Dallas Fort Worth Insurance Lawyer Blog

People in Grand Prairie, Arlington, Mansfield, Crowley, Benbrook, Burleson, Keene, Joshua, Cleburne, Granbury, Pecan Plantation, Acton, and other places in Texas need to have a basic understanding of some of the consumer protection laws enacted to protect them against businesses that violate basic rules of fairness.
The Texas Business & Commerce Code, Section 17.46(b) has a "laundry list" of false, misleading, or deceptive acts or practices that have been declared unlawful by the Texas Legislature. In the appropriate situation, even the district and county attorneys throughout the state will get involved in making sure the public is protected from illegal acts that some businesses engage in.
Here is a partial list of some of the unlawful conduct found in the above section:
1. passing off goods or services as those of another;
2. causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
3. causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another;
4. using deceptive representations or designations of geographic origin in connection with goods or services;
5. representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not;
6. representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand;
7. representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
8. disparaging the goods, services, or business of another by false or misleading representation of facts;
9. advertising goods or services with intent not to sell them as advertised;
10. advertising goods or services with intent not to supply a reasonable expectable public demand, unless the advertisements disclose a limitation of quantity;
11. making false or misleading statements of fact concerning the reasons for, existence of, or amount of price reductions;
12. representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law;
13. knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service;
14. misrepresenting the authority of a salesman, representative or agent to negotiate the final terms of a consumer transaction;
15. basing the charge for the repair of any item in whole or in part on a guaranty or warranty instead of on the value of the actual repairs made or work to be performed on the item without stating separately the charges for the work and the charge for the warranty or guaranty, if any;
16. disconnecting, turning back, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge;
17. advertising of any sale by fraudulently representing that a person is going out of business;
18. (this section deals with health insurance and prescription cards)
19. (this section deals with chain selling plans)
20. representing that a guarantee or warranty confers or involves rights or remedies which it does not have or involve, ...:
21. promoting a pyramid promotional scheme as defined by Section 17.461;
22. representing that work of services have been performed on, or parts replaced in, goods when the work or services were not performed or the parts replaced;
23. (this section is semi-complicated and deals with filing lawsuits)
24. failing to disclose information concerning goods or 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;
25. using the term "corporation," "incorporated," or an abbreviation of either of those terms in the name of a business entity that is not incorporated under the laws of this state or another jurisdiction;
26. (this section deals with anuity contracts)
27. taking advantage of a disaster declared by the govenor under Chapter 418, Government Code, by: (a) selling or leasing fuel, food, medicine, or another necessity at an exorbitant or excessive price; or (b) demanding an exorbitant or excessive price in connection with the sale or lease of fuel, food, medicine, or another necessity.
Even the above list is only a partial list of wrongs that businesses can commit and be in violation of state law. A careful reading of the list will show that these are necessary protections for the public to prohibit wrongful conduct on the part of bussinesses.
Other sections in the Texas Business & Commerce Code provide exemptions and exclusions for businesses, depending on the type of business or service they are providing.
Other sections refer to other laws such as laws found in the Federal Trade Commission rulings and acts.
One thing for certain; it is necessary to check with an attorney who handles Deceptive Trade Practice cases whenever you find yourself in a situation where a company is trying to take advantage of you.

Insureds in Grand Prairie, Arlington, Irving, Grapevine, Coppell, Keller, Saginaw, Lake Worth, Aledo, Hudson Oaks, Azle, Springtown, Burleson, Benbrook, and other places in Texas need to have an understanding of how Personal Injury Protection (PIP) and uninsured / underinsured (UM/UIM) benefits work in an automobile policy of insurance. Here is a case that gives some insight.
The case is styled, Old American County Mutual Fire Insurance Company v. Zeferino Sanchez. This is a 2004, case decided by the Texas Supreme Court.
Texas Insurance Code Sections, 1952.101 and 1952.152 provide that "any insured named in the policy" may reject UM/UIM and PIP coverages. The question in the case is - whether the insured spouse of the person listed as the "named insured" in the declarations page of a policy may reject those coverages.
The case is presented to the court on stipulated facts. On January 8, 1998, Margarita Sanchez, wife of Zeferino Sanchez, applied for and purchased an insurance policy from Old American for two of the couple's vehicles. Ms. Sanchez rejected UM and PIP coverages on the insurance application, and Old American never assessed premiums for the coverages. In applying for the policy, Ms. Sanchez affirmed that the rejections of UM and PIP coverages would apply to the 1998 policy and to all future renewals of that policy. The Sanchezes renewed their existing policy in 1999. Neither Mr. or Mrs. Sanchez requested PIP or UM coverages at that time.
Although Ms. Sanchez's name appeared on the 1998 policy application, she was not listed as a "named insured" on the declarations page. The policy, however, defined "you" and "your" to include the "named insured" as well as "the spouse if a resident of the same household." Ms. Sanchez fell within the policy definitions of "you" and "your" because she and Mr. Sanchez lived in the same house at all pertinent times. To that end, the parties stipulated that both Mr. and Mrs. Sanchez were insured under the policy. The parties disagree, however, about the extent of the policy's coverage. Specifically, the parties dispute whether Mr. Sanchez was entitled to UM and PIP benefits to cover damages arising from a 1999 accident.
On April 11, 1999, Mr. Sanchez's 1984 Chevrolet pickup truck was parked on the shoulder of Interstate 35 in Hays County. A vehicle driven by an uninsured motorist struck Mr. Sanchez's truck as he was lying beneath it repairing a broken fuel hose. The impact caused the pickup to collapse on Mr. Sanchez and sever his spinal cord. Although Mr. Sanchez owned the pickup truck at the time Ms. Sanchez applied for the policy, Ms. Sanchez did not identify the pickup in the application and it was not a "covered auto" under the policy. The policy's UM and PIP provisions excluded coverage for injuries sustained while "occupying" or when "struck by" any vehicle owned by an insured that was not insured under the policy.
The parties did not dispute that Ms. Sanchez rejected UM and PIP coverages in writing; they do not assert that there were any formal defects with the manner or form of rejection; and they agree that premiums were never assessed for the coverages. The only issue was whether Ms. Sanchez had statutory authority to waive them. To resolve the issue, the court had to determine whether, under sections 1952.101 and 1952.152 of the Texas Insurance Code, the spouse of the person identified as the named insured in the declarations page of a policy may reject UM and PIP coverages.
This court then discussed at length the legislative history of the statutes and their purposes. They also discussed the ways other states dealt with this issue. At one point the court stated, "Finally, we note that interpreting 'insured named in the policy' to mean 'named insured' is consistent with the approach taken by other jurisdictions that have considered similar statutory language."
In ruling in favor of the Old American, that the rejection by Ms. Sanchez was valid as to Mr. Sanchez, the court said, this conclusion is consistent with the breadth of authority Ms. Sanchez had in these transactions. It is undisputed that she was able to purchase the policy for her husband and herself, and she was covered under the policy to the same extent as her husband. "We find it difficult to conceive that the Legislature intended for a husband to be (i) covered under a policy obtained exclusively by his wife but admittedly for his benefit; (ii) entitled to recover from the insurer under the terms and policy limits set by the wife; yet, (iii) not bound with respect to one aspect of the policy -- the rejection of UM and PIP coverages -- because his wife was not authorized to reject coverages. Under this reasoning, the wife would not even be entitled to reject UM and PIP coverages on her own behalf. Based on the circumstances surrounding the enactment of ... (the UM and PIP statutes), we conclude that the Legislature did not intend a meaning of "named insured" that would lead to this result; instead, the Legislature intended "named insured" to include the spouse of the individual named on the declarations page of an insurance policy."
The court then held that the phrase "insured named in the policy" is synonymous with "named insured." Because Ms. Sanchez can be classified as a "named insured" and thus an "insured named in the policy," the court held that she had statutory authority to reject UM and PIP coverages.

