Dallas Fort Worth Insurance Lawyer Blog

Is Smell A Loss Under Your Insurance Policy?

June 13, 2015 | Mark S. Humphreys

Here’s something for Texas insurance lawyers to have in their bag of knowledge. This comes from the “Claims Journal” and is about an opinion in New Hampshire but is relevant to Texas also.

The New Hampshire Supreme Court recently held that a persistent odor could constitute a “physical loss” under a homeowner’s insurance policy as long as the smell distinctly and demonstrably changed the condition of the property. The decision represents an important statement about policy interpretation, defining “physical loss” and applying pollution exclusions.

In the case before the court the insureds owned a condo that they rented to various tenants. Shortly after renting the upstairs unit, a tenant moved out complaining of a cat urine odor which had come through an open plumbing chase from the downstairs unit where another tenant owned multiple cats. After the insureds moved into the unit themselves and noticed the odor, a health inspector advised them to move out temporarily while the units were cleaned. Unfortunately, they could not rid the smell. They were unable to find new tenants and ultimately sold the condo at a significant loss.

Loss Of Use In Insurance

June 11, 2015 | Mark S. Humphreys

Benbrook insurance lawyers need to be aware of this case. The reason to be aware of this case is that the case is, as of the date of this post, on appeal to the Texas Supreme Court. Hopefully their decision will put to rest some of the arguments in the Courts of Texas dealing with how to handle “loss of use” issues. The style of this case is, American Alternative Insurance v. Davis. It is from the Waco Court of Appeals.

The crux of this case involves whether a chattel owner should be compensated for measurable loss-of-use damages suffered when the owner’s chattel is totally destroyed and the owner is unable to replace the chattel or obtain a substitute immediately. The dispute arises from an automobile accident on December 29, 2011. At the time of the accident, Davis was driving a wrecker owned by his business, J & D. The only issue submitted to the jury pertained to J & D’s damages for the loss of use of its wrecker.

Davis testified that the wrecker in question was a 2002 Dodge 3500 with an 806 Vulcan wheel-lift unit on the rear. Davis stated that this was J & D’s only wrecker. Davis did not replace the wrecker until the second week of March 2012 because he claimed that he was financially unable to purchase a replacement wrecker. Accordingly, J & D was unable to continue operations for a period of approximately four months.

Hire A Texas Insurance Law Lawyer

June 9, 2015 | Mark S. Humphreys

Dallas insurance lawyers will all have tales of people who lost cases they might have otherwise won if only they had hired an experienced Insurance Law Attorney. This is illustrated in a Dallas Court of Appeals case styled, Marqueth Wilson v. Colonial County Mutual Insurance Company. Please understand that even with an attorney Wilson may have lost this case but here they did not even stand a chance.

According to Wilson’s original petition, on June 24, 2012, he was driving on Scyene Road in Dallas when an object fell off of the car traveling in front of him. The object hit his car, causing property damage. He further alleged the impact of “hopping the curb” caused bodily injury to his lower back, neck, shoulders, and legs.

At the time of the incident, his insurance policy included uninsured motorist, underinsured motorist, comprehensive and collision coverage, rental reimbursement, and personal injury protection (“PIP”). Wilson alleged that despite giving Colonial the opportunity to honor his policy, the insurance company refused; therefore, he filed suit for breach of contract, negligence, bad faith, and private nuisance.

Potential Recovery In Insurance Claims

June 7, 2015 | Mark S. Humphreys

Crowley insurance lawyers should be able to discuss with clients the potential recovery when an insurance company wrongfully denies a claim.

One element of recovery is the actual damage. In other words the actual amount due under an insurance policy. An example would be a life insurance policy with a $100,000.00 benefit to beneficiary. If that claim is denied and it is found to be a wrongful denial, then the claimant / beneficiary is entitled to the actual damages of $100,000.00.

Another potential recovery when a trier of fact, whether that be a Judge or Jury, finds that the insurance company acted “knowingly” the trier of fact can award not more than three times the amount of actual damages. This relief is found the Section 541.152 of the Texas Insurance Code. This is commonly referred to as “treble damages.” This term originated from the days when the Texas Deceptive Trade Practices Act (DTPA) mandated an automatic tripling of the injured parties’ damages. The current state of the law states this trebling must accompany a finding of “knowing” conduct. It is important to know that the trebling is not an automatic number. For example a trier of fact could find the insurance company “knowingly” committed a wrong but then choose to not award any amount of extra damages. It is entirely up to their discretion according a 1994, Texas Supreme Court case styled, Celtic Life Insurance Company v. Coats.

Health Insurance Attorney

June 6, 2015 | Mark S. Humphreys

Burleson insurance attorneys who handle health insurance situations need to read this 1989 opinion from the Houston Court of Appeals [14th Dist.]. It is styled Paramount National Life Insurance v. Williams.

On March 5, 1981, insurance agent Cliff Cox met with Frankie Williams and her husband Willie and took an application for a hospital insurance policy to be issued by Paramount. Mrs. Williams was sixty-four and had a long history of medical problems which the couple described to Cox. Cox told the Williamses he needed to know only about the preceding five years. He filled out the application and had them read and sign it. Paramount approved the application and issued the policy on March 20, 1981. Mrs. Williams was hospitalized in July 1981 and again in December 1981. She filed two claims totaling over $40,000 in connection with these hospitalizations. Paramount denied the claims and cancelled the policy on the grounds that Mrs. Williams had failed to disclose her full medical history on the insurance application and that the conditions for which she was being treated were preexisting conditions. The company refunded her premiums. Mrs. Williams then sued Paramount for breach of contract, breach of the duty of good faith and fair dealing, fraud and violations of both the Texas Insurance Code and the Texas Deceptive Trade Practices Act.

