Dallas Fort Worth Insurance Lawyer Blog

Pre-Suit Notice And Attorney Fees – 2

February 13, 2023 | Mark S. Humphreys

Attorney fees. Attorney fees. Attorney fees. It’s a big deal. Questions about attorney fees are common in cases involving insurance claims. The fairly new Texas Insurance Code, Section 542A deals with attorney fees in specific weather related events, such as hail storms. A 2022 opinion from the Northern District of Texas, Dallas Division discusses this issue. The opinion is styled, Fiberco, Inc. v. Acadia Insurance Company and Union Standard Lloyds d/b/a Union Standard Insurance Group.

The Defendants in this case filed a motion asking the Court to disallow attorney fees for Fiberco. The Court denied the motion.

A hailstorm damaged Fiberco’s property in 2020. Fiberco sued the Defendants. Counsel for Fiberco sent a demand letter in October 2020 demanding $406,678.05 to settle its claim. That letter also requested reasonable and necessary attorney’s fees but did not demand a specific amount.

Pre-Suit Notice And Attorney Fees – 1

February 11, 2023 | Mark S. Humphreys

A common question for insurance lawyers is whether or not a claimant can recover attorney fees if they file a lawsuit. This issue is discussed in a 2022 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Antonio Mantzuranis v. State Farm Lloyds.

This is a case by Mantzuranis against State Farm for damages resulting from a storm. State Farm paid the amount they believed owed on the claim but a trial resulted over the unpaid amount. A jury awarded $84,020.03, less $39,020.03 for “Money Already Paid,” leaving a net of $45,000. The Court ordered the parties to submit information regarding attorney fees. Mantzuranis concedes that his attorney’s fees claim is subject to reduction under Insurance Code, Section 542A.

Texas Insurance Code, Section 542A.003(b)(2) applies to actions against insurers, including breach of contract claims, and requires a potential plaintiff to provide to a potential defendant pre-suit notice of “the specific amount alleged to be owed by the insurer on the claim for damage to or loss of covered property.”

Pre-Suit Notice And Attorney Fees

February 6, 2023 | Mark S. Humphreys

As all insurance lawyers know, the Texas Insurance Code requires that prior to filing a lawsuit against an insurance company, that the insured give the insurance company a pre-suit notice. This issue is discussed in a 2022 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Nisha Hospitality LLC d/b/a Shady Oaks Motel v. Scottsdale Insurance Company.

A storm damaged Shady Oaks in October 2019. Scottsdale estimated the damage at $19,461.40 in terms of replacement cost value. On November 30, 2020, the public adjuster Shady Oaks hired (Pinnacle) sent Scottsdale its estimate of $87,270.91. Pinnacle sent this estimate twice more on subsequent dates. Counsel for Shady Oaks again sent the same demand for $87,270.91 on June 9, 2022, less than 61 days before filing suit.

Texas Insurance Code section 542A.003 requires that “not later than the 61st day before the date a claimant files an action . . . the claimant must give written notice to the person in accordance with this section as a prerequisite to filing the action.”

What Gets You To Bad Faith

February 4, 2023 | Mark S. Humphreys

Insurance lawyers have a tendency to talk a lot about “bad faith” in the context of insurance disputes. However, the Courts have a strong tendency to rule that most cases are simply a breach of the insurance contract and do not amount to “bad faith” and violations of the Texas Insurance Code. A 2022 opinion discussing this was issued by the Western District of Texas, San Antonio Division. The opinion is styled, Ted Switzer v. State Farm Lloyds.

Switzer held a property insurance contract with State Farm covering his residential property. This case arises from Switzer’s claim for coverage benefits due to damage to his property caused by a hailstorm on May 27, 2020. Based upon allegations that State Farm improperly failed to satisfy its insurance coverage liability, Switzer asserted causes of action for breach of the insurance contract, violation of the Texas Insurance Code , Section 541 for unfair settlement practices, violation of the Prompt Payment Act in Texas Insurance Code, Section 542, violation of the Texas Deceptive Trade Practices Act, (DTPA) breach of duty of good faith and fair dealing, and common law fraud.

State Farm filed this Motion for Partial Summary Judgment on the causes of action of violation of the Texas Insurance Code, Section 541 for unfair settlement practices, violation of the DTPA, breach of duty of good faith and fair dealing, and common law fraud. State Farm also seeks summary–judgment dismissal of Switzer’s claim for exemplary damages based upon these causes of action. In his response, Switzer concedes summary judgment is appropriate on the causes of action of fraud and violation of the DTPA. Consequently, summary judgment on these two causes of action will be granted.

Insurable Interests?

January 30, 2023 | Mark S. Humphreys

Life insurance lawyers know that a beneficiary of a life insurance policy must have an “insurable interest” in the life of the insured.