Here is one for policy holders in Grand Prairie, Arlington, Dallas, Fort Worth, Garland, Mesquite, Irving, Richardson, Wylie, Highland Park, Oak Cliff, and other parts of Texas to consider. What is the statute of limitations for sueing under an insurance policy? Well, it depends.
The Texas Civil Practices & Remedies Code, Section 16.051, says:
Every action for which there is no express limitation period, except an action for the recovery of real property, must be brought not later than four years after the day the cause of action accrues.
However, the above statute must be read with Section 16.070(a), which says:
Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state.
The statute of limitations in insurance breach of contract suits is four years, the same as other breach of contract suits. However, insurance companies have begun to use endorsements intended to reduce the period in which an insured may bring suit against the insurance company. State Farm, for example, has begun using a "Suit Against Us Endorsement," which provides that "an action against us must be made within two years and one day after the cause of action accrues." Insureds should be aware of these contractual limitations periods.
A 1984, Houston, 14th District, Court of Appeals, case styled, Curtis J. Duster v. Aetna Insurance Company is worth reading.
In the Duster case, Duster insured a yacht with Aetna Insurance Company. In September of 1979, Dusters' yacht was damaged. He filed suit against Aetna in February of 1982. The insurance agreement stated that action against Aetna was limited to a twelve month period following damage or loss. The limitation paragraph also contained a savings clause which stated:
"Provided that where any of the above limitations of time is prohibited or invalid by or under any applicable law, then and in that event no suit or action shall be commenced or maintainable unless commenced within the shortest limitation of time permitted under such law."
Attorneys for Duster pointed out that it is illegal to fix a limit on actions on a contract to a period of not less than two years.
The court held that a twelve month period is void as a matter of law. The question then became whether of not the saving clause then allowed the shortest time allowed by law (two years) to become the limitations period.
This court then stated,
"There are two rules of construction which provide guidance on how this savings clause should be interpreted ... . Our Supreme Court has told us in ... , that ambiguities in a writing are to be strictly construed against the author and in a manner which will give effect to the intent of the parties. If two constructions are possible, the one requiring execution or performance is to be favored.
The second general rule of construction is that provisions denying benefits under an insurance policy should be construed strictly against the insurer. Consistent with these two rules, we hold that the savings clause in this case was inadequate to invoke the two year limitation ... ."
The savings clause in this case was not sufficiently specific to invoke the two year limitation statute. In order to invoke the two year statute, the maker of the contract must specifically state the period of limitation he wished as a term of the insurance policy. The statute allows the parties to fix the limitation at any period under four years, so long as it is not less than two years.
The agreement in the Dusters case failed to specify a lawful period of limitations. The four years statute of limitations governing written contracts then applied.
These cases are not really that difficult, however it is necessary for an experienced Insurance Law Attorney to read the insurance policy in order to properly advise a client. Additionally, there plenty of actions in the Texas Insurarance Code, an insurance company can take or fail to take that only have a two year limitations period regardless of anything written in the insurance contract. This is the part that can become very confusing.

A policyholder in Dallas, Fort Worth, Grand Prairie, Arlington, Crowley, Addison, Mesquite, Garland, Carrolton, Richardson, Mansfield, Rendon, or anywhere else in Texas who has a policy of insurance will probably find a provision in that insurance policy that they submit to an examination under oath if the insurance company requests one. Most people might have an idea what that means, but are not positive.
An examination under oath is not a situation where an insurance adjuster talks to you on the phone and asks you for permission to record the interview. The recorded phone interview is requested on almost all claims that are filed. The insurance adjuster likes to get a recorded version of what you are claiming before you have a lot of time to think about what you are saying and before you have a chance to get "lawyered up." This recorded phone interview is usually completed within a few days of making the claim and in some cases on the same day. The adjuster asks a bunch of questions about whatever the incident is that you are reporting and then based on what you have told them, they begin conducting an independent investigation. The reality is that in most cases the recorded statement does not really hurt the insured's claim. The problem of course is in the cases where it does hurt. And also, rarely, will the insured know that what seems like innocent statements, can be used as justification for denying the claim or limiting the value of the claim. What is important to know is that a person does not have to agree to a recorded interview.
The examination under oath is a serious matter. When this is being conducted, the insurance company is usually looking for justification for denying the claim. This examination under oath is usually carried out by an attorney who is hired by the insurance company. It usually takes place in the lawyers office. You are usually invited to attend by certified and regular mail. The examination under oath is recorded by a certified court reporter who places you under oath "to tell the truth - the whole truth - and nothing but the truth", or something to that effect.
If the insurance contract provides for this examination under oath, and it usually does, it becomes a condition of the policy which must be satisfied before the insurance company becomes liable on the policy. The purpose of the examination under oath was described in 1921, by the Texas Commission of Appeals, the Court that existed before the Texas Supreme Court, in the case, Humphrey v. National Fire Insurance Company of Hartford., who stated:
"The insured agrees, at reasonable times and places, as often as required, to submit to examination by agent of insurer, and to submit all relevant books of account, bills, invoices, vouchers, etc. It is clear that the chief purpose of this priviledge to the insurer is the ascertainment and adjustment of the loss which has already occurred. The insurance company, in its policy, evidences in many ways its desire to avoid the necessity of litigation in the settlement of its losses. It reserves the right to have the benefit of the examination provided for before suit can be sustained."
Abatement of the suit is the proper means to enforce such a clause.
The Humphrey case was cited in 1989, by the Beaumont Court of Appeals in the case, State Farm General Insurance Company v. Honorable Monte D. Lawlis.
This case was what is called an "original petition for writ of mandamus." Judge Lawlis had refused to order an abatement of the underlieing lawsuit until an examination under oath could be completed.
A lawsuit had been filed against State Farm by its insureds, Mr. and Mrs. Caldwell, alleging State Farm failed to pay under the terms of their homeowners policy after the structure was destroyed by fire, and alleging bad faith settlement practices. State Farm alleged the policy contained express conditions precedent to recovery regarding production of records and submission of the insured to examination under oath. State Farm alleged the examination had been requested and scheduled on numerous occasions and that the Caldwell's attorney had cancelled the examinations. The Caldwells contend they have substantially complied with the policy requirement by submitting Mr. Caldwell to a four hour recorded interview with State Farm's adjuster. The interview was neither sworn nor subscribed.
The insurance policy provisions read as follows: "If loss occurs ... the Insured shall ... if requested by the Company, submit to examination under oath and subscribe the same." The policy further states: "No suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been complied with ...."
The end result was the appeals court ordered the trial court to abate the lawsuit until the Caldwells had complied with the examination under oath provisions of the insurance policy.
When someone finds themselves in a position where an examination under oath is being requested by an insurance company, it is advisable that the advise of an experienced Insurance Law Attorney be obtained.

