Dallas Fort Worth Insurance Lawyer Blog

Insurance Misrepresentations

February 6, 2019 | Mark S. Humphreys

Insurance attorneys know that Section 541.051 broadly prohibits making any statement misrepresenting the terms of a policy, or the benefits, advantages, or dividends of a policy, making misrepresentations about the financial condition of an insurer, misrepresenting the true nature of any policy or class of policies, or making any misrepresentation to a policy holder for the purpose of inducing or intending to induce the policyholder to allow an existing policy holder to lapse, forfeit, or surrender his insurance. This provision is sometimes referred to as the “anti-twisting” provision, because the latter portion is aimed at preventing one insurer stealing away the insureds of another insurer by making misrepresentations.

Section 541.052 prohibits making any advertisement or statement containing any assertion, representation, or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business that is untrue, deceptive, or misleading.

Section 541.061 prohibits misrepresenting an insurance policy by:

Responsibilities Of Insurance Agents

February 3, 2019 | Mark S. Humphreys

Here is a list of responsibilities that insurance agents can be held responsible for failing to perform or performing incorrectly.

A. From a 1948, El Paso Court of Appeals opinion styled, Burroughs v. Bunch, an insurance agent has a duty to procure the coverage entrusted to his care, or failing to do so, to immediately notify the insured of this fact. A more recent opinion from the Tyler Court of Appeals, Critchfield v. Smith, which was issued in 2004, says this duty to procure is two distinct duties: (1) the duty to use reasonable diligence in attempting to place the requested insurance, and (2) the duty to inform the client promptly if unable to do so.

B. From the 1992, Texas Supreme Court opinion styled, May v. United Services Association of American, requires that agents keep their insureds fully informed about the current status of a policy’s in force status.

How Are Insurance Agents Held Liable For Their Wrongs

February 2, 2019 | Mark S. Humphreys

In order to hold a person liable for his/her acts or omissions, the thing complained of must violate a duty which the law recognizes. This is easily understandable in the case of a collision resulting from running a stop sign. The law imposes a duty of drivers to stop at stop signs. So, when a driver violates that duty by running a stop sign, he or she is liable for the damages caused. So, too, with insurance agents.

Nationally there is a concept known as the “professional judgment rule” which holds that an agent in the business of selling insurance must act in a manner befitting a reasonable and prudent agent. Accordingly, agents who do not utilize their skills in this way are subject to claims for damages. Unfortunately, our Texas Supreme Court has rejected the “professional judgment rule” for use Texas. Instead, in Texas, agents have a general duty to use reasonable care, skill and diligence in procuring insurance. It even includes the duty of an agent to “keep his clients fully informed so that they can remain safely insured.” This is according to the 1977, Beaumont Court of Appeals opinion, Trinity Universal Ins. Co. V. Burnette. In the Burnette case the court upheld a jury finding that an insurance agent was negligent in failing to “thoroughly acquaint himself” with his client’s needs and in failing to produce the coverage for risks or perils the client faced.

On 1992, the Texas Supreme Court was faced with deciding if an insurance agent was negligent for failing to explore other health insurance coverage options beyond one with a tricky termination and deferral clause. This was the opinion styled, May v. United Services Association of America. In this case, the May wound up without coverage after buying the policy that the agent recommended. The lawsuit claimed that the agent failed to investigate alternative policies which were easily obtainable. This was factually true – the agent did not investigate any of the several other possible policies and instead settled on the first one he found. Nevertheless, the Texas Supreme Court found that the agent did not “mislead” the May about the limits of the policy selected. The May case dramatically changed the fact of insurance law in Texas. In essence, it appears the the Court now requires there to be an actual misrepresentation in order for the Plaintiff to succeed. However, the court did leave open the possibility that the Mays might have succeeded if they had an explicit agreement with the agent regarding what terms they required in the policy that the agent obtained. Had the agent violated such an agreement, he might have been found liable.

Uninsured Motorist Case And A Jury

January 30, 2019 | Mark S. Humphreys

Texas insurance lawyers will find this interesting.

A person finds early on when dealing with an insurance company that simply making complaints and contacting the Texas Department of Insurance is a waste of time and effort.

If you are an attorney representing someone injured in an automobile accident and the person who cause the wreck is uninsured and the person injured has uninsured motorist (UM) coverage with their auto insurance company and the company is refusing to compensate their customer, here is a sample opening statement when trying this case to a jury:

Underinsured Motorist Coverage And Standing To Sue

January 27, 2019 | Mark S. Humphreys

Here is a 2018, case with circumstances this insurance lawyer has not seen before. The case is out of the San Antonio Court of Appeals and is styled, Virginia Bretado v. Nationwide Mutual Insurance Company.

