Articles Posted in Claims Denial

Insurance claims often do not need an expert to help the case.  When an expert is needed, it is important to know how courts look at experts.  Here is a homeowners case wherein an expert is being used to bolster the case.  This is a 2022 opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, FB & SB Leasing, LLC v. Chubb Lloyds Insurance Company of Texas.

In this firstparty insurance dispute involving a property experiencing plumbing problems and foundation issues, Chubb presents two reliability arguments to support excluding the opinion
testimony of Plaintiff FB &SB Leasing’s sole causation expert, Michael B. Couch Chubb urges first that Couch’s report provides insufficient information about his methodology.  Second, Chubb argues Couch relied on mistaken or incorrect underlying data when opining that there were multiple leaks at the property.  There’s no dispute that Couch’s testimony, if reliable, would be relevant. Chubb also doesn’t dispute Couch’s qualifications. As argued, and on this record, Chubb’s complaints go to the eventual weight a jury might afford the testimony and are most appropriately addressed at trial via cross-examination or through introduction of competing expert testimony.

As to the first argument, there’s no dispute that Couch inspected the property on multiple occasions and relied on a plumbing report that noted multiple breaks in plumbing lines.  Relying on this underlying data and his ample training and experience, Couch opined on the cause of the damage to the property.  This is sufficient given the parties arguments presented here.  The second of Chubb’s arguments relies on a distinction Chubb draws between leaks and breaksin plumbing, which on this record is an issue better reserved for cross examination at trial.  Both sides experts relied on the same plumbing report that noted multiple plumbing issues.  Even Defendant’s expert appears to use the terms break and leak interchangeably in his expert report. Moreover, Chubb didn’t depose Couch, which might have provided more detail and nuance on these issues to further inform a motion to exclude.  Accordingly, on this record and based on the arguments presented by Chubb, the Motion, is Denied Without Prejudice.  Chubb may re-urge its arguments later in the case, via a motion in limine or at trial.

Insurance lawyers live on the Texas Insurance Code, Section 541.060.  There is disagreement among the Federal Courts about which of the sub-sections under 541.060 require the specifics of a “fraud” pleading.  This issue is discussed in a 2022, opinion from the Northern District of Texas, Dallas Division.  The style of the opinion is UGM Of Dallas, Inc. d/b/a Union Gospel Mission Of Dallas, Inc. v. Harleysville Insurance Company And Laura Jones.

UGM has a insurance policy with Harleysville that covers hail damage to the insured property.  UGM claimed a loss that was eventually adjusted by Jones.  The facts of the case can be read in the opinion.  What is discussed here is the courts coverage of whether or not the requirements of a fraud pleading applied to the section of the insurance code that was pled by UGM when a lawsuit resulted against Jones.

Defendants respond that Plaintiff fails to state a claim against Defendant Jones
that is cognizable under Texas law and also fails to satisfy the higher federal pleading
standard under Federal Rule of Civil Procedure 9(b) because these claims are “grounded
in fraud”

Is there such a thing as an oral insurance contract?  Well, according to the 1949, Texas Supreme Court opinion styled, Pacific Fire Insurance Company v. Donald, …, Yes.

In the Donald case, Paul Donald sued Pacific Fire to recover for the loss of 5500 bales of hay which were destroyed by fire.  The lawsuit is based on an alleged oral contract between himself and agent Henry Moore, who represented Pacific Fire.

The controlling question presented here is whether there was any evidence to sustain the trial court’s finding that Pacific Fire and Donald entered into a valid parol contract to insure respondent’s hay.

Insurance policies are contracts, and as such are subject to rules applicable to contracts generally.  This is stated in the 1994, Texas Supreme Court opinion styled, Hernandez v. Gulf Group Lloyds.

An insured seeking to recover on an insurance contract must prove that the contract was in force at the time of the loss.  Also, as discussed in the 1975, Tyler Court of Appeals opinion, Hartford Acc. & Indem. Co. v. Spain, a party who claims under a policy is required to produce the insurance contract upon which he sues or to prove the terms.  To prove a breach of contract, the insured must establish:

(1)  the existence of the contract sued upon

I know, I know.  Nobody reads the policy.  But, not reading the policy and understanding it can be a killer.  This is illustrated in a May 2022, opinion from the United States 5th Circuit Court of Appeals.  The opinion is styled, Bradford Realty Services, Incorporated v. Hartford Fire Insurance Company.

The Policy at issue in this case is a commercial building policy.  It provides coverage for losses “caused by or resulting from water that backs up from a sewer or drain.”  It also excludes coverage for damage caused by rain unless the Property “first sustains damage by a covered Cause of Loss to its roof or walls through which the rain . . . enters.”

In September 2018, heavy rains swept over the insured property.  Drains on the building were clogged.  The clog and a subsequent leak caused extensive damage to the inside of the property.  Bradford filed a claim that was subsequently denied by Hartford with Hartford saying the damage was caused by rain that did not enter the building through damage caused by the storm and thus fell into the Policy’s exclusion for damage caused by the rain.

There are many reasons an insurance company use to deny a claim.  One of those reasons is a requirement in almost all insurance policies that an insured provide timely notice to the insurance company of a claim.  The primary reason the insurance company requires a quick, “timely” notice, is so that they can investigate the claim while it is new.

Here is a 2022, opinion form the Dallas Court of Appeals.  The opinion is styled, Richland Trace Owners Association v. Landmark American Insurance Company, Vericlaim, Inc. and Jason Roberts Keen.

The facts of this case are unique to the case.  However, the general discussion about a claim being submitted in a timely manner needs to be understood.

Here is an interesting claim denial.  The case is a 2022, from the Southern District of Texas, Houston Division.  It is styled, Sergio and Maria Weitzman v. Allstate Vehicle and Property Insurance Company.

The Weitzman’s bottle wine in Argentina and sell it, for money, to and through their Texas company, Serca Wines, LLC.  In 2019, a fire destroyed 7,727 bottles stored in Argentina awaiting shipment to, and sale from, the United States.  The Weitzman’s made a claim through their homeowners policy for the loss.  The policy covered personal property located away from the residence, but with a business property coverage limit of $200.00.  Allstate paid $200.00.  The Weitzman’s, representing themselves sued Allstate alleging the wine business is a hobby and that the bottles were personal property.  They sued for the policy limits of $303,000.00.

The undisputed facts in the record, which includes the tax returns for the relevant period and a few invoices, as well as responses to written discovery, show that as a matter of law, the $200.00 policy coverage limit for business property located away from the insureds’ residence applies.  Allstate’s motion for summary judgment was granted.

Being aware of when the statute of limitations runs on a claim is vital so that the limitations period does not expire.  This is illustrated in the 2022, opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Tobin Endowment v. Great American Assurance Co.

Tobin Endowment is the insured and Great American is the insurer.

Tobin filed this lawsuit on August 23, 2020, claiming that Great American underpaid the claimed loss.  Great American eventually filed this Motion For Summary Judgment stating to the Court that Tobin let too much time expire and that Tobin’s claim is barred by the statute of limitation stated in the policy.

Most insurance claims will not end up in a lawsuit.  However, for those claims that do end up in a lawsuit it is important for the insured to understand their responsibilities when in the lawsuit.  The failure of a party to the lawsuit to cooperate in the litigation process can be fatal to the lawsuit.

The above is illustrated in a 2022, opinion from the Austin Court of Appeals.  The opinion is styled, Michael V. Wright and Phyllis F. Wright v. State Farm Lloyds.

The Wrights were insured by State Farm with a homeowners policy.  The Wright’s suffered losses stemming from two fires to their residence.  One in 2013, and the other in 2015.

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.

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