Articles Posted in Bad Faith Insurance

Here is an interesting case dealing with hail damage.  This is a 2021, case from the San Antonio Court of Appeals.  It is styled, Allstate Vehicle And Property Insurance Company v. Peter Reininger.  The opinion is an appeal from a jury trial in favor of Reininger.

The opinion is lengthy and discusses several legal issues.  However, the facts of the case are pointed out here because the facts are similar to situations many other homeowners face themselves.

Reininger’s home had previously been covered by a policy issued by Liberty Mutual and that policy covered cosmetic hail damage to his metal roof.  When Reininger began looking for a new policy in 2015, he contacted Justin Losoya, an Allstate agent.  Reininger told Losoya he wanted a policy that was “apples to apples” with his Liberty Mutual policy, and Losoya stated Allstate could provide that. Reininger also asked Losoya, “If I have any bad weather, hail or any type of hail and it damaged my roof, am I covered?”  Losoya answered, “Yes, sir, Mr. Reininger, you are.  You pay a 1 percent deductible.”  Losoya did not mention any exclusions on coverage for the roof, and Reininger did not make any further inquiries about exclusions.

There are many actions or inactions an insurance can be accused of that may amount to bad faith.  One of those is discussed in a 2021 opinion from the Northern District of Texas, Sherman Division.  The opinion is styled, Deanne M. Hinson v. State Farm Lloyds.

A Magistrate Judge was assigned to hear a Motion for Summary Judgment on the case.  The Magistrate Judge ruled in favor of State Farm and Hinson appealed that ruling to the sitting Judge.  The sitting Judge affirmed the finding of the Magistrate.

This is a hail damage claim that was originally filed in State Court and then removed to Federal Court.  The Magistrate ruled in favor of State Farm on all of Hinson’s causes of action.  Hinson is appealing the decision as to one cause of action only.

An argument that insurance companies make in many “bad faith” claims is that there can be no bad faith unless or until there is a breach of the insurance contract.  To reach the level of bad faith insurance, most of the time there has to be a breach of the insurance contract – but not all the time.

The Dallas Court of Appeals says there it is not necessary to have a breach of the insurance contract for there to be a bad faith claim.  And the Court backs up his decision by citing the Texas Supreme Court.  The opinion is styled, In Re Allstate Fire And Casualty Insurance Company and Latina Foster.

Before the Court are relatorspetition for writ of mandamus, real party’s response, and relators’ reply to the response.  Relators contend they are entitled to mandamus relief because the trial court abused its discretion by denying their special exceptions complaining about real party’s failure to plead a claim for breach of contract, and by failing to quash relator Latina Foster’s deposition because it is premature.  Entitlement to mandamus relief requires relators to show both that the trial court clearly abused its discretion and that relators have no adequate appellate remedy.  Although the Court questions the scope of the identified deposition topics, based on relators’ arguments and the record, we conclude relators have failed to show a clear abuse of discretion.  Further, in light of the Texas Supreme Court’s recent opinion in, In re State Farm Mutual Automobile Insurance Co., from Mar. 19, 2021, the trial court did not abuse its discretion by denying relators’ special exceptions. In that opinion the Texas Supreme Court concluded the insurer was not required to plead a breach of contract claim to recover for extra-contractual claims. 

Claim Denial lawyers need to have a full understanding of the rules regarding the time periods for filing a lawsuit and how to avoid pitfalls in this area of the law.  This is discussed in a Western District of Texas, Austin Division opinion styled, Kobra Dadfar and Esmail Roostaie v. Liberty Mutual Insurance Company.

This is a summary judgment opinion wherein the underlying case contains allegations of Insurance Code violations and breach of contract among other causes of action.

Liberty filed a motion for summary judgement alleging that Plaintiffs have let the statute of limitations expire and thus, the case should be dismissed.

Insurance companies always want to litigate cases in Federal Court.  The Judges and rules related to proceedings tend to skew in favor of insurance companies.  Here is a 2020 opinion where the insured actually got a favorable ruling.  The opinion is from the Southern District of Texas, Houston Division, and is styled, Caramba, Inc. v. Nationwide Mutual Fire Insurance Company.

Caramba is the named insured under a Nationwide policy.

