Dallas Fort Worth Insurance Lawyer Blog

Insurance Law – New For September 1, 2019

September 29, 2019 | Mark S. Humphreys

Here are some new laws enacted in the State of Texas that went into effect on September 1, 2019. There were several transparency and consumer protection bills that were passed in the wake of Hurricane Harvey. The most significant bills were related to flood, wind, and hail, although significant legislation related to adjusters was also passed.

Senate Bill (SB) 442 requires any insurance company that issues residential property insurance policies without coverage against flood loss to provide written notice to the insured. This bill gives the Texas Insurance Commissioner rule making authority to issue the form and content of the notice.

House Bill (HB) 1306 provides for additional flood coverage access under insurance policies issued by surplus lines insurance companies. Surplus lines coverage is only to be used if the full amount of coverage cannot be obtained in the Texas market.

Bad Faith Insurance And Pleadings

September 28, 2019 | Mark S. Humphreys

Bad Faith insurance claims often involve allegations of some sort of fraud by the insurance company and / or the adjuster handling the claim. The Southern District of Texas, McAllen Division, issued an opinion recently dealing with allegations of fraud against an insurance company. The opinion is styled, Cesarea Trevino v. Allstate Vehicle And Property Insurance Company.

After a hail/windstorm event, Trevino filed a claim with Allstate for alleged property damage. Trevino sued for Texas Insurance Code violations regarding misrepresentation, among other things, and in response, Allstate filed a partial motion to dismiss the misrepresentation claims.

In reviewing Allstate’s motion to dismiss, the Court pointed out that Federal Rule of Civil Procedure, Rule 9(b) imposes a heightened set of pleading requirements when the claim in question is grounded in fraud. The Fifth Circuit Court of Appeals has ruled that Rule 9(b) requires “specificity as to the statements (or omissions) considered to be fraudulent, the speaker, when and why the statements were made, and an explanation why they are fraudulent.” Rule 9(b) applies by its plain language to all averments of fraud, whether they are part of a claim of fraud or not and therefore applies to statutory claims which are based on allegations of fraud. Claims alleging violations of the Texas Insurance Code are subject to the requirement of 9(b).

Employee Retirement Income Security Act (ERISA)

September 25, 2019 | Mark S. Humphreys

ERISA has it’s own set of rules and regulations and is unlike normal insurance that is governed by State laws and the Texas Department of Insurance.

Here is a 2019, opinion from the Eastern District of Texas, Sherman Division, that deals with ERISA and a claim for Long Term Disability (LTD) benefits. The opinion is styled, Xien Huang Napodano v. Ericsson Inc. Short Term Disability Plan.

On August 22, 2017, Napodano resigned from his job by leaving a note on the desk of his boss and a few days later applied for LTD benefits. He was informed that he had to first apply for Short Term Disability (STD) benefits first, before being eligible for LTD benefits. He then filed for STD benefits.

Delay In Paying A Claim

September 22, 2019 | Mark S. Humphreys

When an insurance company delays in paying a claim, the claimant may be entitled to relief under the Texas Prompt Payment of Claims Act.

The Texas Prompt Payment of Claims Act, Section 542.060 provides that

(1) if an insurer that is liable for a claim under an insurance policy is not in compliance with this subchapter, the insurer is liable to pay the holder of the policy or the beneficiary making the claim under the policy, in addition to the amount of the claim, interest on the amount of the claim at the rate of 18 percent a year as damages, together with reasonable attorney’s fees

Statute Of Limitations

September 21, 2019 | Mark S. Humphreys

Here is a case where the statute of limitations defense by the insurer did not work. The case is from the Southern District of Texas, Houston Division. It is styled, Arcelia Flores, et al v. Allstate Texas Lloyds.

Allstate filed a Motion for Summary Judgement based on the statute of limitations having expired before the lawsuit was filed.

The lawsuit filed by Flores arises out of alleged storm damage that occurred in August 2015. The claim was filed on January 25, 2016. Allstate evaluated the claim and sent a denial letter to Flores on January 28, 2016. Flores filed this lawsuit on August 16, 2017. Flores elected to effectuate service privately but did not serve Allstate with the summons and citation. On February 8, 2018, Flores filed an amended petition and then on February 12, 2018, Allstate was served for the first time with the amended petition. Allstate filed its answer to the first amended petition on November 26, 2018. Allstate filed its Motion for Summary Judgement on June 3, 2019, based on the affirmative defense of statute of limitations.

