Dallas Fort Worth Insurance Lawyer Blog

DTPA And Insurance

September 14, 2014 | Mark S. Humphreys

Experienced Grand Prairie insurance lawyers can tell you how the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) interact. A 1996, San Antonio Court of Appeals opinion also shows this interaction or lack thereof as it related to the case. The case is styled, Saunders v. Commonwealth Lloyd’s Insurance Company. Here is some of the relevant information from the opinion.

This is an appeal from the granting of a summary judgment in an insurance bad faith case. Jan Saunders, the insured, sued Commonwealth alleging several instances of improper claims handling including failure to promptly pay a fire loss that completely destroyed Saunders’ home in 1988.

Jan and Dan Saunders’ house was completely burned down by a fire in 1988. The Saunders made a claim on their policy. The insurance company investigated the claim and concluded that Dan Saunders was responsible for setting the fire. Saunders was convicted of the felony of conspiring to burn the house down. The insurance company then denied the claim. This court reversed that conviction. Saunders was acquitted of the charge following a retrial.

Uninsured Motorists

September 13, 2014 | Mark S. Humphreys

Fort Worth insurance lawyers can tell you there are a lot of uninsured motorist cases to be seen. The Insurance Journal published an article recently titled, “IRC: Uninsured Motorists a Perplexing Pervasive Concern.” Here is what the article tells us.

A new report shows there hasn’t been much ground gained in the battle to reduce the number of uninsured motorists on the road, and there’s nowhere experts can point their fingers as an explanation of the pervasive problem.

From a percentage point of view, the nation’s uninsured motorist dilemma is easing, but the bad news is that the cost of uninsured motorist claims has risen dramatically in the past decade, according to a report from the Insurance Research Council.

Assign DTPA Claim?

September 11, 2014 | Mark S. Humphreys

Dallas insurance and Deceptive Trade Practices Act (DTPA) lawyers will tell you a DTPA claim cannot be assigned. If you don’t believe them, you can believe the Texas Supreme Court. The Texas Supreme Court issued an opinion in 2004 that discusses the assignability of a DTPA claim. The style of the case is, PPG Industries, Inc. v. JMB/Houston Centers Partners Ltd. Partnes. Here is the relevant information from that case to help understand why these claims cannot be assigned.
Houston Center Corporation contracted for and constructed the One Houston Center in April 1978. It subsequently sold the building to JMB in 1989 on an “as is” basis. In 1982, some seven years prior to the sale of the building, it had become apparent that the windows manufactured and installed by PPG were defective and about one quarter of the windows had to be replaced. As part of the sale, HVV assigned its warranties to JMB and JMB, in turn, waived its potential DTPA claims against HCC. When more window problems appeared in 1991, JMB sued PPG for breach of warranty and DTPA violations. A jury found for JMB and awarded damages of $4,745,037, and trebled the damages in accordance with the DTPA. The jury also awarded attorney fees in the amount of $1,716,181.00. The Fourteenth District Court of Appeals in Houston affirmed the judgment of the trial court. PPG appealed to the Texas Supreme Court.
It was held by the Texas Supreme Court that DTPA claims are not assignable. While the Texas legislature failed to specify within the language of the DTPA whether claims were assignable, the purpose of the statute argues against assignability. The Texas Supreme Court noted that if it allowed the assignment of DTPA claims, it could well result in a market whereby third-parties purchased a claim from a consumer for less than its full value, thus enabling the third-party to bring the claim and obtain treble damages. In other words, the Court wished to avoid creating a secondary market similar to the one that exists for the purchase of structured settlements. The Court also held that JMB was not restricted in bringing its breach of warranty claim against PPG, thus allowing the court to sustain the jury award for breach of warranty and attorney’s fees.

Disability Policy Claim Denial

September 9, 2014 | Mark S. Humphreys

Dallas insurance lawyers who handle disability policy’s need to be aware of an opinion from the United States District Court, Houston Division. The style of the case is, Fernandez v. Mutual of Omaha Ins. Co. Here is the relevant information.

