Dallas Fort Worth Insurance Lawyer Blog

Most homeowners in Grand Prairie, Arlington, Irving, Fort Worth, Dallas, Duncanville, De Soto, Cedar Hill, Mansfield, and other Dallas County and Tarrant County cites will have a policy of insurance on their home. Most of the time that homeowners policy is going to have a medical payments coverage in the policy.
Medical payments coverage will usually provide payments for "reasonable and necessary" medical expenses up to the limits of the coverage which is usually $1,000 to $5,000. It is coverage that should pay medical bills without regards to who is at fault for the injuries sustained.
Here is a case dealing with the coverage. The case is styled, Cynthia Farris, as next friend of Vidal de Jesus Farias, a minor v. Allstate Insurance Company and Allstate Property and Casualty Insurance Company. This opinion was issued by the Corpus Christi Court of Appeals on June 2, 2011.
Here is some background.
The dispute pertains to an incident where Farias's eleven year old son was bitten by a dog owned by Jose Ocanas, an insured of Allstate. Farias alleged the following:
On or about October 3, 2005, 11 year old Vidal de Jesus Farias was walking his family dog near his home. Without provocation, defendant Ocana's dog attacked Vidal and bit him several times in the legs and buttocks. Defendant Ocanas' housekeeper watched the whole thing and did nothing to get the dog off of Vidal even though Vidal was screeming for help.
Farias sued the homeowner Ocanas for allegations of inappropriate conduct in this matter and further alleged that Allstate was liable for breach of contract, breach of the duty of good faith and fair dealing, negligence, and violating several provisions of the Texas Insurance Code, including sections 542.003, 542.055, 542.056, 542.057, and 542.058.
Allstate entered entered a general denial denying all of the allegations contained in Farias's original petition. Allstate later filed a traditional motion for summary judgment, alleging that Farias had failed to state a cause of action under Texas law. Specifically, Allstate contended that Farias's lawsuit "fails because Texas law does not recognize a direct cause of action in a third-party scenario against the insurer for the mishandling of a third-party claim." Allstate argued that: (1) violations of chapter 542 of the insurance code do not apply to third-party scenarios; (2) Farias's breach of the duty of good faith and fair dealing causes of action do not apply in a third-party scenario; (3) Farias cannot maintain a breach of contract action against Allstate because there is no privity between Farias and Allstate and because Farias is not a third-party beneficiary; and (4) Farias's negligence cause of action must fail because Allstate did not owe a duty to either Farias or Vidal.
Allstate also argued that Farias was not a third-party beneficiary under the insurance contract between Allstate and Ocanas and that "there is no distinction between medical payments coverage and other insurance coverage which entitles a third party to bring a direct cause of action against the insurer for denial of medical benefits payments."
The court began its analysis by examining the "Medical Payments Coverage" clause of the insurance contract between Ocanas and Allstate. The clause provides as follows:
COVERAGE D (Medical Payments to Others)
We will pay necessary medical expenses incurred and medically determined within three years from the date of an accident causing bodily injury. Medical expenses means reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices and funeral services. This coverage does not apply to you and regular residents of your household. This coverage does not apply to residence employees. As to others this coverage applies only:
1. to a person on the insured location with the permission of an insured.
2. to a person off the insured location, if the bodily injury:
a. arises out of a condition on the insured location or the ways immediately adjoining.
b. is caused by the activities of an insured.
c. is caused by a residence employee in the course of the residence employee's employment by an insured.
d. in caused by an animal owned by or in the care of an insured.
Farias argued that this language expressly provides a benefit for Vidal as a third-party beneficiary and, thus, confers standing upon her to sue Allstate for breach of contract on behalf of Vidal.
In discussing this issue regarding third-party beneficiaries the court said the following.
A stranger to a contract may enforce the contract as a third-party beneficiary if the parties to the contract intended to secure a benefit to that third party and entered into the contract directly for the third party's benefit. The person claiming to be a third-party beneficiary must establish the existence of a contract and standing as a third-party beneficiary. A party is presumed to contract only for its own benefit; thus, any intent to benefit a third party must be clearly apparent. There is a presumption against, not in favor of, third-party beneficiary agreements. Once some evidence has been produced to show a contract and standing as a third-party beneficiary, it is incumbent upon the opposing party to prove any defenses that would limit or bar recovery by the third-party beneficiary.
Here, the "Medical Payments Coverage" clause does not specifically mention Farias or Vidal, nor does the plain language of the insurance policy indicate that Farias or Vidal were contemplated when Ocanas and Allstate entered into the insurance contract so that Farias or Vidal could bring any direct claim against Allstate. Moreover, the Texas Supreme Court has held that "an injured party cannot sue the tortfeasor's insurer directly until the tortfeasor's liability has been finally determined by agreement or judgment."
In making its ruling the court stated, "The record does not reflect that Ocanas's 'liability has been finally determined by agreement or judgment.'" Because Ocana's liability had not been finally determined by agreement or judgment and because the language of the "Medical Payments Coverage" clause does not overcome the strong presumption against conferring third-party beneficiary status to Farias, the court concluded that Farias lacked standing in this matter.
The writer of this blog, who is an experienced Insurance Law Attorney, does not agree with all the issues in this opinion. Maybe an appeal to the Texas Supreme Court will result in a different outcome.

Persons living in Fort Worth, Dallas, Grand Prairie, Arlington, Irving, Mesquite, Garland, Richardson, Carrolton, Farmers Branch, and other places in Texas might enjoy this case. It tells us how someone who does not consult with an experienced Insurance Law Attorney is just wasting their time doing a lawsuit by themselves.
The opinion in this case was issued on June 2, 2011, by the Austin Court of Appeals. The style of the case is, Cynthia Ulett Lynch v. State Farm Mutual Automobile Insurance Company. Lynch was appealing from a summary judgment against her based on res judicata.
Here is some background.
Lynch alleges that on May 10, 2002, she was walking in a parking lot when she was struck by a vehicle driven by Cecil Vannoy and insured by State Farm. On May 7, 2004, Lynch filed a lawsuit in Bell County against Vannoy alleging negligence. Lynch's attorney withdrew soon after. Lynch proceeded by herself and added State Farm as an actual defendant in the case.
State Farm filed a motion for summary judgment contending that Lynch had no direct cause of action against State Farm. The trial court agreed and granted State Farms' motion. The case against Vannoy continued but State Farm was out.
Approximately six months later, Lynch filed a second lawsuit against State Farm in Williamson County. The lawsuit alleged various causes of action arising out of the 2002 automobile accident. State Farm filed another motion for summary judgment which the trial court granted. The ruling was based on res judicata.
To prevail on a res judicata defense, State Farm had to prove, (1) there is a prior final judgment on the merits by a court of competent jurisdiction (this had occurred in the Bell County lawsuit), (2) the parties in the two actions are identical or in privity with the prior parties, and (3) the claims in the second action are based on the same claims that were raised or could have been raised in the first action. These are the principles set out in the Texas Supreme Court case, Amstadt v. United States Brass Corp., a 1996 case.
In this Lynch case, all three elements of res judicata had been met.
The difference in the two cases was that in the Williamson County lawsuit, Lynch had alleged "breach of contract" and "fraud". However, even these were not properly plead in the lawsuit papers. As the court stated, these pleadings were construed as allegations resulting from the Bell county negligence case.
There are a couple of noteworthy points to be taken out of this case. One is that an experienced attorney needs to be the one filing lawsuit papers. In this case, Lynch was pro se, in other words, representing herself. According to the judges, Lynch had not properly worded her lawsuit.
The other noteworthy point to be taken from this case is this. Very few people, this includes attorneys, have a clear understanding in the difference between a first party insurance claim and a third party insurance claim. As to attorneys, most do not really need to understand the difference because it is not the type of law they practice.
Maybe this will help to understand the difference. Whenever a person is making a claim or suing their own insurance company, that is a first party claim or lawsuit.
Whenever someone is making a claim against someone else, that is a third party claim. It is very unusual to be able to file a third party lawsuit against the insurance company. Although there are a few exceptions, when someone other than your own insurance company commits some type of wrong that causes you harm then that is a third party claim. And the claim is against whoever cause the harm. The other person's insurance company is rarely who did anything wrong, rather it is their insured who committed the wrong and who has to be sued for the harm caused. Their insurance company provides a defense and pays the claim or lawsuit if it is determined that the insured is at fault.
This can be confusing unless it is something that is dealt with on a routine basis.

