Articles Posted in Claims Denial

Texas homeowners have just experienced the worst loss state wide that has ever been experienced.  Homeowners will be reeling from the damage and hopefully the insurance companies treat all their customers fairly.  Unfortunately, there will be many customers who end up having their claim denied for one reason or another.

Here are some things to think about as it relates to weather related property claim.

After the historic and widespread property loss and damage resulting from the recent Texas freeze, home and business owners will be turning to their insurance provider for help.  Some of those insurance claims will be denied unfairly and property owners will turn to Texas Trial Lawyers Association (TTLA) members for assistance in getting their homes and businesses repaired.

Insurance lawyers who handle hail damage claims will need to read this opinion from the Western District of Texas, San Antonio Division.  It is styled, Mazhar Footsteps, LLC v. Amguard Insurance Company and Michael Clayton Hepburn.

This lawsuit arises from damages incurred by a hailstorm.  Based on the way the claim was handled, Mazhar sued Amguard and the adjuster, Hepburn.  The lawsuit was filed in State District Court.  Amguard timely removed the case to Federal District Court based on diversity jurisdiction and in its notice of removal, Amguard elected under Texas Insurance Code, Section 542A.006, to accept whatever responsibility Hepburn might have to Mazhar for Hepburn’s acts or omissions related to the claim.

Mazhar timely filed this Motion To Remand.

In order to successfully pursue lawsuits against insurance companies, an insurance attorney must understand how the insurance company looks at their case.

A big part of a lawsuit is deposition witnesses who are controlled by the insurance company.  These people are usually the corporate representative, the adjuster, and experts.  Hear is a perspective that is primarily from the viewpoint of the insurance company lawyer.

Corporate representative depositions are make-or-break propositions.  Sometimes, that choice is out of the hands of the insurance company lawyer but many insurance carriers have identified particular employees for whom giving testimony on behalf of the company is part of their job description.  An ideal corporate representative will be someone with general knowledge of the case and the willingness to become a case expert.  He or she should also have an unflappable demeanor.

The Employee Retirement Income Security Act (ERISA) provides various kinds of insurance to employees.  The important thing for insurance lawyers to know about ERISA is that it is governed by Federal law and it preempts State law.  This is illustrated in a 2020, opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Marco Z. v. UnitedHealthcare Insurance Company, Forma Automotive, LLC.

Marco does not dispute that the health plan at issue is governed by the ERISA.  Further, it is undisputed that at the time of the incident forming the basis of this action Marco was a beneficiary of the subject ERISA health plan established and maintained by Forma Automotive and administered by UnitedHealthcare.

Marco sustained medical problems in Mexico and was forced to seek medical assistance.  Marco  assigned insurance benefits to the Hospital, which is not a network provider under the Plan.  As a non-network provider, it has no express contract with UnitedHealthcare establishing payment for medical services provided to beneficiaries of the Plan.

Virtually all insurance lawyers would like to see the “claims manual” each insurance company has made for its use.  Being able to access that claims manual is discussed in a 2020 opinion from the Northern District of Texas, Dallas Division opinion styled, Jose Chavez v. Standard Insurance Company.

Chavez had a wrist problem.  He applied for long term disability (“LTD”) benefits which Standard paid beginning September 2016.  Standard requested a medical referral in July 2017, which resulted in termination of Chavez’s LTD benefits.  During the considerable pretrial skirmishing, Chavez made a request for Standard’s “internal rules, guidelines, protocols, or other similar criterion” related to Chavez’s claim.  Standard moved for a protective order, claiming that its Claims Manual constituted a trade secret.  To avoid a discovery dispute, Standard agreed to produce the Claims Manual subject to the entry of a protective order to protect from public disclosure.  The Court entered a protective order, granting confidentiality status to the relevant documents.  Nearly two years after the parties agreed to the protective order, Chavez challenges Standard’s confidentiality designation and seeks to unseal the cover page and a 195-word excerpt from Standard’s Claims Manual.

The Fifth Circuit has made clear that the public “has a common law right to inspect and copy judicial records.”  This right promotes the trustworthiness of the judicial process, curbs judicial abuses, and provides the public with a better understanding of the judicial process, including its fairness, and serves as a check on the integrity of the system.  Even information that may not be of particular interest to the public is subject to the presumptive right of public access.  This right, however, is not absolute and merely establishes a presumption of public access to judicial records.  The Fifth Circuit has not assigned a particular weight to this presumption, nor has it interpreted this presumption as creating a burden of proof.  The cases that have recognized a common law right of access do agree that the decision as to access is one best left to the sound discretion of the trial court.  In determining whether to seal judicial records, “the court must balance the public’s common law right of access against the interests favoring nondisclosure” and consider “relevant facts and circumstances of the particular case.”

