Dallas Fort Worth Insurance Lawyer Blog

Here is a situaton where a Dallas resident had a wreck in Mesquite, but it could have been Fort Worth, Arlington, Grand Prairie, or out in Weatherford. The injured persons had two insurance policies with the same insurance company.
This happened in a 1984 case, The Travelers Indemnity Company of Rhode Island, v. Lenny and Terri Lucas. Mr. Lucas was accompanied by his wife, Ms. Lucas, in an ambulance. A drunk driver ran head-on into the ambulance causing injuries to the Lucas'. They had two separate insurance policies with Travelers Indemnity, for Personal Injury Protection benefits and underinsured motorists benefits. Travelers paid the full amount under one policy to each of the Lucas' but refused to pay under the second policy. The damages to the Lucas' exceeded the limit of both the policies combined.
The ambulance also had underinsured benefits with a policy through Aetna. Travelers tried to limit what it had to pay by citing an "Other Insurance" clause within the Travelers policy.
The court ruled that an insurance company may not reduce its underinsured liability to an amount less than the policy limit by crediting itself an amount paid under another policy. The same ruling was made regarding payments made for Personal Injury Protection benefits.
A case decided in 2007, was essentially the same. The 2007 case was Kelley v. Progressive County Mutual Insurance Company.
Here, Kelley was injured by a motorist while riding her horse and her claim exceeded $1,000,000. She received the policy limit of $100,000 from the at fault driver and then received the limit of $500,000 under a policy issued to her by Progressive. However, on a policy issued to her father by Progressive, which also named her, Progressive refused to pay. Progressive asserted a policy provision that prohibited "stacking" the policies and argued that her recovery was limited to just one of the polices.
The court noted that the policies were separate policies, with separate policy numbers and separate vehicles listed. Just because Progressive issued both policies to members of the same family did not allow Progressive to prevent a "stacking" of these policies.
There are situations where an insurance company may not have to pay where there is duplicate coverage. When there is more than one policy that may cover a claim it is important to seek the advice of an Experienced Insurance Law Attorney to insure your rights are properly protected.

It does not matter whether you live in little ole Weatherford, Texas, or some of the bigger communities like Dallas, Fort Worth, Arlington, or Grand Prairie. Health insurance is a concern of everybody.
A recent lawsuit in Colorado illustrates the anger that can be taken out against an insurance company that does one of its insureds wrong. The article is in the Denver Post. The title of the article is "Canceled Insurance Leads To $37 Million Verdict For Woman."
A jury in the city and county of Boulder returned a verdict of $37 million to a woman whose health insurance policy was canceled after she was seriously injured in a car accident.
The reason the insurance company cited for termination of the insurance coverage was that the woman failed to disclose previous medical treatment on her health insurance application. It turns out she had previously visited an emergency room for shortness of breath and she had received treatment for Time Insurance Company, which also does business as Assurant Health.
In the lawsuit, a claim was made for $7 to $8 million based on the evidence. The jury returned with one of the largest verdicts in Colorado history.
An appeal is certain to follow.