Homeowners in Grand Prairie, Arlington, Irving, Duncanville, De Soto, Cedar Hill, Dalworthington Gardens, Fort Worth, Dallas, and other places in Texas might be interested in this story. It has to do with insurance and arson.
The story is from knoxnews.com and was written by Jamie Satterfield. The article was published on May 27, 2011, and is titled "Vonore couple accused of arson: Insurance firm sues, claiming pair blamed neighbor as cover-up."
The article tell us that the insurance company, American National Property and Casualty Company, a Missouri based insurance company, is accusing a lesbian couple of being arsonists who burned down their own home to receive the insurance proceeds. The couple say they are victims of hate crime.
The insurance company filed a lawsuit in a United States District Court against Carol Ann Stutte and Laura Jean Stutte, accusing them of torching their house and mounting a cover-up of the crime that included publicly blaming a gay-bashing neighbor for the fire.
The article tells us that the Stuttes' house was destroyed in a blaze reported September 4, 2011. They said then that the word "Queers" had been spray-painted in black letters on a detached garage near the charred ruins and blamed a neighbor Janice Millsaps in both media interviews and a lawsuit filed against Millsaps in Monroe County Chancery Court.
In the Stuttes' lawsuit, their attorney alleged Millsaps "repeatedly threatened the lives of the Stuttes" and also "specifically and repeatedly threatened to burn the Stuttes' house."
The Stuttes claimed in the lawsuit that Millsaps, a month before the fire, said to them: "Do you know what is better than one dead queer? Two dead queers."
Millsaps denied any role in the fire and has not been charged despite extensive probes by the FBI. the Tennessee Bureau of Investigation and local arson investigators, according to Millsaps' attorney.
American National notified the Stuttes last week that the company would not pay their claim, which the lawsuit totaled to just more than $276,000, and filed its case in the federal court.
"It was determined through investigation that the preponderance of evidence shows that the loss was intentionally caused by the Stuttes," according to the Chattanooga attorney who filed the lawsuit.
The federal lawsuit also accuses the Stuttes of "concealment and fraud" for "swearing that the loss did not originate by any act, design, or procurement on their part and statements made and documents submitted during the investigation of the loss."
The author of the article tried to get hold of the Stuttes and their attorney for comment and had been unsuccessful in both cases.
Noteworthy, is that the Stuttes attorney, earlier in the year, had accused the insurance company of intentionally dragging its feet in responding to the couple's fire claim and requests for living expenses payments under the provisions of the couple's insurance plan.
In earlier interviews the Stuttes attorney had claimed that she was having to "fight and claw for simple insurance reimbursement checks." At that time the Stuttes were having to continue paying their $1,200 monthly mortgage, taxes and insurance premiums on the burned house while also spending $900 to rent another place to live.
American National is asking the federal Judge, Senior United States District Judge Leon Jordan, to declare the Stuttes' insurance plan void as a result of their alleged arson and cover-up.
As a side note, the Stuttes' mortgage lender, Chase Home Finance, is listed as a defendant in the case because they may have a stake in the outcome.
It is probably safe to say that anytime an insured structure burns, that the insurance company is going to investigate for arson. In Texas, the Texas Government Code, Section 417.001 thru 417.010, designates the State Fire Marshall as being responsible for investigation of arson claims.
Anytime an insurance company does not promptly pay a fire claim, the insured should seek the immediate help of an experienced Insurance Law Attorney.

Most homeowners in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Azle, Peaster, Brock, Millsap, Cool, and other communities in Parker County would not be very interested in the legal technicalities associated with an insurance dispute. Instead they would hire an experienced Insurance Law Attorney and let that person handle the legal aspects of dealing with the insurance company. However, knowing a little about how it sometimes works can be informative.
The 14th Texas Court of Appeals in Houston issued an opinion on May 26, 2011. The style of the case is "In Re Liberty Mutual Group, Inc." This case is called a "mandamus proceeding" and arises from a dispute over the amount of the covered loss under a homeowner's insurance policy. On April, 18, 2011, Liberty filed this action asking the appeals court to compel, the Honorable Mike Miller, Judge of the 11th District Court of Harris County, to abate the underlying lawsuit until an appraisal to determine the amount of the covered loss had been completed. This appeals court denied the request.
Here is some background information. After Hurricane Ike, the homeowners filed a claim under their insurance policy with Liberty. A dispute arose over the amount of the covered loss. Liberty invoked the appraisal process pursuant to the terms of the insurance policy. The appraisal was underway when the lawsuit was filed against Liberty. Liberty answered the lawsuit and then filed a motion to abate the case until the appraisal process was completed.
Legally speaking, mandamus relief is available if the trial court abuses its discretion, either in resolving factual issues or in determining legal principles, when there is no other adequate remedy by law. A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law, or if it clearly fails to analyze or apply the law correctly.
The Texas Supreme Court in a 2002 case, In re Allstate County Mutual Insurance Company, has determined that mandamus relief is appropriate to enforce an appraisal clause because denying an appraisal would nullify the insurance company's right to defend its breach of contract claim. In this Liberty case, the parties had begun the appraisal process, and Liberty had not asked the court to enforce the appraisal clause. Instead, the only relief sought was that the trial court be ordered to abate the case until the appraisal had been completed.
As recently as May 6, 2011, in the case, In re Universal Underwriters of Texas Insurance Company, the Texas Supreme Court confirmed that a mandamus action is not proper regarding the grant or denial of a motion to abate. Specifically addressing a motion to abate for an insurance appraisal, the court held that "the trial court's failure to grant the motion to abate is not subject to mandamus, and the proceedings need not be abated while the appraisal goes forward."
So accordingly, Liberty's petition for a writ of mandamus was denied.
Most insured people do not need to get bogged down in the legal formalities of an insurance law lawsuit. On the other hand, knowing or understanding some of the steps that are taking place is reassuring even when the steps taking place are not always the way one would want them to go.

