Dallas Fort Worth Insurance Lawyer Blog

Property And Casualty Insurance Bills

January 25, 2014 | Mark S. Humphreys

Burleson insurance attorneys and all insurance attorneys need to keep up with the law related to insurance. The Insurance Journal printed a story that should be read to keep up to date in the insurance field of law.

The article tell us the Texas Department of Insurance has posted information and brief summaries of selected bills enacted during the 83rd Legislative regular session that relate to property/casualty insurance.

The bills listed may require action by regulated individuals and entities. The department advised affected entities to refer to the actual bills for the complete content of the legislation.

Read The Policy

January 23, 2014 | Mark S. Humphreys

Saginaw insurance attorneys and their clients need to read and understand the insurance policies they are presented with by the insurance company. The United States 5th Circuit issued an opinion in November 2013, that illustrates why. The style of the case is Willoughby v. Metropolitan Lloyds. Here is the relevant information.

This appeal involves the timeliness of a homeowner’s lawsuit against her insurer. The district court determined the lawsuit was untimely and granted summary judgment. This appeals court affirmed.

Willoughby contracted with Metropolitan Lloyds for a homeowner’s insurance policy. The policy included a shortened limitations period, stating that “[a]ction brought against [Metropolitan] must be started within two years and one day after the cause of action accrues.” In November 2007, Willoughby reported to Metropolitan that a fire had damaged her home in Blooming Grove, Texas. Metropolitan subsequently investigated Willoughby’s insurance claim and examined her under oath regarding the circumstances of the fire. During the course of this examination, Willoughby provided her mailing address and stated that her and her husband’s attorney was Paul Lewallen. Nine months later, in a letter dated September 25, 2008, Metropolitan denied Willoughby’s claim, explaining that it believed “the fire was set by or at the direction of one or more of the named insureds.” The letter further explained that Willoughby had not complied with her insurance policy’s reporting obligations, one of which required her to provide a signed “proof of loss” statement. Metropolitan sent this letter to the mailing address provided by Willoughby. Willoughby denies ever receiving it.

The Other Person’s Insurance And Bad Faith

January 21, 2014 | Mark S. Humphreys

Texas insurance attorneys already know that bad faith claims in Texas only apply to 1st party claims, not 3rd party claims.

The 1994, Texas Supreme Court case styled, Allstate Insurance Company v. Watson, explains how Bad Faith claims apply to 1st party claims. Here is the relevant information from that case.

Kathleen Watson was injured in a car accident. The driver of the other car was M.D. Townley, an insured under an automobile liability policy issued by Allstate Insurance Company. Watson filed suit against Townley alleging that Townley was negligent and that his negligence was a proximate cause of the accident and her injuries. In the same action, Watson also sued Allstate under art. 21.21, section 16, for alleged unfair claim settlement practices in failing to attempt in good faith to effectuate prompt settlement of her claims where liability had become reasonably clear and in denying or unreasonably delaying payment of her claim. Watson alleged that Allstate’s conduct violated 28 Tex.Admin.Code § 21.3 and section 17.46 of the Texas Deceptive Trade Practices–Consumer Protection Act (DTPA). In addition to her claim under art. 21.21, Watson alleged violations of the DTPA, breach of contract, breach of the duty of good faith and fair dealing, and sought a declaratory judgment that Watson was an intended third party beneficiary of the Allstate liability policy.

Misrepresentations In Life Insurance Policy

January 19, 2014 | Mark S. Humphreys

Weatherford lawyers who handle life insurance disputes need to know the law relating to when an insurance company can void a policy after it has learned of a misrepresentation. The particular statute can be found in Texas Insurance Code, Section 705.005.

A 1969 case from the San Antonio Court of Appeals helps to show how this statute works. The style of the case is, Prudential Insurance v. Torres.

The facts are substantially undisputed. Prior to January 5, 1967, Torres was an employee of Gonzaba Lumber Company, which was owned by Luis Gonzaba, brother of Mrs. Bertha Torres. For some time, Luis Gonzaba and some of his six employees had considered securing a group insurance policy to provide hospitalization and medical benefits.

What If You Make A Misrepresentation?

January 18, 2014 | Mark S. Humphreys

An experienced insurance law attorney will tell that insurance misrepresentations made by the insured do not always mean “no coverage.”

A 1956, Texas Supreme Court case is a good illustration of the above. The style of the case is, Womack v. Allstate. Here is the relevant information.

This is a summary judgment case. On January 4, 1952, Allstate issued a policy of public liability automobile insurance to Mrs. L. N. Coffee, the wife of William T. Coffee. Malcolm Womack and others, recovered judgment in the 99th District Court of Lubbock County against William T. Coffee for the damages which they sustained on July 20, 1952, when the automobiles in which they were riding collided with a vehicle operated by the latter. Womack instituted this suit to recover the amount of the judgment from Allstate, alleging that at the time of the accident William T. Coffee was driving, with the consent of the insured, the automobile covered by Allstate’s policy. The trial court entered summary judgment for Allstate, and the Court of Civil Appeals affirmed. This court reversed the summary judgment.

Prompt Payment Of Claims Law

January 16, 2014 | Mark S. Humphreys

Tarrant County insurance attorneys should be familiar with the Texas Prompt Payment of Claims Act. Here is a little information taken from a State Bar of Texas publication that attorneys and their clients should know. The article was discussing the legality of ordering an insurance company to pay restitution for it’s failure to promptly pay claims.

