Dallas Fort Worth Insurance Lawyer Blog

Drivers in Grand Prairie, Arlington, Duncanville, De Soto, Cedar Hill, Mansfield, Irving, Dallas, and other places in Dallas and Tarrant County are required by law to be offered Uninsured Motorist protection when they purchase liability insurance on their vehicles. This is mandatory unless the coverage is rejected in writing.
A 1974, Beaumont Court of Appeals case deals with this issue in a fact pattern that has an unusual twist to it. The style of the case is, Oran Greene v.Great American Insurance Company. In this case the court ruled in favor of the insurance company.
Here is some background.
Oran Greene brought this suit for damages under the uninsured motorist (UM) provision of an auto policy issued to his mother, Letitia Greene. He was injured in a collision while driving his mother's automobile, when it was in a collision with another auto driven by an uninsured motorist. In the policy was a Form 119 which reads as follows:
"It is agreed that the insurance afforded by this policy shall not apply with respect to any claim arising from accidents which occur while any automobile is being operated by Oran Castine Greene." This was acknowledged by Letitia Smith Greene.
The complaint by Greene here is that an attempt to exclude him from UM coverage by the use of Form 119 is void as contrary to public policy. His arguement was that this form violated the Texas Motor Vehicle Safety Responsibility Act.
The laws regulating UM coverage are currently found in the Texas Insurance Code, Section 1952.101 thru 1952.110. This section currently and at the time of this case required that all policies of insurance provide UM coverage. A policy would have this coverage unless the coverage was rejected in writing.
Greene's argument was that a rejection of this coverage was against the above Act.
In response the court stated, "The plaintiff in this case was offered, and accepted, a contract furnishing her uninsured motorist coverage except when her son was driving the automobile. Why should that be contrary to public policy? If plaintiff's contention is allowed to become the law in Texas, insured motorists with sons and daughters with bad driving records will be unable to secure uninsured motorist coverage in any form except from the assigned pool at a much greater cost. Public policy dictates the allowance of partial rejection of such coverage in order to allow insureds in that situation to secure insurance they can afford, just as they presently can when liability coverage is in question.
Attorneys for Greene spent a great deal of time argueing that this violated the Act and they also spent a great deal of time talking about California law in this area of insurance regulation. This court in response, spent a great deal of time drawing distinctions between the Texas law and the California law. Here is some of this court's response:
"The 'whittling away of insurance coverage' which was repeatedly codemned in all of the above California cases has not met with the same reception in Texas. Form 119, which does allow particular policy exclusions, has been approved not only by the State Bar of Insurance (currently the Texas Department of Insurance) but also by the courts of this state (then cites the Texas cases). Although these cases do not involve the issue of uninsured motorists, it is nevertheless true that the terms of the Form were approved including the words 'any claim.' The affirmance of Form 119 indicates the Texas policy that some limitations may be applied to insurance coverage, and there has been no Texas case which stated that such limitation is to apply only to liability provisions of a policy. There appears to be no authority to negate the conclusion that Texas has followed the majority of jurisdictions in enacting uninsured motorists' coverage with the premise that such coverage is to put the motorists injured in a collision with an uninsured vehicle in the same position that they would have been in had the other motorists been properly insured."
In conclusion the court said that the evidence shows Letitia Greene wanted to secure insurance coverage for her automobile, but she had a son under twenty-five years of age with a bad driving record. She was informed by the agent that Great American would not write such insurance unless she signed a form excluding her son from coverage. She was also informed that the insurance could be secured with the son included through another company or through the assigned risk plan at a higher cost. Letitia Greene chose to take this policy excluding her son from coverage. Parties should be allowed to contract in this manner if they want to, and the contract entered into should not be found to be contrary to public policy.
As with the majority of situations involving insurance, it is important to consult with an experienced Insurance Law Attorney in order to have some assurance that the insurance company is not violating a person's rights in Texas.

Drivers in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Decatur, Peaster, Millsap, Brock, Hudson Oaks, Poolville, Newark, Willow Park, and other parts of Texas are all offered Personal Injury Protection (PIP) benefits coverage when they buy coverage for their automobile. It is the law.
It is the law that the coverage be offered. However, it can be rejected. To reject it, the rejection must be clearly made and in writing. This law is found in the Texas Insurance Code, Section 1952.152(b).
Here is a 1978 case by the Texas Supreme Court dealing with the rejection. The style of the case is, Unigard Security Insurance Company v. Charles Schaefer et al. Here is some background.
Schaefer and others sued to recover under the PIP endorsement of an auto policy issued by Unigard. The case was tried on stipulated facts. The trial court ruled for Unigard. The first appeals court reversed the trial court and then this Supreme Court upheld the first appeals court decision. All the people sueing for benefits in this case were killed or seriously injured in an accident where a David Wyloge was the driver of the car in which everyone was riding.
Prior to the accident, Abraham Wyloge obtained liability insurance coverage from Unigard. The policy included an Endorsement 243, which was PIP, mandated by the Legislature in the then existing Insurance statutes. That statute is the predecessor of the current 1952.151 thru 1952.161.
Under that law the only exclusion of benefits provided in the statute was injury caused to oneself intentionally or while in the commission of a felony or attempting to elude arrest. Mr. Wyloge did not reject the PIP coverage. On the contrary the policy was written with coverage included in Endorsement 243, and Unigard collected a premium for it.
On a subsequent date, Mr. Wyloge signed a Form 119. "Exclusion of Named Driver" endorsement. It excludes claims arising from any accidents occurring while any automobile is operated by David Wyloge. Unigard asserted that the exclusion in Endorsement 119 was tantamount to a partial rejection, while David was driving, of the PIP coverage. This is the reason Unigard denied the claim.
In this case, there was much arguement over the difference between an endorsement and an exclusion and the effect of signing the Form 119 exclusion and the Endorsement 243.
In making it's decision the court stated as follows:
"This holding is consistent with that part of (old statute) which sets forth the only exclusion of benefits authorized by the statute. They are: when the insured causes injury to himself intentionally or is injured while in the commission of a felony or attempting to elude arrest. Any attempt to add another exclusion applicable when the automobile is being operated by an unauthorized driver would be repugnant to the statute. When specific exclusions or exceptions to a statute are stated by the Legislature, the intent is usually clear that no others shall apply. When the Legislature specifies a particular extent of insurance coverage, any attempt to void or narrow such coverage is improper and ineffective."
"Even if Endorsement 119 were not inapplicable because of the terms of (old statute) and Endorsement 243, we do not agree with Unigard that 119 was sufficient as a partial rejection of the statutory (PIP). As heretofore indicated, there is not a word in that endorsement which mentions (PIP, the old statute) or Endorsement 243. A matter of public policy involving more than the present litigants is here involved. The Legislature has declared it to be the public policy of this State that 'no automobile liability insurance policy ... shall be delivered or issued for delivery ... unless personal injury protection coverage is provided therein or supplemental thereto.' Among the purposes are to provide injured occupants of the insured automobile with up to $2,500 per person for hospital and doctor bills arising from accidents 'without regard to fault or nonfault of the named insured or recipient ...'"
This is an old case upholding the current law stating that rejection of PIP benefits must be clear and in writing. There are a lot of cases dealing with PIP benefits and whenever someone finds themselves in a position where those benefits are being denied, they should seek the advice of an experienced Insurance Law Attorney.

