Dallas Fort Worth Insurance Lawyer Blog

Insurance – Waiver And Estoppel

March 9, 2014 | Mark S. Humphreys

Insurance attorneys need to know legal issues that will help their clients.

Two common defenses relied upon to prevent an insurance company from avoiding coverage when a judgment has been entered against their insured are “estoppel” and “waiver.” While both theories have been applied by courts to avoid forfeiture of a policy, they normally cannot be applied to change, re-write, or enlarge the risks covered by a policy. This was told us by the Texas Supreme Court in the 2008, case styled, Ulico Casualty Co. v. Allied Pilots Association, and other cases. Stated in a different way, neither waiver nor estoppel can be invoked to bring a non-covered loss within coverage of a policy so as to supply coverage where none exists.

To distinguish between estoppel and waiver, it has been explained that “Waiver presupposes full knowledge of existing rights, while estoppel arises where, by fault of one, another had been induced to change his position for the worse.” This was discussed in another Texas Supreme Court case. It was Massachusetts Bonding and Insurance Co. v. Orkin Extermination Co., Inc., decided in 1967.

Liability Insurance Exclusions

March 8, 2014 | Mark S. Humphreys

Attorneys handling insurance law will want to keep up with how the courts are interpreting insurance exclusions. The Austin American Statesman ran an article in January 2014 that is interesting reading. Here is what it tells us.

The Texas Supreme Court issued a key ruling Friday that should boost consumer confidence in the liability insurance coverage that builders and general contractors carry.

Writing for the court, Justice Phil Johnson denied an insurance company’s attempt to avoid paying a claim based on language found in most commercial general liability insurance policies. The court’s decision was one of the most anticipated insurance cases in the country because Texas decisions often influence other courts across the nation, said Randy Maniloff, an insurance law expert at the White and Williams law firm in Philadelphia.

Loss Of Use Claims

March 6, 2014 | Mark S. Humphreys

Dallas insurance lawyers need to know this recent court decision regarding “loss of use” damages. It is a Fort Worth Court of Appeals decision issued in January 2014. The style of the case is, Morrison V. Campbell. Here is some of the relevant information.

In this agreed interlocutory appeal, Morrison appealed from the trial court’s denial of his motion for summary judgment on the claim for loss of use damages brought against him by Campbell. Morrison’s vehicle struck Campbell’s motorcycle in an accident, and the motorcycle was damaged. Morrison argued that loss of use damages are not available to Campbell because his motorcycle was declared a total loss. Because this court held that damages for loss of use are available in total loss cases when the insurer unreasonably delays payment of a claim, it affirmed the trial court’s denial of the motion for summary judgment.

The accident that gave rise to this suit occurred on October 23, 2009. On June 22, 2010, Morrison’s insurance carrier (Insurer) sent a letter to Campbell’s attorney denying Campbell’s claim based on its determination that Campbell was at fault for the accident because of “faulty evasive action & following too closely.”

Co-Operating With Your Insurance Company

March 4, 2014 | Mark S. Humphreys

Insurance attorneys will tell a client that they have a responsibility, under their insurance policy, to co-operate with their insurance company. If they refuse to co-operate they may lose coverage. A 2006, San Antonio Court of Appeals case illustrates this. The style of the case is, Progressive v. Trevino. Here is some info on that case.

This appeal concerns a personal injury lawsuit brought in by Hector Raul Trevino and Mario Moyeda against Alejandro Alvarado, a driver covered by automobile insurance issued by Progressive. In this lawsuit, Trevino and Moyeda obtained a post-answer default judgment against Alvarado. Although Alvarado had timely notified Progressive that he had been served with a negligence suit brought by Trevino and Moyeda, according to Progressive, he later refused to cooperate with his defense. Because Alvarado refused to cooperate, on October 16, 2003, the lawyers hired by Progressive to represent Alvarado withdrew from their representation of Alvarado. However, before withdrawing, the lawyers filed a motion to continue the trial set for October 20, 2003. On October 20th, the district court called the case, and Trevino and Moyeda announced ready. Alvarado, however, did not appear for trial. The district court proceeded to hear evidence and argument from Trevino and Moyeda. It later entered a judgment awarding $45,000 to Trevino and $25,000 to Moyeda.

After obtaining the default judgment against Alvarado, Trevino and Moyeda filed this action against Progressive, arguing that by virtue of the judgment against Alvarado, they had become judgment creditors of Alvarado and thus, had standing to bring a claim directly against Progressive as third-party beneficiaries of the insurance policy. In their petition, Trevino and Moyeda pled that all conditions precedent to bringing the suit had been satisfied. Progressive, however, in its answer, denied that all conditions precedent had been satisfied: “Alejandro Alvarado and Plaintiffs, as judgment creditors, have failed to comply with the cooperation clause contained in the policy of insurance.”

Insurance Company Choosing Liability Attorney

March 2, 2014 | Mark S. Humphreys

Choosing an insurance attorney is usually the choice of the person being sued. However, if a person is being sued under an insurance policy, it is the insurance company who gets to choose the attorney. A 2004, Texas Supreme Court case illustrates this. The case is styled, Northern County Mutual Insurance Co v. Davalos. Here are some of the relevant facts of the case.

The automobile liability policy in this case obligated the insurer to provide a defense for covered claims and granted the insurer the right to conduct that defense. The insured, however, refused the insurer’s tendered defense because of a disagreement about where the case should be defended.

