Attorney’s Fees In Insurance Lawsuits

Almost all insurance disputes are going to have situations where an attorney is involved. Too many times these disputes end up in lawsuits. Prior posts on this blog have shown how most situations are going to require the insurance company to pay or reimburse attorneys fees where the policy holder prevails in their claim.
In 2007 a case, Lamar Homes, Inc. v. Mid-Continent Casualty Company, the Texas Supreme Court ruled that Section 542.060, Texas Insurance Code, applied to not just the underlying claim at issue in a lawsuit but to also attorneys fees in situations where the insurance company did not pay for attorneys on behalf of the insured persons or business.
Section 542.060 assesses an 18% annual penalty on the attorneys fees that the insurance company did not pay for.
This issue on the unpaid attorney’s fees was fought again and re-stated in a case decided in December 2009. This case, Nautilus Insurance Company v. International House of Pancakes, Inc., was mainly a dispute as to how much the attorney’s fees were and how much of the time, and thus, the fees were attributable to the case at issue, rather than another case.
International House of Pancakes argued that the fees of $14,973.55 were 95% related to the case and based on that number, the 18% penalty to be paid by Nautilus totaled $15,804.49. Furthermore, there was an additional $119,674.34 in attorney’s fees for the present litigation. Nautilus Insurance Company did not agree with the time and money that was claimed to have been spent of the case and the lawsuit ensued.
The important thing for policy holders to take from this is that the insurance companies do get punished for their wrongful handling of claims and that with the assistance of an experienced Insurance Law Attorney, the insurance company can be forced to pay on claims they are suppose to pay and be forced to re-imburse the policy holder for attorneys fees plus penalties for their wrongful conduct.