Articles Posted in Interpreting An Insurance Policy

When it comes to claims dealing with automobile policies, here is a case that needs to be read.  It is a 2019, opinion from the Texarkana Court of Appeals and is styled, Alan Kiely v. Texas Farm Bureau Casualty Insurance Company.

Kiely sued Farm Bureau in an effort to recover Personal Injury Protection (PIP) benefits that had been denied.  Summary Judgement was granted in favor of Farm Bureau and this is Kiely’s appeal from that ruling.  This Court sustained the ruling in favor of Farm Bureau.

The PIP policy at issue provided coverage up to $10,000 per person for each accident.  Texas Insurance Code, Section 1952.151, states PIP requires payment of all reasonable expenses that: (1) arise from an accident; ….

Insurance lawyers know that almost all insurance policies require that an insured provide to the insurance company, prompt notice of a claim.  The purpose of this prompt notice requirement is to allow the insurance company to investigate the claim while the facts of the claim are fresh.  However, if the insured fails to provide this prompt notice, the insurer is required to show that it was prejudiced or harmed by the insured’s failure to provide the prompt notice.  Here is a case discussing that issue.

The case is from the Fifth Circuit Court of Appeals and is styled, Blanco Properties, L.L.C. v. Arch Specialty Insurance Company.

Blanco owed commercial property insured by Arch.  Blanco’s owner did not discover April 2016, hail damage until October 2017 and did not file a claim until November 2017.  The claim was denied due to the policy containing a specific endorsement that explicitly required hail related claims to be brought within one year.  The District Court granted summary judgement in favor of Arch and this Court affirmed that judgment.

Interpreting the number of accidents or occurrences that are covered by a policy can be confusing.  The State Bar of Texas, Insurance Law Section, Insurance Journal, published an article titled, Texas Law And The Restatement Of The Law Of Liability Insurance: An Initial Comparison Of Blackletter Principles.  This article dedicates about a page discussing the issue.

The article tells us that for liability policies, the number of occurrences is determined by finding the number of events or incidents for which the insured is liable.  This is discussed in quite a number of Texas cases starting with the 1971, 5th Circuit opinion styled, Maurice Pincoffs Co. v. St. Paul Fire & Marine Ins. Co.

The Restatement of Law essentially mirrors Texas law in adopting a “cause” standard:

Insurance lawyers understand that an insured has an obligation to cooperate with the insurance company investigation of a claim.  This topic is briefly discussed in an article published by the State Bar of Texas, Insurance Section Journal.  The article is titled, Texas Law And The Restatement Of The Law Of Liability Insurance: An Initial Comparison Of Blackletter Principles.

In most situations when an insured has a claim, he calls the insurance company, the insurance comes out, takes a statement, and a few days later the claim is resolved.  But, that is not how it always occurs.

The law in Texas, is that an insured has a duty to cooperate with its insurance company in the defense of claims for which the insurer has a duty to defend.  This was made clear in the 1993, opinion from the Texas Supreme Court styled, State Farm Fire & Cas. Co. V. S.S.  These clauses, called cooperation clauses, are intended to guarantee to the insurance companies the right to prepare adequately their defense on questions of substantive liability.  This was stated in the 1971, 5th Circuit opinion styled, Martin v. Travelers Indem. Co.  The Restatement essentially recognizes this same duty and says:

The subject of anti-assignment clauses was discussed in an article published in the State Bar of Texas, Insurance Section, Journal.  The article is titled “Texas Law And The Restatement Of The Law Of Liability Insurance: An Initial Comparison Of Blackletter Principles.”

The article is lengthy and a good read for lawyers dealing with this area of the law.  One page of the article deals with anti-assignment clauses.  It tells us this.

A 1994, Fort Worth Court of Appeals opinion styled, Tex. Farmers Ins. Co. v. Gerdes, says that anti-assignment clauses have been consistently enforced by Texas courts.  Texas courts enforce anti-assignment clauses post-loss ad without requiring the insurer to show prejudice and this is reinforced by the 2010, U.S. 5th Circuit opinion styled, Keller Foundations, Inc. v. Wausau Underwriters Ins. Co.  Thus, Texas courts will uphold anti-assignment provisions so long as they do not interfere with the operation of a statute.

The issue of whether or not punitive damages are covered under a liability policy is very important in a case where punitive damages are being sought by an injured party.

The State Bar of Texas, Insurance Section, published an article discussing this issue.  The article is titled, Texas Law And The Restatement Of The Law Of Liability Insurance: An Initial Comparison Of Blackletter Principles.

Here is what it tells us.

Here is an opinion from the Fort Worth Division, Northern District of Texas, that discusses insurance policy interpretation.  The opinion is styled, Suzann Ross v. Hartford Lloyd Insurance Company.

Ross had homeowners insurance coverage with Hartford and suffered a windstorm loss.  Ross made a claim for benefits and Hartford adjusted the claim and paid the amounts it believed it owed under the policy.  The main dispute was whether the roof damage needed to be totally replaced or just a portion replaced.  Ross sued Hartford and Hartford filed this Motion For Summary Judgment on her claims.

The relevant policy language reads in pertinent part:

The title of this blog topic should be “Insurance Company Gone Wacko”.

The case at issue here is from the Fifth Circuit Court of Appeals.  It is styled, Frederking v. Cincinnati Insurance Company.

This case involves Frederking being injured by an insured of Cincinnati who was intoxicated at the time of the automobile wreck.  The insured caused a wreck between the vehicle he was driving and the vehicle being driven by Frederking, causing injury to Frederking.  A jury found in favor of Frederking and Cincinnati refused to pay based on their assertion that the wreck was not the result of an accident as that term is used in the policy.

Insurance policies need to be read carefully and complied with.  The reason is that most times the courts are going to enforce the insurance policy provisions.  This is illustrated in a 2019 opinion from the Southern District of Texas, Galveston Division.  The case is styled, Benjamin Ford, et al v. United Property & Casualty Insurance Company, et al.

The Fords had a homeowners policy with United.  The Fords filed a claim with United for damage to their home resulting from a hurricane.  United inspected the claim and offered a cash settlement of $7,105.74.  The Fords rejected the offer and sought another inspection, after which, United made a “supplemental payment of $31,053.89.  This payment was also rejected causing United to invoke the appraisal provision in the homeowner’s policy on January 18, 2018.

Two months later, the Fords sent a pre-suit demand letter to United.  United responded by invoking the appraisal right again.  The Fords then filed this lawsuit.  United filed a motion with the court seeking an Order that appraisal be compelled.

The Fifth Circuit Court of Appeals issued an opinion on November 14, 2018, in a situation which is going to be rarely seen, but is something for insurance lawyers to know exists.  The case is styled, Sentry Select Insurance Company v. Lorena Munoz, Individually and on behalf of the Estate of Lorenzo Munoz, and as Next Friend of L.M. and C.M., Minor Children; Virginia Munoz.

The Munoz’s were defendants in the case.  Sentry had been granted a summary judgment in the District Court.

On August 17, 2010, Lorenzo Munoz, was killed when the semi-truck in which he was traveling veered off the highway and crashed into a concrete drainage channel.  The semi-truck consisted of a tractor owned by Moore Freight Services and a trailer leased by Goal Transport.  Sentry issued a commercial auto insurance policy to Goal.