Dallas Fort Worth Insurance Lawyer Blog

Customers in Grand Prairie, Arlington, Mansfield, Fort Worth, Hurst, Euless, Bedford, Saginaw, Haslet, Rhome, and other places in Texas would have a hard time trying to read and interpret an insurance policy. This is when the advice of an experienced Insurance Law Attorney is most helpful.
The United States District Court, Southern District of Texas, Houston Division, issued an opinion on October 5, 2011. This opinion deals with policy interpretation. The case arises from a declaratory judgement lawsuit filed by the insurance company, RLI Insurance Company, and the partial motion for summary judgment filed by the insured, Willbros Construction (U.S.) LLC, et al.
The court ruled in favor of the insureds. Her is some factual background.
This case concerns whether a particular exclusion in an insurance policy precludes coverage of the value of line pipe that the insureds attempted to install under a river. RLI issued a policy to the insured that was in effect during all relevant times. The insureds had been retained to construct a natural gas pipeline ("the project"). The insureds subcontracted with Southeast Directional Drilling, LLC (SEDD) to drill the pipeline hole. While SEDD was installing the line pipe by pulling it through a hole drilled underneath a river, the line pipe became lost and damaged. A replacement hole was drilled, and the insureds purchased replacement line pipe. They submitted a claim under the policy for $1,567,530.09, to recover the cost of the replacement line pipe, which RLI denied. This lawsuit resulted.
RLI contends that the insureds' loss was caused by faulty construction or workmanship excluded from coverage by the "Defects, Errors, and Omissions" exclusion to the policy, because the hole through which the pipe line was to be installed was defectively drilled. It maintains that the "ensuing loss" provision does not extend coverage to the insureds' claim because there was no separate and independent "covered peril" beyond the faulty construction that caused the loss.
The insureds contend that the policy covers the pipe's value, and that even if the hole was defectively drilled, the resulting damage to the line pipe is a covered loss that is not otherwise excluded.
The issue is whether the line pipe constitutes "construction," as used in the polemical policy provision. Because "construction" is an ambiguous term that could have multiple meanings in the policy, The Court held in the insureds' favor.
The policy extended coverage to "direct physical loss caused by a covered peril to materials, supplies, machinery, fixtures, and equipment that the insureds were installing, constructing, or rigging as part of their installation or construction project." However, exclusions in the policy act to deny coverage of certain claims, including "Defects, Errors, and Omissions" exclusion, which provides:
"We" do not pay for loss caused by:
1) an act, defect, error, or omission (negligent or not) relating to:
a) design or specifications:
b) workmanship or construction; or
c) repair, renovation, or remodeling; or
2) a defect, weakness, inadequacy, fault, or unsoundness in materials.
But if a defect, error, or omission described above results in a covered peril, "we" do cover the loss or damage caused by that covered peril.
In effect, the exclusion eliminates coverage for the repair or replacement of defective workmanship while preserving coverage for damage that results from that defective workmanship. The exclusion protects RLI from becoming the guarantor of the insureds' work, but it does not eliminate coverage for ensuing losses caused by defective workmanship -- here, the damages line pipe.
The parties dispute whether the lost or damaged line pipe is property covered by the policy, or "construction" excluded from coverage. In cases involving ambiguous contract terms, the Court must "adopt the [interpretation] of an exclusionary clause urged by the insured as long as that [interpretation] is not unreasonable, even if the [interpretation] urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent."
Accordingly, the Court found that the line pipe was covered property. Consequently, even if the hole was defectively drilled, the resulting damage to the line pipe is a covered loss of property separate and distinct form the allegedly defective hole.

