the plumbing leaks, but rather asserted that the damage occurred from natural soil movement common to north Texas. State Farm’s homeowners policy excludes damage caused by ordinary settlement. Based on the exclusion, State Farm denied the claim.

Johns filed suit against State Farm alleging wrongful denial of her claim, violations of the Texas Insurance Code, and violations of the Texas Deceptive Trade Practices Act. The trial court rendered judgment on the verdict in favor of Johns based on the DTPA and Insurance Code claim. State Farm appealed.

“Knowing” Conduct By Insurance Company

August 27, 2016 | Mark S. Humphreys

A 1998, Dallas Court of Appeals case is a good read for lawyers handling bad faith insurance cases. The case is styled, State Farm Lloyds v Johns.

Johns house was built in 1964. Johns moved in to her house in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door misalignment, significant cracks in the interior walls and a slope on the floor. Repairmen later discovered two plumbing leaks under the house. Johns made a claim for foundation damage alleging that the plumbing leaks caused the soil underneath the house to expand resulting in upheaval of the foundation, thereby damaging the structure. State Farm concluded that John’s foundation problems were not cause by the plumbing leaks, but rather asserted that the damage occurred from natural soil movement common to north Texas. State Farm’s homeowners policy excludes damage caused by ordinary settlement. Based on the exclusion, State Farm denied the claim.

Johns filed suit against State Farm alleging wrongful denial of her claim, violations of the Texas Insurance Code, and violations of the Texas Deceptive Trade Practices Act. The trial court rendered judgment on the verdict in favor of Johns based on the DTPA and Insurance Code claim. State Farm appealed.

Insurance Claims And Emotional Distress

August 25, 2016 | Mark S. Humphreys

Damages and coverages available under an insurance policy will vary depending on the circumstances and policy language. As it relates to a claim for emotional distress, a 1994, 5th Circuit Court of Appeals case is a good read. The opinion is styled, Travelers Indemnity Co. v. Holloway.

In this declaratory judgment action, the insurance carrier, Travelers contended that it had no duty to defend its insured, Wanda Holloway, against a lawsuit for intentional infliction of emotional distress, since it was not covered under the policy. Holloway, the mother of a junior high school student competing for a cheerleader position, allegedly plotted to kill Heath, the mother of one of her daughter’s competitors. The mother of the competitor brought suit against Holloway alleging “outrageous conduct causing severe emotional distress” or “intentional infliction of emotional distress.” Holloway sought a defense from Travelers. Travelers argued that Holloway was not entitled to a defense and that there was no coverage, since (1) the conduct did not constitute an “occurrence” under the policy, (2) the conduct was excluded from coverage as intentional conduct, and (3) the conduct was not alleged to have caused “bodily injury” as defined by the policy.

The 5th Circuit affirmed the District Court’s opinion that there was no duty to defend or coverage since there was no allegation or evidence of a bodily injury.

Hail Claims And Staying Out Of Federal Court

August 23, 2016 | Mark S. Humphreys

Lawyers who handle hail claims know the insurance companies prefer to fight lawsuits in Federal Court. Hail claims lawyers know one way of defeating the insurance company desire to be in Federal Court is by suing the adjuster. The Sherman Division, Eastern District issued an opinion illustrating how to Not file a lawsuit against an adjuster. The style of the opinion is Walters v. Metro. Lloyds Ins. Co.

The Walters residence sustained hail damage. The insurance company, Metropolitan, assigned Buchanan to adjust the claim. The claim was denied and Walters sued Metropolitan and Buchanan in State Court and the case was then moved to Federal Court by Metropolitan and Buchanan.

The only question at this point in the case is whether or not Buchanan was improperly joined as a defendant to defeat diversity jurisdiction.