Dallas Fort Worth Insurance Lawyer Blog

How does someone living in Grand Prairie, Arlington, Mansfield, Fort Worth, Keller, Bedford, Hurst, Euless, Irving, De Soto, Duncanville, Burleson, Granbury, or anywhere else in Texas, know when an unlisted driver on an insurance policy is covered if an accident occurs? This is the third of three posts in a row on this subject. The following is what happened in a third case addressing this topic.
In 1989, the Texas Supreme Court, in the case, United States Fire Insurance Company v. United Service Automobile Association, discussed the issue of permissive driver coverage. This case involved a dispute between insurance companies over which had the duty to defend Anna Milliken, a passenger in an automobile, who allegedly caused an accident by grabbing the steering wheel of a moving vehicle. One policy was issued by United States Fire Insurance Company (Fire) and covered the automobile involved in the accident. The other was issued by United Service Automobile Association and insured the father of the passenger, Anna Milliken. The courts ruled that Fire had responsibility in this case.
The claim arose out of an accident that occurred when Anna was riding back with Douglas Martin from a church sponsored retreat. The car Douglas was driving was owned by his father and was covered by the Fire policy. Douglas testified that there was some swerving and horseplay prior to the accident. Anna testified that Douglas was zigzagging the wheel back and forth prior to the accident and that she grabbed the wheel on two occasions prior to the accident in an effort to play back with him. The first time Douglas did not object, and the second time was immediately prior to the accident. Anna testified that she and Douglas were "just kind of playing around."
The issue in this case was whether or not Anna was a permissive user of the automobile and thus covered under the policy of insurance.
First, the court considered whether Anna was a user of the automobile. The court conclude that at the time of the accident, it was undisputed that Anna was riding as a passenger in the automobile and this fact alone constitutes a "use" of the automobile. Thus, she was a user.
Next, the court looked to see if she was "operating" the automobile. They concluded that Anna was also "operating" the vehicle when she grabbed the steering wheel. By grabbing the wheel and exerting a force on it, she obtained control of the vehicle, even though for only an instant.
The final issue was whether or not Anna had permission to be operating the automobile. The issue on this point was not whether or not Douglas considered her to have permission. The focus by the court was whether or not Anna had a reasonable belief that she was entitled to grab the steering wheel when she did. In light of the testimony to facts in this case the court concluded that she did believe she had permission to act as she did and thus she became a covered driver under the policy of insurance.
These cases are fact specific and when someone finds themselves in a position having to argue this one way or the other, it is vital that an experienced Insurance Law Attorney be consulted.

If you are a business owner in Grand Prairie, Arlington, Mansfield, Hurst, Euless, Bedford, Keller, Colleyville, Plano, Fort Worth, Burleson, or anywhere else in Texas and one of your employees is involved in an accident in a company vehicle, will your insurance provide coverage for him? This is the second of three posts on this related subject. Read on to find out what happened in one case.
The Texas Supreme Court, in 1979, issued an opinion in the case, Betty Coronado v. Employers' National Insurance Company et al.
The issue before the court in this case was whether an employee who was driving a company owned vehicle on a purely personal mission after working hours was operating the vehicle with the permission of the company so as to be insured under the company's automobile liability policy. The jury said yes. The first appeal court said no and the Texas Supreme Court agreed with the decision of no.
The facts were as follows. On August 23, 1974, Fernando Sotelo was one of five operators for White Well Service and, as such, he was in charge of a crew of three other men. He was assigned a company truck for use in the performance of his duties. The company yard was located in Wickett which is a small town a few miles west of Monahans where Sotelo and his crew lived. Sotelo used the pickup to transport his crew to and from their homes to the company yard each day as well as from the company yard to the different well locations where their work was to be performed. On August 23, he and his crew left the company yard about 4 or 4:30 p.m. after completing their work for the day. Sotelo drove east on Highway 80 towards Monohans and the homes of all crew members. All of the crew lived on the east side of Monahans near the highway. He testified that just before they reached the intersection of Loop 464, which is on the western edge of Monahans, they decided to go to Wally's Bar and have a beer. They stayed there for three or four hours and then went to Rose Gardens, which is another bar located some distance west of Wally's Bar. He left Rose Gardens sometime after midnight, apparently many beers after leaving the company yard. Shortly thereafter, he was involved in a collision with another vehicle and, as a result thereof, Reynoldo Coronado lost his life.
Betty Coronado, the surviving wife of Reynaldo, subsequently brought suit against Sotelo and the jury found in her favor. She then sued White Well Service and Employers National Insurance Company, who had issued the auto policy.
It was not contended in this case that Sotelo had express permission to use the vehicle for the purpose it was being used at the time and place he was involved in the fatal accident. In fact, Sotelo testified that such a use was prohibited by his employer. It was urged, however, that his employer had impliedly granted him permission for such use by acquiescence or lack of objection to similar use on prior occasions.
Since the uncontradicted evidence established that Sotelo was permitted to use the vehicle for business purposes only, the precise question before the court was whether his deviation for personal pleasure at the time and place of the accident was such as to avoid coverage under the policy.
The court discussed that there are three different approaches to the problem of deviation in the United States; 1) the "strict" or "conversion" rule, 2) the "liberal" rule, and 3) the "minor deviation" rule. Under the "strict" rule, the actual use at the time of the accident must be within the time limits and geographical area specified or contemplated by the parties, otherwise permission cannot be found to exist. Under the "liberal" rule, coverage is extended so long as the vehicle was originally entrusted by the named insured to the person operating it at the time of the accident. The only essential thing is that permission be given for use of the vehicle in the first instance and coverage remains afforded irrespective of how gross the deviation from the original use. The third position is somewhat between these two extremes and the courts applying this rule modify the strict rule to the extent that protection will be afforded if the use is not a material or gross violation of the terms of the initial permission. Under this rule, the court must determine in each instance taking into account the extent of deviation in actual distance or time, the purposes for which the vehicle was given, and other factors whether the deviation was "minor' or "material."
Based on the evidence in the case and the prior paragraph guidance on these issues the court found there was no coverage in this instance. Each of these cases are fact specific and have to be examined on an individual basis.