Those who have an insurable interest in the life of another fall into three general classes:

(1) one so closely related by blood or affinity that he or she wants the other to continue to live, irrespective of monetary considerations;

Who Can Recover Life Insurance Benefits “Slayer’s Rule”

January 28, 2023 | Mark S. Humphreys

What if the person who is the named beneficiary of a life insurance policy, intentionally caused the death of the insured? Who gets the money?

Pursuant to the 1987, Texas Supreme Court opinion, Crawford v. Coleman, a beneficiary who willfully participates in bringing about the insured’s death, either as a principal or as an accomplice, forfeits any right to benefits. The benefits are payable to any innocent contingent beneficiary or to the insured’s nearest relative.

Sandra Shoaf was stabbed to death by her husband, Cornelius Shoaf. Sandra’s life was insured under four insurance policies, each designating Cornelius as the primary beneficiary. The trial court disqualified Cornelius from receiving Sandra’s death benefits because the jury found that Cornelius willfully caused Sandra’s death.

Bona Fide Dispute On Homeowners Claim

January 23, 2023 | Mark S. Humphreys

It is important in an insurance lawsuit whether or not the insurance company is subject to being sued for bad faith claims handling or whether or not there is a bona fide dispute about coverage. A bona fide dispute rids the lawsuit of claims related to bad faith issued.

This was the issue in a 2022 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, David McArthur, Jean McArthur v. Safeco Insurance Company of Indiana.

This is a first–party insurance dispute arising out of alleged damage to residential property as a result of a wind and hail storm. Plaintiffs are the owners of an insurance policy (“the Policy”) issued by Defendant Safeco.

Fallen Tree Damage To Roof – Damage Segregation

January 21, 2023 | Mark S. Humphreys

The law clearly in Texas clearly places the burden on segregating damages on the insured. This issue is discussed in a 2022 opinion issued by the Northern District of Texas, Dallas Division. The styled of the opinion is Benham Bagheri v. State Farm Lloyds.

This is a first-party insurance coverage action by Bagheri alleging a claim for breach of a homeowners insurance policy and extra-contractual claims in connection with damage to his residence caused by a large falling tree. State Farm moves for summary judgment, contending that Bagheri’s breach of contract claim must be dismissed because he has not provided the jury a reasonable basis to segregate damage attributable solely to the covered event, as Texas law
requires, and that he has failed to produce evidence of actions by State Farm that, absent a
breach of contract, are sufficiently extreme to enable a reasonable jury to find in his favor on his extra-contractual claims. For the reasons explained, the court grants State Farm’s
motion and dismisses this action with prejudice.

Bagheri, a homeowner and State Farm policyholder, filed a claim in 2020 after his residence was damaged by a large falling tree. State Farm inspected the residence and issued a payment that Bagheri deemed insufficient. Bagheri retained a public adjuster to prepare another estimate and requested that State Farm perform a second inspection. During the second inspection, State Farm determined that some of Bagheri’s claimed damage originated from a 2015 incident in which limbs from the same tree fell and damaged the same part of the house that Bagheri claimed was damaged in 2020. In 2015 Bagheri was insured by Farmers and filed an insurance claim, which Farmers paid, for the damage caused to his residence by the fallen tree limbs.

Is Your Insurance Plan Governed By ERISA?

January 16, 2023 | Mark S. Humphreys

How does an insurance lawyer know whether or not his insurance plan is governed by the Employee Retirement Income Security Act of 1974?

Here is a November 2022 opinion that discusses how to determine whether or not an insurance plan is governed by ERISA. The opinion is from the Western District of Texas, Austin Division, and is styled, Robert Abraham v. Blue Cross And Blue Shield of Texas.

This case is in this Federal Court after being removed there by BCBS. The lawsuit was originally filed in a Justice of the Peace Court.

Life Insurance Policies And Beneficiaries

January 14, 2023 | Mark S. Humphreys

Who is the named beneficiary primary beneficiary under the policy and will that person always be the person who receives the policy benefits is a question many life insurance attorneys are asked by prospective client.

This issue is discussed in a 1981 Eastland Court of Appeals opinion styled, Pilot Life Insurance Company v. Koch. This is a declaratory judgement case.

Pilot sought a judgment declaring it had no duty to pay life insurance proceeds to Lawrence Koch because of the death of his wife. Pilot has issued a group policy to Koch’s employer. The policy afforded life insurance coverage for employees and their eligible dependents. Eligible dependents were defined to include “your husband or wife, unless you were legally separated or divorced.” Pilot alleged that Mr. and Mrs. Koch were legally separated on the date of her death. Koch filed a counterclaim seeking the policy proceeds. The jury found that Mr. and Mrs. Koch were separated at the time of her death. Although that separation was pursuant to a “temporary” court order entered in the pending divorce proceedings between the Koch’s, the trial court entered judgment for Koch notwithstanding the verdict on the theory that under Texas law there is no status of legal separation of a husband and wife before the marriage is dissolved by a decree of divorce.