Dallas Fort Worth Insurance Lawyer Blog

Segregating Damages Case – 5th Circuit

November 21, 2022 | Mark S. Humphreys

Insurance lawyers in the Dallas and Fort Worth need to read this 2022, United States 5th Circuit opinion. It is styled, Advanced Indicator And Manufacturing, Incorporated v. Acadia Insurance Company; Nicolas Warren.

Advanced asserts it suffered damage to the roof of its building as the result of the storm, Hurricane Harvey. Advanced submitted a claim to Acadia and Acadia assigned Warren to adjust the claim. Warren inspected the building and determined that the damage was pre-existing and leaks resulted from deterioration and poor workmanship. Based on Warren’s report, Acadia denied the claim.

On August 7, 2018, Advanced sued Acadia and Warren in state court, alleging various claims, including breach of contract, common law bad faith, and violations of the Texas Prompt Payment of Claims Act.

Dallas Fort Worth Insurance Lawyers – 5th Circuit Opinion

November 19, 2022 | Mark S. Humphreys

Insurance lawyers in the Dallas and Fort Worth, plus other parts of the state, need to read this 2022, United States 5th Circuit opinion. It is styled, Advanced Indicator And Manufacturing, Incorporated v. Acadia Insurance Company; Nicolas Warren.

Advanced asserts it suffered damage to the roof of its building as the result of the storm, Hurricane Harvey. Advanced submitted a claim to Acadia and Acadia assigned Warren to adjust the claim. Warren inspected the building and determined that the damage was pre-existing and leaks resulted from deterioration and poor workmanship. Based on Warren’s report, Acadia denied the claim.

On August 7, 2018, Advanced sued Acadia and Warren in state court, alleging various claims, including breach of contract, common law bad faith, and violations of the Texas Prompt Payment of Claims Act. On August 30, 2018, Acadia elected to accept responsibility for Warren under Section 542A.006 of the Texas Insurance Code, which provides that an insurer may accept liability for its agents. The next day, Acadia removed the case to federal court. One week later, Warren filed a motion to dismiss, arguing in part that Advanced could no longer state a claim against him. Advanced filed a motion to remand the case to state court, arguing that Warren was not improperly joined notwithstanding Acadia’s Section 542A.006 election. The remand was denied without reason by the District Court except to say that Warren was improperly joined.

Hail Damage Claims And Insurance Code Section 542A

November 14, 2022 | Mark S. Humphreys

Here is a 2022, opinion from the Northern District of Texas, Lubbock Division, that deals with recovery of attorney fees under Section 542A of the Texas Insurance Code. The opinion is styled, Mario Rodriguez v. Safeco Insurance Company of Indiana.

This is a decision based on Safeco’s motion for summary judgment.

At issue is whether payment of an appraisal award, plus payment of estimated interest due under the Prompt Payment Act, entitle an insurer to summary judgment on an insured’s claim
under the Prompt Payment Act. If so, then the insurer is absolved from paying attorney’s fees
that otherwise would be due under the Prompt Payment Act. No issue of material fact is present to prevent the entry of summary judgment. As the Parties have recognized, this is purely a matter of law. After careful review of the arguments and authority cited by the Parties, the Court finds that Defendant’s position is meritorious. Although the issue presents policy factors that weigh in favor of each possible outcome, the Court finds that pursuant to 542A.007(a), the legislature’s intent appears clear when enacting Chapter 542A of the Texas Insurance Code to limit attorney’s fees. It must be presumed that the legislature was aware of the conflict Chapter 542A would have with the Prompt Payment Act and chose to limit attorney’s fees anyway. It is logical that attorney’s fees are not recoverable when the computation of fees as set forth in Chapter 542A.007(a) lead to zero because the apparent purpose is to curb abusive hailstorm claims.

Bad Faith Insurance Lawyers And Insurance Company Removal To Federal Court

November 12, 2022 | Mark S. Humphreys

As has been discussed at this site many times, insurance companies prefer to litigate insurance claims in the Federal Court system rather than the State or County courts. However, they have standards they must meet to be able to get a case to Federal Court. This is discussed in a 2022 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Robert Stricklin v. State Farm Lloyds And Angel Hernandez.

This case concerns a dispute over residential property insurance coverage between Stricklin and State Farm. Plaintiff claims to have suffered damage to his home as the result of a hail and windstorm. State Farm assigned Hernandez to adjust the claim. A dispute arose over the extent of covered damage to the property. Stricklin filed suit in State Court for various violations of law in the Texas Insurance Code and for breach of contract. State Farm removed the case to Federal Court arguing Hernandez was improperly joined in the lawsuit.

Federal courts are courts of limited jurisdiction. Thus, courts must presume that a suit lies outside this limited jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the federal forum. And if the record does not contain sufficient evidence to show that subject matter jurisdiction exists, a federal court does not have jurisdiction over the case. A defendant may remove a case from state to federal court based on diversity jurisdiction pursuant to 28 U.S.C., Sections 1332(a) and 1441(a). The party seeking to assert federal jurisdiction has the burden of proving the facts establishing subject-matter jurisdiction by a preponderance of the evidence. Thus, when a suit is removed based on diversity jurisdiction, the removing party must establish by a preponderance of the evidence that: (1) the amount in controversy exceeds $75,000; and (2) all person on one side of the controversy are citizens of different states than all persons on the other side of the controversy.

