Dallas Fort Worth Insurance Lawyer Blog

The topic of this piece is a case that arose out of Mansfield, Texas. The case could have just as easily arisen in Arlington, Grand Prairie, Fort Worth, Dallas, or out in Weatherford.
The Fort Worth Star-Telegram published a story about a claim against a home builder for the builders faulty construction work.
Even when a claim is against a home builder for mistakes in the construction of the home, often times the same claim can be made against the insurance company that insures the home. The advantage of claiming against the home owners insurance is to, hopefully, get the matter resolved quickly rather than get involved in an extensive and long drawn-out court battle with the builder. Of course, sometimes it is just the opposite.
The title of the article is, "Jury Awards $58 Million to Mansfield Couple In Home Builder Lawsuit". The article tells that the lawsuit lasted almost a decade.
The Mansfield couple had purchased their home from their builder, Perry Homes, and also involved in the lawsuit was a home warranty company. They also included in the lawsuit, their insurance company, Warranty Underwriters Insurance Company, a Houston company.
The couple had paid nearly $234,000 and was the only new home the couple had ever had. They had bought it for their retirement after moving from a home in Arlington they had lived in for 25 years, and where they had raised their three children.
After moving into the home in 1996, problems became apparent by the following January. A representative for Perry Homes assured them that the home was just settling and that everything would be ok. However, cracks kept appearing in walls, and doors and windows jammed shut. They also discovered that a drainpipe that was punctured during construction had soaked a kitchen wall, requiring them to move out for several months while mold was removed.
This case was submitted to arbitration in 2001 where Perry Homes lost. They appealed and the case was again arbitrated in 2002, where Perry Homes lost again. Perry Homes then appealed to the Texas Supreme Court where the case was sent back to the trial court and the verdict resulted.
Home claims are in a classification to themselves. Home claims also involve insurance claims and claims against the builder for violations of the Texas Deceptive Trade Practices Act. It is important to get an attorney involved early when having disputes related to homes. This same advice applies to used / older homes the same as to new ones and also to major reconstruction, such as after a fire or flood.

An important issue for any resident of Grand Prairie, Arlington, Dallas, Fort Worth, or even a resident of a smaller community such as Weatherford is: What happens if I get into an insurance dispute with my insurance company? What laws apply in fighting with the insurance company?
This question is atleast partially answered by a section of the Texas Insurance Code. Article 21.42 of the Texas Insurance Code is titled, Texas Laws Govern Policies. It says, "Any contract of insurance payable to any citizen or inhabitant of this State by any insurance company or corporation doing business within this State shall be held to be a contract made and entered into under and by virtue of the laws of this State relating to insurance, and governed therby, notwithstanding such policy or contract of insurance may provide that the contract was executed and the premiums and policy (in case it becomes a demand) should be payable without this State, or at the home office of the company or corporation issuing the same".
Wow, no wonder attorneys are needed to decipher the law!
What this insurance law says is that policies of insurance issued by insurance companies doing business in Texas, to Texas citizens, are governed by Texas laws. This is important because different states will have different laws governing insurance policies.
There are exceptions to the law. One exception is a federal case decided in 1979. The style of the case is Butler v. Mutual Life Assurance Company of Canada. Another exception is found in an old case decided in 1896. This is also a federal case styled, Manhatten Life Insurance Company v. Fields. These cases with exceptions to the above law have to be scrutinized carefully to make sure they are still good law today. Most of the cases finding exception to the Texas law are older cases.
It is important to realize that insurance companies fight over which laws apply because they are trying to get the laws of the state most favorable to them to be the laws that are applied to a lawsuit. Any person sueing an insurance company has to seek the advice of an experienced Insurance Law Attorney to make sure their rights are properly protected. Sometimes the laws the laws of another state may actually be more favorable to the insured.