Insureds in Grand Prairie, Arlington, Fort Worth, Pantego, Dalworthington Gardens, North Richland Hills, Saginaw, Lake Worth, Benbrook, and other places in Tarrant County and Texas need to have some understanding of what an excluded driver is in an automobile insurance policy. An excluded driver is a driver who is not insured under an automobile insurance policy. For some reason the insurance company is refusing to insure the driver. The reasons could vary widely.
A case decided in July, 1993, by the Texarkana Court of Appeals deals with excluded drivers and is worth having an understanding about for future reference. The style of the case is, John DiFrancesco and DSS Partnership d/b/a DS & S Farms v. Houston General Insurance Company. Here is some background.
In July 1990, an automobile accident occurred in which a pickup truck owned by the Partnership and driven by their employee, Thomas V. Avey, was involved. The Partners and Avey were sued for damages by Troy and Nikki Beckham. The Beckhams were allegedly forced off the road and injured by a pickup truck owned by the partnership and operated by Avey. The Partners demanded Houston General defend them which Houston General did, subject to a reservation of rights.
Houston General filed a declaratory judgment action seeking to have the court declare that there was no coverage under the policy due to Avey being an excluded driver under the policy of insurance. The controversy is the result of the parties' conflicting constructions of a standard exclusion of a named driver endorsement to an automobile liability insurance policy. The policy afforded liability coverage of various automobiles and motor vehicles owned by the Partnership. The endorsement contained this language.
"You agree that none of the insurance coverages afforded by this policy shall apply while Thomas Avey is operating a covered auto or any other motor vehicle. You further agree that this endorsement will also serve as a rejection of uninsured motorists coverage and personal injury protection coverage while a covered auto or any other motor vehicle is operated by the excluded driver."
There was eventually a trial in the matter where a jury found that Houston General did not owe a defense or indemnity to the Partnership or Avey.
In this case there was a fairly big arguement on the meaning over the word "operating" in the insurance contract. Evidently there was no dispute that Avey did not have permission to be operating the vehicle and the argument by the Beckhams was that Avey should be covered since he was operating the truck as an unauthorized driver. As a result the court got into a discussion of the various definitions of the term operating. The Random House Dictionary of the English Language 1357 (2nd ed. 1987) evidently contained twelve different meanings for the word.
One argument says it is clear that in clause (3) of the policy the word "operated" is employed to describe a relationship between an individual and an automobile. When used in this context the word "operate" means "drive."
The court said that the endorsement's purpose is to suspend coverage when a specific person, considered or known to be an unsafe driver, is operating a covered vehicle. It also served the public welfare by tending to keep unsafe drivers off the public highways.
The language employed to state the purpose modifies and defines the word operating in the endorsement to mean the exercise of physical control over a motor vehicle's usual use, function, and movement; in short, the control of a motor vehicle's dynamics normally accomplished by a motor vehicle's driver. Such contextual definition renders the word operating and the endorsement unambiguous. As limited by the context, it has but one meaning. Coverage under the policy is suspended when Thomas Avey drives a covered vehicle, nothing in the language deals with or relates to or limits suspension to authorized use of a vehicle. The conclusions expressed are fortified by the fact that the contextual language conveys no rational message when the word operating is given other of its dictionary or common usage meanings.
This court firmly came down in support of Houston General and the jury that the excuded Driver endorsement clearly limited coverage to situations where Avey was not operating the truck.
This case is an easy call but there are situations where an excluded driver can still get coverage on an insurance policy. For that reason it is vital that an experienced Insurance Law Attorney be consulted.

This could happen to someone in Grand Prairie, Arlington, Fort Worth, Mansfield, Hurst, Euless, Bedford, Colleyville, Keller, or anywhere else in Tarrant County or the State of Texas. It is a case dealing with umbrella insurance policies and uninsured motorist automobile policies.
The case was decided in January, 1996, by the Austin Court of Appeals and is styled, Joel Sidelnik et al v. American States Insurance Company. Here is some background.
Sidelnik brought a declaratory judgment action seeking a determination that, as a matter of law, his umbrella insurance policy issued by American provides uninsured motorist coverage for the car accident in which his wife was killed. The trial court and this appeals court ruled in favor of American.
Sidelnik's wife was killed in a car wreck with an uninsured motorist (UM). Sidelnik received the full $100,000 available under his UM coverage. Sidelnik also had an umbrella policy which provided one million dollars in coverage, which Sidelnik attempted to get American to pay. American refused and this action ensued.
Sidelnik argued that the umbrella policy could be construed to provide coverage and since it could be construed that way then by operation of law, coverage was provided.
In its analysis, the court stated that insurance policies are controlled by rules of interpretation and construction applicable to contracts generally. The primary concern of a court in construing a written contract is to ascertain the true intent of the parties as expressed in the instrument. If a contract is so worded that it can be given a definite or certain legal meaning, then it is not ambiguous.
The court went on to say if the language of a policy or contract is subject to two or more reasonable interpretations, it is said to be ambiguous. Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of the circumstances present at the time the contract was executed. Only where a contract is first determined to be ambiguous may the court consider the parties interpretation.
The court then discussed ambiguity in a contract and how the ambiguity is viewed in light of the type of ambiguity there is that exists. The court ultimately decided that there was no ambiguity.
They next discussed the relationship between UM coverage and umbrella insurance policies. Sidelnick argued provisions of the Texas Insurance Code dealing with the requirement that UM coverage be provided in an auto policy and that umbrella coverage was coverage that provided protection above the limits of the auto policy.
The court pointed out that the statute regarding UM coverage applies only to "automobile liability insurance." Noting other jurisdictions in this area of the law the court found other jurisdictions concur that UM statutes are inapplicable to umbrella policies. The court said "The umbrella policy issued by [the insurance company] is an inherently different type of insurance from an automobile or motor vehicle liability policy, and consequently does not come within the scope of the uninsured motorist statute." In other discussion the court stated "there is no intention to supplant the basic carriers on the homeowners or automobile coverages ..."
As part of its ruling the court stated:
"We are pursuaded that umbrella policies providing excess liability coverage serve a purpose distinct from that served by policies that exclusively cover liability from damages arising from the ownership, maintenance, or use of an automobile. While Sidelnik's umbrella policy provides excess coverge for liability arising from an automobile accident, this fact does not convert it into an 'automobile liability insurance' policy ..."
Going further, the court said that the statute that mandates UM coverage for auto liability policies does not also mandate that the umbrella policy provide additional UM coverage.