Paramount denies there was a breach of contract. It alleged that it rejected Mrs. Williams’ two hospital claims on the basis that the conditions for which she was being treated (primarily colon-related) did not comply with the definition of sickness under the policy as well as her failure to disclose preexisting medical conditions. Paramount claims that certain language in the documents relating to the policy puts the applicant on notice that accurate and complete information is required. On her application Mrs. Williams stated she was in good health and free from any physical or mental defects and her only prior medical problems were a kidney stone in 1952 and a cancerous uterus in 1975, both with full recovery. However, the evidence showed Mrs. Williams had experienced numerous physical and mental problems, including the removal of a kidney stone, colitis, possible diverticulitis, recurring pneumonia and schizophrenia. Paramount’s president testified that had the company been aware of Mrs. Williams’ complete medical history, the policy would not have been issued.

Insurance — Who Can Be Sued?

June 4, 2015 | Mark S. Humphreys

Everman insurance attorneys need to be aware of the people and entities that can be liable under the Texas Insurance Code. Section 541.151 provides that a person who has sustained damages caused by another’s engaging in unfair or deceptive insurance practices may sue the person engaging in those acts or practices. Section 541.002(2) defines “person” to mean “an individual, corporation, association, partnership, reciprocal or interinsurance exchange, Lloyd’s plan, fraternal benefit society, or any other legal entity engaged in the business of insurance, including an agent, broker, adjuster or life insurance counselor.”

In 1998, the Texas Supreme Court applied the plain language of the statute to hold that the term “person includes businesses and individuals “engaged in the business of insurance.” However, the statute would not apply to an insurance company employee that was not engaged in the “business of insurance.” The style of the opinion is, Liberty Mutual Insurance Company v. Garrison Contractors, Inc.

Engaging in unfair practices in “the business of insurance” is the key to liability. Those engaged in it may be liable. Those who are not may not be. Thus, when the Texas Supreme Court concluded that contracts of suretyship are not part of the business of insurance, the court also held that a surety could not be liable for unfair insurance practices. This was a 1995 opinion styled, Great American Insurance Company v. North Austin Municipal Utility District No. 1.

Who Can Sue An Insurance Company?

June 2, 2015 | Mark S. Humphreys

Benbrook insurance lawyers need to know who can properly be a plaintiff in a lawsuit against an insurance company. In order to sue an insurance company, the plaintiff must have “standing.”

A 1996, 5th Circuit Court of Appeals opinion states that an intended beneficiary under a policy of insurance has standing to sue under the Texas Insurance Code statutes. After reviewing Texas cases and other 5th Circuit cases, the court concluded that “if the Texas Supreme Court were presented with the question before us it would hold that standing under (Section 541) is satisfied by not only those who can establish privity of contract or reliance on a representation of the insurer, but also by those who can establish that they were an intended third party beneficiary of the insurance contract.” The court set out the standards under Texas law for third party beneficiary status:

(a) the claimant was not privy to the written agreement between the insured and insurer;

Policy Exclusions And City Ordinances

May 31, 2015 | Mark S. Humphreys

Everman insurance lawyers need to be know this 2015, Texas Supreme Court opinion. It is styled, Jaw The Point, L.L.C. v. Lexington Insurance Company.

This insurance dispute involves losses the insured incurred as a result of city ordinances triggered by damage to an apartment complex during Hurricane Ike. The insurance policy covers the costs of complying with city ordinances, but only if the policy covers the property damage that triggers the enforcement of the ordinances. Here, the property damage that triggered the ordinances resulted from both wind, which the policy covers, and flooding, which the policy expressly excludes. The policy’s anti-concurrent-causation clause excludes coverage “for loss or damage caused directly or indirectly by” flooding, “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” Because the evidence conclusively establishes that flood damage triggered the enforcement of the city ordinances and thus “directly or indirectly” caused the insured’s losses, the Court concluded the policy excludes coverage for such losses regardless of the fact that wind damage “contribute[d] concurrently or in any sequence to the loss.” Because the Court agreed with the court of appeals that the policy did not cover the insured’s losses and thus the insured cannot recover for the insurer’s bad faith failure to effectuate a prompt and fair settlement of the claim the case was affirmed.

In July 2007, JAW purchased an apartment complex in Galveston for approximately $5.7 million.Fourteen months later, Hurricane Ike struck the Island and caused substantial damage to The Pointe apartments. Lexington provided the primary coverage.

Who Has Standing To Sue An Insurance Company

May 30, 2015 | Mark S. Humphreys

Arlington insurance lawyers need to be able to answer the above question when someone comes into their office with a complaint. Simply put, standing means the legal right to be in court on a case.

Texas Insurance Code, Section 541.151 grants a cause of action to a person who sustains actual damages caused by another person engaging in any unfair insurance practice or deceptive trade practices.

The Texas Supreme Court in a 2000, case stated the law that to assert a cause of action a plaintiff must be: (1) a “person” as defined by the statute; or (2) injured by another’s unfair or deceptive acts.

Deceptive Trade Practices Act (DTPA) And Insurance

May 28, 2015 | Mark S. Humphreys

Texas insurance lawyers need to understand the ways the Texas DTPA can help with insurance claims.

Texas Insurance Code, Section 541.151(2) cross-references and prohibits conduct defined in the Texas Business & Commerce Code, Section 17.46(b), commonly known as the Deceptive Trade Practices Act. This latter statute applies to all types of consumer transactions, not just insurance, so many of the provisions are not directly relevant. The most relevant subsections prohibit:

* Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services.