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Insurance lawyers will often get calls wherein the person on the other end of the line is explaining to the lawyer that his insurance company wants to perform an examination under oath (EUO) of them before going any further with the claim.  And the question is, “Do I have to do that?”  Nine times out of ten, the answer is yes.

If the insurance contract provides for it, the insurer may require an EUO as a condition to a suit on the policy.  The purpose of such clauses has been described thus:

The insured agree, at reasonable times and places, as often as required, to submit to examination by agent of insurer, and to submit all relevant books of account, bills, invoices, vouchers, etc.  It is clear that the chief purpose of this privilege to the insurer is the ascertainment and adjustment of the loss which has already occurred.  The insurance company, in its policy, evidences in many ways its desire to avoid the necessity of litigation in the settlement of losses.  It reserves the right to have the benefit of the examination provided for before suit can be sustained.

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Many property insurance policies contain appraisal clauses.  These clauses define a process for appraising the value of the damaged property, if the parties cannot agree.  Common provisions call for each party to choose an appraiser.  Those appraisers then chose a neutral third appraiser, called an umpire.  If the parties or their appraisers cannot agree on an umpire, either party may petition a court to appoint one.  Once the appraisers and umpire are chosen, they value the loss.  If all do not agree on the value, the decision of nay two will control.  The intent is to give the insurer and insured a simple, speedy, and fair means of deciding disputed values.  This was set out in the 1938, Waco Court of Appeals opinion, Fire Ass’n of Philadelphia v. Ballard.

The 1994, San Antonio Court of Appeals case, Provincial Lloyds Ins. Co. v. Crystal City I.S.D., says that when the two appraisers do not agree, the umpire does not simply choose between them, rather, it is the duty of the umpire to ascertain and determine, in the exercise of his own judgment and as the result of his own investigation, the values of the disputed items.

Either party may seek specific enforcement of the appraisal clause, and the court will abate any pending lawsuit and compel the parties to submit to the appraisal process.  In addition, an insured may recover consequential damages sustained as a result of the insurer’s failure to comply with the appraisal clause.  This was made clear in the 1979, 14th Court of Appeals opinion, Standard Fire Ins. Co. v. Fraiman.

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This time, one of the insurance company games does not involve cheating on a claim, rather it involves they overcharging for auto insurance.

The information comes from an Insurance Journal story titled, Lawsuit Says Fargo Executives Knew About Insurance Overcharges.

The article tells us that Wells Fargo & Co. executives were warned that an auto insurance plan could be overcharging customers four years before the bank scrapped the program, according to a complaint released by a Judge.

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Many times a person comes to an Experienced Insurance Law Attorney complaining that their insurance company has not paid anything on their claim.  While most insurance companies take the claims call then go out and evaluate / adjust the claim and then make payment, they are not required to do so.

Almost all policies make it clear that the insured has to file a sworn proof of loss as a condition precedent to enforcement of the policy.  This was recognized in the 1926, Texas Supreme Court opinion, Commercial Union Assur. Co. v. Preston.  It was was restated in the 1954, Fort Worth Court of Appeals opinion, Whitehead v. National Cas. Co.  A “proof of loss” is a statement to the company, stating, among other things, the cash value of each item of property lost or damaged by fire, and the amount of loss.  The insurance company may require that the insured swear to the accuracy of the proof of loss.

The 1960, Fort Worth Court of Appeals opinion, International Service Insurance Co. v. Brodie, says policy provisions requiring a proof of loss are for the insurance company’s benefit and may be waived by the company.  A requirement was waived where the insurance company would only accept proof asking for amount its adjusters agreed to, although the insured wanted more.

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When making a claim against an insurance policy, knowing what the policy says is important to an insurance attorney.  Virtually all policies have as a condition to payment, the requirement that you cooperate with their investigation of the claim.

The 1994, Texas Supreme Court opinion styled, Hernandez v. Gulf Group Lloyds, makes clear that an insurance contract may impose conditions on the insured.  Most policies require that notice of the claim be given to the insurance company and that the insured cooperate with the investigation.  Sometimes, just calling and reporting the claim is not enough.  An insured may be required to file a formal proof of loss.  When a party to the insurance contract commits a material breach or the contract, the other party is discharged or excused from any obligation to perform under the contract.  The Court in the Gulf Group opinion explained this way:

In determining the materiality of a breach, courts will consider, among other things, the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance …  The less the noon-breaching party is deprived of the expected benefit, the less material the breach ….

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When an insurance company denies your claim, you need to immediately hire an Experienced Insurance Lawyer.  The insurers are always looking for a reason to deny a claim but there are also times when it is justified.

