Articles Posted in General

Most Fort Worth insurance lawyers will be aware of this case. It is a Houston Court of Appeals [14th Dist.] case styled, Allstate v. Rehab Alliance of Texas. This Court upheld the trial Court summary judgment in favor of Rehab Alliance. The opinion is long but here is a little of what it says.

Rehab Alliance is a chiropractic clinic which provided services including chiropractic care, orthopedic and pain management, epidural steroid injections, and radiologists’ services to persons injured in car accidents. As part of its services, Rehab Alliance also provided reports to attorneys outlining injuries and treatment plans for its patients in order to facilitate settlements of their claims for damages.

Allstate claims that Rehab Alliance solicited referrals from attorneys representing such claimants. In those situations, Rehab Alliance would treat the injured parties under a “letter of protection” with the patients’ attorneys. According to Allstate, these letters provided that Rehab Alliance would seek to recover payment of its bills from its patients only if there were a recovery reached by way of settlement or judgment; that is, the patients were released from financial responsibility for health care services if there was no settlement or judgment with an insurer. Allstate alleged these “letters of protection” were concealed from it because they were not included as a part of the settlement packages that attorneys for the various claimants presented to Allstate.

Most Dallas insurance attorneys can give a quick answer to the above question. A November 2014, Texas Supreme Court opinion helps with the answer. The style of the case is, In re Essex Insurance Company. Here is relevant information from that case.

Rafael Zuniga sued San Diego Tortilla (SDT) for personal injuries and then added a declaratory judgment claim against SDT’s liability insurer, Essex Insurance Company, seeking a declaration that Essex must indemnify SDT for its liability to Zuniga. The trial court denied Essex’s motions to dismiss, and the court of appeals denied Essex’s petition for writ of mandamus. In Texas, the general rule . . . is that an injured party cannot sue the tortfeasor’s insurer directly until the tortfeasor’s liability has been finally determined by agreement or judgment.

Zuniga sued SDT after he lost his hand while operating a tortilla machine at SDT’s facility. Essex, which had issued a commercial general liability policy insuring SDT, investigated the accident and concluded that the policy does not cover Zuniga’s claims because Zuniga was an SDT employee at the time of the accident. Zuniga and SDT denied that Zuniga was an employee and asserted instead that he was working at SDT as an independent contractor. While maintaining its position that Zuniga was an employee, Essex nevertheless agreed to defend SDT under a reservation of its right to refuse to indemnify SDT against any judgment, based on the policy’s employee exclusion.

Insurance Law Lawyers all know that in many instances an insurance company hires the attorney who represents a person or entity being sued. The issue comes up, “who does the attorney work for, the insured or the insurer?” A 1973, Texas Supreme Court case discusses this issue and is still good law. The style of the case is, Employers Casualty Company v. Tilley.

This is a declaratory judgment action.

Prior to filing the instant suit, Employers, secured a standard non-waiver agreement from Tilley and engaged an attorney to represent Tilley as his attorney in the Starky personal injury suit. For a period of nearly 18 months, the attorney not only performed such services for Tilley in defending against Starky, but he also performed services for Employers which were adverse to Tilley on the question of coverage. Tilley claimed that he had no knowledge of the Starky accident which occurred on November 25, 1967, until he was sued on September 19, 1969. This was his excuse for not notifying Employers before the suit was filed.

Insurance attorneys in Dallas will see situations where a policy is cancelled due to nonpayment of premiums. The Texas Insurance Code, Sections 551.101 thru 551.113 deal with policy cancellations. But what about specific situations. Here is a 1997, case to look at. It is a U.S. Eastern District opinion styled, Clare v. Richards. Here is what it tells us.

Heilman applied for a commercial property insurance policy for his restaurant. Richards and City National were listed as an “additional interests” on the policy. City National held a mortgage on the property and Richards was the owner of the real property and building in which the restaurant was operated. Heilman entered into an insurance premium financing agreement with Texas Specialty Finance (TSF). Heilman gave TSF full power of attorney to cancel the insurance policy and collect any return premiums in the event of nonpayment of policy premiums when due. When Heilman failed to make payment, TSF mailed Heilman notice of intent to cancel the policy. Prior to cancellation, notice of cancellation was never sent to the “additional interests.”

On February 6, 1997, the policy was canceled effective January 31, 1997. The restaurant was destroyed by fire on February 9, 1997.

Attorneys handling insurance claims need to be aware of legal matters be decided in the state that relate to insurance. The Insurance Journal ran an article dated October 21, 2014, that is titled, Jury Finds Texas Windstorm Insurer Adequately Paid City For Ike Claims. Here is what the article tells us.

Texas’ wind and hail insurer of last resort in coastal areas announced that a judgment has been entered in its favor in a lawsuit brought by League City in Southeast Texas.

The judgment signed on Oct. 16, 2014, by Presiding Judge Kerry Neves of the 10th District Court in Galveston, Texas, found that League City was not entitled to further payment from the Texas Windstorm Insurance Association (TWIA) over damage to city property during Hurricane Ike in 2008.

North Richland Hills insurance lawyers can tell you that when an insurance company believes someone is filing a false claim, the insurance company will deny that claim. What a lot of people do not realize is that the insurance company will sue for any claim they have paid and in some instances will file criminal charges.

The Los Angeles Times ran an article where the insurance carrier sued. The title of the article is, “Brothers Behind Lap-Band Ads Sued.” Here is what the article says.

The nation’s largest health insurance company accused the brothers behind the 1-800-GET-THIN advertising campaign of defrauding the insurer of more than $40 million by operating a complex weight-loss surgery billing scheme.

Attorneys who handle home owner insurance policy might want to share this article from the Insurance Journal regarding rates and the Texas Insurance Commission. The title of the article is, Homeowner Insurance Rates Hikes Not Challenged By Texas Commissioner. Here is what the article tells us.

The Texas insurance commissioner has allowed the three largest home insurers to impose significant rate hikes on many policyholders despite the objections of a state consumer advocate.

Insurance Commissioner Julia Rathgeber can reject any new rates that are deemed excessive and order refunds. But her office has taken no action since learning of the increases late last year, and it’s unclear whether she will do so.

Dallas insurance attorneys who look at Title Insurance issues will find a recent article published by the Los Angeles Times interesting. The article is titled “Lawsuit Puts Scrutiny On Title Insurance Kickbacks.” Here is what it tells us.

A new federal court suit alleging kickback violations by one of the country’s top-producing real estate sales teams raises an unsettling question for home buyers: Could your agent or broker be pocketing under the table large chunks of what you pay for title insurance?

Some legal analysts say the litigation should be a wake-up call for realty brokers and their customers nationwide. It focuses fresh attention on the often murky financial relationships that exist between title insurance agencies and realty firms — relationships that have been drawing increasing scrutiny from the federal Consumer Financial Protection Bureau.