Dallas Fort Worth Insurance Lawyer Blog

Someone from Dallas, Fort Worth, Mansfield, Arlington, Grand Prairie, Benbrook, Aledo, Burleson, or anywhere else in Texas might ask. What is the declarations page?
One web-site describes the "declarations page", otherwise known as the "dec page", very simply as "this page contains the basic terms of coverage. It is an outline of who and what is covered."
Insurance policies normally contain a declarations page or pages. This page sets forth the identity of the insured, the policy limits, and the duration of coverage, and it identifies the attached policy forms. The main function of the declarations page is to customize the policy for the particular insured and the specific risks covered by the policy. This is set out in the 14th Houston Court of Appeals case, Frazier v. Wallis, decided in 1998. And the San Antonio Court of Appeals case, Ortiz v. State Farm Mutual Automobile Insurance Company, in 1997.
The first thing an experienced Insurance Law Attorney wants to do when trying to determine coverage in a case is to carefully review the declarations page, which will list the various forms and endorsements that constitute the complete policy. This is important because sometimes the insurance company attaches the wrong forms or endorsements. Sometimes the insurance company inadvertently omits forms or endorsements at the time the policy is sent to the insured. By comparing the list of forms and endorsements set forth on the declarations page, it is possible to verify the precise forms and endorsements issued to the insured.
So what exactly is suppose to be on the declarations page? Answer:
1) the named insured (this may be a person or persons or a company)
2) the policy period
3) the designation of coverage
4) the policy limits and deductibles
5) forms and endorsements (what is an endorsement?)
6) certificates of insurance
(1) The named insured would be the individual or entity that is expressly identified by proper name in the policy. It usually also includes an address.
(1a) The named insured is also followed by "additional insureds" in some policies, such as a parent corporation may wish to add its subsidiary.
(2) The policy period will normally have two dates, the beginning date for coverage and the ending or expiration date of coverage.
(3) Lots of policy forms are preprinted and may contain many distinct coverages. The person or entity buying coverge chooses the coverages they want and the declarations page state's which coverages are provided.
(4) The policy limits and deductibles are usually easy to understand. The policy limit is the most an insurance policy will pay. The deductible is the amount the policy holder has to pay.
(5) The forms and indorsements that are named and listed in the policy are part of the policy. This is true even when they are not actually attached to the policy, so long as they are named in the policy. One issue for fights here is when endorsements are added later.
(6) Certificates of insurance may not make sense at first but here is what they are: Example, a corporation buys health insurance for its employees. The corporation has the policy but the employees get "certificates of insurance."

Home owners in Benbrook, Arlington, Grand Prairie, Mansfield, Dallas, Fort Worth, Azle, Aledo, and other places in Texas need to know about what is happening with home owner insurance claims across the nation. Being informed helps you keep your "guard up" when dealing with a home owners claim.
The Washington Post ran an article on August 17, 2010, dealing with policyholders having their home damage claims being denied. The author of the article is Greg Risling and the title of the article is "Suit: Farmers Hasn't Paid California Wildfire Claims."
The lawsuit that this article is about was filed in Los Angeles. In the lawsuit it is alleged that Farmers Group Inc. is refusing to pay claims to policyholders whose homes were damaged in last summer's massive Station Fire.
The lawsuit, which alleges breach of contract and violations of the state's unfair business practices, seeks unspecified damages for more than 1,000 homeowners who reported smoke, ash, and other damages from the blaze. This fire killed two firefighters, destroyed 89 homes and burned 250 square miles of Angeles National Forest.
The attorney for the plaintiffs in this lawsuit says that Farmers denied or minimized the claims to boost its bottom line. He also said that the average loss to the homeowners named in the lawsuit was $25,000 to $50,000.
A spokesman for Farmers says they cannot comment on the lawsuit because they have not actually received the lawsuit papers. As of the date of the article the Department of Insurance in California had not commented either.
Other insurance companies including Farmers were accussed of similar practices after the 1994 Northridge earthquake that killed 72 people and caused an estimated $15.3 billion in damages.
As for the current claim against Farmers, it appears most other insurance companies have paid claims.
In the lawsuit, Farmers is accused of hiring biased consultants to deny or undercut claims as well as being unreasonable in its claims adjustment practices. The result is that plaintiffs and other insureds are cheated of money that is rightfully owed to them .
The article gave one example of one of the plaintiffs. His name is Russell Reed, a 55 year old who lives in the Altadena community which is near the site of the fire. He had damage to his home and a layer of ash and debris a foot deep in his pool that clogged drains and became a nuisance for weeks. Agents of Farmers came out and told him he was not eligible to receive any money. What Reed says is something an experienced Insurance Law Attorney hears all the time. "I've been a good customer of Farmers for a long time. The one time we have a major catastrophe, Farmers doesn't want to assist me.

It will probably happen to most people at one time or another. Including residents of Dallas, Arlington, Grand Prairie, Mansfield, Burleson, Crowley, De Soto, Mesquite, Weatherford, and lots of other towns and cities in North Texas. An insurance company will refuse a reasonable offer from you or your attorney to settle a claim you have against the insured of an insurance company. If it happens - what can be done?
This article will focus on one aspect of the above. That aspect is when a third party claimant has his demand for a settlement refused by the other person's insurance company. This happens in lots of scenarios but the most common is a car wreck. The most common situation is where the third party causes a wreck wherein the claimant has damages that exceed the insurance policy limits of the third party who caused the damages. Example - The third party has insurance coverage for the state's required minimum as of this date, $25,000. The person injured has medical bills exceeding $40,000 plus another $10,000 in lost wages, plus he is entitled to compensation for his impairment, and pain and suffering.
Next, the injured person through his attorney demands that the insurance company for the person who caused the wreck to pay $120,000 to settle the claim or policy limits, which ever is less. The insurance company refuses to pay. The injured person sues the person who caused the wreck and gets a judgment for $120,000. The insurance pays only the $25,000 that they insured and now the injured person has a judgment against the responsible person for the balance. Of course, most of the time the only money this person has is the money he is insured for.
Next, the injured person gets an assignment from the person who caused the damages for the claim he has against his own insurance company for not settling the case for the policy limits of $25,000 and thus exposing him to a judgment for the balance. This is called a "Stowers" claim.
The injured person then takes this assignment and sues the third parties insurance company for the entire amount of the judgment plus other damages that are available by way of the Texas Insurance Code.
The issue was the focus of a case decided on June 25, 2008, by the Tyler Court of Appeals. This case is styled, Home State County Mutual Insurance Company v. George Horn, Jr., as Assignee of Burrell Rowe, as Administrator or the Estate of Eric A. Hulett. In this case Home State County Mutual Insurance Company (Home State) prevailed because the other side failed to properly make a demand on Home State to settle the case. It is vital here that an experienced Insurance Law Attorney be involved in the claim.
In this case, Horn was severely injured and Hulett, the at-fault driver was killed. Horn's attorney sent a letter dated June 10, 1999 to Home State, the at-fault driver's insurance company, in which he offered to settle Horn's claim for policy limits and promised to fully release Home State's insured from all liability and satisfy the hospital lien, provided the settlement check was received by 5 P.M. on June 25, 1999. Even thought the check was mailed it was not received by the deadline and was refused. Horn sued Hulett's estate and got a judgment for $10,231,844.06.
Horn eventually got an assignment from Hulett's estate and sued Home State for failure to settle a Stowers claim as well as other Insurance Code violations.
Home State got the case thrown out of court and what follows is some reasoning used by the Court in reaching its decision and is good guidance for these types of cases.
-- Per the Stowers case / doctrine, to prevail on a Stowers cause of action, a plaintiff must establish that the insurer was negligent in failing to accept a settlement offer. As stated by the Texas Supreme Court, the law is well settled that an insurer has no affirmative duty to make or solicit settlement offers under Stowers. Rather, the insurer is held to that degree of care and diligence which an ordinary prudent person would exercise in the management of his own business in determining whether to accept an offer made to it. As a threshold matter, "a settlement demand must propose to release the insured fully in exchange for a stated sum of money." Furthermore, for a settlement demand to activate the insurer's Stowers duty, (1) the claim against the insured must be within the scope of coverage, (2) the demand must be within policy limits, and (3) the terms of the demand must be such that an ordinarily prudent insurer would accept it, considering the likelihood and degree of the insured's potential exposure to an excess judgment. In determining whether the claimant's demand was reasonable under the circumstances, along with other factors, evidence concerning claims investigation, trial defense, and conduct during settlement negotiations is considered. Nevertheless, the ultimate issue remains whether the claimant's demand was reasonable under the circumstances such that an ordinarily prudent insurer would have accepted.
This court concluded that Horn failed to demonstrate he was entitled to judgment because no Stowers duty was created as to Hulett's estate. Here, Horn relied on the June 10 letter to support the existence of a Stowers duty. In the reference line of the letter, Horn defined Berry as Home State's "insured" and Hulett as Home State's "driver." The settlement offer then proposed to "fully release your insured from all liability" in exchange for policy limits. Thus, by its express language, the June 10 letter proposed to release Berry only, and did not offer to release Hulett's estate.
Horn's Stowers claim is not his own, but instead is a claim assigned to him by the administrator of Hulett's estate. In order for Horn, as assignee of Hulett's estate, to have a potential Stowers claim, he was required to present evidence of a proposed settlement offer to fully release Hulett's estate. Because Horn's underlying judgment was taken only against the administrator of Hulett's estate, an offer to fully release Berry fails to demonstrate the existence of a Stowers duty owed to Horn and Home State. Since there is no evidence of an offer to release Hulett or his estate in the record, the court held that Horn failed to demonstrate that Home State owed Hulett's estate a Stowers duty and, therefore, was not entitled to judgment.
This case is not hard to follow if you are familar with how the Stowers doctrine works. If you don't know it, then you probably did not really understand what was happening in this case.