If you live in Grand Prairie, Arlington, Fort Worth, Mansfield, Duncanville, De Soto, Hurst, Euless, Bedford, Aledo, Azle, Weatherford, or anywhere else in Texas and a friend or acquaintance uses your car and has a wreck is there coverage? This posting and the two following will show what has happened in three previous cases.
In 1966, the Texas Supreme Court, in the case, Royal Endemnity Company v. H.E. Abbott & Sons, Inc., had this question before them in a case.
In this case, a 1961 pickup truck owned by Jack Herring and driven by George K. Landers ran into and damaged a building owned by H.E. Abbott & Sons, Inc. The truck was insured by a liability policy issued by Royal Indemnity Company. The insurance policy with Royal had a clause extending coverage to anyone operating the truck with Herring's implied permission. In the lawsuit, Abbott obtained a judgment against Landers then sued Royal to enforce its judgment.
The case turns upon whether Landers was using the truck with the permission of Herring. There is no alligation that Landers had express permission to use the truck, but the jury found that Landers had Herring's implied permission to be using the truck.
The relevant facts are that Landers was hired by Herring on April 18, 1963, to work on Herring's ranch which was located some 14 miles from the city of Ballinger, Texas. Landers had a drivers license. Landers was paid monthly, plus his room and board, and lived in a small house on the ranch. Originally, Landers was to prepare his own meals but he soon began eating with the Herring family in the main ranch house. He often prepared his meals there when the Herrings were not at home.
Herring owned three vehicles: a ranch truck, which was unlicensed and intended for use on the ranch only, the 1961 pickup truck, and a passenger vehicle. Landers had permission to use the ranch truck, but only on the ranch. Herring always drove the 1961 pickup truck. Landers had permission to use the 1961 truck only if the ranch truck was being prepared and Herring was not using it. The keys were always left in both vehicles.
On the day of the wreck Herring and Landers had made a trip, with Herring driving, in the 1961 pickup. At the end of the day, Herring and his family left the ranch to spend the night. Landers had told Herring that a friend was coming to get Landers and the two were going to go to San Angelo. This plan did not materialize and Landers ended up leaving the ranch in the 1961 pickup and the wreck eventually occurred.
Upon learning of the wreck, Herring went to see Landers and threatened to "beat the stuffing" out of him. Plus he threatened to file charges against Landers.
On three or four previous occassions prior to the accident, Landers had driven one of the vehicles off the ranch to pick up the Herring children at a school bus stop some five miles from the ranch house. These were the only times Landers had driven off the ranch, and on each occassion he was expressly instructed by Herring to pick up the children. Herring had never told him to use the vehicles off the ranch. Landers had no car of his own, and Herring always took him to town whenever Landers wanted to go.
In this case, the jury hearing the case decided that Landers had the implied permission of Herring to use the vehicle at the time of the wreck. The Texas Supreme Court decided that the weight of the evidence was against such a finding and reversed the decision of the jury, ruling that the great weight of the evidence was against such a finding.
Here is what the court stated in making the above finding:
"In the present case the evidence shows neither a relationship nor a prior course of conduct from which implied permission might fairly be inferred. Landers was employed as a ranch hand. He had never driven one of the vehicles off the ranch except when specifically instructed to do so, and had never used any of them for a personal errand. His employer had always driven him to town whenever he wanted to go, and had no reason to believe that he intended or might need to use one of the vehicles on the evening of the accident. In view of these undisputed facts, the limited privileges Landers was allowed in the Herring house, his occassional pleasure trips with Herring, the availability of the vehicles, his use of the same on the ranch, Herring's inquiry about his driver's license, and the absence of any prior instruction not to take the vehicles off the ranch, afford no basis for concluding that Landers had implied permission to use the truck for a trip to San Angelo on a personal mission."
These types of cases are fact driven and have to be looked at on an individual basis.

