Dallas Fort Worth Insurance Lawyer Blog

A lot of people in Grand Prairie, Arlington, Irving, Fort worth, Dallas, and other areas in Texas will have a disability policy. Sometimes these policies are from work and other times a person will purchase one for themselves. But what happens if the insurance company refuses to pay benefits under one of these policies when a person becomes eligible for benefits.
What happened in one case is discussed by the Houston Court of Appeals, in a 1976 case styled, Republic Bankers Life Insurance Company v. B.L. Jaeger.
This lawsuit concerned a disability insurance contract. B.L. Jaeger sued Republic Bankers Life Insurance Company to recover accrued and unaccrued disability benefits for an accidental injury.
In the lawsuit, Jaeger testified that he was injured on September 10, 1974, and that Republic refused to pay benefits due him on his disability insurance policy issued March 20, 1973. At the trial a letter was introduced from Republic to Jaeger's attorney stating:
As the policy contract is still within the contestable period, we feel it to be in the best interests of all concerned to rescind the policy and refund all the premiums paid by Mr. Jaeger since the contract's inception. Enclosed find our check in the amount of $429.75 which represents a refund of all premiums paid ....
Jaeger initially brought suit only for accrued benefits under the policy, however, before judgment a trial amendment was allowed whereby Jaeger pled anticipatory breach and sought recovery of all benefits under the policy accrued and unaccrued. The trial judge permitted the trial amendment.
At this point the appeals court began a discussion as to whether or not the trial judge should have allowed the trial amendment and got into a discussion of the ways this can be allowed or disallowed, depending on the circumstances of the case. The statute that deals with this issue is found in the Texas Rules of Civil Procedure, Rule 66.
For there to be recovery of unaccrued benefits, there must have been a renunciation of the contract.
In order to justify the adverse party in treating the renunciation as a breach, the refusal to perform must be of the whole contract or of a covenant going to the whole consideration, and must be distinct, unequivocal and absolute.
The letter introduced in this case showed Republic's distinct, unequivocal and absolute intent to refuse to perform its obligation under the insurance contract.
As the court pointed out, "This is not a case where the insurance company did nothing and was sued on the theory of repudiation, .... In this case, Republic took action by writing a letter repudiating their contract with Jaeger. Jaeger is justified in treating the renunciation as a breach enabling him to sue for accrued and unaccrued benefits under the policy."
One thing relevant here, to Insurance Law Attorneys, is the measure of damages in an action for breach of contract by repudiation is the present value at the time of trial of all that the plaintiff would have received if the contract had been performed. This involves a calculation of all that would have been received under the insurance contract, then reducing that amount to its present value. This calculation is a calculation that involves interest rates, but is not something that is usually very hard to figure.

Insured persons with life insurance in Grand Prairie, Fort Worth, Arlington, Dallas, Mesquite, Richardson, Carrolton, Farmers Branch, and other places in the DFW metroplex area will find this case informative.
In 2006, the Texas Supreme Court issued an opinion in the case styled, Minnesota Life Insurance Company v. Vasquez. Here are some of the facts.
Minnesota Life issued a Mortgage Accidental Death Insurance policy to the Vasquezs', promising to pay their home mortgage in the event either died due to an accident. The insured husband later apparently fell, hit his head, and died. The insured wife filed a claim with Minnesota Life requesting payment of the balance due on the mortgage and submitted copies of the death certificate and autopsy report. Minnesota Life took six months to pay the claim because the death certificate made coverage unclear and the hospital was slow to produce the remaining medical records that had been requested. Ms. Vasquez filed a lawsuit alleging that Minnesota Life had knowingly engaged in an unfair and deceptive act, in violation of the Texas Insurance Code. The jury found that Minnesota Life knowingly violated the Insurance Code and that Ms. Vasquez was entitled to $60,000 for mental anguish, $250,000 in additional damages, and $37,000 in attorney fees. The court of appeals affirmed and Minnesota Life appealed to the Texas Supreme Court.
The Texas Supreme Court reversed the lower court and trial court on the award of extra-contractual damages, holding that there was no evidence that Minnesota Life was "actually aware" that it was handling the claim in a way that was false, deceptive, or unfair. The Supreme Court agreed with Minnesota Life that liability was not reasonably clear due to the conflicting information contained in the autopsy report and death certificate that described the insureds' death as both caused by an accident and a seizure disorder. The court noted that the policy provided coverage if "death results directly and independently of all other causes ... from an accidental injury." The court reviewed the appellate court's standard of review in insurance bad-faith cases and concluded that the appropriate standard is for the appellate courts to look at all the evidence in such cases, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. The court applied the standard of review, and held that there was no evidence that Minnesota Life failed to pay the claim after coverage had become reasonably clear. In addition, the Supreme Court held that there must be evidence that Minnesota Life was actually aware that it was handling the claim in a way that was false, deceptive, or unfair in order for Minnesota Life to be liable for violation of the Texas Insurance Code.
These cases are fact specific. It is hard, even for an experienced Insurance Law Attorney, to accurately predict an outcome on a case. However, the life insurance companies must be held accountable to keep them from taking advantage of their insureds on a regular basis.

When someone in Weatherford, Mineral Wells, Aledo, Willow Park, Hudson Oaks, Azle, Springtown, Millsap, Brock, or anywhere else in Texas really gets mistreated in an insurance case, that person will probably have a claim for mental anguish. So, how does that work?
A 2004, Corpus Christi Court of Appeals case gives some insight on the answer. The style of the case is, Minnesota Life Insurance Company v. Elia L. Vasquez. Here is some background.
Elia Vasquez alleged that Minnesota Life Insurance Company unreasonably delayed payment of the proceeds of an accidental death policy that insured the life of her deceased husband. As part of the lawsuit, Vasquez sued for mental anguish damages. The jury awarded her $60,000 in mental anguish damages. There were other issues in the case which are not discussed here.
In reviewing the mental anguish award, the court stated Texas law which says: To support an award of mental anguish, a party must present either direct evidence of the nature, duration, and severity of her mental anguish, thereby establishing a substantial interruption in her daily routine, or circumstantial evidence of a high degree of mental pain and distress that is greater in degree than mere worry, anxiety, vexation, embarrassment, or anger. If a party's pre-existing medical condition deteriorates or is compounded because of the torts of another party, the worry and pain associated with the aggravated condition can be considered mental anguish. Mental anguish can be established through testimony from the injured party explaining how she felt and how her life was disrupted. Other cases that had evidence to serve as examples included evidence of insomnia, humiliation, and an inability to function and maintain a normal relationship with family, feelings of physical pain, and an affect on work and family relationships.
In this case, Vasquez testified that during the time Minnesota Life was delaying the payment of the accidental death claim, she could not sleep due to the stress from the uncertainty of her financial situation. She was worried about the effect of the delayed payment on the mortgage on her home and felt that her "whole world" had caved in. Although her doctor had told her not to return to work for at least another year because of various health problems, she was so concerned about the loss of her home that she began looking for work. Vasquez was a diabetic, and she testified that during this waiting period, she experienced an increased blood-sugar level that her doctor attributed to her stress levels. Her blood-sugar levels were sufficiently altered to require a change in her medical regimen, from taking pills to having daily insulin shots. The court said that this evidence alone more than satisfies the requirements of legal sufficiency.
The relevance of this case to an Insurance Law Attorney, is that the case discusses the requirements of successfully obtaining a judgment on a mental anguish claim. Mental anguish is not that hard to prove in a case involving personal injury such as in a car wreck claim, but is much harder to prove in cases where an insurance company denies a claim or is slow in paying a claim.

