Dallas Fort Worth Insurance Lawyer Blog

Force Placed Insurance Policies

June 12, 2023 | Mark S. Humphreys

Force Placed Insurance Policies are unique. The biggest thing to know about these policies is that their purpose is to protect the lender, not the homeowner. This is illustrated in a 2023 opinion from the Southern District of Texas, Houston Division. The opinion is styled, Peter Garcia v. Great American Assurance Company.

Peter Garcia (“Plaintiff”) filed this action against Great American Assurance Company (“Defendant”) alleging that Defendant failed to pay for covered damage to his home under an insurance policy purchased by his mortgagee, Carrington Mortgage Services LLC (“Carrington”). Pending before the court is Defendant’s Motion for Summary Judgment. The Court granted the motion.

Plaintiff’s home is mortgaged in favor of Carrington. Lenders often require borrower-mortgagors to purchase insurance on their home. When the borrower does not do so, the lender might purchase a “force-placed” policy and include the cost in the borrower’s mortgage payments. Carrington purchased a force-placed insurance policy (“the Policy”) covering its interest in Plaintiff’s home. Plaintiff is not a party to the Policy, and all payment for loss is
to be made to Carrington.

Life Insurance And More Than One Beneficiary – Life Insurance Claim Denial Attorney

June 10, 2023 | Mark S. Humphreys

Here is an unusual life insurance situation. It is an opinion from 1992. The opinion is from the Amarillo Court of Appeals and is styled, Ester Belle Medlin, Appellant v. Earnest G. Medlin, Floyd W. Medlin, Brenda E. Burford and Carolyn E. Medlin, Appellees.

The question to be determined in this matter is whether appellant Esther or appellees are entitled to one-half of insurance proceeds which had become payable due to the death of Jessie F. Medlin, Jr. (Jessie), the insured. Appellant is the insured’s mother and appellees are the insured’s children by a previous marriage. From a trial court judgment awarding those proceeds to appellees, appellant brings this appeal. For reasons hereinafter expressed, we reverse the judgment of the trial court and render judgment awarding the proceeds in question to appellant.

The beneficiary clause of the insurance policy provides in pertinent part:

Bad Faith Lawyers – Was There A Settlement Agreement

June 5, 2023 | Mark S. Humphreys

Here is a 2023 opinion from the Northern District of Texas, Dallas Division worth reading when it comes to determining whether the insurer and the insured have reached a settlement agreement. The opinion is styled, Brenda Kirby and Gary Kirby v. State Farm Lloyds’, Evan Kingery, and Kimberly Scholes. The opinion deals with other issues and the facts make a good read along with the legal history. We will focus on whether or not there was a settlement agreement.

After the lawsuit was filed, Defendant’s filed a motion to enforce a settlement agreement. For support, State Farm submitted copies of the above referenced e-mail correspondence exchanged by counsel for the parties on January 18, 21, 24, and February 2, 2022. Defendant contends that this correspondence clearly establishes the formation of a binding agreement to settle the claims asserted in this lawsuit under Texas law.

A district court has inherent power to recognize, encourage, and when necessary enforce settlement agreements reached by the parties. That one party to a suit initially agrees to a settlement but later refuses to execute a formal agreement that recites the terms of the settlement does not preclude a district court from exercising such discretion to enforce a settlement agreement. Further, the issue of whether such withdrawal by one party is allowed under Texas law is irrelevant to whether a settlement is enforceable. Unless the party seeking to withdraw can demonstrate that the agreement is invalid under state law at the time it was made or differs materially from any judgment entered enforcing the agreement, a federal court may hold them to their word by incorporating the terms of their agreement into a final judgment.

Bad Faith Insurance And Claims Expert

June 3, 2023 | Mark S. Humphreys

Here is a case discussing bad faith insurance and a claims expert. This is an 2023 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, PMJ Bleu Terre Management, LLC v. AmTrust Insurance Company of Kansas, Inc.

AmTrust filed a Motion to Strike Expert, PMJ’s claims handling expert, Mark Earle. The Court has authority in this matter pursuant to 28 U.S.C., Section 636(b)(1)(A).

This is a claim arising out of alleged property damage that resulted from a storm causing wind and hailstorm damage.

Hail Damage And Experts

May 29, 2023 | Mark S. Humphreys

Hail damage claims sometimes require experts to assist in the claim. This is the case in a 2023 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, PMJ Bleu Terre Management, LLC, v. AmTrust Insurance Company Of Kansas, Inc.