Every business owner in Grand Prairie, Fort Worth, Arlington, Irving, Dallas, Mansfield, or any other DFW city would need to have a basic understanding how their commercial insurance policies are interpreted. Especially the policies that have arbitration clauses in them. When there is a question, the first thing to do is to consult with an experienced Insurance Law Attorney. A second thing to do would be to read the following case for some guidance.
The Texas Supreme Court issed an opinion this month in the case, In Re Universal Underwriters of Texas Insurance Company. This case dealt with the interpretation of an appraisal clause in an insurance contract and the standard for judging whether or not that appraisal clause has been waived by either party.
Here is some background. Grubbs Infiniti, a car dealership, suffered hail damage to buildings on its property. Grubbs filed a claim with its insurer, Universal, and a claims representative inspected the property and subsequently paid Grubbs $4,081.95 for the damage. Grubbs asked for a reinspection and as a result, Universal reinspected and issued a $3,000 supplemental payment. At the time of this second payment Universal sent a letter to Grubbs inviting them to discuss the issue further and reminding them that under the policy they had a certain amount of time to file suit and that the file would remain open.
Four months later, Grubbs sued Universal for underpayment of its claim alleging violations of the DTPA, violations of the Insurance Code, and breach of contract. In response to the lawsuit, Universal invoked the appraisal clause which said that if the parties disagreed with the value of the property loss, then either of them could demand in writing, an appraisal. Grubbs position with the court was that Universal had waived its right to invoke an appraisal.
The courts in Texas have stated that appraisal clauses provide an inexpense and quick means to resolve disputes about the amount of loss for a covered claim. That these clauses are generally enforceable, absent illegality or waiver.
This Supreme Court has stated, ... to constitute waiver the acts relied on must be reasonably calculated to induce the assured to believe that a compliance by him with the terms and requirements of the policy is not desired, or would be of no effect if performed. The acts relied on must amount to a denial of liability, or a refusal to pay the loss.
Grubbs asserted that from the time the claim was made until the time Universal asked for appraisal, eight months had passed, and that this passage of time was a waiver of the appraisal process by Universal. Grubbs cited numerous cases dealing with waiver and the passage of time.
In response the court stated that, while an unreasonable delay is a factor in finding waiver, reasonableness must be measured from the point of impasse. That the date of disagreement, or impasse, is the point of reference to determine whether a demand for an appraisal is made within a reasonable time.
The court stated that a mere disagreement between the parties does not indicate an impasse. The court stated there are factors to consider in whether or not an impasse has arisen and cited a Federal case that said:
"In deciding whether a demand for appraisal was made within a reasonable time, and consequently has not been waived even if suit was filed before the demand was made, courts have considered the timeliness of the demand in light of the circumstances as they existed at the time the demand was made. Pertinent circumstances include (1) the time between the breakdown of good faith negotiations concerning the amount of the loss suffered by the insured and the appraisal demand: and (2) whether there would be any prejudice to the other party resulting from the delay in demanding an appraisal."
Using the point of "impasse," rather than the first sign of disagreement, corresponds with the court's definition of waiver as an "intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right." In other words, both parties must be aware that further negotiations would be futile, "or would be of no effect if performed."
In this case, the policy contained no time limits for the appraisal request, and Universal never denied liability for the loss. At no point did Grubbs notify Universal that it refused to discuss the matter further, despite Universal's statement that it would leave its file open for further discussions should Grubbs care to do so. Whether Universal was aware of Grubbs' disagreement as to the estimate of damages is also irrelevant, since mere disagreement does not in itself signal an unwillingness to negotiate further. Here Universal sought appraisal approximately one month after Grubbs sued. The court concluded that Universal demanded appraisal within a reasonable time after the parties reached an impasse.

Grand Prairie, Fort Worth, Arlington, Mansfield, Crowley, Benbrook, Burleson, Cresson, and other Tarrant County residents would naturally wonder what the value of their claim is when their insurance company violates the law in the way they treat one of their customers. In other words, what will it cost the insurance company.
The most common actual damages when an insurance company treats somebody wrong are the actual policy benefits themselves. In certain cases under the Insurance code, the amount of policy benefits wrongfully withheld is an element of damages caused by the insurance company's conduct. This is often held to be the case as a matter of law. This was stated in the Texas Supreme Court case, Vail v. Texas Farm Bureau Mutual Insurance Company, decided in 1988. The Supreme Court in the Vail case rejected the insurance company arguement that damages for an unfair settlement practice had to be something more than the amounts due under the policy. The court held that damages for a wrongful refusal to pay are at least equal to the policy benefits, as a matter of law. The reasoning of the court was:
The fact that the Vails have a breach of contract action against Texas Farm does not preclude a cause of action under the Texas Deceptive Trade Practices Act and what is now Section 541 of the Texas Insurance Code. Both the DTPA and the Insurance Code provide that the statutory remedies are cumulative of other remedies. They said it was well settled that persons without insurance are allowed to recover based on false representations of coverage, and that an insurance company may be liable for damages to the insured for its refusal or failure to settle third-party claims. It would not be right to bar an insured person who has paid premiums and is entitled to protection under the policy of insurance from recovering damages when the insurance company wrongfully refuses to pay a valid claim. The court stated that "Such a result would be in contravention of the remedial purposes of the DTPA and the Insurance Code."
One thing for any person, including an experienced Insurance Law Attorney to be aware of here is that sometimes the courts construe this language in the Vail case to not always include that policy benefits are damages as a matter of law. This was the result in the 1995 case, Twin City Fire Insurance Company v. Davis. The court held that policy benefits culd not serve as independent tort damages resulting from the insurance company's breach of its duty of good faith and fair dealing, which were necessary to support exemplary damages. Other cases have also concluded that policy benefits are not necessarily damages as a matter of law. One of these cases is Seneca Resources Corporation v. Marsh & McLennan, Inc., a 1995, Texas Court of Appeals, Houston 1st District case. Another is, Beaston v. State Farm Life Insurance Company, a 1993, Austin Court of Appeals case.
The issue boils down to - making sure you have good legal representation when pursueing a claim against an insurance company for wrongfully denying a claim.

Solutions - that is what someone in Grand Prairie, Arlington, Fort Worth, Bedford, Hurst, Euless, North Richland Hills, Keller, Colleyville, Grapevine, and other Tarrant County cities want when they are having problems with their insurance company.
One thing that can be recovered in an insurance claim situation is "actual damages." Actual damages are the real damages someone suffers. Actual damages are also called compensatory damages. Compensation paid for harm, loss or injury suffered by an aggrieved party due to an act or a failure to act by another party/parties. Actual damages can be measured. For example, 'A' suffers a loss of income and or wages due to injuries that resulted in A's unemployment. They also include medical expenses and specific losses due to breach of contract, like in insurance cases where a house burns down or a car suffers hail damage. It is usually amounts that can be easily proven. Examples that are not so easy to prove are, pain and suffering, impairment, disfigurement, mental anguish, loss of comfort.
The Texas Supreme Court, in 1997, set out the following principles that govern recovery of "actual damages" under the similar language that existed under the Texas Deceptive Trade Practices Act - that is that the same analysis should apply to the Texas Insurance Code, Section 541.152(a)(1). The relevant case was, Arthur Andersen & Company v. Perry Equipment Corporation.
Here is the language the court used:
The amount of actual damages recoverable is "the total loss sustained as a result of the deceptive trade practice."
Actual damages are those damages recoverable under common law. At common law, actual damages are either "direct" or "consequential." Direct damages are the necessary and usual result of the defendant's wrongful act; they flow naturally and necessarily from the wrong. Direct damages compensate the plaintiff for the loss that is conclusively presumed to have been foreseen by the defendant from his wrongful act.
Consequential damages, on the other hand, result naturally, but not necessarily, from the defendant's wrongful acts. Under the common law, consequential damages need not be the usual result of the wrong, but must be foreseeable, and must be directly traceable to the wrongful act and result from it. Of course, foreseeability is not an element of producing cause under the DTPA. Still, if damages are too remote, too uncertain, or purely conjectural, they cannot be recovered.
Under Texas common law, direct damages for misrepresentation are measured in two ways. Out-of-pocket damages measure the difference between the value the buyer has paid and the value of what he has received; benefit-of-the-bargain damages measure the difference between the value as represented and the value received. Under the DTPA, a plaintiff may recover under the damage theory that provides the greater recovery. Both measures of damages are determined at the time of sale.
Here is an example of an "actual damage" you may not normally consider. The Texas Court of Appeals, Houston 14th District, in 1989, in the case styled, Paramount National Life Insurance Company v. Williams, allowed an insured to recover actual damages for loss of credit or injury to credit reputation based on receiving notice letters from bill collectors arising from medical expenses the insurer misrepresented would be paid.
There are other damages that can be recovered besides "actual damages" when you are dealing with violations of the Texas Insurance Code and the Texas Deceptive Trade Practices Act. What this means is that an experienced Insurance Law Attorney needs to be consulted to make sure that all allowable theories of recovery are considered.

