Dallas Fort Worth Insurance Lawyer Blog

Insurance Agent Authority

February 23, 2020 | Mark S. Humphreys

There are various acts or in-actions that an insurance agent can take that will hold not only the agent responsible but also the insurance carrier.

An insurance company may be liable for unauthorized acts by an agent, if the agent is acting within the scope of his “apparent authority.” Actual authority is not required. The insurance company will be liable when by its conduct it has given the agent the appearance of having authority, so that a reasonable person would suppose the agent had authority. This was made clear in the 1979, Texas Supreme Court opinion styled, Royal Globe Ins. Co. v. Bar Consultants, Inc.

Apparent authority is an estoppel theory that holds the insurer liable because the insurer clothed the agent with indicia of authority that would lead a reasonable person to believe the agent had authority. If the agent is acting within the scope of his apparent authority, not even instructions not to mislead, nor diligence in preventing misrepresentations, will shield the insurer from liability according to the Royal Globe opinion. Evidence of apparent authority may include:

Uninsured/Underinsured Coverage And Bad Faith

February 22, 2020 | Mark S. Humphreys

Uninsured/Undersinsured (UIM) coverage has its own rules. It is sometimes hard to understand the distinction between UIM coverage claims and other tort claims and how this works with the Texas Insurance Code. However, this discussed in a January 2020, opinion from the United States Northern District Dallas Division. The opinion is styled, Detavia Wilson v. State Farm Mutual Automobile Insurance Company, Robert Nash, and Yulonda Jones.

Detavia was injured in an automobile accident wherein she incurred past medical bills of $21,259.00 and future medical expenses of $231,500.00. Detavia settled with the 3rd party insurance company for policy limits, a settlement which State Farm approved. Detavia then claimed against her UIM coverage with State Farm. The adjuster asked for additional medical records and then Detavia sued State Farm and the adjuster for violating Texas Insurance Code, Sections 541.060(a)(2), (a)(3), and (a)(2).

State Farm claims that Detavia lawsuit for Insurance Code violations is not yet ripe because Detavia has not obtained the proper predicate adjudication of the tortfeasor’s liability to her. Only after doing so can she present a ripe UIM claim to State Farm. This Court agreed with State Farm.

Delay In Paying Claim

February 19, 2020 | Mark S. Humphreys

What about those times that an insurance company pays a claim but the payment has been a lot later than it should have been paid? That is an issue that is partially addressed in a January 2020, opinion from the United States District Court, Southern District of Texas, Houston Division. The opinion is styled, Zachary Dunne v. Allstate Vehicle And Property Insurance Company.

This part of the ruling is the result of a Motion For Summary Judgment filed by Allstate.

The facts are not in dispute. Dunne’s home was damaged in a storm that was insured by Allstate on June 20, 2018. Dunne reported the claim on July 3, 2018. Allstate’s adjuster determined the damage was below Dunne’s deductible despite increasing its estimate.

Insurance Company Responsibility For Agent Conduct

February 16, 2020 | Mark S. Humphreys

Lawyers handling insurance disputes know that often times the wrongs committed in an insurance dispute are committed by the agent who sold the policy.

When it comes to the conduct of insurance agents and their relationship with the insurance company, there are two kinds of authority. There is “actual authority” and “apparent authority.”

Our Courts have described actual authority this way:

Insurance Disputes And Federal Jurisdiction

February 15, 2020 | Mark S. Humphreys

As has been stated many times, insurance companies prefer to litigate lawsuits in Federal Court rather than State Court. Conversely, it is usually better for someone suing an insurance company to litigate the case in State Court rather than Federal Court.

Here is a 2019, opinion from the Southern District of Texas, Houston Division. The opinion is styled, Antonio Diaz v. GeoVera Specialty Insurance Company. In this case, Diaz alleges “GeoVera improperly denied and / or underpaid the claim.” On August 22, 2019, a lawsuit was filed in State Court against GeoVera claiming violations of the Prompt Payment of Claims Act, various violations of the Texas Insurance Code, and breach of contract. GeoVera timely removed the case to Federal Court on October 10, 2019. Diaz timely filed a motion to remand.

Pursuant to 28 U.S.C., Section 1332(a)(1), Federal courts have original jurisdiction over all civil actions between citizens of different states where the amount in controversy exceeds $75,000, exclusive of interest and costs.