The cross-motions for summary judgment in this disability insurance dispute raise one legal issue: whether the statute of limitations bars the plaintiff’s causes of action. The answer depends on when the limitations periods began to run. If the defendant insurer’s July 27, 2009 letter to the plaintiff insured legally denied the claim, then, as the plaintiff concedes in his brief, all his causes of action are barred. If, as the plaintiff contends, the July 27, 2009 letter did not legally deny the claim, the causes of action alleged did not accrue until the policy terminated when he became 65, and the action is timely filed.

Based on the undisputed facts in the summary-judgment record, the July 27, 2009 letter repeating an earlier letter stating that the plaintiff’s benefits claim was “inactive,” legally denied the claim. The statutory and extracontractual claims had to be brought by July 27, 2011. The breach of contract claim, subject to a three-year contractual-limitations period, had to be brought by July 27, 2012. Fernandez filed this suit on September 30, 2013, well after all limitations periods had expired.

Uninsured Coverage

September 7, 2014 | Mark S. Humphreys

Richardson insurance attorneys need to be aware of this Eastland Court of Appeals case. The style of the case is Anderson v. Texas Farm Bureau. Here is some of the relevant information.

Anderson appeals the trial court’s judgment that granted Texas Farm Bureau’s motion for summary judgment. Texas Farm Bureau moved for summary judgment because the pickup that injured Anderson was not a scheduled vehicle on Anderson’s policy and was owned by Anderson’s adult son, Dean, who was staying in Anderson’s home at the time of the accident. Anderson claimed he was covered under his UM coverage because a thief took the pickup, which Anderson did not own, and, as the thief fled, the thief drove the pickup into Anderson and injured Anderson.

Anderson lived at 610 Texas Street in Throckmorton, Texas. On January 23,

Commercial Roof Hail Damage Claim

September 6, 2014 | Mark S. Humphreys

Fort Worth insurance attorneys who handle hail damage claims need to ready this recent opinion out of the United States District Court, Dallas Division. The style of the case is Hamilton Properties v. American Insurance Company. The opinion was issued in July 2014. Here is the relevant information.

This case arises out of a dispute regarding an insurance company’s decision to disclaim coverage and deny its client’s claim for property damage following a hailstorm. Plaintiffs are suing for: (1) breach of contract; (2) violations of the Texas Deceptive Trade Practices Act; (3) violations of the Texas Insurance Code; (4) breach of the duty of good faith and fair dealing; (5) breach of fiduciary duty; (6) misrepresentation; and (7) common law fraud by misrepresentation. Defendant The American Insurance Company (“AIC”) has moved for summary judgment with respect to all of these claims.

The Property was originally covered under an umbrella insurance policy through Hamilton Properties’ hospitality management company. However, on February 16, 2009 the Property was added to Hamilton Properties’ insurance policy number S 67 MXX 80895731, whose coverage ended September 24, 2009.

Water Damage To Foundation

September 4, 2014 | Mark S. Humphreys

Arlington insurance attorneys will get phone calls where a home owner has a claim denied by the insurance company where the insurance company says the foundation damage is not covered under the policy. The United States District Court, Houston Division issued an opinion recently that deals with a claim denial for foundation damage. The style of the case is, Salazar v. State Farm Lloyds. Here is the relevant information from the opinion.

This is an insurance coverage dispute. The plaintiffs, Diane Salazar and Jesse Salazar, obtained a homeowners’ insurance policy (the “Policy”) from State Farm Lloyds. The Salazars allege that State Farm breached the Policy and extracontractual duties by denying their claim for losses for damage to the interior of the home caused by water leaking from plumbing pipes under the home. The Salazars allege that the damage was caused by foundation movement resulting from the water leaks. State Farm Lloyds denied coverage for the collateral losses from the foundation movement.