Residents of Dallas, Fort Worth, Arlington, Grand Praire, Weatherford, or any other town in Texas should be interested in a question posed by an attorney the other day on a web-site, to other attorneys who sub-scribed to the site. It was a question dealing with uninsured and underinsured (UM) automobile coverage.
In the situation, a potential client had come into the attorneys office. The potential new client had been involved in an accident where the other person did not have enough insurance coverage to fully cover the damages this potential new client had suffered. Sounds simple so far. Here was the problem: More than two years had past since the accident had occurred. The question posed was: Can I recover more money from the UM coverage on the injured persons automobile policy.
This was the issue in the case Raul C. Franco et ux., v. Allstate Insurance Company. In the Franco case, Franco sought to recover damages due to the death of their daughter in an automobile accident. The lawsuit had been filed approximately three years after the date of the accident. The applicable statute of limitations for an injury claim was two years.
In the Franco case, the lawsuit had been filed against Allstate Insurance Company because of the accident but the basis for the claim against Allstate was the policy of insurance issued by Allstate. A policy of insurance is a contract between the insurance company and the insured. The statute of limitations on a contract claim is four years.
Allstate argued, among other things, that because the two year statute of limitations had expired on the accident, that the claim against Allstate that originated out of that wreck, was also barred by the two year statute of limitations. The Texas Supreme Court disagreed with Allstate and ruled in favor of the Franco family members stating that the claim against Allstate was a contract claim and thus the four year statute of limitations applied.
What is to be learned here is two-fold. First, a claim for UM benefits under an insureds' own insurance policy is four years, not two. Second, not discussed in the case but important is the extent of the recovery.
If the other driver had insurance, for instance a liability policy of $20,000, and the injured person had underinsured coverage of $20,000, and a claim whose value was estimated to be $30,000, what would have happened? The answer would be, that because the two year statute had expired for making a claim against the other guys policy and the claim was now only against the injured persons' underinsured policy, the total recovery would be limited to $10,000. Why? Because the underinsured policy would get a credit for the $20,000 that would have been recovered from the other drivers liability policy.
This can be confusing. It illustrates though, why it is important to get an Experienced Insurance Law Attorney involved early in a case in order to fully compensate a person who is trying to make claims against an insurance company.

Lots of insurance policies are issued with arbitration agreements written into them. Almost never, will the person taking out the insurance policy be aware of, or ask about an arbitration agreement being part of the insurance policy. Residents of Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or any any city or town in Texas can be adversely affected by these arbitration clauses in the insurance policy.
Lake Texoma Highport, LLC, v. Certain Underwriters at Lloyd's of London, et. al., is a recent case discussing arbitration clauses in insurance policy's. This case was decided on December 28, 2009, and is good reading to try and understand the way courts look at arbitration clauses.
Lake Texoma Highport, LLC ("Highport") owns a marina. In early 2005 and early 2006 and in 2007 Highport instructed defendant Houstoun, Woodward, Eason, Gentle, Tomforde and Anderson, Inc. d/b/a Insurance Alliance ("Insurance Alliance") to locate a property insurance policy. Insurance Alliance provided Highport with a property insurance agreement from defendant Certain Underwriters at Lloyd's of London ("Lloyd's"). Highport suffered damages and filed a claim under the policy. Highport then learned for the first time that CRC Insurance Services, Inc ("CRC") and Bowood Partners, Limited ("Bowood") were active participants in procurment of the insurance policy.
Highport settled against Lloyd's. CRC filed a motion with the court to compel arbitration based upon an agreement between CRC and Insurance Alliance that contained an arbitration clause.
The court discussed how the Federal Arbitration Act ("FAA") expresses a strong national policy favoring arbitration of disputes, and all doubts concerning the arbitration of claims should be resolved in favor of arbitration. The FAA, leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.
In deciding whether or not to order the litigants to arbitration, the Court must address two questions. First, whether there is a valid agreement to arbitrate, and second, whether the dispute in question falls within the scope of the arbitration agreement.
After stating the above, the Court then began to analyse the situational facts in this case to determine what was appropriate. In the end the parties were ordered to arbitration. A reading of the case gives insight into how courts apply the laws related to arbitration agreements to the particular fact pattern in a case.
The case is a good read for trying to understand how these types of case are decided. If someone finds themselves in a situation where they discover they have an arbitration agreement in their insurance policy, the natural question would be, "What difference does it make in my situation?" For a discussion of this, an Experienced Insurance Law Attorney should be consulted.

