Dallas Fort Worth Insurance Lawyer Blog

Properly Suing An Insurance Adjuster

October 13, 2015 | Mark S. Humphreys

Lake Worth insurance lawyers know that one way of keeping out of Federal court, which is where insurance companies prefer to litigate, and staying in State court is to be able to state a legal cause of action against an insurance adjuster. This was successfully done in a recent U.S. District Court, Western District of Texas, San Antonio Division. The style of the case is, Joyce Birch v. Stillwater Insurance Company and Jimmie Pospisil.

This law suit arises out of damage caused to Birch’s home during a hailstorm. Birch submitted a claim to Stillwater for roof and water damage that her home sustained during the storm. The adjuster was Pospisil.

Birch sued Stillwater and Pospisil alleging Pospisil improperly adjusted the claim by failing to include many of her damages, disallowing funds to cover repair and restoration expenses, and reducing the number of shingles reported as damaged. That Pospisil’s failure to properly adjust the claim resulted in a failure to pay the full proceeds of Birch’s insurance policy and adequately settle the claim. She then sued for violations of the Texas Insurance Code, Section 541.

Delay In Paying Claim

October 11, 2015 | Mark S. Humphreys

Most Saginaw insurance lawyers have had a client to call and complain about an insurance company to delay in paying a claim. This is often a violation of the Prompt Payment of Claims Act. The U.S. District Court, Northern District of Texas, Dallas Division issued an opinion in August of 2015, that in part, explains how that Act applies. The opinion is styled, Mainali Corporation v. Covington Specialty Insurance Company, et al. This is a case that was filed in State Court and removed to Federal Court by Covington based on diversity jurisdiction. Mainali was attempting to have the case remanded to the State Court.

This lawsuit arises in connection with a fire that damaged Mainali’s property, a Chevron station and convenience store. According to Mainali’s original petition, Covington insured the Property under a policy that covered fire damage and business interruption losses; Covington assigned Engle Martin and Associates, Inc. as the adjustment company to oversee the claims adjustment process; and Engle Martin assigned Summers as the individual field adjuster. Mainali alleges that Summers failed to conduct a reasonable investigation, denied coverage for damage to the Property and business losses, and underestimated the damage; after underestimating the damage, Summers and Engle Martin reduced the amount payable to Mainali under the Policy; relying on Summers’ inadequate investigation and conclusions regarding the damage, Covington agreed to pay only a portion of the amount due on the claim; and because of Covington’s refusal to pay for repairs and business losses, Mainali was unable to reopen the Chevron station and convenience store, causing Mainali to suffer additional damage in the form of lost business income. Mainali also alleges that Covington, Engle Martin, and Summers failed to conduct a reasonable investigation of Mainali’s claim, thereby violating Texas Insurance Code, Section 541.060(a)(1); failed to attempt to settle the claim in a fair manner, even though they were aware of their liability under the Policy, thereby violating Section 541.060(a)(2)(A); failed to provide prompt and reasonable explanation for the denial of the claim, thereby violating Section 541.060(a)(3); refused to pay the claim without conducting a reasonable investigation of the claim, thereby violating Section 541.060(a)(7); misrepresented the Policy to Mainali by making an untrue statement of material fact, thereby violating Section 541.061(1); misrepresented the Policy to Mainali by failing to state a material fact necessary to make other statements not misleading, thereby violating Section 541.061(2); misrepresented the Policy to Mainali by making a statement that would mislead a reasonably prudent person to a false conclusion of material fact, thereby violating Section 541.061(3); failed to acknowledge receipt of the claim, thereby violating Section 542.055(a)(1); failed to timely commence an investigation of the claim thereby violating Section 542.055(a)(2)-(3); failed to notify Mainali in writing of the acceptance or rejection of the claim not later than the 15th business day after receipt of all items, statements, and forms, thereby violating Section 542.056(a); delayed payment of the claim, thereby violating Section 542.058(a). Plus other causes of action.

As it relates to the last four allegation, violations of the Texas Prompt Payment of Claims Act, the Court stated, “Summers cannot be held liable under any section of Chapter 542. Chapter 542 only applies to specifically listed “insurers,” and Summers, an adjuster, is not an insurer.”

