Articles Posted in Bad Faith Insurance

Here is a 2022 opinion from the Northern District of Texas, Dallas Division, that articulates how courts look at insurance bad faith claims.  The opinion is styled, Art Dallas, Inc. v. Federal Insurance Company and Derek Franks.

This is an insurance dispute involving Federal Insurance Company (FIC) and Art Dallas, Inc’s (ADI) extracontractual claims or “bad faith” claims against FIC.  The opinion, in part, comes from FIC’s Rule 12(c) motion.

The standard for deciding a motion under Rule 12(c) is the same as the one for deciding a motion to dismiss under Rule 12(b)(6).

Insurance attorneys must know the time period from which the statute of limitations starts.  This issue is addressed in a 2022, opinion from the Southern District of Texas, Houston Division.  The opinion is styled, Patriot Logistics v. Travelers Property & Casualty Company of America.

This case deals with various issues and the facts of the case can be read in the opinion.  It is a summary judgment opinion.  Here, the focus is the statute of limitations on the bad faith claim.

The Fifth Circuit holds that under Texas law the statute of limitations begins to run when the particular cause of action generally accrues—being ‘“when facts come into existence that authorize a party to seek a judicial remedy . . . regardless of when the plaintiff learns of the
injury.”’

Bad Faith Insurance – It’s been said that if you need an expert to explain bad faith, then you probably don’t have a case.  However, there may be an expert needed on other aspects of the case.  Our last Blog explained part of the way that courts look at experts.  This is some more of that opinion.  The case is styled, Richard Kim D/B/A Centre Cleaners v. Nationwide Mutual Insurance Company.  The opinion is issued by the Northern District of Texas, Dallas Division.

Plaintiff had hail damage coverage for his property through Nationwide.  Plaintiff made a timely claim for damages and Nationwide inspected the claim and asserted that the damage amount was below the deductible amount.

Plaintiff filed suit under the Texas Insurance Code, Sections 541 and 542, and for various violations of the Texas Deceptive Trade Practices Act. and breach of the duty of good faith and fair dealing.

A claim against an insurance company generally speaking, will involve at least two distinct claims.  One for a breach of the insurance contract and a second claim for the insurance company acting in “bad faith” in their handling of the claim.  This issue was discussed in a 2022 opinion from the Northern District of Texas, Dallas Division.  The case is styled, Claire Garcia v. Allstate Vehicle and Property Insurance Company.

Allstate had filed a Motion to Sever and Abate the contract claim from the bad faith claims alleged to be violations of the Texas Insurance Code, Sections 541.060 and 542.060, plus violations of the Texas Deceptive Trade Practices Act and fraud.

Garcia experienced hail damage to her home and filed a claim for coverage through her home insurer, Allstate.  Allstate sent an adjuster to Garcia’s home who calculated an estimate of $843.68.  Later, another agent calculated an estimate of $1,166.84.  After applying deductibles, Garcia was not receiving any monies for the claim.

Bad Faith insurance lawyers are always questioning themselves on where the line is drawn regarding bad faith claims.  This issue is discussed in this 2022, opinion from the Western District of Texas, San Antonio Division.  It is styled, Dr. John Winston, III v. State Farm Lloyds.

State Farm filed a motion for summary judgment regarding Winston’s bad faith allegations.

Winston sued State Farm regarding a claim for damage to Dr. Winston’s residence caused by a hail storm.

Bad Faith Insurance Lawyers need to read this 2022 opinion from the Northern District of Texas, Dallas Division.  The style of the case is, Vernon Humphries and Rebecca Humphries v. State Farm Lloyds.

The Humphries sued State Farm alleging State Farm failed to pay the full amount of their claim.  After litigating some of the case, State Farm filed a motion for summary judgment regarding Humphries’ bad faith claims.

We will not state the detailed facts of this case.  To get the facts of this particular case, a reading of the opinion is necessary.

Insurance companies and insurance agents have no general duty to obtain coverage nor to make sure the coverage is adequate.  On the other hand, courts have found insurance companies liable for affirmative misrepresentations, and an insurance agent who undertakes to procure insurance for another owes a duty to a client to use reasonable diligence in attempting to place the requested insurance and to inform the client promptly if unable to do so.  This is discussed in numerous cases, including, the 1992, Texas Supreme Court opinion, May v. United Services Ass’n of America.  Also, the 1999, 1st Court of Appeals opinion, Frazier v. Texas Farm Bureau Mutual Ins. Co.

An agent has a duty to keep the customer informed about the insurance policy’s expiration date when the agent receives information pertaining to expiration date that is intended for the customer.  This was discussed in the 1985, Texas Supreme Court opinion, Horn v. Hedgecoke Ins. Agency.

Additionally, the court in May suggested an agent could be found negligent if an explicit agreement or course of conduct showed the agent undertook to determine the customer’s insurance needs and counseled the customer as to how they could be met.

Bad Faith insurance claims are common complaints when dealing with claims being denied.  When fighting these cases a common tactic is to sue the adjuster for the wrongs the adjuster did in causing the claim to be denied.  When suing an adjuster the insurance company is going to always claim that the adjuster is not a proper party to be sued in the case.  The relevance of whether the adjuster is sued or not often determines whether the case will be litigated in a State Court or in Federal Court.

Properly suing an adjuster was discussed in this 2022 opinion from the Northern District of Texas, Dallas Division.  The case is styled, Art Dallas, Inc. v. Federal Insurance Company and Derek Franks.

In this case, ADI made a claim for wind and hail damage.  The insurance company, Federal, sent it’s adjuster, Franks, to inspect the claim.  Franks determined the damage from wind and hail was minimum and that the roof damage was due to “wear and tear.”

Insurance claims lawyers are well aware that insurance companies prefer to litigate in Federal Court.  Proper pleading can often times prevent a case from being litigated in Federal Court.  Usually suing the adjuster who handled the claim will prevent removal to Federal Court.  The key is properly pleading claims against an adjuster.

This is discussed in a 2022, opinion from the Northern District of Texas, Dallas Division.  The style of the case is, Jackie Preston v. Nationwide Property & Casualty Insurance Company; Stevie Bruesewitz; and Matthew Vaughters.

Preston sustained damage to her property in 2019.  Nationwide was her property insurer and thus, Preston made a timely claim to Nationwide.  Preston became frustrated with Nationwide’s handling of her claim and sued Nationwide and the two adjusters, Stevie and Matthew.

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