Someone in Grand Prairie, Arlington, Grapevine, Colleyville, Hurst, Euless, Bedford, Keller, Flower Mound, Roanoke, Haslet, Saginaw, and other places in the state of Texas would naturally be upset if their claim were denied. But next, they would want to hire an experienced Insurance Law Attorney and pursue a lawsuit against their insurance company to make them pay.
Here is a case where an attorney tried to get the insurance company to pay but most of the lawsuit was almost thrown out of court. The style of the case is, Rosa Garcia and Augustin Garcia v. Nationwide Property and Casualty Insurance Company. The opinion in this case was issued on May 16, 2011, by the United States District Court, S. D. Texas, Houston Division.
Here is what is going on in this situation:
The Garcia's are owners of a Texas Homeowners Insurance Policy issued by Nationwide and sold to the Garcia's, covering their home.
The lawsuit papers submitted by their attorneys, is similar to many by the same attorneys. The petition, recites that during Hurricane Ike, water intruded through the roof, significantly damaging the entire house and garage, including ceilings, walls, insulation, and flooring. The storm caused substantial structural and exterior damage to the building and damaged the Garcia's personal belongings, and as a result they also incurred additional living expenses. They submitted a claim to Nationwide for these expenses, but Nationwide denied the claim for repairs even though the policy provided coverage for such losses, and it underpaid their other claims for damages. Nationwide continued to delay payment owed under the policy for their damages.
In the lawsuit, the Garcia's asserted that Nationwide failed to perform its contractual duties to adequately compensate them under the terms of the policy, refusing to pay the full proceeds of the policy despite demands. This being in breach of the insurance contract.
As to specific statutory violations, the Garcia's alleged that Nationwide misrepresented that the damage to their property was not covered, in violation of Texas Insurance Code, Section 541.060(a)(1). They also asserted that, in violation of Section 541.060(a)(2)(A) Nationwide failed to make an attempt to settle the claim in a fair manner even though it was aware of its liability under the policy. In addition, that Nationwide failed to explain to them the reasons for its offer of an inadequate settlement. Nationwide also did not communicate any future settlements or payments that they would pay for the entire losses covered under the policy not explain why they failed to adequately settle the claims, in violation of Section 541.060(a)(3). They also accused Nationwide of failing to affirm or deny coverage of their claims within a reasonable time, in violation of Section 541.060(a)(4). Moreover Nationwide's refusal to fully compensate under the terms of the policy and failure to conduct a reasonable investigation of their claims, indeed its performance of an outcome-oriented investigation that resulted in a biased, unfair, and inequitable evaluation of their losses on the property, violated Section 541.060(a)(7). And, in violation of Section 542.055, the Garcia's contended that Nationwide failed to timely acknowledge the claim and to request all information reasonably necessary to investigate their claim within the statutorily mandated time of receiving notice of the claim. In violation of Section 542.056, Nationwide additionally failed to accept or deny the full claim within the statutorily mandated time of receiving all necessary information. Nationwide further delayed full payment of the claim longer than allowed in violation of Section 542.058.
Going on, the Garcia's alleged Nationwide breached their common law duty of good faith and fair dealing by refusing to pay them in full even though a reasonable insurance company would know there is no basis on which to deny them full payment.
Finally, the Garcia's claim that Nationwide knowingly or recklessly made false representations of material facts and or knowingly concealed all or some material information from them.
This court then cited well established Federal law found in Federal Rule of Civil Procedure 9(b) which says: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally. The Fifth Circuit Court of Appeals strictly construes this rule and requires that plaintiffs pleading fraud in federal court "to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent."
The bottom line in this case is that the court ordered the Garcia's to amend their lawsuit papers within 20 days, and to be specific according to the requirements of Rule 9(b) or almost all of the lawsuit would be dismissed except the portions dealing with breach of contract.
What is to be learned from this case is one of the distinctions between Federal Court and State Court. That being that their are different rules and that the differences must have attention paid to them or the case could be dismissed.

A natural question for someone in Grand Prairie, Arlington, Mansfield, Fort Worth, Dallas, Hurst, Euless, Bedford, North Richland Hills, and other places in Texas would be - How much does an insurance company have to pay on a claim? The answer is - It depends on many things?
A Fort Worth Court of Appeals case, decided in 2000, gives some insight into how much an insurance company may have to pay on a claim. The style of the case is, Thomas Carter, Mary Carter, and Ed Carter v. State Farm Mutual Automobile Insurance Company. Here is some background.
In April of 1997, Thomas Carter, Kari Brunson, Jeff Goodman, Michelle Keeffe, and Craig Derrick were traveling west on I-30 in an Isuzu. At the same time, Jennifer Puterbaugh was traveling the same direction at a high rate of speed weaving through traffic and struck the Isuzu from behind. The collision caused the death of Kari Brunson and injured the four other occupants of the Isuzu. State Farm insured Michelle Keeffe, the Isuzu's owner, against loss caused by bodily injury under a $50,000 per person up to $100,000 per incident uninsured/underinsured (UM/UIM) policy.
On May 15, 1997, State Farm sent a letter to Thomas Carter's attorney suggesting that the potential claimants to the Keeffe policy meet for a settlement conference. The attorney replied that a settlement conference was premature because Thomas Carter and Jeff Goodman were still receiving medical treatment for the injuries they sustained and they did not know the extent of their damages. State Farm notified Carter's attorney on June 9, 1997, that State Farm had received a demand for $50,000 from Kari Brunson's estate and that they had to decide that day whether or not to pay the demand. State Farm accepted the demand of Brunson's estate and paid out policy limits of $50,000, leaving only $50,000 available for any remaining claims. State Farm notified the potential claimants of that settlement by letter.
Carter and Goodman then demanded $50,000 each to settle their claims. State Farm replied that it stood by its decision to pay Brunson's estate $50,000 and again encouraged Carter and Goodman to participate in the settlement conference scheduled for August 29, 1997. At the conference, the attorney representing Carter refused to consider settling his claim for less than $50,000, and Goodman said he wanted no settlement on Keeffe's policy, at that time, because he had uninsured motorist coverage under his own policy. State Farm settled Keeffe's and Derrick's claims by paying $35,000 to Keeffe and $10,000 to Derrick. State Farm then unconditionally tendered a check for $4,000 to Carter and a check for $1,000 to Goodman.
In May 1999, the Carters filed suit alleging State Farm had breached the duty of good faith and fair dealing. The trial court granted summary judgment for State Farm.
In arguing its case, State Farm asserted that there was no breach of contract because State Farm's settlement of the claims presented by Keeffe, Derrick, and Brunson's estate were reasonable, even though the settlements depleted most of the uninsured motorist coverage available under Keeffe's policy. The Carters urged the court to consider only whether State Farm's actions were reasonable as to the Carter's claims, not whether State Farm reasonably settled the other claims. The court said that an insurance company does not breach its contract by settling with covered persons, even when the settlement depletes or exhausts the policy proceeds.
In this case, the Carters sued for other violations which are not relevant to this posting. What is relevant is showing what an insurance company may have to pay on a claim. The first consideration is the limits of the policy. A policy with a $30,000 limit will not have to pay more than $30,000. A policy with a $50,000 limit will not have to pay more than $50,000. And so on. Most policies actually have two limits, for example, a limit of $30,000 per person or a maximum of $60,000 per incident. This means that one person may get $30,000 and 4 other people injured may have to split the other $30,000, or one person could get $30,000 and another person could get $30,000 and the other three people get nothing.
All of this can be confusing. Of course that this is the reason that an experienced Insurance Law Attorney must be consulted early.