Grand Prairie, Weatherford, Fort Worth, Dallas, Arlington, and other business people in Texas need to understand what the insurance policy they have purchased covers, and what it does not cover.
The United States District Court, Northern District, Dallas Division, issued an opinion on July 27, 2011, in the case styled, Great American Insurance Company v. AFS/IBEX Financial Services, Inc., that would be interesting for these business people. The Judge in this case is Reed O'Conner. Here is some background.
This case arises out of a dispute over insurance coverage. AFS entered into an agreement with McMahon Sr., the owner of Charles McMahon Insurance Agency, authorizing McMahon Sr. to originate, create, and sign premium fiance agreements on behalf of insureds. AFS sought insurance coverage from Great American Insurance Company (GAIC) to protect it from crime risks. GAIC sold AFS two applicable policies.
McMahon Sr.'s son, Jr., submitted applications to AFS for financing when no insurance was meant to be obtained. AFS approved the financing requests and issued at least 120 checks payable to "Charles McMahon Insurance Agency." Those checks were deposited into Jr's own accounts. AFS submitted a claim to GAIC's claim department and filed a lawsuit against the McMahon's and the bank. GAIC denied AFS's claim and filed suit seeking a declaratory judgment that the crime insurance policies issued to AFS did not provide coverage for losses stemming from checks issued by AFS payable to Charles McMahon Insurance Agency. This court eventually ruled in favor of GAIC.
This case ends up getting very complicated. This case was appealed, sent back to this court, had claims, cross claims, and appeals to various ruling by the court all through the legal process. There were assertions for breach of contract, violations of the Texas Insurance Code, common law bad faith, unfair claims settlement practices, claims for statutory 18% penalty and attorney's fees.
The court got into a good analysis of the legal standards involved. It also studied where there was a bona fide dispute and how it should be looked at. What the damages were and what actually caused them. Lawsuit fees incurred by Chase. Calculations regarding lost profits, lost opportunities, and ruling regarding counterclaims in the lawsuit.
Even experienced Insurance Law Attorneys will disagree on the eventual outcome. Plus, it can be a certainty that this case will continue in the appeals process and stay in the court system for some time into the future.
What the case is noteworthy for, is that a reading of it gives the reader insight and understanding into how the courts look at and analyze these types of claim. The difficult facts of the case and the parties involved go to making it a difficult case.

Lots of people in Weatherford, Mineral Wells, Aledo, Springtown, Millsap, Brock, Hudson Oaks, Willow Park, Cool, Peaster, Poolville, and other towns in Parker County own rental property. There will be times when that property is vacant. What if a fire occurs when the property is vacant?
The Fort Worth Court of Appeals issued an opinion in 2002, that dealt with the above scenario. The style of the case is, Charles J. Walch v. United Services Automobile Association Property and Casualty Insurance Co. The trial court had granted a summary judgement in favor of United and Walch appealed. There were several issues in this case but the relevant part to this writing, is where the appeals court overruled the trial court as it relates to the question as to whether the property was "vacant" at the time the fire loss occurred.
Here are relevant facts to know. Walch owed a small rental house that was insured by United under a policy of insurance. The tenants of the house moved out on May 15, 1999, and left it in a damaged condition. About ten days later, Walch began renovations. On September 2, 1999, Walch discovered the house had been damaged by fire and in October filed a claim for the fire losses.
The policy with United contained a vacancy clause which read:
17. Vacancy. During the policy term, if an insured building is vacant for more than 60 consecutive days immediately before a loss, we will not be liable for a loss by the perils of fire and lightning or vandalism or malicious mischief. Coverage may be provided by endorsement to this policy.
United contended that as a matter of law, there was no coverage due to the house being vacant more than 60 days before the fire loss.
Walch contended that the interpretation of the vacancy clause was that it should be read to mean entire abandonment, deprived of contents, empty, that is, deprived of contents of substantial utility. United on the other hand urged that vacant meant whether the character of the building's contents, if any, is such that a person could find it being used as a residence or dwelling.
The insurance policy did not define the term "vacant."
In examining the law in Texas as it relates to the definition of the term "vacant" in case law, this court looked at other cases and prior holding by the Texas Supreme Court. A 1940, case held the definition of "vacant" in a fire insurance policy to mean "entire abandonment, deprived of contents, empty." A 1992, Houston Court of Appeals [1st Dist.] case, stated, "The term 'vacant' means an entire abandonment, deprived of contents, empty, that is, without contents of substantial utility." The same Houston court in citing other courts also has said, "The term vacant means 'entire abandonment, deprived of contents, empty ...' that is, without contents of substantial value."
United's argument went more to whether or not the property was unoccupied.
The court in making it ruling in favor of Walch, said that the argument did not turn on whether the contents of the dwelling demonstrated that a person either resided or intended to return and reside in the dwelling, rather, whether the term vacant was satisfied when the term is interpreted by Texas courts to mean, entire abandonment, deprived of contents, empty, that is, without contents of substantial utility.
Fire claims that are denied by the insurance company based on the reason that vacant property is excluded under the policy are exactly the type of cases in which an experienced Insurance Law Attorney needs to be involved. Early involvement is needed to lend greater assurance to a favorable outcome.