This case is an appeal from a motion for summary judgment granted in favor of Nationwide. Bretado was struck from behind by Paul Moryl. On the same day, Bretado filed a claim against Nationwide for underinsured motorist (UIM) benefits. Later, Bretado sued Moryl.

Nationwide denied the claim, stating the Moryl’s insurance was sufficient to satisfy Bretado’s damages.

Delay In Paying Insurance Claim – Uninsured Coverage

January 26, 2019 | Mark S. Humphreys

Insurance lawyers will often run across the situation at issue in the 2018, Dallas Court of Appeals opinion, George Bryant v. Progressive County Mutual Insurance Company and Kristen Winkler.

This is a uninsured motorist (UM) case wherein Bryant sued Progressive and the adjuster, Winkler, for the harm caused by the UM driver and numerous insurance code violations. The trial court severed the auto wreck from the bad faith insurance claims. In an UM case, Brant first had to prevail at trial, which he did. Bryant then continued his claims for insurance code violations. The trial court granted a motion for summary judgment in favor of Progressive and this appeal followed.

Bryant alleged numerous appeal points but the one discussed here is the issue regarding the Texas Prompt Payment of Claims Act (PPCA).

Renter’s Insurance Claims

January 23, 2019 | Mark S. Humphreys

Renter’s insurance claims are not really much different than a homeowners claim. But one distinction that sometimes appears is the language in a renter’s policy will often times shorten the statute of limitations. This is seen in the 2018, San Antonio Court of Appeals opinion styled, Terry Granger v. The Travelers Home And Marine Insurance Co.

This is a summary judgment case rendered in favor of Travelers and affirmed on this appeal. The relevant policy language reads:

9. Suit Against Us. No suit or action can be brought against us unless there has been full compliance with all of the terms under Section I of this policy. Action

Insurance Lawsuits – Cooperation

January 20, 2019 | Mark S. Humphreys

Insurance lawsuits, as all lawsuits, require the parties involved to cooperate with each other in the discovery process and to abide by the Rules of Procedure. The results of failure to do so are illustrated in the 2018, Dallas Court of Appeals opinion styled, Farbod Ayati-Ghaffari v. Farmers Insurance Exchange.

The issue in this appeal is whether the trial court abused its discretion in imposing death penalty sanctions against Ayati for his abuse of the discovery process.

This opinion makes a long list of the abuses of occurred over the course of this lawsuit including Orders made by the Court that were not followed and numerous chances given by the Court to correct wrongs being committed by Ayati.

Subrogation And Statute Of Limitations

January 19, 2019 | Mark S. Humphreys

Here is an insurance subrogation case from the U.S. Southern District of Texas, Houston Division. It is a 2018, opinion styled, AXA Insurance Company a/s/o The Museum Of Printing History v. Yoau Electric Co. Ltd., LG Electronics U.S.A., Inc., and Chocolates El Rey Inc.

The museum leased a portion of the place of business to El Rey. A fire occurred at the subject premises on or about May 10, 2016, resulting in extensive smoke, fire, and water damage to Chocolates’s historical collection and the premises. AXA, as subrogee, made payments on the loss. Investigators determined the fire resulted from faulty wiring of an LG air conditioning unit used by El Rey at the premises. The air conditioning unit was designed and manufactured by LG and Yoau. AXA as subrogee, asserts that defendants LG and Yoau and Chocolates are responsible for the fire loss sustained by AXA due to breach of express and implied warranties, negligence, and strict products liability.

This is a Rule 12(b)(6) motion to dismiss opinion. In considering a Rule 12(b)(6) motion, courts generally must accept the factual allegations contained in the complaint as true. While a complaint attacked by a Rule 12 (b)(6) motion does not need detailed factual allegations, a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. The factual allegations must be enough to raise a right to relief above the speculative level. The supporting facts must be plausible enough to raise a reasonable expectation that discovery will reveal further supporting evidence.

Suing Insurance Adjusters

January 16, 2019 | Mark S. Humphreys

Suing Adjusters in federal court is often times difficult. The reason is that an adjuster is usually sued in state court in an effort to defeat diversity jurisdiction thus, keeping the case in state court. When an insurance company believes the adjuster has been sued solely to defeat diversity jurisdiction, the insurance company will remove the case to federal court and ask the Judge to dismiss the adjuster.

This is what happened in this 2018, 5th Circuit opinion styled, William Mauldin v. Allstate Insurance Company; Mayella Gonzales; Theresa Hernandez.

Pursuant to 28 U.S.C., Section 1441 and 1446, Allstate removed this case to federal court where the Judge allowed the removal. Mauldin appealed this issue to this Court.