It does not matter where in the State of Texas that you live. Whether you are in a small community like Weatherford or in the middle of the Dallas, Fort Worth, area, in cities like Arlington or Grand Prairie, you will see rate increases in your health insurance.
In the state of California, a consumer group filed a lawsuit on March 1, 2010. This was reported by the San Francisco Chronicle. The article is found in the health care section of the paper and is titled "Anthem Blue Cross Sued Over Rate Increases". The lawsuit alleges that Anthem Blue Cross, by raising rates, was forcing policy holders to move into other policies with higher deductibles and lower benefits.
The consumer group, called Consumer Watchdog, accuses Anthem of violating state law by failing to offer policy holders comparable coverage and minimized rate hikes after the company directs customers to alternative plans when closing existing plans. One lady in the lawsuit, said the company offered her the option of switching to a policy with a higher deductible and skimpier benefits by a specific deadline, but also told her she could stay in her current policy. The company then notified her of the enormous premium increases in her plan after the deadline for switching had passed.
The lawsuit, which was filed in Ventura County, effects about 800,000 people. Anthem, which is owned by WellPoint Inc. has come under state and federal scrutiny for hiking its 800,000 individual policy holders, or those not covered through a group plan, by as much as 39 percent.
One piece of good news is, the company has agreed to delay the rate increase that were taking effect on Monday, until May 1, to allow the state time to investigate.
The lawsuit also accuses Anthem of forcing older and sicker members, who are unable to switch carriers, to pay higher and higher premiums until they accept inferior coverage or drop coverage altogether.
As further information, another lawsuit was filed in San Mateo County Superior Court, on February 11, accusing the insurer of unfair competitive business practices.

All over the Dallas, Fort Worth, Arlington, Grand Prairie areas and even out in Weatherford in Parker County, are immigrants. What many people fail to understand because of all the media coverage on illegal immigration in the United States, is that there is a large and growing number of legal immigrants in our country.
A newspaper in Massachusetts recently ran an article about health insurance and legal immigrants. The newspaper was The Boston Globe. The title of the article is "Immigrants Sue State Over Exclusion From Health Care".
The State of Massachusetts, prior to 2006 provided health care to legal immigrants. According to the article, in an effort to save money, the legislature voted to eliminate coverage to about 26,000 immigrants. About a third of the money cuts were restored and the immigrants were given a stripped down health care plan with significantly higher copayments for medications and other treatments.
Since 2006, more than 8,000 more legal immigrants had become eligible but were denied coverage. The reason for the denial of coverage was because the same law that restored the third coverage also capped future enrollment.
This insurance is called Commonwealth Care. The state's Connector Authority and its executive director, Jon Kingsdale, are named in a lawsuit, accusing each that they violated the immigrants' right to equal protection under the state and federal constitutions when the administrators cut coverage in the Commonweath Care program.
The article in the Boston Globe gives two examples of legal immigrants being effected by the state's denial of health insurance benefits. The first example is a 51 year old immigrant from Zimbabwe with college degrees in psychology and business management, who was a project manager in London before coming legally to the United States. She was denied coverage in the Commonwealth Care program and she suffers from oral health infections, vision loss, and kidney and heart problems.
The second example is a legal immigrant from the Phillippines. She is a licensed architect with a master's degree in building science. She has breast cancer and is unable to find cancer specialists from the list provided to immigrants in the state's stripped down health plan.
The Massachusetts Immigrant and Refugee Advocacy Coalitions is attempting to assist in the lawsuit.