What can someone in Grand Prairie, Arlington, Mansfield, Bedford, Hurst, Euless, De Soto, Duncanville, Fort Worth, or anywhere else in Texas do when they are being "jerked around" by an insurance company? Answer number one - Find an experienced Insurance Law Attorney to consult with. Answer number two - file a complaint.
Seeking the aid of an experienced Insurance Law Attorney is sometimes hard to do. There are a lot of attorneys that help victims of accidents. These attorneys are usually referred to as Personal Injury Attorneys. These types of claims are called third party claims. The other type of claim is called a first party claim. This is a claim against your own insurance company. There are not that many attorneys that have experience in handling these types of claims. These attorneys are usually referred to as Insurance Law Attorneys.
The majority of the time an attorney is going to be able to get you the money you are entitled to plus more depending on how wrong the conduct of the insurance company has been in handling the claim. Consultations are usually free and there is nothing to lose by having an attorney look at your situation.
As to "answer number two", filing a complaint, the Texas Department of Insurance has a website that a consumer can go to for filing a complaint. After studying the complaint, the consumer protection division sends the insurance company a copy and asks for a detailed written response to the complaint. The Texas Department of Insurance is understaffed for properly supervising insurance companies but one way for an insurance company to get their attention is to not respond to the complaint. As a result a response is almost gauranteed. The problem is that once the response is received, very little else is done. As you could assume, the insurance company response is going to be self serving.
What next happens is the Texas Department of Insurance staff determines if the claim or any other issue was handled properly under the policy. Again, the response from the insurance company is self serving and there is little ever done.
The Texas Department of Insurance staff also reviews the file to assess whether laws were violated. Most these laws are found in the Texas Insurance Code. If violations are found, the department institutes an enforcement action that can result in sanctions ranging from a fine and restitution to revocation of the insurance company's state license.
As previously stated, usually nothing is done as long as the insurance company files a response. Failing to file a response results in an investigator going to the insurance company. Based on the response received, the normal outcome is that the department communicates with the person complaining saying that there seems to be an honest dispute between the person and the insurance company and that the person complaining should seek an attorney. Thus, we are back to answer number one.
It should be remembered that filing complaints is still important. If legal action by an attorney is commenced against an insurance company it sure helps the case for the attorney to be able to get his hands on copies of the complaints filed against the insurance company.

It would be fair to say that most residents of Grand Prairie, Arlington, Mansfield, Coppell, De Soto, Duncanville, Fort Worth, Weatherford, and all other places in Texas, are responsible and conduct themselves in fair and proper ways in their dealings with others. Unfortunately that is not the way insurance companies always conduct their affairs.
The Dallas Morning News recently ran an article showing misconduct by two insurance companies doing business in Texas. The article is titled, "2 Texas auto insurers top complaints list, face investigation." This article ran on June 5, 2010, and was authored by Terrence Stutz. Almost any experienced Insurance Law Attorney could tell you the names of the insurance companies that treat people right most of the time and the ones that treat people wrong most of the time. Further, even the "good" companies will do people wrong too many times.
In the article, Terrence Stutz gives some examples that are typical problems with the two companies named. The insurance companies are Loya Insurance and Old American County Mutual. These two companies were at the top of the list after an analysis of the Texas Department of Insurance figures showed that 10 of the 25 largest auto insurers in the state had worse than average customer service records. The above companies were at the top of the list.
One example cites where a driver, Larry Randal, was in an accident that was not his fault. His vehicle was sideswiped and forced off the road. The driver at fault had tried to flee the scene. Randal's damages were $1,700, but the insurance company, Loya Insurance, offered to pay only $270.
Another example cited in the article involved a hospital administrator who was offered a low ball figure for damages to her car that was more than a $1,000 less than was what was needed to fix her car even though the other driver admitted fault.
A third example showed a Loya insured driver running a stop sign and broadsiding a lady named Arlene Gillespie and her three year old daughter. The driver was suspected of drinking and ran from the scene, but dropped his wallet and cell phone allowing the police to determine his identity. She got the run-around from Loya who eventually compensated her for her car but still had not taken care of the leg injuries that were sustained in this broadside collision.
Other examples are cited in the article. All the examples are situations where the insurance company should just take care of the claim and allow the not at fault drivers to get on with their lives.
Complaints to the Texas Department of Insurance should not be discouraged but rarely will anything be done. The Texas Department of Insurance cannot make or force a company to pay a disputed claim if there is no violation of the law nor can they decide who is at fault. The only positive outcome to filing a complaint is that records are kept and this information is then available to other prople and sometimes can be used in litigation against these companies.
It is companies like this, conducting their business with total disregard of the consequences to those who are harmed by their conduct, that force victims to seek legal help in situations that should be worked out without the need of seeking an attorney.