Insurance payers in Grand Prairie, Arlington, Fort Worth, Dallas, Mansfield, De Soto, Cedar Hill, Duncanville, Irving, Cockrell Hill, and other places in Dallas County and Tarrant County do not like insurance fraud.
The Los Angeles Times published an article on May 20, 2011, dealing with insurance fraud in the state of California. The article is written by Marc Lifsher and the title to the article is, Quest Diagnostics Settles Medi-Cal Whistle-Blower Suit.
The article tells us that Quest Diagnostics, Inc., the biggest provider of medical lab services in California, has agreed to pay $241 million to settle a whistle-blower's lawsuit that accused it of overcharging the state Medi-Cal program. The lawsuit also alleged that the Madison, N.J., company paid illegal kickbacks to doctors, hospitals, and clinics that sent patients their way.
The settlement was the largest in the history of California's False Claims Act, which allows private citizens to sue on behalf of the state if they have evidence that a government contractor has defrauded a state agency.
Chris Riedel and his company, Hunter Laboratories of Campbell, California, the whistleblower, alleged that the unfair business practices of Quest and other labs was pushing them out of the market. The California attorney general subsequently intervened in the case and conducted a three year investigation.
As would be expected, Quest acknowledged the settlement in a statement it released, but denied any wrongdoing. "Our laboratory testing services for Medi-Cal were priced appropriately, and we deny all allegations in the complaint," said Michael E. Prevoznik, Quest's senior vice president and general counsel. What he should have said is, "We got caught cheating in a big way and rather than get stung for a whole lot more money and risk losing out contract with California and other states, we are going to pay this money in hopes of making more in the future."
Quest said it settled "to put the lawsuit behind us."
Here is an interesting note - The lawsuit was one of five pending cases against medical laboratory firms, the attorney general's office said.
"Medi-Cal providers and others who seek to cheat the state through false claims and illegal kickbacks should know that my office is watching and will prosecute," said California Attorney General Kamala Harris. A little sarcasm is appropriate here in that it was not her office that caught the offenders, rather it was a competitor of Quest who was losing money due to Quest's illegal actions.
On a positive note for the Attorney General, their involvement with all the resources a government agency can bring to bear, is probably what forced a settlement.
For those who were not aware, Medi-Cal is a joint state-federal government program that provides medical care for the poor and disabled.
In Texas there are strict laws for enforcement of Insurance fraud. There are civil remedies and also criminal remedies. The civil enforcement available to insurance companies is found in the Texas Insurance Code, Sections 701.001 thru 701.154. The criminal actions that may be taken against someone committing insurance fraud is found in the Texas Penal Code, Section 35.01 thru 35.04. The range of offense for insurance fraud will depend on the amount of harm but can be as small as a Class C misdemeanor to as severe as a First Degree Felony which is punishable up life in prison.
As further information, the Texas Penal Code, Section 35A.01 and 35A.02 deal with Medicaid Fraud. Violation of these statutes can also be as low as a Class C misdemeanor to as severe as a First Degree Felony.

An attorney in Weatherford, Mineral Wells, Aledo, Willow Park, Hudson Oaks, Azle, Peaster, Millsap, Brock, Poolville, Springtown, or anywhere else in Texas may be a good attorney to help someone with their case. When an insured gets sued he may want one of these attorneys to help him with his case and would expect their insurance company to pay the costs because that is one of the benefits of having insurance. Most of the time the insurance company pays for defense costs. Right?
The answer is no. The insurance company will pay for defense costs but they get to chose who the lawyers are going to be.
The Texas Supreme Court decided a case in 2004 styled, Northern County Mutual Insurance Co. v. Timoteo Davalos. Here is some background.
The automobile liability policy in this case obligated the insurer to provide a defense for covered claims and grant the insurer the right to conduct that defense. The insured, however, refused the insurer's tendered defense because of a disagreement about where the case should be defended. The issue for the court was "whether a disagreement over venue is a sufficient reason for the insurer to lose its right to conduct the defense, while still remaining obligated to pay for it." This Supreme Court said, NO.
Davalos, a resident of Matagorda County, was injured in an automobile accident in Dallas County. Davalos sued the driver of the other car in Matagorda County. The other driver and his wife then sued Davalos and a third driver involved in the accident, but in a separate action in Dallas County. Although Davalos was insured by Northern, he turned the Dallas litigation over to the attorneys representing him as a plaintiff in Matagorda County. These attorneys answered the Dallas suit and moved to transfer venue to Matagorda County. The attorneys then notified Northern of the Dallas litigation.
Northern responded in writing to Davalos, stating that it did not wish to hire the attorneys he had selected to defend the Dallas case, that it opposed his pending motion to transfer venue to Matagorda County, and that it had chosen another attorney to defend Davalos in Dallas County. The letter suggested that liability protection under the policy might be threatened if Davalos' personal attorneys did not abandon their venue motion and withdraw.
The underlying lawsuit eventually settled but this case regarding whether Northern had to pay for the attorneys that Davalos had chosen and whether Davalos had voided the policy by not allowing the insurer to hire the attorney of its choosing continued.
Northern argued that it complied fully with its duty to defend. Northern said that a coverage dispute is the only type of disagreement that is sufficient to defeat an insurer's contractual right to conduct the defense. Because it never disputed that the collision was covered and because it offered to defend Davalos without a reservation of rights or non-waiver agreement, Northern concluded that Davalos had no right to refuse its defense.
Davalos responded that Northern attached improper conditions to the defense and inappropriately threatened his coverage, thereby forfeiting its right to conduct the defense. Moreover, Davalos submitted that his disagreement with Northern about venue was itself a sufficient conflict of interest to defeat Northern's contractual right to conduct his defense. Davalos concluded that Northern remained obligated to pay for his defense because it failed to meet its duty to defend by offering an unconditional defense.
This court stated, "Whether an insurer has the right to conduct its insured's defense is a matter of contract. The Texas Personal Auto Policy here granted Northern that right, providing that the insurer would 'settle or defend, as we consider appropriate, any claim or suit asking for damages.' The right to conduct the defense includes the authority to select the attorney who will defend the claim and to make other decisions that would normally be vested in the insured as the named party in the case."
The court went on to say, "Every disagreement about how the defense should be conducted cannot amount to a conflict of interest .... If it did, the insured, not the insurer, could control the defense by merely disagreeing with the insured's proposed actions."
The court then listed situations where a conflict would probably allow for an insured to select their on attorney. Those mentioned include;
1) when an insurer issues a reservation of rights letter, which creates a potential conflict of interest,
2) when the facts to be adjudicated in the lawsuit are the same facts upon which coverage depends,
3) when the defense tendered "is not a complete defense under the circumstances in which it should have been,"
4) when "the attorney hired by the carrier acts unethically and, at the insurer's direction, advances the insurer's interests at the expense of the insured's,"
5) when "the defense would not, under the governing law, satisfy the insurer's duty to defend,"
6) when, though the defense is otherwise proper, "the insurer attempts to obtain some type of concession from the insured before it will defend."
It is usually rare for there to be a dispute about the attorney hired by the insurance company to defend an insured in a lawsuit, but if there is a reason that an insured believes that the attorney is not acting in the insured's best interests, then an experienced Insurance Law Attorney should be sought.