Employers in Grand Prairie, Weatherford, Arlington, Fort Worth, Dallas, Mansfield, Irving, Garland Mesquite, Richardson, and other places across Texas will have insurance coverage on their vehicles, equipment, and employees. At some point there is likely to be times where there is a dispute about the coverage the insurance provides. Here is a case to think about when the term "domestic employee" is used in the policy of insurance that the company has purchased.
The case is styled, Paul Robertson v. Home State County Mutual Insurance Company. The opinion was issued by the Texas Court of Appeals for the Second District in Fort Worth. Here is some background information.
Paul Robertson had obtained a judgment against his employer, Ray Redi-Mix, Inc., for damages for personal injuries that he sustained while on the job. Home State County Mutual Insurance Company (Home State) was an insurer of Redi-Mix. Home State denied coverage under several exclusions contained in the policy of insurance. Home State obtained a summary judgment based on these exclusions.
Factually, here is what happened. Robertson was an employee of Redi-Mix. On November 3, 2005, Robertson informed Redi-Mix that the truck assigned to him had a defective tarp but Redi-Mix instructed him to make do with the tarp. The next day, the tarp malfunctioned and Robertson was seriously injured.
Redi-Mix did not provide workers' compensation insurance. It did have the Home State policy covering the trucks. The policy provided coverage for "all sums an insured legally must pay as damages because of bodily injury or property damage to which the insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto." The policy contained the following relevant exclusions to which coverage did not apply:
3. WORKERS COMPENSATION
Any obligation for which the insured or the insured's insurer may be liable under any workers compensation, disability benefits or unemployment compensation law or any similar law.
4. EMPLOYEE INDEMNIFICATION AND EMPLOYER'S LIABILITY
Bodily injury to:
a. An employee of the insured arising out of and in the course of employment by the insured; and
b. The spouse, child, parent, brother or sister of that employee as a consequence of paragraph a. above.
This exclusion applies:
(1) Whether the insured may be liable as an employer or in any other capacity; and
(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury.
But this exclusion does not apply to bodily injury to domestic employees not entitled to workers compensation benefits or to liability assumed by the insured under an insured contract.
Robertson obtained a final judgment against Redi-Mix for, among other things, damages in the amount of $967,631.52.
Home State prevailed in its summary judgment motion on two relevant grounds (1) that coverage under the policy for Robertson's claims is excluded under the workers' compensation exclusion and (2) that coverage under the policy for Robertson's claims against Redi-Mix is excluded under the employee exclusion and did not fall within the "domestic employees" exception.
Robertson contended that the "domestic employees" exception to the employee exclusion applied to extend coverage to him under the policy because he was "employed in the United States" and because he was not entitled to workers' compensation benefits as an employee of Redi-Mix, a nonsubscriber. He thus advocated interpreting "domestic employees" to mean persons who work in the United States as opposed to persons who perform certain duties at a personal residence. Alternatively, he argued that the term "domestic employees" is, at the very least, ambiguous and, therefore, that his interpretation must be adopted.
In this case, the court pointed out that there is no dispute that Robertson was an employee of Redi-Mix. Thus the court focused on the applicability of the "domestic employees" exception to the employee exclusion.
In discussion the court recognized that the term "domestic" has several accepted meanings. It is defined as both "relating to the household or the family" and "relating and limited to one's own country." In light of these two definitions, Robertson argued that a "domestic employee" as used in the policy's employee exclusion - is a person who works in the United States or, alternatively, that the term is ambiguous because there is more than one accepted meaning. But the court pointed out that "no one phrase, sentence, or section of the policy should be isolated from its setting and considered apart from the other provisions." And that Robertson is doing exactly that by isolating "domestic employees" from the "not entitled to workers compensation benefits" part of the exception.
This appeals court got into an in depth discussion regarding the definition of "domestic employees" by looking at that term as defined and used in the Texas Workers Compensation Act and the Texas Motor Vehicle Safety Responsibility Act. This would be Texas Labor Code, Section 406.002(a) and 406.091(a)(1) and the Texas Transportation Code, Section 601.051(1) and 601.075(2).
The value in reading this case is in understanding how the courts in Texas look at insurance policies and their interpretation. Of course the best course of action is to get an experienced Insurance Law Attorney involved when having problems.