Solutions are what someone in Grand Prairie, Fort Worth, Dallas, Arlington, Cockrell Hill, Irving, Mesquite, Richardson, Garland, Duncanville, and other places want when it comes to a situation where they are being taken advantage of by an insurance company.
One of the first things an experienced Insurance Law Attorney has to decide when taking on an insurance case is - Who can be sued.
The Texas Insurance Code, Section 541.151, provides that a person who has sustained damages caused by another's engaging in unfair or deceptive insurance practices may sue the person engaging in those acts or practices. The statute itself defines "person" to mean "an individual, corporation, association, partnership, reciprocal or interinsurance exchange, Lloyd's plan, fraternal benefit society, or any other legal entity engaged in the business of incurance, including an agent, broker, adjuster or life insurance counselor.
A Texas Supreme Court case decided in 1998, applied the plain language of the statute to hold that "person" includes businesses and individuals "engaged in the business of insurance." The style of this case is, Liberty Mutual Insurance Company v. Garrison Contractors, Inc. However, the statute does not apply to an insurance company employee that was not engaged in the "business of insurance."
Engaging in unfair practices in "the business of insurance" is the key to holding an individual to liability. Those engaged in it may be held liable. Those who are not may not be held liable. In the Garrison case, an insurance agent whose job duties included soliciting and obtaining policy sales, explaining policy terms, and explaining premiums was engaged in the business of insurance and could be held liable under the statute.
In another Texas Supreme Court case, Great American Insurance Company v. North Austin Municiple Utility District No. 1, decided in 1995, the court held that contracts of suretyship are not part of the business of insurance, and the court decided that a surety could not be liable for unfair insurance practices.
A clear and understandable distinction was made in the Garrison case when the court said, "On the other hand, an employee who has no responsibility for the sale or servicing of insurance policies and no special insurance expertise, such as a clerical worker or janitor, does not engage in the insurance business."
In addition to the holding in Liberty Mutual Insurance Company v. Garrison Contractors, Inc. that the sale of a policy is part of the business of insurance, the court also has held that the investigation and adjustment of claims and losses are too. This is from a 1988, Texas Supreme Court case styled, Vail v. Texas Farm Bureau Mutual Insurance Company.
Knowing who to sue and sueing for the right reasons can make a big difference in the eventual outcome of a case. The next step regards discovering and knowing what it is that can be recovered in a resulting lawsuit.

If someone in Grand Prairie, Arlington, Fort Worth, Dallas, Irving, Hurst, Euless, Bedford, Dalworthington Gardens, Crowley, or some where else in Texas gets mis-led by an insurance company, can they sue them? The answer is a definite yes if the company is that person's insurance company but is probably a no if it is the other person's insurance company.
The 1989 case, Hermann Hospital v. National Standard Insurance Company and American Fire & Casualty Company, decided by the Houston Court of Appeals, 1st District, is a good case for an example where you can sue the other person's insurance for a misrepresentation.
On June 17, 1978, Jose Carreon was stabbed by a fellow worker while working for his employer. He was taken to, and treated at, Memorial Hospital. In September 1978, Memorial sought to transfer Carreon to Hermann for further care and treatment. The insurance company paid Memorial. Three months after Carreon was injured, on September 18 and 20, 1978, and prior to accepting the transfer of Carreon, Hermann verified coverge with the insurers for its care and treatment of Carreon. On September 20, 1978, after verifying coverage, Hermann accepted the transfer of Carreon. Coverge was again verified on October 16, 1978. Thereafter, later in October 1978, the insurers denied that there was insurance coverage for the injury sustained by Carreon and refused to pay Hermann for the expenses incurred. Hermann asserted in the lawsuit it filed that it relied on the representation of coverage in accepting the transfer of Carreon and that it incurred expenses of $217,444.90 in its care and treatment of Carreon.
The first issue the court had to decide in this case was whether or not Hermann had standing as a third party to sue the insurers for their misrepresentations. Hermann alleged these misrepresentations were in violation of what is now Texas Insurance Code, Section 541.060. The insurers claimed that Hermann did not have the right to sue under this Insurance Code law.
This court discussed where there is a long line of cases disallowing a third party to sue an insurance company directly for the misreresentations of that insurance company. As the court stated, this is not a normal case that is before them.
Here, Hermann is not sueing on an insurance policy or for the wrongful denial of payment under the policy at issue. It is sueing for the damages it suffered by relying on the representations of coverge allegedly made by the insurers. The Texas Supreme Court has held that misrepresentations as to coverage and benefits are precisely the sort of conduct that give rise to a cause of action under the Insurance Code.
This court then said, "We find that as a practical matter, the relationship between insurance companies and providers of health care is a direct one, with the health care provider acting in reliance on the representations of representations of coverage in making their decisions regarding admission of potential patients. If insurance coverage and benefits can be verified, the hospital will usually accept an assignment of benefits to insure it is paid for any services rendered. If insurance coverage and benefits cannot be verified, or if no coverage exists, the medical provider can then make alternative financial arrangements. To insulate the insurance carriers from liability leaves the medical care provider without recourse against the party causing its damage, if it acts in reliance on the representation of coverage. Had the insurance carrier not falsely or negligently provided information, Hermann could have sought alternative means to ensure that it received payment for services before rendering them.
This case serves as one of the few exceptions to the general rule that a third party cannot sue an insurer directly.

Anybody in Weatherford, Mineral Wells, Millsap, Aledo, Azle, Springtown, Peaster, Brock, Lipan, Hudson Oaks, Annetta, Poolville, Whitt, or other places in Texas would wonder if they can sue the insurance company. Especially when they feel as if though they are being jerked around and treated in a disrespectful or improper manner. Well the answer to the question is yes, you can sue them. The bigger question is, can you win. Here is a case to think about.
The Texas Supreme Court, in 1994, decided a case styled, Allstate Insurance Company v. Kathleen G. Watson. The issue in the case was whether the state legislature allowed a third party claimant to directly sue the other guy's insurance company for violation of what is now Section 541.060 of the Texas Insurance Code. The holding by the court was no, it is not allowed in Texas.
Here are some facts in the case:
Watson was injured in a car accident. The driver of the other car was Townley, an insured under an automobile liability policy issued by Allstate Insurance Company. Watson filed suit against Townley alleging Townley was negligent and that his negligence was a proximate cause of the accident and her injuries. At the same time, Watson also sued Allstate under what is now the above statute. More specifically, Section 541.060(2)(A), which says, "failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect to which the insurer's liability has become reasonably clear..." She sued for other reasons also that are not relevant here.
In discussing this case the court said that to have a cause of action for alleged unfair claim settlement practices, such practices must be declared unfair or deceptive acts or practices in the business of insurance. This is per Section 541.003. Or the act must be defined as unlawful deceptive trade practices in Section 17.46, Texas Business & Commerce Code. This per Section 541.151, Texas Insurance Code.
Section 541.151 says:
A person who sustains actual damages may bring as action against another person for those damages caused by the other person engaging in an act or practice: (1) defined to be an ... unfair or deceptive act or practice in the business of insurance; ...
The Texas Department of Insurance has adopted rules similar to the rules in the Texas Insurance Code and the Texas Business & Commerce Code.
Through these rules and orders, Watson claimed she was entitled to sue Allstate for unfair claim settlement practices.
The court then discussed the legislative history of the laws and the purpose of the laws under which Watson was sueing Allstate. The court pointed out that these laws were for the purpose of persons being able to sue their own insurance company for their own insurance company's misrepresentations and illegal treatment, not for third parties such as Watson. When a person makes a claim against their own insurance company, that is called a "first party claim." Claims made against someone else's insurance company are "third party claims."
After discussing this the court said, "Watson, however, is not an insured. Rather, she asserts her claims against Allstate as a third party to the contract between Allstate and its insured. The obligations imposed by ... of the Insurance Code ... are engrafted onto the contract between the insurer and insured and are extra-contractual in nature. A third party claimant has no contract with the insurer, and in short, has no basis upon which to expect or demand the benefit of the extra-contractual obligations imposed on insurers under (the insurance code) with regard to their insureds."
The court went on to say that extending to third party claimants the same duties duties insurers owe to their insureds, insurers would be faced with owing coextensive and conflicting duties. These duties would be adverse to the insured, necessarily compromising the duties the insurer owes to its insured. In fact, the logical result of permitting a separate and direct cause of action in favor of third party claimants allows third parties to sue for unfair claim settlement practices even though the insured has no claim for an unfair claim settlement practice. As troublesome, it is conceivable that in attempting to settle claims pursuant to the demands of a third party claimant, insurers may be liable to the insured for settling to quickly.
The reading of this case may sound more confusing than it actually is. Bottom line is that, with a few exceptions, a third party may not sue an insurance company that treats them improperly. But, as a first party the person can sue the insurance company. A second bottom line would be, talk to an experienced Insurance Law Attorney to make sure your rights are not being violated.

