Articles Posted in Hail Claims

Getting the insurance adjuster served with legal papers in a lawsuit is important and for some reason, overlooked.  This is illustrated in an Eastern District, Sherman Division case styled, Robert Crawford v. Allied Property and Casualty Insurance Company, Laura Jones.

Crawford, a citizen of Texas, sued Allied, an Iowa Company and Jones, who is a Texas resident in State District Court.  The suit arises out of the Defendant’s alleged improper handling of an insurance claim.  Crawford suffered extensive damage to his property during a storm.  Allied was Crawford’s insurer.  Jones was hired by Allied to inspect and adjust Crawford’s loss.  Thereafter, it is alleged that Jones conducted a substandard investigation and inspection of the property, prepared a report that failed to include all of the damages that she noted during the inspection, and undervalued the damages she observed during the inspection, all of which resulted in Allied denying Crawford adequate coverage under the policy.  Crawford sued for breach of contract and sued Allied and Jones for violations of the Texas Insurance Code.

Allied and Jones removed the case to Federal Court based on diversity jurisdiction, alleging that Jones was improperly joined to defeat diversity jurisdiction.

Insurance attorneys with much experience learn real quick that the insurance companies prefer to litigate cases in Federal Court.  The reason is that Federal Court is much less forgiving of mistakes and the Federal Courts look for reasons to dispose of a case.  This authors opinion is that many of the Federal Courts put a priority on technical rules rather than substance.  This authors opinion is bolstered by the fact that an insurance company will always attempt to get a lawsuit against them in State Court, removed to Federal Court.

This is illustrated in a 2017, opinion from the Southern District of Texas, McAllen Division.  The case is styled, Maria Abdon v. State Farm Lloyds.

In this case, the court is considering State Farm’s motion for partial dismissal on the pleadings, as well as Abdon’s response and alternative motion for leave to amend.  The Court granted State Farm’s motion for partial dismissal and denied Abdon’s motion for leave to amend.

This is a case from the Northern District, Dallas Division, dealing with which court is proper to litigate the case.  The case is styled, Hutchins Warehouse Limited Partners v. American Automobile Insurance Company et al.

A court may sua sponte raise the issue of its jurisdiction at any time during the course of litigation.

28 U.S.C. Section 1441(a) permits the removal of any civil action brought in a state court of which the Federal Courts have original jurisdiction.  However, the removal statue must be strictly construed because removal jurisdiction raises significant federalism concerns.  Therefore, any doubts concerning removal must be resolved against removal and in favor of remanding the case back to state court.

A case from the Southern District, Laredo Division has an interesting twist for insurance lawyers to know about.  The case is styled, Luis Gonzalez v. State Auto Property & Casualty Insurance Company, et al.

A hailstorm caused damage to the roof on Luis home and he submitted a claim to State Auto.  State Auto hired Haag Engineering, one of the defendants in this case, to help inspect the roof damage.  Haag prepared an engineering report that State Auto relied upon when it adjusted and allegedly undervalued Luis roof damage.

Luis filed suit in State Court.  The defendants removed the case to Federal Court alleging that Haag was improperly joined for the purpose of defeating diversity jurisdiction under 28 U.S.C. Section 1441.

The Northern District of Texas, Dallas Division issued an opinion dealing with hail damage and abatement of the case to compel appraisal.  This is becoming more and more common in hail damage claims.  The case is Nabors v. American Reliable Insurance Company, et al.

This claim arises out of water and hail damage to Nabors home.  The insurance company is American.  It is a declaratory judgment action regarding the scope of the policy’s coverage as well as damages for breach of contract and violations of the Texas Insurance Code against American.  American filed a motion to abate the proceeding and compel appraisal.

In this case, there was also a dispute over whether or not the adjuster assigned to the claim by American was properly joined as a defendant in this lawsuit or whether the joinder was merely an effort to defeat diversity jurisdiction in order to have the case remanded to State Court.  As in other cases in this blog, the examination by the Court was in favor of American.

What is the result oi an insurance company pays a claim after an appraisal even if you don’t agree with the appraisal?  This issue is addressed in a Houston Court of Appeals [14th Dist.] opinion.  It is styled, National Security Fire & Casualty Co. v. Hurst.

This is an appeal from a jury trial in favor of Hurst against National.  This appeals court reversed the jury trial results.

