Dallas Fort Worth Insurance Lawyer Blog

Hail Damage

July 9, 2015 | Mark S. Humphreys

Duncanville insurance attorneys need to know how the courts looks at the appraisal provisions in an insurance policy. This issue came up in a recent Amarillo Court of Appeals opinion styled, Texas Farm Bureau Insurance Company v. Brittni Sampley.

Farm Bureau insured Sampley’s vehicle under a Texas personal automobile policy. The vehicle suffered hail damage and, when the parties disagreed over the cost of repairs, Sampley invoked the appraisal provision in the policy. It requires each party to select a “competent appraiser.” Each party selected an appraiser. After being notified of Sampley’s choice of Robert Batt as her appraiser, Farm Bureau sent her a letter advising her choice was “unacceptable as Mr. Batt is an employee of Bernard’s Advanced Collision, the body shop who repaired your vehicle. Texas law not only requires appraisers to be competent, but also disinterested in the outcome of the appraisal process.” The letter asked Sampley to “inform us once you have selected a disinterested appraiser.” When Sampley declined to change appraisers, Farm Bureau filed suit asking the trial court to remove Batt as appraiser. The parties stipulated Batt “is not disinterested as to the appraisal of the loss at issue because he is employed by Bernard’s Advanced Collision and that company will be paid from the results of the appraisal.”

Farm Bureau filed a motion for summary judgment which was denied. The court issued a further order stating in part that it “sees no requirement that an appraiser in this appraisal process must be both competent and disinterested and will not impose such a requirement.”

Insurance Coverage Issue

July 7, 2015 | Mark S. Humphreys

Benbrook insurance lawyers will find this case interesting. It is from the Western District, Austin Division. The style of the case is, State Farm Mutual Automobile Insurance Company v. Watkins.

State Farm filed this lawsuit to obtain a declaratory judgment that it has no duty to indemnify Defendants Ernest Lynden Watkins III (Mr. Watkins) and Kathy Watkins (Mrs. Watkins) for a separate lawsuit brought in Texas state court (Underlying Suit). In the Underlying Suit, police officer Doff Slade Fisher alleges Ernest Lynden Watkins IV (Watkins IV), the son of Mr. and Mrs. Watkins, negligently operated a vehicle causing bodily injury to Fisher. According to the petition, Officer Fisher was in pursuit of a car owned by Mr. and Mrs. Watkins that had evaded detention during a traffic stop. Fisher alleges Watkins IV was driving the vehicle, and in the processing of pursuing Watkins IV, Fisher crashed his motorcycle and sustained injuries.

According to State Farm, the express language and scope of coverage of the Policy have been implicated by the Underlying Suit. Indeed, State Farm is currently providing a defense in the Underlying Suit, and it does not seek an adjudication of its duty to defend through its declaratory judgment action. Instead, State Farm only requests a declaration the Policy bars any claim for indemnification arising from the Underlying Suit. In other words, State Farm contends the Policy does not provide coverage for the events at issue.

Prompt Pay And Third Party Claims

July 5, 2015 | Mark S. Humphreys

Everman insurance attorneys need to know the insurance laws regarding payment of claims the same as any other insurance lawyer. Here is one nuance to the Prompt Pay Statutes that a lot of attorneys are not familiar with. It regards prompt pay and third-party claims.

In looking at the Prompt Pay Statute, on its face, the statute applies only to “first-party” claims. The statute defines “claim” to mean a “first-party claim that: (A) is made by an insured or a policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract; and (B) must be paid by the insurer directly to the insured or beneficiary.” That is the clear language in Section 542.051. This would exclude liability insurance claims for coverage that must be paid to an injured third party.

In spite of the reading of this statute, the Texas Supreme Court ruled in a 1996, opinion that the statute does apply to third-party liability insurance. The style of the opinion is, State Farm Fire and Casualty Company v. Gandy. The court was discussing the liability insurer’s ability to seek a declaratory judgement when issues of coverage and the duty to defend arise. The court stated that if the insured were successful, the insured should be entitled to recover attorney’s fees and penalties under the statute.

Insurance Claims And Claimants

July 4, 2015 | Mark S. Humphreys

Insurance lawyers in Kennedale need to know these basics regarding insurance claims and claimants when looking at the Prompt Payment of Claims Statutes.

The Texas statutes regarding Prompt Pay are found in the Texas Insurance Code. It is there we find that the protections of the insurance statutes apply to a “claimant” who is defined as “a person making a claim.” This is found specifically in Section 542.051(3).

The statute provides:

Uninsured Motorist Rejection

July 2, 2015 | Mark S. Humphreys

Springtown lawyers handling insurance cases would want to know about a ruling in the Florida Supreme Court in May 2015. This ruling was written about in the Claims Journal. The curious thing to try to figure from this case is whether or not the Texas Supreme Court would rule the same way.

The article says the Florida Supreme Court recently considered whether the original policyholder’s signed rejection form, rejecting higher limits of UM coverage, applied to the original insured’s daughter who later became the sole named insured under the policy. In this case the Florida Supreme Court held that the original policyholder’s original rejection of higher UM limits on the policy that named him as an insured, and listed his daughter as a driver, was not binding on the daughter, individually, nor in her capacity as personal representative of her father’s estate. The facts indicated that the original insured, Richard Chase, insured his vehicle in 2001 with a policy through Horace Mann, providing liability limits of $100,000/$300,000. The vehicle insured under the policy was a 1992 Chevrolet Geo. Richard Chase who was the only named insured at that time, and the titled owner of the Geo, signed a form in which he selected reduced UM limits of $25,000/$50,000. Allison Chase, his daughter, was listed as a driver on the policy but was not a named insured on the policy and, therefore, had no right to select UM limits.

