Dallas Fort Worth Insurance Lawyer Blog

Home Owners Insurance Policies

October 21, 2014 | Mark S. Humphreys

Attorneys who handle home owner insurance policy might want to share this article from the Insurance Journal regarding rates and the Texas Insurance Commission. The title of the article is, Homeowner Insurance Rates Hikes Not Challenged By Texas Commissioner. Here is what the article tells us.

The Texas insurance commissioner has allowed the three largest home insurers to impose significant rate hikes on many policyholders despite the objections of a state consumer advocate.

Insurance Commissioner Julia Rathgeber can reject any new rates that are deemed excessive and order refunds. But her office has taken no action since learning of the increases late last year, and it’s unclear whether she will do so.

Bad Faith Damages

October 19, 2014 | Mark S. Humphreys

Weatherford lawyers who handle bad faith claims need to be able to know how to calculate damages that may be assessed in a bad faith claim. There are lots of opinions that deal with this issue and they all have to be read if a lawyer is to get a good idea as to what will be an end result. An opinion issued in 1995, by the Texas Supreme Court is one that is worth reading. The style of the case is, Twin City Fire Insurance Company v. Davis. Here is some of the relevant information from the case.

Davis injured her lower back while she was working at her place of employment. She filed a worker’s compensation claim after she was injured. As part of her therapy, her treating doctor prescribed a “hot tub or jacuzzi.” Davis later, settled her worker’s compensation case with the worker’s compensation insurance carrier agreeing to pay five years of future medical expenses. Davis immediately made a claim under the terms of the settlement for the hot tub which had been prescribed by her doctor.

Twin City investigated the medical necessity of the hot tub by requesting a confirmation from the doctor. The doctor confirmed the prescription with Twin City. An outside consultant also supported the doctor’s recommendation. Davis then requested a pre-hearing conference before the IAB to challenge Twin City’s failure to honor the hot tub claim. Twin City denied the hot tub was a medical necessity.

Insurance Law And Technicalities

October 18, 2014 | Mark S. Humphreys

Grand Prairie insurance attorneys need to know about technicalities and insurance policies. The Texas Supreme Court just issued an opinion in a case styled, Greene v. Farmers Insurance Exchange. This case deals with the Texas Anti-Technicality Statute found in the Texas Insurance Code, Section 862.054. Here is some of the information relevant to the lawsuit.

In this case a house that had been vacant for several months was damaged when fire spread to it from a neighboring property. The house was insured under a Texas homeowner’s policy containing a clause suspending dwelling coverage if the house was vacant for over sixty days. The homeowner had not purchased an available endorsement providing coverage for extended vacancies, and the insurer denied the homeowner’s claim, even though the vacancy was not related to the loss. On cross-motions for summary judgment, the trial court granted judgment for the homeowner. This was reversed by the Court of Appeals and upheld by the Texas Supreme Court.

Greene owned and lived in a house in Irving that she insured with Farmers Insurance Exchange. The policy Farmers issued to Greene was a Texas Homeowners-A Policy prescribed by the Texas Department of Insurance. The policy was effective from February 10, 2007 to February 10, 2008. On June 30, 2007, Greene moved into a retirement community. On July 5, 2007, she notified Farmers that she was going to sell her house and provided Farmers with change of address information. On November 14, 2007, fire from a neighboring house spread to Greene’s house and damaged it. Farmers denied Greene’s fire damage claim on the basis that the house had been vacant for more than sixty days. The denial prompted a lawsuit on Greene’s behalf.

Alleging Insurance Code Violations

October 16, 2014 | Mark S. Humphreys

Fort Worth insurance lawyers who handle bad faith insurance claims will tell you that the paperwork filed with a court are important to keeping the case in court. This was illustrated by a recent Eastern District case. The style of the case is, Weidner v. Nationwide Property & Casualty Insurance Company. Here is the relevant information.