What if someone in Grand Prairie, Arlington, Duncanville, Mansfield, Burleson, Weatherford, Fort Worth, or some other city in Texas is involved in an accident, as an employee, with an underinsured driver? Does the employers underinsured portion of their insurance policy provide coverage?
This was the issue in a May 12, 2010 case decided by District Judge, T. John Ward, of the United States District Court, E.D. Texas, Marshall Division. The style of the case is, Dean and Parwana Amanzoui, Individually and as next friends of Fahim Amanzoui and Sabrina Amanzoui v. Universal Underwriters Insurance Company.
In this case, Parwana Amanzoui (Parwana) was riding in an automobile driven by her husband, Dean Amanzoui, and owned by her husband's employer, the Huffines Automotive Group (Huffines). At the time of the accident, Huffines carried its insurance with Universal Underwriters Insurance Group (Universal) pursuant to a multiple coverage policy. Coverage under the policy for underinsured motorist (UIM) was limited. "Insureds" for purposes of UIM coverage was expressly limited to three categories of persons: (1) persons designated on the declarations as subject to the UIM policy, (2) family members of persons designated in the UIM policy, and (3) persons occupying vehicles driven by someone falling within category no. 1 or no. 2. It was uncontested that Parwana was not included in this list.
Texas Insurance Code, Section 1952.101, was relied on by both sides of this case.
The material facts in this case were not in dispute. The sole issue was whether the policy language above provided coverage to Parwana.
Citing Section 1952.101, Parwana argued that Texas law does not allow Huffines to accept liability coverage for its "friends and family" while excluding occupants of otherwise covered vehicles and individuals who are otherwise "insured" under the policy. Thus, Universal's efforts to impose restrictions not found in the statute are improper and ineffective as attempts to void or narrow the scope of insurance coverage specified by the Texas legislature in drafting the statute.
The finding of this Court was that the policy was clear and unambiguous that Parwana was not entitled to recover UIM benefits. The Court explained by saying that Parwana can only be an insured if she qualified as an individual designated in the declarations, a family member of such individual, or a passenger in a covered auto driven by these individuals. She did not qualify.
The Court found that if Huffines had the legal right to reject the UIM coverage in toto per Section 1952.101, that it had the right to restrict UIM coverage to selected individuals. Further, the Texas Supreme Court, in a 1997 case, Grain Dealers Mutual Insurance Company v. McKee, has held that it is not against public policy to limit UIM insureds to certain individuals.
The important point in this case was the ruling by the Court that certain persons can, pursuant to the insurance contract, be covered by UIM coverage while others are excluded from the same coverage.
Whenever this isssue comes up, it is important to carefully read the policy.

Auto policy holders in Grand Prairie, Arlington, Fort Worth, Mansfield, Azle, Dallas, Weatherford, or any other city in Texas would want to know what all that "stuff" in their auto policy means. One part that is pretty easy to explain is the "Named Driver Exclusion." This is other times called the "515-A Exclusion" or "515-A Endorsement".
The normal automobile insurance policy is going to have a part that reads, "You agree that none of the insurance coverage afforded by this policy shall apply while ______________ is operating your covered auto or any other motor vehicle. These exclusions and endorsements are legal in insurance contracts. The language used is partly governed by laws published in the Texas Insurance Code. See Sections 1952.051 et al and Sections 2301.001 et al. As for the "Named Driver Exclusion", it is legal and is intended to give policy holders the option to exclude from coverage drivers who, by virtue of their driving history or other factors, are deemed high risk drivers. This category of drivers would include drivers who have been convicted of violating the Driving While Intoxicated laws found in the Texas Penal Code, drivers with too many moving violations, too many wrecks, and other high risk drivers such as teenagers who have just got their license. It is important to realize that almost all of these drivers can get insurance but the cost of the insurance is much higher than what other drivers must pay.
The Texas Corpus Christ Court of Appeals decided a case in 1996 that is often cited for the validity of the Named Driver Exclusion. The style of the case is, Janie Zamora, Pete Zamora, Jesus Toc, and Gracie Vela v. Dairyland County Mutual Insurance Company. In this case the excluded driver was Gracie Vela, who was driving Jesus Toc's vehicle. She had a wreck with the Zamoras causing them injury. In this case, the court upheld the validity of the exclusion and discussed the reasons for its validity.
Gracie Vela was a known risk to drive because she suffered from epileptic seizures, had been advised not to drive, and did not even have a driver's license.
The court stated that the Named Driver Exclusion furthered Texas public policy on two levels; first, the named driver exclusion furthers public policy by enabling drivers with family members having poor driving records to secure insurance they can afford, rather than being relegated to securing coverage from an assigned risk pool at a much greater cost. And, second, by detering insured drivers from entrusting their automobiles to unsafe drivers, thus, keeping those unfit drivers off public roadways.
Here, Dairyland County Mutual Insurance Company denied the claim made by the Zamora's when the Zamora's were sued for negligently entrusting their vehicle to Vela for her to drive. Toc sued along with rest of the plaintiffs, challenging the validity of the exclusion. It was upheld as being valid by the court.
An experienced Insurance Law Attorney on rare occassion can beat this exclusion. However, the facts allowing this exclusion to be deafeated are limited and each case has to be looked at closely.

