Dallas Fort Worth Insurance Lawyer Blog

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.

BP Claims

July 6, 2014 | Mark S. Humphreys

Dallas and Fort Worth insurance lawyers need to keep up with events happening in the world of insurance claims. The Southeast Texas Record published an article of general interest recently. The title of the article is. “BP Files Emergency Appeal To U.S. Supreme Court To Intervene In Suspension Of Claims Payouts.” Here is what the article tells us.

BP has asked the U.S. Supreme Court to intervene after the U.S. Fifth Circuit Court Appeals disallowed maintaining a temporary stay in claims payouts following allegations of fraud within the 2010 Deepwater Horizon oil spill claims process.

BP has already paid out an estimated $3.7 billion to more than 38,000 claimants. The company successfully received a stay on the claims process in December following several revelations that businesses who were not actually harmed by the oil spill were receiving claims.

Partial Payment And Prompt Pay Insurance Law

July 5, 2014 | Mark S. Humphreys

Aledo insurance lawyers need to know how partial payment of an insurance claim works in a claim for violating the Prompt Payment of Claims Act. A 2004, Texas Supreme Court case styled, Republic Underwriters Insurance Company v. Mex-Tex, Inc. helps an insurance law attorney to understand. Here is the relevant information.

Facts: The roof atop a shopping mall was damaged by a hail storm. Before Republic agreed to pay for the replacement, Mex-Tex, owner of the mall, retained a roofer on a priority basis to replace the roof in order to avoid further injury to the tenants from future rains at a total cost of $179,000. Republic estimated the cost of replacing the roof with an identical make to be $145,460 and tendered that amount. The new roof was substantially similar in kind and quality to the old one, but the additional cost was due to the method of the roof’s attachment to the building and the high priority of the job. Republic refused to pay the balance of the claim and Tex-Mex sued. Tex- Mex sought to recover the balance of the amount owed plus a statutory 18% penalty on the entire claim. Republic argued that the penalty, if any, should be assessed only on the disputed amount, rather than on the entire claim. The trial court entered the judgment in favor of Tex-Mex and Republic appealed. The Amarillo Court of Appeals affirmed, holding that the policy did not require the replacement roof to be identical and that Republic’s tender of the amount it believed was owed on a claim did not stop the accrual of Texas Insurance Code, Prompt Payment of Claims Act penalties, or prejudgment interest, on what was later judicially determined to be the full amount of the claim. The Texas Supreme Court granted review.

The Texas Supreme Court reversed and remanded, agreeing that replacement of a damaged roof with one of “like kind and quality” fell within the policy but rejecting the lower court’s holding that the Prompt Payment of Claims Act calls for an 18% penalty of the amount of the claim, not just the amount outstanding after partial tender.

Surface Water Exclusion In Homeowners Insurance

July 3, 2014 | Mark S. Humphreys

Parker County insurance attorneys need to know the exclusions in homeowners policies and how courts interpret those exclusions. A 2007, Dallas Court of Appeals case is one worth reading. It is styled, Crocker v. American National General Insurance Co. Here is some of the relevant information.
The insureds had a homeowner’s insurance policy issued by American. The policy included a standard “surface water” exclusion. Because of improper design, the insureds’ raised patio collected water, which ran into the insured’s home. Armstrong, who represented an independent adjusting firm, was retained by one of the insurance companies to investigate the claim. After Armstrong’s report, coverage for the claim was denied under the “surface water” exclusion. The insureds’ brought suit against the insurance companies for breach of contract and for breach of common law and statutory duties of good faith, arguing that the “surface water” exclusion did not apply because the water was on the patio and never actually touched the surface of the ground. The insured’s also filed suit against Armstrong alleging negligence per se for violations of Texas Penal Code sections 22.02, 28.03, and 28.04; violations of Texas Insurance Code, Section 542.060; and for violations of the DTPA. Both carriers and Armstrong moved for summary judgment. The trial court granted summary judgment for all of the defendants, holding that the water which had fallen on the raised patio constituted “surface water” as a matter of law. Neither American nor Armstrong has addressed the “surface water” exclusion in their motion for summary judgment. The insureds’ appealed.
The Court of Appeals affirmed the trial court, holding that the plain meaning of the words “surface water” could reasonably include water that had collected on the surface of the insured’s patio, and thus, the “surface water” exclusion applied to the insureds’ claim. The court found that “surface water” is defined as water or natural precipitation diffused over the surface of the “ground” until it evaporates, is absorbed by the land, or reaches channels where water naturally flows. The court then found that to limit the term “ground” to dirt would exclude all man-made surfaces and, therefore, render the exclusion virtually meaningless in the multitude of man-made environments. The court also found that since the carriers’ had a valid exclusion they could not be liable for any bad faith claims. The court further found that the summary judgment was valid for both American and Armstrong, under the “surface water” exclusions even though they had not affirmatively pled the exclusion. The court further held that Armstrong as an independent adjuster, owed no duty to the insureds’ and, therefore, could not be liable for bad faith claims; and the insureds’ had not properly briefed the Penal Code claims against Armstrong.