The parties filed cross-motions for partial summary judgment. The issue is the relationship of two endorsements: the Dwelling Foundation Endorsement (DFE) and the Water Damage Endorsement (WDE). The DFE limits coverage for foundation and related damage to 15% of the Policy’s Coverage A–Dwelling limit. The Salazars’ Dwelling limit is $229,100. State Farm asks this court to grant partial summary judgment that any recovery is limited to 15% of that amount, or $34,365.00. In their cross-motion and response, the Salazars contend that the WDE provides coverage for losses due to foundation movement caused by plumbing leaks. They assert that the WDE provides broader coverage than the DFE and therefore controls. Alternatively, they assert that the endorsements are conflicting, producing ambiguity that must be construed in their favor.

DTPA And Insurance Code Violations

September 2, 2014 | Mark S. Humphreys

Duncanville insurance attorneys need to know how the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) interact. A United States 5th Circuit Court of Appeals case from 2008 discusses this a little bit. The style of the case is, National Union Fire Insurance Company v. Puget Plastics Corp. Here is some of the relevant information to try and understand.

In the underlying lawsuit, a jury found that Puget Plastics Corp. and Puget Plastics Corp. SA DE CV (Puget) knowingly violated the Texas DTPA in their business dealings with Intervenor, Microtherm, Inc. After the trial, both parties and the primary insurance carrier mediated the case and reached a settlement. The insured assigned its rights against National Union as part of the settlement.

National Union filed a declaratory judgement action in federal court. On cross motions for summary judgment, the trial court found against National Union. National Union appealed.

Credit Disability Insurance

August 31, 2014 | Mark S. Humphreys

Duncanville insurance attorneys need to be able to discuss credit disability issues with a prospective client. A 1996, Austin Court of Appeals opinion helps to understand credit disability issues. The case is styled, American National Insurance Co. v. Paul. Here is some of the relevant information.

The Pauls purchased a van from Dodge. In the negotiations, Mr. Paul asked the salesman whether the purchase price included credit disability insurance. The salesman did not know. There was no further discussion regarding credit disability insurance. The Pauls came into the car dealership later, stated that they were in a hurry and needed to buy the van over the lunch hour. The Pauls met the finance agent who prepared documents which included an application for credit disability insurance provided by American National. The total purchase price included premium payments for this coverage. The finance agent did not orally disclose the existence of the credit insurance application and the Pauls did not read the paperwork.

The insurance application contained a paragraph entitled “Applicant’s Statement” which required the applicant to affirm that she was in good health and had not consulted a doctor within three years for certain conditions. Mrs. Paul signed the statement even though at the time she suffered from Lou Gehrig’s disease. As of April 1, 1994, Mrs. Paul became permanently and totally disabled and unable to continue working. On May 5, 1995, she applied for disability insurance benefits pursuant to the credit disability insurance policy which American National denied. When American National discovered her condition, they refunded the premium payment to Chrysler Credit which in turn refunded it to the Pauls.

What If An Insurance Company Does A Bunch Of Things Wrong?

August 30, 2014 | Mark S. Humphreys

Arlington insurance attorneys need to be able to explain to clients what happens when an insurance company is found to do many things wrong. This is illustrated to a certain extent by a 1998 Texas Supreme Court case. The case is styled Waite Hills Services v. World Class Metal Works, Inc. Here is the relevant information from that case.

World Class chrome-plates truck hitches and muffler tips. Colony issued World Class a commercial general liability, commercial property, and commercial inland marine policy. In July 1990, a hole appeared in one of World Class’s nickel-plating tanks, causing some nickel solution to spill out of the tank. World Class did not know what caused the hole, but it stopped work on its assembly line. A World Class employee contacted David Ingram, its insurance agent, to report the incident. Ingram contacted Vee Riley, an employee of Burns & Wilcox, to determine if the event was covered. Riley advised Ingram that the event was probably not covered if normal wear and tear caused the hole. Ingram so informed World Class.

World Class drained and salvaged the remaining solution, removed the existing tank liner and installed a new liner, repaired the hole in the tank’s exterior, and engaged in clean-up efforts. These repairs allegedly cost World Class thirty days of operation.