A lot of homeowners insurance policies in Texas have "appraisal" clauses written into them. So whether you live in Weatherford, Texas, or in Grand Prairie, Arlington, Fort Worth or Dallas, if you have homeowners insurance you need to be aware of these appraisal paragraphs.
An appraisal paragraph is of benefit to the insurance company. That is why they put it into the insurance policy. When the homeowner and the insurance company cannot reach an agreement on the amount of money that should be paid on a claim, the insurance company will try to invoke the appraisal clause in the insurance contract. Appraisal happens when the insurance company knows they owe the homeowner money, but there is a dispute as to how much money is owed.
The United States District Court, Southern Division, recently handled a case where the issue was whether the homeowner properly defeated the insurance company trying to invoke the appraisal process. The style of the case is, Hector Sanchez v. Property and Casualty Insurance Company of Hartford and Irene Bernardo. The courts' opinion was handed down on January 27, 2010.
In this case Sanchez made a claim for benefits on October 26, 2008. This was after Hurricane Ike struck Harris County, Texas, on September 12, 2008. The next day Property and Casualty Insurance Company of Hartford (Hartford) sent adjuster Irene Barnardo out to inspect the Sanchez home. Bernardo concluded that Sanchez had suffered a loss, but that the loss was only $150, an amount below Sanchez's deductible of $5,850.
In a letter dated October 29, 2008, Hartford refused to make a payment on his claim. Sanchez called to complain the next day. Six months later, Sanchez called Hartford complaining about their handling of the claim and then filed a lawsuit on April 29, 2009, which Hartford received on May 12, 2009.
When making a claim for insurance benefits the Texas Insurance Code, Section 541.154 provides that a person must give a 60 day written notice to the insurance company before filing a lawsuit.
Hartford, successfully had the case removed to Federal Court on June 5, 2009 and filed an answer to the lawsuit on June 29, 2009. Two months later, on August 3, 2009, Hartford filed a motion with the Court having the case abated for 60 days so that the time required for notice could be observed. The case was unsuccessfully mediated in September. Then on October 15, 2009, Hartford sent Sanchez correspondence seeking to invoke the appraisal clause in the insurance policy.
The bad thing for policy holders is that most appraisal clauses have requirements in them similar the Sanchez appraisal clause. It required Sanchez to: 1) pay for his own appraiser and, 2) bear the other expenses of the appraisal and umpire equally with the insurance company.
Without getting into more details of this case and the law associated with it, Sanchez prevailed, and did not have to submit to the appraisal process. The bottom line to his victory were the arguements his lawsuit attorney was able to make regarding the time frame that had past without Hartford invoking its right to the appraisal process.
An experienced Insurance Law Attorney would understand how this process works. It is important for a policy holder to get an attorney involved early in this process to more assure the policy holder will not get cheated by having to submit to the appraisal process.

Most insurance company's have their main offices located outside of Texas. If you live in Weatherford, Texas, Arlington, Grand Prairie, or the Dallas - Fort Worth area, and you sue an insurance company, how do you know you won't have to travel to Delaware or some other state to fight the lawsuit?
The United State District Court, Southern District, Houston Division, recently had a case dealing with this issue. The case decision was handed down on January 26, 2010, and was styled, Houston Baptist University, v. Ace American Insurance Company and York Claims Service, Inc.
Houston Baptist University (HBU) had a policy of insurance with Ace American Insurance Company (Ace). HBU suffered losses as the result of Hurricane Ike hitting the Houston area and made a claim against Ace. Ace assigned York Claims Service, Inc. (York) to adjust and inspect the claim. HBU and Ace could not reach an agreement on the value of the claim and HBU filed a lawsuit against Ace and York. The insurance policy had a policy provision that read: Any dispute arising under this policy shall be exclusively subject to the jurisdiction of the federal and state courts located in the Commonwealth of Pennsylvania.
After the lawsuit was filed in Texas, Ace and York filed a motion with the court to have the case transferred to Pennsylvania in accordance with the forum selection clause contained in the policy.
28 U.S.C. Section 1404(a) is the law that governs this area of the law and states: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." Under this statute, the court "must make an individualized, case-by-case consideration of convenience and fairness." The court is required to look at two issues. First, the court must determine if the transferee court is one in which the case originally could have been brought. The answer in this case is, yes.
Second, the court must determine whether the convenience of the parties and witnesses and the interest of justice require that the case be transferred. On this issue the court looked closer and said no.
Even though the court is to consider the clause in the policy contract, it is not the determining factor. Consideration is also to be given to convenience of witnesses and those public interest factors of systemic integrity and fairness under the heading of "the interest of justice." The burden of proving where the case should be litigated is on the party trying to get it moved to another location.
The law requires courts to balance private and public factors in determining if a case should be transferred. Private factors to be considered include: (1) the availability and convenience of witnesses and parties; (2) trial expenses; (3) the location of books and records; (4) the place of the alleged wrong; (5) the plaintiff's choice of forum; (6) the possibility of delay and prejudice if transfer is granted; and (7) the location of counsel. Public interest factors address broader objectives, such as the fair and efficient administration of the judicial system and the degree of local interest in the matter.
In this matter the court ultimately ruled against allowing the case to be transferred. In making it's decision the court stated, "Everything related to this case, the witnesses, experts, documents, physical evidence, and the damaged building itself are all located in Houston. The case is governed by Texas law. The city of Houston and the State of Texas have strong interest in this case; Pennsylvania has none."