Life insurance is something most people in Arlington, Dallas, Fort Worth, Grand Prairie, Mansfield, Weatherford, and other places in Texas pay for each month. Of course, the reason it is purchased is to help in a financial way those left behind. Those left behind are spouses and children nine times out of ten.
The amount of money tied up in life insurance policies nationwide is staggering. Insurance companies make lots of money on the premiums paid to them for the policies and most people understand and accept that. What bothers people is when the life insurance companies continue making money after a claim is made and that money is made at the expense of the beneficiaries of the life insurance policies.
Bloomberg ran an article on this topic on August 16, 2010. The authors are David Evans and Hui-yong Yu. The title of the article is, "U.S. Insurance Regulators Issue Consumer Alert on Death Benefits."The article tells us that State insurance regulators, under pressure to improve disclosure of death benefit payment options, issued a consumer alert about the industry practice of retaining funds rather than paying them in a lump sum.
It is reported the National Association of Insurance Commissioners (NAIC) issued an alert saying, "You may be able to earn a higher rate of interest on the life insurance proceeds if you select a different payout option. While the documents you receive might look like a checkbook, it might actually be drafts, which are similar to checks, but different in some ways."
This alert was issued after an NAIC panel met to review retained asset accounts. The regulators created the panel after Bloomberg Markets magazine reported in July that life insurance companies profit by holding and investing $28 billion owed to 1 million beneficiaries. Lets say that again - Life insurance companies profit by holding and investing $28 billion owed to 1 million beneficiaries.
These retained asset accounts let life insurance companies keep proceeds of life insurance policies in their general corporate accounts, earning investment income, while providing the beneficiary with a checkbook-like account that is not insured by the Federal Deposit Insurance Corp. (FDIC) The counter to this as expressed by a representative of the National Organization of Life & Health Insurance Guaranty Associations, is that the accounts are covered by state insurance backstops.
The alert issued by NAIC suggests that beneficiaries consider keeping benefits in an interest bearing gauranteed account rather than the accounts provided by the life insurance companies.
The FDIC has voiced concerns that beneficiaries may mistakenly believe these accounts are insured.
The article tells us that the New York Attorney General has opened a fraud investigation and subpoenaed insurers including MetLife Inc. and Prudential Financial Inc.The NAIC says, "Allowing the life insurance companies to default to retained asset accounts is just not acceptable," "How any consumer advocate, which is what an insurance commissioner is suppose to be, could allow a default to a retained asset account raises serious concerns ... about who is protecting who."
The life insurance companies defend their practices by saying they provide ample disclosures to beneficiaries explaining retained asset accounts and give policyholders and beneficiaries the choice of a lump-sum payment.
Next, and this has got to be a joke, the companies defend their practices by saying, "Checks have a tendency to get lost" (as if the document they issue would not have a "tendency to get lost'). They also defend themselves by saying a person receiving a large lump-sum payment can leave beneficiaries "subject to predators."
Bottom line here is that the retained asset accounts represented by the document beneficiaries receive, is of benefit to no one except the life insurance company and should be discontinued.
Without a little financial education on these "accounts" most people would never understand that it is not in their best interest to leave the life insurance proceeds in these accounts.

People in Arlington, Grand Prairie, Mansfield, Burleson, Dallas, Fort Worth, Irving, Mesquite, Garland, and all over the State of Texas buy cars. When they buy cars they buy them from dealerships rather than individuals 95% of the time. Have you ever wondered if those dealerships are deceitful in their dealing with you. The answer is yes, and in fact a lot of people are convinced the dearlerships are not honest.
Here is a victory for the books, and car purchasers across the nation. The Kansas City Star ran an article on August 12, 2010. The article was written by Meredith Rodriguez and was titled, "Couple Wins More Than $1 Million in Court Case Against Owner of Defunct Auto Dealership."
The article tells of a Kansas jury in Clay County, Kansas, that awarded a Harrisonville couple more than $1 million in damages against Chad Franklin and his defunct Suzuki dealership in North Kansas City.
The jury found that Chad Franklin Auto Sales North violated the Missouri Merchandising Practices Act when it lured Glenna and Max Overbey into buying a Suzuki with a too-good-to-be-true promotion. It turns out it was too good to be true.
The Overbey's responded to an advertisement in 2007 that promised they could pay $49 per month for six months on a new Suzuki and at the end of the period trade in their car for another to keep the same low monthly payments. This was stated by their attorney. But when the Overbey's returned at the end of six months, they alleged, the dealership did not honor the agreement, and their monthly payment rose to $719.
Noteworthy here, is that atleast thirty five other people made the same complaints about this promotion.
The attorney for the dealership and Franklin did not have any comments to make.
This article tells us that similar lawsuits have been filed against Chad Franklin Suzuki dealerships in North Kansas City and Kansas City, Kansas, but this case was the first one that came to a judgment.
The jury awarded $76,000 in actual damages and $250,000 in punitive damages against Chad Franklin National Auto Sales North, and $4,500 in actual damages and $1 million in punitive damages against Franklin.
In Texas, a dealership doing something similar to what was done in Kansas would be liable for violations of the Texas Deceptive Trade Practices Act. There could be several provisions of this act that a consumer could file suit for relief but the most obvious would be Section 17.46(b)(9) which says it is a violation to advertise goods or services with intent not to sell them as advertised.
Section 17.50 sets out some of the relied that a consumer who prevails in one of these cases is entitled to receive.
Advice for anyone who thinks they have been deceived by a business would be to seek out the assistance of an attorney who can handle Deceptive Trade Practice claims.