Insured persons in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Hudson Oaks, Willow Park, Brock, Millsap, and other places in Parker County may have a situation arise where a policy of insurance they have is cancelled. A natural question at times may be - How does that work?
To find out about the procedures for policy cancellation, a person can seek several sources for an answer.
1) Get the insurance agent who sold the policy to explain. The problem with this answer is that sometimes the agent may have made a mistake or may have reasons to not be completely honest with his answers or explanations.
2) Check with an experienced Insurance Law Attorney. Most attorneys who handle many insurance disputes is going to run across situations where an insurance company claims a policy has been cancelled and an investigation shows that the cancellation was improper and unwarranted and the cancellation is being used as a reason for not paying a proper claim.
3) Check with the Texas Department of Insurance website. Their website contains lots of insurance information and can either answer or give guidance to a lot of questions. If someone feels like they should file a complaint, the website has information for filing a complaint. This writer would suggest that if you have reached a point with your concerns such that you feel filing a complaint is necessary, then you also need to have an Insurance Law Attorney involved. You would not want something put into a complaint to be something that ends up hurting your rights.
4) The Texas Insurance Code has sections devoted to the proper procedures insurance companies must follow in canceling the various types of insurance policies that are written and in circulation.
5) The policy itself will often have within itself, the procedures they should follow in canceling the policy.
6) Speak with someone at the insurance company. Hear what they have to say. But, still follow up with an attorney.
The Texas Insurance Code, Section 551.103 says that cancellation of an insurance policy occurs when the policy is cancelled without the consent of the insured. This means coverage has terminated and the insurance company refuses to to provide additional coverage to which their customer is entitled under the policy.
Reasons an insurance company can cancel a policy are discussed in Section 551.104. This section says a policy can be cancelled for (1) non-payment of premiums, (2) submission of a fraudulent claim, or (3) the Texas Department of Insurance determines it is necessary.
Other reasons stated in that section include:
1) There is an increase in the hazard covered by the policy that is within the control of the insured and would produce an increase in the premium rate of the policy.
2) If the driver's license or motor vehicle registration of the named insured or any other motor vehicle operator who resides in the same household as the named insured is suspended or revoked.
3) The insurance company can cancel an auto policy effective on any 12 month anniversary of the original effective date of the policy if notice of cancellation is mailed not later than the 30th day before the effective cancellation date.
4) The insurance company may cancel any insurance policy other than an auto policy or homeowners policy if the policy has been in effect less than 90 days.
5) An auto policy can be cancelled if it has been in effect less than 60 days.
6) A homeowners policy can be cancelled if it has been in effect less than 60 days and the insurance company identifies a condition that creates an increased risk of hazard that was not disclosed in the application for insurance coverage and is not the subject of a prior claim; or, before the effective date of the policy, the insurance company does not accept a copy of a required inspection report (there are other conditions to this part) and is dated not later than the 90th day before the effective date of the policy.
There are several other statutes dealing with cancellation of insurance policies.
What needs to be taken from this writing is that when an insurance company cancels a policy, they may not have a legally recognized right of making the cancellation and they may have not followed the proper procedures.
Many times violations of the above will not make a difference, but if a person has a claim and the claim is being denied because of cancellation issues, it becomes very important to check and see if proper procedures were being followed.

Most insureds in Grand Prairie, Arlington, Fort Worth, Dallas, and other places in the Dallas - Fort Worth metroplex do not have much understanding how Underinsured Motorist (UIM) protection works. Here is a case that helps to explain a little of it.
The case is styled, Salvador Olivas v. State Farm Mutual Automobile Insurance Company and Dan McDowell. The opinion was issued in 1993, by the El Paso Court of Appeals. Here is some background.
Salvador Olivas, while driving an automobile belonging to Dan McDowell, had an accident with a vehicle driven by Alex Harrison IV. Harrison's liability insurance policy had coverage limits of $25,000 for one person. Olivas settled his tort claim against Harrison for $15,000. This lawsuit was then filed in which it was alleged that Olivas's damages exceeded $25,000 and recovery was sought on McDowells' and Olivas's UIM policies, both of which were issued by State Farm.
Both State Farm and McDowell filed special exceptions which were sustained and when Olivas failed to amend, the case was dismissed with prejudice.
The issue here was: Does the settlement of a third-party tort claim for less than the full amount of the liability coverage carried by the tortfeasor bar a claim for UIM coverage for the injured party?
The conclusion by this court was, "An injured party may settle a third-party claim for less than the full amount of the tortfeasor's liability coverage and still claim underinsured motorist coverage, but recovery may be had only for damages sustained in an amount in excess of the total amount of the tortfeasor's liability coverage."
So, what does this mean?
In this case, Harrison had liability coverage for $25,000. Olivas settled his claim with Harrison for $15,000. Olivas may recover on any underinsured motorist coverage only to the extent that his damages exceed $25,000. This means that if Olivas obtains a judgment for $48,000 then State Farm would get a credit for the amount of the Harrison policy, which was $25,000. Which means Olivas would be able to collect only $23,000 from State Farm.
In the court's discussion of this case they pointed out Texas Insurance Code, Section 1952.103 which provides for UIM coverage, that says the term "underinsured motor vehicle" means an insured motor vehicle on which there is collectable liability insurance coverage with limits of liability for the owner or operator that were originally lower than, or have been reduced by payment of claims arising from the same accident to, an amount less than the limit of liability stated in the underinsured coverage of the insured's policy. Section 1952.106 says UIM shall apply to "... all sums which he is shall be legally entitled to recover as damages ... and reduced by the amount recovered or recoverable from the insurer of the underinsured motor vehicle."
This appeals court pointed out that the trial court having sustained special exceptions, the allegations of damages in excess of the amount of Harrison's coverage of $25,000, must be true. Thus, at the time of settlement, Harrison was an underinsured motorist. To hold as State Farm urged, that Olivas's settlement constitutes a judicial admission that Harrison's liability insurance was more than sufficient to compensate for all damages would discourage not encourage settlement of claims.
The court then said, "Where, as here, the claim greatly exceeds the available coverage, we find no reason to require that payment be delayed while awaiting payment by the liability carrier."
There are pitfalls to doing what was done in this case that did not exist at the time this case arose. Changes in the law regarding UIM coverage have to be taken into account. There are also other strategies for maximizing the chance for a favorable outcome. it is important to see an experienced Insurance Law Attorney in these types of claims.

