Insurance Company Denies Claim

Someone in Grand Prairie, Arlington, Grapevine, Colleyville, Hurst, Euless, Bedford, Keller, Flower Mound, Roanoke, Haslet, Saginaw, and other places in the state of Texas would naturally be upset if their claim were denied. But next, they would want to hire an experienced Insurance Law Attorney and pursue a lawsuit against their insurance company to make them pay.
Here is a case where an attorney tried to get the insurance company to pay but most of the lawsuit was almost thrown out of court. The style of the case is, Rosa Garcia and Augustin Garcia v. Nationwide Property and Casualty Insurance Company. The opinion in this case was issued on May 16, 2011, by the United States District Court, S. D. Texas, Houston Division.
Here is what is going on in this situation:
The Garcia’s are owners of a Texas Homeowners Insurance Policy issued by Nationwide and sold to the Garcia’s, covering their home.
The lawsuit papers submitted by their attorneys, is similar to many by the same attorneys. The petition, recites that during Hurricane Ike, water intruded through the roof, significantly damaging the entire house and garage, including ceilings, walls, insulation, and flooring. The storm caused substantial structural and exterior damage to the building and damaged the Garcia’s personal belongings, and as a result they also incurred additional living expenses. They submitted a claim to Nationwide for these expenses, but Nationwide denied the claim for repairs even though the policy provided coverage for such losses, and it underpaid their other claims for damages. Nationwide continued to delay payment owed under the policy for their damages.
In the lawsuit, the Garcia’s asserted that Nationwide failed to perform its contractual duties to adequately compensate them under the terms of the policy, refusing to pay the full proceeds of the policy despite demands. This being in breach of the insurance contract.
As to specific statutory violations, the Garcia’s alleged that Nationwide misrepresented that the damage to their property was not covered, in violation of Texas Insurance Code, Section 541.060(a)(1). They also asserted that, in violation of Section 541.060(a)(2)(A) Nationwide failed to make an attempt to settle the claim in a fair manner even though it was aware of its liability under the policy. In addition, that Nationwide failed to explain to them the reasons for its offer of an inadequate settlement. Nationwide also did not communicate any future settlements or payments that they would pay for the entire losses covered under the policy not explain why they failed to adequately settle the claims, in violation of Section 541.060(a)(3). They also accused Nationwide of failing to affirm or deny coverage of their claims within a reasonable time, in violation of Section 541.060(a)(4). Moreover Nationwide’s refusal to fully compensate under the terms of the policy and failure to conduct a reasonable investigation of their claims, indeed its performance of an outcome-oriented investigation that resulted in a biased, unfair, and inequitable evaluation of their losses on the property, violated Section 541.060(a)(7). And, in violation of Section 542.055, the Garcia’s contended that Nationwide failed to timely acknowledge the claim and to request all information reasonably necessary to investigate their claim within the statutorily mandated time of receiving notice of the claim. In violation of Section 542.056, Nationwide additionally failed to accept or deny the full claim within the statutorily mandated time of receiving all necessary information. Nationwide further delayed full payment of the claim longer than allowed in violation of Section 542.058.
Going on, the Garcia’s alleged Nationwide breached their common law duty of good faith and fair dealing by refusing to pay them in full even though a reasonable insurance company would know there is no basis on which to deny them full payment.
Finally, the Garcia’s claim that Nationwide knowingly or recklessly made false representations of material facts and or knowingly concealed all or some material information from them.
This court then cited well established Federal law found in Federal Rule of Civil Procedure 9(b) which says: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally. The Fifth Circuit Court of Appeals strictly construes this rule and requires that plaintiffs pleading fraud in federal court “to specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.”
The bottom line in this case is that the court ordered the Garcia’s to amend their lawsuit papers within 20 days, and to be specific according to the requirements of Rule 9(b) or almost all of the lawsuit would be dismissed except the portions dealing with breach of contract.
What is to be learned from this case is one of the distinctions between Federal Court and State Court. That being that their are different rules and that the differences must have attention paid to them or the case could be dismissed.