When a house burns in Grand Prairie, Arlington, Colleyville, Keller, Mansfield, Fort Worth, Azle, Aledo, or Weatherford, or anywhere else in Texas; What happens when the house catches on fire? Will the insurance company pay for the damages?
In, State Farm Fire & Casualty Insurance Company v. Simmons, the answer was no until the case went to court. At that point, State Farm Fire & Casualty Company (State Farm) was eventually ordered to pay the damages. This is a 1998, Texas Supreme Court case. In this case, the Simmons had moved into a new home and spent monies improving the property and buying items for the inside of the house. Their house had been burglarized in the middle of the day and later those responsible were located.
Mr. Simmons, a construction supervisor, had experienced down time from work and the Simmons had missed house payments. They later refinanced the house. They continued to experience problems with vandalism and other strange occurrances around the house.
Eventually, one day they left the house for a trip and the house burned down. They made a claim to State Farm for benefits. State Farm denied the claim. State Farm asserted that the Simmons burned down their own home on purpose.
The Simmons sued State Farm for breaching its duty of good faith and fair dealing, violations of the Deceptive Trade Practices Act (DTPA) and punative damages. The jury found in favor of the Simmons and awarded $275,000 in actual damages and $2 million in punative damages. The Supreme Court took away the punative damages.
In supporting the jury finding that State Farm violated its duty of good faith and fair dealing the court pointed out the following;
1) the earlier burglary claim, which State Farm said was suspicious, later the culprits were found and Mr. Simmons returned merchandise to State Farm that State Farm had paid for when the police returned it to Simmons, yet State Farm still considered this "suspicious."
2) State Farm refused to investigate for other suspects in the fire even when there was evidence that others may have been involved;
3) State Farm's claims supervisor conceded that State Farm's investigation was not properly conducted;
4) on expert testimony of eight reasons why people commit arson, six did not apply to the Simmons; the seventh had to do with people removing furniture and personal items from the property and even though they had taken some of the kids summer clothes out of the house, other items, some very personal in nature were not taken, and the eigth reason dealt with financial burdens. Here, the Simmons had always had problems but State Farm relied on the Simmons burden of a $1,343 monthly house payment. The evidence showed they had refinanced and that their actual burden was $540 a month less;
5) the Simmons mortgage obligation exceeded the policy limits on their homeowners insurance by several thousand dollars, thus leaving them still in debt;
6) conflicts in the investigation process which could have been addressed by talking to the Simmons were never resolved because State Farm did not talk with them.
The bad law in this case is the court setting a high standard for punative damages by way of the Texas Civil Practices & Remedies Code, Section 41.001.
The court did allow for the damages under the Texas DTPA, and remanded the case to the trial court for a finding on those damages.

There are homeowners in Grand Prairie, Arlington, Mansfield, Weatherford, Aledo, Fort Worth, and everywhere else in Texas. 95% of those homeowners have insurance. So how do you know if your insurance company is violating the "bad faith" laws in Texas?
Here is a 1997, Texas Supreme Court case to read to give some insight into the above question. The case is, State Farm Lloyd's v. Ioan and Liana Nicolau.
In the insurance claim giving rise to this dispute, the Nicolau sought coverage for extensive foundation damage to their home. The homeowners policy, issued by State Farm Lloyds, (State Farm) generally excludes losses caused by "inherent vice," or by "settling, cracking, bulging, shrinkage, or expansion of foundations." Under an express exception, however, these exclusions do not apply to losses caused by an "accidental discharge, leakage or overflow of water" from within a plumbing system.
The Nicolau suspected damages for an extended period of time and had it investigated before turning to State Farm. They hired a foundation repair contractor and a structural engineer with Maverick Engineering. After much time went by and numerous tests, they finally concluded the problem was the result of a substantial leak in the plumbing system.
State Farm, hired an adjuster with ABJ Adjusters, Inc., who submitted two reports expressing doubt about the foundation problem being the result of the plumbing leak. State Farm then hired Haag Engineering Company who did a report concluding that the leak was not causing the foundation problems. Based on this report State Farm denied the claim made by Nicolau.
The Nicolau then hired Trinity Engineering Testing Corporation (Tetco) who filed a professional and detailed report stating the foundation problem was the result of the leak and detailing why that conclusion was reached.
The Nicolau then sued State Farm, asserting breach of contract and several extracontractual claims based on State Farm's conduct. The jury found for the Nicolau and State Farm filed this appeal.
At the trial of this matter, evidence was introduced that Haag worked almost exclusively for State Farm. That they always found in favor of State Farm in ways to exclude coverage on the policy. That in the two cases where they had made finding against State Farm that the employees responsible for the findings were terminated.
In ruling in favor of the Nicolau the jury also assessed punative damages against State Farm. The Texas Supreme Court took away some of these punative damages but remanded the case to the trial court for findings of damages under the Texas Deceptive Trade Practices Act.
The relevance of this case is seeing how the appeals court looks at these bad faith cases to determine whether or not the insurance company has actually acted in "bad faith." An experienced Insurance Law Attorney is very helpful in understanding how the courts in Texas look at these cases. He can advise as to the best course of action to get a remedy for the wrongs that are committed.

