Dallas Fort Worth Insurance Lawyer Blog

Federal Court Pleadings Against Adjusters

August 5, 2017 | Mark S. Humphreys

A successful pleading against an insurance adjuster was found in a Western District, Austin Division opinion issue in May 2017. The opinion is styled, Affordable Portable Structures, Inc. and JFJ Group, Inc. v. The Cincinnati Insurance Company and Alfred Gray.

Affordable was insured by Cincinnati when a storm caused damage to property owned by Affordable. Cincinnati hired Alfred Gray to adjust the claim, who hired Rimkus Consulting Group, to prepare a report. According to Affordable, Rimkus is known to provide results oriented reports that are favorable to insurance companies and minimize damage estimates.

Affordable hired a consultant who estimated Affordable’s damages at $698,111.69. Gray turned in an estimate for $25,935.38 — less than 3.5% of the figure that Affordable’s consultant estimated. Affordable alleged that Gray is an inexperienced adjuster and, as such, knew or should have known that the Rimkus report vastly underestimated the amount of damage caused to the property. Accordingly, Gray’s decision to conduct no further investigation was unreasonable and did not constitute a good faith attempt to effectuate a prompt, fair, and equitable settlement.

Prompt Payment And Appraisal

August 3, 2017 | Mark S. Humphreys

What is the result oi an insurance company pays a claim after an appraisal even if you don’t agree with the appraisal? This issue is addressed in a Houston Court of Appeals [14th Dist.] opinion. It is styled, National Security Fire & Casualty Co. v. Hurst.

This is an appeal from a jury trial in favor of Hurst against National. This appeals court reversed the jury trial results.

Dissatisfied with the initial estimate and payment, Hurst sued National and others for claims arising out of a wind and hail storm damage to his home. This lawsuit also claimed violations of the Texas Prompt Payment of Claims Act. National hired adjusters who assessed the damage and paid Hurst $3,524.56 (accounting for the $1,000 policy deductible), which Hurst accepted. Hurst proceeded to file suit on September 7, 2010.

Clarifying Claims Against Adjusters

August 1, 2017 | Mark S. Humphreys

Claims against insurance adjusters need to be specific. This is exemplified in a case from the Southern District of Texas, McAllen Division. The opinion is styled, Jorge Vallejo v. Allstate Vehicle and Property Insurance Company, et al.

Vallejo filed suit in State Court suing Allstate and the adjusters, asserting claims for violations of the Texas Insurance Code. Vallejo alleges Allstate assigned dates of loss of February 6, 2016 and May 31, 2016 to the claims. Jeff Doll was assigned to the February claim and Doll sent a letter to Vallejo on June 17, 2016 but did not schedule an inspection until July 11. As of July 28, 2016, the claim was still not processed.

Vallejo also alleges Ronald Sledge erroneously estimated the value of the claim and that his estimate failed to fully quantify Vallejo’s damages, thus demonstrating that Sledge did not conduct a thorough investigation of the claim.

ERISA And Attorney Fees

July 30, 2017 | Mark S. Humphreys

Here is an ERISA case from the Southern District, Galveston Division. The case is styled, Unum Life Insurance Company of America v. Sandra Mohedano, et al.

Before the Court is Plaintiff’s Motion for Attorneys’ Fees and Brief in Support. The Court had earlier granted Unum’s cross-motion for summary judgment while denying Defendants, cross motion in an ERISA action. A Final Judgment followed, terminating the case. Unum now seeks to recoup attorneys’ fees expended while litigating the following: (1) the interpleader of Life Benefits ($10,492.50); and (2) the appeal of its denial of Accidental Death and Dismemberment Benefits ($76,683.50). It is undisputed that Unum is the successful party in this litigation. Nevertheless, based on the applicable law, the motion for attorneys’ fees is Denied. The reasons are as follows.

Under ERISA, 29 U.S.C. Section 1132(g)(1), a court in its discretion may allow a reasonable attorney’s fee and cost of action to either party. This fee-shifting provision is a statutory exception to the “American Rule,” wherein the prevailing litigant is ordinarily not entitled to collect a reasonable attorneys’ fee from the loser. The text of the statute confers broad discretion upon district courts as it provides no factors relevant to the decision. The only prerequisite is that the party to which the fees and costs are allowed achieved some degree of success on the merits. The Fifth Circuit has provided guidelines to assist district courts in exercising their discretion. These factors include:

Get An Insurance Lawyer

July 29, 2017 | Mark S. Humphreys

The need to get an insurance lawyer is illustrated in a recent opinion from the Southern District, Houston Division. The opinion is styled, Trudy Sawyer v. Geico General Insurance Company.

On December 28, 2015, Sawyer filed a complaint and an application to proceed in forma pauperis in this case, which was granted. On October 26, 2016, the court ordered the parties to submit a Joint Discovery/Case Management Plan. Nevertheless, the parties filed independent discovery plans. In its discovery plan, Geico stated its intention to take Sawyer’s deposition between December, 2016, and May, 2017.