Policy holders in Grand Prairie, Arlington, Dallas, Fort Worth, Flower Mound, Haslet, Saginaw, Newark, Benbrook, Crowley, Cedar Hill, Hutchins, and other places in Texas will wonder what an "appraisal clause" in their insurance policy means. Insurance companies put these in policies because it is a good thing for them. There are ways of getting around these clauses, but an experienced Insurance Law Attorney needs to be consulted.
Many property insurance policies contain appraisal clauses. These clauses define a process for appraising the value of the damaged property, if the parties cannot agree. Common provisions call for each party to choose an appraiser. Those appraisers then choose a neutral third appraiser, called an umpire. If the parties or their appraisers cannot agree on an umpire, either party may petition a court to appoint one. Once the appraisers and umpire are chosen, they value the loss. If all do not agree on the value, the decision of any two will control. The intent is to give the insurance company and the insured a simple, speedy, and fair means of deciding disputed values. This was stated in the Texas Appeals Court in Waco, as far back as 1938. The reality however is that this is not always the case.
When two appraisers do not agree, the umpire does not simply choose between them. It is the duty of the umpire to ascertain and determine, in the exercise of his own judgment and as the result of his own investigation, the values of the disputed items. This is what a San Antonio Appeals Court said in 1994.
Either party may seek specific enforcement of the appraisal clause, and the court will abate any pending lawsuit and compel the parties to submit to the appraisal process. In addition, an insured may recover consequential damages sustained as a result of the insurance company's failure to comply with the appraisal clause.
Although either party may seek abatement to compel the appraisal process, the trial court has discretion on the timing of that process and does not have to order an immediate appraisal.
An appraisal award is binding and enforceable. An appraisal award may be disregarded:
(1) when the award was made without authority;
(2) when the award was the result of fraud, accident, or mistake; or
(3) when the award was not made in substantial compliance with the terms of the contract.
While appraisers have the power to determine the money value of the property damage, they do not have power to determine whether the insurance company is liable for the loss. Appraisers may answer some questions touching on causation but not for others, depending on the nature of the parties' dispute and possible causes of loss alleged, among other factors. Generally, if different causes are alleged for a single injury to the property, causation issues are outside the scope of appraisal. This was stated by the Texas Supreme Court in a 2009 case styled, State Farm Lloyds v. Johnson.
If an insurance company imposes unreasonable conditions on the appraisal, or seeks to invoke appraisal other than in accordance with the policy's terms, the insurance company may be found to have waived the appraisal requirement. This was the ruling in a 1960, Fort Worth Court of Appeals case where the insurance company tried to designate one individual and two companies as its appraisers, instead of a single individual as required by the policy.

Here is a case for someone in Grand Prairie, Arlington, Weatherford, Mineral Wells, Mansfield, Cedar Hill, Duncanville, De Soto, Granbury, Burleson, Lake Worth, and other places through out the state of Texas to be aware of. The case is styled, State Farm Fire and Casualty Company v. Matthew Lange. The opinion in this case was issued on January 11, 2011, by Judge Keith Ellison, out of the United States District Court, Southern District Texas, Houston Division.
Before getting into the facts and final outcome of this case, it is noteworthy to point out that Mr. Lange did not have an attorney in this case. In other words, he was pro se, or representing himself.
This case arose out of a one-vehicle accident on February 5, 2009. Two of the passengers in Lange's car were killed as a result of the accident. The sole determination in this case is whether Lange was insured under his parents' Personal Liability Umbrella Policy (the "Policy") at the time of the accident.
The facts that Lange pointed to in order to try and convince the court that he was a resident of his parents house (State Farm alleged he had moved out) at the time of the accident are lengthy. And it is this authors opinion that the court did not rule correctly. However, instead of reciting the facts relied upon to try and show that Lange resided at his parents at the time in question, we will point out what the court ruled and the courts basis for the ruling.
The court began by pointing out that "primary residence" is not defined in the Policy, nor have Texas courts interpreted its meaning in the insurance context. Citing the Texas Supreme Court, this court said, whether a term is ambiguous is a question of law. If a written contract is so worded that it can be given a definite or certain meaning, then it is not ambiguous. An ambiguity does not arise, however, merely because the parties advance conflicting contract interpretations. If, however, the language of a policy or contract is subject to two or more reasonable interpretations, it is ambiguous. If a term is found to be ambiguous, it must be resolved in favor of coverage.
This court then said, "The Court finds that 'primary residence' is unambiguous as a matter of law." It then reasoned that, "Primary" means "first in rank of importance." Thus, a person can only have one "primary residence" for purposes of this policy.
The court then stated:
"That 'primary residence' is the person's residence that is most important based on all relevant considerations. Relevant factors in this inquiry include (but are not limited to):
- how often a person stays at a residence;
- how long he has resided in a residence;
- where he keeps his belongings;
- whether he lists a residence on important documents, including as his "personal address";
- whether he owns or rents and if he rents, the length of the lease;
- whether he has plans, or will be required, to vacate a residence;
- whether he contributes to maintenance, upkeep, property taxes, or other costs;
- whether he shares a residence with others;
- whether blood or legal relationships exist between him and others living in either residence;
- whether he has full and free access to a residence and its contents;
- the subjective views of the persons and the other people living in his residences.
Where a person spends the majority of his time is the most important factor, but no one factor is dispositive, and the determination of the primary residence should be based on a totality of the circumstances. Thus, although a person's 'primary residence' will generally be the dwelling in which he spends the majority of his time, strong evidence indicating that a different dwelling is in fact the 'most important' may overcome the quantitative factor."
The court went to great lengths discussing the above factors and applying them to the facts and evidence and testimony in this case. They even cited a portion of the Texas Tax Code, Section 11.13, for support of their conclusion.
The relevance of this case is again, showing how courts look at interpreting insurance policies. The factors and reasoning go a long way to assisting an experienced Insurance Law Attorney in advising a client how best to proceed based on a prospective client's situation.