Most insureds in Grand Prairie, Fort Worth, Dallas, Mansfield, Arlington, and other areas in the Dallas - Fort Worth metroplex have no idea how the uninsured motorist protection coverage on their automobile policies works. All they know is that their insurance agent told them that they should have it in case they have a wreck with someone who does not have insurance.
The Texas Insurance Code, Section 1952.101 requires that all automobile policies issued in the State of Texas contain uninsured motorist UM protection unless the UM protection is rejected in writing. Section 1952.108, allows for the insurance carrier to pursue the uninsured driver for any amounts paid out by the insurance company. As a result of Section 1952.108, allowing the insurance company to pursue the uninsured driver, almost all insurance policies require that their insured obtain written permission from their insurance company before reaching a settlement with the uninsured driver. Most people do not realize this. As a result, what happens if permission to settle is not obtained before settlement with the uninsured driver?
The answer to the above question is partially answered in the 1977, Texas Supreme Court case, Robert William Ford, Jr., et al. v State Farm Mutual Automobile Insurance Company. The principle question in this case was whether State Farm's unconditional denial of liability constituted a waiver of its right to consent before its insured subsequently settled with another insurance carrier.
Here are some of the facts.
On October 18, 1969, Mrs. Ford was a passenger in an automobile driven by Mrs. Harvey when the Harvey auto was in a collision with a vehicle driven by Jeffrey Whittten. The collision resulted in Ford's death and damages in excess of $20,000. Ford was survived by her husband and children. Whitten, whose negligence caused the collision, was an uninsured motorist.
On July 21, 1970, suit was filed by Mr. Ford, for recovery under the UM of a State Farm policy and a Gulf Insurance Company policy. On October 23, 1970, State Farm filed an answer denying any liability. On April 20, 1971, State Farm filed its first amended answer with pleas in bar "to Plaintiff's action in its entirety." Later, Ford settled with Gulf. One of these pleas by State Farm, alleged that plaintiff's action was barred and that State Farm was in no event liable to pay anything under its policy.
State Farm later filed a second amended answer in which it set up the defense that plaintiff's claim was barred because a settlement reached with another insurance carrier had not received the written consent of State Farm. This written consent was a requirement of the policy Ford had with State Farm.
In discussing this case, the court pointed out that this was a case of first impression for Texas courts.
In deciding for plaintiffs the court stated, "State Farm neither paid not pursued any of its affirmative steps for determination of what, if anything, it was due to pay plaintiff. Instead, it unconditionally denied all liability under the policy. This intentional conduct was inconsistent with claiming the right under the policy to consent before its insured settled with a third party. Such conduct constituted a waiver of that right. Waiver has been frequently defined as an intentional relinquishment of a known right or intentional conduct inconsistent with claiming it."
The court further said, "If State Farm had been correct in unconditionally denying coverage and liability, it would have lost nothing by plaintiff's settlement with Gulf. Since State Farm was incorrect it its denial, it has lost only the inconsistent right to assert the exclusionary clause as a grounds for forfeiture of plaintiff's entire coverage. It has not lost its right of subrogation. When it pays the amount adjudged to plaintiff by the trial court, State Farm will still have its right to institute proceedings in the name of plaintiff against the uninsured motorist or any other person responsible for the accident. It is true that State Farm will have to share subrogation rights with Gulf Insurance which may, by reason of earlier settlement, have a call on the first $10,000 recovered by plaintiff from any person responsible for the accident. The relative status of the subrogation rights of the two companies, as between themselves, is a question which is not before us, and we express no opinion thereon."
If you are not confused by the above, then you must be pretty experienced with these types of situations. But, it is still confusing and serves as an example why an experienced Insurance Law Attorney needs to be involved.

People in Grand Prairie, Fort Worth, Arlington, Irving, Dallas, and other places in Texas, who have underinsured motorist (UIM) coverage will hope they never have to use that coverage. But what if they do have to use it? What are the rules?
One rule focused on here, is that in order to make the UIM claim, the claimant must first get written permission from their UIM insurance carrier to settle the case with the underinsured driver who caused injuries. If there is a settlement with the underinsured driver without getting written permission from the UIM carrier, the UIM carrier can refuse benefits. Here is a case where this played out.
The case is a Texas Supreme Court case decided in 1994. The style of the case is Ruben and Anita Hernandez v. Gulf Group Lloyd's.
In this case, the court had to consider whether an insurer may deny a UIM claim on the basis of a "settlement without consent" exclusion clause absent any showing that the settlement prejudiced the insurer. The court held that an insurer may escape liability on the basis of a settlement-without-consent exclusion only when the insurer is actually prejudiced by the insured's settlement with the tortfeasor.
This case was tried on the following stipulated facts. On November 21, 1987, Elizabeth Hernandez was killed when the car in which she was a passenger flipped over. The driver of the car, Charles McCullough, Jr., was the sole cause of the accident. McCullough was nineteen years old and his only asset was a $25,000 liability policy with State Farm. Elizabeth was covered by her parents' insurance policy with Gulf Group and that policy provided UIM benefits of $100,000. The damages suffered by Elizabeth and her parents exceeded $125,000.
Six weeks after the accident, the Hernandezes, without the consent of Gulf, entered into a settlement with McCullough for the limits of the State Farm policy. The Hernandezes then sought UIM coverage from Gulf. Gulf denied the claim based on the Hernandezes' failure to obtain its consent in writing before settling with McCullough.
In its appeal of the Gulf decision, the Hernandezes did not dispute the validity of the settlement-without-consent exclusion in the Gulf policy. They argued, however, that such an exclusion is unenforceable absent a showing by Gulf that it has been prejudiced by Hernandezes' failure to obtain consent before settling with an underinsured motorist.
In discussing this case, the court said, "Insurance policies are contracts, and as such are subject to rules applicable to contracts generally." "A fundamental principle of contract law is that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from any obligation to perform." Citing from the RESTATEMENT (SECOND) OF CONTRACTS, Section 241(a), the court said, "In determining the materiality of a breach, courts will consider, among other things, the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance." The less the non-breaching party is deprived of the expected benefit, the less the material the breach.
In the context of an UIM claim, there may be instances when an insured's settlement without the insurer's consent prevents the insurer from receiving the anticipated benefit from the insurance contract; specifically, the settlement may extinguish a valuable subrogation right. In other instances, however, the insurer may not be deprived of the contract's expected benefit, because any extinguished subrogation right has no value. In the latter situation -- where the insurer is not prejudiced by the settlement -- the insured's breach is not material. The court concluded, therefore, "that an insurer who is not prejudiced by an insured's settlement may not deny coverage under an uninsured/underinsured motorist policy that contains a settlement-without-consent clause.
In the case, the parties stipulated that McCullough had no assets other than the $25,000 State Farm policy, and that he did not believe his financial situation would change in the foreseeable future; and Gulf further stipulated that it "has not incurred any financial losses ... with regard to its subrogation rights by the failure of the [Hernandezes] to obtain [its] consent before settling with McCullough and releasing him from all liability." Gulf, therefore, remained in the same position it would have occupied had the Hernandezes complied with the settlement-without-consent clause. Since Gulf had not been prejudiced by the Hernandezes' breach, the breach was not material, and Gulf therefore is not excused from its obligation to perform under the contract.