Many people in Grand Praire, Arlington, Irving, Mansfield, Garland, Mesquite, De Soto, Duncanville, Dallas, Fort Worth, Hurst, Euless, Bedford, and other places in Texas will wonder from time to time if they can sue the insurance company when something goes wrong.
Here is a short answer that does not necessarily apply to all situations.
When it is your own insurance company that commits a wrong then there is a procedure to be followed, but you can sue them.
When it is someone else's insurance company then generally the answer is no, but there are exceptions.
The following case may help someone to understand the difference. The case is a 1987, case decided by the Texas Court of Appeals, Houston, 14th District. The style of the case is, Robert A. Chaffin and G. Robert Friedman v. Transamerica Insurance Company, Premier Insurance Company, and Crown Underwriters.
Here is some background. Chaffin and Friedman (Plaintiffs) sued the insurers (Defendants) listed above for their alleged tortious handling of their property damage claim. Plaintiffs owned two townhomes that were being remodeled. They subcontracted with U.S. Seal to waterproof the townhome roofs. U.S. Seal was negligent and both properties sustained damage in a rainstorm. U.S. Seal was informed of the damage, they admitted fault, and notified the Defendants. The Defendants denied the claim on the basis of no coverage. The Defendants neither conducted an invstigation of the merits of the claim nor appraised the damage before closing the file without payment.
Plaintiffs then sued U.S. Seal for damages resulting from the faulty repair work and then they sued the Defendants for tortious handling of the claim.
The Defendants later admitted no reason existed for its previous denial of coverage. The Defendants eventually paid $100,000, the limits for the damages sustained. However, Plaintiffs continued their suit against Defendants for their torious handling of the property claim, which they allege resulted in expenditures caused by their unnecessary litigation against U.S. Seal. Plaintiffs sought recovery for attorneys' fees, expenses of litigation, plus interest on the money borrowed to repair the property until the settlement with U.S. Seal.
The trial court ruled in favor of Defendants and this appeals court upheld that ruling. On the appeal Plaintiffs argued that Texas law recognizes an independent cause of action by a third party against a tortfeasor's insurance company, arising from the carrier's wrongful denial of coverage under the tortfeasor's policy. Plaintiffs alleged four causes of action but the relevant one here is one under Chapter 541, Texas Insurance Code.
In discussing this case the court pointed out that the Plaintiffs are not listed as insured's under Defendants insurance policy, they are not third party intended beneficiaries of the contract, and there is no legal relationship between the Plaintiffs and the Defendants in this situation.
In response to the Plaintiffs assertions this court pointed out that Texas Insurance Code, Section 541.151, does allow for an action against any "person" harmed or injured by the conduct of one in the insurance business without regard to the "person's" relationship to the insurer. However, the law is settled that even though the term "person" used in this section is not to be construed as being limited to one "engaged in the business of insurance," there is no authority for extending the construction of "person" beyond one who is either an insured or a beneficiary of the policy.
In fact, Texas Rule of Civil Procedure, 51(b), specifically prohibits the joiner of an insurance company by an injured third party in a tort action. Further, Texas case law is in accord both that an injured party has no direct cause of action against a tortfeasor's insurance company, whether or not the insured party is joined; and that the carrier owes a legal duty only to its insured or to an intended beneficiary of the policy.
In citing other cases, this court said, "Direct action by a third party may lie against a carrier after an injured party has secured a judgment against the insured. However, the insurer's liability is nontheless limited to the amount of the policy."
This court then stated, "We are aware of no Texas case providing a statutory remedy for an injured third party against the insurance carrier of an insured. Therefore, although (Plaintiffs) construction of the term "person" appears on its face to lend credence to their position, the weight of authority belies such an interpretation of the term."
One thing that is hopefully very clear is that an experienced Insurance Law Attorney needs to be consulted in these matters.

People who own homes in Weatherford, Aledo, Azle, Poolville, Brock, Hudson Oaks, Willow Park, Peaster, Mineral Wells, Cool, Millsap, and other areas of Parker and Palo Pinto counties might want to pay attention this story.
The Court of Appeals, Beaumont, issued an opinion on March 10, 2011, that gives some insight into how the courts will look at appraisal clauses in homeowners insurance policies. The style of the case is, In Re Southern Insurance Company.
In this case the homeowner, Michelle Neisen, suffered a loss that she alleges was the result of hurricane damage. Southern sought to have an appraisal process to determine the amount of the disputed loss. Neison claimed that Southern waived its right to appraisal because Southern claimed it was not responsible for the loss. The trial court refused to order participation in the appraisal process which Southern was requesting and Southern appealed that decision.
Under the insurance contract, if the parties "fail to agree on the actual cash value, amount of loss, or the cost of repair," either party may make a written demand for appraisal. The appraisal clause did not provide for a forfeiture of that right, and the policy states that "no provision of this policy may be waived unless the terms of this policy allow the provision to be waived."
Neisen's arguement was that Southern must agree that the loss is covered by the policy before it may "fail to agree" on the amount of the loss. As the court pointed out, nothing in the plain language of the policy requires Southern to acknowledge liability before it may demand an appraisal. In fact the policy refers to a failure to agree on the amount of the loss. Neisen contended that Texas case law provides that when an insurer completely and unconditionally denies coverage, there is no dispute over the amount of the loss and the insurer waives its right to demand an appraisal. This court pointed out that recent case law clarifies that a dispute over the extent of the loss is a dispute over the amount of the loss. The court pointed out that in one recent decision the parties disagreed over whether hail damaged only the ridgeline or the entire roof. The homeowner sought declaratory relief compelling an appraisal. The Texas Supreme Court ultimately upheld the appraisal provision.
The court then cited other cases saying, "When different causes are alleged for a single injury to property, causation is a liability question for the courts. By contrast, when different types of damage occur to items of property, appraisers may have to decide the damage caused by each before the courts can decide liability."
This court also talked about that in this case, Southern contended that the damage to Neisen's home is the result of long term repeated leakage while Neisen contends it is hurricane damage. That appraisal should be determined as an initial matter and the parties may then litigate causation questions. They said that when an indivisible injury to property may have several causes, appraisers can assess the amount of damage and leave causation to the courts. When divisible losses are involved, appraisers can decide the cost to repair each without deciding who must pay for it. That when an insurance company denies coverage, appraisers can still set the amount of loss in case the insurer turns out to be wrong. The appraisal clause "binds parties to have the extent or amount of the loss determined in a particular way, leaving the question of liability for such loss to be determined, if necessary, by the courts.
In discussing the waiver issue, the court pointed out that waiver may arise by agreement or estoppel. The insurance policy in this case allowed either party to invoke the appraisal clause. Under the policy at issue here, no provision of the policy was waived unless the terms of the policy allowed it. The policy did not require an admission of liability to invoke the appraisal clause. The record in this case did not establish that Southern induced Neisen to believe compliance with the terms of the policy was not desired and would be of no effect if performed. Even though Southern denied the claim based on its determination that the damage to the covered property was not caused by a covered peril, the appraisers "can still set the amount of loss in case the insurer turns out to be wrong."
This case serves as yet another example of why an experienced Insurance Law Attorney needs to be consulted when dealing with an insurance company.

