Dallas Fort Worth Insurance Lawyer Blog

Getting The Insurance Adjuster Sued Is Important

November 5, 2017 | Mark S. Humphreys

Getting the insurance adjuster served with legal papers in a lawsuit is important and for some reason, overlooked. This is illustrated in an Eastern District, Sherman Division case styled, Robert Crawford v. Allied Property and Casualty Insurance Company, Laura Jones.

Crawford, a citizen of Texas, sued Allied, an Iowa Company and Jones, who is a Texas resident in State District Court. The suit arises out of the Defendant’s alleged improper handling of an insurance claim. Crawford suffered extensive damage to his property during a storm. Allied was Crawford’s insurer. Jones was hired by Allied to inspect and adjust Crawford’s loss. Thereafter, it is alleged that Jones conducted a substandard investigation and inspection of the property, prepared a report that failed to include all of the damages that she noted during the inspection, and undervalued the damages she observed during the inspection, all of which resulted in Allied denying Crawford adequate coverage under the policy. Crawford sued for breach of contract and sued Allied and Jones for violations of the Texas Insurance Code.

Allied and Jones removed the case to Federal Court based on diversity jurisdiction, alleging that Jones was improperly joined to defeat diversity jurisdiction.

Insurance Contract Provisions

November 4, 2017 | Mark S. Humphreys

A recent case filed in Tarrant County was removed to Federal Court, Northern District, Fort Worth Division. One issue dealt with the appraisal provision in the insurance contract. The style of the case is, Reese Hallak v. Allstate Vehicle and Property Insurance Company.

Hallak sued Allstate for breach of contract and violations of the Texas Insurance Code. Hallak’s petition alleges Allstate mishandled and underpaid him for two separate property damage claims. After removal to Federal Court, Allstate filed a Motion To Abate Pending Appraisal, arguing that, pursuant to the terms of the insurance contract between the parties, this case should be abated until conclusion of the appraisal process.

There is no specific federal statute or rule which expressly authorizes a motion to abate. The court’s decision to do so is largely a matter of judicial discretion.

Lawsuits In Federal Court – It Has To Be Right

November 2, 2017 | Mark S. Humphreys

Insurance attorneys with much experience learn real quick that the insurance companies prefer to litigate cases in Federal Court. The reason is that Federal Court is much less forgiving of mistakes and the Federal Courts look for reasons to dispose of a case. This authors opinion is that many of the Federal Courts put a priority on technical rules rather than substance. This authors opinion is bolstered by the fact that an insurance company will always attempt to get a lawsuit against them in State Court, removed to Federal Court.

This is illustrated in a 2017, opinion from the Southern District of Texas, McAllen Division. The case is styled, Maria Abdon v. State Farm Lloyds.

In this case, the court is considering State Farm’s motion for partial dismissal on the pleadings, as well as Abdon’s response and alternative motion for leave to amend. The Court granted State Farm’s motion for partial dismissal and denied Abdon’s motion for leave to amend.

Insurance Lawsuits Need To Be Specific

October 31, 2017 | Mark S. Humphreys

Lawsuits need to be specific when claiming what an insurance company, adjuster, or agent did that caused harm to their insured. This is illustrated in an Eastern District opinion styled, Scott Jengemuhle and Ty Properties, LLC v. Acceptance Indemnity Insurance Company and Robert Saucier.

This case relates to an insurance claim for storm related damages to Plaintiffs’ business and property. Plaintiffs file suit in State Court and Defendants removed the case to Federal Court. Plaintiffs allege that Acceptance did not provide coverage sufficient to complete necessary repairs to the property. Saucier is the adjuster assigned to the claim. Acceptance asserts that Saucier was improperly joined in the lawsuit and thus, his joinder should be disregarded for purposes of diversity. Plaintiff asserts that he has sufficiently alleged causes of action against Saucier to maintain the claim against him.

To establish fraud in joining a non-diverse defendant, the removing party must establish the plaintiffs’ inability to establish a cause of action against the non-diverse party in state court. The Court must decide whether there is a reasonable basis for predicting that Plaintiffs might be able to establish liability on the pleaded claims in state court.

Disability Insurance Coverage Issues

October 29, 2017 | Mark S. Humphreys

In a definition of “total disability in an individual accident and sickness policy or hospital, medical, and dental service corporation subscriber contract, the inability to perform duties may not be based solely on an individual’s inability to perform “any occupational duty,” but the insurer may specify the requirement of the inability of the insured to perform all of the substantial and material duties pertaining to his or her regular occupation, or words of similar import. This is found in the 28 Texas Administrative Code, Section 3.3012(b).