Someone in Grand Prairie, Arlington, Dallas, Fort Worth, Grapevine, Colleyville, Keller, North Richland Hills, Roanoke, Azle, Hurst, Euless, Bedford, or anywhere else in Texas who has a claim may run into a situation where they are considering to assign their claim to someone else. There are multiple reasons they might want to do this. Before actually assigning a claim it might be wise to read the following case.
The case is, Nautilus Insurance Company, et al. v. Concierge Care Nursing Centers, Inc., et al. This case was decided by the United States District Court for the Southern District of Texas, Houston Division, on December 23, 2010. Here is some background:
In 1999, Brae Burn Construction Company, Inc. (Brae Burn) entered into a contract to build a skilled nursing facility for Concierge Care Nursing Centers, Inc. (Concierge). Brae Burn entered into subcontracts with Nevco Waterproofing, Inc. (insured by Nautilus Insurance Company), Antex Roofing, Inc (insured by Travelers), Mitchell Chuoke Plumbing, Inc. (insured by Amerisure) and Conex Constructors, Inc. (insured by Evanston). In August 2000, a Certificate of Substantial Completion was issued, and Concierge took possession and control of the building.
Concierge claimed that the building eventually developed water leaks and mold. Concierge sued Brae Burn for the resulting damage to the building. In August 2006, Concierge and Brae Burn settled their lawsuit for $3 million. Concierge alleges that, as part of the settlement, Brae Burn assigned its claims against the subcontractors and their insurers to Concierge.
In 2008, Concierge, as Brae Burn's purported assignee, filed a lawsuit against the subcontractors and the Insurers for indemnity. In May 2010, while dispositive motions were pending, Concierge dropped the lawsuit. Rather than wait for another lawsuit, the insurance companys filed this lawsuit seeking a declaration that Concierge does not have coverage under any of the relevant policies. Concierge then refiled its claims against the insurance companies. The insurance companies filed a Motion for Summary Judgment asserting, inter alia, that any purported assignment to Concierge of Brae Burn's claims against the insurance companies is invalid under the anti-assignment provisions of the relevant insurance policies.
In its analysis, the court pointed out that each of the insurance companies policies includes a anti-assignment provision precluding assignment of any rights and duties under the policy without the insurance companies written consent. Concierge argues that these anti-assignments, do not apply absent a showing that the insurance companies have been prejudiced by the assignment, and do not apply because the insurance companies are estoped to assert the provisions. With reference to the estoppel arguement, Concierge did not plead estoppel and, therefore, the arguement is waived.
This court pointed out that higher courts have rejected the arguement that the insurance companies must show prejudice. The Fifth Circuit Court of Appeals has squarely rejected the arguement that the insurance company "must show prejudice in order to enforce the non-assignment clause."
In this case, the anti-assignment provisions of the insurance policies preclude assignment of Brae Burn's rights to Concierge absent written consent of the insurance companies. As a result, there was no valid assignment. The end result here is a ruling in favor of the insurance companies.
These cases can be confusing and serve as an example why an expereinced Insurance Law Attorney should be consulted before someone gets themselves in a position of discussing the appropriateness of assigning rights in insurance policies.

There are many things insured people in Cleburne, Granbury, Aledo, Burleson, Keene, Joshua, Wylie, Roanoke, Keller, Colleyville, and the major cities, like Dallas, Fort Worth, and others need to be aware of as it relates to applying for, or receiving benefits from an insurance policy. A good example of this is found in an article written by Shan Li in the Los Angeles Times.
The article was published on January 25, 2011, and is titled, "Insurers Are Scouring Social Media For Evidence Of Fraud." Much of the content of the article is included here and is a good read for "one of those things consumers need to be aware of."
The internet social network sites such as Facebook and Twitter are great sources of information and fun and communication between relatives and friends. One downside to these sites is that other people can find out things that you may not want being public. But as the article tells us, now there's another reason to be careful about what you post on Facebook and Twitter: "Your insurance company may be watching."
One lady has found this out the hard way.
The, un-named here, person was struggling with depression. She is a 30 year old from Quebec, Canada, who took a medical leave in 2008 from her job as a technician. Soon after, she began receiving monthly disability benefits from her insurance company, Manulife Financial Corp. But, a year later the payments stopped.
A representative of the Toronto insurance company told her that Manulife used photos of her on Facebook -- showing her frolicking at a beach and hanging out at a pub -- to determine she was depression free and able to work.
This lady's attorney says the insurance company just assumed from the pictures that she was a fraud without further investigating before terminating the benefits.
Manulife was sued, accusing them of failing to talk to her doctor and neglecting to inform her before cutting off payments. The case is set for trial in a year.
The insurance company, Manulife, is saying: "We would not deny or terminate a valid claim solely based on information published on websites such as Facebook."
What is important for the consumer to know here is that such sites have become the latest tools in detecting fraud, which the insurance industry says costs the United States as much as $80 billion a year and accouts for 3% to 10% of total annual healthcare spending.
A spokesman for the National Insurance Crime Bureau, Frank Scafidi, says that investigators who once followed people with cameras now sit behind desks "mining databases and searching Facebook. They look out for things that don't add up, like someone claiming they hurt their back too badly to work and then bragged on Facebook about running a marathon."
These social network sites have become such "standard tools" that Peter Foley, vice president of claims administration at American Insurance Association, said that investigators could be considered negligent if they didn't conduct at least "a quick scan of social media to check for contradictions." He also pointed out though, that the evidence gathered on these sites should be used only as a launch pad for further investigations and never as final proof of fraud.
Some insurance companies are even exploring using online data to help underwrite policies. In this regard, Celent, the insurance consulting arm of financial and insurance brokerage firm, Marsh & McLennan Cos., recently published a study titled "Leveraging Social Networks: An In-Depth View for Insurers" and suggested that social-networking data could be used to help price policies.
A Celent senior analyst said life insurance companies could find social media especially valuable for comparing what people will admit about lifestyle choices and medical histories in applications, and what they reveal online. This could range from "liking" a cancer support group online to signs of high-risk behavior. "If someone claims they don't go sky diving often, but it clearly indicates on their online profile that they do it every weekend they can get away, that would raise a red flag for insurers."
The situation is coming up more and more in court where the lawyers for insurance companies lay traps for the insured person based on pictures or postings on Facebook or Twitter. This author has seen this in court cases.
The problem for the insurance company is that if they don't do a proper follow-up investigation based on what they have found online, they are setting themselves up for a big lawsuit. What happens often is that the photos can be years old, people are writing things in jest or joking, or maybe just fantasizing a bit.
Insurance company lawyers will use anything they can find on these sites to make the insured look bad, photos of you drinking, photos of tatoos, maybe some vulgar language or racy language. The intent is to just make the person look bad in an effort to bolster the case of the insurance company.
What happens on these sites many times is that a person tries to picture themselves in what they believe is their best light, to seem "cool" and to appear to be having a great time in life. They do not post pictures of themselves crying in pain or sitting lonely by themselves because they are unable to do anything else as the result of some bad event that an insurance claim is based on.
The bottom line is for consumers to be aware of how these social network sites can be used in a negative way by insurance companies. Just being aware of this will take care of a lot of the problems that might result. Seeing an experienced Insurance Law Attorney if you find yourself the victim of what has been posted being used against you, can go a long way toward getting the situation resolved in a favorable way.