No matter where you live, Fort Worth, Dallas, Grand Prairie, Mansfield, Arlington, Haslet, Hurst, Euless, Bedford, or some other place in Texas, at some point you are going to need repairs to your vehicle due to an accident. So the question becomes: If you have insurance, does insurance cover the repairs? Of course, the answer will depend on the type of insurance you have. Plus, an experienced Insurance Law Attorney is probably a good source for guidance to an answer to the question. Here is a case to look at for some help.
The case is, Great Texas County Mutual Insurance Company v. Emmett C. Lewis. This case was decided in 1998 by the Austin Court of Appeals.
This case was appealed by Great Texas County Mutual Insurance Company (Great Texas) after the trial court ruled in favor of Lewis. The Austin Court of Appeals upheld the judgement against Great Texas.
The facts are undisputed. While covered by a policy issued by Great Texas, Lewis's Dodge Caravan motor car sustained damage to the engine. The automobile had been driven 110,000 miles at the time. Great Texas inspected the automobile and calculated the cost of repairing the damage to be $3,608.27, which included the cost of a re-manufactured engine, replacement parts, and labor. From the $3,608.27, Great Texas subtracted the policy deductible of $527.00 and $2,031.72 for betterment or depreciation, leaving a net sum to discharge Great Texas's obligation under the property damage section of the policy.
Alleging his coverage did not authorize the $2,031.72 deduction for betterment or depreciation, Lewis sued Great Texas on his policy to recover the $3,608.27 estimated cost, less the policy deductible of $527.00, together with other sums not in dispute. The trial court concluded the policy did not authorize a deduction for betterment or depreciation and rendered judgment accordingly.
Great Texas's sole issue on appeal is one of law: whether the language of the policy authorized the deduction of $2,031.72 claimed by Great Texas for betterment or depreciation.
Concerning damage to a covered automobile, the policy provided as follows under the heading "Limit of Liability":
Our Limit of Liability for loss will be the lesser of the:
1. Actual cash value of the ... damaged property;
2. Amount necessary to repair or replace the property with other like of like kind and quality; or
3. Amount stated in the Declarations of this policy.
Here, the appeals court quoted, L.S. Tellier, Annotated, Measure of Recovery by Insured Under Automobile Collision Insurance Policy, saying "In arriving at the correct measure of damages in an action to recover under an automobile collision policy, it must be kept in mind that the action is not a suit for damages but one on the contract of insurance, and that therefore ... the language of the contract sued upon must prevail ... "
The contract provision above gave Great Texas an election. They could pay Lewis (1) the actual cash value of the damaged property or (2) the amount necessary to repair or replace the property with another of like kind and quality. After inspecting the engine, Great Texas elected to pay the "amount necessary to repair or replace the property with other of like kind and quality." The parties agreed that the engine required repairs totaling $3,608.27 and that the car had been driven 110,000 miles when the engine - original to the car - was damaged.
The words betterment and depreciation are not found in the policy. Great Texas argued that they are implied because the replacement engine costing $3,608.27 is tantamount to a new engine - it will carry a warranty even though it is re-manufactured. Thus, the rebuilt engine will have an expected useful life much longer than Lewis's used engine that had been driven 110,000 miles when it was damaged. Great Texas argued that Lewis would be receiving a windfall unless there was a deduction for betterment or depreciation.
This court stated that by electing to pay Lewis the "amount necessary to repair or replace" the engine with another "of like kind and quality," Great Texas elected a measure of loss that does not allow for depreciation.
The Corpus Christi Court of Appeals, quoting Appleman, Insurance Law and Practice, stated, "The words 'repair' and 'replace' mean restoration to a condition substantially the same as that existing before the damage was sustained." Because Lewis's car was a functioning car before the damage, Great Texas was required to pay an amount necessary for a repaired or replacement car of that character. The qualifying words "of like kind and quality" permit but do not require an engine of similar age, use, condition, or present cash value; they refer simply to repairing the damaged car so that it is suitable for it's intended purpose.
In conclusion the court said, "If Great Texas may discharge its obligation by paying Lewis $1,049.55, he will not have, under the evidence, a sum sufficient to restore his engine and car to a functioning state. He will be deprived of the protection ostensibly purchased in his policy - protection against the risk of having to pay out his own pocket to restore his car and its parts to a functioning state in the event they are damaged. The insurance company is not entitled to a deduction for depreciation in the event of a partial loss, as distinguished from a total loss."

Everybody in Mansfield, Arlington, Grand Prairie, Dallas, Fort Worth, Coppell, De Soto, Burleson, Granbury, Aledo, and other towns in Texas will suffer the loss of a loved one. In fact it will probably happen many times. Have you ever wondered about the quality of services offered by the funeral home at this time of loss?
The Houston Chronicle recently ran a story about the services of a funeral home that were not acceptable. The article ran on August 9, 2010, and was authored by Allan Turner. The title of the article is, "Funeral Home Faces Suit Over State of Corpse."
Allan Turner writes that a Richmond man is sueing a Pasadena funeral home claiming he suffered nausea, nightmares, emotional breakdowns, severe pain and suffering and emotional trauma, grief and sorrow after his son's body arrived for burial in his native Uganda in a state of advanced decomposition.
He says in the article that Nicholas Jjemba, identified by his lawyers as an oil company employee, said in the lawsuit against Fairmont Funeral Home and Cremation Services that he had difficulty identifying his son's remains when he arrived in Kampala, Uganda, about three weeks after he died in an accident.
It is reported that Jjemba's son, 26 year old Noah Jjemba, died instantly on July 1, when he was pitched from the bed of a pickup truck while helping an acquaintance move.
The lawsuit papers seek unspecified damages from the funeral home and one of its employees for negligence, negligent infliction of emotional distress and breach of contract. What is not mentioned is whether or not the lawsuit seeks damages under the Texas Deceptive Trade Pratices Act. The law has enforcement provisions to assist those who are the victims of violators of this law.
As for the funeral home, Heather Martin, a co-owner, said she was "shocked" by the lawsuit's allegation, adding that the elder Jjemba had not informed the morturary of the problems. A requirement of a DTPA claim would be to give the funeral home a 60 day written notice of the complaint against them. Even in a breach of contract claim, a 30 day written notice of the complaint should be sent.
It is reported that Noah Jjemba's corpse was so badly decomposed that the plaintiff ... became violently ill as a result of not only the odor emanating from the coffin, but also from the visual impact of seeing a deceased child in such a decayed condition.
Judy Mingledorff, the lawyer said, "I know people are shipped from the Middle East war zone and don't arrive in this state. I don't know any reason why the body of this young man arrived in the shape it was in."
The corpse's condition is said to be documented on video.
The dead man's brother, Jeremy Jjemba, said a local memorial service arranged by the funeral home was well handled, but he agreed that the body had "spoiled" en route to Uganda.

What does the policy mean? A good question for anybody in Mansfield, Arlington, Dallas, Fort Worth, Grand Prairie, Grapevine, Colleyville, and other cities in Texas.
The answer is hard. The short and quick answer is: Consult with an experienced Insurance Law Attorney. The longer answer is: It depends. Each case and each policy and each set of facts is different and have to be looked at in light of all together.
The United States Court of Appeals for the Fifth Circuit, recently was called on to interpret an insurance policy and to determine whether or not the facts of a claim implicated coverage in the policy at issue. The opinion in the case was issued on July 16, 2010. The style of the case is, Standard Waste Systems Ltd. v. Mid-Continent Casualty Co., Mid-Contitent Insurance Co., Oklahoma Surety Co. The justices were, Dennis, Owen, and Southwick.
In this case, Standard Waste Systems Ltd. appealed from the district court's ruling in favor of Mid-Continent Casualty Co. and Oklahoma Surety Co. Standard sought coverage from the insurers for damages arising out of a personal injury lawsuit in the Eastern District of Oklahoma. The district court found that the policy at issue contained an exclusion that negated the insurance companies duty to defend. This Court affirmed that finding.
In the underlying lawsuit, the plaintiffs asserted claims for negligence against Standard, J.B. Hunt, and The Scotts Company based on personal injuries the plaintiffs suffered as a result of exposure to a hazardous chemical. The plaintiffs, employees at the Georgia-Pacific paper plant, were injured after handling the contents of a trailer delivered to Georgia-Pacific by J.B. Hunt and loaded with scrap paper by Standard.
The insurance policy at issue here had a pollution exclusion which stated the policy does not apply to:
(1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants":
(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured ...
...
(c) Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for:
(i) Any insured; or
(ii) Any person or organization for whom you may be legally responsible ...
The policy defined "pollutants" as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed."
The Court nexted looked to the facts being alleged in the paperwork filed by the plaintiffs in the lawsuit and found that: (1) "none of the various complaints alleges any facts that would support liability on Standard if Standard were not the source of the chemical"; and (2) "the liability allegations regarding Standard make sense only in the context of alleging that Standard was the source of the chemical."
The pollution exclusion in Standard's policy bars coverage for claims of bodily injury from pollutants if Standard was the source of the pollutant. Thus, the Insurers only had a duty to defend Standard in the underlying litigation if the underlying complaints allege that Standard is liable independent of Standard being the source of the hazardous material.
Granted this case is hard to fully follow without reading the whole thing. What is relevant is seeing how the courts look at the policy and the facts presented in the claim being made to determine whether or not there is coverage under the policy.