Any homeowner is Grand Prairie, Arlington, Irving, Mesquite, Garland, Richardson, Mansfield, Dallas, Fort Worth, or any other place in Texas who thinks they know a lot about their insurance policy, probably is still not sure how an arbitration clause in the policy works.
The Texas Court of Appeals, Beaumont, issued an opinion on March 24, 2011. The style of the case is, In re Ranchers & Farmers Mutual Insurance Company. This case is being appealed by way of a "writ of mandamus" and is normally referred to as a mandamus proceeding.
The name of a writ, the principle work of which when the proceedings were in Latin, was mandamus, meaning we command. It is a command issuing in the name of the sovereign authority from a superior court having jurisdiction, and is directed to some person, corporation, or inferior court, requiring them to do some particular thing therein specified, which appertains to their office and duty, and which the superior court has previously determined, or at least supposes to be consonant to right and justice.
So, to put it in more simple terms, Ranchers & Farmers Mutual Insurance Company (Ranchers) is appealing to the Beaumont Court of Appeals requesting that they order the trial court to order the homeowners in the case to submit to an appraisal.
Here is some background. The homeowners insured their property with Ranchers. In litigation between Ranchers and the homeowners over a loss, Ranchers invoked the appraisal provision of the insurance policy and filed a motion with the trial court requesting the judge to enforce the appraisal provision in the policy. The trial judge refused to enforce the appraisal provision. This appeal followed.
After the appeal was filed, the homeowners filed papers with the court asking the court to vacate its order denying the request for the enforcement of the appraisal process. As a result the homeowners argued that this appeal was not necessary. This apppeals court pointed out that the trial court order had not been vacated and there had not been an enforcement of the appraisal provision of the insurance policy.
This appeals court then got into a discussion of why it was wrong for the trial court to have refused to enforce the appraisal provision of the insurance policy. Included in this discussion was a recitation of the recent court decisions on this issue. The guiding case is a case styled, In re Southern Insurance Company, which was decided after the trial court rendered its decision but which is now controlling law. In the Southern case, there was an issue on whether or not the appraisal clause had been waived.
Ultimately this trial court ordered the lower court to sign an order enforcing the appraisal provision in the insurance policy. These appraisal clauses and how they work can be confusing. It is proper to seek the advice of an experienced Insurance Law Attorney whenever a homeowner is being forced to participate in the appraisal process. There is a certain amount of strategy to be employed when dealing with apraisal clauses.

Consumers in Grand Prairie, Fort Worth, Arlington, Dallas, Mansfield, Burleson, Crowley, Benbrook, Lake Worth, Rendon, Keene, Burleson, and other places in Texas have the protection of the Texas Insurance Code and the Texas Deceptive Trade Practices Act (DTPA) when it comes to having rights against businesses and insurance companies that treat people in an unjust manner.
Regarding these two areas of law, Texas court cases and the statutes themselves tell us that the Insurance Code provisions are to be liberally construed and applied to promote its underlying purposes to define and prohibit unfair and deceptive insurance practices. This is specifically stated in the Insurance Code, Section 541.008, where it says, "This chapter shall be liberally construed and applied to promote the underlying purposes as provided by Section 541.001." This is also made clear in the 1988, Texas Supreme Court case, Vail v. Texas Farm Bureau Mutual Insurance Company.
The Supreme Court has stated that the similar liberal construction mandate in the DTPA requires that the statute be given "its most comprehensive application possible without doing any violence to its terms." The courts apply this same reasoning to insurance cases, which is made clear in other court cases.
Both the Insurance Code and the DTPA provide that the statutory remedies are cumulative of other remedies. This is told to us in the Vail case above which looks at the the Texas Business & Commerce Code, Section 17.43, which tells us in part, "The provisions of this subchapter are not exclusive. The remedies provided in this subchapter are in addition to any other procedures or remedies provided for in any other law; ...."
As a limitation on potential recoveries, Section 541.453, tells us, "A person may not recover damages and penalties for the same act or practice under both this chapter and another law."
So what are the limits to the punishment a person can recover? Here is one for consideration:
With regards to Personal Injury Protection (PIP) benefits, Section 1952.157 (b) tells us the following when someone entitled to PIP benefits has to sue to recover the benefits: "If the insurer is required to pay benefits described by ..., the person entitled to the benefits is entitled to recover reasonable attorney's fees, a penalty of 12 percent, and interest at the legal rate from the date those amounts became overdue."
Okay, now look at the Prompt Payment of Claims Act, Section 542.061. This section speaks to when an insurance company does not pay a claim in a timely manner. 542.061, says, "The remedies provided by this subchapter are in addition to any other remedy or procedure provided by law or at common law."
So, what happens if a claim for PIP benefits is not paid in a timely manner? The Insurance Code section that deals specifically with PIP says that the claimant is entitled to the amount owed, plus a 12 percent penalty, plus interest at the legal rate (assume it is 5%), plus attorney fees.
Next, the Insurance Code section dealing with prompt payments of claims says a claim that is paid late is entitled to the amount owed, plus interest on the amount owed at 18 percent a year, plus attorney fees.
Then, the Insurance Code section dealing with prompt payments of claims has the Section 542.061, cited above.
Result: On a $2500 PIP claim that is paid a year late, the insurance company would owe the $2500, plus the 12 percent penalty of $300, plus interest at the legal rate of 5 percent which is $125, plus the 18 percent late payment penalty which is $450, for a total of $875 in penalties on top of the $2500. Add to that, the attorney's fees which could be thousands of dollars.
$2500 is a relatively small number to be working with but the total penalty amount is about 35 percent, not counting attorney fees. Try earning that at the bank in a C.D. or some other investment.
As should be obvious, consultation with an experienced Insurance Law Attorney is worthwhile and should be considered early when a claim gets denied by an insurance company.

