Dallas Fort Worth Insurance Lawyer Blog

Suing For Bad Faith

July 24, 2014 | Mark S. Humphreys

A Texas insurance law lawyers needs to know the proper way to sue on bad faith insurance cases. The proper way will differ depending on the type of case. When the claim arises out of an uninsured motorist claim it is different than other types of bad faith claims. The Houston Court of Appeals [1st Dist.] recently addressed this issue. The style of the case in In re Progressive County Mutual Insurance Company. This is a mandamus proceeding. Here is some of the relevant information from that case.

Following an automobile collision with an uninsured motorist’s vehicle, Guia sued her insurer, Progressive. While investigation into the claim was ongoing, Guia sued Progressive for breach of the uninsured motorist provisions in her policy, violations of Chapter 542 of the Texas Insurance Code, violations of the Deceptive Trade Practices-Consumer Protection Act, and breach of the duty of good faith and fair dealing. Guia served Progressive with a number of discovery requests, some of which would not be relevant to the breach-of-contract claim. Progressive filed a motion to sever the breach of contract claim for uninsured motorist coverage from the extra-contractual claims. The trial court judge signed an order abating the motion to sever, allowing discovery to move forward on all claims, and deferring the other issues covered by the motion until the pretrial hearing. Progressive filed a writ seeking to compel severance and abatement.

Texas Rule of Civil Procedure 41 governs severance of claims. The rule provides, in part, that “actions which have been improperly joined may be severed . . . on such terms as are just. Any claim against a party may be severed and proceeded with separately.” Id. The predominant reasons for a severance are to do justice, avoid prejudice, and promote convenience. Claims are properly severable if: (1) the controversy involves more than one cause of action; (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted; and (3) the severed claim is not so interwoven with the remaining action that it involves the same facts and issues. Only the third element is in dispute here.

Life Insurance For Companies

July 22, 2014 | Mark S. Humphreys

Attorneys handling life insurance claims in Texas might one day run across a situation where a company is attempting to collect life insurance benefits due to the death of an employee. An article in the New York Times discusses this issue. Here is what the article tells us.

Employees at The Orange County Register received an unsettling email from corporate headquarters this year. The owner of the newspaper, Freedom Communications, was writing to request workers’ consent to take out life insurance policies on them.

But the beneficiary of each policy would not be the survivors or estate of the insured employee, but the Freedom Communications pension plan. Reporters and editors resisted, uncomfortable with the notion that the company might profit from their deaths.

Insurance And The 8 Corners Rule

July 20, 2014 | Mark S. Humphreys

Dallas insurance attorneys need to understand the 8 corners rule as it relates to insurance policies and lawsuits. A U.S. District Court, N.D. Texas, Fort Worth Division case helps understand this rule. The style of the case is, Acadia Insurance Company v. Jacob and Martin, Ltd. Here is some of the relevant information.

This is an insurance coverage dispute in which Plaintiffs seek a declaratory judgment as to their duties to defend and indemnify Defendants in an underlying state court action. Accordingly, the following facts are drawn from the live pleading in the underlying action. Plaintiffs issued general liability and umbrella policies to Jacob and Martin, Ltd. Jacob and Martin contracted with the city of Gordon, Texas, to design and install a new sewer system. Turner was the lead engineer on the project, and Lovelady was a project engineer. Martin is the general partner of Jacob and Martin.

The City of Gordon also contracted with Granbury Contracting & Utilities, Inc. to install sewer lines. While working on the project, Lovelady directed Eliseo Alberto Ramirez Rodriguez (“Ramirez”), an employee of Granbury, to open a manhole, climb inside it, and remove a plug from the sewer line. When Ramirez removed the plug, “toxic fumes were released and Ramirez died from asphyxia due to methane gas inhalation.” Ramirez’s parents filed suit against Jacob and Martin, Lovelady, Turner, and Martin under the Texas Wrongful Death and Survival statutes.

Stating A Claim Against An Insurance Adjuster

July 19, 2014 | Mark S. Humphreys

Arlington insurance attorneys want to know the proper way to state a claim against an insurance adjuster so as to keep a case in State Court rather than have an insurance company get the case removed to Federal Court. A recent case from the US District Court, Northern District, Dallas Division, shows how to be successful in this effort. The case is styled, Sara Esteban v. State Farm Lloyds and Aaron A. Galvan. Here is the relevant information from the case.

