Articles Posted in Claims Handling Process

One of the responsibilities for an insured who has a claim is to promptly report the claim to his insurance company.  This is illustrated in this 2019, Southern District of Texas, Houston Division, opinion styled, Bobwhite Rentals, LLC v. National Liability & Fire Insurance Company.

This is a summary judgment case in favor of National.

One of Bobwhite’s customers had property destroyed by a fire on March 6, 2015, while the property was on Bobwhite’s premises.  Bobwhite reported the fire to its insurance broker the same day.On April 30, 2015, Bobwhite paid $50,000 to settle the customer’s claim.  Over a year later, the fire and the damage to the customer’s property was reported to National.  National issued a reservation of rights letter on July 14, 2016 and began its investigation of the claim and on November 1, 2017, denied the claim saying:

Filing a proof of loss as part of a claim is very basic to all insurance claims.  This issue was a topic in a recent Fifth Circuit opinion styled, Andre Yanez v. American Strategic Insurance Coporation; E-Ins., L.L.C.; FKS Insurance Services, L.L.C.

The lower court granted the insurers motion for summary judgment based on Yanez not submitting a proof-of loss form as required by the federal flood program policy.

This claim arose out of storm in 2016, causing flood damage to Yanez’s property.  Yanez filed a claim and adjusters were assigned to the claim.  Yanez completed a flood field survey and filed a proof-of-loss and was paid for the 2016 flood consistent with the proof-of-loss that was filed.

Here is a Northern District of Texas, Fort Worth Division opinion issued by Justice Reed O’Conner.  This opinion echoes similar opinions being issued in the Federal Courts in Texas.  The style of this case is, Twanya Braden v. Allstate Vehicle and Property Insurance Company.

Braden reported a claim for hail and windstorm damage to her house to Allstate.  A dispute arose as to the damages amount and appraisers set the amount of loss at $9,005.92.  Allstate had made a previous payment and after taking into account the deductible, Allstate paid the balance.

Allstate moved for summary judgment based on the claim having been properly paid pursuant to the appraisal amount and thus, there were no other issues for the Court to decide.

When a Plaintiff sues an insurance company in State Court, the insurance company is usually going to do everything it can to have the case removed to Federal Court.  Plaintiffs normally lose this fight over which court the case will be litigated.

Here is a case where the Plaintiff won the fight and primarily because of mistakes the insurance company lawyers made.  The case is from the Southern District of Texas, Houston Division.  It is styled, Jade Freeman v. State Farm Mutual Automobile Insurance Company ….

Freeman filed the case in State Court on February 21, 2018, suing State Farm.  On October 9, 2018, plaintiff filed her first amended petition adding Progressive as an additional defendant.  The lawsuit arose out of an auto accident and State Farm and Progressive were sued for breach of contract and violations of the Texas Insurance Code.  On November 20, 2018, Progressive filed its Removal Petition in this Court.  Freeman timely filed its Motion to Remand.

Most people do not know what an anti-assignment clause in an insurance policy means.  This issue is discussed in a 2018, opinion from the 14th Court of Appeals.  The opinion is styled, Safeco Insurance Company of America v. Clear Vision Windshield Repair, LLC.

This case concerns anti-assignment clauses in insurance policies.  Clear Vision repaired chips in the windshields of Safeco’s insureds.  Safeco recently refused to pay invoices for the windshield repairs on four of Safeco’s insureds.  The insureds had assigned the claim to Clear Vision for payment and Safeco denied the payments relying on the anti-assignment clause in the policies at issue.

The trial court ruled in favor of Clear Vision and that ruing was upheld on appeal by this Court.

It’s probably not right to pick only on State Farm.  Most if not all, of the insurance companies or their individual employees will break the rules for their own gain.  This is illustrated in a Chicago Tribune story titled, State Farm Pays $250 Million, Ducks Trial Over Allegations It Tried To Rig Illinois Justice System.