Excluded Drivers On The Insurance Policy

October 10, 2015 | Mark S. Humphreys

Benbrook insurance attorneys know to check auto insurance policies for “excluded drivers.” An excluded driver has no coverage when he is operating a vehicle. The Eastland Court of Appeals issued an opinion in August of 2015, that should be read. The opinion is styled, Allied North America Insurance Brokerage of Texas, L.L.C. v. Diamond Pump & Transport, LLC and the Insurance Company of the State of Pennsylvania.

James Garrett died as the result of injuries that he received when Aaron Sanchez, a driver for Diamond Pump & Transport, LLC, ran into the motorcycle that Garrett was riding. The truck that Sanchez was driving at the time belonged to Diamond and was insured by the Insurance Company of the State of Pennsylvania. However, ICSOP had named Sanchez as a driver who was excluded from coverage under the policy. Allied North America Insurance Brokerage of Texas, L.L.C. was Diamond’s insurance agent that placed the policy with ICSOP. This appeal concerns the validity of the named driver exclusion.

This lawsuit began when the representative of Garrett’s estate, joined by Garrett’s heirs, filed a wrongful death suit against Diamond. Because ICSOP had issued Diamond’s vehicle insurance policy, and after it had issued a reservation of rights notice, ICSOP provided Diamond with a defense in connection with the Garrett lawsuit. Later, the Garrett plaintiffs amended their petition and added Sanchez as a defendant. Because it had listed Sanchez as an excluded driver in the policy, ICSOP then withdrew its defense and denied liability.

Insurance Companies Doing Wrong Again

October 8, 2015 | Mark S. Humphreys

Insurance Companies doing wrong again is a constant theme with Texas insurance lawyers. Day in and day out, claims get processed properly, but too many times they are not. The Texas Tribune published an article in September 2015, that illustrates one of the times an insurance company does wrong. The title of the article is, “Workers’ Comp Insurer Fined $250,000.00.”

The article tells us that for years, Crystal Davis battled an insurance company for workers’ compensation benefits after her husband, Wayne, was killed on the job in 2012.

As a result of her struggles, the Texas Department of Insurance has slapped that insurer with what is believed to be the largest fine ever issued for workers’ compensation violations in the state — $250,000. None of the money goes to Davis — a stay-at-home Tyler mom with two children — but the state is requiring that a large chunk of it be used to help children of injured or killed workers.

Insurance Agent Stealing Premiums

October 6, 2015 | Mark S. Humphreys

An insurance attorney who has handled very many insurance cases will end up having a case where the agent took money from their customer but never got the insurance. The agent will give the customer a receipt and maybe hand them a “binder” to indicate the coverage is in effect, but just pocket the money, hoping the customer does not have to make a claim and never knows the difference.

The Insurance Journal published an article in September of 2015, where an agent pocketing money was the topic. The title of the article is, “Miami Agent Arrested for Operating With Expired License, Stealing Premium Funds.”

The article tells us that the Florida Division of Insurance Fraud announced the arrest of Tania Michel, 41, for failing to notify the Department of Financial Services of a federal fraud conviction, continuing to work in the insurance industry after having her license expire, and knowingly misappropriating premium funds while working at an insurance agency.

Suing Insurance Company – Proper Pleadings

October 4, 2015 | Mark S. Humphreys

Saginaw insurance lawyers will know that a lot of cases against insurance companies end up in Federal Court. The pleading standard in Federal Court is high. Understanding the Rule 12(b)(6) is important. This is illustrated in a 2015, opinion from the U.S. District Court, Northern District of Texas, Dallas Division. The style of the case is Infectious Disease Doctors,P.A. v. BlueCross BlueShield of Texas, A Division of Health Care Service Corporation, et al.

In this case the pleadings were found to be adequate. What is important to realize is most insurance companies will have their lawyers file motions to get the case thrown out of court on technicalities. You must be prepared for this.

To defeat a motion to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” A claim meets the plausibility test “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” While a complaint need not contain detailed factual allegations, it must set forth “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” The “factual allegations of a complaint must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true even if doubtful in fact.” When the allegations of the pleading do not allow the court to infer more than the mere possibility of wrongdoing, they fall short of showing that the pleader is entitled to relief.

Insurance Lawsuits – Pre-Suit Notice

October 3, 2015 | Mark S. Humphreys

Duncanville insurance lawyers need to understand the pre-requisites to filing a lawsuit against an insurance company. The most important of these pre-requisites is found in Texas Insurance Code, Section 541.154. This section requires pre-suit notice. The failure to follow this requirement is discussed in a recent opinion from the U.S. District for the Northern District of Texas, Dallas Division. The case is styled, Johnson Medical Associates v. State Farm Lloyds.

