Dallas Fort Worth Insurance Lawyer Blog

A Twist On Appraisals

May 30, 2020 | Mark S. Humphreys

Here is a 2020, case from the Eastern District of Texas, Sherman Division, that has an interesting twist. The case is styled, Jennifer Hamorsky v. Allstate Vehicle and Property Insurance Company and Charmell King.

In this case, Jennifer sustained hail and wind damage to her home as the result of a storm in April of 2018, and timely filed a claim. She made a claim with her home insurer, Allstate. Allstate investigated the claim and paid Jennifer $31,614.47 to cover the damage. Jennifer believes she should receive $51,043.27.

On January 9, 2019, Jennifer filed suit against Allstate. A Scheduling Order was entered and after the substantial completion of the litigation process, the case was mediated on the Court was notified on September 10, 2019, that the mediation resulted in an impasse. After said impasse, Allstate filed a motion for summary judgment on October 8, 2019, and on October 11, 2019, Jennifer invoked the appraisal clause in the insurance contract. Allstate opposed the appraisal resulting in Jennifer filing a Motion to Compel Appraisal and Abate Pending Completion of Appraisal.

Is The Insurance Company Responsible When An Agent Does Something He Was Not Authorized To Do?

May 27, 2020 | Mark S. Humphreys

The answer to the titled question will vary according to the exact situation being reviewed. According to the 1994, Texas Supreme Court opinion, Celtic Life Ins. Co. v. Coats, an insurance company cannot escape liability by showing that it did not authorize the specific wrongful act. The Supreme Court in the Celtic case said that in determining a principal’s vicarious liability, the proper question is not whether the principal authorized the specific wrongful act; if that were the case, principals would seldom be liable for their agents’ misconduct. Rather, the proper inquiry is whether the agent was acting within the scope of the agency relationship at the time of the act. The misrepresentation in the Celtic case was made in the course of explaining the terms of the policy. This explaining of the policy was the task the jury specifically found to be within the scope of the agent’s authority. As a result, Celtic cannot escape liability on the basis that it did not authorize particular representations concerning the policy.

After reading the preceding paragraph, try to square that paragraph with Texas Insurance Code, Sections 4001.051(c) and 4001.053 that say an agent is not authorized to altar or waive a term or condition of an insurance policy or an application for an insurance policy. According to Section 4001.051(b) an insurer will be liable “for purposes of the liabilities, duties, and penalties provided by “certain statutes. The referenced statutes include the prohibitions found in Sections 4001.051 and 4001.009. The result of is that even if the agent cannot change the policy, the insurance company may still be responsible for what the agent represented.

Bad Faith And Appraisals

May 24, 2020 | Mark S. Humphreys

Bad faith claims are a common source of litigation. A 2020, opinion from the Southern District of Texas, Houston Division, discusses bad faith claims in the situations where an appraisal clause in the insurance contract allows for appraisal and that clause is invoked. The case is styled, Braulio Reyna v. State Farm Lloyds.

Reyna was insured by a State Farm policy which covered loss to his home. This homeowners policy contained an appraisal clause. The home suffered storm damage during the policy period. A claim was timely made. State Farm had the home adjusted by one of its adjusters and made payment of the claim. State Farm later paid more money on the claim based on a reevaluation.

Next, Reyna requested another investigation on the damages and State Farm sent an additional small amount. Reyna then invoked the appraisal clause in the insurance contract and the appraisal resulted in a much higher estimate of damages which State Farm immediately paid.

An Interesting Twist For Appraisal Clauses

May 23, 2020 | Mark S. Humphreys

Here is an opinion from the Texas Supreme Court that was issued in April 2020. This opinion deals with how an appraisal clause is handled when the appraisal clause is unilateral. The style of the case is Steven Biasatti and Paul Gross D/B/A TopDog Properties v. GuideOne National Insurance Company.

The issue in this case is whether an insurer’s payment of an appraisal award, the award of which was obtained under a unilateral appraisal clause, bars an insured’s claim under the Texas Prompt Payment of Claims Act (TPPCA).

In June 2013, TopDog who was insured by GuideOne, sustained wind and hail damage to its property. After a first inspection, GuideOne determined the damage fell below the $5,000 deductible and refused to pay. A second inspection resulted in the same outcome. TopDog sought to invoke the policy appraisal process and GuideOne refused based on the appraisal clause only allowing GuideOne to invoke the appraisal.

Insurance Company Making Partial Payment Of Claim

May 20, 2020 | Mark S. Humphreys

Does an insurance company making a partial payment of a claim mean that they are responsible for the claim. The answer to this question and a couple of other questions was answered by the United States 5th Circuit in the April 2020, opinion styled, Sandford T. Pulley v. Safeco Insurance Company of America.

