Articles Posted in Hail Claims

It is important in an insurance lawsuit whether or not the insurance company is subject to being sued for bad faith claims handling or whether or not there is a bona fide dispute about coverage.  A bona fide dispute rids the lawsuit of claims related to bad faith issued.

This was the issue in a 2022 opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, David McArthur, Jean McArthur v. Safeco Insurance Company of Indiana.

This is a firstparty insurance dispute arising out of alleged damage to residential property as a result of a wind and hail storm.  Plaintiffs are the owners of an insurance policy (“the Policy”) issued by Defendant Safeco.

Hail damage claims are a frequent source of litigation.  The insured says the damage occurred in the last storm.  The insurance company says the damage is wear and tear or occurred in another storm under a different insurance policy.

The argument about when and how the hail damage occurred generally deals with the legal question known as “concurrent causation.”  This is discussed in a 2022, opinion from the Western District of Texas, Austin Division.  The opinion is styled, Marina Club Condominium Association vs. Philadelphia Indemnity Insurance Company.

This is a summary judgment opinion.  Plaintiff has sued for breach of contract and for insurance code violations.  The Court ruled in favor of Defendant on the insurance code violations but denied the summary judgement for the breach of contract claim.

Insurance lawyers in the Dallas and Fort Worth, plus other parts of the state, need to read this 2022, United States 5th Circuit opinion.  It is styled, Advanced Indicator And Manufacturing, Incorporated v. Acadia Insurance Company; Nicolas Warren.

Advanced asserts it suffered damage to the roof of its building as the result of the storm, Hurricane Harvey.  Advanced submitted a claim to Acadia and Acadia assigned Warren to adjust the claim.  Warren inspected the building and determined that the damage was pre-existing and leaks resulted from deterioration and poor workmanship.    Based on Warren’s report, Acadia denied the claim.

On August 7, 2018, Advanced sued Acadia and Warren in state court, alleging various claims, including breach of contract, common law bad faith, and violations of the Texas Prompt Payment of Claims Act.  On August 30, 2018, Acadia elected to accept responsibility for Warren under Section 542A.006 of the Texas Insurance Code, which provides that an insurer may accept liability for its agents.  The next day, Acadia removed the case to federal court.  One week later, Warren filed a motion to dismiss, arguing in part that Advanced could no longer state a claim against him.  Advanced filed a motion to remand the case to state court, arguing that Warren was not improperly joined notwithstanding Acadia’s Section 542A.006 election. The remand was denied without reason by the District Court except to say that Warren was improperly joined.

Here is a 2022, opinion from the Northern District of Texas, Lubbock Division, that deals with recovery of attorney fees under Section 542A of the Texas Insurance Code.  The opinion is styled, Mario Rodriguez v. Safeco Insurance Company of Indiana.

This is a decision based on Safeco’s motion for summary judgment.

At issue is whether payment of an appraisal award, plus payment of estimated interest due under the Prompt Payment Act, entitle an insurer to summary judgment on an insured’s claim
under the Prompt Payment Act.  If so, then the insurer is absolved from paying attorney’s fees
that otherwise would be due under the Prompt Payment Act.  No issue of material fact is present to prevent the entry of summary judgment.  As the Parties have recognized, this is purely a matter of law.  After careful review of the arguments and authority cited by the Parties, the Court finds that Defendant’s position is meritorious.  Although the issue presents policy factors that weigh in favor of each possible outcome, the Court finds that pursuant to 542A.007(a), the legislature’s intent appears clear when enacting Chapter 542A of the Texas Insurance Code to limit attorney’s fees.  It must be presumed that the legislature was aware of the conflict Chapter 542A would have with the Prompt Payment Act and chose to limit attorney’s fees anyway.  It is logical that attorney’s fees are not recoverable when the computation of fees as set forth in Chapter 542A.007(a) lead to zero because the apparent purpose is to curb abusive hailstorm claims.

Hail damage claims have few unique aspects to themselves.  One of those unique aspects is that an insurance company claims the damage to a roof is the result of something other than the recent hail storm a homeowner is claiming, then the homeowner has to properly present the claim to be able to make a recovery.  The most common reason an insurance company denies the claim is that their position that the damage to the roof is the result of wear and tear.

Here is a 2022 opinion from the Northern District of Texas, Dallas Division, that deals with this issue.  The opinion is styled, John Garcia v. State Farm Lloyds.

Garcia had a homeowners policy with State Farm.  After  a hail storm Garcia made a claim for hail damage to his roof.  State Farm sent out an adjuster who asserted the damage was mainly due to wear and tear and that the damage from the hail was minimal to the extent that it did not meet Garcia’s deductible.  Garcia hired an expert that said the damage was in excess of $70,000 and was solely the result of the hail.

Bad Faith Insurance – It’s been said that if you need an expert to explain bad faith, then you probably don’t have a case.  However, there may be an expert needed on other aspects of the case.  Our last Blog explained part of the way that courts look at experts.  This is some more of that opinion.  The case is styled, Richard Kim D/B/A Centre Cleaners v. Nationwide Mutual Insurance Company.  The opinion is issued by the Northern District of Texas, Dallas Division.