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

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

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

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

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

Insurance purchasers in Grand Prairie, Arlington, Dallas, Fort Worth, Mansfield, Irving, Mesquite, Cockrell Hill, Oak Cliff, Richardson, or any other place in Texas need to know about the "known-loss" exclusion in an insurance policy.
One way of understanding this exclusion is by reading the case, Colony National Insurance Company v. Unique Industrial Product Company, L.P. This case was decided by the United States District Court, Southern District, Judge Lynn N. Hughes, on April 7, 2011. This is a summary judgment ruling.
Here is some background.
Unique is an importer and supplier of plumbing parts. Uponor, Incorporated, sells plumbing supplies to plumbers and individual customers. In 2002 and 2003, Unique supplied Uponor with swivel nuts and brass fittings. In June of 2004, Uponor notified Unique that the nuts it bought from Unique were failing and damaging houses.
Uponor and Unique met in 2006, and as a result of the meeting Unique agreed to pay damages to Uponor for losses incurred as a result of the defective supplies and in return Uponor agreed to continue to use Unique as a supplier.
In November of 2006, Uponor made another claim for losses and Uniques failed to honor this request. In September of 2007, Uponor sued Unique for its losses.
Here is the relevant insurance background.
Unique had been insured by American Wholesale Insurance from October 16, 2001, through October 16, 2005, when American chose not to renew the policy. On September 30, 2005, Unique requested liability coverage from Colony National Insurance Company. In its application, Unique disclosed it's knowledge of failed fittings and fifty-six pending claims against Unique, and it reported that additional claims were expected. When Unique was sued by Uponor, Unique requested that Colony provide coverage and Colony refused based on fortuity.
A critical component of insurance is fortuity. A fortuity is something that occurs by chance or accident, something that could not have been reasonably foreseen. Insurance is designed to protect against unknown risks of harm and loss. This component in an insurance policy precludes coverage of a loss that is known or in progress at the time the policy is purchased. An insured cannot seek coverage for a loss that has already begun and which is or should be known to have begun. The issue in fortuity is not liability, but the insured's knowledge of a loss before buying the policy.
The policies that Unique had purchased from Colony contained an exclusion for property damage that Unique knew of, in whole or in part, before the policy period - a known-loss exclusion. At law, Unique knows of an occurrence when it reports part of that property damage to Colony or an other insurer, when it receives a demand or claim for damages because of property damage, or when it otherwise becomes aware that property damage exists.
As the court stated and was clear from the evidence - Unique knew of the losses before buying insurance from Colony. This was in the application for insurance. Unique knew it had already paid over $300,000 to Uponor on over 56 claims. Accordingly, the occurrences described in the suits are excluded because Unique knew of the failures prior to inception of the policy and because Unique disclosed its knowldege of the failures and of the current and future claims.
This case is an easy call for the court. The language in the insurance policy is plain and the forturity rules are clear. The loss was known before coverage was purchased and that is admitted.
In this case there were a couple of other legal issues but they are not relevant to the fortuity issue but are probably the reasons this case went as far as it did in the legal system.

