Articles Posted in Claims Refusal

Insurance attorneys in Texas need to know how the “misrepresentation defense” works. A good illustration in found in this January 2016, opinion from the Waco Court of Appeals. The case is styled, Karl Wallace v Amtrust Insurance Company of Kansas, Inc.

Until the time of his death in 2007, Wallace’s father lived on property located at 1100 Lone Oak Drive in Oakhurst, Texas–a few hundred miles from Fort Worth, Texas. This property included both a mobile home and 130 acres of land. Because he had been granted a life estate in the property, Robert Guenther began living in the mobile home until he died in 2009. Wallace, a resident of Fort Worth, subsequently took sole ownership of the property in late 2009.

Realizing that the property was left vacant and that the mobile home was deteriorating, Wallace decided to sell the property. However, to protect his interest in the interim, Wallace contacted John Cole Insurance Agency, Inc. to procure insurance. Wallace transacted with Cole because Cole’s company had insured the property for Wallace’s father.

Attorneys handling hail damage insurance claims need to read this opinion from the U.S. District Court, Northern District of Texas, Fort Worth Division. The case is styled, Monclat Hospitality, LLC vs Landmark American Insurance Company.

This case was filed in State District Court in Tarrant County and then removed by Landmark to Federal Court base on there being a lack of diversity of citizenship subject matter jurisdiction as contemplated by 28 U.S.C. Section 1332(a). Insurance companies always want to fight insurance disputes in Federal Court because matters are more in their favor in Federal Court. Monclat had attempted to prevent the removal by suing the adjuster and then trying to convince the Court why suing the adjuster was proper in this case.

Monclat filed this lawsuit to recover benefits from Landmark under a policy issued by Landmark. Monclat alleged that it had suffered damages due to wind and hail.

Insurance lawyers who handle home owners claims are all aware of the “vacancy exclusion” in a home owners policy. They may vary slightly from policy to policy but almost of the policies are going to have an exclusion that excludes losses that result when a home or building is vacant for a defined period of time.

The Claims Journal published an article in July of 2015 dealing with this issue. The article speaks to a Florida case but because of similarities in Texas and Florida insurance law, the article is worth reading. Here is what the article says.

Homeowner policies contain a vacancy exclusion. Under the terms of the standard vacancy exclusion, damage caused by “vandalism and malicious mischief” are excluded from coverage. However, is arson encompassed within the phrase “vandalism and malicious mischief?” That issue was recently decided by the Florida Court of Appeals in Botee v. Southern Fidelity Ins. Co.

Lancaster insurance attorneys will occasionally see a claim covered by the National Flood Insurance Program. Each of these types of government programs are governed in their own particular way. The United States District Court for the Southern District of Texas, Galveston Division issued a ruling that attorneys handling these types of claims need to know about and read. The style of the case is, Ruby Pal v. Texas Farmers Insurance Company.

This is a summary judgment ruling wherein Farmers sought to have the court dismiss the case filed by Pal.

Pal’s property was damaged in flooding during Hurricane Ike in September 2008. At the time, Pal had insured the property for $110,000.00 against flood loss with Farmers, a WYO insurer with the National Flood Insurance Program. Pal’s initial claim was adjusted and paid, on December 29, 2008, in the amount of $53,610.45. The extended deadline for filing a Proof of Loss (POL) for Hurricane Ike claims expired on August 7, 2009. Seven months later, on March 11, 2010, piled filed her second POL seeking policy limits. Farmers negotiated Pal’s claim and by April 7, 2010, determined she was due an additional $7,644.68. The parties requested a waiver of a timely POL for that amount which was approved by FEMA on April 13, 2010. On October 1, 2010, Pal sued Farmers seeking additional proceeds under her policy. The parties continued to negotiate her claim, but reached impasse around May 30, 204. As a result, Farmers filed the summary judgment motion.

Everman insurance lawyers need to be know this 2015, Texas Supreme Court opinion. It is styled, Jaw The Point, L.L.C. v. Lexington Insurance Company.

This insurance dispute involves losses the insured incurred as a result of city ordinances triggered by damage to an apartment complex during Hurricane Ike. The insurance policy covers the costs of complying with city ordinances, but only if the policy covers the property damage that triggers the enforcement of the ordinances. Here, the property damage that triggered the ordinances resulted from both wind, which the policy covers, and flooding, which the policy expressly excludes. The policy’s anti-concurrent-causation clause excludes coverage “for loss or damage caused directly or indirectly by” flooding, “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” Because the evidence conclusively establishes that flood damage triggered the enforcement of the city ordinances and thus “directly or indirectly” caused the insured’s losses, the Court concluded the policy excludes coverage for such losses regardless of the fact that wind damage “contribute[d] concurrently or in any sequence to the loss.” Because the Court agreed with the court of appeals that the policy did not cover the insured’s losses and thus the insured cannot recover for the insurer’s bad faith failure to effectuate a prompt and fair settlement of the claim the case was affirmed.

In July 2007, JAW purchased an apartment complex in Galveston for approximately $5.7 million.Fourteen months later, Hurricane Ike struck the Island and caused substantial damage to The Pointe apartments. Lexington provided the primary coverage.