What if a resident of Grand Prairie is involved in a wreck on his motorcycle with an uninsured driver? Any difference if he is a resident of Fort Worth, Arlington, or Dallas? Answer - not for anyone in Texas.
This is what happened in the 1987 case, Glen Arnold v. National County Mutual Fire Insurance Company. This Texas Supreme Court case is an insurance contract dispute. Arnold was severly injured when the motocycle he was operating was struck by an uninsured motorist. Arnold had uninsured motorist benefits protection on the policy he had with National County Mutual Fire Insurance Company (National). Arnold made a demand for payment and the independent adjusting firm hired by National recommended the claim be paid. In spite of this, National refused to pay.
Arnold sued and won a judgment exceeding the policy limits then sued National for breaching its duty of good faith and fair dealing.
National had refused to initially pay benefits because they believed that potential jurors would be prejudiced against Arnold because he was a "motorcyclist."
In this case, Arnold raised the issue of whether there is a duty on the part of insurers to deal fairly and in good faith with their insureds. The court held that such a duty of good faith and fair dealing did exist. The court stated, "While this court has declined to impose an implied covenant of good faith and fair dealing in every contract, we have recognized that a duty of good faith and fair dealing may arise as a result of a special relationship between the parties governed by a contract." This was stated in the 1984, Texas Supreme Court case, Manges v. Guerra.
The court further stated, "In the insurance context a special relationship arises out of the parties' unequal bargaining power and the nature of insurance contracts which would allow unscrupulous insurers to take advantage of their insureds' misfortunes in bargaining for settlement or resolution of claims. In addition, without such a cause of action insurers can arbitrarily deny coverage and delay payment of a claim with no more penalty than interest on the amount owed. An insurance company has exclusive control over the evaluation, processing, and denial of claims. For these reasons a duty is imposed that an indemnity company is held to that degree of care and diligence which a man of ordinary care and prudence would exercise in the management of his own business." This in part cites the famous Stowers case.
An expereinced Insurance Law Attorney is going to be familiar with this case and others like it. In this regard, he is in position to give advice on the facts he may be presented with by clients having difficulties with their insurance company.

The guy in Grand Prairie, Arlington, Weatherford, Fort Worth, Dallas, or any other place in Texas, wonders what he can do when his insurance company does him wrong. Usually when an insurance company does something that is wrong with one of their insured policyholders, that is called "bad faith" insurance.
Changes in insurance laws in recent years have made it more difficult to make bad faith claims against insurance companies. But this concept of bad faith is definitly not dead. The Texas Department of Insurance has a complaint department that does investigate improper conduct by insurance companies. That is the good news. The bad news is that they seldom do anything except in the most extreme cases where the wrongs are big and affecting thousands of people. What they often times end up telling individuals is that they should consult an experienced Insurance Law Attorney to further pursue complaints. It is not that they don't care, it's that they do not have the staff to be pursuing all the wrongs being committed.
A person should never give up when being wronged by one of these companies. The Texas Insurance Code has contained within it, statutes with a lot teeth for attorneys to use in making an insurance company pay for the wrongs it commits. Section 541.060, is titled "Unfair Settlement Practices" and lists several acts, or examples of inaction, that will subject an insurance company to civil liability to the person being wronged.
Section 542.051 thru 542.061, is known as the "Prompt Payment Statute" and also has lots of "teeth" to it.
When talking about bad faith it is sometimes difficult to convey that concept to prospective jurors and when it can be effectively conveyed, the Texas Supreme Court has a history of reversing judgements in favor of policyholders and ruling in favor of the insurance companies. Most cases do not end up going all the way to a trial, but the cases get resolved or settled based on what each side believes would happen if the case did go to trial. In this regard, a jury can appreciate a rule in the law books, the insurance company violated the rule, and the company needs to be held liable for violation of the rule.
Generally, bad faith claims fall intend categories such as:
1) There is a wrongful denial of coverage;
2) A claim where you can show the company intentionally or knowingly or wrongfully denied, delayed, or attempted to under pay the claim. The actual legal standard is, "knew or should have known." This is discussed in the Texas Supreme Court case, The Universal Life Insurance Company v. Giles. Here, it was held that Universal Life breached its duty when they failed to settle a claim when they knew or should have known that the claim was covered.
3) There was a complete failure to conduct an investigation of the claim.
4) The carrier took a crazy position on liability or damages which either denied or delayed payment because you can show that there was no basis in fact for the original position. In the case, State Farm Lloyd's v. Nicolau, the court found bad faith when State Farm Lloyd's relied on an expert's report and found evidence that the report was not objectively prepared and therefore State Farm Lloyd's reliance upon it was unreasonable.
One of the better models to look at is the case, State Farm Fire & Casualty Co. v. Simmons. This 1997, Texas Supreme Court case had the court focused on whether State Farm Fire & Casualty fulfilled its duty to its insured by pursuing a thorough, systematic, objective, fair and honest investigation of the claim prior to denying the claim.
What should be obvious is that an experienced Insurance Law Attorney needs to consulted in cases where an insurance company is denying a claim. Bad faith cases are good cases for attorneys to be able to help their clients. And even where bad faith is hard to prove there are still the other statutory remedies that are available.