Business owners in Grand Prairie, Fort Worth, Dallas, Arlington, Cedar Hill, Irving, De Soto, Duncanville, Mesquite, Garland, Carrolton, Farmers Branch, Richardson, and other places in Texas might be interested in the following case if they find themselves in a position where they are buying or selling a business.
The style of the case is, Ford Bacon & Davis, L.L.C. v. Travelers Insurance Co., et al. This case was decided on March 14, 2011, by the United States Court of Appeals for the Fifth Circuit. This is a case where one company purchased the assets of another company.
A 1996 Asset Purchase Agreement (the agreement) was between Ford, Bacon & Davis, L.L.C. (FBD LLC) and Ford, Bacon & Davis, Inc. (FBC Inc.) The agreement explicity excluded coverage relevant to this lawsuit, which is "asbestos related lawsuits."
None the less, FBD LLC argued that Travelers had a duty to defend against the asbestos litigation.
The agreement at issue spelled out certain assets that were being purchased. It also spelled out certain assets that were not being purchased, including "all policies of insurance relating to the business or assets or any rights thereunder," except for certain rights and claims not relevant to this litigation.
The agreement also excluded certain liabilities, including "any liability or obligation, direct or indirect, absolute or contingent, known or unknown, of FBD or any FBD subsidiary ...."
FBD LLC argued that the asbestos litigation transferred by "operation of law" regardless of what the agreement said. This arguement is valid in some states, specifically California and Washington. One of the legal "rules" here is the product-line successor liability rule.
This court got into a discussion and explanation why it did not and would not follow California and Washington law. In doing so they cited the Texas Business Organizations Code, which provides that "a person acquiring property described by this section may not be held responsible or liable for a liability or obligation of the transferring domestic entity that is not expressly assumed by the person." This is found in Section 10.254.
The court then stated, "Therefore, because Texas, unlike California and Washington, does not follow the product-line successor liability rule, the Northern Insurance rule has no application here. Where, as here, the entity purchasing assets has expressly not assumed liability for the assets it purchased, such liability will not extend under "operation of Texas law." Therefore, Travelers does not have a duty to defend FBD LLC, as FBD LLC is admittedly not an insured under Travelers's policies with FBD Inc. and the policies do not extend to FBD LLC by operation of law.
In conclusion the court ruled, "FBD LLC's purchase of assets explicitly excluded both liability for the assets relevant to this case and the insurance policies that covered those assets. Because Texas law does not permit liability to extend by "operation of law" under a product-line successor theory, neither does it permit the insurance coverage of those assets to extend by "operation of law." We therefore affirm the ruling of the district court granting summary judgment to Travelers."
This case is confusing, but it is also important to people who find themselves in the position of buying or selling a business.

For folks in Grand Prairie, Arlington, Fort Worth, North Richland Hills, Hurst, Euless, Bedford, Keller, Colleyville, Saginaw, Lake Worth, and other places in Texas, interpreting an insurance policy is something that is very hard to do. Even an experienced Insurance Lawyer cannot always assure someone who asks what an outcome may be if there is a dispute.
Based on decisions and opinions issued by courts in Texas, an experienced Insurance Law Attorney can give guidance to probable outcomes of disputes. Here is one of those cases that the attorney would have read and used as a resource.
The case is Colony Insurance Company v. ACREM, INC. d/b/a Stetsons Nightclub, and was decided by the United States District Court for the Southern District of Texas Houston Division. The opinion was issued on February 23, 2011.
This case, a declaratory judgment action, arises out of lawsuit filed in state court wherein the plaintiffs sued Stetsons for an alleged accident that occurred while plaintiffs were patrons of Stetson's on the evening of September 1, 2007. The plaintiffs allege they were leaving the nightclub and while walking through the Stetson's parking lot, they were struck from behind by a vehicle driven by patrons of Stetson's that night. The plaintiffs allege that Stetsons improperly provided alcohol to the patrons when they were obviously intoxicated. Stetsons filed a claim under their policy of insurance with Colony asking Colony to defend the lawsuit and provide indemnity for any resulting judgment against it. Colony denied that it owed Stetsons a duty to defend or indemnify.
Colony filed this lawsuit in Federal Court asking the court to issue an order saying that Colony did not have a duty to defend or indemnify based on policy language in the policy.
Colony relies on the "Absolute Auto, Aircraft and Watercraft Exclusion" (Auto Exclusion), that excludes coverage for any bodily injury arising out of or resulting form the use of an automobile. Stetsons replies on the "Limitation to Coverage to Business Description" (Business Limitation), that limits coverage to bodily injury that is caused by or results from the business described in the policy, specifically as "Bar with Dance Floor."
In discussing this case the court said it was well settled law that, "An insurer owes its insured a duty to defend if a plaintiff's factual allegations potentially support a covered claim. Whether the insurer owes a duty to defend is question of law for the Court to decide. When faced with a coverage dispute, the Court must give effect to the intention of the parties as that intention is expressed in the insurance policy itself."
The focus for the court is on the factual allegations in the underlying complaint, not on the legal theories. The Court is required to "resolve all doubts regarding the duty to defend in favor of the duty" and to "construe the pleading liberally." The law is clear that when a lawsuit potentially includes a covered claim, the insurer must defend the entire lawsuit.
"Where there is no duty to defend, and there are no facts alleged in the underlying lawsuit that could create coverage if proven at trial, the Court may conclude that the insurer had no duty to indemnify for the claims in the underlying lawsuit."
In this case, the court said that the policy includes an Auto Exclusion that excludes coverage for bodily injury arising out of or resulting from the use of any automobile. The plain meaning of the Auto Exclusion is that it excludes coverage for claims that arises out of incidents involving automobiles.
The court did not accept any of the arguements by Stetsons. The court pointed out that the Auto Exclusion precluded coverage whether the automobile was owned and/or operated by the insured or by a third party because the exclusion applied to bodily injury arising out of or resulting from the use of "any" automobile and did not distinguish between "cars owned and operated by the insured and cars owned and operated by patrons."
Stetsons argued that it intended for the Auto Exclusion to exclude coverage only if the automobile involved in the incident was owned or operated by an employee and other agent of Stetsons. This arguement failed because it is unsupported by clearly established Texas law. Under Texas law, the intent of the parties is determined by the unambigouous terms fo the contract itself.
The court ended up ruling that there was no coverage provided by this insurance policy for the claim being made. A reading of this case helps in allowing an understanding of how the courts look at these coveage issue cases.

