Articles Posted in Bad Faith Insurance

Hee is a 2021, opinion dealing with bad faith claims by an insured and the insurance company efforts to dispose of the bad faith claim via summary judgement.  The opinion is from the Southern District of Texas, Houston Division, and is styled, GeoVera Specialty Insurance Company v. Sam Walker.

The insured is Walker.  The insurance company is GeoVera.  Walker suffered wind damage and a subsequent theft claim.  There are other issues in the case, but only the bad-faith / extra=contractual issues will be looked at here.

Geovera denied the claim and then sued Walker seeking a declaratory judgment that it did not owe any damages to Walker.

The question asked in the title is a good question.  However, it is a hard question to answer.  A 2021, opinion from the Northern District of Texas, Fort Worth Division, lends some insight into how bad faith is analyzed by the courts.  The opinion is styled, Cocanougher Asset No. 3, LLC v. Twin City Fire Insurance Company.

The facts of the case can be read in the opinion and will not be rehashed here.

Twin City filed a motion for summary judgement on the bad faith allegations of the plaintiff.  In deciding the motion in favor of the plaintiff, the court explained how these situations are analyzed.

Insurance lawyers are frequently asked, “Can you make the insurance company pay my attorney fees?”

Here is a case from the Southern District of Texas, Houston Division.  The case is styled, Shane and Shannon Richardson v. Liberty Insurance Co.

Most case, over 98%, get resolved short of a trial.  Some cases get dismissed for legal reasons soon after the lawsuit is filed or at the Motion for Summary Judgment stage of the case.  The others reach a settlement.  When a case is settled, the insurance company really doesn’t care how the settlement money is applied.  They are going to pay a certain sum of money and how that money gets distributed, i.e., actual damages, exemplary damages, interest, court costs, or attorney fees is not really important to them.

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:

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