Dallas Fort Worth Insurance Lawyer Blog

Even in Grand Prairie, Arlington, Fort Worth, Dallas, Euless, Bedford, Hurst, Saginaw, Roanoke, Keller, Grapevine, and other locations in the Metroplex area, arson fires occur. One of the first things an insurance company is always going to do when there is a fire claim is investigate for the possibility of arson. If the insurance company determines a fire is arson, the next thing they will do is see if the insureds' under the insurance policy are responsible or have a motive to set the fire. Of course by this time, the insured needs to be consulting with an experienced Insurance Law Attorney.
A 1987, case from the Dallas Court of Appeals styled, Texas General Indemnity Company v. Jerry L. Speakman and Donald E. Coffman, is interesting based on the facts in the case. There are a lot of legal procedures in the case, which will not be discussed because they are unusual and hard to follow without a lot of legal knowledge. But briefly on the legal aspects, the trial was to the Judge instead of a jury and the Judge ruled in favor of the insurance company. Coffman and Speakman filed a "motion to correct judgment or for new trial" and a "first amended motion to correct judgment or for a new trial." Surprisingly the Judge reversed his earlier decision and ruled against the Texas General Indemnity Company. He awarded close to $200,000 to the insureds. This appeals court upheld the trial court decision with some modification to the money.
Here are some of the facts in this case.
Speakman and Coffman jointly owned a house in Tool, Texas, which was destroyed by fire on December 31, 1983. They had left the house about three months earlier to live at a townhouse in Dallas which they purchased together. On the morning of December 31, 1983, they returned to the house and visited Coffman's mother who lived across the street from the house. They also visited two neighbors before returning to the house about 4:30 - 5:00 p.m. While visiting the neighbors, they made a decision to stay the night in the house and the neighbors gave them two five gallon jugs of water because the pipes were frozen and none of the homes in the area had running water. Speakman borrowed the neighbors van and left for Dallas at about 5:30 or 5:45, in order to get his dog that was in the Dallas townhouse. Coffman took his mother out to eat and to buy groceries and got back to her house about 9:15 or 9:30 p.m. He helped his mother unload groceries then went across the street at approximately 9:30 p.m. He testified that he was going to get one of the five gallon jugs of water for his mother because he and Speakman would not use two five-gallon jugs in just one night. He testified that he opened his front door and "smoke just boiled out of the entry hall of the house." He did not recall if the door was locked but that he normally kept it locked. He returned to his mother's and called the fire department who arrived about ten to twelve minutes later. The firemen entered the house with masks and equipment and put out the fire in about 30 to 35 minutes. The firemen determined the fire had originated in a back bedroom which is where the fire was confined. But there was smoke damage throughout the house. The firemen had opened all 32 windows in the house and chopped up a portion of the bedroom floor to ascertain whether the fire had spread below the floor. The firemen told Coffman to check the house every hour to see if the fire rekindled during the night.
Speakman arrived about twenty minutes later and they and the dog returned to Coffman's mother's house. As they were discussing the nights events, the mother noticed the house was on fire again. The fire department arrived at about 11:15 and finally extinguished the second fire. The entire house and contents were destroyed except for a painting that hung near the doorway.
Coffman and Speakman testified that they did not keep anything unusually dangerous or inflammatory in their home. They also testified they had lit four or five candles earlier to remove the dank smell from the house being "tied up." Plus, the house contained a wet bar that was well stocked. The garage was used for storage and was full enough that a car would not fit into it, unless things were removed.
The house was worth about $90,000 more than it was insured for and the content loss exceeded the insurance value by about $7,000.
Neither Coffman nor Speakman appeared to have any financial problems.
The chief of the Tool Volunteer Fire Department was Bill Forrester who was also a Dallas Fire Department employee of twenty-seven years. Forrester had assisted with both fires and after the first fire had sent someone to the attic to make certain the fire had not spread to the attic but could not recall who he sent. He was not able to determine how the first fire originated. He did recall seeing flames shooting out of the roof upon arrival to the second fire. During the course of the fire, he went to the rear of the house where the garage door was down and locked. When it was opened, he recalled seeing a "pretty blue flame" that would not extinguish. He opined that the second fire was incendiary. He said the blue flame he saw was caused by petro-chemicals. On cross examination he admitted the second fire could have been a rekindle of the first fire and that the garage was not filled with smoke in an amount disproportionate to the flame involved as is common with petrochemical induced flame.
Travis Roberts, Fire Marshall for the City of Athens, testified that Forester called him to assist in an investigation regarding the Tool fire. Roberts testified that he had been involved in fire fighting for seventeen years and that he had considerable training and experience in arson investigations. He took three samples from different areas in the house that appeared to have strange "burn patterns" but lab results reported no traces of any flammable liquid . Roberts stilled testified that evidence regarding "burn patterns" suggested the presence of an accelerant. He also testified that "rekindles" sometimes occur despite the best efforts of firefighters.
Donald Owen testified that he was a member of the Tool Volunteer Fire Department and that he helped fight both fires in question. Owen testified that he never observed anyone check the attic after the first fire. Owen testified that he was the firefighter who chopped out the panels in the garage door during the second fire and that he did not notice a blue flame on the garage floor. Owen testified that if there had been a blue flame he would have noticed. Owen testified that he wasn't particularly looking for types of flames but was instead concentrating on fire fighting and that if, in fact, Forrester was near the garage and observed a blue flame, he, Owen, would have no reason to doubt Forester. Owen testified that it was his experience that rekindles sometimes do occur.
Also testifying was an expert in origins of fires, Kal Britt McManus, who was the president of Loss Research and Analysis, Inc. (LRA), and that LRA was employed by Texas General Indemnity Insurance Company. He testified that both fires were arsons.
McManus testified on cross examination that he did not know of the well stocked bar at the time of his investigations. Nor did he know of the candles burning in the house prior to the first fire. He also testified about "spalling marks" being common in arson fires but there were no "spalling marks" in this fire. He did not indicate in his report anything about wind conditions but did know that thirty two windows had been left open after the first fire. McManus did not investigate who set the fires.
Coffman's mother testified and backed-up Coffman's version of events. She also testified that she never noticed the smell of any accelerant.
All the above gives one a small insight into what testimony can be in a suspected arson fire. The insurance company will hire fire origin experts. Residue of the fire will be sent to the lab for analysis. Fire fighters will be interviewed. Neighbors will be interviewed. The financial position of the insured will be investigated.
None of this is a pleasant experience.

