Arbitration in Insurance Contracts

Suing Insurance Company Based On Fraud

December 18, 2021 | Mark S. Humphreys

Filing a lawsuit is not as simple as saying the words. One common reason for suing an insurance company is based on allegations of fraud. A 2021, opinion from the Southern District of Texas, Galveston Division, shows that pleading fraud an insurance company has to meet certain criteria or the case will be dismissed. The style of the case is, Smiley Team II, Inc. v. General Star Insurance Company.

Smiley carried commercial property insurance with General Star. A vehicle crashed into Smiley’s covered property and a claim was made. Smiley complains that General Star failed to properly adjust the claim, issuing a payment that substantially undervalued the damages.

Smiley’s First Amended Complaint asserted causes of action for breach of contract and various violations of the Texas Insurance Code and the Texas DTPA.

Duty To Defend Insurance Case

April 3, 2019 | Mark S. Humphreys

Here is a type of case insurance lawyers do not see very often. It is from the Southern District of Texas, Corpus Christi Division. It is styled, Lamarr Womack & Associates, L.P.; dba LWA Architects, et al v. Lexington Insurance Company.

LWA filed a claim against Lexington seeking a defense and indemnity under the policy with Lexington. Lexington tendered a defense under a reservation of rights to dispute coverage, claiming LWA had notice of the claim prior to purchasing the insurance policy and failed to disclose it in their application. Lexington initiated arbitration seeking a declaration that it owes LWA neither a defense nor indemnity for the underlying claim.

LWA filed this declaratory judgment action, seeking a judicial determination of those issues and making a claim for breach of contract. Lexington filed for dismissal under Federal Rule 12(b)(6), arguing that LWA failed to state a claim on which relief may be granted because of the arbitration agreement.

Insurance Disputes And Arbitration

April 17, 2018 | Mark S. Humphreys

Insurance lawyers will be looking to see what happens in a case taken up by the Texas Supreme Court. The case is an appeal from the Amarillo Court of Appeals who had agreed with the trial court decision to compel arbitration.

This is a dispute between an insurance agency “The Altman” and Jody James Farms (JJF) and is a petition for review.

The conflict began in 2010 after JJF purchased a Crop Revenue Coverage Insurance Policy from Rain and Hail LLC. Altman Group was the insurance agency which sold the insurance to JJF through Rain & Hail LLC.

Home Owners Policy And Arbitration

December 6, 2016 | Mark S. Humphreys

Texas attorneys who handle insurance claims will find an article from the Texas Tribune to interesting. The article published on November 3, 2016, and is titled, Texas Insurer Drops Push To Let Homeowners Forgo Right To Sue.

The Texas Farm Bureau has dropped a proposal that would have allowed its homeowner insurance policyholders to pre-emptively sign away their right to sue the company in exchange for a discount on rates.

Consumer advocates on Thursday cheered the withdrawal of the proposition that stirred fierce debate in meetings held by the Texas Department of Insurance, where some called it a raw deal for consumers.

Arbitration And Insurance

July 10, 2014 | Mark S. Humphreys

Grand Prairie insurance lawyers will see insurance policies that contain arbitration provisions. The United States 5th Circuit issued an opinion in 2014 that should be read. The style of the case is Why Nada Cruz, L.L.C. v. Ace American Insurance Company. Here is some of the relevant information.

On August 15, 2010, the vessel “Sweet Dreams” sunk. Appellants Greg Anderson and Why Nada Cruz, L.L.C., also known as Why Not Cruise (collectively “Anderson”), sought recovery for the loss under a yachtsman policy of insurance (“Policy”) issued by Appellee ACE American Insurance Company (“ACE”). The Policy included a provision requiring disputes to be settled by binding arbitration. The Policy further provided that the “request for arbitration must be filed within one (1) year of the date of loss or damage.”

ACE advised Anderson on September 20, 2010 that it had denied his claim. On July 7, 2011, Anderson’s counsel sent ACE a letter stating:

How To Beat Appraisal Clause In Insurance Contract

February 22, 2010 | Mark S. Humphreys

A lot of homeowners insurance policies in Texas have “appraisal” clauses written into them. So whether you live in Weatherford, Texas, or in Grand Prairie, Arlington, Fort Worth or Dallas, if you have homeowners insurance you need to be aware of these appraisal paragraphs.

An appraisal paragraph is of benefit to the insurance company. That is why they put it into the insurance policy. When the homeowner and the insurance company cannot reach an agreement on the amount of money that should be paid on a claim, the insurance company will try to invoke the appraisal clause in the insurance contract. Appraisal happens when the insurance company knows they owe the homeowner money, but there is a dispute as to how much money is owed.

The United States District Court, Southern Division, recently handled a case where the issue was whether the homeowner properly defeated the insurance company trying to invoke the appraisal process. The style of the case is, Hector Sanchez v. Property and Casualty Insurance Company of Hartford and Irene Bernardo. The courts’ opinion was handed down on January 27, 2010.

Arbitration In Insurance Contracts

February 5, 2010 | Mark S. Humphreys

Lots of insurance policies are issued with arbitration agreements written into them. Almost never, will the person taking out the insurance policy be aware of, or ask about an arbitration agreement being part of the insurance policy. Residents of Dallas, Fort Worth, Arlington, Grand Prairie, Weatherford, or any any city or town in Texas can be adversely affected by these arbitration clauses in the insurance policy.

Lake Texoma Highport, LLC, v. Certain Underwriters at Lloyd’s of London, et. al., is a recent case discussing arbitration clauses in insurance policy’s. This case was decided on December 28, 2009, and is good reading to try and understand the way courts look at arbitration clauses.

Lake Texoma Highport, LLC (“Highport”) owns a marina. In early 2005 and early 2006 and in 2007 Highport instructed defendant Houstoun, Woodward, Eason, Gentle, Tomforde and Anderson, Inc. d/b/a Insurance Alliance (“Insurance Alliance”) to locate a property insurance policy. Insurance Alliance provided Highport with a property insurance agreement from defendant Certain Underwriters at Lloyd’s of London (“Lloyd’s”). Highport suffered damages and filed a claim under the policy. Highport then learned for the first time that CRC Insurance Services, Inc (“CRC”) and Bowood Partners, Limited (“Bowood”) were active participants in procurment of the insurance policy.