Homeowners in Grand Prairie, Arlington, Mansfield, Britton, Crowley, Burleson, Benbrook, Lillian, Godley, Glen Rose, Acton, Cresson, and other places in Texas, might be interested in this case.
This case is from the El Paso Court of Appeals and was decided on April 20, 2011. The style of the case is, Pamela Rust v. Texas Farmers Insurance Company.
This is a case where Pamela Rust brought suit seeking medical payment benefits from Texas Farmers Insurance Company under two homeowner policies that it had issued to Frank Kurosky, her father.
Here are some of the facts in the case.
Kurosky owned two adjacent lots in Haltom City insured by Farmers under separate homeowner liability policies. Kurosky resided at the first property, located at 4325 Fossil (25-Fossil), and was the sole named insured for that property. Kurosky rented the property next door, located at 4333 Fossil (33-Fossil), to his daughter, Pamela Rust, and both Kurosky and Rust were named insureds on that policy.
Allegedly, Rust was operating a riding lawnmower at the 33-Fossil rental property, the lawnmower overturned on a steep, unfenced incline at the back of the property, causing her life threatening injuries and resulting medical bills in excess of $100,000. Rust submitted the medical bills to Farmers seeking a $5,000 payment under Kurosky's homeowner's policy. This lawsuit commenced after Farmers refused to pay Rust's claim for benefits.
In this case there was also a lawsuit under the liability portion of the policy which will not be discussed.
Regarding the 33-Fossil rental property and the policy relating thereto, Farmers argued that while the policies provided property and liability coverage, they did not cover medical expenses incurred by a named insured or resident at the insured location nor did they cover medical expenses unless the insured person was liable for the bodily injury occurring at the insured location. Therefore, Farmers argued that Rust could not recover medical payment benefits under the 33-Fossil policy because she was both a named insured and a resident of that insured property.
Rust filed a motion for summary judgment asking the court to rule as a matter of law that she was entitled to the medical benefits. Farmers repeated its argument that Rust could not succeed under the 33-Fossil policy because she was an insured and a resident, and therefore, the policy coverage was inapplicable to Rust. Farmers stated that for Rust to recover any monies, even under the 25-Fossil property, that Rust would have to show that the injury occurred on the 25-Fossil property and this is contrary to her allegation that her injuries were caused by, among other things, a steep incline at the back of the 33-Fossil property. Rust had presented no evidence that some condition on the 25-Fossil property caused any of her injury.
In citing Texas law, this court stated, "In general, an insured bears the initial burden of showing that there is coverage under an insurance policy, and the insurer bears the burden of proving the applicability of an exclusion that permits it to deny coverage. When an insurer proves the applicability of an exclusion, the burden shifts to the insured who must demostrate that coverage exists under an exception to the exclusion. (This is found in Texas Insurance Code, Section 554.002). Exclusionary language in the contract or an insurer's claimed exception to coverage constitutes an avoidance or an affirmative defense."
The policies at issue at similar and provide that the medical-payments-to-others provision of the policies specifies that Farmers will pay reasonable medical expenses for necessary medical services furnished to a person to whom the coverage applies, and specifies that coverage thereunder applies, in part, to:
Persons on an insured location with permission of an insured; or
Persons off an insured location if the bodily injury is:
a. the result of a condition on the insured location or the ways immediately adjoining;
b. caused by the activities of the insured; or
c. caused by a residence employee in the course and scope of employment by an insured.
For those persons, the policies provide that Farmers will pay reasonable medical expenses for necessary medical services furnished for an occurrence causing bodily injury. The medical coverage policy limits are $1000 per person under the 25-Fossil policy and $5000 under the 33-Fossil policy.
The court then discussed the exclusions.
There were three exclusions to coverage. Both policies exclude from coverage bodily injury or personal injury to any insured or any resident of the residence premises. They also exclude coverage for an insured's bodily injury and personal injury arising from, during the course of, or in connection with the rental of any property or any part of any premises by an insured. An exception within the policies provides in relevant part that this rental property exclusion is not applicable to the rental of that part of an insured location which is rented either on an occasional basis for sole use as a residence or to no more than two roomers at the same time for sole use as a residence. Also included is an other-property exclusion for bodily or personal injury arising from, during the course of, or in connection with a location other than an insured location which is owned by an insured, rented to an insured, or rented to others by an insured.
Based on the plain policy language and the exclusions therein and the law in Texas, the court ruled in Farmers favor.

Residents of Grand Prairie, Arlington, Dallas, Fort Worth, Mansfield, Irving, Garland, Mesquite, Richardson, Farmers Branch, Carrolton, and other cities in Texas would probably get confused trying to understand what is a covered loss in an insurance policy and what is not a covered loss.
The Fourteenth Court of Appeals in Texas recently issued an opinion is a case covering this topic. The opinion, styled Markel American Insurance Company v. Lennar Corporation, Lennar Homes of Texas Sales & Marketing Ltd., and Lennar Homes of Texas Land & Construction Ltd., was issued on April 19, 2011.
This case involved several legal issues but the most relevant here dealt with how courts examine these cases to see what is a covered loss versus a loss that may have been incurred that is not covered by the insurance policy. Here is some background.
This case is an appeal from a trial court where the case was being retried from an earlier appeal. Some of the relevant facts are that in 1992 or so, Lennar used a product called Exterior Insulation and Finish System (EIFS), an imitation stucco siding product on homes it built. Because EIFS's outer surface was intended to be a moisture barrier for the siding, it did not have a secondary moisture barrier to protect underlying structures. It appears undisputed that EIFS allows the siding to trap water behind it and the materials underneath the EIFS are damaged by ongoing exposure to moisture. Approximately 800 homes were built with this product.
In 1994, warranty problems began being experienced with EIFS.
A story on a Dateline television program ran about EIFS and Lennar began receiving numerous phone calls. Thus Lennar began a voluntary business plan to act on the EIFS issues and remediate in the interest of customer relations.
Specifically, Lennar began contacting homeowners by letter to arrange an inspection of the EIFS. Lennar then undertook repairs on the homes. Lennar tried to repair sixteen homes, but those homes still had moisture problems. Lennar decided to pursue a uniform course of action: Lennar would remove all of the EIFS on a home if it found it necessary to remove 60-75% of the EIFS in order to do the repair and replace it with cementious stucco. Ultimately, Lennar decided to strip all of the EIFS off all the houses and replace it with conventional stucco. It took four and a half years to repair all the homes.
Lennar then ended up sueing their insurance company, Markel American Insurance Company, for the costs of repairs.
A jury ended up awarding Lennar almost three million for the amount of covered property damage and Markel filed this appeal claiming that Lennar had not proved that all the damages were covered damages under the insurance policy. Markel said that many of those costs were associated with Lennar investigating and tearing out EIFS in houses where there was no damage.
In analyzing this case the appeals court stated Texas law when it said the following:
An insured is not entitled to recover under an insurance policy unless it proves its damages are covered by the policy. Under the doctrine of concurrent causes, when covered and non-covered perils combine to creat a loss, the insured is entitled to recover only that portion of the damage caused solely by the covered peril. The doctrine of concurrent causation is not an affirmative defense or an avoidance issue; rather, it is a rule embodying the basic principle that insureds are not entitled to recover under their insurance policies unless they prove their damage is covered by the policy. The burden is on the insured to prove coverage. The insured must present evidence from which the jury can allocate the damage attributable to the covered peril. The insured must attempt to segregate the loss caused by the covered peril from the loss caused by the uncovered peril and secure a jury finding on the amount of damage attributable to the different causes. The failure to segregate covered and uncovered perils is fatal to recovery.
This court then spent time discussing issues related to the questions a jury is presented with, in order to reach a decision on the amount of covered damages.
Markel had argued there was no evidence of covered property damage because Lennar did not segregate the costs related to the removal and replacement of EIFS as a preventative measure from the costs related to the removal and replacement of EIFS where there was property damage. The court then analyzed the actual questions presented to the jury.
In the earlier appeal of this case, Lennar had been specifically directed to "apportion the EIFS related damages between its costs to remove and replace EIFS as a preventative and its cost to repair water damage to the homes." Lennar did not do so.
Lennar lost this appeal.