Insurance companies prefer to have lawsuits litigated and fought in Federal Court. Attorneys who represent individuals and companies in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or any other community in Texas, prefer to be in the local State and County Courts. There are several reasons an insurance company prefers to be in Federal Court, but the bottom line is, it is better for them to be in Federal Court.
One fight an insurance company recently lost was in the case, Rosario Mayorga, v. Government Employees Insurance Company. The opinion on this case was issued on January 20, 2010.
The Mayorga case was originally filed in the 79th District Court of Jim Wells County. Mayorga sued Government Employees Insurance Company (GEICO) and the adjuster, Sean Hicks. GEICO is an insurance company with its headquarters located outside of Texas, which is a condition that would allow for the case to be removed to Federal Court. However, the adjuster, Hicks, was a Texas resident which would prevent removal. GEICO claimed that Hicks was improperly sued and because he was improperly sued the case should be allowed into Federal Court.
The Federal Court analysed the burden of proof for the fraudulent joinder of Hicks in the lawsuit to stand. The Court cited Texas law stating that the burden of proof is on the insurance company to prove that the joinder of Hicks was a sham to keep the case from being in Federal Court. And that this burden was a heavy burden.
Analysing the causes of action asserted against Hicks, the Court looked at the Texas Insurance Code, Section 541. In that section, Hicks met the definition of a "person" and it defined how Hicks could be personally responsible for his actions rather than just being an agent of GEICO. The law in Texas says a person may be personally liable for deceptive acts notwithstanding the fact that he acted within the scope of his employment. The only insurance company employees exempted from this personal liability in Section 541 of the Texas Insurance Code, are those employees who have no responsibility for the sale or servicing of insurance policies and no special insurance expertise, such as a clerical worker or janitor.
Next, the Court analysed whether or not there were acts committed by Hicks, whereby he could be personally liable. Mayorga asserted that Hicks failed to conduct a reasonable investigation of her claim and failed to effect a prompt resolution of her claim. In this regard, the Insurance law in Texas is clear, insurance employees that fail to properly adjust insurance claims are liable under Section 541 and can be sued individually.
The allegations do not have to be allegations that are definite winners. As the Court said, the allegations are to be taken in the light most favorable to Mayorga and when they demonstrate there is a possibility of success, that is all that is required.
The value in this case is in demonstrating to an Insurance Law Attorney, good ways of maintaining a case against an insurance company in the State Courts, rather than having a case removed to Federal Court, where the outcome for the policyholder is usually less favorable.

The United States Court of Appeals for the Fifth Circuit recently decided a case wherein the insured argued that he had an excess insurance policy. The court decided that his policy was not an excess insurance policy.
The case is styled "Danny Kirk, v. Universal Underwriters of Texas Insurance Co." In this case, Universal Underwriters of Texas Insurance Co. ("UUT"), issued to Olympic International Trucks, Inc. d/b/a Olympic Ideal Lease ("Olympic") an insurance policy. Kirk, who was injured by a tractor-trailer unit leased to Gulf Coast Building Supply ("Gulf Coast"), asserted that the policy issued to UUT was an excess policy.
The court analysed the policy. Reading Part 500 of the UUT Policy, it provided liability insurance to Olympic for injuries arising out of "garage operations" or "auto hazard." Auto hazard included coverage of "anyone else required by law to be an insured while using an auto under a lease or rental agreement, within the scope of Olympic's permission." The UUT Policy provided that it only covered Olympic's lessees if "at the time of the accident, the insurance required by the lease or rental agreement is not collectable."
The lease agreement required Gulf Coast to maintain $750,000 of liability insurance on the tractor-trailer unit and in fact Gulf Coast had coverage for $1,000,000 with Home State County Mutual Insurance Company. Home State paid the policy limits of $1,000,000. Kirk had injuries that exceeded this amount that were not fully compensated, thus the reason for Kirk bringing suit against UUT for more.
The court found that the UUT Policy only provided coverage where "the insurance required by the lease or rental agreement is not collectable," and the court found that the term "collectable" did not require UUT to show that Kirk would be fully compensated for his injuries, only that the other insurance was able to be collected.
In this case the court applied Texas law because the policy was issued in Texas and the insurance company was domiciled in Texas. The court stated "Texas's interests in governing insurance contracts entered into in Texas for the protection of Texas residents would be most seriously impaired if Texas law did not apply."
As a side note, there was an arguement about the spelling of the word "collectable" in this case. The correct spelling is collectible, whereas in the policy it was spelled "collectable." The court went to Random House Webster's Unabridged Dictionary and pointed out that "collectable" is an acceptable alternative spelling of collectible and means "capable of being collected."
The lesson from this case for the policyholder is to make sure they know what they are buying. There needs to be a discussion with the agent to clarify what is being purchased.