People in Grand Prairie, Arlington, Mansfield, Fort Worth, Dallas, or anywhere else in Texas will often times try to settle a claim they have without the assistance of an experienced Insurance Law Attorney. The problem with doing this is that there are multiple ways a person can be making a big mistake. Here is just one of them.
The Dallas Court of Appeals, decided a case in 1992, styled, "Rochelle Traylor v. Cascade Insurance Company, Formerly Known as Bonneville Texas Insurance Company, Successor in Interest to Victoria Lloyds Insurance Company."
Here is some factual background:
Traylor was riding in a car driven by Glynnis Penny when they were involved in an accident caused by Khoron Page. Traylor was seriously injured in the accident. Page's liability insurance was limited to $25,000 per person. Traylor settled with Page for the full policy amount of $25,000 and released Page from further liability without the consent of Cascade Insurance Company, Penny's insurer. Because Traylor's damages exceeded $25,000, she sued Cascade for its underinsured motorist (UM) protection of $20,000 per person. Cascade denied coverage and moved for summary judgment contending that coverage was excluded under Section A.2 of the policy's exclusions, which provides:
A. We do not provide Uninsured/Underinsured Motorists Coverage for any person:
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2. If that person or the legal representative settles the claim without our consent.
Traylor argued in response that the exclusion violates Texas Insurance Code, Section 1952.108. The trial court disagreed and granted Cascade's motion.
Traylor argued that the consent-to-settlement clause in the insurance policy violated the statutory purposes of underinsured motorist coverage expressed in the Texas Insurance Code. Pointed out was that the Texas Supreme Court has stated that the purpose of underinsured motorist coverage is "the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured or underinsured motor vehicles ...." Thus, the purpose of this court is to determine whether the consent-to-settlement clause is inconsistent with and fails to further the purpose of the Texas Insurance Code UM statutes.
This court then discussed the results of other cases dealing with this subject. After that discussion this court said that the consent-to-settlement clauses are a valid way for an insurance company to protect its right to subrogation against the UM motorist or any other person legally responsible for the insured's injuries. The court said that by permitting the insurance company to recover from the at-fault party some or all of the insurance proceeds paid to the insured, the right of subrogation defrays the cost and expands the availability of underinsured motorist coverage. When the insured settles with the at-fault party and releases that party from all future liability, even when the release is in exchange for the entire sum for which that party is insured, the insured cuts off the insurance company's right to recover its liability from the at-fault party. The consent-to-settlement clause preserves that right. Because the consent-to-settlement clause furthers the insurance company's right to subrogation under the Texas Insurance Code, the clause furthers the purpose of the Insurance Code. Accordingly, the exclusion under the policy for failure to obtain the insurer's consent to settlement is valid.
Traylor further argued that the enforcement of consent-to-settlement clause would encourage insurance companies to deny consent to an injured claimant to settle with a negligent motorist, thereby frustrating the attempts of the claimant to recover any insurance proceeds. In response, this court pointed out that the law provides heavy penalties against insurance companies that delay or refuse settlement of claims in bad faith.
There are exceptions to the law expressed in this opinion.

Whether you live in Grand Prairie, Fort Worth, Dallas, Weatherford, Arlington, Mansfield, Irving, or anywhere else in the state of Texas, too many times when making a claim for insurance benefits, you are forced to hire an attorney. An experienced Insurance Law Attorney is valuable for recovering monies due under an insurance policy and a disability insurance policy in particular.
An example of the above in noted in a 1966 case that was decided by the Houston Court of Appeals. The style of the case is Continental Casualty Company v. Walter Earl Vaughn. Here are a lot of facts in this case.
The evidence showed that on April 10, 1962, Vaughn wrote Continental a letter stating he had sustained a back injury on March 30, 1962, and that he was in Leggett Memorial Hospital, and did not know how long he would be hospitalized or unable to work. Vaughn returned a standard claim form he had been sent, reporting that he had "a back injury in the nature of a ruptured disc that occurred on March 30, 1962 while loading a load of tubing on a truck in Houston." The same report contained a statement by Vaughn's doctor saying Vaughn had a ruptured intervertebral disc between Lumbar 4 and Lumbar 5; that the accident occurred on March 30, 1962; that Vaughn first consulted the doctor on April 1, 1962; and that Vaughn was to have a spinal fusion. Continental sent a one month's indemnity and a thirty days' hospital indemnity. The indemnity continued for another month after another claim form was filed.
Continental then sent an inquiry to the hospital to examine the record of Vaughn. In response Continental received a history stating "patient was lifting a pipe and felt sudden pain in lower back with radiation to left leg." Another report showed Vaughn was injured "while unloading my truck with a load of tubing. I picked up a joint of tubing, rupturing a disc in my back. It happened about 4 p.m."
Continental did not question that Vaughn had injured his back. Continental questioned "Was it an accidental injury?" Its definition of "injury" according to its representative was "an abnormal, localized condition of the body that is not caused by an existing illness or disease process": whereas the policy defined "injury" as a "bodily injury caused by an accident and resulting directly and independently of all other causes, in loss ...."
On July 13, 1962, a Continental representative wrote Vaughn explaining that his description of how his disability occurred indicated that such disability was not the result of an accident, and that benefits were, therefore, not payable. Thus, Continental denied liability on the basis that what had happened to Vaughn could not be considered an accident.
Continental took the position that the occurrence in question was not an accident since Vaughn in lifting the pipe was doing what he intended to do, and hence any bodily injury sustained by him was not the result of an accident.
To make matters worse, Continental was telling Vaughn to return the money that he had already received.
The disability policy is this case, which was in 1962, paid benefits of $100 per month for the rest of Vaughn's life.
This case went to trial and a jury found in favor of Vaughn. The jury awarded $29,200 on the policy and attorney's fees of $8,850. The trial judge reduced the $29,200 to $14,246. This was based on the present current value of the award. The court also awarded 12% penalty on 43 past due accrued monthly installments and 6% interest thereon.
It is worth noting that today, 2011, the Texas Insurance Code, Section 542.060 requires an 18% penalty rather than the 12% that existed when this case was decided. Further, the present law allowing for more ways of financially punishing the insurance company for conduct that is committed "knowingly" or "intentionally" as those terms are defined in the insurance code. Per section 541.152, the "trier of fact may award an amount not to exceed three times the amount of actual damages."