Safeco was the insurer for Pulley on some property he owed. The District Court granted summary judgment in favor of Safeco and this appeal followed.

Pulley argues that summary judgment for Safeco was improper because, in Pulley’s view, by initially sending him a check in response to his insurance claim, Safeco conceded liability. Since the check was insufficient to offset his repair costs, Pulley argues that the only remaining issue in the case is the amount of damages. Pulley cites neither the terms of the policy nor any legal authority for the proposition that Safeco’s partial payment of his claim is an admission of liability. As a result, and because Pulley fails to address the District Court’s basis for dismissing his claims, the summary judgment was affirmed.

Pre-Suit Notice In Insurance Cases

May 17, 2020 | Mark S. Humphreys

Prior to filing a lawsuit, if the lawsuit is filed making claims for violations of the Texas Deceptive Trade Practices Act, or the Texas Insurance Code, Chapters 541 or 542A, it is required that at least a 61 day pre-suit notice be given if the claimant wishes to recover all that is legally allowed under those laws.

A 2020 case from the Western District of Texas, San Antonio Division, makes this clear. The opinion is styled, PMG International, LTD. v. Travelers Indemnity Company of America.

This lawsuit results from an insurance dispute between PMG and Travelers related to storm damage to one of PMG’s properties insured by Travelers. PMG sued Travelers alleging breach of contract and various violations of the Texas Insurance Code after the claim was denied.

ERISA And How It Works

May 16, 2020 | Mark S. Humphreys

Attorneys who handle Employee Retirement Income Security Act (ERISA) cases need to be able to explain to potential clients how ERISA cases are handled / looked at, by the Courts. This is explained in a 2020 opinion from the Western District, San Antonio Division, case. The case is styled, Ramon Hernandez v. Life Insurance Company of North America, Schlumberger Group Welfare Benefits Plan.

The case needs to be read to grasp an understanding of the underlying facts. Here, we are looking at the law the Court used in reaching its determination.

In this case, the Court granted summary judgment against Hernandez. In reaching the decision, the Court restated law as it relates to ERISA cases. The Court looks at these cases under an “abuse of discretion” standard, not a de novo standard.

Homeowners Claim And Breach Of Contract

May 13, 2020 | Mark S. Humphreys

Home owners claims are a frequent source of litigation. Here is a case from the Northern District of Texas, Fort Worth Division, that has a little different twist to it. The case is styled, Allen Ripley, et al v. State Farm Lloyds.

Ripley’s home was damaged by a hail storm and he was insured by State Farm. A dispute arose about the damages and there was ultimately an appraisal award. State Farm did not pay the full appraisal amount due to their assertion that part of the damages were not covered by the policy. This lawsuit resulted with Ripley alleging breach of contract and various violations of the Texas Insurance Code.

State Farm filed a motion to dismiss for failure to state a claim.

Personal Injury Protection (PIP) Benefits

May 10, 2020 | Mark S. Humphreys

Personal Injury Protection (PIP) is a coverage which is required by Texas law to be offered when a person purchases automobile coverage. One of the questions regarding this coverage is, why is it paid. This issue was partially addressed in the 2020, Texas Supreme Court opinion styled, Farmers Texas County Mutual Insurance Company v. Rodney Beasley.

In this case the Court had to decide whether a plaintiff had standing to file a lawsuit against his PIP insurer after the insurer paid the incurred medical expenses pursuant to the PIP policy, but the amount paid was the negotiated rate between the plaintiff’s health care provider and the insurer — not the medical providers’ list rate. This Court concluded that plaintiff could not show harm and thus, the case should be dismissed.

Here, Beasley was injured in a car accident. Beasley sought medical treatment and incurred expenses with a list rate of $2,662.54. Beasley’s health insurer, Blue Cross Blue Shield (BCBS) has a negotiated rate with the medical providers and paid $1,068.90, and no attempt was made against Beasley by the medical providers to recover any further monies.

Suing The Insurance Adjuster And Insurer Accepting Responsibility

May 9, 2020 | Mark S. Humphreys

Insurance lawyers know the insurance laws change every year and know that they have to keep up with those changes. One significant change was when Texas Insurance Code, Section 542A was added. While this change is to the advantage of the insurance company, there are times when the insurance company does not properly take advantage of the change.

This happened in a 2020 case in the Southern District of Texas, Houston Division, styled, Mohammad Shenavari v. Allstate Vehicle and Property Insurance Company, et al.

Shenavari, a homeowner with insurance through Allstate suffered storm damage and made a claim with Allstate. Allstate assigned adjuster Idolina Stockert to the claim. Stockert made an offer to Shenavari that was unacceptable and a lawsuit being filed in State Court suing Allstate and Stockert resulted.