Someone in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Brock, Millsap, Peaster, Azle, Cool, Cresson, or anywhere else in Parker or Palo Pinto Counties might wonder - How long do I have to give an insurance to pay a claim before I can do something about it? The lawyerly answer to that is - It depends.
First, if an insurance company is being too slow in paying a claim, a person should not have any hesitation in approaching an experienced Insurance Law Attorney.
Second, there is a section of the Texas Insurance Code titled the "Prompt Payment of Claims Act" which gives guidance to the question, - When is too long - too long?
Third, there is case law that gives guidance to specific facts situations to help someone understand when a payment should be made and the rules governing different situations. One of these cases was issued by the Texas Court of Appeals, Houston, (14th District) on May 17, 2011. The style of the case is, Christus Health Gulf Coast, Christus Health Southeast Texas, Gulf Coast Division, Inc., Memorial Hermann Hospital System and Baptist Hospitals of Southeast Texas v. Aetna, Inc. and Aetna Health, Inc.
Here is some background:
The hospitals filed a lawsuit suing the above HMO's for violating the Texas Insurance Code, Prompt Pay Statute. The hospitals alleged that the HMO's failed to timely pay claims for healthcare services provided to Aetna's Medicare HMO enrollees under agreements between the hospitals and an intermediary that failed to pay the hospitals. The trial court held in favor of the insurance company and this appeals court upheld that decision saying that under the Prompt Pay Statute there must be a contract between the insurance company and the health care provider. That in the absence of a contractual relationship between any of the hospitals and Aetna, the trial court did not err by denying the hospitals' lawsuit.
In discussion of this case the court recognized the hospitals contention that Aetna's refusal to pay them for services provided to Aetna's insureds violates the Texas Prompt Pay Statute. Under the applicable version of the Texas Insurance Code's HMO Act, the Prompt Pay Statute at issue provided as follows:
(c) Not later than the 45th day after the date that the health maintenance organization receives a clean claim from a physician or provider, the health maintenance organization shall:
(1) pay the total amount of the claim in accordance with the contract between the physician or provider and the health maintenance organization;
(2) pay the portion of the claim that is not in dispute and notify the physician or provider in writing why the remaining portion of the claim will not be paid; or
(3) notify the physician or provider in writing why the claim will not be paid.
The hospitals acknowledged that they have no contracts with Aetna, but contended the Prompt Pay Statute does not require contractual privity. In making this argument the hospitals looked to only portions of the statute rather than reading the statute as a whole. The Texas Supreme Court has made it clear that statutes have to be read in their entirety in order to be given their legislative intent.
In explaining its' decision the court stated, "We conclude that subsection (n) enables a provider to bring an action for violation of the Prompt Pay Statute against a "person" with whom the provider has contracted to process claims or to obtain the provider's services for the HMO's enrollees. Effectively, article 20A.18B would be read to substitute the "person" with whom the provider contracts for "HMO," and would enable providers like the hospitals to recover under the Prompt Pay Statute when that "person" violates the statute. This conclusion is consistent with the statute's imposition of deadlines upon the "receipt" of a claim "from a physician or provider." If the provider's contract is with an intermediary (which also contracted with the HMO), it follows that this intermediary would be the "person" actually receiving the claims from the physician or provider for purposes of the Prompt Pay Statute, and therefore would be the person on whom the statute imposes liability. In this case, the hospitals' contracts were with the Management Services or NAMM, not Aetna. Accordingly, Management Services or NAMM - not Aetna - would be the proper defendant in a Prompt Pay Statute suit.
The court also pointed out that their reasoning in this case was sound because the legislature subsequently enacted an amendment to the HMO Act to provide an avenue for recovery against an HMO intermediary's violation of the Prompt Pay Statute even when the HMO is not contractually liable.
It is important to realize that in this case the patient was not receiving the payment to then reimburse the hospital for their services, rather the payments for services were suppose to be sent to an intermediary who was suppose to then pay the hospital. If the payments were coming straight to the insured who had received services, then the insured would have a claim against the insurance company if it did not promptly pay the bill.

Insured's in Grand Prairie, Arlington, Fort Worth, Burleson, Crowley, Benbrook, Hurst, Euless, Bedford, North Richland Hills, and other places in Tarrant County and Texas rarely understand what is covered in their auto insurance policy and what is not.
Here is a case decided in 1989, discussing exemplary damages. The case was decided by the El Paso Court of Appeals and is styled, Emigdia C. Manriquez, Individually and on Behalf of all Statutory Wrongful Death Beneficiaries of Jorge Ramon Manriquez, Deceased v. Mid-Century Insurance Company of Texas.
Here are some facts of the case.
Manriquez and the others are the widow and surviving parents of a pedestrian killed when struck by an automobile driven by an unlicensed minor, Gregory Alkofer. Gregory was sued for negligent driving and gross negligence.
Mid-Century intervened in the lawsuit and moved for a declaratory judgment limiting its liability to $50,000.
Pertinent parts of the policy in question provided:
PART A -- LIABILITY COVERAGE
Insuring Agreement
We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident.
...
Limit of Liability
If separate limits of liability for bodily injury and property damage liability are shown in the Declarations for this coverage the limit of liability for "each person" for bodily injury liability is our maximum limit of liability for all damages for bodily injury sustained by any one person in any one accident. Subject to this limit for "each person" the limit of liability shown in the Declarations for "each accident" for bodily injury liability is our maximum limit of liability for all damages for bodily injury resulting from any one accident. The limit of liability shown in the Declarations for "each accident" for property damage liability is our maximum limit of liability for all to all property resulting from any one accident.
If the limit of liability shown on the Declarations for this coverage is for combined bodily injury and property damage liability, it is our maximum limit of liability for all damages resulting from any one auto accident.
This is most we will pay regardless of the number of:
(1) Covered persons;
(2) Claims made;
(3) Vehicles or premiums shown in the Declarations; or
(4) Vehicles involved in the auto accident.
The policy provided separate limits of liability for bodily injury and property damage liability in the following amounts: bodily injury -- $50,000 for each person / $100,000 for each accident.
Attorneys for Manriquez first contended that any $50,000 limitation would not include an award for exemplary damages. They cited many other court decisions holding that where insuring agreements provide for the payment of ... all sums which the insured shall become legally obligated to pay as damages because of ... bodily injury will include payment of punitive damages for gross negligence. These cases emphasize the words "all sums" as being the important inclusive considerations. In determining whether these words include coverage for punitive damages, a majority of courts have used the following rational: (1) the average insured, in the absence of an express policy exclusion from liability from punitive damages, would assume that the term "damages" would include punitive damages, since they would become by judgment a "sum" that the insured would be legally obligated to pay; (2) because the insurer drafted the policy and could have made clear its intention to exclude coverage for punitive damages, the rules of construction require it to bear the burden of ambiguity; and (3) punitive damages are covered because they always "arise" out of the underlying action for injury.
In making its decision that exemplary damages are covered by the auto policy the court stated; "Appellant pleaded for exemplary damages because of heedless and reckless conduct on the part of the insured. Gross negligence, to be the ground of exemplary damages, should be that entire want of care which would raise the belief that the act or omission complained of was the result of conscious indifference to the right or welfare of the person or persons to be affected by it. The term "accident" as used in an insurance policy was construed to include negligent acts of the insured causing damage which is undesigned and unexpected. It could be argued that one who acts with conscious indifference and causes an accident, does so with some expectation. We reject this, however, and conclude that punitive damages, excepting those for intentional conduct, were within the coverage and the coverage limitation.
When an insurance policy covers exemplary damages and when it does not, can be confusing and will vary with the facts of a case and the wording of the insurance policy. For these reasons, it is important to seek the advice of an experienced Insurance Law Attorney when faced with the potential of exemplary damages being part of a claim.