The policy may further provide coverage for “partial disability,” which is typically defined as the insured’s inability to perform one or more but not all of the essential duties of his or her employment or occupation.

Disability policies normally require that any claimed disability occur while the policy is in effect or within a specified time after any claimed accident or injury.

Disability Policy Language

October 28, 2017 | Mark S. Humphreys

As in all insurance policies, the language used in the policy will be used in enforcing and interpreting the policy.

In the 2003, Texas Supreme Court opinion, Provident Life and Accident Insurance Co. v. Knott, the court read the policies in question defining the term “total disability” to mean that the insured must, in order to be considered totally disabled under the policies, be unable to “perform all of the important daily duties of his occupation.” The then held that the trial court’s granting of summary judgment in favor of the insurance company was appropriate given that the insured, a gynecologist seeking benefits for total disability under those policies was able to see patients, perform surgery, consult with other physicians and perform administrative duties.

A long term disability policy that defined disability in part as the inability to perform “each of the material duties” of the insured’s regular occupation required only that the insured be unable to perform any single material duty of her occupation in order to be considered disabled, not that she be unable to perform all duties of that occupation. This was in the 2002, U.S. 5th Circuit opinion, Lain v. UNUM Life Insurance Co. of America. No concrete evidence disability insurer’s determination of non-disability for insured who suffered recurring severe chest pains, while overwhelming evidence supported disability claim, warranting benefit award under ERISA civil enforcement provision: the insured’s time at home doing research on her medical condition did not equate to ability to practice law, as insurer contended; insurer focused on certain “normal” test results to support its finding, but test results were primarily abnormal and also could not clinically measure insured’s pain; and insurer’s reliance on insured’s failure to seek psychiatric care prior to ceasing employment was misguided since her disability was physical.

Private Disability Claims

October 26, 2017 | Mark S. Humphreys

It needs to be noted at the beginning here. Private disability claims are different from government disability claims and also from disability claims that are governed by ERISA.

This posting deals those disability claims that are from private policies or policies other than government or ERISA.

Disability policies will usually specify an amount that will be paid in the event a claimant becomes disabled (as that term is defined in the policy) and a maximum length of time for which such benefits will be paid. As an example the policy may pay $500 per month for up to 10 years.

Auto Insurance 515A Endorsement

October 24, 2017 | Mark S. Humphreys

Weatherford insurance lawyers know about the 515A Endorsement (a named driver exclusion) that applies to auto policies. These 515A Endorsements are discussed in a 2013, El Paso Court of Appeals opinion styled, Stadium Auto, Inc. v. Loya Insurance Company.

Olga Salazar purchased and financed a vehicle through Stadium. A Loya policy was issued which contained a 515A Endorsement listing Junior Sanchez as an excluded driver. Junior had a wreck in the vehicle after allegedly taking the keys from Olga’s purse without permission. Olga ceased payments to Stadium and Stadium sought payment from Loya. Loya refused coverage based on the exclusion of coverage for Junior.

Stadium sued Loya alleging violation of Texas Insurance Code, Section 541.060 and the Texas DTPA, Section 17.46(b). Stadium also alleged that Loya was estopped from denying liability based on the 515A Endorsement. Loya also asserted that they were entitled to payment based on the 530A Endorsement that provides coverage for the loss payee despite the named driver exclusion.

Homeowners Policies And Flood Insurance Awareness

October 22, 2017 | Mark S. Humphreys

The Houston Chronicle ran a story of September 20, 2017, that all homeowners need to read. It is titled “Flooded Houston Homeowners Might Have Been Spared Ruin — But Only If They Read The Fine Print.”

25 words of a public document that could have spared thousands of homeowners from losing everything sat tucked away in a Fort Bend county clerk’s office for the past 20 years.

“This subdivision is adjacent to the Barker Reservoir and is subject to extended controlled inundation under the management of the U.S. Army Corps of Engineers.” These 25 words, in the finest of fine print were of public record.

Life Insurance – 2 Year Incontestability Clause

October 21, 2017 | Mark S. Humphreys

Fort Worth insurance lawyers need to be aware of a life insurance policy’s incontestability clause.

All life insurance policies must contain an incontestability clause, which is a provision that the policy will be incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums. The statute requiring this is found in the Texas Insurance Code, Section 1131.104 for life insurance policies and Article 3.50, Section 2(2) for group life insurance policies. Also, look at Sections 705.101 to 705.105. The effect of these clauses is to limit the preceding defenses so they can apply only during the first and second policy years.

The purpose of the incontestability clause is to protect the insured from a contest as to the validity of the policy after the set period has expired. This is discussed in the 1972, Texas Supreme Court opinion styled, Minnesota Life Insurance Co. V. Morse.