Dallas Fort Worth Insurance Lawyer Blog

Sworn Proof Of Loss

April 25, 2020 | Mark S. Humphreys

Providing an insurance company with a “Sworn Proof Of Loss” is a requirement under most insurance policies. This is illustrated in the 2020, Amarillo Court of Appeals opinion styled, City of Spearman, Texas v. Texas Municipal League Intergovernmental Risk Pool.

This case is an appeal from a summary judgment granted in favor or Texas Municipal League (TML).

TML insures Spearman with property insurance and on September 16, 2016, Spearman submitted a “Claims Notice” reporting “hail damage to buildings” from a hailstorm occurring on May 16, 2016. TML sent an adjuster who inspected five building and estimated the damage at $5,437.66.

Insurance And Covid-19

April 22, 2020 | Mark S. Humphreys

Insurance and Covid-19 usually come together in commercial insurance policies. The relevant part of a policy is usually referred to as “business interruption” coverage. This issue was recently discussed in an article published in the National Law Review. Here is a what a lot of what the article tells us. Keep in mind that each state and each policy will have its own ways of reading and enforcing these policies.

The impacts of the Covid-19 are far-reaching. Concern about lost revenue, liability for the health and welfare of workers, their family members, and customers remain top-of-mind for all businesses. As a result, many businesses have started to question whether they might have insurance coverage available to respond to this unprecedented situation. Although the analysis of any particular claim for insurance benefits will vary based on the specific language of insurance policies and the circumstances of each case, here is a summary of common insurance considerations in light of the Covid-19 pandemic.

As it relates to lost revenue many commercial property insurance policies provide coverage for financial losses due to business interruption suffered as a result of “direct physical loss or damage” to covered property (these are the most commonly used words in a policy) – often the business’s physical facility. If coverage is afforded, insurance may be available to cover lost net income and operating expenses while operations were suspended.

Insurance Policy Interpretation

April 19, 2020 | Mark S. Humphreys

When it comes to interpreting an insurance policy, the Courts are suppose to read the relevant portions of a policy and see how the policy language tracks with whatever the facts are in a claim. Many claims are denied due to the insurance company believing the policy says something or is interpreted in such a way as to allow the insurance company to deny the claim.

When an insurance company interprets the policy language in such a way as to allow the insurer to deny the claim and the insured interprets the language in such a way as to believe coverage exists, a lawsuit is going to result. Insurance companies want these policy interpretations to be litigated in Federal Court because, most of the time, Federal Courts are much stricter in their interpretation than most State or County Courts.

The normal way to get a ruling in these policy interpretation cases is for the insurer or either party to file a motion for summary judgment. In this motion the party asks the Court to rule as a matter of law what the policy is saying and how that is relevant to the facts of the claim. This was an issue in a 2020 opinion from the Southern District of Texas, Galveston Division, styled, Louise Odom Hayes v. Blue Cross And Blue Shield Of Texas, Inc. And Health Care Service Corporation.

Interpreting An Insurance Policy

April 18, 2020 | Mark S. Humphreys

Insurance lawyers will always ask for a copy of the policy when an insured complains that their claim for benefits has been denied and the reason for denial is based on the language in the policy. In Texas, insurance companies are required to explain to a policy holder the reason for denial of benefits. Whether or not the reason for denial is proper is usually based on the language in the policy as applied to the facts of the particular case.

A 2020, opinion from the Southern District of Texas, Galveston Division, provides some insight as to how the Courts interpret policies. The case is styled, Louise Odom Hayes v. Blue Cross and Blue Shield of Texas, Inc. and Health Care Service Corporation.

Hayes sued Blue Cross for breach of the health insurance policy Hayes had purchased from Blue Cross wherein Blue Cross refused to pay for additional benefits Hayes claims she should have received. Blue Cross filed a motion for summary judgment based on its contention that its determination of benefits was consistent with its contractual obligations to Hayes.

Bad Faith Insurance – Is This It?

April 15, 2020 | Mark S. Humphreys

Lawyers who handle bad faith insurance cases will usually tell you that it is not necessarily easy to explain but as it relates to “bad faith” you know it when you see it.This is discussed a little bit in a 2020 opinion from the Western District of Texas, San Antonio Division, case styled, Jorge A. Alvarez v. State Farm Lloyds.

This is a lawsuit wherein State Farm is sued for violations of the Texas Insurance Code among other things.