If you live in Grand Prairie, Arlington, Mansfield, Dallas, Fort Worth, Burleson, Southlake, Hurst, Euless, Bedford, Lake Worth, or anywhere else in Texas, you might wonder what happens if your car is involved in a wreck and it is the other person who is at fault, then the other person's insurance refuses to fix the car. What happens?
That is kind of what happened in the 1997 case, Cirilo Mondragon v. Morris Austin. This case was decided by the Austin, Court of Appeals.
To begin with, this case is not that uncommon. When something like this happens, it would be prudent to seek the advice of an experienced Insurance Law Attorney.
Here are the facts of the case and they are undisputed. In mid-1993, Austin borrowed money and purchased a car for his daughter to drive while she was away at college. About two months later, Mondragon, driving drunk and backwards down the road, collided with Austin's car while Austin's daughter was driving it. As a result of this accident, the car could not be driven. Austin had the car towed to his home.
Shortly after the accident, Austin filed a claim with Mondragon's insurance company. The company chose to deny the claim despite the circumstances surrounding the accident. Because Austin had no money and no collision insurance, he had no way to repair the car and did not obtain an estimate of the damages until September 1994, over one year after the accident.
As a consequence of Mondragon's choices, Austin had to continue making the payments on the car, send additional money to his daughter for transportation at college, and travel six hundred miles each way to transport her back and forth on holidays.
In March 1995, Austin sued Mondragon for the cost of repairing the car, the value of his loss of use of the car, and exemplary damages. At trial, the defendant agreed to stipulate that: (1) the collision was Mondragon's fault; (2) the fair market value of the car at the time of the collision was $3,400; (3) the cost of repairing the car was $2,752.70; (4) the daily rental value for a replacement car was $20; and (5) any exemplary damages awarded Austin would not exceed $5,000.
The parties tried the case to the Judge on January 18, 1996. As of the trial date, Austin had not repaired the car because, according to Austin, he did not have the money to do so. Mondragon did not offer any evidence to the contrary.
The Judge awarded Austin $8,020 in damages for loss of use of the car and $2,752.70 for repairs, plus interest and court costs.
Mondragon appealed for various reasons but the focus here is on the loss of use.
In Texas, a person whose car has been totally destroyed as a result of a tort (car wreck) may recover only the value of the car, while a person whose car is repairable may also recover for loss of use of the car. This was stated by the Tyler Court of Appeals in 1994. This was also addressed by the Texas Court of Appeals in a 1950 opinion.
One way a plaintiff in a lawsuit may prove loss of use damages is to establish the reasonable rental value of a substitute car. Here, the parties stipulated to $20 per day. The only dispute was the length of time over which the damages may be computed. Austin contended he should be eligible to recover loss of use damages for the entire period of time he was deprived the use of his car. Mondragon, on the other hand, argued the period of time should be limited to that reasonably necessary to repair the car. He argued the car could have been repaired in two weeks, and thus he is not liable for damages that accrued in excess of two weeks.
In an earlier case, the Texas Supreme Court, discussed the appropriate method by which to measure loss of use damages for deprivation of the use of a repairable car. The court noted the "period of compensatory loss of use will be the amount of time the plaintiff was deprived of the loss of the use of the automobile." The Court emphasized that "the thing to be kept in view is that the party shall be compensated for the injury done." This language is requiring courts to consider the particular circumstances of the plaintiff and the facts of each case in assessing loss of use damages.
Here, the Court reasoned that if they were to limit Austin's loss of use award to two weeks, they would be penalizing him for his lack of financial resources, denying him recovery of the damages he suffered because of Mondragon's negligent act, and allowing the insurance company to reap the benefit of its refusal to pay the meritorious claim. They stated, "The law does not permit or require such a result."
There were other arguements and points in this case related to the loss of use and how that number should be computed. Another source of information on compensation for loss of use can be found with the Texas Department of Insurance.

Someone in Aledo, Azle, Haslet, Saginaw, Cedar Hill, Grand Prairie, Arlington, Dallas, Fort Worth, Hurst, Bedford, or anywhere else in Texas might ask: What happens when I lose the use of my car because of the actions of another person?
This usually happens in a car wreck situation but also happens in situations where engine repairs are not properly completed. Other insurance situations might be when a car is lost or destroyed due to fire, flood, or theft, and the owner is trying to get their own insurance company to take care of the matter.
As it relates to the Texas Deceptive Trade Practices Act (DTPA) the issue of compensation for "loss of use" came up in a case decided in 1984. The style of the case is "Yolanda Luna v. North Star Dodge Sales, Inc. and was decided by the Texas Supreme Court.
The basis facts of the case were that in March 1980, Luna sought to purchase a 1980 Dodge Omni from North Star Dodge Sales, Inc. (North Star). A 30-day/1,000 mile "money back guarantee" was offered to Luna. If a purchaser was not satisfied with the car, then the purchase price would be refunded if the car was returned prior to the expiration of 30 days from the purchase date or before the 1000 mile limitation occurred. Luna took delivery of the car and while driving it home noticed a constant vibration and rattling with steering wheel.
Two days later Luna took the car back to North Star and asked the salesman, Lewis, to refund her purchase money. They did not, nor did they ever say they would. Luna was told the refund decision was up to someone who was not available at that time. North Star offered to fix the car. Luna claimed it was never fixed. She returned to North Star several times with the car. She testified that she requested the refund each time which was not honored. She felt she had no choice but to let North Star attempt to repair the car. Luna thought that if North Star did not fix the car, then she would still get her purchase money back.
Eventually, she just left the car at North Star where it remained at the time of the trial. Luna continued to make monthly payments on the car for 15 months. The jury awarded Luna $5,200 for loss of use of the car from April 11, 1980 to the time of trial. This court upheld that finding.
There were several other issues at the trial but only the loss of use is being discussed here. Luna testified she thought the reasonable rental value for her car was approximately $100.00 per week. Luna was unable to afford to rent a replacement car. A man in the auto leasing and rental business testified the reasonable rental value for Luna's car in April 1980 was $108.00 per week plus approximately $0.18 per mile.
The Court held that in order to prove loss of use of an automobile, the plaintiff need not rent a replacement automobile or show any amounts actually expended for alternative transportation. They cited another court which stated:
If we were to hold that a plaintiff who has lost the use of his pleasure automobile ... cannot be compensated because he has not hired a substitute automobile, we would be placing upon recovery a condition of financial ability to hire another automobile to take the place of the injured automobile. The law cannot condone such a condition. He would be denied compensation for his inconvenience resulting from the defendant's wrongful act.
This Court went on to say that to prove up loss of use, the reasonable rental value of a substitute automobile is sufficient evidence to support an award of actual damages. The period of compensatory loss of use will be the reasonable rental value by the day, week, or month.
The Court said it is not perhaps possible to lay down a rigid and unbending rule, applicable to all cases because it must of necessity vary with the character of the property, and somewhat with the peculiar circumstances of each case. But the thing to keep in view is that the harmed party shall be compensated for the injury done.
There are some rules that can seem kind of strange related to "loss of use" claims and claims related to substitutes by rental. An experienced Insurance Law Attorney will look at the Texas Transportation Code. Section 501.091 of this code and the sections following to give some guidance as it relates to "loss of use" claims.

Homeowners in Grand Prairie, Arlington, Dallas, Fort Worth, Burleson, Coppell, De Soto, North Richland Hills, Keller, Colleyville, and other North Texas cities don't spend a lot of time worrying about floods, with maybe a few exceptions. However, residents along the Texas Gulf Coast have to think about it all the time. But North Texas residents need to appreciate that the floods along the Gulf Coast also effect them in an indirect way.
An article recently published in the Houston Chronicle brings this issue to light. The article was published on August 9, 2010, and was authored by Spencer Gaffney, who works out of the Washington Bureau. The article's title is "Insurance From Floods Underwater."
The article tells us that between 1977 and 1995, the National Flood Insurance Program paid out $806,851 for repeated storm damage to a suburban Houston home that was valued at $114,489. Guess what? The math does not add up.
Gaffney tells us that the federal government's program to protect coastal residents from nature's devastation has coughed up more than $8 billion over the past 15 years for more than 150,000 troubled properties that have filed multiple claims for storm damage.
That's just one problem for a program that was designed to be an essential economic safety net to hundreds of thousands of coastal residents but has come under attack for the way it manages its money and fulfills its mission. Critics say the program, rather than acting as a safety net against catastrophic damage from hurricanes, has become a taxpayer funded subsidy to coastal home owners and real estate interests to build and buy homes in high risk areas.
Here are some interesting numbers. 1% of properties account for between 25 and 30 percent of the claims it pays. The number of "repetitive loss" homes more than doubled in the past 15 years. What's more is that the devastation wrought by Hurricanes Katrina and Rita in 2005 has left the program deeply in debt with little or no hope of stemming the tide of this debt.
The National Flood Insurance Program is lossing more than $200 million a year and now owes the Department of Treasury more than $18 billion. The Government Accountability Office says the program is unlikely to be paid back.
This is of interest to Texas because Texas receives more money from the flood insurance program than any other state. Before the program was instituted in 1968, people living along the coasts or in high risk areas had no access to insurance. When a flood hit, they paid out of pocket or got disaster aid from the state or federal government.
Now, the National Flood Insurance Program supports entire industries, including the banks that sell mortgages to homes with flood insurance, the construction workers who repair and rebuild the homes, the insurers who write the policies, and the real estate agents who sell the lucrative waterfront properties.
The policies themselves are written by independent insurance agencies like Allstate with government approval. They get to keep up to 17% of the premium.
"You're doing the same work, you're getting paid the same, but you don't have the risk," said Mark Calabria, director of financial regulation studies at the libertarian Cato Institute. "The flood insurance program allows people to live where they wouldn't live otherwise."
The article goes on. Austin Perez, environmental policy representative for the National Association of Realtors, says "its not true" that the program encourages rebuilding in sensitive areas. Instead, he says, it allows residents to live in at-risk coastal areas with some degree of confidence they will not be financially ruined.
Perez points out that if there were no flood insurance that taxpayers woud pick up the bill in the form of disaster relief.
Craig Fulgate, an administrator of the Federal Emergency Management Agency, which oversees the program, has said the program needs to be reformed.
The program has to be reauthorized by Congress periodically. One result of the repeated reauthorization process is a steady flow of campaign cash from real estate interests to lawmakers who decide the program's fate. All house members who co-sponsored the bill to continue the program recently, received campaign contributions from the National Association of Realtors totaling $49,000.