For someone in Grand Prairie, Arlington, Dallas, Fort Worth, Irving, Hurst, Euless, Bedford, Garland, Mesquite, Carrolton, Richardson, or anywhere else in Texas, it is sometimes difficult to understand the conditions that are written in a policy and how those conditions apply to a claim the insured person is making to the insurance company.
An insurance contract may impose conditions on the insured. For example, almost all policies are going to require that the insured give notice of the claim as soon as is practicable when a claim arises. The insured also has a duty to to co-operate with the insurance company in its investigation of the claim. Most policies require that the insured file a formal proof of loss, if the insurance company requests it. When the insured commits a material breach of the insurance contract, the insurance company is excused from its obligation under the insurance contract. In this regard, it then becomes important to understand what a "material" breach is.
In trying to understand what a "material" breach is, the case, Rueben and Anita Hernandez v. Gulf Group Lloyds, decided in 1994, by the Texas Supreme Court is a good case to look at for guidance.
This case was tried on agreed upon facts. "On November 21, 1987, Elizabeth Hernandez was killed when the car in which she was a passenger flipped over. The sole proximate cause of the accident was the negligence of the driver of the car, Charles McCullough, Jr. At the time of the accident, McCullough was nineteen years old and his only asset was a $25,000 liability policy with State Farm Mutual Automobile Insurance Company. Elizabeth Hernandez was covered by her parents' insurance policy with Gulf Group Lloyds (Gulf). That policy included uninsured/underinsured motorist coverage in the amount of $100,000. The damages suffered by Elizabeth Hernandez and her parents exceeded $125,000.
Six weeks after the accident, the Hernandezs, without the consent of Gulf, entered into a settlement with McCullough for the limits of McCullough's State Farm policy. On March 30, 1990, the Hernandezes sought to recover from Gulf under the underinsured motorist coverage. Gulf denied coverge based upon the Hernandezes' failure to obtain its consent before settling with McCullough.
At trial, in the trial court, judgment was rendered for the Hernandezes in the amount of $100,000, plus interest and attorney's fees. The trial court ruled that Gulf had suffered no material harm because of the Hernandezes failure to comply with the settlement without consent exclusion. The first level appeals court disagreed and reversed the trial court.
In arguements, the Hernandezes did not dispute the validity of the settlement without consent exclusion in the policy. They argued, however, that such an exclusion is unenforceable absent a showing by the insurer that it has been prejudiced by the insured's failure to obtain consent before settling with an uninsured or underinsured motorist.
Insurance policies are contracts, and as such are subject to rules applicable to contracts generally. A fundamental principle of contract law is that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from any obligation to perform.
In determining the materiality of a breach, courts will consider, among other things, the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance. This principle is discussed in the "Restatement (Second) Of Contracts, Section 241". The less the non-breaching party is deprived of the expected benefit, the less material the breach.
In the context of an uninsured motorist claim, there may be instances when an insured's settlement without the insurer's consent prevents the insurer from receiving the anticipated benefit from the insurance contract; specifically, the settlement may extinguish a valuable subrogation right. In other instances, however, the insurer may not be deprived of the contract's expected benefit, because any extinguished subrogation right has no value. In the latter situation -- where the insurer is not prejudiced by the settlement -- the insured's breach is not material.
Applying this materiality principle to the facts of this case, the court concluded that the Hernandezes' failure to obtain Gulf's consent before settling with McCullough was not a material breach. Gulf stipulated that it knew of no case in which it has refused its consent to settle a claim when an insured driver has tendered the full limits of his or her policy. The parties stipulated that McCullough had no assets other than the $25,000 State Farm policy, and that he did not believe his financial situation would change in the foreseeable future; and Gulf further stipulated that it "has not incurred any financial losses ... with regard to its subrogation rights by the failure of the Hernandezes to obtain its consent before settling with McCullough and releasing him from all liability. Gulf, therefore, remained in the same position it would have occupied had the Hernandezes complied with the settlement without consent clause.
The courts ruling was:
We hold that an insurer may escape liability on the basis of a settlement-without-consent exclusion only when the insurer is actually prejudiced by the insured's settlement with the tortfeasor.
So, this is an example where a condition in the policy was not complied with, yet this non-compliance did not void the coverage. It is best to consult with an experienced Insurance Law Attorney before thinking that a policy conditon can be ignored. What is important to know is that often times an insurance company will point to a policy condition that was violated by the insured and use that violation as an excuse to void coverage when that excuse is not legally justified.

A fair question for someone in Grand Prairie, Arlington, Mansfield, Alvarado, Keene, Joshua, Cleburne, Granbury, Aledo, Hudson Oaks, or anywhere else in Texas might be; What is the potential recovery against an insurance company that breaks their agreement with me?
Of course, the answer would depend on many things. The harm caused by breaking the agreement, the intent of the insurance company in breaking the agreement, was a lawsuit filed or was there just some phone calls and correspondence back and forth, did the insured have to hire an experienced Insurance Law Attorney to protect their rights, etc. Many factors come into play but as it relates to just the breaking of the contract here is some food for thought.
Policy benefits are the basic recovery allowed for the insurance company's breaking of its contractual obligations. An insurance company's refusal to pay the insured's claim causes damages in at least the amount of the policy benefits wrongfully withheld. This was stated by the Texas Supreme Court in the case, Vail v. Texas Farm Bureau Mutual Insurance Company, a case decided in 1988. Another Texas Supreme Court case, which was decided in 1994, styled Transportation Insurance Company v. Moriel, said breaking of the insurance contract allows recovery of benefit of the bargain damages.
In addition to the above an insured person should be able to recover consequential damages that are the foreseeable result of the insurance company's breach of the contract of insurance. Numerous cases hold that insurance policies are subject to the same rules as other contracts. This was stated in another 1994, Texas Supreme Court case styled, Hernandez v. Gulf Group Lloyds. One of the best established rules is that:
"Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally; i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach."
This was stated as far back as 1854, in Hadley v. Baxendale, and quoted by the Texas Supreme Court in 1981, in the case, Mead v. Johnson Group, Inc. The court in Mead stated, "In an action for breach of contract, actual damages may be recovered when loss is the natural, probable, and foreseeable consequence of the defendant's conduct."
The Texas Civil Practices & Remedies Code, Section 38.001, tells us that a successful claimant may recover attorney's fees for the insurance company's breach of contract. There are also a number of cases standing behind that statute.
One thing that is not recoverable under a breach of contract claim is punative damages. This was made clear by the Texas Supreme Court in the 1995 case, Twin City Fire Insurance Company v. Davis.
When an insurance company breaks an insurance contract with one of its insured's there are many other theories of recovery beyond the breach of contract claim discussed above. Only an experienced Insurance Law Attorney is going to understand and properly advise on these other powerful theories of recovery.

