Dallas Fort Worth Insurance Lawyer Blog

“Surface And Ground Water Damage” Exclusion

January 11, 2020 | Mark S. Humphreys

Spring is coming soon and exclusions in homeowner policies for “surface and ground water damage” will be an issue an insurance lawyer must be able to discuss with client.

Here is a November 2019, opinion from the Southern District of Texas, Houston Division, that “kinda” addresses this issue. The opinion is styled, Robert Salcetti v. AIG Property Casualty Company.

Salcetti suffered damage to his home after the U.S. Army Corps of Engineers decided to release water from reservoirs and Salcetti alleges that water entered his home causing significant damage.

What Is Bad Faith Insurance?

January 8, 2020 | Mark S. Humphreys

What is “bad faith” in the context of insurance? There is a lot of material on this subject. Here is a little to know about.

In the 1997, Texas Supreme Court opinion styled, Universe Life Ins. Co. v. Giles, adopted the standard that an insurer breaches its duty of good faith and fair dealing by “failing to attempt in good faith to effect a prompt, fair, and equitable settlement of a claim with respect to which the insurer’s liability has become reasonably clear.” The current statutory version of this is Texas Insurance Code, Section 541.060(a)(2)(A).

The statutory standard adopted in Giles takes the place of the common-law standard for unreasonably denying a claim or unreasonably delaying payment. The court’s analysis in Giles also supports adopting the statutory standard for failing to conduct a reasonable investigation. That standard is found at Texas Insurance Code, Section 541.060(a)(7), which prohibits “refusing to pay a claim without conducting a reasonable investigation with respect to the claim.”

Prompt Payment And Federal Court

January 5, 2020 | Mark S. Humphreys

As discussed before, litigating cases in Federal Court is what an insurance company prefers to do. Ans as discussed before, there are ways to keep this from happening in the right circumstances. The United States 5th Circuit issued an opinion issued an opinion in 1998, that is worth knowing about as it relates to calculating damages and how that calculation effects whether or not a case will be litigated in Federal Court. The opinion is styled, St. Paul Reinsurance Co., LTD. v. Greenberg.

This declaratory judgment action is a case wherein the insurance company won their fight to have the case litigated in Federal Court because the amount in controversy requirement for diversity jurisdiction under 28 U.S.C., section 1332, was not satisfied.

Greenberg had a homeowners policy with St. Paul. Greenberg’s home was destroyed by arson. Greenberg filed a sworn proof of loss for $35,000, which was the policy limits. St. Paul denied the claim for three reasons.

Prompt Payment Of Claims And Getting Information

January 4, 2020 | Mark S. Humphreys

All insurance lawyers understand that there are time limits within which an insurance company must accept and pay the claim or else deny the claim. And it is also understood that the insured making the claim has an absolute duty to cooperate with the claims investigation. But what about a situation where the insurance company needs to be able to get information from a third party, such as medical providers?

What is clear is that if the insurance company reasonably requests information from the claimant, deadlines for payment of the claim are postponed until the insurance company receives that information.

In contrast, the Prompt Pay Statute does not expressly extend any deadlines while the insurance company awaits information from third parties. However, if the insurance company cannot accept or reject a claim because it is still waiting for such information, Texas Insurance Code, Section 542.056(d) allows the insurance company a one-time 45 day extension.

Interpreting Insurance Policies Again

January 1, 2020 | Mark S. Humphreys

Understanding how insurance policies are interpreted by the courts is one of the more important aims of an insurance law attorney.

Here is some more information to be kept in mind.

An insurance policy is a contract, generally governed by the same rules of construction as all other contracts. This is told to us by the Texas Supreme Court in the 2010, opinion styled, Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London. When construing a contract, our primary concern is to ascertain the intentions of the parties as expressed in the document according to the Texas Supreme Court 2014, opinion styled, Amedisys, Inc. v. Kingwood Home Health Care, LLC. In the Gilbert opinion the court stated that, we begin our analysis with the language of the contract because it is the best representation of what the parties mutually intended. Unless the policy dictates otherwise, we give words and phrases their ordinary and generally accepted meaning, reading them in context and in light of the rules of grammar and common usage. We strive to give effect to all of the words and provisions so that none is rendered meaningless. In quoting from a 1938, opinion, the court said, “No one phrase, sentence, or section [of a contract] should be isolated from its setting and considered apart from the other provisions.”