If a Grand Prairie resident buys a new home, 95% of the time he is also going to be required to purchase a title insurance policy. This would be the same for a resident of Arlington, Dallas, Fort Worth, or Weatherford.
The Texas Supreme Court decided a case in 1994 that is relavent to home buyers and purchasers of title insurance policies. The case is styled, Chicago Title Insurance Company v. Jerry E. McDaniel and Christina W. McDaniel.
This case involves a claim against Chicago Title Insurance Company for violations of the Texas Deceptive Trade Practices Act (DTPA). The McDaniels purchased a title insurance policy issued by Chicago Title. The policy guaranteed the McDaniels had good and indefeasible title to the estate or interest in land described in the policy, which was the home they had purchased. This was in 1983.
In December 1988, the McDaniels received notice from the bankruptcy trustee of Couch Mortgage that their property was subject to a preexisting lien that had been properly filed and recorded. There were later federal bankruptcy court actions.
The McDaniels brought the lawsuit seeking damages under the DTPA, based on Chicago Title's representations. Chicago Title then secured the release of the preexisting lien.
Chicago Title asserted that it had discharged its obligations under the title insurance policy, and that it cannot be liable under the DTPA because it had made no representations regarding the status of the title to the McDaniels' property.
The Supreme Courts' ruling was that "A title insurance policy is a contract of indemnity. In other words, the only duty imposed by a title insurance policy is the duty to indemnify the insured against losses caused by defects in title." Thus, Chicago Title's issuance of a policy did not constitute a representation regarding the status of the property's title; rather it constituted an agreement to indemnify the McDaniels against losses caused by any defects.
The Court further ruled that a title insurer may be liable under the DTPA for an affirmative representation that is the producing cause of damages to the insured. But, in the present case, there is no allegation of any such affirmative representation. Nor is there any allegation that Chicago Title breached its duty under the contract, or that it may be liable to the McDaniels in any other respect apart from the DTPA.
It appears in this case that the lawsuit was limited in the matters that were sued upon. An experienced Insurance Law Attorney may have been able to assert other causes of action or been more expansive in the DTPA claims. Title companies usually do a good job in making sure title to property is properly researched. Most of the time the property is somebody's home. At the least, the property would be a big investment for somebody. On the occassions that a problem is encountered it is important to seek legal help to insure your rights are protected.

Good words of advice for any person buying insurance anywhere is: Know what you are buying. At the least, get it explained to you when purchasing some sort of insurance or warranty. This applies to the good people in the Dallas, Fort Worth, Arlington, Grand Prairie, and Weatherford areas of Texas.
The Pittsburgh Post Gazette recently published a news story where-in people were buying a pipe warranty. The title of the story is "Lawsuit Filed Over Opt-Out Waterline Insurance". The charge for this warranty was only five dollars a month, but it was worthless to the people to whom it was being sold.
The pipe warranty was sold by the Pittsburgh Water and Sewer Authority. The warranty provider is Utility Line Security, or ULS, a new, Wilkinsburg-based business that shares most of their officers with Resource Development and Management. RDM is a politically connected firm that worked closely with the water authority Executive Director.
This warranty was automatically billed to accounts. Rather than being an opt-in warranty, it was an opt-out warranty. In other words you had to pay for it unless you took the actions necessary to "opt-out".
But here is the real problem with this warranty. It's coverage was limited to such a degree that it did not provide coverage to most people who might have a problem. The warranty only applys to pipes of a certain small size, when most pipes are larger. If a person had a problem, it was only then that they would discover that the warranty did not really help them.
The lawuit was filed for violation of the "Deceptive Trade Practices Act". Apartment and building owners were finding out too late that the coverage was insufficient.
The Apartment Association of Metropolitan Pittsburgh is involved in the lawsuit.