The story tells us State Farm agreed to pay $250 million on the brink of a trial to customers who claimed the company tried to rig Illinois justice system to wipe out a $1 billion jury verdict from 19 years ago.

The customers were seeking as much as $8.5 billion in damages in a civil racketeering trial that was set to start Tuesday in federal court in East St. Louis, Illinois.  A judge granted preliminary approval to the accord and set a final fairness hearing for December.

Insurance lawyers who handle home owner and property claims must know this case.  It is a 2018 case from the Northern District of Texas, Dallas Division.  It is styled, Meisenheimer v. Safeco Insurance Company of Indiana.

This is a storm damage claim.  Plaintiff suffered damage and made a claim.  Safeco sent out an adjuster who found total damage that was less than the $7,700 deductible amount.  Plaintiff hired a public adjuster who determined the loss to be $129,794.  Safeco re-inspected the property and the parties still could not reach a resolution.  Plaintiff claims the inspections were substandard.

The insurance contract includes an appraisal provision for resolving disputes over the proper amount of the claim.  Safeco invoked the appraisal process and both parties participated.  An umpire issued a final appraisal award of $54,535.  Safeco timely paid the final appraisal amount.

Anytime an insurance company is sued from conduct arising from insurance policy and the investigation of a claim, the insurance company is going to seek to have the case heard in a federal court.  This is seen again in the 2018, opinion from the Western District of Texas, San Antonio Division, styled, Electro Grafix, Corp. D/B/A Aetna Sign Group, LTD., D/B/A Aetna Sign Company, Inc. v. Acadia Insurance Company, and Marlin Douglas Odermatt.

This is a lawsuit filed in State District Court arising out of claim for property damage wherein Acadia claims there was no damage or minimal damage to Aetna’s property.  Marlin was an engineer assigned to investigate the claim by Acadia.  Aetna claims Acadia has not accepted responsibility for the conduct of Marlin and thus Marlin is being sued in his individual capacity.

Acadia had the case removed to federal court and Aetna is filing this motion remand based on Marlin being improperly joined.

As is normal, an insurance company will remove a case to federal court anytime they can.  When an insured sues parties besides the insurer, the insurance company claims the joinder of the other party is fraudulent.  To often the insurer wins this removal battle.  Here is a case where the insured won the removal battle.

The case is a 2018 case styled, Ramona L. Smith v. Government Employees Insurance Company and R&M Towing and Recovery.  The case is from the Eastern District of Texas.

Smith’s husband was killed in an accident.  R&M towed Smith’ vehicle.  Smith contends R&M agreed to maintain possession of the vehicle while she pursued a civil action against the manufacturer.  R&M subsequently released the vehicle to GEICO.  She then contacted GEICO and reached an agreement for GEICO to ensure the continued storage and preservation of the vehicle.  GEICO then sold the vehicle for salvage without Smith’s permission and allowed it to be destroyed.

Attorneys who handle insurance cases in Fort Worth and around Texas will want to read this 2018, opinion from the U.S. District Court, Eastern Texas, Sherman Division.  It is styled, Bradley Sanson v. Allstate Texas Lloyd’s.

This situation deals with property that was substantially destroyed in a storm.  Allstate was the insurer.  The insureds were Bradley and Vicki Sanson.  Bradley submitted a claim and after attempts to settle the claim were unresolved, Bradley filed a suit alleging breach of contract, and violations of the Texas Insurance Code among other causes of action.

Allstate filed a Rule 12(b)(7) motion to dismiss based on Bradley failing to join a party under Rule 19 .  Under a Rule 12(b)(7) motion to dismiss the Court makes two inquiries under Rule 19.  The Court must first determine under Rule 19(a) whether a person should be joined in the lawsuit.  If joinder is warranted, then the person will be brought into the lawsuit.  But if such joinder would destroy the court’s jurisdiction, then the court must determine under Rule 19(b) whether to press forward without the person or to dismiss the litigation.  Allstate has the burden of showing that Vicki Sanson is a necessary and required party as they allege.