Insureds living in Haslet, Saginaw, Newark, Cedar Hill, Grand Prairie, Arlington, Hutchins, Dallas, Fort Worth, Benbrook, and other places in Texas rarely know what their insurance policies say. And even if they knew what the policy said they would not really understand. Of course, that is why an experienced Insurance Law Attorney should be consulted.
What about "exemplary damages"? Will your auto insurance pay a claim for exemplary damages? Here is a 1997, that provides some guidance.
The case is styled, Lolitha J. Milligan v. State Farm Mutual Automobile Insurance Company. The case was decided by the Court of Appeals, 14th District, Houston.
The facts in this case are not in dispute. On August 20, 1992, Milligan was injured in an accident caused by an uninsured drunk driver. The parties agree that the driver's conduct constituted gross negligence. At the time of the accident, Milligan was insured by State Farm undr a policy providing uninsured motorist coverage. The policy provides in relevant part as follows:
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by a covered person, or property damage caused by an accident.
Milligan and State Farm settled her claim for actual damages under the uninsured motorist coverage in her auto policy, but State Farm denied coverage of her claim for exemplary damages. They brought this case before the court for a determination of whether or not the policy paid for exemplary damages.
The court here, discusses the purpose of uninsured motorist coverage and the relevant portions of the insurance code where the requirments of this coverage are stated. Here is a cite taken from the case in its discussion. From a Fort Worth Court of Appeals case, "we reject the arguement that awarding exemplary damages under an uninsured motorist provision contravenes public policy by allowing an innocent party to be punished for the wrongdoing of a third party tortfeasor."
Writing about other courts decisions, this court stated, "Those courts finding exemplary damages are not recoverable under the uninsured motorist provisions focus on the policy reasons for imposing exemplary damages. First, the courts note the statutory definition of exemplary damages as 'any damages awarded as an example to others, as a penalty, or by way of punishment.' Exemplary damages are assessed both to punish the wrongdoer and to serve as a deterrent to future wrongdoers. Neither deterrence of wrongful conduct or punishment of the wrongdoer is achieved by imposing exemplary damages against an insurance carrier in this situation. Therefore, the courts ... determined that coverage provisions requiring an insurer to pay damages that a plaintiff was legally entitled to recover from an uninsured motorist because of bodily injury does not include an award of exemplary damages."
This court next got into a discussion of the wording in the policy and the language used to describe the coverage provided.
Ultimately the court ruled, stating, "The insuring agrements for uninsured motorist coverage in these cases are identical to the language in the policy here. In view of the Texas Supreme Court's clear guidelines concerning the imposition of exemplary damages and the policy reasons therefore, we no longer accept the position taken in ... We instead agree with our sister court's decision in ... and hold that the uninsured motorist clause in the auto policy in this case does not cover exemplary damages as a matter of law."
Bottom line is that most of the time the courts will not make insurance companies pay for exemplary damages under the uninsured motorist portion of an auto policy. But it must be kept in mind that it is worthwhile to get an attorney to review the pollcy and facts of each particular situation before giving up.