Insurance companies prefer to have lawsuits litigated and fought in Federal Court. Attorneys who represent individuals and companies in Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or any other community in Texas, prefer to be in the local State and County Courts. There are several reasons an insurance company prefers to be in Federal Court, but the bottom line is, it is better for them to be in Federal Court.
One fight an insurance company recently lost was in the case, Rosario Mayorga, v. Government Employees Insurance Company. The opinion on this case was issued on January 20, 2010.
The Mayorga case was originally filed in the 79th District Court of Jim Wells County. Mayorga sued Government Employees Insurance Company (GEICO) and the adjuster, Sean Hicks. GEICO is an insurance company with its headquarters located outside of Texas, which is a condition that would allow for the case to be removed to Federal Court. However, the adjuster, Hicks, was a Texas resident which would prevent removal. GEICO claimed that Hicks was improperly sued and because he was improperly sued the case should be allowed into Federal Court.
The Federal Court analysed the burden of proof for the fraudulent joinder of Hicks in the lawsuit to stand. The Court cited Texas law stating that the burden of proof is on the insurance company to prove that the joinder of Hicks was a sham to keep the case from being in Federal Court. And that this burden was a heavy burden.
Analysing the causes of action asserted against Hicks, the Court looked at the Texas Insurance Code, Section 541. In that section, Hicks met the definition of a "person" and it defined how Hicks could be personally responsible for his actions rather than just being an agent of GEICO. The law in Texas says a person may be personally liable for deceptive acts notwithstanding the fact that he acted within the scope of his employment. The only insurance company employees exempted from this personal liability in Section 541 of the Texas Insurance Code, are those employees who have no responsibility for the sale or servicing of insurance policies and no special insurance expertise, such as a clerical worker or janitor.
Next, the Court analysed whether or not there were acts committed by Hicks, whereby he could be personally liable. Mayorga asserted that Hicks failed to conduct a reasonable investigation of her claim and failed to effect a prompt resolution of her claim. In this regard, the Insurance law in Texas is clear, insurance employees that fail to properly adjust insurance claims are liable under Section 541 and can be sued individually.
The allegations do not have to be allegations that are definite winners. As the Court said, the allegations are to be taken in the light most favorable to Mayorga and when they demonstrate there is a possibility of success, that is all that is required.
The value in this case is in demonstrating to an Insurance Law Attorney, good ways of maintaining a case against an insurance company in the State Courts, rather than having a case removed to Federal Court, where the outcome for the policyholder is usually less favorable.

The United States Court of Appeals for the Fifth Circuit recently decided a case wherein the insured argued that he had an excess insurance policy. The court decided that his policy was not an excess insurance policy.
The case is styled "Danny Kirk, v. Universal Underwriters of Texas Insurance Co." In this case, Universal Underwriters of Texas Insurance Co. ("UUT"), issued to Olympic International Trucks, Inc. d/b/a Olympic Ideal Lease ("Olympic") an insurance policy. Kirk, who was injured by a tractor-trailer unit leased to Gulf Coast Building Supply ("Gulf Coast"), asserted that the policy issued to UUT was an excess policy.
The court analysed the policy. Reading Part 500 of the UUT Policy, it provided liability insurance to Olympic for injuries arising out of "garage operations" or "auto hazard." Auto hazard included coverage of "anyone else required by law to be an insured while using an auto under a lease or rental agreement, within the scope of Olympic's permission." The UUT Policy provided that it only covered Olympic's lessees if "at the time of the accident, the insurance required by the lease or rental agreement is not collectable."
The lease agreement required Gulf Coast to maintain $750,000 of liability insurance on the tractor-trailer unit and in fact Gulf Coast had coverage for $1,000,000 with Home State County Mutual Insurance Company. Home State paid the policy limits of $1,000,000. Kirk had injuries that exceeded this amount that were not fully compensated, thus the reason for Kirk bringing suit against UUT for more.
The court found that the UUT Policy only provided coverage where "the insurance required by the lease or rental agreement is not collectable," and the court found that the term "collectable" did not require UUT to show that Kirk would be fully compensated for his injuries, only that the other insurance was able to be collected.
In this case the court applied Texas law because the policy was issued in Texas and the insurance company was domiciled in Texas. The court stated "Texas's interests in governing insurance contracts entered into in Texas for the protection of Texas residents would be most seriously impaired if Texas law did not apply."
As a side note, there was an arguement about the spelling of the word "collectable" in this case. The correct spelling is collectible, whereas in the policy it was spelled "collectable." The court went to Random House Webster's Unabridged Dictionary and pointed out that "collectable" is an acceptable alternative spelling of collectible and means "capable of being collected."
The lesson from this case for the policyholder is to make sure they know what they are buying. There needs to be a discussion with the agent to clarify what is being purchased.

