The United States District Court, S.D. Texas, McAllen Division, denied a defense motion for summary judgment in a case where the defendant settled a claim with a homeowner who had two claims, asserting that the release covered both claims.  The case is styled, Aidee Bazan v. State Farm Lloyds.

Bazan had insurance with State Farm insuring his residential property.  Two storms are alleged to have damaged Bazan’s property – the first in March 2016, and the second in May 2016 – forming the basis of two different lawsuits against State Farm.

A dispute arose about the damages sustained by Bazan and a lawsuit was filed as to the March 2016 damage.  Bazan later filed a lawsuit on the second storm damage.   This second claim was assigned claim number 912. The pleadings on the two lawsuits are essentially the same.

The United States District Court, N.D. Texas, Dallas Division, Judge Boyle, issued an Order remanding a case in March of 2018.  The case is styled, Allied Stone, Inc. v. Acadia Insurance Company, Union Standard Insurance Group, LLC, and James Amato.

Acadia insured property owned by Allied.  In 2016, Allied claims it suffered hail and wind damage and made a claim to Acadia.  Acadia hired Union to adjust the claim.  Acadia sent out it’s employee Amato.

Allied Stone alleges in relevant part that “Mr. Amato did not prepare any estimates

The United States District Court, Northern District Texas, Abilene Division, issued an opinion March 13, 2018, that is worth reading to note deficiencies in a case against State Farm.  It is styled, Bob Click v. State Farm Lloyds and Rob Allen.

Pleadings in Federal Court are strict.  This case was filed in State Court against State Farm and their adjuster.  State Farm removed the case to Federal Court and Click filed a motion to remand back to the State Court.  The Motion to Remand was denied.

Click’s home suffered water damage.  Click’s homeowners policy with State Farm covered this type of loss.  Click objected to State Farm’s estimates of damages that were quotes of $9,015 and $11,824.  State Farm did another inspection and quoted $18,288.

The United States District Court for the Northern District of Texas, Judge Boyle, issued an opinion on March 9, 2018, wherein the court denied the insurance company request for summary judgment.  The case is styled, Padilla v. Allstate Fire and Casualty Insurance Company.

This dispute arises from a claim for insurance benefits under a homeowners’ policy.  The claim was with Allstate for wind and hail damage to Padilla’s property.  Allstate’s adjuster inspected the home, a shed roof, several windows, the back fence, the back deck, an AC unit cover, the pergola, and the carport.  The adjuster assessed damages at $19,132.24.  After subtracting the $9,789.70 deductible, recoverable depreciation of $801.61, and non-recoverable depreciation of $3,786.16, Allstate issued a check for $4,754.77.

Padilla filed sued for breach of contract and violations of the Texas Insurance Code.  Allstate caused the case to be removed to Federal Court and filed it’s motion for summary judgment.

Here is some basic information about automobile policy coverage for damage to your insured vehicle.

Under this portion of an auto policy the limit of liability to the insurer is the lesser of:  1)  the actual case value of the stolen or damaged property, 2)  the amount necessary to repair or replace the property with like, kind, and quality, 3)  the amount stated in the declarations of the policy.

The terms “repair” and “replace” mean restoring the auto to essentially the same condition as it was in immediately before the damage.  This is discussed in the 1969, Corpus Christi Court of Appeals opinion, Northwestern National Insurance Co. v. Cope and the 1998, Austin Court of Appeals opinion, Great Texas County Mutual Insurance Co. v. Lewis.

Here’s some basic information for insurance lawyers.

“Collision” is defined in the standard policy as “the upset, or collision with another object, of your covered auto.”

As an example, in the 1984, Amarillo Court of Appeals opinion, Nutchey v. Three R’s Trucking Company, Inc., a three-inch depression in a road, which caused damage to a trailer fell under this definition of “collision.”

The terms of coverage for damage to the auto are fairly straightforward: “named-peril” coverage is provided on “covered autos.”  Specifically, the Texas Personal Auto Policy provides that the carrier will pay for “direct and accidental loss to your covered auto.”  The coverage is divided into “collision” coverage and “coverage other than collision.”  The “other than collision” coverage insures against more causes of loss than collision coverage.  If both collision coverage and the “other” peril coverage are purchased then the insured is said to have “comprehensive” coverage.   Different deductibles are charged for each coverage because insureds elect not to carry one of the two available coverages.

The most common type of loss is “accidental loss,” however the definition of “accidental loss” loss is not in most policies.  In 1997, the Austin Court of Appeals issued an opinion in State Farm Mutual Automobile Insurance Co. v. Kelly, which held that an “accidental loss” is a loss that does not ordinarily follow and cannot reasonably be anticipated from the producing act, that is, one that the actor did not intend to produce.  In Kelly when an insured made a good faith purchase of a stolen vehicle and insured it, only to have the police confiscate it and return it to its true owner, such an act is not the natural and probable result of the insured’s good faith purchase.  Accordingly, the loss of the vehicle was “accidental.”  Even though the insured intentionally purchased the vehicle, the ensuing confiscation by the police was unexpected, unanticipated, and unintentional on the insured’s part.  The court went on to say that a stolen vehicle, newly acquired by an insured was a “covered auto” even if the insured did not have good title.  The insured had an insurable interest that was enough to make it a covered auto.