This is an appeal from a United States Magistrate Judge report. The rulings deals with a Rule 12(c) motion which is a civil procedure judgment on the pleadings. The Magistrate found:

Plaintiffs’ claims arising under the Texas Insurance Code suffer from the same limitations. Plaintiffs assert (merely by stating the statute number) that Nationwide made, issued, or circulated or caused to be made, issued, or circulated an estimate, circular, or statement misrepresenting with respect to a policy issued or to be issued: (A) the terms of the policy; (B) the benefits or advantages promised by the policy; or (C) the dividends or share of the surplus to be received on the policy. TEX. INS. CODE § 541.051(1). There are no facts alleged by the Plaintiffs to plausibly suggest that Nationwide misrepresented the terms of the policy, benefits or advantages of the policy, or dividends to be received under the policy. Plaintiffs also assert that Nationwide used a name or title of a policy or class of policies that misrepresents the true nature of the policy or class of policies. TEX. INS. CODE § 541.051(4). Again, there are no facts alleged to support this assertion. Plaintiffs also contend that Nationwide misrepresented Plaintiffs’ insurance policy by “(i) making an untrue statement of material fact. § 541.060(1); (ii) failing to state a material fact that is necessary to make other statements made not misleading, considering the circumstances under which the statements were made. § 541.060(2); (iii) making a statement in such a manner as to mislead a reasonably prudent person to a false conclusion of a material facts. § 541.060(3)” Plaintiffs fail to allege what misrepresentations or omissions they are referring to, in what manner the statements were made, and in what way Plaintiffs were misled by the statements.

Standard For Punitive Damages In An Insurance Claim

October 14, 2014 | Mark S. Humphreys

Arlington insurance lawyers need to know what to look for in a case to determine how likely it is to achieve punitive damages. A 1998, Texas Supreme Court opinion sheds some light on how the court looks at punitive damages evidence. The style of the case is, State Farm Fire & Casualty Company v. Simmons. Here is some of the relevant evidence in the case.

The plaintiff in this case, Simmons, had purchased his first home by financing through a VA loan. Simmons was a construction supervisor who fell on hard times when his work slowed down. Simmons arranged a repayment program with the VA that substantially lowered his monthly payments. The same month he worked out this refinance program, his home was burglarized. The burglary occurred in the day and none of Simmons neighbors saw any wrong acts around Simmons home. Simmons began his own investigation and followed some wheel barrow tracks through the woods around his house to the home of Mattix, who later confessed to the police that he had committed the burglary of Simmons home. State Farm paid Simmons for this loss. Simmons then experienced a rash of vandalism to his property. Simmons then left to take his children to Louisiana for the summer. He planned to return right away because he had to work the next day. Soon after he left, someone noticed smoke from Simmons home. His home was completely destroyed by fire. State Farm denied the fire loss claim.

At trial, the jury made a finding that Simmons did not burn his own home, then found that State Farm had breached its duty of good faith and fair dealing in handling the claim and for knowingly violating the DTPA. The jury also determined State Farm acted with conscious indifference in determining whether there was a reasonable basis to deny Simmons claim. Based on these findings, Simmons was awarded $275,000 for actual damages and $2 million in punitive damages.

When Are Punitive Damages Available

October 12, 2014 | Mark S. Humphreys

Fort Worth insurance lawyers need to be able to discuss with clients, the situations wherein punitive damages may be part of a claim. A 2008, 5th Circuit Court of Appeals opinion discusses one aspect of these punitive damages. The style of the case is, American International Specialty Lines Inc. Co. v. Res-Care, Inc. Here is the necessary information.

American sought reimbursement from Res-Care under a non-waiver agreement for the uncovered claims included in its $9 million settlement of the underlying claim, asking the district court to apportion the settlement costs among covered and non-covered claims. The court determined that the non-waiver agreement satisfied the conditions set forth by the Texas Supreme Court for reimbursement. Turning to the merits, the court determined the district court properly considered all evidence relevant to the settlement decision, and was not limited to considering only the evidence admissible in the underlying suit. Res-Care sought to defeat American’s coverage claims by asserting waiver and estoppel because American waited 18 months after coverage issues were apparent before raising a coverage question. The court further held Res-Care waived the defense by entering into the non-waiver agreement, and the court found no merit in Res-Care’s contention that it was “forced” to enter into the non-waiver agreement.

In making its ruling in this case, the court found Texas public policy did not provide coverage for punitive damages in this instance given the egregious circumstances and nature of the avoidable conduct that caused the injuries. The 5th Circuit stated that “we conclude that the extreme circumstances which gave pause in another related court decision were present in this case. The plaintiff’s complaint in the underlying case is rife with allegations of gross negligence for which the responsibility should not be shifted from the defendants to their insurance company. The complaint alleged that all defendants including Res-Care, were grossly negligent in their actions, not only for direct participation in the bleach incident on April 12, 1998, but also for failure to take reasonable steps to prevent the situation from occurring, and for failure to alleviate the harm immediately afterward.” The circumstances of the decedent’s injury and death, were so extreme that the purposes of punishment and deterrence of conscious indifference outweigh the normally strong public policy of permitting the right to contract between the insurance company and the insured.

