Dallas Fort Worth Insurance Lawyer Blog

Subrogation On Insurance Claims

July 18, 2015 | Mark S. Humphreys

Subrogation is a big issue to be dealt with by Dallas insurance attorneys. The efforts to collect on subrogation rights is discussed in an article published by Bloomberg News in June 2015. It tells of a lawyer instrumental in the collection efforts, George Rawlings.

The article tells us George Rawlings grabs a stack of computer printouts and stretches them six feet across his office, admiring data from police reports of Florida auto accidents: the names of those hurt and the severity of their injuries.

For Rawlings, this information is gold. It’s his job to track these injured people down and collect money from them.

Hospitals Over Charging Patients

July 16, 2015 | Mark S. Humphreys

Dallas area attorneys need to know actions that can be taken to fight hospital over charging uninsured patients. The Washington Post published an article in June that named 50 hospitals that charge uninsured more than ten times the cost of care. Three of those were in the Dallas / Fort Worth area. Here is what the article says.

All but one of the facilities are owned by for-profit entities. The hospitals with the highest markups are not in pricey neighborhoods or big cities, where the market might explain the higher prices.

Topping the list is North Okaloosa Medical Center, a 110-bed facility in the Florida Panhandle about an hour outside of Pensacola. Uninsured patients are charged 12.6 times the actual cost of patient care.

Written Notice Of Claim To Insurance Company

July 14, 2015 | Mark S. Humphreys

Carrollton insurance lawyers need to make sure when a client is filing an insurance claim that the claim is a written claim for benefits. Most insurance companies will take an oral claim report but at least one court in Texas is requiring that a notice of claim be in writing. This is the situation in a 2005, Austin Court of Appeals opinion styled, McMillin v. State Farm Lloyds.

The claims underlying this appeal arose while the McMillins were renovating their house. The McMillins had removed a portion of the roof and covered the opening with tarp. On October 6, 2000, a storm hit and the tarp failed to prevent water from entering the house. The McMillins filed a claim with their homeowners’ insurance carrier, State Farm, and, within a few days, State Farm made a payment of $2508.35 for viewable damage. Later that same month, after additional inclement weather, the McMillins reported additional water damage, along with mold growth throughout the house. Unlike the case with the McMillins’ initial claim, several months passed before State Farm paid the second claims. On March 1, 2001, a mold remediator sent a fax to State Farm opining that remediation was so expensive that it was no longer cost-effective; State Farm did not share that estimate with the McMillins. On August 7, 2001, a week after getting another estimate from the mold remediator, State Farm paid $344,367.27 to the McMillins on their claim of water damage resulting in mold; thus, State Farm paid $346,875.62 to compensate the McMillins for their covered losses, an amount that excludes the $1000 deductible. By August 2001, the McMillins had purchased another home and moved there, partly in order to enable their planned adoption of a child to move forward.

The McMillins sued State Farm for among other things, violations of the Texas Prompt Payment of Claims Act.

Duties Of Insured Under Prompt Pay Statute

July 12, 2015 | Mark S. Humphreys

Saginaw insurance lawyers need to be able to discuss with their clients the duties the clients have to the insurance company regarding the Prompt Payment of Claims Act.

It boils down to this, a claimant has two duties to the insurance company.

(1) to give the insurer notice of the claim; and (2) to give the insurance company all the items the insurance company reasonable needs to secure proof of final loss.

ERISA And Plan Administrator As Fiduciary

July 11, 2015 | Mark S. Humphreys

ERISA attorneys need to read a recent opinion from the U.S. District Court for the Western District of Pennsylvania. It is styled, US Airways, Inc. v. James E McCutchen and Rosen, Louik & Perry, P.C.

The legal journey of this case is semi-complicated. What is relevant is that the employer, US Airways did not produce a copy of the ERISA Plan until US Airways agreed to produce the Plan during a meeting requested by the Office of the Solicitor General of the United States and the Department of Labor. The purpose of the meeting was to assist the Government’s attorneys in deciding whether to file an amicus curiae brief in the United States Supreme Court.

US Airways produced the actual Plan with numerous amendments, and Defendants contend that they then learned for the very first time that the Plan differed in material respects from the SPD, neither providing for a right to reimbursement nor mentioning the right to reimbursement from a recovery from one’s own insurance policy, i.e., underinsured motorist benefits.

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.