Texans in Grand Prairie, Arlington, Dallas, Fort Worth, Mansfield, Duncanville, De Soto, Cedar Hill, Mesquite, Richardson, Garland, and other places in Dallas County will rarely find themselves in a position wherein they are making a claim for exemplary damages but would be surprised how often they are close to being able to make that claim. Think about this - If someone injures you in a car wreck and the person has been drinking, then you have a claim against that person for your injuries plus a claim for exemplary damages. So how does that work?
The Fort Worth Court of Appeals had a case in December 2004, which discussed exemplary damages. The style of the case is Westchester Fire Insurance Company v. Admiral Insurance Company. Here is some background.
In 1994, PeopleCare Heritage Western Hills, Inc. (PeopleCare), the owner of Heritage Western Hills Nursing Home had a primary policy with Admiral with limits of $1,000,000 and an excess policy with Westchester with limits of $10,000,000. Beulah Cagle was a patient at Western Hills. In December 1994, Beulah (Beulah had been allowed to lie in a urine soaked bed for extended periods of time) and her daughter Lola sued PeopleCare under several legal theories including gross negligence.
After a trial to the Judge, the Judge ruled in favor of Beulah and Lola for an amount that exceeded the primary policy. The court then scheduled a hearing on exemplary damages. Before the hearing, PeopleCare settled the Cagle's suit for an amount exceeding the compensatory damages, with Admiral tendering its policy limits, less defense costs and PeopleCare's deductible, and Westchester contributing the remainder.
Westchester then sued Admiral alleging , among other things, that Admiral negligently failed to settle the Cagles' claims against PeopleCare with the limits of the primary insurance policy. The court in this second case ruled that "insurance coverage for punitive damages, now and at the time in question, violates the public policy of the State of Texas. Accordingly, coverage for punitive damages under the Admiral insurance policy is void ...."
The issue for this appeals court to resolve was whether the trial court erroneously relied on a federal case construing Texas law in determining that insurance coverage for punitive damages at the time the Cagle cause of action arose or was settled was void as against public policy.
This appeals court overruled the trial court and stated, "...We hold that insurance coverage under Admiral's policy for the punitive damages awarded to the Cagles and against PeopleCare was not void as against the public policy of Texas at that time. Because insurance coverage for punitive damages under Admiral's policy was not void as against public policy at the relevant time, the trial court erred in determining that the Admiral policy did not provide coverage for punitive damages: ..."
In discussing this case the court heard arguments that punitive damages / exemplary damages are for the purposes of punishing the wrongdoer and that if the insurance company has to pay the punitive damages, then the wrongdoer is not being punished or deterred from the wrongful conduct that gives rise to the exemplary damages. The court did a good job of reviewing the laws in this area and the legislative intent and legislative history of these insurance laws. The court also distinguished the other cases dealing with this subject matter. And they looked at what the Texas Supreme Court has declared regarding exemplary damages in insurance policies.
One area where exemplary damages is not allowed to be covered by the insurance company is uninsured and underinsured motorist coverage. In these coverages exemplary damages are not allowed for the reason that the wrongdoer is not punished at all. Whereas in the insurance at issue here, these commercial policies are a cost of doing business and a business that does not conduct itself in a proper manner has vastly increased coverage costs.
The case is a long opinion and a good read for trying to understand how the courts look at exemplary damages coverage in insurance policies.

Someone in Grand Prairie, Arlington. Fort Worth, Keller, Hurst, Euless, Bedford, Richland Hills, Saginaw, Lake Worth, Benbrook, or anywhere else in the Tarrant County area would only be normal to think about sueing an insurance company someday. Particularly if they are doing you wrong.
Here is a case where a business that works with one insurance company got screwed around by apparently not sueing the insurance company correctly. One way to lessen the chances of this happening is to work with an experienced Insurance Law Attorney.
Here is some of the background of the case.
The case is styled, Gamma Group, Inc. v. Home State County Mutual Insurance Company, and the opinion from the Dallas Court of Appeals was issued in May 2011.
The case involves a 1995 agreement between Home State, an insurance company, and Gamma Group, Home State's agent for binding and adjusting policies. The agreement provided Gamma Group would produce policies, collect premiums, and adjust liability claims of Home State's insureds. Gamma Group used the collected premiums to pay its commission and to pay Home State and its reinsurer, Transatlantic Reinsurance Co. (TRC).
Home State had disagreements with Gamma Group over its performance as agent, and withdrew from the agreement and terminated the agency agreement effective January 1, 1999. Following termination of the agreement, Gamma Group could no longer write new business on Home State policies, but Gamma Group remained responsible for adjusting claims made on policies issued during the term of the agency agreement (the run-off claims). In 2002, Home State terminated Gamma Group's servicing of run-off claims and hired Marshall Contrat Adjustors to service those claims. Home State and TRC paid over $4 million on the run-off claims.
Later Home State and TRC sued Gamma Group In the 191st District Court alleging breach of the agency agreement by failing to pay the claims adjusted by Marshall out of premiums Gamma Group had collected. Because Gamma Group had not paid the claims but had retained the premiums, Home State and TRC were required to pay the claims out of their own funds. Home State and TRC sought recovery of the premiums Gamma Group improperly retained. Gamma Group filed a counterclaim against Home State alleging that under paragraph 6.2 of the agency agreement, Home State was liable to Gamma Group for any amounts Gamma Group owed TRC relating to the claims adjusted by Marshall.
Without getting into all the details the trial court eventually made a determination on that lawsuit.
Gamma Group then filed the lawsuit this appeal was about against Home State seeking indemnity under section 13.2 of the agency agreement for the unreasonable amounts of any settlements on the runoff claims adjusted by Marshall that Gamma Group was required to pay out of the premiums it had collected.
Here is what is noteworthy - Home State moved for summary judgment on several grounds, the primary being that Gamma Group's lawsuit was barred by res judicata.
Res judicata precludes relitigation of claims that have been finally adjudicated, or that arise out of the same subjecdt matter and that could have been litigated in the prior action. In determining what constitutes "the same subject matter," Texas courts follow the "transactional" approach to res judicata set forth in the Restatement(Second) of Judgments. The Restatement "provides that a final judgment on an action extinguishes the right to bring suit on the transaction, or series of connected transactions, out of which the actioin arose." The court then got into a discussion of how this is properly reviewed to reach a proper result based on the facts in any particular case. Ultimately, this court ruled that these claims in the second lawsuit arose out of the same subject matter as the first lawsuit that had already been resolved.
What needs to be learned or realized here is that when filing a lawsuit against an insurance company, or for that matter anybody, the lawsuit must encompass all possible claims.
The Texas judicial system will not allow a person to bring claims that are related in a piece meal fashion.