Insureds in Weatherford, Mineral Wells, Millsap, Hudson Oaks, Aledo, Azle, Peaster, Cresson, Cool, Brock, Poolville, Springtown, and other places in Texas would have a very hard time reading and understanding what an insurance policy says. That is the main reason why an experienced Insurance Lawyer needs to be consulted whenever a claim is denied.
The Texas Court of Appeals in Amarillo decided a case on April 18, 2011, that dealt with policy interpretation. The style of the case is, Evanston Insurance Company v. D&L Masonry of Lubbock, Inc. In this case the court of appeals granted a summary judgment in favor of D&L Masonry. Here is some background.
Evanston issued a commercial general liability policy to D&L. The policy periods are not in dispute. D&L was engaged in the masonry business and contracted to install masonry and renovations to public schools in Muleshoe, Texas. Because of difficulties and weather concerns, D&L did not do the masonry work until after the window frames and windows had been installed. Because the windows and frames were already in place, D&L had to attempt to seal the area between the frames and brick with mortar. In an effort to prevent masonry mortar from damaging the windows and frames, D&L used masking tape around the window frames and soap and water to soap the windows. After D&L had completed the masonry work, the schools were examined and mortar stains were found on many of the window frames. Additionally, some of the frames were scratched when D&L attempted to remove some of the excess mortar that had fallen on the frames during the masonry work. D&L was eventually charged and they paid to have the windows replaced at a cost of $58,113. D&L paid the amount and submitted a claim to Evanston for reinbursement. Evanston denied the claim stating the policy exclusions applied because the window frame damage was damage to property upon which D&L performed its work. D&L then sued Evanston.
At the trial court level, the trial court ruled in favor of D&L based on the policy language and this appeals courts affirmed that ruling.
The question presented to the court was whether the exclusions relied upon by Evanston to deny D&L's claim were proper.
The policy in question provided for coverage for "damages because of 'bodily injury' or 'property damage' to which this insurance applies." However, paragraph 2 of the policy provided for certain exclusions from coverage. Evanston contended that paragraph 2. J. (5) and (6) excluded the property damage to the window frames in question from coverage. These exclusions deny coverage for damages caused to:
(5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the "property damage" arises out of those operations;
(6) That particular part of any property that must be restored, repaired, or replaced because "your work" was incorrectly performed on it.
Section V, Paragraph 21 of the policy defines "Your Work" as follows:
a. Work or operations performed by you or on your behalf, and
b. Materials, parts or equipment furnished in connection with such work or operations.
In this case, no one was contesting the definitions, rather, it appears the conflict arises in the application of the definitions to the facts. The main point of contention between the parties was whether the actions taken by D&L in preparing to apply the mortar, and applying the mortar, to the space between the last brick and the window frame constitutes working on the window frames. Evanston's position was that the activity of applying the tape to the window frames and soap to the windows was work on the window frames for purposes of the exclusions. Further, Evanston contended that allowing the mortar to come into contact with the window frame also constituted work on the frames. Finally, Evanston contended that any effort D&L took to eliminate any of the mortar from the window frame was also work on the window frames. Under Evanston's theories, all of this work on the window frames placed D&L squarely within the ambit of both exclusion J(5) and J(6). D&L contended that the policy in question was designed to protect them when its work damages someone else's property. Under D&L's theory, their work did not include work on the frames. Rather, their work was with the brick and mortar which had to be placed next to the frames in order to seal the frames. Accordingly, the exclusions would not apply.
In discussion of this case the court asked; What work was D&L contracted to perform in connection with the renovations of the schools in question? The answer, and both parties agreed, was masonry work. D&L was not contracted to perform work on the window frames. D&L's contact with the window frames came about only as a prophylactic measure to attempt to prevent damage.
This court then began an analysis of other court decisions where a similar issue was presented. After reviewing those cases and their discussions of "Your Work" and "That Particular Part" language of the various policies at issue, this court was of the opinion that the trial court was not unreasonable in its ruling.
These types of cases can be very difficult and usually require exstinsive research. A reading of this case does allow someone to understand how these cases are analyzed by the courts.

Most insureds living in Grand Prairie, Fort Worth, Dallas, Arlington, Pantego, Hurst, Euless, Bedford, Keller, Colleyville, Saginaw, and other places in Texas would not be sure what it means to submit to an "examination under oath" (EUO).
An EUO is where a person is asked questions, usually by an attorney or insurance investigator, after the person has taken an oath to tell the truth, and the testimony is taken by a certified court reporter.
The United States District Court, Southern District, Houston Division, issued an opinion on April 11, 2011, where part of the case dealt with the requirements of an EUO. The style of the case is, Rossco Holdings, Inc. v. Lexington Insurance Company.
Here is some background. The case involves a claim for storm damage to real property located in College Station owned by Rossco and insured by Lexington. One of the issues in the case appears to center around when the policy was taken out, when premiums were paid and an issue about some attempts at cancellation of the policy by Rossco.
On or about July 20, 2009, a rain storm damaged Rossco's property. On August 17, 2009, Rossco filed a claim with Lexington notifying it of its loss and seeking damages. Upon investigating the claim, Lexington informed Rossco of its concerns regarding coverage and made the following request for information:
In order to assist us with the investigation, we ask that you provide us copies of all documents, including emails and correspondence, pertaining to your request that Lexington cancel the policy, and your subsequent request to extend the termination date of the policy to July 28, 2009. We also ask that you provide us with a copy of all documents that reflect, relate or pertain to the date of loss, the payment of the premium, and the submission of the notice of loss to Lexington.
On October 23, 2009, Lexington made a second request for the aforementioned information. On October 29, 2009, Rossco provided Lexington with a Sworn Statement of Loss dated October 28, 2009, which listed "TBD" for the values of both the property and claimed loss. On November 11, 2009, Lexington sent another request for information to support Rossco's claimed loss and advising him of its intent to conduct an EUO of Rossco's corporate representative. Rossco then filed this lawsuit alleging breach of contract as well as violations of the unfair settlement practices and prompt payment provisions of the Texas Insurance Code.
Lexington submitted a motion for summary judgment to the court requesting a ruling in its favor due to Rossco not complying with the policy's terms. Rossco's arguement was that it had "substantially complied" with the requests of Lexington and that Lexington had waived its right to conduct an EUO.
Lexington, in particular argued, that Rossco, in an effort to obscure Lexington's investigation into its loss, repeatedly refused to comply with conditions precedent to coverage under the policy by refusing to furnish documents to support its claim of coverage and refusing to participate in an EUO. It alleges that because Rossco failed to furnish documents pertinent to its claimed loss and failed to submit to an EUO, it failed to comply with conditions precedent to coverage and is not entitled to benefits under the policy. Consequently, Lexington maintained that absent Rossco's compliance with the aforementioned conditions precedent, it has no duty to provide benefits under the policy and Rossco's claim for breach of contract fails. Likewise, Lexington argued that Rossco's claims for extra-contractual damages under the Texas Insurance Code also fail because Lexington cannot be in violation of the Insurance Code if its duties and obligations have yet to be triggered due to Rossco's non-compliance with the policy's terms and conditions governing coverage.
In discussing this case, the court cited well settled law that "Insurance policy provisions requiring the insured's submission to examination under oath as a condition precedent to sustaining a suit on the policy are valid." First, it is well settled law in Texas that abatement rather than exclusion or barring of a claim is the insurer's appropriate remedy for enforcement of an insured's conditions precedent to coverage. Second, without commenting on the strength or credibility of the evidence presented, the Court determined that the parties had raised genuine issues of material fact concerning whether all necessary and reasonably comprehensive information in support of Rosco's proof of loss had been provided to Lexington in compliance with the policy's terms and whether Lexington has handled, processed and or investigated Rossco's claim in good faith.
This court then denied the request for summary judgment and abated the case until 30 days after Rossco provides Lexington with all documents previously requested and submited to an EUO.
An experienced Insurance Law Attorney should be consulted anytime an insurance company is asking for an examination under oath. There are a couple of reasons for this. One is that the insurance company oftens asks for items or ask questions that they do not have a right to be asking. Second, when a claims investigation has reached a point where the insurance company is requesting an EUO, that is usually a sign they are going to deny the claim and they are only seeking further information to justify their denial.