Can someone in Burleson, Benbrook, Crowley, Cleburne, Keene, Joshua, Arlington, Pantego, Mansfield, Fort Worth, Granbury, or any other place in Texas assign the benefits of their insurance policy to someone else? The answer is, it depends.
Like other contract rights, the right to insurance proceeds can be assigned, giving the assignee the right to recover under the policy. This was stated in the 1968, Texas Supreme Court case, McAllen State Bank v. Texas Bank & Trust Company. However, a policy may contain a non-assignment clause, which will be enforced.
An example of this can be found in the case styled, Texas Farmers Insurance Company v. Sally Gerdes, By and Through Her Assignee, Griffin Chiropractice Clinic. This is a case decided in 1994, by the Fort Worth Court of Appeals.
In this case the trial court had granted a motion for summary judgment in favor of Griffin Chiropractice Clinic (Griffin) and against Texas Farmers Insurance Company (Farmers). Farmers appealed the trial court's decision.
The parties agreed there was no dispute regarding the facts of the case. The record reflects that on November 18, 1990, Sally Gerdes was injured when a vehicle, in which she was riding as a passenger, was involved in a minor collision. The automobile was owned and operated by a Farmers insured. The policy provided Personal Injury Protection benefits coverage to any passenger injured while occupying a covered automobile with the permission of the insured.
On November 21, 1990, Gerdes began a series of treatments at Griffin. Without obtaining written consent from Farmers, Gerdes signed an assignment of rights, dated November 20, 1990, assigning "any and all claims, demands, and causes of action of whatsoever kind and nature, which I now have or may have in the future against any third person or entity, including, but not limited to, any insurance company ..." Following reciept of the assignment, Farmers paid Gerdes $1,003 for the chiropractic treatments under the PIP coverage of the Farmers policy. Gerdes never paid Griffin.
Griffin filed suit against Farmers for payment premised on the assignment of rights executed by Gerdes.
On this appeal Farmers argued that Griffin failed to prove a valid assignment existed.
The court then stated, "To recover an assigned cause of action, the party claiming the assigned rights must prove a cause of action existed that was capable of assignment and the cause was in fact assigned to the party seeking recovery."
There was no dispute that Gerdes was entitled to compensation for medical treatment for injuries suffered while occupying an automobile insured by Farmers. In addition, there was no dispute that Gerdes signed an assignment of rights assigning her cause of action to Griffin. The sole issue before the court was therefore, the validity of the assignment of rights. Without a valid assignment, no breach of contract could have occurred.
Generally, a contract of insurance is subject to the same rules of construction as other contracts. If the insurance contract is worded so that it can be given a certain definite meaning or interpretation, then it is not ambiguous, and the court will construe the contract as a matter of law. Moreover, where there is no ambiguity, it is the court's duty to give words their plain meaning. In the Farmers policy there was a non-assignment clause. The court said it was unambiguous and provided:
"Your rights and duties under this policy may not be assigned without our written consent."
Texas courts have consistently enforced non-assignment clauses. In addition, the prohibition against the assignment of rights by a named insured to an insurance contract has been upheld by this particular appeals court in the case, Dallas County Hospital District v. Pioneer Casualty Company.
Based on the above the court issued the following written opinion:
"We hold Gerdes, as a third-party beneficiary to the insurance contract, assumed the same rights and duties as the named insured. We further hold the non-assignment clause contained in the insurance contract effectively barred an assignment of rights. The assignment Gerdes executed accordingly had no effect. Griffin acquired no rights against Farmers, and Farmers assumed no duties to Griffin. Because there was no breach of contract, we reverse the judgment of the trial court and render a take-nothing judgment.

Drivers in Weatherford, Aledo, Azle, Parker County, Millsap, Godley, Hudson Oaks, Mineral Wells, Pool, Brock, and all other parts of Texas probably do not realize that the minimum policy limits for liability insurance on all automobiles went up on January 1, 2011.
Lawyers, and in particular, lawyers who do a lot of personal injury types of cases have wondered how this new law was going to work. The law originally changed regarding minimum limits on April 1, 2008. At that time the minimum, which had been $20,000 for personal injuries was raised to $25,000.
This law is found in the Texas Transportation Code, Section 601.072. When it was enacted, it was interpreted to mean that any new policy that went into effect after April 1, 2008, would have the new minimum limit of $25,000. What this means is that any policy that was written before April 1, 2008 still insured for the lower limit of $20,000. So, a policy issued in March of 2008, that was to provide coverage through September 2008, would still have a minimum of only $20,000 because the policy had been issued prior to the change going into effect on April 1, 2008. However, all policies written after the April 1, date would carry the $25,000 minimum.
The new minimum that went into effect on January 1, 2011, raises the minimum limit from $25,000 to $30,000. The difference between this change and the change that took effect on April 1, 2008, is that this most recent change effects all policies immediately. So, even a policy that was issued before January 1, 2011, now automatically covers the new minimum of $30,000. It applies to not just the new policies issued but also the older policies that are still in effect.
Any doubt about the interpretation of this new law appears to be resolved by a communicaton by the Texas Department of Insurance. This communication was issued on November 15, 2010. This is "Commissioner's Bulletin #B-0048-10".
This communication / bulletin was issued, "TO: ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, COUNTY MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS OR OTHER INSURERS WRITING AUTOMOBILE INSURANCE IN THE STATE OF TEXAS
RE: MOTOR VEHICLE SAFETY RESPONSIBILITY ACT: INCREASE IN MINIMUM FINANCIAL RESPONSIBILITY LIMITS FOR COMMERCIAL AND PERSONAL AUTOMOBILE INJURY LIABILITY COVERGE"
This communication informed all insurance companies that the new automobile liability insurance would change from $25,000 to $30,000 for bodily injury or death of one person in one accident and from $50,000 to $60,000 for bodily injury to or death of two or more persons in one accident. One part of the liability coverage that did not change was the minimum liability coverage on property damage. This element of liability coverage remained at $25,000.
Along these lines the minimums for underinsured and uninsured coverage would also have increased on January 1, 2011, to reflect the new limits.
The law telling us this is found in the Texas Insurance Code, Section 1952.105. This section says that the minimum limits that are applicable are those in Chapter 601 of the Transportation Code.
Some insurance companies are not telling new claimants of these changes when claims are made. Even some personal injury attorneys are not aware of these changes and thus are negotiating and handling the people they represent as if the old limits are still in effect.
Knowing about these changes may not make a difference in every case but it certainly makes a difference in any case that has a potential worth in excess of $25,000.
To be on the safe side, it is wise to consult with an experienced Insurance Law Attorney.
Regardless of when the policy was issued, an accident that happened prior to January 1, 2011, would still be under the old limits of liability. Any accident or loss occurring after that date would have the new limits.

