Dallas Fort Worth Insurance Lawyer Blog

Concurrent Causation And The Insurance Code

September 2, 2017 | Mark S. Humphreys

When two events combine to cause damage, one being covered and the other not covered, issues arise regarding whether the loss is covered, and who bears the burden of proof to allocate causation between the covered cause and the excluded cause. In the San Antonio Court of Appeals case, Wallis v. United Serv. Auto. Assoc., the court held that the insurance company will only be liable for that portion of the damage that was caused by a covered event.

When the covered and excluded perils combine to cause injury, the Texas Supreme Court has held that the insured must present some evidence affording the jury a reasonable basis on which to allocate the damages.

Generally, courts have held that if a loss occurs as a result of two concurring perils, one insured and one not, then the loss is covered only to the extent that it can be traced to the covered peril. Expert testimony allocating damage between covered and excluded causes may satisfy this burden of proof, according the United States 5th Circuit, in Fiess v. State Farm Lloyds.

Hurricane Harvey News

August 31, 2017 | Mark S. Humphreys

News from Law 360. While some Texas lawyers are encouraging property owners to quickly lodge claims for Hurricane Harvey damage before a new state property insurance law takes effect on Friday, the reality is that the potential downsides of the legislation — including a lower interest rate on successful lawsuits against insurers — don’t warrant such swift filings, several attorneys told Law360.

Starting at the beginning of the week, a slew of law firms began to issue alerts on social media platforms recommending that homeowners and business owners file claims for Harvey losses with their insurers prior to the Friday effective date of House Bill 1774, which Gov. Greg Abbott signed into law in May. Among other things, the law reduces from 18 percent to about 10 percent the amount of prejudgment interest an insurer must pay if it is found to have delayed payment on or wrongfully denied a meritorious claim.

Opponents of HB 1774 say the law scales back important deterrents for insurers to comply with statutory deadlines for responding to and paying claims for losses tied to natural disasters. As such, some attorneys say, property owners would be well-served to file Harvey claims before the new law takes effect, so that if those claims wind up in litigation down the road, they will still be subject to current law.

Renters Insurance Claims

August 29, 2017 | Mark S. Humphreys

The San Antonio Court of Appeals issued an opinion in USAA Texas Lloyd’s Company v. John Doe and Jane Doe, and as next friends of XXX, a Minor. The case is an appeal from a motion for summary judgment in a declaratory judgment action filed by USAA seeking a declaration that it had no duties under a renters policy insuring the Doe’s.

The Doe’s thirteen year old son had sexually assaulted a five year old and the Doe’s were sued by the parents of the five year old and the Doe’s sought to have USAA defend them under the renters policy.

USAA claimed there was no coverage for the incident, pointing to the liability section of the policy which read:

Jurisdiction And Insurance Cases

August 27, 2017 | Mark S. Humphreys

This is a case from the Northern District, Dallas Division, dealing with which court is proper to litigate the case. The case is styled, Hutchins Warehouse Limited Partners v. American Automobile Insurance Company et al.

A court may sua sponte raise the issue of its jurisdiction at any time during the course of litigation.

28 U.S.C. Section 1441(a) permits the removal of any civil action brought in a state court of which the Federal Courts have original jurisdiction. However, the removal statue must be strictly construed because removal jurisdiction raises significant federalism concerns. Therefore, any doubts concerning removal must be resolved against removal and in favor of remanding the case back to state court.

Life Insurance And ERISA

August 26, 2017 | Mark S. Humphreys

As any ERISA attorney can tell you, the rules surrounding ERISA are tough. This is illustrated in a Fifth Circuit opinion styled, Kimberly D. Hendrix v. Prudential Insurance Company of America, et al.

Hendrix appeals the summary judgment granted against her on her ERISA claims arising out of a life insurance policy issued to her husband Randy, by Prudential and the dismissal of her claims against her former employer, Wal-Mart.

Randy was employed by Wal-Mart until July 11, 2012. Prudential presented evidence that it sent a letter on July 23, 2012 , notifying Randy of his right to convert his Wal-Mart policy to an individual life insurance policy. Randy had until August 11, 2012, thirty-one days after he ceased to be insured under the Wal-Mart plan, to indicate whether he would convert to an individual policy. Randy passed on August 27, 2012. On September 4, 2012, because Prudential received no response to the notice of conversion and because Randy passed outside the thirty-one day conversion period, the claim for life insurance benefits was denied and Kimberly was so notified.