Allegations Of Insurance Company Fraud

September 18, 2019 | Mark S. Humphreys

When suing an insurance company for insurance fraud, especially in Federal Court, the insured needs to plead with specificity. This is illustrated in a 2019, opinion from the Southern District of Texas, Laredo Division. The opinion is styled, Salvador Aviles v. Allstate Fire and Casualty Insurance Company.

Aviles had a homeowners policy with Allstate when he sustained severe wind and/or hailstorm damage. A disagreement arose as to the extent and amount of damages.

Aviles filed suit in State Court alleging fraud under the Texas Insurance Code, among other causes of action. Allstate removed the case to Federal Court and thereafter filed a motion for partial dismissal of the fraud claims citing Federal Rules of Civil Procedure, 12(b)(6) and Rule 9(b).

Who Is Engaged In The Business Of Insurance?

September 15, 2019 | Mark S. Humphreys

The answer to the titled questions is partially addressed in a 2019 opinion from the Southern District of Texas, Corpus Christi. The opinion is styled, MJ & JJ, LLC; dba Peacock Manor Apartments v. Clear Blue Specialty Insurance Company, et al.

After sustaining hurricane damage, Peacock sued Clear Blue, Madsen, Kneppers & Associates (MKA), Hylton Cruickshank, and Charles Jendrusch in State Court. Clear Blue removed the case to this Court based on diversity jurisdiction. Then they contend Cruickshand and Jendrusch should be dismissed. Peacock file a motion to remand.

The parties agree Cruickshank and Jendrusch are not diverse, but the MKA defendants contend they were improperly joined, thus, removal to Federal Court was proper.

Limitations Period In Insurance Contract

September 14, 2019 | Mark S. Humphreys

Insurance lawyers and anybody who has an insurance policy needs to know what the limitations period is in the insurance policy. This is illustrated in the 2019, 5th Circuit Court of Appeals opinion styled, Lillian Smith v. Travelers Casualty Insurance Company of America.

Lillian sued Travelers for contractual and statutory violations that arose out of the denial of her commercial property claim for benefits. Here are the facts.

Smith agrees that Travelers sent her an unambiguous letter, denying her claim for benefits. She however, insists that her causes of action did not accrue until nine months later (rather than the date of the denial) because Travelers had agreed upon her request, to re-investigate her claim for damages. After a re-investigation, Travelers affirmed they were standing by their original denial of the claim.

Articulating The Wrongs Against An Insurance Adjuster

September 11, 2019 | Mark S. Humphreys

As stated before, the insurance companies prefer to litigate cases in Federal Court. One of the ways to stay out of Federal Court when suing the adjuster for an insurance company is to clearly articulate the wrongs that the insurance adjuster committed. This is illustrated in a 2019, opinion from the Northern District of Texas, Dallas Division. The case is styled, David Williams v. Allstate Vehicle And Property Insurance Company.

Williams filed suit against Allstate and Allstate’s adjuster, Murray McKay, alleging that McKay violated various sections of the Texas Insurance Code when adjusting Williams claim for storm damage to his home. Allstate removed the lawsuit to Federal Court pursuant to 28 U.S.C., Section 1441(b), alleging that McKay had been improperly joined in the lawsuit, thus, the requirements of diversity were satisfied. Williams sought a remand to the State Court based on 28 U.S.C., Section 1447(c).

The Federal Court conducts a Rule 12(b)(6) type analysis to determine whether a plaintiff has failed to state a claim against a nondiverse defendant, in this case, the defendant being McKay.

Personal Protection Benefits – Occupying A Vehicle

September 8, 2019 | Mark S. Humphreys

When it comes to claims dealing with automobile policies, here is a case that needs to be read. It is a 2019, opinion from the Texarkana Court of Appeals and is styled, Alan Kiely v. Texas Farm Bureau Casualty Insurance Company.

Kiely sued Farm Bureau in an effort to recover Personal Injury Protection (PIP) benefits that had been denied. Summary Judgement was granted in favor of Farm Bureau and this is Kiely’s appeal from that ruling. This Court sustained the ruling in favor of Farm Bureau.

The PIP policy at issue provided coverage up to $10,000 per person for each accident. Texas Insurance Code, Section 1952.151, states PIP requires payment of all reasonable expenses that: (1) arise from an accident; ….