This case arises out of an insurer’s alleged failure to properly adjust and pay the full proceeds due on a claim made under an insurance policy. Esteban purchased an insurance policy fromState Farm to insure real property that she owned. A wind and hailstorm struck, causing significant damage to homes and businesses in the area. The Property suffered roof and water damage as a consequence of the storm, and Esteban submitted a claim to State Farm to cover the costs of repair. Galvan was assigned by State Farm to adjust Esteban’s claim. At all relevant times during the adjustment of Esteban’s claim, Galvan acted as an independent adjuster and was not an employee of State Farm. Esteban alleges that Galvan “improperly adjusted” her claim, and that his subsequent report “failed to include many of Esteban’s damages.” More specifically, Esteban charges that “his estimate did not allow adequate funds to cover repairs to restore her home” and that Galvan “misrepresented the cause of, scope of, and cost to repair the damage to Plaintiff’s Property, as well as the amount of and insurance coverage for Plaintiff’s claim/loss under Plaintiff’s insurance policy.” Esteban also insists that Galvan advised her as to how she could repair the Property in order to prevent further damage, but that this advice was negligent and false.

Esteban maintains that, as a consequence of Galvan’s misrepresentations, State Farm wrongfully denied portions of her claim and misrepresented the amount of damages, which in turn prevented her from properly repairing the Property and caused further damage. Specifically, while State Farm and Galvan represented that Esteban’s damages were only $1,932.72, Esteban insists that her damages exceed $33,000. Esteban asserts that State Farm has not performed its contractual duty under the Policy and that it has failed to settle her claims in a fair manner. She also insists that Defendants’ respective failures to properly adjust, inspect, or communicate with her regarding her claims, or to later fully compensate her, constitute violations of the Texas Insurance Code.

Burden Of Proof For Uninsured Coverage

July 17, 2014 | Mark S. Humphreys

Insurance lawyers as well as all other lawyers understand that reading the law is not enough. It has to be researched to find changes and facts that may exist. Read all the way to the end to understand this. But first here is a case to read. It is a 1970, Texas Supreme Court opinion styled, State Farm v. Matlock. Here is the relevant information.

The Matlocks suffered injuries in an accident with a car driven by a man identified in this record only as a man with one leg. They knew the name of this man, but did not testify about his name. Upon the theory that he was an uninsured motorist and without joining him as a defendant, the Matlocks filed a direct action against their own insurer, State Farm, and asserted its liability under its policy terms to cover the Matlocks for damages for bodily injury caused by an uninsured motorist. The Matlocks obtained a judgment in the courts below.

State Farm is before this court upon points which urge that the Matlocks failed to obtain a judgment against the uninsured motorist. It says that a judgment against the uninsured motorist is a condition precedent to the Matlocks’ action against State Farm. State Farm also has a point, which it insistently urges in its motion for rehearing, that the Matlocks failed to prove that the driver of the other vehicle was an uninsured motorist. The Court was convinced that State Farm is correct in the contention that the Matlocks failed to discharge their burden of proof in this latter proposition citing:

Burden Of Proof For Under Insured Coverage

July 15, 2014 | Mark S. Humphreys

Fort Worth insurance attorneys handling car wreck cases need to understand how underinsured insurance coverage works. There are many aspects of this understanding. One thing to know is that when a claim for underinsured benefits is made, the burden of proof is on the insurance company to prove the underinsured driver is actually underinsured. This is exemplified in a 1999, Austin Court of Appeals case styled, Wiley v. State Farm Mutual Automobile Insurance Company. Here is relevant portions of the opinion.

Kay Wiley was injured in an automobile collision caused by Satyn Kaura. Unable to recover her full damages from Kaura, Wiley sued Kaura’s insurer, Farmers, and her own insurer, State Farm in separate suits. She settled with Farmers. After a trial to the court based on stipulated facts, the court found State Farm was liable to Wiley by virtue of her underinsured motorist policy. This court affirmed the judgment.

The collision occurred in September 1993. Kaura’s insurance carrier, Farmers, initially did not compensate Wiley for her personal injuries. In October 1993, Wiley told State Farm she intended to file claims under her policies for personal injury protection (PIP) and underinsured motorist benefits.

