Renters Insurance

Irving insurance lawyers will run into situations where a renters insurance policy is at issue. The Dallas Court of Appeals issued an opinion in 2015, that should be read. It is styled, Chambers v. American Hallmark Insurance. This case is a good illustration why an experienced insurance law attorney needs to be involved.
This is an appeal by Chambers wherein the trial court granted summary judgment in favor of Hallmark.
Chambers purchased a renter’s insurance policy (the Policy) from Hallmark that went into effect on February 1, 2010. The insurance policy covered the Chambers premises. Chambers paid $252.00 in premiums on the Policy. On or about March 13, 2010, Chambers reported a loss of personal property from the residence identified on the Policy. Chambers submitted his claim for coverage with Hallmark. Hallmark claimed that the alleged theft was not a covered loss under the Policy and denied the claim.
Chambers filed suit and in his original petition purported to allege claims for negligence, violations of Chapters 541 and 542 of the Texas Insurance Code, and violations of Chapter 17 of the Texas Business and Commerce Code. Hallmark filed an answer and special exceptions. The court granted Hallmark’s special exceptions and required Chambers to re-plead his case.
Chambers then filed a second amended petition alleging claims pursuant to the Texas Insurance Code and DTPA, and adding claims under the Texas Administrative Code pursuant to section 21.203.
Texas follows a “fair notice” standard for pleading, in which courts assess the sufficiency of pleadings by determining whether an opposing party can ascertain from the pleading the nature, basic issues, and the type of evidence that might be relevant to the controversy.
The purpose of the fair notice requirement is to give the opposing party information sufficient to enable it to prepare a defense.
This petition specifically pled the portions of the DTPA and the Texas Insurance Code that Chambers contended Hallmark violated with sufficient facts to put Hallmark on notice of the allegations against it. Additionally, Chambers complied with the trial court order and did not replead his claim for negligence. This appeals court determined that Chambers made a “good faith” effort to re-plead his claims to state a valid cause of action in compliance with the trial court’s order.
Because the trial court had previously granted Hallmark’s special exceptions,
Hallmark’s motion for summary judgment was an appropriate procedural tool to address continuing deficiencies.
Chambers’s second amended petition included a section titled “Statement of Factual Allegations,” in which he pled the following relevant facts:
1. Hallmark is an insurance company that writes homeowner’s and renter’s insurance policies in the State of Texas through a network of insurance company agents that are appointed as its agents. Virtually all policies sold by Defendant to homeowners or renters are single premium policies where the entire period of insurance coverage, . . . is paid for in one or more payments and policy is underwritten and placed into full force and effect.
2. In selling single premium homeowner’s insurance policies, Defendant represents that if an insured’s underlying debt is paid off early or their insurance terminates, Defendant will refund the unearned portion of the homeowner’s insurance premium.
3. Defendant has refused or failed to promptly refund unearned portions of the homeowner’s insurance premiums to insured and has unlawfully retained these premiums, unjustly enriching itself.
4. Defendant maintains business policies and practices that require insureds to fulfill conditions not required by their insurance policies or by law as a precondition to obtaining refunds of unearned homeowner’s insurance premiums paid to Defendant by insured.
5. Defendant has totally failed to establish procedures that are sufficient to ensure that it will receive timely notification from claims filed by insured to the extent that the claims department had terminated homeowner’s policy when insured has initiated a claim of loss and property is no longer insured as a direct result of the loss.
6. Defendant delegates premium intake and refund functions to its agents and/or claims adjusters, but Defendant grossly fail[s] to implement any meaningful audit procedures to ensure that it[s] agents and/or claims adjusters are making timely refunds owed to insureds.
Chambers also contends that the trial court erred in granting summary judgment on his coverage claim. Chambers’s original petition contained allegations that could have conceivably constituted a coverage claim; however, those allegations were not included in Chambers’s second amended petition. Amended pleadings supersede and supplant previous pleadings. When Chambers amended his pleadings and did not reassert his coverage claim, he effectively non-suited that claim. Chambers therefore did not have any pleadings before the trial court on his coverage issue, and it was not included in the summary judgment.
There is more to this case but the bottom line is that the pleading were not sufficient.