What if you are a "good ole boy" in Weatherford, Texas? Or for that matter, in Arlington, Grand Prairie, Fort Worth, or Dallas, and you have a gun rack in your vehicle. In the gun rack you have a loaded firearm. Next, the firearm is accidently discharged. Will your insurance company cover the resulting damages to others? The answer is a lawyerly answer for you: It depends.
Here is an interesting case issued by the Texas Supreme Court. This case discusses how the facts should be analysed to see if coverge will exist. The case, decided in 1999, is styled, Mid-Century Insurance Company of Texas, a division of The Farmers Insurance Group of Companies, v. Richard Tanner. The cite is, 997 S.W.2d 153.
The question for the court to decide in this case was whether the underinsured motorist provision of a standard Texas personal auto policy covers the insured's bodily injuries resulting from the unintentional discharge of a shotgun on a gun rack in a pickup truck parked nearby. The answer, in this case, depended on whether, within the meaning of the policy, the injuries resulted from "an accident" "arising out of" the "use" of the truck.
The facts: Richard Metzer and his wife had been fishing with their nine year old son when the boy returned to their pickup to get his coveralls. The truck was locked and the boy climbed into the bed of the truck and attempted to enter the cab through the truck's sliding rear window. In doing this, he accidentally touched a loaded shotgun in the gun rack, in the rear window, causing the gun to discharge. The buckshot struck Richard Lindsey, who was seated in his mother's car parked next to the pickup. Lindsey sued Metzer and recovered the policy limits, which was far less than the total of his damages. He then claimed the underinsured policy limits from his mothers policy which was issued by Mid-Century. Mid-Century denied the claim. Lindsey sued.
The Mid-Century policy states:
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured (or underinsured) motor vehicle because of bodily injury sustained by a covered person, ...
The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured (or underinsured) motor vehicle.
The sole dispute was over whether Lindsey's injuries were caused by, 1) an accident, 2) arising out of the use of Metzer's truck.
The court discussed the definition of an accident then ultimately stated, Metzer's son intended only to gain entry to the truck. He did not intend to cause the shotgun to discharge or Linsey to be injured, nor was it reasonably foreseeable that either consequence would result from the boy's trying to enter the pickup through the rear window. Metzer's son was not playing with the gun or acting recklessly. There is no evidence that he even knew it was loaded. His injuring Lindsey was an accident.
The next issue was whether this accident arose out of the use of the pickup. For liability to "arise out of" the pickup, a casual connection or relation must exist between the accident and the use of the motor vehicle. The court stated; "Whether a person is using a vehicle as a vehicle depends not only on his conduct but on his intent."
The court next got into a discussion using well established legal treatises on insurance law. One was, Couch on Insurance. The other was, Appleman's Insurance Law and Practice. Using these treatises they found numerous cases throughout the country using the following test for determining whether an injury arises out of the use of a motor vehicle for purposes of auto liability insurance coverage:
For an injury to fall within the "use" coverage of an automobile policy (1) the accident must have arisen out of the inherent nature of the automobile, as such, (2) the accident must have arisen within the natural territorial limits of an automobile, and the actual use must not have terminated, (3) the automobile must not merely contribute to cause the condition which produces the injury, but must itself produce the injury.
There was much further discussion on the above and what other courts in other states have decided. Applying all these considerations to the facts in this case the court concluded that Lindsey's injuries arose out of the use of the Metzer truck as a matter of law.
There are actually a lot of cases discussing what is covered and what is not covered. An experienced Insurance Law Attorney is familiar with these cases. He would be able to disuss these cases and give advice on whether the facts in any particular situation would be covered by insurance.

You live in Grand Prairie, Fort Worth, Arlington, Dallas, Weatherford, or anywhere else in Texas and you get treated wrong with your insurance policy - Who do you sue? The answer is not very hard.
First of all .... seek the advice of an experienced Insurance Law Attorney. Then ...
The Texas Insurance Code, Section 541.151, provides that a person who has sustained damages caused by another's engaging in unfair or deceptive insurance practices may sue the person engaging in those acts or practices. Texas Insurance Code Statute, 541.002(2) defines "person" to mean "an individual, corporation, association, partnership, reciprocal or interinsurance exchange, Lloyd's plan, fraternal benefit society, or any other legal entity engaged in the business of insurance, including an agent, broker, adjuster or life insurance counselor."
The Texas Supreme Court, in Liberty Mutual Insurance Co. v. Garrison Contractors, Inc., applied the plain language of the above statute to hold that the term "person" includes businesses and individuals "engaged in the business of insurance." But, the statute would not apply to an insurance company employee that was not engaged in the "business of insurance." This would include persons who have no responsibility for the sale or servicing of insurance policies and no special insurance expertise, such as a clerical worker or janitor. The distinction here is that the person who could be held liable under the statute is someone such as the agent whose job duties include soliciting and obtaining policy sales, explaining policy terms, and explaining premiums, - these are the persons who could be held liable under the statute.
Engaging in unfair practices in "the business of insurance" is the key to liability. Those engaged in it may be liable. Those who are not, may not be liable.
In addition to the court's holding in the above case, Liberty Mutual v. Garrison, which held that the sale of a policy is part of the business of insurance, the court also has held that those involved in the investigation and adjustment of claims and losses are also "engaged in the business of insurance." This is affirmed in the Texas Supreme Court case, Vail v. Texas Farm Bureau Mutual Insurance Company, decided in 1988. This case makes it clear that the investigators and adjusters working for the insurance company can be held liable for their actions under the Texas Insurance Code.