Residents of Grand Prairie, Arlington, Grand Prairie, Mansfield, Cedar Hill, De Soto, Duncanville, Dallas, Fort Worth, Burleson, and other places in Texas may need an attorney to tell them who has rights under an insurance policy. For the best and most informative information an experienced Insurance Lawyer needs to be consulted.
So, who can recover on an insurance policy?
Of course, the named insured, as a party to the insurance policy, may file a lawsuit on the policy. Obviously, someone named as a beneficiary may also enforce the contract with the insurance company. This was stated in a Texas Supreme Court in 1967, in the case, McFarland v. Franklin Life Insurance Company.
Sometimes questions arise over who else may, and may not, sue on the insurance contract. An insurance policy is a personal contract between the insurance company and the insured. A stranger to the insurance contract may not sue on the policy. This was stated in a Texarkana Civil Appeals case in 1972, styled, Doss v. Roberts. In this case the court ruled that a joint owner of property was not entitled to proceeds from an insurance policy bought by other joint owners.
However, "additional insureds" and "additional named insureds" are entitled to sue under an insurance policy contract.
An additional insured is a party protected under an insurance policy, but who is not named within the policy. A common example of an additional insured is a person who, although not specifically named, is covered under a liability policy by a definition of "insured" that extends protection to interests, strictly according to a status, such as employees or common members of a household. On the other hand, an additional named insured is a person or entity specifically named in the policy as an insured subsequent to the issuance of the original policy. A party typically becomes an additional named insured to add the additional named insured to the named insured's pre-existing insurance policy. This was discussed in an Austin Court of Appeals case in 1997, styled, Western Indemnity Insurance Company v. American Physicians Insurance Exchange. Here a doctor was an additional insured under the policy extending coverage to "physician providing medical professional services under a contract of employment with the named insured."
Other persons who may sue for benefits under the insurance contract are "intended beneficiaries," also known as "third party beneficiaries."
A third person for whose benefit a contract is made may enforce the contract against the promissor. The controlling factor in determining whether a third party may enforce a contract is the intention of the contracting parties. This is discussed in a Houston [14th Dist.] Court of Appeals case from 1985, styled Hermann Hospital v. Liberty Life Assurance Company.
A presumption exists that parties intended to contract only for themselves, so the contract will not be construed as having been made for the benefit of another, unless it clearly appears that this was the intention of the contracting parties. Any doubts are construed against such an intent. This was the decision by the United States 5th Circuit Court of Appeals in 1997, in the case, Marine Indemnity Insurance Company of America v. Lockwood Warehouse & Storage.
Here is what needs to be proved to qualify as a third party beneficiary according to the same 5th Circuit Court in the case, Palma v. Verex Assurance., Inc.
1) that the purported third party beneficiary was not privy to the written agreement;
2) that the contract was made at least in part for the third party's benefit; and
3) that the contracting parties intended for the third party to benefit from their written agreement.
All of this can be confusing and that why experienced legal help should be sought.

Most people in Grand Prairie, Arlington, Dallas, Fort Worth, Mansfield, Cedar Hill, De Soto, Duncanville, Lancaster, Weatherford, Aledo, Azle, Hudson Oaks, or any other place in Texas would not know the difference between a "claims-made" insurance policy and any other type of insurance policy.
The Texas Supreme Court decided a case in March of 2009, that discussed one of the distinctions in a "claims-made" policy. The case is styled, Prodigy Communications Corp. v. Agricultural Excess & Surplus Insurance Company, et al.
This case is a declaratory judgment action. Agricultural Excess & Surplus Insurance Company (AESIC) brought this action asking the court to declare that they have no obligations in this case to defend or indemnify in the lawsuit brought against Prodigy Communications Corp (Prodigy).
The court had to decide whether a notice-prejudice rule applies to a claims-made policy when the notice provision requires that the insured, "as a condition precedent" to its rights under the policy, give notice of a claim to its insurer "as soon as practicable ..., but in no event later than ninety (90) days after the expiration of the Policy Period or Discovery Period." The parties dispute whether notice of the claim was given "as soon as practicable" but agree that the insured gave notice within the ninety-day cutoff period. AESIC admits that it is not prejudiced by the delayed notice.
For the reasons explained below, the court concluded that "notice as soon as practicable" was not an essential part of the bargained for exchange under the claims-made policy at issue. The court held that "in the absence of prejudice to the insurer, the insured's alleged failure to comply with the provision does not defeat coverage."
Some facts are:
Prodigy had a claims-made "Directors' and Officers' Liability Insurance Policy Including Company Reimbursement" issued by AESIC. The policy covered March 16, 2000 to May 31, 2000 and another til May 31, 2003.
The policy contained the following amended "notice of claim" provision:
The [Insureds] shall, as a condition precedent to their rights under this Policy, give the Insurer notice, in writing, as soon as practicable of any Claim first made against the [Insureds] during the Policy Period, or Discovery Period (if applicable), but in no event later than ninety (90) days after the expiration of the Policy Period, or Discovery Period, and shall give the Insurer such information and cooperation as it may reasonably require.
Prodigy became aware of a lawsuit involving them on June 20, 2002 and first notified AESIC in a letter dated June 6, 2003.
By letter dated June 18, 2003, AESIC denied coverage on the ground that the June 6 letter did not comply with the policy's notice requirements.
In an earlier case, this court had ruled that "an immaterial breach does not deprive the insurer of the benefit of the bargain and thus cannot relieve the insurer of the contractual coverage obligation.
The AESIC policy states unambiguously that the insured's duty to give "notice, in writing, as soon as practicable" is a "condition precedent" to coverage.
AESIC argued, timely notice is always inherent to, and an essential part of, the bargained for exchange in a claims-made policy.
The court in its analysis said that to determine whether "notice as soon as practicable" is an essential part of the bargained for exchange in the claims-made policy at issue, it is helpful to review the basic distinctions between occurrence and claims-made policies and the different types of notice requirements associated with each.
One treatise of law was quoted that said:
D & O insurance policies today are invariably written on a "claims-made" basis, which means that the policy only covers those claims first asserted against the insured during the policy period. This limitation appears in the insuring clauses. This coverage differs from "occurrence" type coverage, written for most casualty insurance, which covers only claims arising out of occurrences happening within the policy period, regardless of when the claim is made. Thus, the main difference between these two types of policies is that a "claims-made" policy provides unlimited retroactive coverage and no prospective coverage, while an "occurrence" policy provides unlimited prospective coverage and no retroactive coverage.
The court went into a many paged discussion regarding these different policies then concluded:
In a claims-made policy, when an insured gives notice of a claim within the policy period or other specified reporting period, the insurer must show that the insured's noncompliance with the policy's "as soon as practicable" notice provision prejudiced the insurer before it may deny coverage. Here, it is undisputed that Prodigy gave notice of the lawsuit before the ninety day cutoff. Even assuming that Prodigy did not give notice "as soon as practicable," AESIC was not denied the benefit of the claims-made nature of its policy as it could not "close its books" on the policy until ninety days after the discovery period expired.
The court then ruled, stating:
Accordingly, we conclude that Prodigy's obligation to provide AESIC with notice of a claim "as soon as practicable" was not a material part of the bargained for exchange under this claims-made policy. As AESIC has admitted that it was not prejudiced by the delay in receiving notice, it could not deny coverage based on Prodigy's alleged failure to provide notice "as soon as practicable."
As always, when these situations arise it is vital to seek the advice of an experienced Insurance Law Attorney as soon as possible.