Hail Claims – Separating Covered And Non-Covered Damages

November 7, 2022 | Mark S. Humphreys

Hail damage claims have few unique aspects to themselves. One of those unique aspects is that an insurance company claims the damage to a roof is the result of something other than the recent hail storm a homeowner is claiming, then the homeowner has to properly present the claim to be able to make a recovery. The most common reason an insurance company denies the claim is that their position that the damage to the roof is the result of wear and tear.

Here is a 2022 opinion from the Northern District of Texas, Dallas Division, that deals with this issue. The opinion is styled, John Garcia v. State Farm Lloyds.

Garcia had a homeowners policy with State Farm. After a hail storm Garcia made a claim for hail damage to his roof. State Farm sent out an adjuster who asserted the damage was mainly due to wear and tear and that the damage from the hail was minimal to the extent that it did not meet Garcia’s deductible. Garcia hired an expert that said the damage was in excess of $70,000 and was solely the result of the hail.

Life Insurance Attorney – Who Gets The Money?

November 5, 2022 | Mark S. Humphreys

Life Insurance lawyers will run into situations where a life insurance company knows they owe the life insurance proceeds but they are unsure who is entitled to the money. There are many ways this can arise such as a beneficiary isn’t named or the person named as a beneficiary has died, or many other ways. The bottom line is, what is the insurance company supposed to do when they are unsure who is entitled to the life insurance monies.

This issue was addressed by the Texas Supreme Court in a 1967 opinion styled, McFarland v. Franklin Life Insurance Company.

In 1950 respondent issued a policy of insurance on the life of John V. McFarland, who was about nine years of age at the time. The policy was taken out by his parents, Bernard and Gwendolyn McFarland, the latter of whom is petitioner here. Bernard was named in the policy as primary beneficiary, and petitioner was designated as contingent beneficiary. John married in 1962 and died the following year. His father predeceased him; he was survived by his widow and petitioner. Petitioner brought this suit against respondent to recover the amount due on the policy plus the statutory penalty and attorney’s fees. Respondent interpleaded Mrs. John V. McFarland, admitted liability for the proceeds of the policy, and paid the funds into court. The trial court, sitting without a jury, awarded petitioner the money so deposited but allowed no penalty or attorney’s fee, and the Court of Appeals affirmed. The only question is whether petitioner is entitled to recover such penalty, attorney’s fee and court costs.

Life Insurance Claims Attorney – Name Change?

October 31, 2022 | Mark S. Humphreys

Here is an interesting life insurance case that takes us down a different path as it relates to what happened. This is a Memorandum Order issued by a Magistrate Judge in the Northern District of Texas, Dallas Division. The case is styled, Delaware Life Insurance Company of New York v. Retirement Value, LLC.

This Order results from a Federal Rule of Civil Procedure, 56, summary judgment motion in the context of a declaratory judgment action.

Here, Retirement Value moves for summary judgment on its counterclaim for declaratory relief. That is, Retirement Value seeks a judgment declaring each of the following facts necessary to require Delaware Life Insurance Company of New York (Delaware Life) to pay Retirement Value the stated death benefits on two policies issued by Sun Life Insurance and Annuity Company of New York insuring the life of Lilly Segal (the “Segal Policies”):

Bad Faith Insurance – A Court’s Discussion

October 29, 2022 | Mark S. Humphreys

Bad Faith Insurance was a topic of discussion in this 2022, opinion from the Eastern District of Texas, Sherman Division. The opinion is styled, Michael Utley v. State Farm Lloyds.

Utley submitted a claim to his insurer, State Farm, for alleged hailstorm damage. State Farm adjusted the claim asserting the damage did not exceed the deductible of $2,577.00. Utley’s hired a public adjuster who asserted a damage estimate of $116,884.52.

Utley filed a lawsuit and asserted bad faith causes of action related to various violations of the Texas Insurance Code.

Bad Faith Insurance Lawyer – Latest Case

October 24, 2022 | Mark S. Humphreys

Exactly what is “bad faith” in the context of insurance claims? This issue is addressed in a 2022 opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Robert Casey v. State Farm Lloyd’s.

Casey sued State Farm over his dissatisfaction of his claim against his homeowners insurance policy issued by State Farm. The lawsuit alleged various violations including, breach of the duty of good faith and fair dealing. The facts can be gleamed from reading the case. A motion for summary judgement case filed by State Farm. The Court granted State Farm’s motion.

Under Texas law, an insurer has a duty to deal fairly and in good faith with its insured in the processing and payment of claims. A breach of the duty of good faith and fair dealing is established when: (1) there is an absence of a reasonable basis for denying or delaying payment of benefits under the policy and (2) the carrier knew or should have known that there was not a reasonable basis for denying the claim or delaying payment of the claim.

Insurance Claims & Experts

October 22, 2022 | Mark S. Humphreys

Insurance claim denial cases will sometimes need an expert. When this happens, an insurance lawyer needs to know what is required of an expert and how the courts look at experts. This issue is discussed in a 2022 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Laura Atkinson v. Meridian Security Insurance Company.

This case is an insurance dispute regarding a homeowners insurance policy. The policy holder, Plaintiff Atkinson, is alleged to have suffered hailstorm damage and her insurer is Defendant, Meridian. Plaintiff named an expert to testify about the improper claims handling by Meridian and Meridian moved to strike the expert.

Meridian first moves to strike the designation and testimony of Plaintiff’s retained expert Gary Johnson, arguing that Johnson’s opinions were not properly disclosed and fail to meet the reliability standards of Federal Rule of Evidence 702.