Texas insurance lawyers will sometimes find themselves in a situation where there was no insurance on a piece of property. When this happens, the next question is why isn’t there insurance. Then, who is responsible for getting the coverage. This was the issue in a 1976, Texas Supreme Court opinion styled, Colonial Savings Association v. Taylor. Here is what happened.

This controversy arose because a house owned by, Mr. Taylor, which was destroyed by fire, was not insured. Mr. Taylor sued Colonial, contending that Colonial had gratuitously assumed responsibility for insuring the house and had negligently failed to do so. Trial was to a jury, which returned a verdict with answers favorable to Mr. Taylor, but the trial court entered judgment Non obstante veredicto for Colonial.

The property involved is located at 846 East 26th Street in Houston. There are two houses at this address, an older house near the street and a newer house behind it. Taylor purchased the property in 1967 from Mr. and Mrs. James E. Reynolds, taking title subject to a prior outstanding lien held by Colonial. In consideration for the conveyance Taylor made four over-due payments to Colonial on the Reynolds note which the property secured. Pursuant to the conveyance, Colonial transferred the mortgage loan to Taylor’s name, and he was made all subsequent payments thereon.

Dallas insurance attorneys will tell you that in order to determine coverage or no coverage under an insurance policy that the entire fact situation needs to be examined. In a 2014, Fort Worth Court of Appeals opinion, in a case styled, City of Carrollton v. Fred Loya Insurance Company, reversed a trial court that said there was no issue to be decided. Here is the relevant information from that case.

This case revolves around whether an insured, Danelle Butts, validly added her daughter, Donna, back to her insurance policy so that the daughter’s car accident with a pedestrian was covered by the policy.

Danelle had an automobile insurance policy through Fred Loya Insurance. On August 3, 2007, Danelle amended her policy to exclude her daughter Donna from coverage under the policy because Donna moved out of the family home.

Fort Worth insurance lawyers will find the 1995, case, Darby v. Jefferson Life, useful in their insurance law practice. It is from the Houston Court of Appeals [1 Dist.].

On October 5, 1987, Jefferson Life’s agent, Charles Sharp, interviewed Darby in her home after she applied for a major medical insurance policy. Sharp read questions from the application and recorded Darby’s answers on the policy application. In one section of the document, Darby’s recorded answers showed one doctor’s visit and one hospital confinement in the previous 24 months but also showed a denial of past health problems. In another section, Darby’s recorded answers indicated she had a complete checkup during the previous month, a blood clot earlier that year, and was on medication for arthritis. Darby signed the application in two places, affirming that each answer was full, true, and complete, and agreeing that any false statement materially affecting Jefferson Life’s acceptance of the risk would render the policy void.

At trial, Darby testified that she also told Sharp, although the application did not so reflect, that she had a computerized axial tomography (CAT) scan and a magnetic resonance image (MRI) the month before her application; she had been hospitalized for a blood clot and continued to see a physician three times a week; and she had rheumatoid arthritis, which was controlled with medication. She also may have told Sharp she saw a physician once a month.

Mineral Wells insurance lawyers will tell you that you have to be aware of “exclusions” in your insurance policies, otherwise, you risk finding out the hard way. A 1999, Austin Court of Appeals case illustrates this. The style of the case is, Zimmerman v. Chicago Title Insurance Company. Here is the relevant information.

In 1988, the Zimmermans purchased residential property in Austin and obtained a policy of insurance from Chicago Title insuring title to that property. The policy obligates Chicago Title to defend the Zimmermans against any action in which a claim adverse to their title is asserted, unless the claim is based on matters excepted by the policy. In the separate litigation underlying this dispute, the Zimmermans were sued by the owners of adjoining property, Mary Joseph and her four daughters, who asserted title by adverse possession to a twelve- to twenty-inch strip of land insured under the Zimmermans’ policy. Chicago Title refused the Zimmermans’ request to defend them against the suit.

The Zimmermans sued Chicago Title for a declaration that it owed a duty under the policy to defend them in the underlying suit. The Zimmermans subsequently moved for partial summary judgment, asserting that Chicago Title had relied on four policy exclusions to refuse their defense, none of which applied. Chicago Title filed its own motion for summary judgment, arguing that each of the claimed exclusions justified its refusal to defend. Following a hearing, the district court rendered an order denying the Zimmermans’ motion and granting summary judgment for Chicago Title.

Grand Prairie insurance lawyers need to know how “exclusions” in an insurance policy work. This is partially explained in a 1994, San Antonio Court of Appeals case. The style of the case is, Telepak v. United Service Automobile Association. Here is the relevant information from the case.

The question before the court concerned whether the insured or the insurer has the burden of proof as to the applicability of an exception to an exclusion in an insurance policy. The court held that the applicability of an exception to an exclusion is a question of coverage, on which the insured has the burden of proof.

The insured brought a claim under an all-risk homeowner’s insurance policy for damage to their home. It is undisputed that the damage was incurred by the settling of the foundation. In its answer, the insurer pled the affirmative defense that “exclusion k” of the insurance policy excluded from coverage damage resulting from settling or cracking of the foundation. The insured asserted that the settling was caused by water which leaked from an air conditioner and escaped under the foundation of their home. They asserted that their loss fell under an exception to exclusion k, which stated that exclusion k would not apply to settling caused by accidental leakage from an air conditioning system. The jury charge read as follows: