Dallas Fort Worth Insurance Lawyer Blog

Cooperation With Insurance Company

January 14, 2018 | Mark S. Humphreys

Cooperation with the insurance company investigation of a claim is required under the insurance policy. Failure to cooperate can result in the policy being rescinded and the claim denied.

The 1994, Amarillo Court of Appeals opinion, Andy Costely and Cathy Costley v. State Farm Fire And Casualty Company, illustrates the necessity of cooperation with the insurance company investigation of a claim.

In this case, State Farm was allowed to rescind a policy based on the insured failure to cooperate. Cathy had her truck, tractor, and other personal property destroyed by a fire while it was parked on Andy’s father’s (Robert) property. Andy and Cathy sued Andy’s father. Later Robert sued Andy alleging the damage was due to the negligence of Andy.

Reasons For Rescission Of An Insurance Policy

January 13, 2018 | Mark S. Humphreys

Area life insurance attorneys need to know the reasons an insurance company can rescind an insurance policy.

In addition to the common law standards, several statutory provisions regulate an insurer’s ability to avoid coverage based on a misrepresentation by the insured. These are found in Texas Insurance Code, Chapter 705.

The statute provides:

Life Insurance And Warranties

January 11, 2018 | Mark S. Humphreys

Parker County life insurance lawyers know how the courts look at warranties in life insurance policies.

As stated in the 1997, 5th Circuit opinion styled, Riner v. Allstate Life Insurance Company, “Warranties in insurance applications are strongly disfavored in the law, and even fairly obvious attempts to create warranties in the application process have been rejected by Texas Courts.” There is a line of cases holding the same as Riner. Courts thus have been disinclined to find that contract language creates a warranty or condition precedent unless the language allows no other conclusion.

The language used the 1966, Texas Supreme Court case, Great American Reserve Insurance Co. v. Britton, said that “the policy shall not take effect until it has been delivered to its owner during the lifetime and good health of the Insured.” The court found this was a condition precedent.

Life Insurance Misrepresentation?

January 9, 2018 | Mark S. Humphreys

Aledo life insurance attorneys need to know the difference between a misrepresentation in a life insurance policy application and a condition precedent. There is an important distinction between statements by the insured that are considered to be representations and those considered to be conditions precedent. If the insured’s statement is considered a representation, a false statement alone will not let the insurer avoid coverage. Each of the elements discussed by the Texas Supreme Court in the 1980, opinion styled, Mayes v. Massachusetts Mutual Life Insurance Co., must be shown. In contrast, if the insured’s statement is considered a condition precedent, then falsity alone will allow the insurer to avoid coverage.

This representation versus warranty issue is well developed under Texas law. If the statements are representations, then to avoid liability under the policy the insurance company must plead and prove:

1) the making of the representation;

Rescission Of An Insurance Policy

January 7, 2018 | Mark S. Humphreys

Most insurance lawyers know that one way an insurance company tries to get away with refusing to pay on an insurance policy is to rescind the policy. According to a 1931, Amarillo Court of Appeals opinion styled, Forrester v. Southland Life Ins. Co., the general principle is, prior to a loss an insurance company has the right to rescind the policy procured through mutual mistake or fraud.

As stated by the Texas Supreme Court in a 1980 opinion styled Mayes v. Massachusetts Mut. Life Ins. Co., an insurance company may rescind a policy based on the insured’s misrepresentation, if the insurance company pleads and proves the following elements:

the making of the misrepresentation;

Punitive Damages And Auto Policy

January 6, 2018 | Mark S. Humphreys

Dallas and Fort Worth area insurance lawyers need to read this November, 2017, opinion from the San Antonio Court of Appeals. It is styled, Farmers Texas County Mutual Insurance Company v. Zuniga.

Zuniga was walking to school and struck by a car driven by Christopher Medina. Zuniga sued Medina for negligence and gross negligence. A jury awarded Zuniga $93,244.91 in actual damages and $75,000.00 in punitive damages. Farmers insured Medina and paid the actual damages but then filed a declaratory judgment action seeking a declaration that the policy did not cover punitive damages.

Zuniga filed a motion for summary judgment on the punitive damages issue. Farmers prevailed in this case.

Insurance Lawyers Have To Sue The Adjuster Correctly

January 4, 2018 | Mark S. Humphreys

A 2017, opinion styled, Carrillo Funeral Directors, Inc. v. Ohio Security Insurance Company, et al, is another example of incorrect pleadings against an adjuster. The case is from the Northern District, Dallas Division.

Carrillo suffered hail damage and made a claim against its insurer Ohio. There was an under payment of the claim and Carrillo sued Ohio and the adjuster John Horvath for violations of the Texas Insurance Code, in State District Court. Ohio timely removed the case to Federal Court asserting that Horvath was improperly joined in the lawsuit in an effort by Carrillo to defeat diversity jurisdiction.

28 U.S.C. section 1441(a) permits the removal of any civil action brought in a State court of which the district courts of the United States have original jurisdiction. But only if the action could have been originally filed in federal court. However, the removal statute must be strictly construed because removal jurisdiction raises significant federalism concerns. As a result, any doubt as to the propriety of removal should be resolved in favor of remand.

Assignment Of Liability Claims

January 2, 2018 | Mark S. Humphreys

What if it can be proved that the insurance company was wrong in denying coverage of a claim when a third party is suing the insured?

A June 2017, Texas Supreme Court opinion addresses this issue in the case styled, Great American Insurance Co. v. Hamel. The issue in this case was, what constitutes a full adversarial trial.

In Texas, when someone is being sued and the person being sued cannot get their insurance company to provide a defense and pay the claim, and the person being sued believes his insurance company should be providing a defense and paying the claim, then when a judgment is taken against him, he can assign the claim he has against his insurance company to the person who sued him and obtained a judgment.

New “Hail Bill” In Texas

December 31, 2017 | Mark S. Humphreys

Texas has a new law regarding hail damage claims.

Here are five things to know about the new law.

First, it creates a new chapter in the Texas Insurance Code, Chapter 542A, which applies to property damage claims caused by “forces of nature.” This includes damage caused by earthquakes, wildfires, floods, tornados, lightning, hurricanes, hail, wind, snowstorms, and rainstorms. The law applies to any lawsuit the insured may bring against the insurer or its agent even if the insured does not sue the insurer. Besides, Insurance Code violations, this new law applies to breach of contract claims and common law claims. Further, “forces of nature” are not specifically limited to weather related events and litigation will probably result over what else is included.

Sworn Proof Of Loss

December 30, 2017 | Mark S. Humphreys

Almost all insurance policies require a “sworn proof of loss” be filed when making a claim. The Dallas Division, Northern District of Texas, issued an opinion in October 2017, dealing with a situation where the sworn proof of loss was waived by the Court. The opinion is styled, Alexander Vilaythong v. Allstate Insurance Company.

Vilaythong (Plaintiff) had a homeowners policy with Allstate. Plaintiff suffered a hail storm damage and submitted a claim to Allstate, who estimated damage at $17,053.76. Plaintiff hired an adjuster who estimated the damage at $40,905.22.

A lawsuit ensued and Allstate moved to have the case dismissed under Rule 12(b)(1) for lack of standing because Plaintiff did not satisfy a condition precedent for filing the lawsuit, because he had not filed a signed and sworn proof of loss at least ninety one days before suing Allstate.