Most of the time when someone thinks of insurance fraud, they think about a staged accident, arson, or something else along these lines, where a person or company is trying to get money out of an insurance company that is not legitamate. Another example is lying on the insurance application. Here is a short story about a company making a false workers compensation report to the State. This case is a California incident but could just as easily have been an incident that happened with a business in the Dallas - Fort Worth area, like Arlington or Grand Prairie, or even out in Weatherford, in Parker County.
This article was found in the Los Angeles Times, in the Business Section. The title of the article is "Staffing Firm Pays $20 Million to Settle Fraud Allegation" and was reported on January 25.
The company, Staffing Services, Inc., was in the business of providing temporary workers to other businesses. They were accused of underpaying premiums to the State Compensation Insurance Fund, the state's workers' compensation carrier of last resort. Regulators filed charges against the company on November 26, 2008, accusing it of misrepresenting the number of employees and their job descriptions so it would pay smaller insurance premiums.
The California Insurance Commissioner, Steve Poizner, reached an agreement with the company whereby the business agreed to pay $20 million in restitution and penalties in the workers compensation fraud case. Poizner said, "Business owners have to realize that they have a moral and legal obligation to report the correct number and types of employees and then make sure they have adequate workers' compensation insurance for those employees. This is not a victimless crime. We all pay when a company chooses not to play by the rules as the rest of us".
The Los Angeles County district attorney's office prosecuted the case against Staffing Services, which was settled with a plea bargain on January 15.

The United States Court of Appeals for the Fifth Circuit, decided another case this month dealing with the duty of an insurance company to defend a lawsuit filed against one of its insureds. The decision on this case was handed down by the court on January 4, 2010. The case was an appeal from the United States District Court for the Southern District of Texas. The Fifth Circuit, located in Louisiana, handles appeals that would arise out of Dallas, Fort Worth, Arlington, Grand Prairie, small towns like Weatherford, and all other places in Texas.
In the opening paragraph of the decision the court makes the following statement, "We have occasion once again to take up the seemingly simple task of determining whether an insurance company owes a duty to defend an underlying liability lawsuit, and because the insurer in this case indeed has such a duty, it is also an occasion to again remind: when in doubt, defend." As stated in this blog in the past, the courts draw a distinction between the obligation of an insurance company to defend an insured who has been sued and the obligation of an insurance company to pay a claim.
The case at issue here is styled, Essex Insurance Company v. Hines. The policy was a "Commercial General Liability Coverage" and another one called a "Commercial Property Coverge" policy. The facts here are relevant to deciding the existence or lack there of, as it relates to coverage in the wording in the policy. What Essex was failing to see was how Texas law applies in the difference between the duty to defend and the duty to pay under a policy of insurance.
Under Texas law, an insurer has a duty to defend a policyholder in actions brought by a third party who asserts claims "potentially" covered by the insurance policy. The key word here being, "potentially." When determining whether an insurance company owes a duty to defend its policyholder, Texas courts follow the "eight corners" rule, which directs the court to examine only "the allegations in the pleadings" which is the first four courners, and "the language of the insurance policy", which is the second four corners.
The insurance company argued that the policy did not cover the type of loss the third party was sueing about. The court was saying that maybe the insurance company was right, but the allegations in the lawsuit were sufficient to raise the possibility that coverage would be triggered and thus the insurance company should be providing a defense to Hines.
Anytime someone is sued and they have a policy of insurance that "might" provide coverage, they should take the lawsuit papers to their insurance company. If the insurance company refuses to defend the lawsuit then an experienced Insurance Law Attorney should be contacted.

