Dallas Fort Worth Insurance Lawyer Blog

Appraisal – Timely Invocation Or Waiver

September 26, 2022 | Mark S. Humphreys

How long does someone have to invoke the appraisal process in an insurance contract? This was addressed in a 2012, opinion from the Beaumont Court of Appeals. The opinion is styled, In Re: Cypress Texas Lloyds.

Cypress Texas Lloyds seeks mandamus relief from an order that denies a motion to compel appraisal. The insureds sued Cypress. Their homeowner’s insurance policy issued by Cypress includes an appraisal clause. Cypress pleaded the failure to submit to the appraisal process and requested abatement in its original answer and in a series of amended answers. Cypress subsequently moved to compel appraisal.

To establish waiver of appraisal, a party must show that the failure to invoke the policy’s appraisal provision within a reasonable time after an impasse was reached caused prejudice. Cypress argues that its first notice of impasse occurred when the Newmans filed suit, and that Cypress invoked the appraisal provision in its pleadings by specifically pleading the failure to submit to the appraisal process by requesting an abatement until that condition was satisfied. Notwithstanding the notice provided by Cypress’s pleadings, the Newmans proceeded with discovery without seeking appraisal under the policy. Cypress argues it did not unreasonably delay before invoking appraisal and any harm suffered by the Newmans stems from their failure to comply with the policy and undergo appraisal before filing suit.

Texas Prompt Payment Of Claims Act

September 24, 2022 | Mark S. Humphreys

Insurance Claims, when not timely paid are subject to the Texas Prompt Payment of Claims Act. So the question becomes when is a claim not timely paid?

A 2022, opinion from the Western District of Texas, San Antonio Division, is worth reading. The opinion is styled, John H. Winston III v. State Farm Lloyds.

This case arises from a dispute between Dr. Winston and his homeowner’s insurance carrier, State Farm. In April 2019, Dr. Winston filed a claim with State Farm for hailstorm damage to his home. State Farm paid Dr. Winston based on its inspector’s assessment of the damage. Dr. Winston was dissatisfied with the payment because the parties disagree about the extent of the damage—specifically, Dr. Winston contends that his roof needs to be replaced, while State Farm believes it could be repaired. When the parties reached an impasse, Dr. Winston invoked an appraisal clause in the parties’ contract to determine the actual amount of loss. The appraisal was conducted in October 2019, finding that $91,138.71 was necessary to replace the roof. State Farm continued to maintain that the roof did not need to be replaced. As such, State Farm reduced the appraisal award by $91,138.71 and paid Dr. Winston the amount it estimated was necessary to repair the roof, plus some additional funds for other damages to the home. All told, State Farm paid Dr. Winston $28,193.74 for hail damage. At issue in the case was whether State Farm breached the parties’ contract by refusing to pay $91,138.71 to replace Dr. Winston’s roof. The case went to trial and a jury found that State Farm had breached the contract.

Bad Faith Life Insurance Lawyer – Is This Bad Faith

September 19, 2022 | Mark S. Humphreys

Here is a 1980, Texas Supreme Court opinion wherein the Court found no bad faith and in fact found in favor of the insurance company. The opinion is styled, Life Ins. Co. of the Southwest v. Overstreet.

This was an unusual case in that the dispute was over whether or not a premium had been timely paid.

Maxie Overstreet, the insured, died on April 24, 1974, at which time he had not paid the 1974 annual premium on the policy. Life Insurance Company (LIC) says that by the date of death, the policy had lapsed because the premium had fallen due on March 15, 1974, the thirty-one-day grace period had expired on April 15, and the insured’s death on April 24 had occurred nine days after the grace period’s termination. Jacquei Overstreet says that the premium payment date was April 18 rather than March 15, that non-payment of the annual premium on April 18 did not end the policy until thirty-one more days, and that Overstreet’s death on April 24 was well within the grace period.

Life Insurance Claim Lawyer – Which Law Applies?

September 17, 2022 | Mark S. Humphreys

Life insurance lawyers need to read this 2022, opinion from the Fort Worth Court of Appeals. The opinion is styled, Government Personnel Mutual Life Insurance Company v. Lincoln Factoring.

Many times where a person buys an insurance policy, where they die, where a beneficiary resides, or what the contract says may play a part in determining under which State law applies to disputes over the life insurance policy.

In this case, the question dealt with whether Texas law applied to the case or whether Louisiana law applied to the case. The facts of the case can be gleamed from reading the opinion. Here is a brief way the Court looked at the case and what life insurance lawyers need to know about when filing a lawsuit.

Insurance Policies And The Statute Of Limitations

September 12, 2022 | Mark S. Humphreys

What insurance attorney hasn’t had someone call after the statute of limitations has already run on the case?

The Dallas Court of Appeals issued an opinion in July 2022, that deals with statute of limitations issues. The opinion is styled, Knox Mediterranean Foods, Inc., v. Amtrust Financial Services.

Knox has incurred a burglary loss on June 16, 2016, and submitted a loss claim to its insurance company, Amtrust. Amtrust paid part of the claim March 15, 2017, along with a letter requesting further information. On June 13, 2017, Amtrust sent a follow up letter that stated in relevant part that due to the requested information not being provided that Amtrust was closing the file. The current lawsuit was filed on May 20, 2020. This summary judgment motion was filed by Amtrust asserting the statute of limitations defense. The judgment was granted.