Is a Grand Prairie resident who purchases an auto policy a person or a consumer for purposes of Texas law? What about residents of Arlington, Fort Worth, Weatherford, or Dallas? Why does it matter?
The Texas Insurance Code allows "persons" to bring claims against insurance companies and their agents. The Deceptive Trade Practices Act (DTPA) gives this power to "consumers". The DTPA, Section 17.45(4) defines consumer as one who seeks or acquires goods or services.
Someone suing under the Insurance Code does not have to prove he is a consumer. This is told to us in the 1987, Texas Supreme Court case, Aetna Casualty & Sur. Co. v. Marshall.
Insureds and beneficiaries of insurance policies meet both definitions. This is because of the direct relationship with the insurance company, and any misconduct by the insurance company affects them directly, plus they are the ones who sought or acquired the insurance services.
Other potential plaintiffs may be "persons" but not "consumers". An example of this is the insurance agent in Crown Life Ins. Co. v. Casteel, decided in 2000. The agent could sue under the Insurance Code as a person harmed by the insurance company conduct, but not as a consumer, because he did not seek or acquire the insurance coverage. He could not sue under the DTPA since it only applies to consumers.
In the 1995 case, Transport Insurance Company v. Faircloth, another Texas Supreme Court case, the court held that third parties negotiating a settlement with an insurance company do not seek to purchase or lease any of the services of the insurance company; they only seek proceeds of the policy. Thus, they are not consumers.
This restriction applies to the following DTPA sections that expressly include the word "consumer", and those that refer to "goods and services." Texas Business & Commerce Code, Section 17.46(b)(5), (7), (9), and (23).
It should be noted that for each of the DTPA sections that apply only to "consumers" there is a prohibition in the Insurance Code that can apply to the same conduct. As an example, DTPA Section 17.46(b)(24) prohibits nondisclosures to consumers. Looking at Insurance Code Sections 541.061(2) and (3), they prohibit failing to state information, and stating information in a misleading manner, both of which may address nondisclosures. Likewise, in place of the DTPA misrepresentation sections that apply only to consumers, a person may rely on Insurance Code Sections 541.060(a)(1) and 541.061(1).
An experienced Insurance Law Attorney will be able to know which sections of the DTPA and the Texas Insurance Code apply to any given situation.
The importance here is that suing under the wrong section will end up in getting a case thrown out of court. Also, the goal would be to maximize the recovery to be allowed and by filing a lawsuit under all applicable theories under the law helps achieve that result and discourages wrong conduct on the part of the insurance companies.

Grand Prairie residents, residents of Arlington, Mansfield, Fort Worth, Dallas, Weatherford or anywhere else in Texas have the same insurance laws apply to each other. They all need to know there is a law that prohibits unfair settlement practices in the State of Texas.
Texas Insurance Code, Section 541.060, is titled "Unfair Settlement Practices". It is the law that prohibits these types of actions. The statute prohibits engaging in any of the following settlement practices with respect to a claim by an insured person or his beneficiary:
(1) misrepresenting to a claimant a material fact or policy provision relating to coverage at issue;
(2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim:
(a) with respect to which the insurer's liability has become reasonably clear; or
(b) a claim under one portion of a policy of a claim with respect to which the insurer's
liability has become reasonably clear in order to influence the claimant to settle
an additional claim under another portion of the coverage, unless payment under
one portion of the coverage constitutes evience of liability under another portion of
the policy;
(3) failing to provide promptly to a policyholder a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer's denial of a claim or for the offer of a compromise settlement of a claim;
(4) failing within a reasonable time to:
(a) affirm or deny coverage of a claim to a policyholder; or
(b) submit a reservation of rights to a policyholder:
(5) refusing, failing, or unreasonably delaying an offer of settlement under applicable first-party coverage on the basis that other coverage may be available or that third parties are responsible for the damages suffered, except as may be specifically provided in the policy:
(6) undertaking to enforce a full and final release of a claim from a policyholder when only a partial payment has been made, unless the payment is a compromise settlement of a doubtful or disputed claim;
(7) refusing to pay a claim without conducting a reasonable investigation with respect to the claim;
(8) with respect to a Texas personal auto policy, delaying or refusing settlement of a claim solely because there is other insurance of a different type available to satisfy all or any part of the loss forming the basis of that claim; or
(9) requiring a claimant, as a condition of settling a claim, to produce the claimant's federal income tax returns for examination or investigation by the person unless:
(a) a court orders the claimant to produce those tax returns;
(b) the claim involves a fire loss; or
(c) the claim involves lost profits or income.
Here are a couple of examples where courts have held that the insurance company violated the above section of the Insurance Code. The first is a 1988, Texas Supreme Court case. The style is, Vail v. Texas Farm Bureau Mutual Insurance Company. In this case Texas Farm Bureau Mutual Insurance Company denied a fire loss claim, based on an arson defense that the jury rejected. The court found that Texas Farm committed an unfair insurance practice by failing to act in good faith to settle once its liability became reasonably clear.
The second case, is a 2000 case, decided by the Texas Court of Appeals in Corpus Christi. The style of this case is, Colonial County Mutual Insurance Company v. Valdez. Here, the court ruled that proving Colonial County Mutual Insurance Company did not meet the deadlines in the Prompt Payment of Claims statute, Texas Insurance Code, Section 542.051 thru 542.061, may be proof to show Colonial County committed an unfair settlement practice by not meeting the "reasonable time" requirements in the above statute.
Whenever a person gets the feeling they are not being treated right by an insurance, they should seek legal help with an experienced Insurance Law Attorney. In fact, they should talk to an attorney any time they are having to make a claim against an insurance company.