Bad Faith attorneys in Grand Prairie, Grapevine, Colleyville, Keller, Saginaw, Newark, Southlake, Roanoke, and other places in the DFW metroplex might find this case worth knowing.
The United States District Court, Southern District of Texas, Houston Division, issued an opinion in November 2011, in the case styled "839 East 19th Street, LP v. Lexington Insurance Company, et al." This is a case wherein a motion for summary judgment filed by one of the defendants, Unified Building Sciences, Inc. (UBS), was granted.
Here is some background:
839 East 19th Street, LP (839) owned the Mesa Ridge Apartments which suffered damages in Hurricane Ike. 839 submitted a claim for damages to Lexington Insurance Company. Lexington hired the adjusting firm Cunningham Lindsey, which in turn hired UBS as an expert consultant. Also assisting in adjusting the claim were: a public adjustor, Gary Krone; an inspector hired by Krone to give a second opinion, Storm Management, Inc.; a roofing company hired by Needham Roofing; and an inspection company hired directly by Lexington, Grayco. Grayco opined that the Mesa Ridge roofs were in bad condition prior to Hurricane Ike and attributed only minor damage to the storm. Krone disagreed with the report. Ultimately, in its 15th report to Lexington, Cunningham Lindsey lowered the repair estimate from $1,016,016.43 to $422,559.61.
839 asserted multiple claims against multiple defendants in this lawsuit, but its only claim against UBS is under the theory of "participatory liability" for aiding and abetting Lexington's bad faith handling of the insurance claim.
In its analysis of this case, the court pointed out that the parties are disputing whether Texas law recognizes the theory of participatory liability as set forth in THE RESTATEMENT [SECOND] OF TORTS Section 876(b) (1977).
Section 876(b) provides:
For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he
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(b)knows that the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, ....
UBS said that its conduct in this matter was not the type of highly dangerous, deviant, or antisocial activity for which a Texas court would impose liability under 876(b), and that it did not provide substantial assistance or encouragement to Lexington, the primary alleged wrongdoer. The court agreed with the argument.
This court considered the following five factors listed in comment d of 876 in determining that the defendants did not provide substantial assistance necessary for liability:
(1) the nature of the wrongful act;
(2) the kind and amount of the assistance;
(3) the relation of the defendant and the actor;
(4) the presence or absence of the defendant at the occurrence of the wrongful act; and
(5) the defendant's state of mind.
Here, UBS merely provided an opinion on the cost of repairing or replacing the Mesa Ridge roofs. UBS was a consultant, it did not work as an adjustor on the claim. Lexington was not obligated to accept UBS's opinion. In fact, Lexington apparently did not accept UBS's initial estimate and sought a second opinion. There is no evidence that UBS encouraged Lexington to deny the claim of 839.
In it's "Conclusion and Recommendation" this court said:
"Because the record establishes as a matter of law that UBS did not provide substantial assistance to Lexington of a nature that would trigger imposition of participatory liability, assuming such a claim exists in Texas, the court recommends that UBS's motion for summary judgment be granted and plaintiff's claim against it be dismissed with prejudice."
One thing to be considered when filing a lawsuit is who are all the proper parties to sue and which of these parties do you want in the lawsuit. Here, 839 appears to be suing numerous parties. Attorneys for 839 may have good reason for doing this. However, other attorneys may take the position that suing just the insurance company is good enough. An experienced Insurance Law Attorney is able to discuss the options with their client. After a thorough discussion the attorney and client can then decide what is the best course of action.

Attorneys in Weatherford, Grand Prairie, Fort Worth, Mineral Wells, or anywhere else in Texas have to have an understanding of insurance law to handle insurance disputes effectively for clients.
There are different ways of recovering when insurance disputes arise. Many of these theories of recovery have common elements.
Insurance transactions tend to resemble one another, so disputes arising from them tend to resemble one another. There are only so many ways that an insurance company and their customer can get crossways. Most situations present recurring problems that can be grouped into categories. Insurance law is even more precedent-driven than other areas of law, as courts try to construe similar policy language consistently. It is not surprising that many cases start to look alike.
The key is to find good authorities that match your facts, or to emphasize the facts that match good authorities. These authorities are found in several places:
1. The Texas Department of Insurance;
2. The Texas Insurance Code;
3. The Texas Administrative Code;
4. Texas Courts such as the Texas Supreme Court, interpreting the laws.
The starting point though is the insurance contract itself. The initial inquiry almost always begins with the language of the contract to determine what is covered and what is not. Other tort and statutory theories may logically depend on the existence of coverage, or may exist independent of coverage. The interplay between recovery for breach of contract and recovery under theories is a broad discussion. Beyond a lawsuit for breach of contract, most insurance cases can be grouped into these categories:
(1) misrepresentations
(2) nondisclosures
(3) unfair settlement practices; and
(4) other misconduct
MISREPRESENTATIONS
One of the most common bases for an insurance dispute is the complaint that someone misrepresented something. After a claim arises, the customer may feel that the coverage accepted by the insurer is less than the coverage promised at the time of sale. Depending on the facts of the case, a representation by the insurance company or its agent may lead to liability for breach of contract, unfair insurance practices, deceptive trade practices, negligence, or fraud.
NONDISCLOSURES
Closely related to misrepresentation is the theory that the insurance company, agent, or insured failed to adequately disclose information. For example, if an exclusion is not adequately disclosed, the insurance company may be liable for breach of contract by relying on the exclusion to deny a claim. Failing to adequately disclose limitations or exceptions to coverage may also make the insurance company or agent liable for unfair insurance practices or deceptive trade practices.
UNFAIR SETTLEMENT PRACTICES
Several statutory prohibitions are specifically aimed at settlement practices. Liability may arise from failing to pay benefits that are owed under the policy, for failing to pay benefits that were promised by the agent, for failing to act promptly to settle once liability is reasonably clear, for paying too little, or for paying too slowly. Liability may also arise from the insurance company's failure to adequately investigate the claim.
OTHER MISCONDUCT
Other disputes may arise that do not fit neatly within the above categories, such as unreasonable cancellation of a policy, unconscionable conduct, or unfair discrimination.
Advice from an experienced Insurance Law Attorney is what is most important when confronted with a situation where an insurance company is not living up to its responsibilities to one of its customers.

No matter if you are in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Brock, Millsap, Cool, Peaster, Springtown, or any other place in Parker County, at many points in your life there will be times when you buy insurance and as a result there will be many chances for the insurance company to make a mistake.
The insurance industry is regulated in Texas by the Texas Department of Insurance and complaints can be filed with that department. The courts in Texas handle disputes that become lawsuits and these disputes can wind up in the Texas Supreme Court. Guidelines and laws/statutes for insurance companies to follow are found in the Texas Insurance Code and the Texas Administrative Code.
There are many ways an insurance company can mess up.
1) The agent can make mistakes when he sells the policy.
2) The underwriting department can mess up in the way they evaluate coverages.
3) The administrators will make mistakes in the way they collect premiums and handle notices to their insureds.
4) Adjusters will not be professional in the way they handle claims.
Rarely are mistakes on purpose, otherwise it would not be a mistake, it would be an intentional act. The problem with mistakes is that they can often times be costly to the insured.
When an insurance company makes a mistake an experienced Insurance Law Attorney needs to be contacted as soon as possible. Don't start making statements and giving recorded interviews to the insurance company until you have consulted with an attorney.
Here are the different parts of the insurance transaction.
To understand the different ways disputes can arise, it is helpful to consider the sequence of events that is likely to occur. At its very simplest, the insurance transaction can be divided into the initial sale of the policy, and subsequent handling of claims. These can be broken down further to include:
(1) The sale of the policy: Initially, the consumer and insurance company or insurance company agent must communicate to establish a contractual relationship. Disputes may arise over what was asked for by the applicant, what was represented by the insurer or agent, or the timeliness of the insurer or agent in providing coverage. Issues may also arise about the truthfulness of the applicant or agent in disclosing information requested by the insurer;
(2) Underwriting: At this stage the insurance company considers the application and determines whether the applicant is an acceptable risk. Certain types of discrimination based on risk are legitimate and are inherent in the process of providing insurance. Other types of discrimination -- such as distinctions based on gender, ethnicity, or disability -- are unlawful;
(3) Policy administration: During the course of the insured/insurer relationship, disputes may arise even if there is no claim. For example, the insurance company may choose to cancel or not renew the policy. The insurer may demand a premium that is higher than the insured was lead to expect. Proper notices may not be sent or may be sent late; and
(4) Claims: If a claim arises under the policy, the parties may fall into disagreement over the scope of coverage, the amount of payment, the insurer's failure to pay, or the timeliness of any payment. An insurance claim may also give rise to disagreements based on the difference between the coverage promised by the insurance company or its agent at the time of sale contrasted with the coverage given at the time of the claim.
As stated earlier, when disputes or concerns arise, speak with an attorney.