Someone in Arlington, Mansfield, Bedford, Benbrook, Burleson, Hurst, Euless, Keene, Grand Prairie, Dallas, Fort Worth, Pantego, or anywhere else in this state would go crazy trying to understand how to correctly interpret an insurance policy. They have to do two things. One, talk it over in detail with the insurance agent at the time of purchase. Two, seek the advice of an experienced Insurance Law Attorney.
An example of the first sentence above is found in the case styled, VRV Development L.P., formerly known as VRV Development, Inc.; Marken Management GP L.L.C.; Kenny Marchant v. Mid-Continent Casualty Company. This case was decided on January 7, 2011, by the United States Court of Appeals for the Fifth Circuit.
In this matter, the plaintiffs above were sued by Goodman Family of Builders, L.P. successor in interest, K. Hovnanian Homes - DFW, LLC. and the City of Dallas. The lawsuit was alleging damage to lots developed by the plaintiffs. The alleged damage was to retaining walls and a public utility easement. The facts are a little confusing and the relevent time period, which begins in May 2004 and goes through sometime in 2007, is also at issue.
The policy with Mid-Continent Casualty Company is alleged to prove coverage for the damages incurred and exactly what the damages are and the time in which the damages occurred is relevant in determining whether or not the Mid-Continent insurance policy provides coverage for the loss.
The trial court ruled in favor of the Mid-Continent and on appeal the Fifth Circuit Appeals Court also ruled in favor of Mid-Continent, but for different reasons.
One issue was whether or not the policy covered the entity that actually did the work. The entities named above changed names during the policy period without notifying the insurance company of the change of the entity. Thus, one arguement for Mid-Continent was that they did not insure the entity that actually did the damage, rather they insured the entity that was in existence prior to the change.
The rest of the arguements and the ones most relevant to this discussion were the ones dealing with the policy language as to what types of losses were covered.
Development on the lands at issue here began in May 2004. Coverage ran from that date and with a susequent policy, ran through May 2006.
A homeowner's inspection conducted sometime between May and July 2006 identified a crack in a retaining wall. In January and March 2007, after periods of heavy rainfall, the retaining walls collapsed, damaging four homeowners yards and undermining support for the public utility. The above plaintiffs were subsequently involved in litigation and Mid-Continent was asked to prove coverage. They refused.
The court stated that the two policies at issue are standard in the industry and identical in most respects. The policies require Mid-Continent to "pay those sums that the insured becomes legally obliged to pay as damages because of ... 'property damage,'" and to defend against any lawsuit seeking such damages. The "property damage" must, however, be caused by an "occurrence" during the policy period. "Property damage" means:
(a) physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or
(b) loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the 'occurrence' that caused it.
An "occurence" means "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Property damage that occurs during the policy period "includes any continuation, change or resumption of that ... 'property damage' after the end of the policy period."
Notwithstanding Mid-Continent's general obligation to cover property damage that occurs during the policy period, the policies at issue do not cover property damage to work performed by the insureds. Specifically, exclusion (l) to the policy excludes coverage for '"property damage' to 'your work' arising out of it or any part of it and included in the 'products-completed operations hazard.'" "Your work" means, "work or operations performed by you or on your behalf." The "products-completed operations hazard" means any property damage "occurring away from premises you own or rent and arising out of ... 'your work' except ... work that has not yet been completed or abandoned." Additionally, to the extent property damage is not included in the "products-completed operations hazard," exclusion (j)(6) to the policies precludes coverage for damage to "that particular part of any property that must be restored, repaired or replaced because 'your work' was incorrectly performed on it."
This court then went into an analysis of the damages claimed, how they occurred, when they occurred, and policy language and interpretation of the policy language and ruled that there was no coverage for the insured under the facts of this situation.
As can be seen, these coverage issues can become involved and complicated. This case serves as an illustration.

Anyone in Grand Prairie, Arlington, Mansfield, Cedar Hill, Duncanville, De Soto, Lancaster, Hurst, Euless, Bedford, Dallas, Fort Worth, or anywhere else in Texas who reads an insurance policy is going to get through with the reading and with their blurred eyes, wonder what they just read. Here is a case where the interpretation of a policy exclusion was at issue.
The case is styled, RLI Insurance Company v. Sylvia Gonzalez; Alma Alicia Gonzalez, Individually and as Representative of the Estate of Hector Gonzalez and as Next Friend of I R G G, a Minor; Hector Gonzalez, Jr. This is a case where the opinion was issued on January 7, 2011, by the United States Court of Appeals for the Fifth Circuit.
This is a lawsuit between family members of a deceased sandblaster and RLI Insurance Company (RLI). The court ultimately ruled in favor of RLI based on a policy exclusion.
The basis for this suit is based on Hector having died due to silica exposure.
In 2008, Hector died. The underlying lawsuit alleges that Hector was exposed to dangerous levels of silica dust through sandblasting while employed by ICO, Inc. It is further alleged that Hector's death was caused by respiratory failure caused by silicosis, a respiratory disease caused by prolonged inhalation of silica dust.
RLI had issued several insurance policies to ICO, including an umbrella liability policy. After receiving the lawsuit papers, ICO forwarded them to RLI and requested that it defend the lawsuit on ICO's behalf under the umbrella policy. RLI filed papers with the court requesting the court to state that there was no coverage under the policy for the claim being asserted. The court eventually ruled on behalf of RLI.
The court said that the pollution exclusion on its face excludes injuries arising from exposure to "all ... irritants and contaminants." The Occupational Safety and Health Administration has classified silica dust as an air contaminant. This can be found at, 29 C.F.R. Section 1910.1000. Inhaling silica dust can result in silicosis, a type of pneumoconiosis. Pneumoconiosis is a "disease of the lungs caused by the habitual inhalation of irritant material." In addition, several district courts have applied substantially similar pollution exclusions to silica-related claims and have concluded that they are pollutants. Silica dust is unambiguously a "pollutant" under the language of the Pollution Exclusion.
The family next argued that the Pollution Exclusion was ambiguous when considered in conjunction with the rest of the Umbrella Policy. They argued the exclusion was too broad and a reasonable person would not know what it was excluding. The Court replied stating; "neither conflicting expectations not disputation is sufficient to create an ambiguity." They then said, the language in the Pollution Exclusion unambiguously applies to claims arising from "contamination of any environment by pollutants that are introduced at anytime, anywhere, in any way."
The family also argued that a separate Asbestos Exclusion in the Umbrella Policy created an inference that silca dust claims are not included by the general Polution Exclusion. The court addressed this by saying "superfluous exceptions are commonplace" in insurance contracts and "have the effect merely of making assurance doubly sure." Even if the Pollution Exclusion covers the same claims as the Asbestos Exclusion, this does not raise an inference that the Pollution Exclusion does not cover silica dust claims. The existence of a separate exclusion for asbestos does not create ambiguity in the Pollution Exclusion.
In ending, the court said, "Silica dust is unambiguously a 'pollutant' under the Pollution Exclusion. Because the Underlying Lawsuit only alleges injuries arising out of the contamination of air from silica dust, RLI does not have a duty to indemnify ICO for the claims in the Underlying Lawsuit as a matter of law."
This case serves an another example of how courts review these types of cases and the analysis they apply in reaching their decisions.