Plaintiff had hail damage coverage for his property through Nationwide.  Plaintiff made a timely claim for damages and Nationwide inspected the claim and asserted that the damage amount was below the deductible amount.

Plaintiff filed suit under the Texas Insurance Code, Sections 541 and 542, and for various violations of the Texas Deceptive Trade Practices Act. and breach of the duty of good faith and fair dealing.

Insurance attorneys who get involved in very many lawsuits will have situations where an expert is required.  When that happens, it is vital to understand what the courts will accept and not accept as it relates to experts.  This is discussed in a 2022, opinion from the Northern District of Texas, Dallas Division.  The opinion is styled, Richard Kim D/B/A Centre Cleaners v. Nationwide Mutual Insurance Company.

Plaintiff had an insurance policy with Nationwide that covers hail damage claims.  Plaintiff filed a claim asserting that his roof had been damaged by hail.  Nationwide denied the claim.  Plaintiff had an expert and named his as someone who would testify in the lawsuit and filed the appropriate experts’ report.  Nationwide filed a motion to strike the expert.  The Court granted Nationwide’s motion.

Under Rule 26(a)(2)(B)(i) and (ii), the disclosures of an expert witnesses who is retained or specially employed to provide expert testimony in the case or whose duties as the party’s employee regularly involve giving expert testimony must be accompanied by a written report that contains “a complete statement of all opinions the witness will express and the basis and reasons for them” and “the facts or data considered by the witness in forming them.”  The Advisory Committee’s Note to Rule 26 provides that expert witnesses “must prepare a detailed and complete written report, stating the testimony the witness is expected to present during direct examination, together with the reasons therefor.  These Notes also explain that the purpose of the reports is to avoid the disclosure of ‘sketchy and vague’ expert information, as was the practice under the former rule.  The purpose of a ‘detailed and complete’ expert report as contemplated by Rule 26(a) . . . [is to] prevent an ambush at trial.  The test of a report is whether it was sufficiently complete, detailed and in compliance with the Rules so that surprise is eliminated, unnecessary depositions are avoided, and costs are reduced.

A frequent insurance problem in Texas is damage alleged to have been caused by a hail or wind storm.  This issue is even confusing for the Courts.  Here is a case discussing this issue and in the opinion, the United States Fifth Circuit is asking the Texas Supreme Court on guidance for resolving the Texas “concurrent causation doctrine.”  The style of the case is, Harold Franklin Overstreet v. Allstate Vehicle and Property Insurance Company.

This case is about a leaky roof.  Overstreet says the leak was caused by a strong hailstorm that hit his neighborhood shortly after he purchased the policy.  Allstate argues that almost all the roof damage was due to uncovered causes, namely a combination of wear and tear and earlier hailstorms that hit the roof before Overstreet purchased the policy.  The district court granted summary judgment to Allstate because Overstreet did not prove what damages were solely attributable to the covered storm.

Overstreet bought a home insurance policy from Allstate that covered damage from wind and hail.  Overstreet’s roof was about three years old when he purchased the policy.  On June 6, 2018 a wind and hail storm hit the area where he lived, allegedly damaging his roof.  Overstreet reported a loss to Allstate, whose adjuster estimated the value of the loss at only $1,263.23.  Because this amount was less than the deductible, Allstate paid Overstreet nothing.

A claim against an insurance company generally speaking, will involve at least two distinct claims.  One for a breach of the insurance contract and a second claim for the insurance company acting in “bad faith” in their handling of the claim.  This issue was discussed in a 2022 opinion from the Northern District of Texas, Dallas Division.  The case is styled, Claire Garcia v. Allstate Vehicle and Property Insurance Company.

Allstate had filed a Motion to Sever and Abate the contract claim from the bad faith claims alleged to be violations of the Texas Insurance Code, Sections 541.060 and 542.060, plus violations of the Texas Deceptive Trade Practices Act and fraud.

Garcia experienced hail damage to her home and filed a claim for coverage through her home insurer, Allstate.  Allstate sent an adjuster to Garcia’s home who calculated an estimate of $843.68.  Later, another agent calculated an estimate of $1,166.84.  After applying deductibles, Garcia was not receiving any monies for the claim.

To show an insurance company has acted in “bad faith” an insured must first show that the insurance company has breached the insurance contract.  This is discussed in a 2022, opinion from the Western District of Texas, San Antonio Division opinion.  The opinion is styled, Rosemarie Wheeler v. Safeco Insurance Company of Indiana.

Wheeler had her home insured through Safeco.  Wheeler contends her home was damaged in a hail storm that occurred on or about May 28, 2020.  The claim was reported on May 30, 2020, and Safeco scheduled an inspection on June 13, 2020.  The adjuster, Doug Lehr, determined that there was hail damage but that most of the damage was cosmetic.  A small check was issued for the damage determined to be non-cosmetic.

Wheeler hired a public adjuster, Elvis Spoon, who prepared an estimate that totaled $140,617.62.  Spoon disagreed the roof damage was cosmetic but did not provide any additional information to dispute Lehr report.

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