In 2004, Horace Mann removed Richard Chase as the sole named insured on the policy and made his daughter, Allison Chase, the sole named insured. Horace Mann also changed the insured vehicle to a 1997 Ford Escort that had been acquired by Allison three days earlier which was titled in her own name. Horace Mann then issued a new policy with Richard Chase as the sole named insured, insuring a 2004 Jeep that was owned by Richard. When the new policy was sold to Richard Chase he was presented with another written rejection form to sign. Allison Chase, who had never previously had the opportunity to select lower UM limits, was not provided the opportunity to reject the coverage or select lower limits when she was designated as the named insured on the policy issued in 2001.

Farming And Ranching Insurance Policies

June 30, 2015 | Mark S. Humphreys

Mineral Wells insurance lawyers are in an agriculture setting and thus are more likely to see insurance situations involving farm and ranch insurance policies. A U.S. District Court case from the Southern District of Texas, Houston Division should be read. It is styled, Mid-Continent Casualty Company v. BFH Mining, Ltd.

Mid-Continent issued an insurance policy (the “Policy”) to BFH covering BFH’s Middleton Ranch located in Fort Bend County, Texas (the “Property”).

Francois Bellon, a potential client of Cathexis, was at the BFH property. While there, he was injured in an accident involving a Polaris RZR all-terrain vehicle (“ATV”) owned by BFH and driven by Sahil Gujral, a Cathexis employee.

Life Insurance And ERISA

June 28, 2015 | Mark S. Humphreys

Forest Hill insurance lawyers who handle ERISA claims can tell you horror stories about the rulings and statutes that govern ERISA. The Washington Post published an article not long ago giving reasons and examples about some of the issues with ERISA life insurance claims.

Life insurance companies want employers with life insurance plans governed by ERISA. So eager are the largest insurers to get ERISA contracts that they sometimes cross a line, according to prosecutors in California and New York.

MetLife and Prudential have made improper undisclosed payments to brokers to win business, according to settlements. Each company paid $19 million to settle accusations by the New York Attorney General’s Office in 2006 that they had illegally paid brokers to get new corporate clients. In a similar case, MetLife paid $500,000 and Prudential spent $350,000 to settle with three California counties in 2008. The insurance companies did not admit to any wrongdoing in the cases.

ERISA And Life Insurance

June 27, 2015 | Mark S. Humphreys

Haltom City life insurance attorneys who handle ERISA claims should already know this, but here goes anyway.

Insurance companies can make erroneous arguments with near impunity when it comes to life and accidental death policies provided by companies with ERISA plans. That is because of loopholes in the ERISA laws intended to protect worker benefits.

Under ERISA – the Employee Retirement Income Security Act, insurers can even win when they lose because they can keep and invest claims money while cases are pending.

Life Insurance Lawyers Know This Already

June 25, 2015 | Mark S. Humphreys

Life insurance lawyers in Dallas already know what was published in the Washington Post. It is an article about the death of a loved one being the beginning of a hard fight with the life insurance company.

The article tells us of an experience by a Jane Pierce. Jane spent nine years struggling beside her husband, Todd, as he fought cancer in his sinus cavity. The treatments were working. Then in July 2009, Todd died in a fiery car crash at the age of 46. Todd’s death ended a fight with cancer but began a long fight with Todd’s insurance company, MetLife, for life insurance benefits.

A state medical examiner and a sheriff investigating the case concluded that Todd’s death was an accident. The accident was caused when Todd lost control of his silver GMC pickup after passing a car on a two-lane road. Sounds simple enough, right!?

Policy Cancellation – Late Payment

June 23, 2015 | Mark S. Humphreys

Fort Worth insurance attorneys will have clients come to them wherein the insurance company is denying a claim. The stated reason for denial is that the policy was cancelled due to late payment. The Austin Court of Appeals ruled on this issue in May 2015. The style of the case is, Plasma Fab, LLC v. Scottsdale Insurance Company.

Plasma Fab, an ornamental iron construction contractor, purchased a general liability policy from Scottsdale in May 2008 and financed payment through premium finance company BankDirect. BankDirect paid all premiums in advance, and Plasma Fab was to make monthly payments to BankDirect. The premium finance agreement gave BankDirect authority to cancel the policy on behalf of Plasma Fab and seek a refund of unearned premiums for nonpayment of premium “after proper notice has been mailed as required by law.” Plasma Fab was chronically late making payments, and twice the policy was cancelled and reinstated. It is the third cancellation that is at issue.

On November 24, 2008, BankDirect prepared a notice of intent to cancel the policy effective December 4, 2008, which was ten days following the date the notice was prepared. However, BankDirect did not mail the notice of intent to cancel to Plasma Fab until the next day, November 25, 2008, so that the stated date of cancellation was only nine days after the date the notice was mailed. On December 4, 2008, after 5:00 p.m., BankDirect mailed a notice of cancellation to Scottsdale effective December 4, 2008.