AmTrust filed a motion to exclude the expert testimony of a roofing expert hired by PMJ to testify about wind and hailstorm damage to PMJ’s property. AmTrust denied the claim stating that the hail damage found on the property predated the policy period by a couple of months and therefore fell outside the scope of coverage. This lawsuit followed.

AmTust’s motion arises under the standards set forth in Rule 702 of the Federal Rules of Evidence. Rule 702 of the Federal Rules of Evidence was amended to provide that a witness “qualified as an expert . . . may testify . . . in the form of an opinion . . . if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. When expert testimony is challenged, the burden of proof rests with the party seeking to present the expert testimony.

Hail Damage – Cosmetic Exclusion

May 27, 2023 | Mark S. Humphreys

Hail damage claims are common and the wording of “Cosmetic Damage” exclusions that apply to these types of claims are important for an insurance attorney to understand. This issue is discussed in a 2023 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Charles Wall and Franze Wall v. Safeco Insurance Company Of Indiana.

This case is writing its opinion in response to Safeco’s motion for Summary Judgement.

Both sides agree that this case arises out of a May 2020 hailstorm. The primary dispute is whether the damage from the storm is excluded from coverage by an exclusion for cosmetic damage. As the summary judgment movant, Safeco bears the initial responsibility of informing the district court of the basis for its motion. Safeco argues that “there is no competent summary judgment evidence that Safeco was unreason- able in handling the insureds’ claim.” It contends that “this case concerns a bona fide dispute as to coverage.” It later argues that “there is no evidence it breached the policy.” As for Plaintiff’s bad faith and related claims, Safeco argues that Plaintiffs cannot show it acted unreasonably. And Safeco further argues that there is no evidence that it engaged in any conduct entitling Plaintiffs to treble or exemplary damages, mental anguish, emotional distress, or fraud.

Insurance Company Delay In Paying A Claim

May 22, 2023 | Mark S. Humphreys

When an insurance company delays in paying a claim, there are often times remedies. Each case has to be looked at to determine what can be done. This issue is discussed in a 2023 opinion from the Southern District of Texas, Victoria Division. The opinion is styled, Naomi Odom v. Central Mutual Insurance Company.

This is a case wherein Odom suffered hurricane damage and made a claim for benefits. Central Mutual made an initial payment and then two additional payments. Later, another payment was made.

Odom was unsatisfied and eventually filed suit alleging breach of contract and other extra-contractual claims. Central Mutual invoked appraisal and upon completion of the appraisal, paid substantially more money on the claim.

Who Is The Insurance Agent An Agent Of – The Insurer Or Insured

May 20, 2023 | Mark S. Humphreys

Most insurance lawyers would think an insurance agent is the agent of the insurance company. But, there are situations where the insurance agent is the agent of his customer.

Here is a 2023 opinion wherein this topic is discussed. The opinion is from the Thirteenth Court of Appeals and is styled, Bill Wendlandt, 120-MP Victoria Ltd, and Laurent Tower, LLC, v. Certain Underwriters at Lloyd’s, London, Subscribing To Policy Nos. AOP-170109 And AQS-170213, et al.

This is an appeal from a summary judgement in favor of Underwriters.

Life Insurance – Electronic Funds Transfer

May 15, 2023 | Mark S. Humphreys

Life Insurance lawyers will eventually receive a phone call wherein the potential new client complains that the life insurance company quit making agreed upon payments for the life insurance from the potential client’s bank account.

Here is a 2023 opinion from the Southern District of Texas, Victoria Division, that discusses this issue. The opinion is styled, Gloria Fric v. Allstate Life Insurance Company.

The opinion discusses several legal issues. The focus here will be the issue related to the electronic funds transfer.

Life Insurance – Duty Of Good Faith And Fair Dealing

May 13, 2023 | Mark S. Humphreys

Life insurance lawyers and other attorneys dealing with insurance companies will often speak of the insurance company “duty of good faith and fair dealing.” This issue is discussed in a 2023 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Avery D. Ensley v. Genworth Life and Annuity Insurance Company.

The facts of the case can be read in the opinion. It is the discussion related to the issue of the “duty of good faith and fair dealing” that is discussed here.

The Court addressed Plaintiffs bad faith claim. Plaintiff alleges that (1) Defendant breached its duty when it failed to adequately notify Plaintiff of premium changes, the Policy’s alleged depleted cash value, and the Policy’s pending lapse; (2) Defendant breached its duty by failing to proceed with automatic withdrawals until Plaintiff was notified of the deficit and given an opportunity to make the requisite payment; and (3) Defendant breached its duty when it failed to reinstate the Policy.