Geico did make arrangements to take Plaintiff’s deposition on January 18, 2017. Sawyer was given proper notice of the deposition, but she did not appear, and belatedly informed Defendant that she would not attend, because she was “the victim” in the action, and so she should not have to endure “such depressive measures.” Geico then rescheduled Sawyer’s deposition for February, 2, 2017. Again, she was properly notified of the deposition, but she again failed to appear, claiming that she could not, because she had been the “victim of robbery,” the night before.

ERISA And Contractual Limitations

July 27, 2017 | Mark S. Humphreys

Here is another opinion for ERISA lawyers to read. The opinion is styled, Ricardo Rodriguez and All Others Similarly Situated v. Hartford Life And Accident Insurance Company http://www.txs.uscourts.gov/offices/houston-division. It is from the Southern District, Houston Division.

This is a motion to dismiss filed by Hartford and granted by the Court.

Rodriguez initiated this suit to recover disability benefits under an ERISA plan with Rodriguez’s employer, Walmart. Rodriguez seeks to enjoin Hartford from imposing a contractual limitations period on long-term disability claims shorter than that permitted by Arkansas law. The Policy provisions states:

Innocent Spouse, Lying Insured, Concealment / Fraud

July 25, 2017 | Mark S. Humphreys

Here is a 2003 case from the Amarillo Court of Appeals that deals with a situation where the spouse is innocent but an insured on the policy is committing fraud. The case is styled, McEwin v. Allstate Texas Lloyds.

Here are the facts.

The husband and wife were both named insureds on their homeowners policy. The husband set the house on fire but the wife was unaware of the arson and was not involved. The proof of loss form did not inquire into whether the insureds were involved and did not reference the origin of the fire. An examination under oath was taken from both insureds who both denied knowledge or involvement in the loss. The husband was subsequently convicted of the arson and the couple divorced. The insurer denied the claim presented by the wife who had received all interest in the insurance proceeds in the divorce and the wife filed suit. The insurer argued that denial was proper based on the concealment or fraud provision of the policy, which stated in part that “this policy is void as to you or any other insured, if you or any other insured … intentionally concealed or misrepresented any material fact or circumstance, made false statements or committed fraud relating to this insurance ….” The trial court found this provision to be unambiguous and held that the husband’s fraudulent misrepresentations, concealment and fraud voided the policy as to all insureds, thereby precluding the wife’s recovery for the fire loss. The wife claimed she was an innocent spouse and that all policy benefits would be her separate property pursuant to the divorce decree. She further asserted that Texas Insurance Code, Section 705.003 required that the insurer prove it waived or lost a valid policy defense based on misrepresentation in order to void the policy. The trial court disagreed and granted the insurer’s motion for summary judgment. This appeal followed.

Liability Insurance Settling When You Think They Are Wrong

July 23, 2017 | Mark S. Humphreys

Insurance lawyers often will hear a story that goes like this. – I was involved in an accident last year. The other guy was at fault. I let my insurance company know about the wreck and then I found out that my insurance company paid the other guy. Can I sue them for doing that?

This issue is addressed in a 2000, Dallas Court of Appeals opinion styled, Stevens Transport, Inc. v. National Continental Insurance Company, et al.

Here are the facts of the case: National Continental Insurance Company, Progressive County Mutual Insurance Company, and Progressive Casualty Insurance Company provided a truckers insurance policy to Stevens Transport, Inc. The policy included a right to defend and settle any suit involving damages resulting from an accident caused by the use of a covered automobile. The policy had a $250,000 deductible.

Insurance Case And Attorney Fees

July 22, 2017 | Mark S. Humphreys

Insurance lawyers know that in a first pary insurance claim lawsuit, a claim for attorney fees can be made. When the insurance company challenges the attorney fees claim of the insured, a natural response by the lawyer is to seek to get the information related to what the insurance company paid their lawyers in attorney fees.

Can that be done? The question was answered by the Texas Supreme Court in this recent 2017, opinion. It is styled, In Re National Lloyds Insurance Company, Wardlaw Claims Service, Inc., And Ideal Adjusting, Inc. Relators.

The discovery dispute in this mandamus proceeding arises in the context of multi-district litigation involving allegations of underpaid homeowner insurance claims. The issue is whether a party’s attorney billing information is discoverable when the party challenges an opposing party’s attorney fee request as unreasonable or unnecessary but neither uses its own attorney fees as a comparator nor seeks to recover any portion of its own fees. This Court held that under such circumstances, (1) compelling en masse production of a party’s billing records invades the attorney work product privilege; the privilege is not waived merely because the party resisting discovery has challenged the opponent’s attorney fee request; and (3) such information is ordinarily not discoverable.

Segregation Of Damages – Property Damage Claims

July 20, 2017 | Mark S. Humphreys

Lawyers who handle property damage claims learn real fast that the damages that exist on the property have to be properly segregated when making an insurance claim. What does this mean? The most common situation that arises is after a hail and wind storm. An insured discovers damage to his home and makes a claim. Nest, the insurance company says that all the damage is not covered. A law suit results.

The law is clear that an insured has the burden of proving what damages occurred, when they occurred, and how they occurred. Often times there is damage from a hail storm but some of the damage may have occurred in at a different time and in a different storm. When this happens, it it he responsibility of the insured, not the insurance company to explain and prove when and how the damage occurred.

This is discussed in a 2006, Northern District of Texas case, styled, Atwill v. State Farm Lloyds.