Suing The Engineer / Adjuster

August 24, 2017 | Mark S. Humphreys

A case from the Southern District, Laredo Division has an interesting twist for insurance lawyers to know about. The case is styled, Luis Gonzalez v. State Auto Property & Casualty Insurance Company, et al.

A hailstorm caused damage to the roof on Luis home and he submitted a claim to State Auto. State Auto hired Haag Engineering, one of the defendants in this case, to help inspect the roof damage. Haag prepared an engineering report that State Auto relied upon when it adjusted and allegedly undervalued Luis roof damage.

Luis filed suit in State Court. The defendants removed the case to Federal Court alleging that Haag was improperly joined for the purpose of defeating diversity jurisdiction under 28 U.S.C. Section 1441.

Suing A Lloyd’s Insurance Company

August 22, 2017 | Mark S. Humphreys

A lot of insurance policies written for commercial or business coverage are Lloyd’s insurance companies. Suing a Lloyd’s company and keeping it out of Federal Court is a little easier than if the company were not a Lloyd’s company. Though this did not happen in this case, it is explained in an Eastern District, Marshall Division opinion styled, North Dallas Lawn Care and Landscape Inc. et al. v. Hartford Lloyd’s Insurance Company.

Regardless of the parties’ agreement that this case should proceed before the Federal District Court, the court has an independent obligation to determine whether subject-matter jurisdiction exists. Hartford asserts that this Court has jurisdiction pursuant to 28 U.S.C. Section 1334(b).

Out of concern that jurisdiction may not exist in this case, the Court ordered Hartford to file a declaration of citizenship and the citizenship of its underwriters.

Events Insurance Lawyers

August 20, 2017 | Mark S. Humphreys

For people having events that can be large, such as wedding, big, family re-unions, company parties, and other types of celebrations, looking to purchase insurance for those events can be a smart thing to do. The Claims Journal published an article about events insurance that is good to read. The article is titled, Disastrous Fyre Festival Sheds Light On Events Insurance.

Already facing numerous lawsuits, Fyre Festival organizer Billy McFarland was arrested on federal charges last week. The government alleged he defrauded investors who bought into Fyre Media Inc., the company behind the music festival that collapsed so spectacularly in the Bahamas a few months back.

But the fiasco’s graduation to prosecution is almost beside the point as far as the festival industry is concerned. Events constructed to attract free-spending youth tend to include some who drink too much or take drugs and consequently do all the risky things that come with both. Organizers already had it tough when it came to getting insurance. Then Fyre Festival came apart, replete with tent cities, stranded teens, broken promises, and a global media spotlight covering it all.

ERISA – Some Legal Standards

August 19, 2017 | Mark S. Humphreys

Employee Retirement Income Security Act (ERISA). These types of plans are loved by insurers and not so much by the insured. The reason is that so often, the decisions of plan administrators are final in that the courts uphold their decisions. A Southern District, Galveston Division opinion is good reading to illustrate this favoring of the ERISA plan administrators. The opinion is styled, Kristin Walker v. Regency Blue Cross Blue Shield of Oregon.

After citing some lengthy and convoluted facts the court’s opinion read thus:

This Court had previously found the plan to be covered by ERISA. A claimant must exhaust all available administrative remedies before filing suit. An exception to this rule found in 29 C.F.R., Section 2560.503-1(g) wherein there is non-compliance with requirements.

ERISA And Administrator Conflict Of Interest

August 17, 2017 | Mark S. Humphreys

Here is an ERISA case from the United States Fifth Circuit Court of Appeals. It is styled, Lashondra Davis v. Aetna Life Insurance Company. It is an appeal from a summary judgment in favor of Aetna.

The facts can be read from the case. The important issue in this case, is how the Court analyzed the allegation that the plan administrator abused his discretion and there was a conflict of interest with the plan administrator being both who evaluates the claims for benefits and pays benefits claims.

The Court stated that in determining whether there was an abuse of discretion, we also consider whether the plan administrator had a conflict of interest. A plan administrator has a conflict of interest if it “both evaluates claims for benefits and pays benefits claims.” However, a conflict of interest is but one factor among many that a reviewing judge must take into account. A conflict of interest should prove more important where circumstances suggest a higher likelihood that it affected the benefits decision. A reviewing court may give more weight to a conflict of interest where the circumstances surrounding the plan administrator’s decision suggest procedural unreasonableness — that is, where the method by which the plan administrator made the decision was unreasonable.