Appraisal - People in Grand Prairie, Arlington, Fort Worth, Dallas, Keller, Coppell, Farmers Branch, Hurst, Euless, Bedford, and other places in the DFW area are probably not familiar with the way appraisal works in an insurance policy.
The Texas Supreme Court issued an opinion in 2009 that deals with appraisals. The style of the case is State Farm Lloyds v. Becky Ann Johnson. Here is some background.
A hailstorm moved through Plano, Texas in 2003, damaging the roof of Becky Ann Johnson's home. She filed a claim under her homeowners insurance policy with State Farm. The inspector concluded that hail had damaged only the ridgeline of her roof, and estimated repair costs at $499.50, which was less than her deductible. Johnson's roofing contractor concluded the entire roof needed to be repaired at a cost of more than $13,000.
To settle this difference, Johnson demanded appraisal of the "amount of loss" under the following provision in her standard-form policy:
Appraisal. If you and we fail to agree on the amount of loss, either one can demand that the amount of the loss be set by appraisal. If either makes a written demand for appraisal, each shall select a competent, disinterested appraiser. Each shall notify the other of the appraiser's identity within 20 days of receipt of the written demand. The two appraisers shall then select a competent, impartial umpire .... The appraisers shall then set the amount of the loss. If the appraisers submit a written report of an agreement to us, the amount agreed upon shall be the amount of the loss. If the appraisers fail to agree within a reasonable time, they shall submit their differences to the umpire. Written agreement signed by any two of these three shall set the amount of the loss.
State Farm refused to participate, asserting that the parties' dispute concerned causation and not "amount of loss." Johnson then filed this suit seeking a declaratory judgment compelling appraisal. Johnson and State Farm filed motions for summary judgment.
In this case, the Court attempted to clarify the division between issues that are subject to appraisal and those that are not. At one end, questions on liability are not proper for appraisal and must be decided in court. At the other end, the amount of damage is subject to appraisal. In between, questions on causation may be decided by appraisers in determining the amount of loss. This Court rejected State Farms' argument that every issue of causation is beyond the scope of appraisal.
The court reasoned that "any appraisal necessarily includes some causation element, because setting the 'amount of loss' requires appraisers to decide between damages for which coverage is claimed from damages caused by everything else." The following causation questions would be within the scope of appraisal:
- Appraisers may properly allocate damages between covered and excluded perils;
- Appraisers may determine whether a loss is due to a covered event, as distinguished from the property's preexisting condition.
By contrast, causation issues are improper for appraisal, "when different causes are alleged for a single injury to the property." In those instances, causation issues are to be decided by the courts.
In sum, whether the appraisal goes "beyond the damage questions" and impermissibly answers liability questions "will depend on the nature of the damage, the possible causes, the parties' dispute, and the structure of the appraisal award."

If someone in Weatherford, Mineral Wells, Aledo, Azle, Springtown, Hudson Oaks, Willow Park, Millsap, Brock, Cool, or some other place in Parker County suffers a loss that should be covered by their homeowners insurance, one of the first things they should do is to consult with an experienced Insurance Law Attorney.
The Texas Department of Insurance (TDI) use to require that all homeowners policies written in Texas require a certain format and contain certain required coverages in that homeowners policy. In recent years TDI has allowed insurance companies to write their own policies without as much over sight. However, most policies are still following the rules as outlined by TDI.
These current homeowners policies follow two basic forms. One is called the Homeowners -- Form A (HOA) and then other is referred to as Homeowners -- Form B (HOB).
A loss involving personal property is calculated differently under the HOB policy than is a loss to a dwelling. A loss to the dwelling is calculated based on the following policy language:
Our limit of liability for covered losses to the dwelling and other structures under Coverage A (Dwelling) except wall to wall carpeting, cloth awnings and fences, will be at replacement cost settlement subject to the following:
(1) If, at the time of loss, the Coverage A (Dwelling) limit of liability is 80% or more of the full replacement cost of the dwelling, we will pay the repair or replacement cost of the damaged building structures, without deduction for depreciation.
(2) If, at the time of loss, the Coverage A (Dwelling) limit of liability is less than 80% of the full replacement cost of the dwelling, we will pay only a proportional share of the full replacement cost of the damaged building structures. Our share is equal to:
Replacement Cost of the Loss
X
Coverage A (Dwelling) Limit of Liability
80% of Replacement Cost of the Dwelling
(3) If, at the time of the loss, the actual cash value of the damaged building structures is greater than the replacement cost determined under (1) or (2) above, we will pay the actual cash value up to the applicable limit of liability.
We will pay only the actual cash value of the damaged building structures until repair or replacement is completed. Repair or replacement must be completed within 365 days after loss unless you request in writing that this time limit be extended for an additional 180 days. Upon completion of repairs or replacement, we will pay the additional amount claimed under replacement cost coverage, but our payment will not exceed the smallest of the following:
(1) the limit of liability under this policy applicable to the damaged or destroyed building structures;
(2) the cost of repair or replace that part of the building structures damaged, with material of like kind and quality and for the same use and occupancy on the same premises; or
(3) the amount actually and necessarily spent to repair or replace the damaged building structures.
Based on the writing in the second paragraph above, it is important that each person experiencing a loss, read their policy closely and get with an attorney to make sure they are getting compensated fully under the policy they have paid for and for the loss they have incurred.
While this writing deals with the structure, it is also important to be aware of coverages for the contents of the property and to read the policy carefully to make sure there is full compensation, under the policy, for the damages that may be incurred for the contents.