Businesses in Hurst, Euless, Bedford, De Soto, Grand Prairie, Arlington, Fort Worth, Dallas, Mansfield, Southlake, Grapevine, or any other city in Texas have various kinds of insurance policies to protect their bussiness. One of those kinds of insurance is called Crime Protection Policies. Here is a recent case dealing with this type of insurance coverage.
The case is, Great American Insurance Company v. AFS/IBEX Financial Services, Inc. The opinion in this case was issued on July 22, 2010, and authored by Circuit Judge Carl E. Stewart. This is from the United States Court of Appeals for the Fifth Circuit.
In this case, Great American Insurance Company (GAIC) issued crime protection policies to AFS/IBEX Financial Services, Inc. (AFS). After suffering a loss caused by the forgery of certain checks, AFS submitted a claim to GAIC. GAIC denied coverage and filed this lawsuit asking the court to affirm their decision.
Here are some facts of the case: AFS provides premium financing in the insurance industry. In connection with this business, AFS entered into an agreement with Charles McMahon, Sr. (Sr), who owns the Charles McMahon Insurance Agency. This agreement contemplated that Sr would create and sign premium finance applications on behalf of insureds. AFS would then send a check to the insurance company for the purchase price of the insurance, and the insureds would send regular payments to AFS.
Sr's son, Charles McMahon, Jr. (Jr) was the office manager at Sr's agency and was responsible for submitting applications for premium financing to AFS. Jr exploited this relationship by submitting approximately 122 false applications for premium financing to AFS. These fraudulent applications induced AFS to issue 127 checks made payable to "Charles McMahon Insurance Agency." Jr endorsed these checks "Charles McMahon Insurance Agency" and deposited the funds into his own personal bank account. Jr never endorsed the checks with his own name or signature. Sr was aware that his son had responsibility for submitting financing applications to AFS, but was not aware of his son's fraud. Sr allowed Jr to endorse checks payable to the agency and to write checks out of the agency's account for legitimate business purposes.
After Jr's scheme was uncovered, AFS submitted a claim to GAIC for $519,110.58 under the forgery coverage provision of its Crime Protection Policy (SAA). GAIC claimed that no forgery occurred as that term is defined in the policy.
The threshold question in this case is whether AFS's loss was caused by a forgery such that the forgery provision of the SAA policy was implicated. The relevant portion of the SAA policy states:
2. Forgery or Alteration
a. We will pay for loss resulting directly from forgery or alteration of checks, ... that are:
(1) made or drawn by or drawn upon you; or
(2) made or drawn by one acting as your agent;
that are purported to have been so made or drawn ...
GAIC admits that the SAA policy insured AFS against losses for the forgery or alteration of checks, and that the numerous checks issued by AFS were covered under the SAA policy. It disputes, however, that a forgery occurred such that the coverage contemplated by the SAA policy was triggered. According to the SAA policy,
Forgery means the signing of the name of another person or organization with intent to deceive; it does not mean a signature which consists in whole or in part of one's own name signed with or without authoriy in any capacity, for any purpose.
In arguement to the court, GAIC tried to get the court to adopt the UCC definition of forgery found in the Texas Business & Commerce Code, Section 3.405.
The court said that GAIC's arguement conflicts with the basic principles of Texas insurance law. Under Texas law, an insurance policy, like other contracts, is the law between the parties. In interpreting an insurance contract, terms are given their plain, ordinary meaning unless the parties intended the term to have a different, technical meaning. When terms are defined in the insurance policy, those definitions control. The SAA policy specifically defines the term"forgery." Consequently, its definition controls and there is no merit to GAIC's arguement that the court should look outside the four corners of the insurance agreement and define it according to the UCC definition. As noted above, the SAA policy defines forgery as "the signing of the name of another person or organization with intent to deceive.
GAIC argued that because the words "Charles McMahon" are part of the endorsement (Charles McMahon Insurance Agency) and also part of the endorser's name (Charles McMahon Jr.), the endorsements at issue are not forgeries under the SAA policy. This reading distorts the phrase "a signature which consists in whole or in part of one's own name" to mean that there would be no forgery and therefore no coverage when an endorser shares any part of the name he or she is signing even though the endorser purports to be signing the name of another for a deceitful purpose.
In this case, the court found there was a forgery and that the forgery was covered under the policy. This case is another well reasoned example of how courts will look at and interpret insurance policies.

People everywhere, including Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, Irving, Burleson, Granbury, Lake Worth, or anywhere else in Texas, have dreams of someday having their own business. When that happens they will find themselves having to purchase commercial insurance policies to protect themselves and their business from accidents and mistakes that are simply going to happen at one time or another.
The United States Court of Appeals for the Fifth Circuit decided a case on July 9, 2010, that involved a small business person and their commercial insurance policies. The style of the case is, Employers Mutual Casualty Company; Emcasco Insurance Company v. Juan Miguel Bonilla, et al. This case is an insurance coverage dispute and though there are other issues in the case, the primary issue was the meaning or definition of the word "use" within the insurance policy.
Here are some background facts: Bonilla leased a truck from Jolly Chef Express, Inc. On a daily basis he hired a driver and cook for each of his trucks. At the end of each day the driver and cook would return to their parking place to clean the truck and prepare for the next day's route.
On February 13, 2002, Bonilla hired Fernandez to drive and Molina to serve as a cook on one of the trucks. At the end of the day they returned to their parking place. While parked, Fernandez poured a flammable substance on the floor of the truck to loosen the grease. He then left the truck to turn in the days money. Molina began washing dishes, then an explosion occurred. A pilot light from the stove had ignited the flammable substance and Molina was severely injured.
A lawsuit resulted. Jolly Chef's trucks were insured by Employers Mutual Casualty Company under a Commercial General Liability Policy and a Commercial Unbrella Policy and a Commercial Auto Policy from Emcasco Insurance Company.
Again, the primary issue in this case was whether the fire arose out of the "use" of the vehicle or the maintenance of it.
This Federal Court looked to Texas insurance law to reach a determination in this case. The insurance companies argued that "use" meant driving and operating the truck. There are many cases supporting their arguement. The court looked at the policy. The first page of the Auto Policy is captioned "Commercial Auto Declarations - Business Auto Coverage." That same page states that Jolly Chef is the named insured, that the "form of the business" is a corporation, and that the "description" of the business is "mobile catering." The policy, clearly, was not intended to apply to a motor vehicle used by individuals simply in their daily activities of traveling to and from work or school or otherwise. The policy was specifically for vehicles involved in a mobile catering business.
For coverage to exist, the accident must have been one "resulting from the ownership, maintenance or use of a covered auto."
Here, the truck was a vehicle designed for a special use. It had kitchen facilities built into it. Cleaning necessary from the use of that equipment set in motion the events resulting in the accident, and a pilot light that was a part of the equipment was among the causes of the accident.
The term "use" was not defined in the policy. Under Texas law, liability for "use" requires that "a casual connection or relation ... exist between the accident or injury and the use of the motor vehicle. This is language from the Texas Supreme Court case, Mid-Century Insurance Co. of Texas v. Lindsey, which is applicable case law for guidance here. In the Lindsey case, the court stated, "The term 'use' is the general catchall of the insuring clause, designed and construed to include all proper uses of the vehicle not falling within other terms of definition such as ownership and maintenance." "If a vehicle is only the locational setting for an injury, the injury does not arise out of any use of the vehicle."
Citing legal treatises the court stated:
For an injury to fall within the "use" coverage of an automobile policy (1) the accident must have arisen out of the inherent nature of the automobile, as such, (2) the accident must have arisen within the natural territorial limits of an automobile, and the actual use must not have terminated, (3) the automobile must not merely contribute to cause the condition which produces the injury, but must itself produce the injury.
This is quoting, Couch on Insurance, and John A. Appleman, Insurance Law and Practice.
The court went on to say that the "inherent purpose" of a mobile catering truck certainly could be seen as including the use and maintenance of its kitchen facities, though the inherent purpose of a usual vehicle would not include cooking but it is not an unexpected use.
Here the truck was equipped with a kitchen. According to Dallas City Code provisions, all licensed mobile units were required daily to return to the commissary to be cleaned and stocked for the next day's route. The full scope of the truck's purpose was to transport food and personnel and also to prepare and sell food. Molina could not safely be transported with a greasy floor. Moreover, the food could not be prepared and sold if the truck were not clean and sanitary. Cleaning a mobile kitchen was not simply a speculative event that might conceivably occur, not was the cleaning foreign to the vehicle's inherent purpose.
Further, this vehicle is not some mystical, generic vehicle, but one specifically insured by the parties to the policy. The special nature of this vehicle was not hidden or otherwise unknown. It literally was in black and white in the policy.
The Federal Court ruled in favor of coverage and is good reading for how courts analyse coverage issues in insurance policies.