Most of the time when someone thinks of insurance fraud, they think about a staged accident, arson, or something else along these lines, where a person or company is trying to get money out of an insurance company that is not legitamate. Another example is lying on the insurance application. Here is a short story about a company making a false workers compensation report to the State. This case is a California incident but could just as easily have been an incident that happened with a business in the Dallas - Fort Worth area, like Arlington or Grand Prairie, or even out in Weatherford, in Parker County.
This article was found in the Los Angeles Times, in the Business Section. The title of the article is "Staffing Firm Pays $20 Million to Settle Fraud Allegation" and was reported on January 25.
The company, Staffing Services, Inc., was in the business of providing temporary workers to other businesses. They were accused of underpaying premiums to the State Compensation Insurance Fund, the state's workers' compensation carrier of last resort. Regulators filed charges against the company on November 26, 2008, accusing it of misrepresenting the number of employees and their job descriptions so it would pay smaller insurance premiums.
The California Insurance Commissioner, Steve Poizner, reached an agreement with the company whereby the business agreed to pay $20 million in restitution and penalties in the workers compensation fraud case. Poizner said, "Business owners have to realize that they have a moral and legal obligation to report the correct number and types of employees and then make sure they have adequate workers' compensation insurance for those employees. This is not a victimless crime. We all pay when a company chooses not to play by the rules as the rest of us".
The Los Angeles County district attorney's office prosecuted the case against Staffing Services, which was settled with a plea bargain on January 15.

Most people would not realize how much time and money is spent with insurance companies fighting with other insurance companies. Most of these fights result from situations where a person or company has more than one policy. An example would be where an Arlington resident buys some insurance in Grand Prairie, Dallas, Fort Worth, or maybe out in Weatherford or wherever but also buys another policy at the same time or later on from another company or agent. Next, an incident happens, the result of which is the policyholder has to file a claim or seek coverage through the policies of insurance. Then what happens is, the companies start fighting with each other about which one has to pay the claim or pay the costs of defending the claim asserted. The following case is yet another example of this type of situation.
The United States Fifth Circuit Court of Appeals handed down a decision is one of these cases on January 4, 2010. The style of the case is, Trinity Universal Insurance Company; Utica National Insurance; National American Insurance Company, Subrogees of Lacy Masonery Inc., v. Employers Mutual Casualty Company.
In this case, Employers Mutual Casualty Company (EMC) and the others issued commercial general liability insurance policies to Lacy Masonry, Inc. Lacy was sued. Trinity defended and eventually settled the case on behalf of Lacy. Utica defended and eventually settled the case on behalf of Lacy. And, finally, National defended and eventually settled the case on behalf of Lacy. EMC refused to defend or participate in the settlement.
Trinity, Utica, and National, then sued EMC for EMC's pro rata share of the settlement and defense costs. EMC claimed they did not have a duty to defend and thus no duty to pay a pro rata share of settlement monies or defense costs. The court analysed the policy language and eventually ruled that EMC should have participated in the defense of Lacy. Because of the language in the EMC policy and earlier court decisions related to the policy language, the court partially agreed with EMC, that EMC did not have to contribute to the settlement costs. However, this language did nothing to protect EMC from having to handle its pro rate share of the defense costs because EMC clearly had a duty to atleast defend Lacy in the lawsuit.
A reading of the case distinguishes and explains in an understandable manner the reasoning of the court in this matter. Each situation and policy put together have to be analysed and then applied to the insurance laws in Texas to be able to fully understand the difference between one situation and another.