Business owners in Weatherford, Parker County, Aledo, Azle, Mineral Wells, Millsap, Hudson Oaks, Brock, Springtown, Poolville, Cresson, and other communities through out Texas would naturally wonder about the coverages provided in their commercial insurance policies. Very few people would understand all the language. This lack of understanding extends to insurance agents, insurance companies, and even the courts and experienced Insurance Law Attorneys. The value of attorneys who deal in this area of the law is that they can provide guidance in how the courts would ultimately decide in the cases where there is a dispute.
The Burlington Northern and Santa Fe Railway Company F/K/A The Atchison, Topeka and Santa Fe Railway Company v. National Union Fire Insurance Company of Pittsburg, Pa. The opinion in this case was issued on February 25, 2011.
This is an insurance coverage dispute case. The insurance company took the position that based on policy language and the pleading in the lawsuit in which their insured was sued that they had no duty to defend the lawsuit or pay any damages. This is known as the "eight corners rule", the eight corners being the "four corners" of the insurance contract and the "four corners" of the pleading, or lawsuit papers. In other words, when the two are read together, is there anything in the lawsuit allegations that invoke responsibility by the insurance company in the insurance contract to defend their insured or pay for any damages that may be part of the lawsuit.
National Union filed summary judgement motion with the trial court that was granted. The first level appeals court upheld the trial court decision. The Texas Supreme Court reversed the court of appeals and remanded the case back to the trial level for further determinations.
The lawsuit papers said in part:
The Railroad had a contract with SS Mobility Company to carry out chemical weed control. SS Mobility failed to use reasonable care to carry out its chemical weed control, and because of its improper timing in the application of chemical weed control, there was excessive vegetation at the crossing at the time of the collision, which proximately caused the collision.
Burlington Northern asked National Union to defend them in the lawsuit and National Union denied a defense saying they had no duty based on the eight corners rule. The underlying lawsuit was tried to a jury and Burlington was ordered and did pay the injured claimant. Burlington then filed this suit against National Union.
This Supreme Court stated; "As relevant to our consideration of this matter, National Union's policy coverage contains a "completed operations" exclusion which excludes coverage for "all 'bodily injury' and 'property damage' occurring away from premises [Mobley] owns or rents and arising out of [Mobley's] product or work." "However, the policy also excepts from the completed operations exclusion "work that has not yet been completed or abandoned." The policy provides that Mobley's work would be "deemed completed" at the earliest of the following times:
(1) When all of the work called for in the contract has been completed.
(2) When all of the work to be done at the site has been completed if the contract calls for work at more than one site.
(3) When that part of the work done at a job site had been put to its intended use by any person or organization other than another contractor or sub-contractor working on the same project.
The policy also states:
Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed.
Here the court of appeals had determined that National Union did not have a duty to defend because the language in the plaintiffs' pleadings referenced Mobley's actions as having happened in the past, so the policy's "completed operations" exclusion precluded a duty to defend. But unlike the cases cited by National Union in support of their position, in this case, the pleadings do not show that contractual provisions and other extrinsic evidence cannot possibly bring Mobley's vegetation control operations within coverage of Natinal Union's policy for the 1995 accident because the Mobley contract term was "1994 through 1996".
In this case the court stated, "Assuming, without deciding, that the court of appeals correctly determined that National Union owed no duty to defend, the court nevertheless erred by not considering all the evidence presented by the parties when it determined the question of National Union's duty to indemnify Burlington.
These cases can be very confusing, even to experienced attorneys, but these cases are instructive in helping attorneys understand how the courts look at these issues.