A terrible thing for someone in Arlington, Grand Prairie, Grapevine, Mansfield, Dallas, Fort Worth, Bedford, Euless, or anywhere else in the metroplex is having a loved one die. Then, when the claim for life insurance benefits is made, the live insurance company denies the claim for benefits.
This happens on a daily basis across the country. The New York Daily News recently published an article about this happening to a Long Island family. The Daily News staff writer is, John Marzulli. The title of the article is, "Lawsuit seeks to prevent Jeffrey Locker's family from collecting life insurance after bizarre death."
The article tells us that the family of a Long Island motivational speaker who police say set up his own murder should not collect $4 million in life insurance because he lied about his income. That is the defense in a federal lawsuit filed by the family.
Jeffery Locker, who was married and the father of three children, was stabbed and choked to death this past summer while in his car in East Harlem. The arrested and accused killer told the police that Locker paid him to stage the murder as a robbery so his family could collect the life insurance proceeds.
He had taken out the life insurance policy about a month before his bizarre death.
The lawsuit was filed in Brooklyn Federal Court against the insurance company. The lawsuit papers filed by Locker's family makes no mention of the strange circumstances of Locker's death.
However, Principle Life Insurance of Iowa contends that Locker's tax returns show his earnings were less than the $800,000 he claimed. He also lied about canceling another policy worth $4 million.
Locker was heavily in debt at the time of his killing. He allegedly told ex-con, Claude Minor, to "do a Kevorkian," referring to the notorious proponent of assisted suicide, Dr. Jack Kevorkian. In the criminal matter, Minor is facing second-degree murder charges.
One thing for readers to keep in mind is that all life insurance policies are written differently. Each state in the United States, has its own rules and regulations governing life insurance policies. The average purchaser of these life insurance policies would never know for sure what the wording in the different policies means without consulting an experienced Insurance Law Attorney.
There are lots of clauses in Insurance policies that are not enforceable. Still other clauses that are not enforceable after a certain amount of time has expired from the date the policy was taken out. Further still, even in policies where there are clearly inaccurate statements made by the person who took out the policy, often times these inaccurate statements are not grounds for refusing to pay on the policy.

No matter where you live, Weatherford, Aledo, Azle, Lake Worth, Mineral Wells, De Soto, Arlington, Grand Prairie, Dallas, Fort Worth, Mesquite, Garland, or anywhere else in Texas, the insurance companies are always looking for ways to deny a claim.
The Texas Supreme Court, in 2004, decided a case where the insurance company denied a claim for Personal Injury Protection (PIP) benefits under a policy. The style of the case is, Texas Farm Bureau Mutual Insurance Company v. Jeff A. Sturrock. Justice O'Neil delivered the opinion of the Court.
In this case, an insured, Sturrock, was injured when his foot became entangled with his truck's raised door facing while he was exiting the vehicle. The issue here is whether or not his injury resulted from a "motor vehicle accident" for purposes of PIP coverage under his automobile policy with Texas Farm Bureau Mutual Insurance Company (Farm Bureau). The Court held that a "motor vehicle accident" occurs when (1) one or more vehicles are involved with another vehicle, an object, or a person, (2) the vehicle is being used, including exit and entry, as a motor vehicle, and (3) a casual connection exists between the vehicle's use and the injury producing event.
The facts here were that Sturrock drove his truck to work, parked, and turned off the engine. While exiting the truck, he entangled his left foot on the raised portion of the truck's door facing. He injured his neck and shoulder in his attempt to prevent himself from falling from the vehicle.
The Texas Insurance Code, Section 1952.152, requires that every automobile insurance policy issued within Texas provide PIP coverage, unless rejected in writing. Sturrock's policy provided in pertinent part:
A. We will pay Personal Injury Protection benefits because of bodily injury:
1. resulting from a motor vehicle accident, and
2. sustained by a covered person.
Farm Bureau did not dispute that Sturrock is a "covered person", but denied that his injuries resulted from a "motor vehicle accident" within the policy's PIP coverage.
This lawsuit resulted.
Farm Bureau argued that accidents like the one Sturrock experienced do not fit within the plain meaning of "motor vehicle accident" because the term requires some involvement between the covered motor vehicle and another vehicle, person, or object. Conversely, Sturrock claims the incident at hand was a "motor vehicle accident" because the vehicle itself produced the injury.
In the 1995 case, State Farm Mutual Insurance Company v. Peck, the Amarillo Court of Appeals, which involved a drive-by-shooting, held that State Farm had no duty to defend or indemnify its insured because "a drive-by-shooting" could not be transformed into an 'auto accident' under the policy.
The Texas Supreme Court more recently had addressed the meaning of "automobile accident" in Mid-Century Insurance Company of Texas v. Lindsey, in 1999. There, Linsey, a passenger in his mother's car, was shot by a gun that accidently discharged from an adjacent truck when a boy attempted to enter the cab through the rear window. In that case the Court rejected the interpretation that the term "auto accident" required a collision or excluded occurrences like Linsey's.
The Court went on through an analysis of the meaning of "accident" and "arising out of a motor vehicle's use" and is a good read for trying to understand how Courts reach their decisions. It also illustrates, by cites to other cases, how difficult decisions can be when interpreting insurance policies. One conclusion that should be obvious is that an experienced Insurance Law Attorney should be consulted in these matters.
In the Sturrock case, the Court ruled in favor of Sturrock by finding that the PIP provision in the policy did provide coverage for Sturrock.