The United States Court of Appeals for the Fifth Circuit, decided another case this month dealing with the duty of an insurance company to defend a lawsuit filed against one of its insureds. The decision on this case was handed down by the court on January 4, 2010. The case was an appeal from the United States District Court for the Southern District of Texas. The Fifth Circuit, located in Louisiana, handles appeals that would arise out of Dallas, Fort Worth, Arlington, Grand Prairie, small towns like Weatherford, and all other places in Texas.
In the opening paragraph of the decision the court makes the following statement, "We have occasion once again to take up the seemingly simple task of determining whether an insurance company owes a duty to defend an underlying liability lawsuit, and because the insurer in this case indeed has such a duty, it is also an occasion to again remind: when in doubt, defend." As stated in this blog in the past, the courts draw a distinction between the obligation of an insurance company to defend an insured who has been sued and the obligation of an insurance company to pay a claim.
The case at issue here is styled, Essex Insurance Company v. Hines. The policy was a "Commercial General Liability Coverage" and another one called a "Commercial Property Coverge" policy. The facts here are relevant to deciding the existence or lack there of, as it relates to coverage in the wording in the policy. What Essex was failing to see was how Texas law applies in the difference between the duty to defend and the duty to pay under a policy of insurance.
Under Texas law, an insurer has a duty to defend a policyholder in actions brought by a third party who asserts claims "potentially" covered by the insurance policy. The key word here being, "potentially." When determining whether an insurance company owes a duty to defend its policyholder, Texas courts follow the "eight corners" rule, which directs the court to examine only "the allegations in the pleadings" which is the first four courners, and "the language of the insurance policy", which is the second four corners.
The insurance company argued that the policy did not cover the type of loss the third party was sueing about. The court was saying that maybe the insurance company was right, but the allegations in the lawsuit were sufficient to raise the possibility that coverage would be triggered and thus the insurance company should be providing a defense to Hines.
Anytime someone is sued and they have a policy of insurance that "might" provide coverage, they should take the lawsuit papers to their insurance company. If the insurance company refuses to defend the lawsuit then an experienced Insurance Law Attorney should be contacted.

Lucky for the homeowners in the Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and surrounding areas, the Chinese drywall cases are a non-issue. But for many of the people along the Texas Gulf Coast and other Gulf Coast areas, it is a major and expensive problem.
WCI Communities is a homebuilder in the Southeastern United States. They had to file bankruptcy in 2009 because of issues related to Chinese drywall. This situation is discussed in the Insurance Journal. The article in the Insurance Journal is titled "WCI Chinese Drywall Trust Files Suit Against 14 Insurers". The WCI Drywall Trust was formed in July 2009, after the bankruptcy of the homebuilder WCI Communities and its subsidiaries. Its purpose is to assume liability for claims alleging harm from Chinese drywall installed in homes built by WCI. More than 700 homeowners may seek recovery through the Trust.
The Trust filed suit against 14 insurance companies in the United States District Court, Eastern District of Louisiana, seeking indemnification for losses arising from claims for the development and sale of homes allegedly containing defective Chinese manufactured drywall.

The following case was decided in Louisiana. It is relevant for two reasons. One is, Texas courts will look to other courts and their rulings for guidance on cases. The second reason, is the United States Court of Appeals for the Fifth Circuit is the Federal Court most Texas case will end up being appealed to when the case is in Federal Court.
The case is Stephen Williams; Vanessa Williams v. Allstate Indemnity Company. In this case the William's home suffered a serious property damage loss during Hurricane Katrina. The William's home was insured under a homeowners' policy issued by Allstate that provided $123,000 in coverage for the primary structure, $12,300 in coverage for other structures, and $61,500 in coverage for the home's contents.
The William's reported the loss on August 31, 2005 and Allstate inspected the property on October 17, 2005 and ultimately paid the William's a total of $134,762.43. These payments were made at various times until the last was paid in March 2007. The William's sued for the full policy limits. The trial level court ruled for Allstate and this appeal was filed.
The 5th Circuit Appeals Court affirmed the trial court decision. In affirming the trial courts' decision, the Court of Appeals got into discussions concerning the burden of proof.
The relevance of this case beyond what is discussed in the opening paragraph is realizing and understanding the burden of proof on a person who is filing a lawsuit. In an insurance case the requirements to prevail in a trial will vary from what is required in other types of lawsuits. It is important that an experienced Insurance Law Attorney is consulted for claims against insurance companies.