An insured in Weatherford, Mineral Wells, Aledo, Azle, Willow Park, Hudson Oaks, Brock, Millsap, Peaster, Cool, Springtown, or anywhere else in Parker County may wonder how much they are suppose to do to help the insurance company when a claim is submitted for coverage. The answer is - quite a bit.
As for homeowners policies in Texas, the form and wording of the majority of policies follow what is called the Texas Homeowners Policy - Form B ("HOB").
The HOB Policy requires that the insured cooperate with the insurer's investigation of the claim by promptly submitting notice of the claim, completing an inventory of the damaged property, providing access to the damaged property and records, and signing a sworn proof of loss form. These requirements on the insured constitute a condition precedent to coverage under the policy. A United States, 5th Circuit case styled, Griggs v. State Farm Lloyds, decided in 1999, said absent the insured's compliance with the conditions precedent to coverage, the insurer has no duty to provide benefits under the contract.
The standard HOB policy says:
Section 1 -- Conditions, Section 3 places the following duties on an insured after a loss:
Your Duties After Loss. In case of a loss to covered property caused by a peril insured against, you must:
(1) give prompt written notice to us of the facts relating to the claim;
(2) notify the police in case of loss by theft;
(3) protect the property from further damage;
(4) make reasonable and necessary repairs to protect the property;
(5) keep an accurate record of repair expenses;
(6) furnish a complete inventory of damaged personal property showing the quantity, description and amount of loss. Attach all bills, receipts and related documents which you have that justify the figures in the inventory;
(7) as after as we reasonably require:
(a) provide us access to the damaged property;
(b) provide us with pertinent records and documents we request and permit us to make copies;
(c) submit to examination under oath and sign and swear to it;
(8) send to us if we request, your signed sworn proof of loss within 91 days of our request on a standard form supplied by us. We must request a signed sworn proof of loss within 15 days after we receive your written notice, or we waive our right to require a proof of loss. Such waiver will not waive our other rights under this policy:
(a) This proof of loss shall state, to the best of your knowledge and belief:
(i) the time and cause of loss;
(ii) the interest of the insured and all others in the property involved including all liens on the property;
(iii) other insurance which may cover the loss; and
(iv) the actual cash value of each item of property and the amount of loss to each item.
(b) If you elect to make a claim under the Replacement Cost Coverage of this policy, this proof of loss shall also state to the best of your knowledge and belief:
(i) the replacement cost of the described dwelling;
(ii) the replacement cost of any other building on which loss is claimed; and
(iii) the full cost of repair or replacement of loss without deduction for depreciation.
What is important for people to know who find themselves in a situation where they are making a claim for benefits is that their duty to cooperate does not relieve the insurance company of the responsibilities they have to promptly and properly investigate the claim and pay damages. Nor does your duty to cooperate mean that you have to do the adjusters job for them. Someone who believes the claim process is not being handled properly and quickly should consult with an Insurance Law Attorney.

People with auto insurance policies in Grand Prairie, Arlington, Fort Worth, Dallas, Hurst, Euless, Bedford, and other places through out the DFW metroplex usually do not have a very good understanding of how their auto insurance policies work. All they know is that if they get into a wreck the insurance is suppose to help them.
There are many things an auto insurance policy can provide. The vast majority of people get the bare minimum that is required by state law. But there are many things that can be purchased. The minimum is liability coverage. Beyond liability coverage, a person can purchase coverage for damages to their vehicle, towing, auto rental, life insurance, medical payments, personal injury protection, uninsured and underinsured coverage, and a few other types of coverage.
All of these coverages work a little different from each other. Personal Injury Protection (PIP), and Uninsured / Underinsured (UM) coverage is required coverage on any auto policy sold in the State of Texas, unless these coverages are rejected in writing.
The requirement for PIP coverage is found in the Texas Insurance Code, Section 1952.152. The requirement for UM coverage is found in the Texas Insurance Code, Section 1952.101.
One aspect of these coverages was discussed in a 2004, Texas Supreme Court case styled, Old American County Mutual Fire Insurance Company v. Zeferino Sanchez. The question in this case was whether the insured spouse of the person listed as the "named insured" in the declarations page of a policy may reject those coverages. The case got to the Supreme Court as the result of a summary judgment ruling. This Supreme Court ruled that the spouse falls within the class of persons statutorily entitled to reject UM and PIP coverages under the policy.
Here is the factual background:
This case was presented on stipulated facts. On January 8, 1998, Margarita Sanchez, wife of Zeferino Sanchez, applied for and purchased an insurance policy from Old American for two of the couple's vehicles. Ms. Sanchez rejected UM and PIP coverages on the insurance application, and Old American never assessed premiums for the coverages. In applying for the policy, Ms. Sanchez affirmed that the rejections of UM and PIP coverages would apply to the 1998 policy and to all future renewals of that policy. The Sanchezes renewed their existing policy in 1999. Neither Mr. or Mrs. Sanchez requested PIP or UM coverages at that time.
Although Ms. Sanchez's name appeared on the 1998 policy application, she was not listed as a "named insured" on the declarations page. The policy, however, defined "you" and "your" to include the "named insured" as well as "the spouse if a resident of the same household." Mr. Sanchez fell within the policy definitions of "you" and "your" because she and Mr. Sanchez lived in the same house at all pertinent times. To that end, the parties stipulated that both Mr. and Mrs. Sanchez were insured under the policy. The parties disagreed, however, about the extent of the policy's coverage. Specifically, the parties disputed whether Mr. Sanchez was entitled to UM and PIP benefits to cover damages arising from a 1999 accident.
On April 11, 1999, Mr. Sanchez's pickup was parked on the shoulder of the road. A vehicle driven by an uninsured motorist struck Mr. Sanchez's truck as he was lying beneath it repairing a broken fuel hose. The impact caused the pickup to collapse on Mr. Sanchez and sever his spinal cord. The policy's UM and PIP provisions excluded coverage for injuries sustained while "occupying" or when "struck by" any vehicle owned by an insured that was not insured under the policy.
After the accident, Mr. Sanchez filed a claim with Old American for UM and PIP benefits under the policy. Old American filed suit seeking a declaratory judgment absolving it of any obligation to pay those benefits.
This court got into a multi page discussion about the purpose of the UM and PIP statutes and the wording of those statutes and then compared that discussion to the wording of the Old American policy.
The Texas Supreme Court ultimately held that the phrase "insured named in the policy" was synonymous with "named insured" in the UM and PIP statutes. In so holding it was ruled that Ms. Sanchez's signed reject of UM and PIP coverages, also excluded those coverages for Mr. Sanchez.

There are times for someone in Grand Prairie, Arlington, Fort Worth, Dallas, De Soto, Duncanville, Cedar Hill, Crowley, Mansfield, and other places in Texas to get with an Insurance Law Attorney to understand how certain aspects of insurance claims are to be handled.
In 1999, the Court of Appeals, Fourteenth District, Houston, had a case of "first impression," meaning they were presented with an argument for the first time. The case dealt with an argument for offset and settlement credit against uninsured motorist coverage by a negligent third party. The dispute arose out of a multi-car accident.
The style of the case is, "Ann M. Bartley a/k/a Anne Marie Tadlock v. Martell Rae Guillot." Here are some facts:
Guillot originally sued Ward, Bustos (uninsured), and Bartley (insured). Before trial, Guillot settled with Allstate, her uninsured motorist carrier, for $20,000 for the injuries she sustained in the accident caused by Bustos. The settlement agreement limited Allstate's subrogation rights to any damages recovered from Bustos or any other uninsured motorist. Bustos was dismissed and Ward was nonsuited. Thus, Guillot proceeded against Bartley only and recovered $30,000. Bartley moved the court for a set-off in the amount of $20,000, the amount Guillot received from Allstate. This request was made pursuant to Texas Civil Practices & Remedy Code, Section 33.012. The trial court refused, and Bartley perfected this appeal.
The issue before the court was whether a negligent driver is entitled to receive credit from an independent insurance policy procured by the injured party. This is what made this a case of "first impression" in Texas. An insurance company who pays under contract for a loss or injury for the wrong of another is subrogated to the rights of the creditor or injured person against the wrongdoer. The insurer's right to subrogation derives from the rights of the insured.
Here, Allstate paid Guillot, the insured, pursuant to Guillot's uninsured motorist policy for the multi-car collision. This entitled Allstate to stand in the shoes of Guillot and assert any claims that Guilot was entitled to assert. However, Allstate decided not to exercise its subrogation rights. Thus, Allstate allowed Guillot to receive more money than the damages awarded by the jury because it did not attempt to collect from Bustos. (A total of $50,000).
In discussing this case, the court pointed out that what Bartley really seeks is reimbursement or contribution from Bustos via Allstate's payment to Guillot under her uninsured motorist policy. However, Allstate stands in the shoes of Guillot not the shoe's of the joint tortfeasor. Bustos, the uninsured alleged joint tortfeasor, was not a party to the suit. To prevent what has occurred, Bartley could have joined Bustos in a cross action as a third party defendant creating an opportunity for the jury to adjudicate Bustos's liability, if any. This would have allowed Bartley to seek contribution or reimbursement from Bustos for any damages attributable to Bustos. To offset the $30,000 Bartley owed as damages by Allstate's $20,000 settlement, would allow Bartley to receive contribution from the plaintiff and not a codefendant. Allstate's liability arose from the fault, if any, of the uninsured motorist Bustos, not that of the insured driver, Bartley.
As stated, this was a case of first impression for the court and as such is not the type of situation that is going to happen very often.