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

Business owners in Dallas, Mesquite, Duncanville, Grand Prairie, Fort Worth, De Soto, Arlington, Mansfield, Seagoville, Rowlette, and other places in Texas may ask the same question. What ends up happening when a loss occurs in the business, is that the business owner calls his insurance company and makes a claim, then the insurance company tells that business owner that the type of loss that was incurred is not the type of loss that is covered under the commercial insurance policy.
The Aspen Daily News has reported a story that follows the above scenario. The title of the article is, "Jimmy's Sues Insurance Company Over Bombed-Out 2008 New Years Eve." The articles author is Brent Gardner-Smith.
Jimmy's is a restaurant in Aspen, Colorado.
What happened is described in the article. It appears that bomb threat notes were left at two Aspen banks, a Wells Fargo and Vectra Bank. The notes demanded money and a threat of "mass death" and "a very big fire cracker." Crude looking bombs looking like Christmas presents were left near the banks. These bombs were real and were later detonated by a Grand junction, Colorado, bomb squad.
There were not any injuries or damage as a result of the blasts but the threat shut down 16 square blocks of Aspen's main business district and resulted in an evacuation at 5 P.M. as a precaution and the area did not re-open until 5 A.M.
The bomber was identified and was later found died from a self-inflicted gun wound.
For the restaurants in this area, New Year's Eve is their biggest night of the year. One of the restaurants, Jimmy's, filed suit to prevent the two year statute of limitations from running.
The article tells us that Jimmy's, like may other restaurants in Aspen, had to cancel two pre-paid New year's Eve dinner seatings and refunded money to its guests, who had to scramble to find other ways to celebrate the end of 2008.
The owner of Jimmy's is The Fierce American Food Co., LLC. Their insurance company is Homestate Companies, which also is known as the Berkshire Hathaway Homestate Companies.
The lawsuit papers say that Jimmy's suffered in excess of $100,000 in damages.
Jimmy's filed a claim with Homestate and the claim was denied. Homestate is saying there was not any coverage because there was not any physical damage to the property. The claim was filed under the interruption of business operations coverage portion of the policy.
Lawyers for Jimmy's are saying that even if there is not coverage under the business operations coverge portion of the policy, that the terrorism coverage portion of the policy clearly applies.
It is noteworthy that at one time, most or all of the restaurants in the area were making claims for coverage and that it is estimated that millions of dollars were lost as a result of the bomb threats. At the time of the publication of this article, only Jimmy's had filed suit.
The lesson to be taken from this article is for a business owner to understand what his coverages are in the policies of insurance he buys to protect that business. An experienced Insurance Law Attorney shoud be consulted and given a copy of the policy. A discussion of the facts regarding the cause of the loss and the way the loss was incurred would allow the attorney to discuss options available in a reliable way.
Most policies regarding autos and homes are pretty standard. The variations will be minimum most of the time. However, in commercial policies there is not a lot of standardization. Plus, lots of times, a policy on its face may seem to read in such a way as to provide coverage but then an "endorsement" to the policy takes away the coverage that may have at first seemed to exist.