Articles Posted in Home Owners Policies

Home owners claims are a frequent source of litigation.  Here is a case from the Northern District of Texas, Fort Worth Division, that has a little different twist to it.  The case is styled, Allen Ripley, et al v. State Farm Lloyds.

Ripley’s home was damaged by a hail storm and he was insured by State Farm.  A dispute arose about the damages and there was ultimately an appraisal award.  State Farm did not pay the full appraisal amount due to their assertion that part of the damages were not covered by the policy.  This lawsuit resulted with Ripley alleging breach of contract and various violations of the Texas Insurance Code.

State Farm filed a motion to dismiss for failure to state a claim.

Insurance lawyers need to know the various ways other insurance lawyers have attempted to pursue an insurance company and the ways that work and the ways that do not or have not worked.  Here is a different approach that failed to work.

This is an opinion from the Northern District of Texas, Dallas Division.  It is styled, Corinne Pearson v. Allstate Fire and Casualty Insurance Co.

Corinne filed suit in State Court alleging Allstate improperly denied or underpaid a claim after a storm damaged her home.  Allstate removed the case to this Federal Court and obtained an abatement pending an appraisal of the damage to her home.  In June 2019, the Court was notified that appraisal had been completed and the case was reopened.  Allstate immediately filed this motion for summary judgment.

What is a First Party claim versus a Third Party claim?

A “first party” policy typically involves insurance that provides policy benefits directly to the insured or beneficiary in the event of a loss.  The Texas Insurance Code, Section 541.051(2) defines “first party claim” as a claim “by an insured or policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by insurer directly to the insured or beneficiary.  These types of policies generally include health insurance, life insurance, disability insurance, auto policy insurance, homeowner’s property insurance, and commercial property insurance.

In contrast, “third party coverage” is generally considered to include all forms of liability insurance.  This type of insurance is designed to insure against loss to third parties caused by the insured or another covered person for whom the covered person may be legally responsible.

Spring is coming soon and exclusions in homeowner policies for “surface and ground water damage” will be an issue an insurance lawyer must be able to discuss with client.

Here is a November 2019, opinion from the Southern District of Texas, Houston Division, that “kinda” addresses this issue.  The opinion is styled, Robert Salcetti v. AIG Property Casualty Company.

Salcetti suffered damage to his home after the U.S. Army Corps of Engineers decided to release water from reservoirs and Salcetti alleges that water entered his home causing significant damage.

Here is a homeowners claim that has a different twist to it.  The case is from the Southern District of Texas, Corpus Christi Division, and is styled, Kenneth Stokley v. Allstate Texas Lloyds.

In this case the Plaintiff, Stokley filed a Motion to Compel Appraisal and Allstate is trying to avoid the appraisal claiming the appraisal provision in the insurance policy should not be enforced because Stokley delayed his request for appraisal and Allstate is prejudiced by the delay and Stokley already made repairs and thus, waived the appraisal.

Mere delay is not enough to find waiver; Allstate must show prejudice.  Allstate argues Stokley intentionally delayed to increase pre-judgement interest to accrue on damages.

Insurance lawyers got good news about a month earlier, on April 8, 2019.  The case they got good news out of was from the Western District of Texas, Austin Division.  The style of the opinion was River Of Life Assembly Of God v. Church Mutual Insurance Company and Jim Turner Harris.

The style of this case is still the same but the Court amended its order and the language added to the opinion does a good job of articulating the reasoning in the opinion.  This new language and amended order is helpful for insurance lawyers helping insureds in similar situations.

This was a lawsuit about insurance coverage for storm damage.  River of Life had sued Church and the adjuster, Harris, for the way the claim was handled.  The suit was filed in State Court because Church is diverse and Harris is not.  Pursuant to Texas Insurance Code, Section 542A.006(c), Church elected to accept responsibility for Harris and removed the case to Federal Court.  The statute requires River of Life to dismiss its claims against Harris after this election to accept responsibility for Harris.  So the issue here was whether it was proper to remand the case back to the State Court or to keep it in this Federal Court.

The Southern District of Texas, Houston Division was presented with an issue that is not seen very often in insurance cases except cases involving uninsured motorist benefits.  The case is styled Lamar Donald, Sr. and Diane Cottrell Donald v Metropolitan Lloyds Insurance Company of Texas.

Lloyds filed a Motion to Sever and Abate.  This Court denied the motion.  Here is why.

Plaintiff’s assert that Lloyds improperly denied or paid their claim for benefits after suffering damage from Hurricane Harvey.  The Plaintiff’s sued sued for breach of the insurance contract and for extra-contractual claims based on the Texas Insurance Code.

Not paying on an insurance claim is in simple terms, a breach of contract.  The difference is that the contract breached is an insurance contract.  The Texas Insurance Code provides for damages beyond the simple breach of contract damages.  However, as is pointed out in the 2019, opinion from the Southern District of Texas, Victoria Division, you still have to prove the insurance contract was breached.   The style of the case is, Deborah Gonzalez v. Allstate Vehicle and Property Insurance Company.

Deborah’s claim arose out of damage suffered in Hurricane Harvey in August of 2017.  Deborah filed a claim against Allstate on August 28, 2017.  Allstate’s adjuster reported damages totaling $8,596.63.  After adjustments, Allstate paid Deborah $6,062.63.

Deborah did not agree with the amount paid and on August 13, 2018, Deborah and Allstate designated appraisers.  The appraisers evaluated the loss at $23,822.72.  After applying adjustments, Allstate paid the remainder of the claim.

The U.S. District Court, Western District, Austin Division, issued an opinion on November 16, 2018, that is worth reading.  It is styled, Thomas G. Kezar and Sylva Shroyer Kezar v. State Farm Lloyds.

This is an appeal from a partial motion for summary judgement as to one issue in the case.  The issue is whether Kezars still had a claim against State Farm for breach of contract and extra-contractual damages under the dwelling coverage aspect of the claim when State Farm had already properly and timely paid that aspect of the claim after an appraisal award.  This Court ruled in favor of State Farm.

The policy language at issue states:

Insurance lawyers need to know what the policy at issue says and how the courts interpret those policies and make their rulings.

For a homeowners policy, the 2018 Eastern District of Texas, Sherman Division, opinion styled, Rainey Rogers v. Nationwide General Insurance Company, is a good read.

The Rainey case arises out of a dispute between a policyholder and Nationwide regarding the extent of damages and the amount of loss suffered to Rainey’s property.  On March 26, 2017, the property suffered damage due to storm-related conditions and Rainey made a claim for benefits.

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