Insurance Agent Responsibilities – Part 2

February 12, 2020 | Mark S. Humphreys

Here is some information about ways of holding an insurance agent responsible for his actions or in-actions.

Does an agent have a duty to explain policy terms and coverages to customers? Does an agent have a duty to offer higher limits or additional coverages? Generally, the courts have said the answer to these questions is “NO.” As is the case with most E&O loss exposures, however, an agent can get sued for failing to explain or offer coverages, even if there is no legal duty to do so based on previous court decisions. That’s why loss prevention measures are so important. An important think to realize here is that each case must be looked at for it’s individual set of facts. When a agent is specifically asked a question about coverage, the agent has the responsibility of answering properly.

Client relationships can affect the success or failure of a client’s claim against the agency. An established “special relationship” with an insured can affect the degree of the agent’s legal responsibility to the insured. This has to do with “past dealings” with the customer. In other words, what has the agent done for the customer in the past.

Insurance Agent Responsibilities – Part 1

February 9, 2020 | Mark S. Humphreys

Insurance agent mistakes can be a big cause of litigation.

Everyone makes mistakes, and insurance agents are not immune. The very complexity of the insurance business creates numerous opportunities for errors and omissions to creep into an agency’s operation.

An insurance agent has / serves two masters – the insured, his customer and the insurance company.

Presuit Notice And Recovery Of Attorney Fees

February 8, 2020 | Mark S. Humphreys

Insurance lawyers know and understand that before suing an insurance company for denying a claim, the insurance company must be given the statutory presuit notice of the intent to file a lawsuit. This was recently illustrated in a December 23, 2019, opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Gateway Plaza Condo v. The Travelers Indemnity Company Of America.

Travelers had denied Gateway’s claim for storm damage. There was significant disagreement about the respective parties’ conduct in the early stages of the dispute.

Gateway alleges the property was damaged by a severe storm on June 2, 2017. Gateway contends it cannot recall when Travelers was notified of the loss. Gateway suggests that Travelers retained an inspector, JNT Developers, to survey the property on August 16, 2017. Gateway alleges Travelers denied the claim but does not know exactly when the claim was denied. The evidence indicates that Travelers sent Gateway a letter on October 6, 2017, stating Gateway’s policy does not cover damage to the roof. Gateway asserts that Travelers must have denied the claim earlier because the letter references the parties’ “recent conversations about the claim.”

Federal Court – Amount In Controversy

February 5, 2020 | Mark S. Humphreys

Insurance lawyers and lawyers who practice law in Federal Court know the requirements for a case to be in Federal Court. Most of the time, lawyers representing clients who are suing an insurance company try to stay out of Federal Court.

Pursuant to 28 U.S.C., Section 1332(a), for an insurance company to have a case be tried in Federal Court it must be proven that the parties are citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs. When a case is removed premised upon diversity jurisdiction, courts determine the amount in controversy in light of “the claims in the state court petition as they existed at the time of removal.” As a general rule, the amount in controversy alleged in the State Court petition determines the amount in controversy so long as it was pled in good faith.

This issue arose in a case in the Southern District of Texas, Houston Division. The case is styled, Nicolas Martinez v. Liberty Insurance Corporation.

Properly Suing The Insurance Adjuster

February 2, 2020 | Mark S. Humphreys

The courts interpretation of the new rules regarding suing an insurance adjuster need special attention. This is illustrated in the 2019, opinion from the Northern District of Texas, Wichita Falls Division. The case is styled, Barnes Burk Self Storage, LLC v. United Fire & Casualty Company and Traci McCormick.

Barnes sued United and McCormick in State Court for claims arising from a wind and hail storm. McCormick is a Texas resident and her presence in the lawsuit defeats diversity jurisdiction.

On December 7, 2018, Barnes sued United and McCormick in state court for violations of Texas law relating to its insurance claim. On January 25, 2019, United informed Barnes that it had assumed any liability McCormick would have to Barnes in the case. On February 7, 2019, United removed the case to federal court, alleging that diversity existed between Barnes and United and that this Court should disregard McCormick’s citizenship due to United’s assumption of McCormick’s liability pursuant to Texas Insurance Code, Section 542A.006. On May 23, 2019, this Court rejected this argument and remanded the case.