Interpleader Cases

September 10, 2022 | Mark S. Humphreys

Life Insurance claims are usually the type of claims that involve an interpleader action. Here is a 2022, opinion from the El Paso Court of Appeals that involves an interpleader, however, the interpleader is related to the proceeds of an auto liability policy that involved a death. Irregardless of the reason for the interpleader, this opinion points out some of the proper procedural aspects related to an interpleader case.

The style of the case is, Theresa Ruebbling, Individually and As Heir Of Victoria Rangel, Deceased v. Foremost County Mutual Insurance Company.

This case stems from a February 19, 2021 automobile accident that killed Victoria Rangel. Foremost insured the vehicle Rangel was a passenger in at the time of the crash. It agreed to pay Rangel’s heirs, her parents Theresa Ruebbling and Jorge Rangel, the $100,000 policy limit for bodily injury liability. Foremost filed an interpleader petition under Texas Rule of Civil Procedure 43 alleging a dispute between Ruebbling and Jorge Rangel regarding the division of the insurance proceeds had caused it “reasonable doubt about how to disburse the settlement proceeds.” Ruebbling and Jorge Rangel were both named defendants.

Insurance Bad Faith Explained

September 5, 2022 | Mark S. Humphreys

Here is a 2022 opinion from the Northern District of Texas, Dallas Division, that articulates how courts look at insurance bad faith claims. The opinion is styled, Art Dallas, Inc. v. Federal Insurance Company and Derek Franks.

This is an insurance dispute involving Federal Insurance Company (FIC) and Art Dallas, Inc’s (ADI) extracontractual claims or “bad faith” claims against FIC. The opinion, in part, comes from FIC’s Rule 12(c) motion.

The standard for deciding a motion under Rule 12(c) is the same as the one for deciding a motion to dismiss under Rule 12(b)(6).

Insurance Claims And Appraisal

September 3, 2022 | Mark S. Humphreys

Probably all auto and home insurance policies have appraisal paragraphs in them. So how do the Courts view appraisal paragraphs? This is discussed in a 2022, opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Diane Castanon, Katherine Castanon v. Safeco Insurance Company of Indiana.

This is a lawsuit that arises from a plumbing claim. A plumbing leak is alleged to have occurred on or about July 20, 2019. Plaintiffs sued Safeco on July 20, 2021, for various violations of the Texas Insurance Code and breach of contract.

The wording of the appraisal paragraph can be read in the opinion.

Insurance Claims And Experts (Plumbing)

August 29, 2022 | Mark S. Humphreys

Insurance claims often do not need an expert to help the case. When an expert is needed, it is important to know how courts look at experts. Here is a homeowners case wherein an expert is being used to bolster the case. This is a 2022 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, FB & SB Leasing, LLC v. Chubb Lloyds Insurance Company of Texas.

In this first–party insurance dispute involving a property experiencing plumbing problems and foundation issues, Chubb presents two reliability arguments to support excluding the opinion
testimony of Plaintiff FB &SB Leasing’s sole causation expert, Michael B. Couch. Chubb urges first that Couch’s report provides insufficient information about his methodology. Second, Chubb argues Couch relied on mistaken or incorrect underlying data when opining that there were multiple leaks at the property. There’s no dispute that Couch’s testimony, if reliable, would be relevant. Chubb also doesn’t dispute Couch’s qualifications. As argued, and on this record, Chubb’s complaints go to the eventual weight a jury might afford the testimony and are most appropriately addressed at trial via cross-examination or through introduction of competing expert testimony.

As to the first argument, there’s no dispute that Couch inspected the property on multiple occasions and relied on a plumbing report that noted multiple breaks in plumbing lines. Relying on this underlying data and his ample training and experience, Couch opined on the cause of the damage to the property. This is sufficient given the parties’ arguments presented here. The second of Chubb’s arguments relies on a distinction Chubb draws between “leaks” and “breaks” in plumbing, which on this record is an issue better reserved for cross examination at trial. Both side’s experts relied on the same plumbing report that noted multiple plumbing issues. Even Defendant’s expert appears to use the terms “break” and “leak” interchangeably in his expert report. Moreover, Chubb didn’t depose Couch, which might have provided more detail and nuance on these issues to further inform a motion to exclude. Accordingly, on this record and based on the arguments presented by Chubb, the Motion, is Denied Without Prejudice. Chubb may re-urge its arguments later in the case, via a motion in limine or at trial.

Bad Faith Insurance And The Statute Of Limitations

August 27, 2022 | Mark S. Humphreys

Insurance attorneys must know the time period from which the statute of limitations starts. This issue is addressed in a 2022, opinion from the Southern District of Texas, Houston Division. The opinion is styled, Patriot Logistics v. Travelers Property & Casualty Company of America.

This case deals with various issues and the facts of the case can be read in the opinion. It is a summary judgment opinion. Here, the focus is the statute of limitations on the bad faith claim.

The Fifth Circuit holds that under Texas law the statute of limitations begins to run when the particular cause of action generally accrues—being ‘“when facts come into existence that authorize a party to seek a judicial remedy . . . regardless of when the plaintiff learns of the
injury.”’