What if you live in Fort Worth, Arlington, Grand Prairie, Dallas, Weatherford, or any other town in Texas and you are in a wreck with a drunk driver? Can you get punative damages from your ininsured / underinsured (UM) insurance policy because the other person was drunk at the time of the accident?
This is one of the issues in the case, Suzanne Vanderlinden v. United Services Automobile Association Property and Casualty Insurance Company. This case was decided in 1994, by the Texarkana Court of Appeals.
In this case Vanderlinden was injured in a car wreck caused by a drunk driver. At the trial of this matter the trial judge would not let Vanderlindens' attorney submit a jury question to the jury asking for punative damages due to the other driver being drunk. Vanderlinden was sueing her own insurance company, United Services Automobile Association Property and Casualty Insurance Company (USAA) to recover monies by way of the underinsured motorist coverage portion of her insurance policy with USAA. The Texarkana Court cited an 1849, Texas Supreme Court case saying, "Punative damages are typically not to compensate a damaged plaintiff for his injuries; rather, they are to discourage the defendant from continuing his heinous activities and to likewise discourage others from similarly misbehaving." Thus, the issue in this case is whether an injured person may obtain punative damages from the injured persons insurance company through the underinsured motorist clause.
The policy language says the insurer will:
... pay all sums which the insured ... shall be legally entitled to recover as damages from the owner or operator of an automobile ....
The court also noted that the Texas Insurance Code, Section 1952.101, requires this UM coverage to be made available in all automobile insurance policies.
Furthermore, the Texas Insurance Code is to be liberally construed to give full effect to the policy which led to its enactment and the court is to review the statutory definition of exemplary damages as "any damages awarded as an example to others, as a penalty, or by way of punichment," See also the Texas Civil Practices & Remedies Code, Section 41.001(3).
In the courts' ruling they stated; "Most states that have expressly considered this question have held that in this context an insurance company should not be liable for punitive damages because to allow such recovery would be antithetic to the acknowledged purpose to be served by rendition of such damages."
In reaching this conclusion the court cited and took the reasoning from the following"
1) Milligan v. State Farm Mutual Ins. Co. - Houston 14th Court of Appeals - 1997,
2) State Farm Mutual Ins. Co. v. Shaffer - Houston 1st Court of Appeals - 1994
3) Government Employees Ins. Co. v. Lichte - El Paso Court of Appeals - 1991

Insurance policies have different forms of coverage depending on what it is that the policyholder purchases. In Texas, a homeowners policy purchased in Grand Praire, Arlington, Dallas, Fort Worth, or Weatherford, is going to have the same basic coverage. Parts of this coverage is for losses such as water damage, hail, fire, wind, and others. But most homeowners insurance policies also have liability coverage.
Liability coverage is coverage that protects and pays on behalf of the policyholder for injuries to others caused by the negligent acts of the policyholder. The normal homeowners policy is not going to pay or protect from acts that are voluntary or committed on purpose.
A lawsuit litigating this issue was decided by a Texas Appeals Court in Houston. The name on the case is State Farm Lloyds v. Henderson, et al. In this case, the underlying facts were that Henderson, after drinking a large amount of alcohol, punched a guy named Burnley in the face causing severe bruises and cuts and the loss of one of Burnley's teeth. Henderson was sued by Burnley. State Farm Lloyds was obligated to defend if the injuries sustained by Burnley were the result of an accident. If the injuries to Burnley were intentionally or voluntarily caused by Henderson, then State Farm did not have an obligation to defend Henderson, or to pay for any of the damages suffered by Burnley.
This case is a little complicated in the legal manuvering that occurred but the facts and issues in the above paragraph are what is relevant. The Court ultimately ruled that State Farm had no duty to defend Henderson or to pay damages to Burnley. The Court stated that Henderson acted voluntarily in becoming intoxicated and did so knowing of his propensity to loose control. The facts alleged in the lawsuit clearly established that Henderson voluntarily and intentionally caused Burnley's injuries.
An experienced Insurance Law Attorney may have made a difference in this case. The wording in a lawsuit must be very carefully drafted. This drafting must be done with an awareness of what it takes to invoke insurance coverage.

