Articles Posted in Home Owners Policies

Almost all insurance policies require a “sworn proof of loss” be filed when making a claim.  The Dallas Division, Northern District of Texas, issued an opinion in October 2017, dealing with a situation where the sworn proof of loss was waived by the Court.  The opinion is styled, Alexander Vilaythong v. Allstate Insurance Company.

Vilaythong (Plaintiff) had a homeowners policy with Allstate.  Plaintiff suffered a hail storm damage and submitted a claim to Allstate, who estimated damage at $17,053.76.  Plaintiff hired an adjuster who estimated the damage at $40,905.22.

A lawsuit ensued and Allstate moved to have the case dismissed under Rule 12(b)(1) for lack of standing because Plaintiff did not satisfy a condition precedent for filing the lawsuit, because he had not filed a signed and sworn proof of loss at least ninety one days before suing Allstate.

Insurance lawyers know that one of the more common claims arise from homeowners claims.  Trying to keep the case in State or County Court is most favorable for the homeowner.  However, doing that is more and more difficult.  This is illustrated in the 2017, Northern District, Fort Worth Division opinion, William Mauldin v. Allstate Insurance, et al.

After damages were suffered to the residence of William, he made a claim against his homeowner’s policy with Allstate.  A lawsuit was eventually filed against Allstate and the adjuster Mayella Gonzalez for violations of the Texas Insurance Code and the Texas DTPA.

Allstate and Gonzalez removed the case to Federal Court under 28 U.S.C. Section 1441(a), alleging that the adjuster Gonzalez was improperly joined in an effort to defeat diversity.  When improper joinder is alleged, the Court does a Rule 12(b)(6) type of analysis to determine whether there is a chance of recovery against Gonzalez.

A recent case filed in Tarrant County was removed to Federal Court, Northern District, Fort Worth Division.  One issue dealt with the appraisal provision in the insurance contract.  The style of the case is, Reese Hallak v. Allstate Vehicle and Property Insurance Company.

Hallak sued Allstate for breach of contract and violations of the Texas Insurance Code.  Hallak’s petition alleges Allstate mishandled and underpaid him for two separate property damage claims.  After removal to Federal Court, Allstate filed a Motion To Abate Pending Appraisal, arguing that, pursuant to the terms of the insurance contract between the parties, this case should be abated until conclusion of the appraisal process.

There is no specific federal statute or rule which expressly authorizes a motion to abate.  The court’s decision to do so is largely a matter of judicial discretion.

Lawsuits need to be specific when claiming what an insurance company, adjuster, or agent did that caused harm to their insured.  This is illustrated in an Eastern District opinion styled, Scott Jengemuhle and Ty Properties, LLC v. Acceptance Indemnity Insurance Company and Robert Saucier.

This case relates to an insurance claim for storm related damages to Plaintiffs’ business and property.  Plaintiffs file suit in State Court and Defendants removed the case to Federal Court.  Plaintiffs allege that Acceptance did not provide coverage sufficient to complete necessary repairs to the property.  Saucier is the adjuster assigned to the claim.  Acceptance asserts that Saucier was improperly joined in the lawsuit and thus, his joinder should be disregarded for purposes of diversity.  Plaintiff asserts that he has sufficiently alleged causes of action against Saucier to maintain the claim against him.

To establish fraud in joining a non-diverse defendant, the removing party must establish the plaintiffs’ inability to establish a cause of action against the non-diverse party in state court.  The Court must decide whether there is a reasonable basis for predicting that Plaintiffs might be able to establish liability on the pleaded claims in state court.

The Houston Chronicle ran a story of September 20, 2017, that all homeowners need to read.  It is titled “Flooded Houston Homeowners Might Have Been Spared Ruin — But Only If They Read The Fine Print.”

25 words of a public document that could have spared thousands of homeowners from losing everything sat tucked away in a Fort Bend county clerk’s office for the past 20 years.

“This subdivision is adjacent to the Barker Reservoir and is subject to extended controlled inundation under the management of the U.S. Army Corps of Engineers.”  These 25 words, in the finest of fine print were of public record.

As it relates to homeowner’s policies, the Texas courts have adopted a rigid rule for when a loss occurs.  The Texas Supreme Court in, Don’s Building Supply, Inc. v. OneBeacon Ins. Co. has emphasized that the applicable rule for when a loss occurs depends upon the language in the policy.

In Don’s Building Supply, the Court interpreted a policy that provided coverage for “bodily injury” or “property damage” that was “caused by an ‘occurrence’ that takes place in the ‘covered territory;'” and “occurs during the policy period.”  The policy defined “property damage” to mean “Physical injury to tangible property, including all resulting loss of use of that property.  All such loss of use shall be deemed to occur at the time of the physical injury that caused it,” or “Loss of use of tangible property that is not physically injured.  All such loss shall be deemed to occur at the time of the ‘occurrence’ that caused it.  Based on this language, the court determined that “property damage under this policy occurred when actual physical damage to the property occurred.”

In Don’s Building Supply, the Court stressed that it was not attempting to fashion a universally applicable rule.  Accordingly, the actual injury or injury-in-fact rule may not apply in all situations.  For example, other cases have determined that a “loss” occurs when the physical damage first manifests itself or becomes apparent.