Lucky for the homeowners in the Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, and surrounding areas, the Chinese drywall cases are a non-issue. But for many of the people along the Texas Gulf Coast and other Gulf Coast areas, it is a major and expensive problem.
WCI Communities is a homebuilder in the Southeastern United States. They had to file bankruptcy in 2009 because of issues related to Chinese drywall. This situation is discussed in the Insurance Journal. The article in the Insurance Journal is titled "WCI Chinese Drywall Trust Files Suit Against 14 Insurers". The WCI Drywall Trust was formed in July 2009, after the bankruptcy of the homebuilder WCI Communities and its subsidiaries. Its purpose is to assume liability for claims alleging harm from Chinese drywall installed in homes built by WCI. More than 700 homeowners may seek recovery through the Trust.
The Trust filed suit against 14 insurance companies in the United States District Court, Eastern District of Louisiana, seeking indemnification for losses arising from claims for the development and sale of homes allegedly containing defective Chinese manufactured drywall.

The following case was decided in Louisiana. It is relevant for two reasons. One is, Texas courts will look to other courts and their rulings for guidance on cases. The second reason, is the United States Court of Appeals for the Fifth Circuit is the Federal Court most Texas case will end up being appealed to when the case is in Federal Court.
The case is Stephen Williams; Vanessa Williams v. Allstate Indemnity Company. In this case the William's home suffered a serious property damage loss during Hurricane Katrina. The William's home was insured under a homeowners' policy issued by Allstate that provided $123,000 in coverage for the primary structure, $12,300 in coverage for other structures, and $61,500 in coverage for the home's contents.
The William's reported the loss on August 31, 2005 and Allstate inspected the property on October 17, 2005 and ultimately paid the William's a total of $134,762.43. These payments were made at various times until the last was paid in March 2007. The William's sued for the full policy limits. The trial level court ruled for Allstate and this appeal was filed.
The 5th Circuit Appeals Court affirmed the trial court decision. In affirming the trial courts' decision, the Court of Appeals got into discussions concerning the burden of proof.
The relevance of this case beyond what is discussed in the opening paragraph is realizing and understanding the burden of proof on a person who is filing a lawsuit. In an insurance case the requirements to prevail in a trial will vary from what is required in other types of lawsuits. It is important that an experienced Insurance Law Attorney is consulted for claims against insurance companies.

A lot of insurance contracts have written into them an appraisal clause or paragraph. Whether you bought the policy in Grand Prairie, Arlington, Dallas, Fort Worth, or out in Weatherford, Texas, you could be forced to submit to an appraisal process if the insurance company insists on enforcing that portion of the insurance contract.
A recent case, JM Walker, LLC v. Acadia Insurance Company, is an example of how these situations are sometimes handle. Each case would be different depending on the wording of the appraisal provision in the contract and the facts of the case.
In this case, Walker was the owner of five building in North Richland Hills, Texas. The roofs of the building suffered damage from a hailstorm. Walker submitted a claim to Acadia, but Acadia denied coverage after its adjuster determined that the roofs did not need to be replaced and that the damage that did exist, was less than the $5,000 deductible that applied in the case.
Walker contested the adjusters findings and Acadia invoked its contractual right to appraisal. Walker then filed a lawsuit, but the Judge compelled the parties to submit to the appraisal process.
The umpire in the appraisal process found on behalf of Walker and found the cost of repair to be $423,053.96. Acadia paid the amount.
Walker filed an appeal in the United States Fifth Circuit, which is the case written about here. Walker wanted more money for his damages, plus was seeking monies for the "bad faith" conduct of Acadia and their handling of the claim.
The Court in its decision stated that under Texas law, "appaisal awards made pursuant to the provisions of an insurance contract are binding and enforceable, and every reasonable presumption will be indulged to sustain an appraisal award." The Court wrote that an otherwise binding appraisal may be disregarded in three situations: "(1) when the award was made without authority; (2) when the award was made as a result of fraud, accident, or mistake; or (3) when the award was not in compliance with the requirements of the policy."
Walker argued all three points and was shot down on all three points. The case is a good place to look to get an idea of how the courts look at these appraisal processes and how they are handled.