A resident of Grand Prairie recently caught his insurance agent in Dallas committing fraud. The agent was taking the cash payments for the premiums from the resident and hand writing a receipt. Sounds okay so far. Next, the agent was pocketing the money rather than forwarding the payment to the insurance company. This could have happened in Arlington, Fort Worth, Weatherford, or anywhere else in Texas.

The agent would have continued to have got away with this except that the resident had an accident and got sued and when he turned the lawsuit papers over to the insurance company and was denied coverage the resident went to an experienced Insurance Law Attorney. A subsequent investigation revealed what was happening and a lawsuit is currently going forward against the agent.

Most of the time when people think of insurance fraud, they think in terms of someone staging a theft, an accident, or committing arson to recover monies from an insurance policy. This type of insurance fraud is defined and talked about in the Texas Penal Code, Chapter 35. Section 35.02, describes some of what constitutes an offense and also describes the penalty. The range of punishment is from a Class C misdemeanor, which is a ticket offense, all the way to a Felony of the First Degree, which is punishable by up to life in prison. The monetary cost includes fines up to $10,000, court costs, and restitution.

The Texas Insurance Code, Chapter 701, is another place where issues concerning insurance fraud are discussed. Section 701.001 says "Fraudulent Insurance Act" means an act that is in violation of a penal law and is: (A) committed or attempted while engaging in the business of insurance; (B) committed or attempted as part of or in support of an insurance transaction; or (C) part of an attempt to defraud an insurer.

The problem with both of the above laws dealing with insurance fraud is that they are focused on the person who may be trying to cheat an insurance company. The fraud that companies and agents commit are not the focus. When an insurance company or an agent commits fraud on one of its' insureds or customers there are things that can be done. But these things are less criminal in nature and more punative in a financial aspect. And this is where Insurance Law Attorneys are most helpful.

Even without an attorney a person can act on their own by turning in the company or agent to the Texas Department of Insurance. Most attorneys would discourage any actions being taken until you have first spoken with an experienced Insurance Law Attorney so that any complaint forms or other types of complaints filed are done so in a proper manner and that nothing that would jeopardize the case is handled in an incorrect manner.

The Texas Supreme Court in the case Tanner vs Nationwide has ruled in a case concerning exclusions for "intentional acts" committed by an insured driver.

The case facts involved a high speed chase wherein the driver, Gibbons was fleeing the police going at speeds in excess of 80 miles an hour in urban and residential neighborhoods, topping 100 miles per hour in rural areas, swerving across the road, going into and across fields, and around police cars. The chase ultimately resulted in Gibbons entering an intersection where the Tanner family was also entering and had the right-of-way. Gibbons did slam on his brakes and skidded to try and avoid a collision with the Tanners. Injuries resulted to the Tanner family.

The Tanners sued Gibbons and took a judgment against Gibbons however Nationwide refused to defend Gibbons or pay for Tanners damages arguing the intentional-injury exclusion in the policy of insurance barred coverage for the Tanners' claims. Nationwide contended that when Gibbons fled police, he voided coverage under the policy's intentional-injury exclusion, which withholds coverage for: "Property damage or bodily injury caused intentionally by or at the direction of an insured, including willful acts the result of which the insured knows or ought to know will follow from the insured's conduct".

The court focused on the word "intentionally" as used in the exclusion saying that it speaks to the resulting damage or injury, not the actions that led to it. In other words the conduct of fleeing and speeding may have been intentional but the causing of injury was not intentional.

As the court stated, the purpose of our auto insurance liability laws is to afford protection to people injured by other drivers acts. The insurance company says that when the accident or injury is intentional there is no coverage. The distinction pointed out by the court is that drivers routinely do things intentionally that result in accidents such as speeding, running stop signs, red lights, improper lane changes or as here failing to yield to the vehicle that has the right of way such as the Tanners. To exclude coverage for these types of "intentional" acts would make insurance liability essentially a waste of time. So the focus is; did Gibbons intend to cause the injury? The evidence shows he did not, in that he slammed on his brakes and skidded in an attempt to avoid the wreck and injuries to the Tanners.

This case is a victory for innocent drivers on the road such as the Tanners who otherwise would be victims without recourse of the negligent acts of other drivers who at the time of the wreck may have been committing an intentional unlawful act such as speeding or running a light simply because they were in a hurry.