I live in Dallas, or Fort Worth, Arlington, Grand Prairie, Flower Mound, Mansfield, Justin, De Soto, Duncanville, Azle, or anywhere else in Texas - How do I know how to interpret my insurance policy? Here is a bunch of answers. Consult with an experienced Insurance Law Attorney. Ask you insurance agent. Attend an insurance seminar. Go to law school. Ask your next door neighbor or your boss at work.
The above may seem rediculous but sometimes the answer is hard to get even when asking the professionals. Here is my suggestion. Talk to the lawyer.
Legal conclusions are sometimes easy to reach but too often they are not so easy. Here is a case that argued over what the work "you" means in the policy.
The case was decided by the Texas Supreme Court in 1997. The style of the case is, Grain Dealers Mutual Insurance Company v. McKee, et al.
In this case, the Court had to determine whether the Business Auto Policy that Grain Dealers Mutual Insurance Company (Dealers) issued to Future Investments, Inc. (Investments), a corporation of which Gerald McKee is the president and sole shareholder, provides coverage for McKee's daughter. The Court said no.
Here are the facts: McKee's eleven year old daughter, Kelly, was injured in a one car accident while riding as a passenger in a car driven by her adult sister, Delane. The parties in this case agreed that neither Delane nor the car involved in the accident were covered under the Dealers policy and that the accident occurred during an outing unrelated to any business purpose of Investments. That Kelly resided with McKee when the accident occurred and Delane did not.
McKee sued his own personal automobile carrier, Companion Insurance Company, and settled with them. He then went after Dealers for coverage under the Personal Injury Protection (PIP) and Under-insured (UM) portions of that policy.
In analysing the policy, the UM endorsement provides three categories of "who is an insured" under the policy:
1. You and any designated person and any family member of either.
2. Any other person occupying a covered auto.
3. Any person or organization for damages that person or organization is entitled to recover because of bodily injury sustained by a person described in 1 or 2 above.
The PIP endorsement provided two categories of "who is an insured":
1. You or any family member while occupying or when struck by any auto.
2. Anyone else occupying a covered auto with your permission.
In order for the policy to cover Kelly, she must fall within one of the categories of "who is an insured." The Dealers policy provides: "Throughout this policy the words 'you' and 'your' refer to the named insured in the declarations page." Investments is the "named insured" in the UM and PIP endorsements. The UM endorsement defines "designated person" as "an individual named in the schedule. By such designation, that person has the same coverage as you." Investments did not name a "designated person" in the space provided in the UM endorsement and did not list additional autos to be covered under either endorsement. The names Gerald McKee and Kelly McKee do not appear anywhere in the policy or the endorsements. As a result, Kelly does not qualify as "you" or "designated person" under the endorsements.
Additionally, Kelly does not qualify as a "family member" under the endorsements. "Family member" is defined in both endorsements as a "person related to you [Investments] by blood, marriage, or adoption who is a resident of your [Investments] household, including a ward or foster child." Kelly is obviously not related to Investments by blood, marriage, or adoption. Of course, she does not reside in Investments' household. A corporation cannot have a "family" as that term is defined in the policy.
Because Kelly does not qualify as a "designated person," a "family member," or "you," she does not fall within the first classification of who is an insured under the UM and PIP endorsements. The parties agreed that Kelly was not occupying a covered auto when the accident occurred. As a result, Kelly does not fall within category 2 of either the UM or PIP endorsements. In order to recover under category 3 of the UM endorsement, Kelly would have to be a person described in categories 1 or 2. Because she is not, it is clear that Kelly does not fall within any of the endorsement classifications of "who is an insured."
Attorneys for McKee argued that the policy was ambiguous and thus should be interpreted as to afford coverage. The Court disagreed.
This case is a good read for understanding how courts might interpret a particular policy. What must be remembered is that each policy has to be read carefully and then the wording in that policy carefully examined in light of the occurrance giving rise to the claim against that policy.

An insured in Dallas, Fort Worth, Grand Prairie, Arlington, Colleyville, Burleson, Benbrook, Grapevine, Irving, or anywhere else in Texas probably thinks they pay too much in health insurance rates. Well, the reality is they probably are paying too much.
The above is addressed in a USA Today article published on July 22, 2010. The author is Alison Young and the title of the article is, "Consumer group: Insurers kept surplus while hiking premiums." The article focused on Blue Cross and Blue Shield health plans because the company covers one in three Americans with private insurance.
The article tells us that non-profit Blue Cross and Blue Shield health plans stockpiled billions of dollars during the past decade, yet continued to hit consumers with double digit premium increases. This was discovered by Consumers Union in an anaylsis of 10 of the plans' finances.
Probably most people know that insurance companies must keep surplus money to ensure they can pay policyholders' medical bills if unexpected market conditions develop. In the research by Consumers Union it was discovered that seven of the plans examined held more than three times the amount regulators consider the minimum to do the above.
The author of the report, Sondra Roberto, said, "Consumers are struggling to afford health coverage. Those funds could be used in some cases to mitigate these rate increases."
The Consumers Union report calls on state regulators to scrutinize surpluses when considering rate increases and set maximum limits for surpluses. In most states, it said, regulators focus only on ensuring companies have minimum surpluses to be financially sound.
Blue Cross and Blue Shield Association senior vice president, Alissa Fox, has said this is a "dangerous" time for regulators to limit health plans' surpluses because of great uncertainty about how insurance costs will change under the nation's new health law. She said, "It's a safety net."
Here are some examples from the report and the Alisa Young article:
Blue Cross Blue Shield of Arizona: A $717.1 million surplus in 2009, seven times the regulatory minimum. The plan raised rates for individual market constomers by as much as 18% in 2009. Their company spokeswoman, Regena Frieden, said, "We believe the amount we have in reserves is appropriate."
Regence Blue Cross Blue Shield of Oregon: A surplus of $565.2 million in 2009, about 3.6 times the regulatory minimum. The plan raised rates on some individual plans an average of 25.3% in 2009 and 16% in 2010. Spokeswoman, Angela Hult, said the company lost money on its individual policies and that the surplus is "essential to protecting our members from surges in claims costs."
Regulating surpluses is a difficult balancing act because keeping plans financially sound is critical, regulators said. Each plan has different surplus risks and needs depending on its members.
Oregon Insurance Division administrator Teresa Miller, whose office considered Regence's surplus and limited its request for a higher 2010 rate hike, said: "The tough question is how much surplus is too much surplus. There is no agreement on that."
The Oregon legislature last year gave state regulators the explicit authority to consider a company's surplus when it reviews rates - a tool Miller said her agency had sought since 2007. A report on the agency's website charts how surplus levels have risen since 2001.
In Michigan, a law caps the surplus of the state's Blue Cross Blue Shield plan at five times the regulatory minimum. Insurance Commissioner Ken Ross said the state's Legislature wanted to give the insurer flexibility but also protect consumers against the possibility the plan could hold too much money in its surplus funds. Blue Cross Blue Shield of Michigan has rarely neared the limit and usually is about halfway between the minimum and the maximum. "It seems to have worked relatively well," Ross said.
The company insurers more than half of the people in Michigan, Ross said, so it's critical it have enough capital to remain financially sound. "Their health in many ways goes to the entire health care system in Michigan." he said.

Insurance companies often times accuse policyholders of trying to cheat them. No matter if you are in Dallas, Fort Worth, Arlington, Grand Prairie, or somewhere else, if you make a claim the insurance company will assign an adjuster to investigate the claim. The adjusters job is to evaluate and settle the claim. Sometimes the adjuster finds things that make him suspicious of how legit the claim is. If the adjuster is ever questioning your honesty you should immediately get an experienced Insurance Law Attorney involved.
A big reason adjusters question the honesty of a claim is that occassionally they find something that is just not right. This is illustrated by an article that was published on July 19, 2010, in the Fresno Bee, a newspaper in California. The article is written by Barbara Anderson and is titled, "Valley doctors, chiropractors accused of fraud."
The article tells us that Allstate Insurance Company is suing San Joaquin Valley doctors and several chiropractors in a multimillion-dollar lawsuit, alleging they falsely operated chiropractic clinics as medical groups to get insurance payments.
The lawsuit in Fresno County Superior Courts also says that the doctors and chiropractors created sham professional medical corporations to illegally purchase and distribute prescription medication to chiropractic clinics and patients.
The lawsuit seeks damages in excess of $3 million as well as statutory penalties. And Allstate seeks more than $1 million in damages, penalties, attorneys fees and costs for violations of California's Insurance Fraud Prevention Act.
In the lawsuit, more than a dozen defendants are named, including Dolphus Dwayne Pierce II of Lemoore, John Brent Arakelian of Fresno and Drs. Tomas Ballesteros Rios of Bakersfield and Charles Orlando Lewis III of Hanford.
It appears the lawsuit was filed after a lengthy investigation by the fraud investigation unit at Allstate. The defendants say that they have already been checked out and cleared by the California Medical Board.
It is the law in California that chiropractors are not licensed to prescribe or dispense prescription drugs. The lawsuit says the defendants knew this and attempted to get around the law by having licensed doctors prescribe the medication. Doing it this way would increase the value of claims being submitted on behalf of the patients they were treating. The lawsuit alleges that the corporations set up by the defendants, Pierce & Rios Med. Corp., Rios & Pierce Med. Corp. and P&R Med-Legal, were sham corporations, for the purpose circumventing the law.
The lawsuit says that in 2004, Rios entered into agreements with a number of chiropractors to appear as majority owner of multiple medical corporations in exchange for money, to give the false appearance that the corporations were in legal compliance.
Another organization alleged to have been set up to carry on this fraud was, San Joaquin Accident & Medical Group Inc. Yet another entity was known as South Gate.
It is also noteworthy that the article says, Rios pleaded guilty to a felony in making or subscribing to a false income tax return on May 27, 2007.