Dissatisfied with the initial estimate and payment, Hurst sued National and others for claims arising out of a wind and hail storm damage to his home.  This lawsuit also claimed violations of the Texas Prompt Payment of Claims Act.  National hired adjusters who assessed the damage and paid Hurst $3,524.56 (accounting for the $1,000 policy deductible), which Hurst accepted.  Hurst proceeded to file suit on September 7, 2010.

Lawyers who handle property damage claims learn real fast that the damages that exist on the property have to be properly segregated when making an insurance claim.  What does this mean?  The most common situation that arises is after a hail and wind storm.  An insured discovers damage to his home and makes a claim.  Nest, the insurance company says that all the damage is not covered.  A law suit results.

The law is clear that an insured has the burden of proving what damages occurred, when they occurred, and how they occurred.  Often times there is damage from a hail storm but some of the damage may have occurred in at a different time and in a different storm.  When this happens, it it he responsibility of the insured, not the insurance company to explain and prove when and how the damage occurred.

This is discussed in a 2006, Northern District of Texas case, styled, Atwill v. State Farm Lloyds.

The Eastern District, Sherman Division, issued an opinion in May 2017, that, yet again illustrates how to NOT sue an insurance adjuster.  The opinion is styled, Hidden Cove Park and Marina v. Lexington Insurance Company and Glenn Hollmuller.

Severe storms caused damage to Plaintiff Hidden Cove.  Plaintiff sued defendants Lexington and the adjuster, Glenn Hollmuller, alleging the adjuster failed to properly conduct an investigation into the cause of loss, failed to issue timely payments, and wrongfully delayed or denied claims.

The lawsuit was filed in State District Court and for breach of contract, and various violations of the Texas Insurance Code Chapter 541 and Chapter 542.

The Western District, San Antonio Division issued an opinion in a case that helps an insurance company keep his client’s case out of Federal Court by suing the insurance agent.  The opinion is styled, The New World Baptist Church, LLC v. Nationwide Property and Casualty Insurance Company, Kevin P. McLoughlin, and Michael Robert Stull.

Plaintiff owns a church under a policy issued by Nationwide and sold by McLoughlin, an insurance agent.  With respect to the sale of the policy, Plaintiff alleges that “Nationwide or its agent, McLoughlin, sold the policy, to Plaintiff.  Nationwide and / or McLoughlin represented to Plaintiff that the policy included wind and hailstorm coverage for damage to Plaintiff’s business ….  When Plaintiff negotiated the premium amount, McLoughlin represented that the policy Plaintiff purchased provided coverage for hail and wind losses.  Unfortunately, Nationwide later represented that the policy sold by McLoughlin did not afford full coverage.  Specifically, the policy sold by McLoughlin was not a full coverage policy, but rather, one with specific exclusions, ….  McLoughlin’s violations of the Texas DTPA include causing confusion as to policy benefits, and representing that the policy had benefits or characteristics that it did not possess.  … McLoughlin is liable to Plaintiff for common law fraud. … Specifically, McLoughlin represented to Plaintiff during the sale of the policy that the policy had benefits or characteristics it did not possess.”

Plaintiff suffered hail damage and made a claim for benefits and eventually a lawsuit was filed on the claim in State District Court and the was removed to Federal Court by the Defendants claiming that McLoughlin was improperly joined in order to defeat diversity jurisdiction.

Most insurance lawyers want to keep their cases out of Federal Court.  One way of doing this, if the opportunity exists, is to find fault with the way an adjuster handled the claim.  This is illustrated in a Northern District, Dallas Division opinion styled, Arlington Heights Memorial Post No. 8234 Veterans of Foreign Wars of the United States, Fort Worth, Texas v. Covington Specialty Insurance Company and Edward Martin Sewell, Jr.

Plaintiff initially sued Covington and Sewell in State Court for violations of the Texas Insurance Code, among other reasons.  The lawsuit was filed, according to Plaintiff, due to the improper handling of a claim Plaintiff made after a hail and wind storm.  Plaintiff alleges that Sewell (1) did not prepare any estimates or scopes of damages to the property or failed to provide those reports to the insured, (2) failed to hire any qualified experts to appropriately assess the damage, (3) delayed the claims process and failed to communicate with the insured, and (4) misrepresented the Policy’s coverage.

The Defendants removed the case to Federal Court based on 28 U.S.C, Section 1441(a), stating that Sewell was improperly sued in this case in an effort to defeat diversity jurisdiction.  If the Defendants can prove that Sewell was improperly joined in the case, then the case will remain in Federal Court.

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