A lot of insurance contracts have written into them an appraisal clause or paragraph. Whether you bought the policy in Grand Prairie, Arlington, Dallas, Fort Worth, or out in Weatherford, Texas, you could be forced to submit to an appraisal process if the insurance company insists on enforcing that portion of the insurance contract.
A recent case, JM Walker, LLC v. Acadia Insurance Company, is an example of how these situations are sometimes handle. Each case would be different depending on the wording of the appraisal provision in the contract and the facts of the case.
In this case, Walker was the owner of five building in North Richland Hills, Texas. The roofs of the building suffered damage from a hailstorm. Walker submitted a claim to Acadia, but Acadia denied coverage after its adjuster determined that the roofs did not need to be replaced and that the damage that did exist, was less than the $5,000 deductible that applied in the case.
Walker contested the adjusters findings and Acadia invoked its contractual right to appraisal. Walker then filed a lawsuit, but the Judge compelled the parties to submit to the appraisal process.
The umpire in the appraisal process found on behalf of Walker and found the cost of repair to be $423,053.96. Acadia paid the amount.
Walker filed an appeal in the United States Fifth Circuit, which is the case written about here. Walker wanted more money for his damages, plus was seeking monies for the "bad faith" conduct of Acadia and their handling of the claim.
The Court in its decision stated that under Texas law, "appaisal awards made pursuant to the provisions of an insurance contract are binding and enforceable, and every reasonable presumption will be indulged to sustain an appraisal award." The Court wrote that an otherwise binding appraisal may be disregarded in three situations: "(1) when the award was made without authority; (2) when the award was made as a result of fraud, accident, or mistake; or (3) when the award was not in compliance with the requirements of the policy."
Walker argued all three points and was shot down on all three points. The case is a good place to look to get an idea of how the courts look at these appraisal processes and how they are handled.

Let's pretend your sister in Dallas, is driving her brothers car, who lives in Fort Worth. The car is insured on hthe parents Safeco auto policy that was bought in Grand Prairie. Your sister has a wreck in Weatherford, Texas. Your sister also had insurance with Allstate on her own car she had purchased in Arlington. Your sister is at fault and the other driver suffers personal injury and property damage. Both Allstate and Safeco refuse to settle the claim being asserted against you and your sister because they believe the other company should be paying the claim or paying the claim on a pro-rata basis.
This can be a very frustrating position for someone to find themselves involved and is referred to as an "other insurance" issue. The above is roughly what happened in the case, Safeco Lloyds Insurance Company v. Allstate Insurance Company. This case was tried and then appealed to the Court of Appeals of Texas, San Antonio.
The general rule in the past has been that auto insurance coverage goes with the vehicle. If the coverage on the vehicle is not sufficient to pay all the lose incurred then, the driver of the vehicle who has separate coverage has this separate coverage kick in as secondary coverage. However, the laws have changed and each insurance policy has to be looked at and compared with the other policy that may provide coverage to see what the result may be in any particular situation.
There are three types of "other insurance" clauses in an auto insurance contract. (1) a pro-rata clause, which restricts liability upon concurring insurers to an apportionment basis, (2) an excess clause, which restricts liability upon an insurer to excess coverage after another insurer has paid its policy limits, and (3) an escape clause, which avoids all liability if other insurance exists. The court went into detail in the opinion of this case explaining the different "other insurance" clauses and how they worked with each other, depending on the facts of each situation.
When it was argued by Allstate that the law in Texas is the insurer of a car provides primary insurance and the insurer of the driver provides excess insurance, it was argued by Safeco that nowhere in Texas law does a court espouse a black-letter rule that insurance follows the vehicle.
In this case it was decided by the court that the costs of the wreck should be shared on a pro-rata basis. The bigger lesson is that these situations can be complicated and when a person finds themselves in a situation where the insurance companies are argueing among themselves about who should be paying the claim, then its time to find an experienced Insurance Law Attorney.