Life Insurance And Beneficiaries

July 13, 2014 | Mark S. Humphreys

Dallas life insurance lawyers need to keep up with the law as it evolves throughout the United States. The Washington Examiner published an article on June 6, 2014, that is interesting reading. The title of the article is, First Circuit rules John Hancock Life Insurance doesn’t have to discover deaths, notify beneficiaries. Here is what the article tells us.

The U.S. Court of Appeals for the First Circuit has ruled that John Hancock Life Insurance Company did not breach its contract in a class action lawsuit in regard to how it handed unclaimed insurance policy proceeds.

The appeals court ruled that Richard Feingold’s class action lawsuit against John Hancock Life Insurance Company and John Hancock Life & Health Insurance Company was properly dismissed for failure to state a claim, according to the May 27 opinion.

Snowmobile Exclusion In Insurance Policy?

July 12, 2014 | Mark S. Humphreys

Fort Worth insurance attorneys will tell you that you have to read the policy to understand how coverage applies. A good example of this is from the Houston Court of Appeals [1st Dist.]. The style of the case is Oleksy v. Farmers Insurance Exchange. Here is some of the relevant information.

Oleksy went snowmobiling in New York with his friend Paul Pochron and several other people. Pochron was seriously injured when his snowmobile collided with Oleksy’s. Pochron and his wife later sued Oleksy in Fort Bend County. Pochron alleged that Oleksy was a resident of Texas and that the snowmobile accident occurred in New York. The petition did not clearly identify the owner of the snowmobile used by Oleksy.

Oleksy filed a declaratory judgment action against Farmers Insurance, his homeowner’s insurance carrier, seeking a declaration that Farmers has a duty to defend and to indemnify him in the lawsuit filed by Pochron. Although his homeowner’s policy includes an exclusion for personal injuries arising from the use of motor vehicles, Oleksy based his claim for coverage on an exception to that exclusion. The relevant policy provisions are:

Arbitration And Insurance

July 10, 2014 | Mark S. Humphreys

Grand Prairie insurance lawyers will see insurance policies that contain arbitration provisions. The United States 5th Circuit issued an opinion in 2014 that should be read. The style of the case is Why Nada Cruz, L.L.C. v. Ace American Insurance Company. Here is some of the relevant information.

On August 15, 2010, the vessel “Sweet Dreams” sunk. Appellants Greg Anderson and Why Nada Cruz, L.L.C., also known as Why Not Cruise (collectively “Anderson”), sought recovery for the loss under a yachtsman policy of insurance (“Policy”) issued by Appellee ACE American Insurance Company (“ACE”). The Policy included a provision requiring disputes to be settled by binding arbitration. The Policy further provided that the “request for arbitration must be filed within one (1) year of the date of loss or damage.”

ACE advised Anderson on September 20, 2010 that it had denied his claim. On July 7, 2011, Anderson’s counsel sent ACE a letter stating:

Claims Against Insurance Agents

July 8, 2014 | Mark S. Humphreys

Dallas insurance lawyers will occasionally have a claim against an agent. With that in mind, a Houston Court of Appeals [1st Dist.], opinion is worth reading. The opinion is styled Houston v. Escalante. Here is some of the relevant case information.

Escalante’s Comida Fina, Inc. sued its former insurance agent, Houstoun, Woodard, Eason, Gentle, Tomforde and Anderson, Inc., d/b/a Insurance Alliance for breach of contract and violations of the Deceptive Trade Practices Act and the Texas Insurance Code. The breach of contract claim was based on the failure to procure an insurance policy with coverages requested by Escalante’s, and the DTPA and Insurance Code claims were for misrepresentations and non-disclosure of information about the policy and the coverage afforded thereunder. The jury returned a verdict in favor of Escalante’s, and the trial court signed a final judgment awarding $56,835 in actual damages, $75,780 in additional damages for Insurance Alliance’s “knowing” violation of the DTPA and the Insurance Code, attorney’s fees, costs, and pre- and post-judgment interest.

Between 2003 and 2008, Escalante’s owned and operated four restaurants in the Houston area. Between 2003 and 2006, the property and casualty insurance policy on the restaurants was with Ohio Casualty Group. The Ohio Casualty Policy provided, subject to certain exceptions, coverage against the loss of business income caused by an off-premises power or utilities outage. In 2005, Hurricane Rita struck Houston. Escalante’s subsequently made a claim against the policy and Ohio Casualty paid the claim.