State Farm Lloyds removed this insurance dispute from state court to federal court on February 25, 2015. Shortly thereafter, State Farm timely filed a Verified Plea in Abatement pursuant to Section 541.155(a) of the Texas Insurance Code on grounds that it did not receive the statutorily-required pre-suit notice of Plaintiff’s claims. On March 23, 2015, the Court abated the action and ordered Johnson Medical Associates to file a notice indicating the date on which it tendered the statutorily-required notice to State Farm. Johnson Medical failed to comply with the Court’s Order or otherwise respond. Thus, on August 12, 2015, the Court again ordered Johnson Medical to file a notice with the Court indicating the date on which it tendered the statutorily-required notice to State Farm. The Court set August 24, 2015 as the deadline for Johnson Meidcal to comply and admonished Johnson Medical that “failure to timely file the notice with the Court will result in dismissal of this case for want of prosecution.” To date of this opinion, State Farm had failed to file any notice with the Court. The Court then determined that this case should be dismissed without prejudice pursuant to Federal Rule of Civil Procedure 41(b).

A district court has authority to dismiss a case for want of prosecution or for failure to comply with a court order. This authority “flows from the court’s inherent power to control its docket and prevent undue delays in the disposition of pending cases.” Such a dismissal may be with or without prejudice. A dismissal with prejudice is appropriate only if the failure to comply with the court order was the result of purposeful delay or contumacious conduct and the imposition of lesser sanctions would be futile.

Texas , New Areas Require Flood Insurance

October 1, 2015 | Mark S. Humphreys

Flood insurance in Texas is about to change. The Claims Journal published an article in August of 2015, dealing with flood insurance coverage in Texas. Specifically, new areas that are now required to have flood insurance. The title of the article is, New FEMA Maps Could Force Central Texas Residents To Buy Flood Insurance. Here is what the article tells us.

Hundreds of Central Texas residents could be forced to buy flood insurance or face stricter building regulations for new structures nearly three months after deadly flooding, according to new Federal Emergency Management Agency advisory maps made public Friday.

The maps, which face a yearlong review process, would dramatically expand flood plains along the banks of the Blanco River and tributary creeks, the Austin American-Statesman reported.

Hurricane Damage Numbers For Katrina

September 29, 2015 | Mark S. Humphreys

Dallas area insurance lawyers need to know what is happening in the world of insurance claims. The Claims Journal, an insurance company business, published an article in August 2015, that showed information from Hurricane Katrina. The article is titled, Hurricane Katrina Facts & Figures.

The article tells us that Hurricane Katrina made landfall in Southern Florida as a Category 1 hurricane 10 years ago this week. It moved into the Gulf of Mexico where it strengthened into a Category 5 hurricane, it then made a second landfall on August 29 in Southern Louisiana as a Category 3 hurricane and finally made a third landfall close to the Louisiana Mississippi border.

The U.S. Census Bureau released a special edition of its Facts for Features highlighting the areas that sustained the most damage: New Orleans and the Mississippi coast.

Getting The Insurance Adjusters File

September 27, 2015 | Mark S. Humphreys

Haltom City insurance lawyers need to know about a 1986, Texas Supreme Court case. The case is styled, Turbodyne Corporation et al. v. The Honorable Wyatt H. Heard. This case allows a claimant to have access to the file investigating the claim of an insured that is put together by the adjuster and the company.

Turbodyne filed this original mandamus action to order Judge Hyatt Heard of Harris County to rescind his order denying discovery of 39 documents from Travelers Insurance Company. Travelers contends that these documents are privileged under Texas Rules of Civil Procedure 166b. This Court held that the trial court abused its discretion in denying discovery, and conditionally grant the writ.

A fire and explosion occurred at Texas City Refining. Turbodyne was the manufacturer of a part of a catalytic cracking unit involved in that fire. Texas City’s casualty insurer, Travelers, initiated an investigation into the causes and damages of the accident. Approximately nine months after the accident, on July 30, 1980, Travelers and Texas City reached a settlement on the coverage. On October 30, 1981, Travelers and Texas City filed a subrogation suit against Turbodyne and other manufacturers. Turbodyne filed a motion to compel production of 39 documents prepared by employees of Travelers or experts employed by Travelers. Travelers asserts that all documents but one were prepared prior to the date Travelers settled with Texas City, July 30, 1980.