A natural question for someone in Weatherford, Mineral Wells, Aledo, Hudson Oaks, Willow Park, Millsap, Brock, or anywhere else in Parker County to ask is; What is the value of my claim?
When the claim is a personal injury claim, there is no easy answer. One general principle in this regard is that there are laws against making a "double recovery." A double recovery would be where you collect money from more than one source for an injury. The most likely place for this to be seen is where a person is injured in an auto accident caused by another. The injured person goes to the hospital and pays for the hospital bills with their personal health insurance. Then later on, the injured person makes a claim against the person who caused the accident and injuries and the insurance company for that person pays the injured person again, for the same hospital bills. Technically, this is illegal.
Another example is where the injured person makes a claim against two other people who may be responsible for the injuries and both pay all the bills.
In the second example above the Texas Civil Practices & Remedies Code, Section 33.012(b) says, "If the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by the sum of the dollar amounts of all settlements."
What Section 33.012(b) means is that if a person has a claim that is worth $1,000, then he cannot collect $1,000 from both people he is making the claim against. So, if one pays $100, then he still has a claim against the other for $900.
In the first example above, where the injured person has had the hospital bills paid by his insurance company, then the hospital has a subrogation interest in any amounts the injured person receives from the person who caused the injuries. The amount of the subrogation amount would be an amount up to what his health insurance has paid. So, if the injured person has a claim worth $1,000 but only $500 is paid by the health insurance company and if the injured person collects $1,000 from the person who caused the injury, then $500 has to be paid back to the health insurance company and the injured person can do as they wish with the other $500.
An experienced Insurance Law Attorney knows how to use other laws and legal principles to increase the total amount of the recovery and or lessen the amount of money that has to be paid back as a subrogation interest. - One thing to know, is it can be very confusing.
One place where a double recovery is allowed and fully legal is in auto injury claims where the injured person has Personal Injury Protection (PIP) benefits. The Texas Insurance Code, Section 1952.155(a) and (b).
Section 1952.155(a) says, "The benefits under coverage required by this subchapter are payable without regard to: (2) any collateral source of medical, hospital, or wage continuation benefits." This means that the injured person can collect his PIP benefits and then still make a claim against some other personal insurance he has for the same losses such as medical bills or lost wages. The caveat here is that there are exceptions to this and is again, a situation where an experienced Insurance Law Attorney needs to be involved to stay out of trouble.
Section 1952.155(b) says, "Except as provided by Subsection (c), an insurer paying benefits under coverage required by this subchapter does not have a right of subrogation or claim against any other person or insurer to recover any benefits by reason of the alleged fault of the other person in causing or contributing to the accident." This means that the PIP insurance company cannot subrogate against the insurance company of the person who caused the injuries. There is only one exception to this statute which is in Subsection (c), and this writer does not know where it has ever come into play.
The lesson to be taken from this posting is that the value of a claim has to take into account the rules discussed above.

People in Weatherford, Mineral Wells, Palo Pinto, Aledo, Azle, Hudson Oaks, Willow Park, Brock, Cool, Millsap, Peaster, and other places in Parker and Palo Pinto Counties may wonder how long an insurance company can take to pay a claim.
The answer is found in the Texas Insurance Code, Sections 542.051 thru 542.061. These sections are also known as the Prompt Payment of Claims law.
A careful reading of these sections will see that the time frame for paying an insurance claim depends on many factors. Some of those factors are (1) what type of insurance company is involved, (2) what type of claim is being made, (3) what is involved in the investigation, (4) how much has the claimant cooperated in the investigation of the claim, and variations of the preceding.
A short answer to the above question is found in Section 542.057. This section says that the claim should be paid "not later than the fifth business day after the date notice is made." (notice of the insurance companies decision to pay the claim). Regarding this, the Houston Court of Appeals, Fourteenth District, issued an opinion in 1998, that discusses this in an unusual context. The style of the case is, John A. Daugherty, Jr. v. American Motorists Insurance Company.
Here is some background.
Daugherty had his 1994 BMW stolen on February 25, 1994. He submitted a claim for $68,895.42. After adjusting the claim, an adjuster called Daugherty's bookkeeper on March 16, 1994, and made an offer of $62,431.14. The following day, police recovered the BMW. At about 2PM on March 17, 1994, the adjuster called the bookkeeper and rescinded the offer. Daugherty did not learn of the offer until after it had been withdrawn.
Based on the damages to the recovered BMW, American tendered a check to Daugherty for $1,901.50 on April 7, 1994.
Daugherty refused the payment and filed a lawsuit against American claiming that American violated the Prompt Payment of Claims Act by not paying the $62,431.14 within five business days after making the offer.Daugherty's contention at trial was that American effectively notified him it would pay his claim when, on March 16, 1994, it informed his bookkeeper it had determined the value of the stolen BMW. Daugherty argued that American was bound by the terms of the contract, which tracked the language of the statute, to pay him within five days after notification. American Motorists, on the other hand, contended that the communication of March 16 was merely an "offer" to pay $62,431.14. Because the offer was rescinded before it could be accepted, American Motorists claimed it was not obligated to pay.
In discussing this case the court noted there was a discrepancy of almost $6,000.00 between Daugherty's and American Motorists' estimation of the loss, the call of March 16, was an offer, not a notification that American Motorists was going to pay the claim. The court stated, "Were we to hold that an oral offer constitutes notice of payment, negotiations between an insurer and its insured would be severely hampered."
The final paragraph of the opinion says:
"Finally, even if we were to find that the communication of March 16, 1994, was a 'notice of payment of claim,' such notice was grounded upon the fact that Daugherty's car had not been recovered. We find nothing in the Insurance Code or the policy at issue which prevents the insurer from withdrawing its notice of payment if the facts and circumstances known to the insurer change significantly after the notice is given but before the claim is paid. Here, the change of circumstances, i.e., the recovery of Daugherty's automobile, favored the insurance company because the loss was not as great as had been previously calculated. However, it is just as conceivable that changing circumstances may favor the insured, i.e., the damage to the property is found to be more severe than previously believed. The purpose of the statutory deadline contained in ... is to guarantee the prompt payment of claims made pursuant to policies of insurance; not to create a statutory windfall for one party or the other. ... Here, there is no evidence that American Motorists unreasonably sought to delay or postpone its obligation to pay Daugherty's claim."