In the 1955, Fort Worth Court of Appeals opinion, Farmers Insurance Exchange v. Wallace, an auto upset by a strong gust of wind while being driven on a public road was an accidental loss.

In Texas automobile policies where the insured has opted to purchase uninsured motorist (UM) coverage, there is an offset for amounts paid under the PIP coverage.

The basis for the PIP offset can be found in the policy language of the uninsred/underinsured motorist policy provision, which provides:

In order to avoid insurance benefits payments in excess of actual damages sustained, subject only to the limits set out in the Declarations and other applicable provisions of this coverage, we will pay all covered damages not paid or payable under any workers compensation law, disability benefits law, any similar law, auto medical expense coverage or Personal Injury Protection Coverage.

As it relates to uninsured motorist (UM) coverage, there are three important exclusions.

Auto policies do not provide UM coverage for any person for bodily injury sustained while occupying or when struck by any motor vehicle owned by the insured or any family member who is not insured for UM coverage under the policy.  This is known as the family member exclusion.  The Courts of Appeals in Houston, Dallas, and Corpus Christi have well written opinions dealing with and upholding this exclusion.  The Dallas Court of Appeals has written that: “It is not the function of UIM coverage to operate as liability insurance and protect family members from their own negligence in owning and operating an underinsured automobile.”

Another exclusion is “settlement without consent” exclusion.  To preserve the carrier’s right to subrogation against the at-fault party, the policy states that it will not provide UM coverage to an insured who settles with the at-fault party, without the carrier’s consent.  The Texas Supreme Court has limited the impact of this rule inasmuch as an insurer has to prove that it was prejudiced by its insured’s breach of this provision in order to void UM coverage.  This is discussed in their 1994, opinion styled, Hernandez v. Gulf Group Lloyds.  After the Hernandez case the carrier must prove that the tortfeasor would have been able to pay the carrier’s subrogation interest.  This standard was applied in the 1997, Houston Court of Appeals [1st Dist.] opinion styled, Davis v. Allstate Insurance Co. where the issue of whether the tortfeasor was judgment-proof presented a question of fact precluding summary judgment on the issue of whether the insured had materially breached the policy by settling without the insurer’s consent.  Because the carrier had not presented sufficient summary judgment evidence to establish the viability of the subrogation right it lost by the insured’s settlement, summary judgment for the carrier was not proper.

Sometimes figuring out what is an “accident” for uninsured motorist (UM) coverage is tricky.

In the 1999, Texas Supreme Court opinion styled, Mid-Century Insurance Company of Texas v. Lindsey, found coverage for the plaintiff, who was seated in the driver’s seat of a parked vehicle.  In a truck next to Linsey’s parked vehicle, a child tried to enter the cab by climbing through the back window.  In doing so, the child accidentally contacted a loaded shotgun, causing it to discharge and strike Lindsey in the head.  Lindsey’s carrier denied coverage on the grounds the injury did not “arise out of the use” of the vehicle and because the event was not an “accident.”  The court opined that an accident need not be an auto accident or collision; rather, it looked to the child’s intent and the reasonably foreseeable effect of his conduct to determine whether an accident had occurred.  Because the child did not intend to discharge the gun or injure Lindsey, and because neither result was reasonably foreseeable, the court determined Lindsey’s injury was caused by an accident.  Further, the court determined that Lindsey’s injury “arose out of the use” of the vehicle due to the fact that the accident was caused by the child’s attempt to enter the vehicle.  In reaching its decision, the court relied more on the fact that the child’s acts were unexpected and unintentional than on the role of the vehicle in the accident.

In a 2000, El Paso Court of Appeals opinion styled, State & County Mutual Fire Insurance Co. v. Trinity Universal Insurance Cos., a woman had been hit by a car as she tried to escape from the insured’s van after the driver had attempted to sexually assault her.  The court identified the following three-prong test under Lindsey for construing the “use” requirement of UM coverage: 1) did the accident arise out of the inherent nature of the automobile; 2) did the accident arise within the natural territorial limits of the automobile; and 3) did the automobile itself produce the injury (rather than merely contributing to the cause of the condition that produced the injury).  Applying these factors, the court found that the accident arose out of the use of the vehicle as a vehicle because “but for the vehicle and its position on the highway,” the woman would dnot have died from being struck by traffic.  Furthermore, she died on a roadway, which was “within the natural territory of the vehicle.”  But under the third factor, the use of the van was merely incidental in producing the victim;s death; it did not itself produce the injury.  The court noted that the victim was not struck by or pushed from the van; she did not fall from it; ans she was not injured by it.  Therefore, the Lindsey test was not satisfied.