Dallas Fort Worth Insurance Lawyer Blog

Accusing Insurance Company Of Fraud

March 28, 2020 | Mark S. Humphreys

Lawyers who handle insurance claims have to know the pleading requirements for alleging fraud when a lawsuit ends of in Federal Court. Otherwise, the fraud allegations can be thrown out of Court. This is illustrated in a February 2020 opinion from the Southern District of Texas, Houston Division. The opinion is styled, Nancy Roberson v. Allstate Vehicle and Property Insurance Company.

This is a claim for roof damage alleged to have resulted from storms in Houston. Roberson had filed two previous lawsuits which she had voluntarily dismissed. In this third lawsuit, Allstate has moved for summary judgment and for a judgment on the pleadings. This Court granted the motion for summary judgment in favor of Allstate.

Roberson’s common law fraud claim must satisfy Federal Rule of Civil Procedure 9(b). This Rule requires a plaintiff to state the circumstances of an alleged fraud with particularity. The elements of Texas common law fraud are (1) that a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. Roberson must state the who, what, when, where, and how of the alleged fraud by pleading the time, place, and contents of the false representation, as well as the identity of the person making the misrepresentations and what that person obtained thereby.

ERISA Clain Or Not?

March 25, 2020 | Mark S. Humphreys

ERISA stands for Employee Retirement Income Security Act. When making an insurance claim related to employment, it is important to know it the claim is subject to ERISA, which is governed by Federal Law, or not ERISA, in which case the claim is governed by State Law.

Plus, there are employee benefit plans that would be governed by ERISA however, elements of the employee benefit plan may fall outside of ERISA. This is discussed in a 2020 opinion from the Western District of Texas, Austin Division. The opinion is styled, Stephen Burrell v. Metropolitan Life Insurance Company and Deloitte LLP.

Burrell’s lawsuit was for short term disability (STD) benefits that had been denied and for long term benefits (LTD) that had been denied. This discussion will focus on the STD benefits claim.

Insurance Claims And Examinations Under Oath (EUO)

March 22, 2020 | Mark S. Humphreys

Almost all insurance policies contain a requirement that the insured submit to an examination under oath (EUO) as often as is necessary for the insurance company to complete its investigation of the claim.

EUO”S were the topic in a Western District of Texas, Austin Division, opinion recently. The opinion is styled, AXO Staff Leasing, LLC v. Zurich American Insurance Company, McCreadie & McCreadie, Inc., and Lassiter Ware Insurance.

The lawsuit is an insurance coverage dispute between Zurich and AXO. Briefly, AXO contends that its former Chief Financial Officer (CFO), John Herzer, embezzled $4.7 million, and that the loss is covered by the Zurich policy.

Appraisal In Insurance Claims

March 21, 2020 | Mark S. Humphreys

Almost all insurance contracts contain appraisal clauses. These clauses are discussed in a January 2020 opinion from the Southern District of Texas, McAllen Division. It is styled, Erasmo Gonzalez v. Allstate Texas Lloyds.

In this case, the Court had urged the parties to discuss appraisal early in the case and both parties assured the Court that appraisal would not be necessary. Months later, Erasmo invoked the appraisal provision in the insurance contract. This Court Ordered the appraisal and discussed it’s reasoning.

The appraisal process determines the value of damages, and courts decide liability. Absent illegality or waiver, the Texas Supreme Court has generally held in favor of enforcing appraisal clauses because denying the appraisal would vitiate the insurer’s right to defend its breach of contract claim. An insured waives its right to appraisal where (1) the parties reached an impasse; (2) there was unreasonable delay between the point of impasse and the insured’s demand for appraisal; and (3) the insurer shows it has been prejudiced by such delay. Waiver requires intent, either the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right.

Insurance Company Did Wrongful Removal?

March 18, 2020 | Mark S. Humphreys

Here is another one of those removal cases wherein the situation is a situation that will not occur very often. This case is from the Northern District of Texas, Dallas Division, and is styled, Jeff Conkey and Shannon Mitchell v. Monica Corker, IAT Insurance Group Specialty, and Acceptance Indemnity Insurance Company.

In this case the Mitchell’s (Plaintiffs) filed a State Court lawsuit alleging violations of the Texas Insurance Code and the DTPA against IAT and Acceptance and conversion and trespass claims against Corker. This Court sue sponte determined that it lacked subject matter jurisdiction and remanded to the State Court.