In 1999, the Texas State Legislature enacted House Bill 610, commonly known as the Prompt Pay Act. It’s general purpose was to require payors under the act, such as insurance companies including health insurance companies, to pay or deny the bills of medical providers within forty-five days after receipt of a bill, provided the claim was “clean,” as defined by the Act. If an insurance company violated this Act, they were subject to the various penalties provided for in the legislation itself. In addition, certain violations might subject an insurance company to administrative penalties under former article 1.10E of the Insurance Code, which is currently Texas Insurance Code, Section 843.342(k). However, these penalties are not the exclusive penalties for violating the Prompt Pay Act. The Act contains a “dragnet” provision clearly reading, “in addition to any other penalty or remedy authorized by this code or another insurance law of this state.”

The language in the dragnet provision indicates the Texas Insurance Commissioner can resort to the power of restitution for violations of the Prompt Pay Act, since restitution is an “other remedy” authorized by the Insurance Code in Section 82.053. Senate Bill 403 allowed the Insurance Commissioner to order restitution to “each entity operating in the state that is harmed by a violation of, or failure to comply with, this code or a rule of the commissioner. Since a medical provider would be an “entity operating in this state,” the Insurance Commissioner could order an HMO, for example, to pay “restitution” to any medical provider that was harmed by a violation of the Act.

Insurance Agent Getting Wrong Policy

January 14, 2014 | Mark S. Humphreys

Parker County insurance lawyers need to understand the responsibility that insurance agents have regarding getting coverage for one of their customers. A 1992, Texas Supreme Court case is good reading for understanding their responsibility. The style of the case is, May v. United Services Association of America. Here is some of the relevant information.

This case involves the scope of an insurance agent’s common-law duty to a customer in rendering advice about and procuring a policy for health insurance. May asserted only common-law causes of action, making no claim under the Texas Deceptive Trade Practices-Consumer Protection Act, or any other statute. While the jury found favorably for the Mays on a claim of the agent’s negligence, it failed to find for the Mays as to misrepresentation. On this verdict, the trial court rendered judgment for the Mays, but the court of appeals reversed. This court affirmed the judgment of the court of appeals because there was no evidence in the record before them that the agent breached the duty to use reasonable care, skill and diligence in procuring insurance in any way that proximately caused harm to the Mays.

On March 16, 1983, Faith May visited with insurance agent Wiley about the policy at issue. Wiley explained the basic provisions of the policy to her.

Agent Misrepresentations

January 12, 2014 | Mark S. Humphreys

Dallas insurance lawyers need to understand when an agent can be held liable for mis-representations regarding an insurance policy. A 1998, San Antonio Court of Appeals case is a good read for understanding when this can be done. The style of the case is, Moore v. Whitney-Vaky Insurance Agency. Here is some relevant information.

Moore contends the trial court erred in granting summary judgment because Whitney-Vaky owed him a common law and statutory duty to disclose any limitation in his insurance coverage.

Moore repossessed an apartment complex known as Oakhills Village. After he reacquired the complex, McLain, an agent for Whitney-Vaky, asked whether he could handle the insurance for the complex. Moore did not recall specifically discussing any types of coverage with McLain; however, Moore had been responsible for obtaining insurance for businesses in the past and expected to receive fire, extended coverage, liability and workmen’s compensation coverage. When he received the policy from McLain, Moore did not discuss the contents of the policy with him; however, Moore thought when he bought liability insurance that he was being covered for any liability that may occur. Moore admitted that McLain never told him that the liability policy would cover all lawsuits against him.

Prompt Payment Of Claims And Attorney Fees

January 11, 2014 | Mark S. Humphreys

Fort Worth insurance attorneys need to have an understanding of how the Texas Prompt Payment of Claims Act works. Here is a case that explains how it works in relation to attorney fees. It is a 2013, United States 5th Circuit Court of Appeals case styled, The City of College Station, Texas v. Star Insurance Company. Here is some of the relevant information.

Star Insurance Company (“SIC”) refused to defend or indemnify its insured, the City of College Station (“the City”), in a lawsuit brought by Weingarten Realty Investors (“WRI”), a real-estate investment trust not party to this appeal. The City settled the underlying litigation with WRI and sued SIC to recover defense costs, indemnification, and statutory penalty interest. Applying Texas law, the district court concluded that SIC had no duty to defend or indemnify the City in the litigation with WRI and, consequently, no penalty liability for late payment. This appeals court reversed the trial court and remanded for further proceedings consistent with their ruling.

The actual facts of the case are not important. What is important is that the court ruled in favor of the insurance company and that on appeal this appeals court ruled that not only should the insurance company paid for a defense in the case, but their failure to do so results in the insurance company having to pay for violations of the Prompt Payment of Claims Act on those attorney fees.

Pain & Suffering

January 9, 2014 | Mark S. Humphreys

Attorneys who handle injury cases need to know this case. It is a 2013, case from the Corpus Christi Court of Appeals. It is styled, Schaffer v. Nationwide. Here is the relevant information.

In February 2006, Schaffer, who was driving north-bound on United States Highway 77 and was beginning to merge onto Interstate Highway 37 in northwest Corpus Christi, Texas, collided with a truck driven by Brady Lovins. Schaffer alleges that she suffered injuries to her lower back as a result of the accident. To treat her injuries, Schaffer underwent: physical therapy, first in April to June 2006 and, again, from September 2007 to January 2008; a series of lumbar steroid and other injections in the summer and fall of 2006 and throughout 2007; and, finally, lumbar fusion spinal surgery in February 2008. Schaffer alleges that she continued to suffer severe pain even after her surgery.

In connection with the accident, Schaffer sued Lovins for negligence. Schaffer also sued Lovins’s employer, Tracey Barrett d/b/a Barrett Pools, for vicarious liability because Barrett owned the truck Lovins was driving. Finally, Schaffer sued Nationwide for underinsured motorist benefits owing under her auto and umbrella policies with the company.