Articles Posted in Claims Denial

An often asked question by insureds having a claim against their insurance company is, “Can I recover my attorney fees?”  There is not a simple straight forward answer to this question.  Many variables come into play.  “Yes” is a simple answer but does not get into the variables.

A 2022, opinion from the Northern District of Texas, Dallas Division, discusses this issue as it relates to claims under Texas Insurance Code, Section 542A.003.  The style of the opinion is, Betty Rahe v. Meridian Security Insurance Company D/B/A State Automobile Mutual Insurance Company and Larysa Santiago.

Plaintiff sued Defendant on a claim arising from wind and hail damage to her property.

There is lots of information available about actions to be taken before a lawsuit is filed.  There is also a lot of information available about the potential wrongs of an insurance company, it’s agents and adjusters.  What is rarely discussed is the work an insured has to do in a lawsuit.  When we say”insured” we are speaking of the person, not the person’s lawyer.

This issue can be seen in a 2022 opinion from the Austin Court of Appeals.  The style of the opinion is Michael V. Wright and Phyllis F. Wright v. State Farm Lloyds.

In this case, the Wrights sued State Farm for breach of contract and various violations of the Texas Insurance Code.  The lawsuit arose out of the way the Wrights were treated after they made a claim for benefits after a fire loss.

Bad Faith Insurance Lawyers understand the law in Texas, at least as of the date of this post, requires that an insurer show that any misrepresentation made in an application for insurance be shown to have been made intentionally for the insurance company to be able to rescind the policy based on that misrepresentation.

This issue came up in a 2022, case from the Fort Worth Court of Appeals.  The case is styled, Maria Robles, J.S. and Jose Almaguer Vazquez v. Cox Insurance Group, LLC and Old American County Mutual.

This is an appeal from a summary judgment granted in favor of the insurer by the trial court.

Insurance lawyers try to evaluate the value of a claim when talking with a prospective new client.  Guess what?  Federal Judges do the same with cases removed to their Court from the State and County Courts.  This is seen in a 2021 opinion from the Southern District of Texas, McAllen Division.  The opinion is styled, Macario Saenz v. State Farm Lloyds.

This is a dispute over the amount of damage resulting from a hurricane claim between Saenz and State Farm.

A lawsuit was filed in State Court and State Farm removed the case to Federal Court pursuant to 28 U.S.C., Section 1332, based on the amount in controversy exceeding $75,000.  Saenz filed a motion to remand.

Insurance lawyers need to understand every way possible for maintaining their case in State Court whenever possible.  It is not possible too often, so when it is possible it needs to be done.

This 2021, opinion from the Northern District of Texas, Dallas Division, shows how one case was allowed to be in State Court.  The opinion is styled, Richard Conrad and Brenda Conrad v. Cincinnati Insurance Company and John W. Schuster.

This is a property insurance coverage dispute.  The Conrads sued Cincinnati and Schuster, an employee of Cincinnati who adjusted the claim, for various violations of the Texas Insurance Code and breach of contract after the Defendants concluded there was minimal damage to the property.  Suit was filed in State Court and the Defendants had the case removed to Federal Court based on diversity jurisdiction and the assertion that Schuster was improperly joined in the lawsuit.  The Conrads filed a Motion to Remand the case back to the State Court.

The vast majority of  insurance claims that get denied are settled.  Less than 2% of these cases actually result in trial.  When there is a trial, the odds are typically with the insurance company prevailing.  That is what happened in this 2021, verdict in a case from the Southern District of Texas, Houston Division.  The case is styled, Shane and Shannon Richardson v. Liberty Insurance Co.

The Richardson’s claimed damage to their roof and part of the interior of their home from a storm.  Liberty inspected the damage and denied the claim based on their assertion that the covered damages were less than the deductible.

The case was tried to a jury and the jury found in favor of Liberty on the breach of contract damages but found that Liberty engaged in “false, misleading and deceptive acts or practices in the  business of insurance in this case” and “misrepresented to the Richardsons the scope or cause of the damage from wind or hail,” in violation of the Texas Insurance Code, Section 541.001 et seq.  The jury awarded no damages for any claim, but, based on finding that Liberty’s violation of the Insurance Code was “knowing,” the jury awarded the Richardson’s $7,082.54 in “additional” damages.

Here is an insurance law situation not seen very often.  This is a 2021, opinion from the Western District of Texas, San Antonio Division.  It is styled, Amali Obaya v. Allstate Vehicle & Property Insurance Company.

Obaya owned property in San Antonio that was insured by a policy of insurance, when the property was damaged in a wind/hailstorm.  A claim was submitted.  Obaya asserts that her claim was unreasonably investigated, improperly adjusted, and that the Defendant wrongfully denied the claim.  Obaya sued Allstate Vehicle and Property Insurance Company for violations of the Texas Insurance Code, DTPA, breach of contract, and other causes of action.  The lawsuit was filed in State Court.  No claims were asserted against Allstate Texas Lloyd’s in State Court, nor did Allstate Texas Lloyd’s utilize procedural means to become an actual party to the lawsuit.

Allstate Texas Lloyd’s removed the case to this Federal Court.  Plaintiff timely moved to remand, arguing that Allstate Texas Lloyd’s was not an actual party to the state court action and thus lacked the power to remove the case to federal court.

Here, an insurance company refused to pay a claim based on their assertion that the insured customer failed to segregate damages.  The Judge agreed with the insurance company.  The opinion is from the Northern District of Texas, Dallas Division.  It is styled, Svetlin Tchakarov and Popova Rossitza v. Allstate Indemnity Company.

The plaintiffs filed suit to recover damages from Allstate for wind and hair damage to the roof of their property.  Allstate moved for summary judgment based on Allstate’s assertion that Plaintiff’s have not provided evidence that would allow a jury to reasonably apportion the harm from the covered and non-covered causes of loss.

The relevant portion of the policy reads:

Claims against adjusters for violations of the Texas Insurance Code must be very specific.  This is illustrated in a 2021, opinion from the Eastern District of Texas.  The opinion is styled, Fred Vernon, II v. Palomar Specialty Insurance Company, Wellington Claim Services, Inc., One Call Claims, David Cardenas, and Tanya Spalding.

This case was filed in State Court and Palomar caused the case to be removed to Federal Court asserting that the adjusting companies were improperly joined in an effort to defeat diversity jurisdiction.  Vernon filed a motion to remand which is the subject of this opinion.

Pursuant to 28 U.S.C., Section 1332, in removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75,000.00.

Here is an insurance policy case from the Tyler Court of Appeals issued in October 2021.  The opinion is styled Irajabedinia v. Lighthouse Property Insurance Company.
This is a homeowners claim for coverage after Hurricane Harvey.  The damage occurred on August 28, 2017.  The claim was timely filed and Lighthouse paid in a letter dated October 13, 2017.  Plaintiff believed the claim was underpaid but did not do anything else until January 28, 2019, when a letter was sent to Lighthouse pursuing the claim further.  On March 14, 2019, Lighthouse responded saying the claim had already been paid and the file was closed.  Later, on October 1, 2019, Plaintiff’s attorney sent a more formal demand for coverage.
On December 3, 2019, Plaintiff demanded an umpire be appointed which was done on December 9, 2019.  Lighthouse refused to participate, stating that limitations had passed on October 14, 2019.  Plaintiff filed suit on December 30, 2019.
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