Dallas Fort Worth Insurance Lawyer Blog

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.

Three Times Actual Damages – How That Works

August 28, 2014 | Mark S. Humphreys

Insurance law attorneys in Dallas and the Fort Worth area need to be able to discuss how trebling of damages works in insurance cases. The Texarkana Court of Appeals issued a 2006 opinion that helps to understand this issue. The style of the case is, Allstate Indemnity Company v. Hyman. Here is some of the relevant information.
The insured was involved in an automobile accident resulting in severe damage to the vehicle. The insured filed a claim with Allstate, but thought Allstate’s offer was inadequate. The insured also filed a lawsuit against the driver of the other car and settled. The insured brought suit against Allstate for breach of contract. The jury in the trial court found in favor of the insured that Allstate breached the contract by not paying and also found a knowing violation of the Texas Insurance Code. The jury awarded actual damages of $21,600.00 ($18,000.00 for the vehicle and $3,600.00 for a rental vehicle for a reasonable period of time), enhanced damages of $54,000.00 and also awarded $25,000.00 in attorney fees. The trial court ordered an offset in the amount of the insured’s settlement with the other driver. Both sides appealed.
This appeals court affirmed the trial court’s judgment that Allstate was liable for breach of contract and a violation of the Texas Insurance Code, but reformed the judgment to provide for an award of $63,300.00 for damages. Rejecting Allstate’s argument that the insured never triggered its duty to pay the claim because the insured failed to provide information and failed to cooperate, the court determined that the information sought by Allstate was not pertinent to the investigation of the claim and the decision to accept or not accept the claim, but was a procedure that Allstate would follow after it accepted liability for the loss. The court agreed with the insured’s belief that if it signed the requested power of attorney, it would be agreeing to the amount Allstate wanted to pay and the insured would be left with no recourse. The court also rejected Allstate’s argument that the insured impaired it’s right of subrogation against the other driver. The court focused on the policy language, “if we make a payment,” and noted that in this instance Allstate had not made a payment, and thus was not entitled to recover its subrogation rights. The court determined that the amount of recovery by the insured in its settlement with the other driver was less than the amount the jury had determined was the actual value of the insured’s vehicle, thus holding that Allstate was entitled to an offset against the damage award in the amount of the value of the vehicle, less the deductible. In making its determination, the court examined the “one recovery rule” and the “made-whole doctrine.” The court next addressed Allstate’s alleged violation of the Texas Insurance Code and found that there was evidence to support the jury’s findings that Allstate made post-loss misrepresentations and that the insured was entitled to extra-contractual damages. In a matter of first impression, the court determined that the Texas Insurance Code capped the plaintiff’s recovery at three times the actual damages, not three times the actual damages plus additional damages, including court costs and attorney’s fees. Lastly, the court, in determining that Allstate was entitled to an offset, applied the offset only after trebling the actual damages stating that if it applied the offset before trebling the damages, “there would effectively be no punitive award.”

Insurance Attorneys – Here’s One For You

August 26, 2014 | Mark S. Humphreys

Tarrant County insurance lawyers who keep up with what is going on in the world of insurance coverages will find an article published by BloombergBusinessweek in July to be entertaining. The title of the article is, “Even Pot Dealers Need Insurance. The Problem Is, Where to Get It?” Here is what the article discusses.

Pot dealers of yore never had to worry about this, but here it is: Even in states where selling marijuana is legal, pot retailers are finding they can’t get standard-issue business insurance.

Big insurance companies aren’t writing policies because the category is so new, it’s hard to price the risk, Carole Walker, executive director of the Rocky Mountain Insurance Information Association, told the Denver Business Journal. The fact also remains that the sale and distribution of marijuana remains illegal under federal law, which puts insurers in a tricky spot.

Insurance For Granny Scooters?

August 24, 2014 | Mark S. Humphreys

Irving insurance attorneys as well as all lawyers in the Dallas – Fort Worth area need to be aware of the changes in law related to insurance issues. BloombergBusinessWeek published an article in July that is interesting. The title of the article is. “Insurers Claim Granny Scooters Must Be Covered – Just Like Cars.” Here is what the article says.

Two insurance companies have made an unusual argument in a Michigan case: They’re insisting that the drivers of motorized mobility scooters should be required to get the same insurance as car and truck owners.

The case involves the claims of a paralyzed man who was hit by an SUV while crossing the street on his way to a doughnut shop. The insurance companies’ position? Because the man didn’t have auto insurance on his scooter, they shouldn’t have to pay for any damage caused to him by the SUV.