Alvarez claims he suffered damage to his clay tile roof caused by hail and wind storms on or about April 25, 2016. This damage was noticed on February 27, 2018, and reported to State Farm. An inspection was performed with experts for Alvarez being present. The adjuster, Santos, did not identify any wind or hail damage to the roof. He observed “many damaged clay tiles,” and noted that the “damage to the tile is not consistent with wind or hail.” Santos determined that cracks on the tiles begin on the upper left corner of the tiles, and start at the nail fastener and then work down or down and across the tile. He did not note any spatter on tile or exterior elevations but did note “mech damage to furnace caps that is not the result of hail.” Santos showed Mrs. Alvarez photos to explain how he reached his conclusions. He recommended that the Alvarezes “contact the tile manufacturer or distributor of the tile to address uniform damage to the tiles” based on the damage he observed. Mrs. Alvarez “expressed understanding” but then had to leave before Santos could draft his letter describing the results of the inspection, so he left the letter at the front door when he finished writing it.

Life Insurance Case And ERISA

April 12, 2020 | Mark S. Humphreys

Here is a 2020, case from the Southern District of Texas, Houston Division, that deals with life insurance wherein the life insurance plan is subject to the Employee Retirement Income Security Act (ERISA). The case is styled, Wagma Mina Huerta v. Metropolitan Life Insurance Company, et al.

This case, filed by Huerta , is an action pursuant to ERISA seeking equitable relief for alleged breaches of fiduciary duty by the Defendants related to the denial of life insurance coverage for the death of Huerta’s husband.

The opinion is lengthy but only a part will be discussed here. The factual background can be read in the opinion. In this case, MetLife had filed a motion to dismiss pursuant to Federal Rule 12(b)(6), which allows dismissal of an action whenever the complaint, on its face, fails to state a claim upon which relief can be granted. United States, 5th Circuit case law states that when considering a motion to dismiss, the court may consider, in addition to the complaint itself, “any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.” This is discussed in the 2010, opinion, Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC. When a defendant attaches such documents, it “merely assists the plaintiff in establishing the basis of the suit and the court in making the elementary determination of whether a claim has been stated.”

Commercial Insurance Policy

April 11, 2020 | Mark S. Humphreys

Here is a case wherein the owner of a commercial insurance policy sued the insurance company for his personal injuries. This case is from the Western District of Texas, El Paso Division, and is styled, Ismael Pease v. State Farm Lloyds.

State Farm issued a business owners liability policy to Pease Law Office, PLLC. Pease is the sole member of the law office and is an insured under the policy. The policy Declarations Page provides: “If you are designated in the Declarations as[] [a] limited liability company, … [y]our ‘members’ are also insureds, but only with respect to the conduct of your business.”

The Policy’s Coverage L provision, entitled “Business Liability,” provides that State Farm “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ … to which this insurance applies.” The Policy further provides: “Damages because of ‘bodily injury’ include damages claimed by any person … for care, loss of services or death resulting at any time from the ‘bodily injury. “‘

Can You Sue An Insurance Adjuster?

April 8, 2020 | Mark S. Humphreys

Insurance lawyers know that suing an adjuster when it can be done, is preferable to not suing the adjuster. There are reasons for this that have been discussed in previous blogs. The Southern District of Texas, Brownsville Division, had a case dealing with this issue in February 2020. The style of the case is, Faith Pleases God Church Corporation v. Philadelphia Indemnity Insurance Company, et al.

Church sued Philadelphia and VeriClaim, Inc. and adjuster John Adame stemming from underpayment of the Church’s claim for property damage resulting form a storm. Church filed a claim with Philadelphia who assigned VeriClaim to the claim and Adame is their employee who investigated the claim.

Church alleges VeriClaim and Adame prepared an undervalued damages report allowing Philadelphia to underpay the claim.

Insurable Interests – Reasons Required

April 5, 2020 | Mark S. Humphreys

Insurance lawyers know the law about insurable interest goes back to 1866, in a United States Supreme Court opinion styled, Howard Fire Ins. Co. v. Chase. An insurable interest is necessary for the following reasons:

– to prevent gambling

– to reduce intentional loss

What Is An Insurable Interest?

April 4, 2020 | Mark S. Humphreys

Insurance lawyers know that a party must have an insurable interest in the insured property to recover under an insurance policy. This is made clear in the 1993, Dallas Court of Appeals opinion styled, Jones v. Texas Pac. Indem. Co. It is not necessary that the party owns the property to have an insurable interest. An insurable interest is an exposure to financial loss possessed by a person giving rise to a legal interest that the insured possesses a right to protect. An insured who owns a house or auto therefore has an insurable interest in the house or auto because the insured would be hurt financially if the house or auto were damaged or destroyed. This was discussed in the 1963, Texas Supreme Court opinion styled, Smith v. Eagle Star Ins. Co. An insurable interest does not constitute an entitlement to insurance because the insurer is permitted to underwrite and price the risk sought to be insured. Even if an insurance policy is issued, it cannot be enforced by a party who has no insurable interest, even if that party is a named insured. This was discussed in the 1972, Amarillo Court of Appeals opinion styled, North River Ins. Co. v. Fisher.