Plaintiffs owned property insured by IAT and Acceptance. Allegedly, Corker entered the property and stole equipment belonging to the Plaintiffs. The insurers denied the claim.

Is Issuing An Insurance Claim Check And Receiving The Check The Same Thing?

March 15, 2020 | Mark S. Humphreys

Insurance lawyers need to know the various ways other insurance lawyers have attempted to pursue an insurance company and the ways that work and the ways that do not or have not worked. Here is a different approach that failed to work.

This is an opinion from the Northern District of Texas, Dallas Division. It is styled, Corinne Pearson v. Allstate Fire and Casualty Insurance Co.

Corinne filed suit in State Court alleging Allstate improperly denied or underpaid a claim after a storm damaged her home. Allstate removed the case to this Federal Court and obtained an abatement pending an appraisal of the damage to her home. In June 2019, the Court was notified that appraisal had been completed and the case was reopened. Allstate immediately filed this motion for summary judgment.

Asserting A Claim Against The Adjster

March 14, 2020 | Mark S. Humphreys

Asserting a claim against an insurance adjuster must be done properly if the goal is to keep the adjuster in the case.

Often times suing the insurance company for the acts of the adjuster is good enough to properly maintain a lawsuit. Other times the adjuster needs to be brought into the lawsuit. This is particularly important when the insured wishes to maintain the case in State Court rather than litigating the case in Federal Court.

One example of properly suing the adjuster was discussed in the 2020 opinion, Hill Country Villas Townhome Owners’ Association, Inc. v. Everest Indemnity Insurance Company, et al. This opinion is from the Western District of Texas, San Antonio Division.

Uninsured Motorist Protection And Declaratory Judgment

March 11, 2020 | Mark S. Humphreys

Uninsured motorist protection (UIM) historically has been its on little niche of the law that was not purely tort law or purely contract law.

Creative attorneys have recently been having success seeking UIM claims by way of a Declaratory Judgment Action. The most recent case is from the Corpus Christi Court of Appeals and is styled, Allstate Fire and Casualty Insurance Company and Allstate Insurance Company v. Jesus Inclan.

Inclan sued Reynaldo Sanchez, the uninsured driver, and Allstate for injuries Inclan sustained in a car wreck with Sanchez. There were offers made and eventually Inclan sought declaratory relief and attorney fees under the Uniform Declaratory Judgments Act (UDJA) pursuant to the Texas Civil Practices & Remedies Code, Section 37.001 – .011.

Insurance Policy – Appraisals – Waiver

March 8, 2020 | Mark S. Humphreys

Insurance lawyers seem to have a lot of confusion regarding insurance contracts with appraisal provisions contained within them and how to interpret and handle them. This issue was addressed in a January 2020 opinion from a Southern District of Texas, Houston Division. The opinion is styled, William A. Linnus and Sarah J. Linnus v. Metropolitan Lloyds Insurance Company of Texas.

Texas insurance policies frequently include provisions requiring or allowing appraisal to resolve disputes about loss amounts. An appraisal clause binds the parties to have the extent or amount of the loss determined in a particular way. An appraiser must decide the amount of loss, not to construe the policy or decide whether the insurer should pay. Unless the amount of loss will never be needed appraisals should generally go forward without preemptive intervention by the courts.

The contractual right to appraisal may be waived. The Texas Supreme Court in the opinion styled, In re Universal Underwriters of Texas Insurance Co., explained that: to constitute waiver of the right to appraisal the acts relied on must be reasonably calculated to induce the assured to believe that compliance by him with the terms and requirements of the policy is not desired, or would be of no effect if performed. The acts relied on must amount to a denial of liability, or a refusal to pay the loss. As the Court more recently concluded, waiver requires intent, either the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right.

Insurance Law – Follow The Rules

March 7, 2020 | Mark S. Humphreys

Failure to follow the rules related to Insurance Law can have bad consequences. This is seen in a September 2019, opinion from the Southern District of Texas, Corpus Christi Division. The opinion is styled, Libardo Taboada v. State Farm Lloyds.

This case was dismissed by the Court for Libardo’s failure to follow rules set out in the Texas Insurance Code, Sections 542A.003 and 541.154.

First there was non-compliance with the pre-suit notice which was sent on August 21, 2018.