Lots of insureds in Weatherford, Aledo, Willow Park, Mineral Wells, Millsap, Brock, Azle, Peaster, Cool, Hudson Oaks, and other places in Parker County will have Personal Injury Protection benefits included in their auto insurance policies.
Here is an article that discusses an antic one company was using to save money on these PIP claims.
The article was published by the Houston Chronicle on May 13, 2011, and is authored by staff writer, Patrick Danner. The title of the article is, USAA Sued Anew Over Medical Payouts In Crashes Plaintiffs Say Insurer's Reviews Are "Shams"; Firm Defends Practices.
The article tells us that USAA is again defending itself against charges it utilizes a "cost containment program" to improperly reduce or deny medical payouts to insurance customers injured in auto accidents.
In Texas, payments are governed by the Texas Insurance Code, Sections 1952.151 thru 1952.161.
The article goes on saying that the latest claims against the San Antonio financial and insurance company were made in a federal lawsuit filed this week in Oregon.
The lawsuit, which seeks national class-action certification, charges that USAA uses an outside auditor to assess claims and to "uniformly conclude that medical treatment was not needed." In other words, USAA is accusing its insureds of fraud.
USAA denies the allegations.
USAA has previously settled two class-action lawsuits that have accused it of using flawed data to arbitrarily deny a portion of the medical benefits for injured customers who have PIP or other medical payments coverage on their USAA auto insurance policies.
One of those cases, filed in Arizona, was settled last summer. Claims are still being processed, so the amount to be paid out under the settlement hasn't been determined.
The other case, filed in Illinois was settled in 2005. Lawyers for the plaintiffs valued the settlement on their website at $35 million, a figure USAA spokesman Paul Berry called "probably wildly" inflated.
USAA settled the two cases because it was the "right thing to do for our membership," Berry said. He noted both courts endorsed USAA's bill review practices.
"We pay all reasonable, necessary, and accident related bills," Berry said. "That doesn't mean we pay all bills. If you had injuries or you received some treatment that had nothing to do with an auto accident, we're not going to pay those bills."
USAA relies on Alabama based Auto Injury Solutions to help review medical bills to determine whether they are reasonable and necessary and to weed out duplicative and fraudulent claims. Bills deemed suspicious are reviewed by a doctor or other health care professional, Berry said. Even when one of its doctors concludes the medical care wasn't necessary, the bill still goes through several other reviews, he said.
USAA also can choose to override any instance where a bill is rejected, Berry said.
In the latest Oregon lawsuit, four unrelated USAA customers in separate accidents allege the medical reviews were a "sham."
It is the agent selling the policy that can often times be a problem when there is a need to make a PIP claim. Talking to an experienced Insurance Law Attorney is one way of insuring that you get what you have paid for when the need for a PIP claim arises.

It would be natural for someone in Grand Prairie, Fort Worth, Arlington, Dallas, Mesquite, Garland, Farmers Branch, Duncanville, De Soto, or anywhere else to think that a claim should be paid pretty soon after it is made. Here is a case to read and think about the next time an insurance conmpany is slow paying a claim.
The case was decided by the Court of Appeals, Dallas, and is an appeal from County Court at Law No. 5. The opinion was issued in May 2011. The style of the case is "Cypress Texas Lloyds Property and Casualty Insurance Co. v. Fred Carrington.
Carrington won at the trial level and Cypress appealed. Here are some of the facts of the case.
Carrington had a homeowner's policy issued by Cypress. He sustained a loss to his home when the hot water heater ruptured on September 11, 2005. After Carrington filed a claim with Cypress, they settled. The insurance policy required Cypress to pay a loss claim within five business days after it notifies the insured that it will pay the claim. By two separate letters dated October 27, 2005, Cypress notified Carrington that Cypress agreed to pay the claim. CSC, a vendor of Cypress, printed and mailed three settlement checks by regular mail to Carrington. The checks were dated October 28, 2005, and were properly addressed. The issued checks were in the amounts of $22,274.37, $3,840, and $2,240 as specified in one of the letters from Cypress agreeing to pay the claim. Subsequently, a fourth check in the amount of $1,058 for depreciation taken on the personal property was mailed to Carrington in the same manner. Carrington received this check and it was not at issue at trial. On November 14, 2005, Carrington contacted Corey Holder, an independent adjuster working for Cypress, regarding the status of the checks. Holder stated the checks had been mailed. Carrington told him the checks had not been received. Holder tried to stop payment on the checks, but they were already deposited at a bank in Dallas. On December 16, 2005, Carrington filed a report with the Grand Prairie Police Department that the checks had been stolen. Then, Carrington contacted Cypress and asked that the checks be reissued because they had been stolen. Cypress refused to reissue the checks. Carrington sued Cypress alleging a claim for breach of contract among others. Holder testified that, according to his notes, the fourth check was mailed on November 7, 2005, more than five days after the agreement to pay the claim. He testified further that the other three checks should have been mailed on October 27, 2005. Also at trial, the evidence showed one of the stolen checks listed Washington Mutual as a co-payee. Thomas Bamesberger, claims specialist for Cypress, testified that Cypress did receive from Carrington a copy of a release of lien showing that Washington Mutual was no longer the mortgagee of Carrington's house. He admitted that Cypress erred in listing Washington Mutual as a co-payee on the check. Holder acknowledged that Carrington faxed the release of lien to him and agreed with Bamesberger that it was an error to list Washington Mutual as a co-payee. Carrington was awarded damages for breach of contract.
Cypress contended that by placing the properly addressed checks in the mail which were then presented to and honored by a bank, it satisfied its obligation under the policy. Carrington contends there is evidence to support the jury's answer because Cypress did not pay the claim within five days of its agreement to pay and it erroneously included Washington Mutual as a payee on one of the checks.
Based on the above the appeals court agreed that there was sufficient evidence to find that Cypress had failed to comply with the terms of the policy and upheld the jury's verdict.
Here in Texas, in addition to what was written in the policy there is an Insurance Code chapter titled, "Prompt Payment of Claims Act" and it provides guidelines for insurance companies to follow in paying claim in a prompt manner. In addition, this part of the insurance code provides punishments when the statutes are not complied with in a tmely manner.

Here is one for residents of Weatherford, Mineral Wells, Aledo, Azle, Springtown, Hudson Oaks, Willow Park, Brock, Millsap, Poolville, and other places in Parker County and Palo Pinto County. This case is unusual.
The Texas Court of Appeals, San Antonio, issued an opinion on May 11, 2011, in a case appealed from the 73rd Judicial District Court. The style of the case is, Dora Gulley v. State Farm Lloyds.
A little legal information first. This is an agreed interlocutory appeal pursuant to Texas Civil Practices & Remedies Code, Section 51.014(d). It is arising out of an insurance case where in both sides in the case filed motions for Summary Judgment asking the court to rule in their favor as a matter of law. The Judge denied both parties motions and allowed them to pursue an appeal pursuant to the above statute. So this case was essentially being given to the appeals court to make a decision / ruling.
Here is some factual background.
Gulley made a claim under her homeowners insurance policy for damage caused by foundation movement resulting from a below-slab leak. State Farm found the damage was covered under the Dwelling Foundation Endorsement to the policy which covered "settling, cracking, shrinking, bulging, or expansion of the foundation ... caused by ... leakage of water ... within a plumbing ... system:" Therefore, Gulley's claim was subject to the endorsement's 15% coverage limitation. Gulley accepted the payment, but later sued State Farm for breach of contract contending she was entitled to additional benefits under a different policy endorsement she had purchased, the Water Damage Endorsement which covered "deterioration ... caused by the continuous or repeated ... leakage of water ... from a plumbing system."
The parties in this case and the trial court agreed that the following was a "controlling question of law" on which there is "substantial ground for difference of opinion." Here is the request made to the appeals court:
Whether damage to walls, floors, roofs or ceilings caused solely by foundation movement resulting from a below-slab plumbing leak is covered under either the Dwelling Foundation Endorsement (to Gulley's Homeowners Policy) or the Policy's Water Damage Endorsement."
This court got into a discussion about the role of trial courts in the resolution of disputes between parties and the role of the appeals courts in the same matter. After more than a four page analysis of these roles and the intent of the legislature in drafting the rules that control the courts, this appeals court sent this case back to the trial court for the trial court to make a decision.
This appeals court essentially told the trial court to make its' own decision on the matter and then if one side or the other disagreed with that decision then the side that disagreed could appeal the decision. Until that occurred, it was not the business of the appeals court to get involved.
The situation here was unusual. It was as if the trial court had decided that no matter how they decided, the other side was going to appeal. So the trial court punted on making a decision. Then the appeals court basically said, that is not the way things are done.
All this means that this case will come back around again. Remember that these are the types of cases that are made for an experienced Insurance Law Attorney. His advice is vital for knowing the best way to go forward.

