Dallas Fort Worth Insurance Lawyer Blog

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.

Federal Court And Stipulation

December 18, 2019 | Mark S. Humphreys

Insurance disputes involving smaller claims can properly be handled in a State or County courts if the insurance lawyer knows how to keep the case from being removed to Federal court. This is illustrated in the 2019, opinion styled, Michael Ihekoronye v. United Property & Casualty Insurance Company. Plaintiff, Michael Ihekoronye, filed the case in State court and United removed the case to Federal court. Plaintiff filed a motion to remand the case back to the State court.

Pursuant to 28 U.S.C., Section 1332(a), Federal district courts have original jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75,000, exclusive of interest and costs. A state-court plaintiff seeking to avoid federal jurisdiction may do so by filing a binding stipulation with the original complaint that limits recovery to an amount below the jurisdictional threshold.

In this case, United argues that removal was proper because the parties are completely diverse and the amount in controversy exceeds $75,000. Plaintiff seeks remand based on a stipulation attached as Exhibit E to the state court petition, which states that “the total sum or value in controversy in this cause of action does not exceed $75,000 exclusive of interest and costs” and that “neither Plaintiff nor his/her attorney will accept an amount that exceeds $75,000 exclusive of interest and costs.”

Entitlement To Bad Faith Damages

December 15, 2019 | Mark S. Humphreys

The standard for recovery of bad faith or extra-contractual damages is discussed in this 2019, Northern District of Texas Dallas Division opinion styled, Carolyn Kee v. Safeco Insurance Company of Indiana.

Kee sued her homeowner insurer, Safeco, for improperly adjusting her claim for damages. Safeco’s adjuster adjusted the claim saying the amount of damages did not exceed the deductible under Kee’s policy. Kee filed suit against Safeco and then Safeco invoked the appraisal clause in the insurance contract.

After the appraisal came back in favor of Kee, Safeco paid the appraisal amount and filed a motion for summary judgement on Kee’s claims. The court refused the motion as it relates to the alleged Prompt Payment of Claims cause of action but on the claim for extra-contractual damages, the motion was granted. In discussing the case the court stated as follows.

Prompt Payment Of Claim – Proof

December 14, 2019 | Mark S. Humphreys

Just saying the claim was paid is not enough. In Court, the insurance company needs to prove the claim was paid and paid timely in order to prevail on a Motion For Summary Judgment.

Here is a case from the Northern District of Texas, Dallas Division. It is styled, Carolyn Kee v. Safeco Insurance Company of Indiana.

Kee alleges that Safeco, her home insurer, conducted an inspection after she made a claim and that the adjuster reported minimum damage, falling below her policy deductible. Kee sued for breach of contract and violation of the Texas Prompt Payment of Claims Act. Safeco then pursued binding arbitration and the resulting award was significantly higher than Safeco’s initial damage assessment.

Suing An Insurance Company – Don’t Do It Pro Se

December 11, 2019 | Mark S. Humphreys

Insurance lawyers may not be perfect in all their actions but if a person wishes to sue an insurance company, get an insurance lawyer, don’t do it yourself. This is illustrated in a recent Fifth Circuit opinion styled, Thomas Petty v. Great West Casualty Company.

This is an appeal resulting from the district court’s dismissal of Petty’s claim with prejudice after Petty, a commercial truck driver sued Great West pro se.

Petty contends he was involved in two accidents involving fatalities and he suffers from ongoing mental trauma that prevents him from being able to operate a commercial truck. As a result, he seeks monetary relief for lost business earnings and mental distress/anguish.