Davalos, a resident of Matagorda County, was injured in an automobile accident in Dallas County. Davalos sued the driver of the other car in Matagorda County. The other driver and his wife then sued Davalos and a third driver involved in the accident, but in a separate action in Dallas County. Although Davalos was insured by Northern, he turned the Dallas litigation over to the attorneys representing him as a plaintiff in Matagorda County. These attorneys answered the Dallas suit and moved to transfer venue to Matagorda County. The attorneys then notified Northern of the Dallas litigation.

Texas Windstorm Claims

March 1, 2014 | Mark S. Humphreys

Attorneys working in the area of insurance law need to keep up with events happening in the insurance field. The Insurance Journal ran an article recently that may be of interest to some. Here is what it tells us.

The Texas Windstorm Insurance Association (TWIA) announced it has released to a litigator what it calls “potentially offensive” emails as part of discovery in a lawsuit against the insurer brought on behalf of the Brownsville Independent School District.

The lawsuit was filed by a Houston-based attorney over claims from Hurricane Dolly, which made landfall in South Texas in 2008. The attorney has alleged that TWIA employees had used racist language in emails to disparage Hispanics, Arabs and African-American.

Sending Copies Of Lawsuit Papers To Insurance Company

February 27, 2014 | Mark S. Humphreys

Dallas insurance attorneys will advise a client to immediately turn over to the insurance company any lawsuit papers they receive. A 1978, Texas Supreme Court case illustrates why this should be done. The style of the case is, Weaver v. Hartford Accident and Indemnity Company. Here is some of the relevant information.

This is a suit by a judgment creditor against an insurer to recover under an automobile liability policy on the basis of a judgment secured against an omnibus insured. It is stipulated that the alleged omnibus insured failed to comply with the provision of the policy requiring him to forward to the insurer “every demand, notice, summons, or other process” he received. At issue is whether compliance with this policy provision by the named insured, in forwarding the citation which was served on him, should also be held to operate as compliance by the omnibus insured.

Thomas Enterprises is the named insured on a comprehensive automobile liability insurance policy issued by Hartford. The policy defines an “insured” under the policy to be the named insured and any other person using the vehicle with the permission of the named insured. Clyde Busch was an employee of Thomas Enterprises. While driving one of Thomas’ trucks in September 1969, Busch was involved in an accident with Weaver. Notice of the accident was given to Hartford who made an investigation.

Timely Notice Of Insurance Claim

February 25, 2014 | Mark S. Humphreys

Dallas insurance lawyers know to tell their clients to give timely notice of a claim to the insurance company. A 2006, Dallas Court of Appeals case discusses this issue. The style of the case is, Blanton v. Vesta Lloyds Insurance Company. Here is the relevant information.

This is a suit for declaratory judgment concerning insurance coverage. Don Blanton appeals the granting of Vesta Lloyds Insurance Company’s second motion for summary judgment, and Vesta appeals the denial of its initial motion for summary judgment. Because Vesta conclusively established that Blanton breached the “timely notice of occurrence” provision of the policy and that Vesta was prejudiced as a result this court ruled against Blanton.

In June 1997, Blanton leased certain property to Justin Burgess to operate a retail store of “one-of-a-kind restored art-deco furniture and related items.” On August 27, 1998, Vesta wrote a commercial general liability coverage policy for the property; the policy ran for a term of one year.

Adjuster Actions That Make Them Liable

February 23, 2014 | Mark S. Humphreys

Insurance attorneys in Grand Prairie know that making the adjuster part of a lawsuit increase the chances that the case will not removed to Federal Court. The United States District Court, McAllen Division issued and opinion in January 2014, wherein the Court remanded a case the insurance company had removed to Federal Court. The style of the case is Rocha v. Geovera Specialty Insurance Company, et al.

Rochas had filed in State Court making specific allegations against the adjuster, Alex Sanchez. Rochas file a motion to remand the case to State Court.

Federal Courts do not have subject matter jurisdiction under 28 U.S.C. § 1332 unless the parties are completely diverse and the amount in controversy exceeds $75,000. In light of the conjunctive requirements of the statute, failure to satisfy the diversity requirement is fatal to subject matter jurisdiction and, therefore, to a successful removal.

Claims Against Adjusters

February 22, 2014 | Mark S. Humphreys

Dallas County insurance attorneys know to make an adjuster part of a lawsuit whenever it is possible to do so. One reason is to make sure the case is fought in Federal Court rather than State Court.

The United States District Court, McAllen Division, issued an opinion recently in the case styled Garza v. Geovera Specialty Insurance Company. Here, Geovera had the case removed to Federal Court. Garza was successful in getting the case remanded to State Court by pointing to specific violations of the Texas Insurance Code committed by the adjuster who is named Kenneth Allen DeMaster.

In the petition filed by Garza, Garza pointed to these actions on the part of DeMaster asserting DeMaster conducted a substandard inspection of Garzas’ property. For example, DeMaster spent a mere forty-five minutes inspecting Garzas’ entire property for hail storm and/or windstorm damages. Furthermore, DeMaster told Garza that, because he believed their damages were low, they would not have insurance coverage if they continued with their claim. DeMaster was neither qualified nor authorized to make coverage determinations. The inadequacy of DeMaster’s inspection is further evidenced by his report, which failed to include all of Garzas’ hail storm and/or windstorm damages noted upon inspection. Moreover, the damages that DeMaster actually included in his report were grossly undervalued. DeMaster also improperly withheld material sales tax and a contractors’ overhead and profit from his estimate, in total contravention of applicable Texas Department of Insurance directives. Ultimately, DeMaster’s estimate did not allow adequate funds to cover the cost of repairs to all the damages sustained. DeMaster’s inadequate investigation was relied upon by GeoVera in this action and resulted in Garzas’ claim being undervalued and underpaid.