Mental Anguish Claim And Worry

October 11, 2014 | Mark S. Humphreys

Any Dallas insurance attorney can tell you that mental anguish can be a part of an insurance bad faith claim. The key to keep in mind is the evidence necessary to show a person eligible to recover for mental anguish.

This was explained in part by the 1996, Texas Supreme Court case styled, Saenz v. Fidelity & Guaranty Insurance Underwriters.

In Saenz, Corina Saenz sued her employer’s workers compensation insurance company for wrongfully inducing her to settle her claim. Saenz recovered actual damages for future medical costs, damages for mental anguish, and punitive damages.

Treble Damages

October 9, 2014 | Mark S. Humphreys

Dallas insurance lawyers have to know when treble damages are available in a case. A 1998, Dallas Court of Appeals helps to understand factors that will get those damages. The style of the case is, State Farm Lloyds v. Johns.

Johns house was built in 1964. Johns moved in in 1972. In the summer of 1990, Johns noticed evidence of extensive foundation problems including door misalignment, cracks in walls, and a slopping floor. Repairmen discovered two plumbing leaks under the house. Johns filed a claim with State Farm. State Farm concluded the foundation problems were caused by natural soil movement. The State Farm policy excluded damage cause by ordinary settlement and denied the claim.

Johns filed suit for violations of the DTPA and Texas Insurance Code. Johns won at trial and State Farm appealed.

Dallas Insurance Lawyers Need To Know This

October 7, 2014 | Mark S. Humphreys

A 1997, Texas Supreme Court case is important for insurance law attorneys to know. The style of the case is, Trinity Universal Insurance Company v. Cowan.

Here are some of the facts to know about in the case.

A male, Gage, was working at an HEB photo shop. He developed a roll of revealing pictures of Cowan. He made extra prints for himself. He shared these prints with friends. This eventually got back to Cowan. Cowan sued Gage and HEB alleging negligence and gross negligence, among other allegations. Cowan alleged she had suffered severe mental pain, loss of privacy, humiliation, embarrassment, fear, frustration, mental anguish, etc. She did not allege any physical manifestation of these injuries. Gage notified his parents’ homeowners insurance company, Trinity. Trinity initially defended Gage under a reservation of rights, but later denied coverage and withdrew the payment of defense lawyers. Cowan settled with HEB and Gage in return for a covenant not to execute against any of Gage’s assets except the Trinity insurance policy. At trial, Gage did not appear or defend. Cowan and her mother testified that she suffered mental anguish, along with headaches, stomachaches and sleeplessness. The trial Judge found Gage responsible and awarded Cowan $250,000.00.

Emotional Distress And Bodily Injury

October 5, 2014 | Mark S. Humphreys

Knowing what is covered and what is not covered under a policy is something Fort Worth insurance lawyers need to be able to discuss with clients. A 1994, United States 5th Circuit Court of Appeals case is instructive as to when emotional distress is a covered claim. The style of the case is Travelers Indemnity Company v. Holloway. It is a declaratory judgement action.

In this lawsuit, the insurance company, Travelers, contended that it had no duty to defend its insured, Wanda Holloway, against a lawsuit for intentional infliction of emotional distress, since this type of claim is not covered by the policy issued by Travelers. Holloway is the mother of a junior high school student who was competing for a cheerleader position, and allegedly plotted to kill Heath, the mother of one of her daughter’s competitors. The mother of the competitor brought a lawsuit against Holloway alleging “outrageous conduct causing severe emotional distress.” Holloway sought a defense from Travelers, however, Travelers argued that Holloway was not entitled to a defense and that there was no coverage, since (1) the conduct did not constitute an “occurrence” under the policy, (2) the conduct was excluded from coverage as intentional conduct, and (3) the conduct was not alleged to have caused “bodily injury” as that is defined in the policy.

In making its ruling, the 5th Circuit affirmed the District Court’s opinion that there was no duty to defend or coverage since there was no allegation or evidence of a bodily injury.