Interpreting Insurance Policies

December 29, 2019 | Mark S. Humphreys

Knowing how to interpret an insurance policy is vital for insurance attorneys attempting to help clients with insurance disputes. Knowing how to do this, is to know how courts interpret insurance policies.

One issue frequently faced by courts is the source of meaning to be given to words. At least two different rules have evolved in order to identify the definitions to be given to words as used in insurance contracts.

The first rule is the “definition” rule. Where the policy, by its own terms, defines a term, those definitions control. This was made clear in the 2003, Texas Supreme Court opinion styled, Provident Life & Accident Ins. Co. v. Knott, and the 1997, opinion styled, Trinity Universal Ins. Co. v. Cowan.

Allegations Of Fraud Against An Insurance Company

December 28, 2019 | Mark S. Humphreys

Allegations of fraud against an insurance company must be specific when a case is in Federal Court. This is illustrated in a recent case from the Western District of Texas, San Antonio Division. The case is styled, Maria Quintero v. Allstate Vehicle And Property Insurance Company.

The claim against Allstate arises from a hail and windstorm that is alleged to have caused property damage to Maria. The assertion is that Allstate breached the insurance contract, misrepresentation, and fraud arising under the Texas Insurance Code.

Allstate filed a motion to dismiss based on Maria’s failure to satisfy the heightened pleadings standards under Rule 9(b) and the general pleading standards under Rule 8.

Underinsured Coerage

December 25, 2019 | Mark S. Humphreys

Insurance lawyers know to look at the Texas Insurance Code, starting at Section 1952.101, to see the requirement that insurance companies are required by the Texas Department of Insurance and by statute to provide underinsured (UIM) coverage in their automobile polices.

One of the steps an insurance lawyer is suppose to make when trying to collect UIM benefits is to get written permission from the UIM insurance carrier to settle with the responsible third party before actually settling the case with the responsible third party. This is required so as to not prejudice the right of the insurance carrier to subrogate against the third party in the appropriate situation.

This issue is discussed in a 2019, opinion from the Dallas Court of Appeals. It is styled, Curtis Davis v. State Farm Lloyds, Inc.

Delay In Paying Claim In Fort Worth

December 22, 2019 | Mark S. Humphreys

Here is an insurance case that was appealed to the Fort Worth Court of Appeals. The case is styled, Joseph Lambert and Susan Lambert v. State Farm Lloyds and Tevin Senne. The appeal involved a few issues but the one focused on here deals with the Texas Prompt Payment of Claims Act (TPPCA).

The Lamberts are appealing a grant of summary judgment in favor of State Farm.

The Lamberts had their home damaged in a storm in May 2015. The y made a claim for benefits and after the first inspection, the damages did not not exceed the Lamberts deductible. A second inspection was requested, after which the Lamberts were issued a check fo $1,700, in October 2015.

Suing Insurance Company In Federal Court

December 21, 2019 | Mark S. Humphreys

When insurance lawyers file a lawsuit that ends up in federal court, they have to make sure that the pleadings in the complaint will satisfy federal court pleading guidelines or they will end up being kicked out of court. This is illustrated in a case from the Southern District of Texas, Houston Division. It is styled, 9520 Homestead, LLC v. Westchester Surplus Lines Insurance Company.

This lawsuit arises from an allegation by 9520 that Westchester’s adjuster conducted a substandard investigation and inspection of 9520’s property after the property was damaged in a hurricane. Based on the substandard investigation, the adjuster’s report undervalued the claim and failed to include all of the damages and thus, Westchester violated various sections of the Texas Insurance Code.

Under Rule 8 of the Federal Rules of Civil Procedure, a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” The complaint need not contain detailed factual allegations, but it must include more than an unadorned, the-defendant-unlawfully-harmed-me accusation.