The Texas Insurance Code requires an insurance company to pay a claim within 60 days of receiving all the information it needs to make a determination of whether or not a claim should be paid and the amount to be paid. The requirement is found in the Texas Insurance Code, Section 542.058. In the event of a weather-related catastrophe, as defined by the Texas Commissioner of Insurance, the period is extended to 75 days. This is found in Texas Insurance Code, Section 542.059. The law here applies to all residents of Texas including those in Dallas, Fort Worth, Arlington, Grand Prairie, or even out in Weatherford or Parker County.
Section 542.059 was recently part of a lawsuit in a case decided on December 15, 2009. The case was styled, Philadelphia Indemnity Insurance Company v. C.R.E.S. Management, L.L.C.
In this lawsuit, CRES owned five properties that suffered multiple losses. Philadelphia had paid all claims on three of the properties but still disputed losses on the others. On the two properties that the dispute existed, Philadelphia did not dispute that they owed atleast part of the claim but not all of the claim. On the part not disputed, Philadelphia did not pay until after the applicable 75 day deadline.
CRES sued for the 18% interest due on the late paid amount. Philadelphia argued that they should not have to pay the penalty interest because they acted in "good faith" in trying to adjust the large, complex claims. Philadelphia then went into great detail explaining all they had done to try to settle and pay the claim as soon as possible.
The court ruled for CRES and ordered Philadelphia to pay the penalty and attorney's fees. The court reasoned that the relevant insurance code provision said what it said, and pointed out that there were excuses written into the code that allowed for extra time if needed and the requirements to be entitled to the extra time. Philadelphia did not argue that it satisfied any of the requirements to get the extra time.
This case is a good case for pointing out to policy holders that the law is on the policy holders side when an insurance does not promptly and properly pay a claim.

Almost all insurance disputes are going to have situations where an attorney is involved. Too many times these disputes end up in lawsuits. Prior posts on this blog have shown how most situations are going to require the insurance company to pay or reimburse attorneys fees where the policy holder prevails in their claim.
In 2007 a case, Lamar Homes, Inc. v. Mid-Continent Casualty Company, the Texas Supreme Court ruled that Section 542.060, Texas Insurance Code, applied to not just the underlying claim at issue in a lawsuit but to also attorneys fees in situations where the insurance company did not pay for attorneys on behalf of the insured persons or business.
Section 542.060 assesses an 18% annual penalty on the attorneys fees that the insurance company did not pay for.
This issue on the unpaid attorney's fees was fought again and re-stated in a case decided in December 2009. This case, Nautilus Insurance Company v. International House of Pancakes, Inc., was mainly a dispute as to how much the attorney's fees were and how much of the time, and thus, the fees were attributable to the case at issue, rather than another case.
International House of Pancakes argued that the fees of $14,973.55 were 95% related to the case and based on that number, the 18% penalty to be paid by Nautilus totaled $15,804.49. Furthermore, there was an additional $119,674.34 in attorney's fees for the present litigation. Nautilus Insurance Company did not agree with the time and money that was claimed to have been spent of the case and the lawsuit ensued.
The important thing for policy holders to take from this is that the insurance companies do get punished for their wrongful handling of claims and that with the assistance of an experienced Insurance Law Attorney, the insurance company can be forced to pay on claims they are suppose to pay and be forced to re-imburse the policy holder for attorneys fees plus penalties for their wrongful conduct.