No matter where you live, Grand Prairie, Arlington, Mansfield, Fort Worth, Dallas, Garland, Mesquite, Richardson, Coppell, Carrolton, or anywhere else in Texas, at some point you are probably going to have an insurance claim denied. To what extent will an insurance company go to prove they do not owe you anything?
The Texas Court of Appeals, Eastland, decided a case in December, 2008, wherein the insurance company appealed the findings of an injured persons own treating experts. The style of the case is, American Casualty Company of Reading, Pa. v. Donna Zachero. Here is some background information.
On March 17, 2003, Zachero was injured at work when she fainted and fell. She hit her chin, shoulder, chest, and elbow during the fall and developed bruises on those areas. She also injured her knee when she fell. On April 17, 2003, Zachero went to the emergency room due to pain and swelling in her knee. She was x-rayed and instructed to see an orthopedic, Dr. Luke, a specialist for the injury.
After seeing Dr. Luke and having an MRI, Zachero was diagnosed with a medial meniscus tear in her left knee. The MRI also revealed osteoarthritis and chondromalacia in the knee. Zachero had a surgery to remove the torn area of the meniscus. Zachero continued to have problems and Dr. Luke referred her to see Dr. Reilly. Dr. Reilly determined that Zachero had osteoarthritis of the left knee that was "traumatic in nature" and that Zachero needed a total knee replacement. Zachero had the surgery on November 1, 2004.
American Casualty disputed that the injury to Zachero's knee included osteoarthritis. American Casualty contended that Zachero's osteoarthritis was related to degenerative joint disease, which is an ordinary disease of life.
The coverage at issue here was determined by the Texas Labor Code, Section 401.011(10)., 401.011(26), and 401.011(34). These sections discuss and define injury and the last section defines the term "injury" to include the aggravation of a preexisting condition or injury.
A trial was held in this case and the jury found in favor or Zachero.
The insurance company appealed the case and one of their points of appeal dealt with their position that the expert testimony of Dr. Reilly was legally insufficient to support the jury's findings. Dr. Reilly had testified that Zachero's osteoarthritis was traumatic in nature from the work injury to the meniscus. Dr. Reilly explained to the jury how Zachero's injury to her knee required the removal of the meniscus and caused her arthritis to progress.
American Casualty specifically argued that Dr. Reilly was not qualified as an expert regarding the cause of osteoarthritis and chondromalacia. American Casualty complained on appeal that Dr. Reilly was not qualified to give expert testimony on causation, that his testimony was not reliable, and that his testimony was not based upon reasonable medical probability.
This court got into a discussion of the requirements of experts to testify and the requirements of their testimony. As is hopefully obvious, this type of testimony needs to be established and in insurance cases an experienced Insurance Law Attorney should be sought to help. The court then identified six factors that trial courts may consider in dertermining whether expert testimony is reliable:
1) the extent to which the expert's theory has been and can be tested;
2) the extent to which the expert's technique relies upon his own subjective interpretation;
3) whether the expert's theory has been subjected to peer review and publication;
4) the potential rate of error of the theory;
5) whether the expert's theory or technique has been generally accepted as valid by the relevant scientific community; and
6) the nonjudicial uses that have been made of the expert's theory or technique.
Having the above information before the trier of fact, whether a judge or jury, allows the trier of fact to have a basis upon which to render a decision.
This court upheld the trial court decision in favor of Zachero.
Fortunately, experts are not needed in all cases. Experts make the cost of cases and litigation go very high and the result of which is that often times an insurance company can out spend the person who might be sueing them. Even in cases where the insured wins, the costs of winning can sometimes exceed the compensation won. In other words a win may be very hollow in nature if the costs exceed the recovery. To get around this there are several things that must be done. One, on cases that are smaller in overall value, is to evauate a case at the beginning to see if the case can be litigated without excessive costs. This calls for spending the least amount of expense possible to prosecute the case.
Understand of course that the costs are not often considered by the insurance company. To them it is just a part of doing business.
When a case has a lot at stake, costs are not looked at that close, in other words you just do what you have to do to win.

At least a few people in the Dallas - Fort Worth area and surrounding counties such as Parker County, Palo Pinto County, Johnson County, and others in Texas know that the insurance industry in the State of Texas is regulated by the Texas Department of Insurance.
Each state in the United States is able to enact its own rules and regulations for insurance companies. The New York Times published an article on May 8, 2011, that discusses how some states regulate insurance in such a way as to encourage insurance companies to come to their state to do business. There are pros and cons to this. The title of the article is, "Seeking Business, States Loosen Insurance Rules" and the authors are Mary Willams Walsh and Louise Story.
The first sentence in the article says, "Companies looking to do business in secret once had to travel to places like the Cayman Islands or Bermuda."
The article tells us lots of other interesting information. Vermont and other states including Utah, South Carolina, Delaware, and Hawaii, are aggressively remaking themselves as destinations of choice for the kind of complex private insurance transactions once done almost exclusively offshore. About 30 states now have laws allowing insurance companies to set up special insurance subsidies called captives. These companies can conduct "Bermuda-style" wizardy.
What captives do is provide insurance to the parent company. This is historicaly done overseas where there is light regulation and little concern since only the parent company is at risk.
But now the states are allowing this. And the concern is that this shadow insurance industry with less regulation and more potential debt than policyholders know, raises the possibility that some companies will find themselves without enough money to pay future claims. This is compared the the shadow banking system that contributed to the financial crisis here in the United States a few years ago.
For states, attracting these insurance deals promotes business travel and creates jobs for lawyers, actuaries and other white-collar workers, who pay taxes. States have also found that they can impose modest taxes on premiums collected by captives.
For insurance companies, these subsidiaries offer ways to unlock some of the money tied up in reserves, making millions available for dividends, acquisitions, bonuses and other projects. For one company, Aetna, three weeks after it closed a deal, it announced it was increasing its dividend fifteenfold.
An advantage to consumers is that as the nation's health systems are phased in, such innovations might help hold down the cost of insurance, much like selling pooled mortgages to investors made buying a home less expensive.
The concern though has to do with reserves. These reserves are used to pay claims. This concern has caused at least one state, California, to not pursue this type of business.
Another issue is oversight. State regulators normally require insurers to make available a lot of detailed information. The information normally available is not available when the insurer relies on a captive. The state laws make the audited financial statements of the captives confidential.
A.I.G. illustrates the kind of secrets companies keep. One of its many lines of business involves a mortgage insurance unit, based in North Carolina but with affiliates as far away as Australia. The unit promised to keep making payments when homeowners defaulted, but nearly failed when the housing bubble burst in 2008 and the claims poured in.
Normally, state regulators shut down insolvent insurers, but Vermont saved the day. It allowed A.I.G. to create a subsidiary, called MG Reinsurance, that took on $7 billion worth of insurance claims. Getting the claims off the books of the North Carolina unit made it solvent again, so it could keep selling policies.
A.I.G.'s mortgage insurance affiliate in Europe and Australia sent the Vermont captive even more obligations, making the transfers retroactive to Jan. 1, 2009, even though MG Reinsurance was not licensed until May. That turned what would have been big losses into a modest profit for A.I.G.'s offshore mortgage insurers.
The article is a good read to see the plusses and minuses of the types of deals that insurance companies are now able to do in the United States versus doing a similar or same deal offhore. It would depend on your point of view whether it is something good or something sinister.