Caramba filed a claim for damages after Hurricane Harvey in August 2017.  On August 27, 2020, Nationwide filed a Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c).

Insurance lawyers can tell a client that proper pleadings, especially in Federal Court, are essential to being able to have a day in Court.  This is illustrated in a 2020, opinion from the Eastern District of Texas, Sherman Division.  It is styled, Albion Investments, Inc. v. Travelers Casualty Insurance Company of America.

Albion owned property that was insured by Travelers insurance.  Albion filed a claim with Travelers for property damage after a storm struck the property with hail and high winds.  The claim was ultimately denied based on the amount of damages falling below the deductible of the policy.

Albion filed suit alleging that Travelers did not conduct a thorough investigation of the claim, failed to account for all of the damages covered, failed to fairly evaluate and adjust the claim, failed to perform its contractual duty to compensate Albion under the policy, made misrepresentations to Albion regarding the damages to the Property and whether it was covered, failed to make an attempt to settle the claim in a prompt and fair manner, and failed to explain why full payment was not being made.

Here is a case that may apply to many of the rural areas of Texas.  The case is a 2020, opinion from the Corpus Christi Court of Appeals and is styled, State Farm Mutual Insurance Company v. Rolando Lopez, Individually and Rolando Lopez D/B/A R&A Transport.

This is an appeal of a summary judgment in favor of Lopez and against State Farm.  This Court reversed the trial court and rendered judgment in favor of State Farm.

The main point of this case is the interpretation of the words “in use” in the commercial policy at issue.  The policy provides in part:

Here is a claims denial opinion worth reading.  It is a 2020 opinion from the Northern District of Texas, Dallas Division.  It is styled, DFWS, LLC v. Atlantic Casualty Insurance Company.

Atlantic insured DFWS.  DFWS alleges it suffered damages as the result of a tornado and high winds.  After making a claim for damages, DFWS alleges that Atlantic “engaged in a results-based investigation to find a non-covered cause of loss to the detriment of DFWS and contrary to the clear evidence otherwise.”

The resulting lawsuit sued for violations of Texas Insurance Code, Sections 541.060(a)(1), (2), (3), (4), and (7).  Atlantic files a Rule 12(b)(6) motion to dismiss in response to the lawsuit.

Here is an opinion from the Northern District of Texas, Dallas Division, that discusses the pleadings in a lawsuit where in the property owner claims to have suffered hail damage and the insurer denied the claim.  The opinion is styled, Valtex Properties LLC v. Central Mutual Insurance Company.

The insured, ValTex, sued Central for various violations of the Texas Insurance Code.  The allegations are that Central violated sections, 541.060(a)(1), 541.051, 541.052, and 541.061.  In response, Central filed a Rule 12(b)(6) motion to dismiss.  This blog will deal with only Section 541.060(a)(1).  However, the case is a good read on how the Court dealt with remaining Insurance Code sections.

To survive a motion to dismiss, a plaintiff must plead enough facts to state a claim to relief that is plausible on its face.  Thread bare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.  A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.  The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.  When well-pleaded facts fail to achieve this plausibility standard, the complaint has alleged—but it has not shown—that the pleader is entitled to relief.

When an insurance claim gets denied and a lawsuit results, the resulting legal battle needs to be dealt with properly.  This can be challenging.  An illustration of this can be found in a 2020, opinion from the Eastern District, Sherman Division, in an opinion styled, Oscar Bermudez and SA Polo, Inc., v. Indemnity Insurance Company of North America and Tin Top Insurance Agency, LLC.

This case was originally filed in State Court by Plaintiffs and Defendants promptly removed the case to Federal Court.  The case needs to be read to get further background information on some of the procedural steps but ultimately the Court denied Plaintiffs Motion For Remand and Plaintiffs filed a Motion for Reconsideration or Clarification, which is the issue presented here.

Even though the Motion to Reconsider is found nowhere in the Federal Rules of Civil Procedure, it is one of the more popular indoor courthouse sports at the district court level.  Motions to reconsider serve the very limited purpose permitting a party to correct manifest errors of law or fact, or to present newly discovered evidence.  Granting a motion to reconsider is an extraordinary remedy that should be used sparingly.

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