While there are many times the denial of a claim is not justified, there are also times when it is justified.  The Insurance Journal published a story in October 2018, that illustrates why they have to investigate claims.  The story is titled, “Texas Pilot Who Crashed Plane For Insurance Sentenced To Prison For Fraud Scheme.”

The story tells us that a pilot from Kemah, Texas, was sentenced recently to more than 5 years in prison and ordered to repay almost $1 million in an insurance fraud related case.

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Most claims filed with insurance companies get paid.  The insured is happy and the insurance company is moving on to the next claim and collecting premiums.  Honest people cannot understand why an insurance company would not pay a claim made by one of their customers.

The Insurance Journal published an article in October titled, “Former Pastor Sentenced To Prison For Setting Fire To Apartment In Insurance Scam.”  Reading the article helps a person understand why insurance companies sometimes deny a claim.. It is because sometimes people try to rip-off the insurance company.

The article tells us that a former pastor in Baltimore Maryland, has been sentenced to three years in prison for setting fire to an apartment he rented in Washington in a plan to collect insurance money.

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There are two important phases at the end of a trial – the jury charge and the closing statement.

Most courts will not approve a jury charge until after the close of all evidence.  Therefore, the charge conference will often take place once a jury has been dismissed for the day or prior to the time that a jury reports for the day.  Lawyers should have the pattern jury charges on hand during the charge conference as well as copies of their proposed charge.  Experience lawyers will also have a template of prior jury charges to help expedite the matter.

I.  Cause of Action – Each cause of action pled by the plaintiff should be the subject of a jury question.  The trend in recent years is for each respective side to produce a proposed jury charge as part of a Joint Pretrial Order.  In the event any changes need to be made, a party may submit an amended jury charge.  Regardless, the most recent jury charge on file is the one that will be taken up in the conference.  Lawyers should be prepared to argue all aspects of the jury charge.  While most jury instructions are form submissions, some jury questions require special instructions, which should be listed prior to the question.  For large cases, have an appeals attorney to consult is wise.

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First party insurance cases are unique.  Filing complaints with the Texas Department of Insurance is usually a waste of time unless the complaint has something to do with a criminal act on the part of the insurance company.  The Texas Insurance Code, Chapters 541 and 542, among others are helpful.

But if no other recourse works and an insured has to hire a lawyer, file a lawsuit, and try the case, witnesses make a big difference in the outcome.

The most effective trial attorneys do not waste time badgering witnesses or asking irrelevant questions to set up their points.  Counsel should know the case inside and out and be prepared with the key points you need from each witness.  Having a working knowledge of the exhibits and deposition testimony in the event you need to impeach a witness is imperative.  Further, it is important to keep the potential jury charge in mind when determining the points to discuss with each witness.  When examining a witness or expert from out of town, counsel should plan to have them on call and prepared.  An out of town witness should arrive a day prior to their testimony to ensure there are no issues with travel and that there is time to go over testimony in a controlled setting.  Scrambling to rearrange witnesses due to delay can negatively affect the way the case is presented.

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Experienced Insurance Law Attorneys will try their fair share of cases.  Maybe they will average 1 to as many as three a year.  Knowing the Chapter 541 and Chapter 542 of the Texas Insurance Code are vital to going after insurance companies for wrongs they have committed.  Resourcing the Texas Department of Insurance is also important.  When the day comes to stand in front of a jury and present your client’s case it is important to know how to talk to a jury.

The opening statement in a first-party insurance case provides an opportunity to educate the jury on the policy language and give the jurors an idea of how badly the plaintiff’s property was damaged and how badly the insurance company handled the claim.  This provides the last opportunity until the closing statement to speak directly with the jury.  Most judges allow 30 minutes to an hour to do the opening statement based on the complexity of the case.  Of course, some courts allow as little as ten minutes.  Counsel should avoid making a simple case more complex than it is, and use the time as efficiently as possible.

I.  Tell the Story –  The opening statement is the plaintiff’s chance to tell the story from the client’s perspective and talk to the jury about what happened.  As previously stated, jurors are significantly more likely to remember things they see as opposed to what they hear.  Therefore, the use of demonstrative exhibits or photographs is extremely beneficial.  Lawyers should also devote some time to provide a preview of the other evidence and testimony the jurors will hear during your case in chief.  Of note, the majority of jurors will never have been on a jury before and will likely not know anything about an insurance policy or the terms involved.  Therefore, counsel should take time to go over some of the more common terms and issues that will come up over the course of the trial.  Last, but not least, the most effective opening statements are concise, interesting, and informative, and not overly long.

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