Residents of Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and other cities, beware. There are businesses out there that will cheat you.
Think about this for a second. There is a saying that says there are only two things in this world a person can be sure of; death and taxes. A person can be a little light hearted and joke by saying they are getting screwed by both of them.
But here is a different twist. According to a Houston Chronicle news story that was published on July 19, 2010, the tax man, or in this case "TaxMasters" is screwing you over also. The author of the article, Mike Tolson, titled the article, "TaxMasters target of state AG, customers." The article tells how the tax assistance company, TaxMasters, appears to be in violation of the Texas Deceptive Trade Practices Act and the Texas Debt Collection Act.
Most of us in Texas have seen or heard the TaxMasters advertisements with its founder, Patrick Cox, urging people with IRS problems to give him a call. Well, it appears that a lot of people did call him and it also appears that a lot of people are very unhappy with the way their cases were handled. You can be sure that things have gotten out of hand when you learn that this past May, Texas Attorney General, Greg Abbott, has filed suit against TaxMasters. Adding to their woes is a class-action lawsuit filed on behalf of former clients earlier this month in Pennsylvania that echoes many of the complaints of the AG's lawsuit. The Pennsylvania lawsuit also alleges violations of federal and Pennsylvania laws.
As reported by the article, both the class-action lawsuit and the AG lawsuit include allegations from TaxMasters customers that the company would do no work on any IRS issue until it was paid in full, even if that meant crucial IRS deadlines were passed, and that their attempts to cancel the agreements not only failed to net a refund, but also demands from TaxMasters to be paid in full, even if it did no work and did not have a signed contract.
One example cited in the article is that of Karen Sanchez, a 65 year old resident of suburban Atlanta. Sanchez swore in an affidavit that she paid TaxMasters $4,083 of an agreed $6,250 in 2009 but that it did nothing on her behalf to settle an IRS debt. She claims TaxMasters employees told her the company would take steps to protect her home, then learned from the IRS that nothing had been done and that her right to appeal had expired.
When she finally reached a TaxMasters supervisor, Sanchez claims she was told nothing would be done further until the company received her final installment in April. Until then, Sanchez alleges, she was told that she would have to handle the matter herself. Sanchez claims she was never told upfront that no actions would be taken to help her until the fee was paid in total or that the fee would not be refunded even if TaxMasters ended up doing no work.
Neither Patrick Cox nor his attorney are returning calls for comment. However, the company issued a statement through its public relations firm that said:
"While faced with these charges raised by the attorney general of Texas, TaxMasters and CEO Patrick Cox are working diligently with the attorney general's office to provide all information necessary to negate any wrongful charges and continue serving its clients as the nation's largest tax representation company."
Essentially is appears that TaxMasters and its CEO are taking the position that they are targets of their competitiors because they have been so successful. It is reported that a steady stream of advertising combined with a nationwide economic downturn translated into explosive growth for TaxMasters, which saw its revenue grow from $6.5 million in 2007, its first year, to more than $36 million last year.
Under the Texas Deceptive Trade Practices Act, there are many potential violations. Here are some that may or may not apply to what TaxMasters did in this situation. They are found in the Texas Business & Commerce Code, Section 17.46:
17.46(b)(5) representing that services have characteristic, uses, benefits, which they do not have,
(7) representing that services are of a particular standard or quality when they are of another,
(9) advertising services with intent not to sell them as advertised,
(12) representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve,
(24) failing to disclose information concerning services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed.
If the allegations against TaxMasters are found to be true, then the consumer would be entitled to the relief found in Section 17.50.
Additionally, the AG lawsuit could result in a restraining order being issued pursuant to Section 17.47.

What do people in Dallas, Fort Worth, Arlington, Grand Prairie, Azle, Irving, Burleson, Mansfield, Duncanville, and other cities in Texas know about life insurance? Answer: not much, except what it costs each time they make a payment.
Life insurance in Texas is regulated by the Texas Department of Insurance. Laws governing life insurance can be found in the Texas Insurance Code. Insurance Law Attorneys can answer a lot of questions whenever someone thinks they are not being treated properly by their agent or the insurance company.
Life insurance policies, by law, must contain several prescribed provisions. This is stated in Section 1101.002(a) of the Insurance Code. The exception to this statute is a single premium life insurance policy. This is stated in Section 1101.002(b), but these single premium policies are not seen very often and the vast majority of people do not have these types of policies.
Otherwise, the required provisions in a life insurance policy generally include (but are not limited to):
1) a life insurance policy must provide that the policy or the policy and the application for the policy constitute the entire contract between the parties. This is found in Section 1101.003;
2) all premiums are payable in advance either at the home office of the company or to an agent of the company upon delivery of a receipt signed by one or more of the officers who are designated in the policy. This is found in Section 1101.004;
3) there is a grace period of at least one month, for the payment of every premium after the first, which may be subject to an interest charge if paid during the grace period, during which the insurance may continue in force. This is found in Section 1101.005;
4) the policy, or policy and application, will constitute the entire contract between the parties and 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 (it may also contain an exception for violation of conditions of policy relating to naval and military service in time of war). This is found in Section 1101.006;
5) all statements made by the insured will, in the absence of fraud, be deemed representations and not warranties. This is found in Section 1101.007;
6) if the insured's age had been understated, the amount payable under the policy will be such as the premium paid would have purchased at the correct age. This is found in Section 1101.008;
7) if, in the event of default in premium payment, the value of the policy will be applied to the purchase of other insurance, and if such insurance is in force and the original policy has not been surrendered to the company and canceled, the policy may be reinstated within three years from such default upon evidence of insurability satisfactory to the company and payments of arrears of premiums with interest. This is found in Section 1101.009;
8. when a policy becomes a claim by the insured's death, settlement will be made upon receipt of or not later than two months after due proof of death and the claimant's right to the proceeds. This is found in Section 1101.011; and
9. include a table showing the amounts of installments in which the policy may be payable. This is found in Section 1101.012.
These statutes will be backed up by the Texas Supreme Court if necessary.

Someone in Dallas, Fort Worth, Grand Prairie, Arlington, Mansfield, De Soto, Aledo, Weatherford, Azle, Burleson, or anywhere else in Texas may ask, What is a "First Party" Insurance Claim?
"First party" insurance claims are claims that an insured makes against their own insurance policy. Most of the time a person making a claim against someone else's insurance policy is considered a "third party" claimant. However, sometimes a person making a claim against someone else's policy is still considered a "first party" claimant when the person making the claim is a beneficiary of the insurance policy.
A "first party" policy typically involves insurance that provides policy benefits directly to the insured or beneficiary in the event of a loss. This is further set out in the Texas Insurance Code, Section 542.051(2). In that section, "first party claim" is defined as a claim "by an insured or a policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary." These types of policies generally include health insurance, life insurance, disability insurance, workers' compensation insurance, auto property insurance, homeowner's property insurance, and commercial property insurance. The Texas Supreme Court, in 1997, described the difference between first party and third party insurance in the case styled, Universal Life Insurance Company v. Giles.
"Third party coverage" is generally considered to include all forms of liability insurance. This type of insurance is designed to insure against a loss to third parties caused by the insured or another covered person for whom the covered person may be legally responsible. These types of policies include commercial general liability, auto liability, homeowner's liability, professional liability, and directors and officers liability policies.
Consultation with an experienced Insurance Law Attorney will help understand the difference between first party and third party insurance.
Another source of research in understanding the differences may be gleamed by searching the Texas Department of Insurance web site.
There are great differences between the ways a first party claim is legally pursued and the ways a third party claim is pursued. Almost all third party claims are going to be "tort" actions, whereas first party claims can be "breach of contract", violations of the Texas Insuance Code, and violations of the Texas Deceptive Trade Practices Act.
Here are some examples of "first party" policies:
Auto Property Coverage. The standard Texas Auto Policy covers accidental loss or damage to the covered auto. If an insured is involved in a single-car accident resulting in property damage to the insured vehicle, the insured possessing this type of coverage may submit a claim directly to their insurance company and receive compensation for the damage in accordance with the terms of the policy.
Health Insurance. Health insurance refers to coverage for medical and hospital expenses and may be issued on an individual or group basis. An insured who requires health care may submit a claim directly to their insurance company for the costs of the health care received.
Life Insurance. Life insurance includes insurance on the life of the insured as well as annuities. Following the insured's death, the life insurer pays death benefits in accordance with the policy to the designated beneficiary.
Disability Insurance. The insurance industry uses the term "disability insurance" to refer to insurance against loss of income to an insured by reason of disability caused by accident or sickness. Disability insurance may be noncancellable or guaranteed renewable. Disability benefits under some policies may be reduced by social security or unemployment benefits.
The above are just a few examples of first party insurance policies, there are many others.