Claims denial law firms are usually well versed on the ways to handle cases that end up in Federal Court when that was not the original intention.  This is illustrated in a 2020 opinion from the Western District of Texas, Austin Division.  The opinion is styled, Jose Rodriguez v. State Farm Mutual Automobile Insurance Company and Rhonda Cox.

Rodriguez filed an original petition on August 20, 2020, in the 98th Judicial District Court in Travis County, Texas.  On September 18, 2020, State Farm timely removed the case to this court based on diversity jurisdiction.  On September 25, 2020, State Farm filed a Motion to Dismiss and an Answer.  Five days later, on September 30, 2020, Rodriguez filed a Second Amended Complaint which added Defendant Rhonda Cox, the individual that State Farm assigned to evaluate Rodriguez’s insurance claim, as a non-diverse defendant.  Rodriguez now seeks to remand to state court in  motion filed October 5, 2020.  State Farm filed a response on October 25, 2020.  Having reviewed the pleadings, record, and applicable law, the court will grant the motion to remand.

Joinder of a non-diverse party after removal is scrutinized under the improper-joinder doctrine.  To demonstrate improper joinder of resident defendants, the removing defendant must demonstrate either: (1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.

Attorneys who handle insurance claims denial cases learn real fast about the requirement to segregate damages, especially with roofing cases.  This is illustrated in a 2020, Eleventh Court of Appeals opinion styled, Prime Time Family Entertainment Center, Inc. v. Axis Insurance Company and Andrew Jencks.

This case presents the question of whether an insured that receives a payment from the insurer on its claim is excused from complying with the requirement to segregate covered losses from non-covered losses under the doctrine of concurrent causes if it later brings a suit for breach of contract.

This is an appeal from a grant of summary judgment in favor of Axis.  This Court affirmed the ruling.

Bad Faith claims will sometimes require a separate trial.  This is illustrated in a 2020, Tyler Court of Appeals opinion styled, In Re: Progressive Casualty Insurance Company.

This case is a mandamus action resulting from the trial court refusing to sever and abate the extra-contractual claims and compelling discovery.

The real party in interest is Phillip Davidson.  Davidson had submitted a claim to Progressive for hull damage to his boat.  Progressive denied the claim.  Progressive later offered to settle the disputed claim for the costs of the repairs in the amount of $11,500.  Davidson filed suit seeking damages for breach of contract, Insurance Code violations and DTPA violations.

The primary purpose of liability insurance is to cover harms caused by negligence. Thus, an intentional act is not covered.  This is discussed in a 2020, opinion from the Eleventh Court of Appeals.  The opinion is styled, Joe Torres v State Farm County Mutual Insurance Company of Texas.

This is an appeal from a Stowers action against State Farm.  In trial, the jury found that State Farm’s insured, Edward Aguilar, intentionally cause injury to claimant, Joe Torres.  The trial court entered a take nothing judgment in favor of State Farm and this appeal followed.

This case arises out of Aguilar getting drunk, getting into an altercation with Torres, Aguilar getting in his car and leaving the scene, then turning around and running his insured vehicle into Torres.

Claim denial attorneys know that a prerequisite to filing a lawsuit against an insurance company for a first party claim is to give a pre-suit notice letter.  Failure to do so will result in a loss of potential causes of action.  This is illustrated in a 2020, opinion from the Southern District of Texas, Houston Division.  The opinion is styled, Nexxt Holding, Inc. v. Travelers Cas. Ins. Co. of Am.

Nexxt Holding sued Travelers in 2020, alleging that Travelers failed to pay repair costs due under the insurance policy  after a August 2017 storm.  Nexxt asserted Texas statutory and common-law claims and sought actual, consequential, and statutory damages, as well as attorneys’ fees.  Travelers answered the lawsuit and filed a verified plea of lack of presuit notice under Texas Insurance Code, Section 542A.003.

Texas Insurance Code, Section 542A.007(d) states that, if an insured plaintiff asserts a first-party claim for storm damage against its property insurer and the defendant insurer “pleads and proves” that it “was entitled to but was not given a presuit notice stating the specific amount alleged to be owed . . . under Section 542A.003(b)(2) at least 61 days before the date the action was filed . . . the court may not award to the [plaintiff] any attorney’s fees incurred after the date the defendant files the pleading with the court.”

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