Dallas Fort Worth Insurance Lawyer Blog

Suing The Adjuster

February 7, 2015 | Mark S. Humphreys

Arlington insurance attorneys can tell you that it is sometimes hard to sue an adjuster. Federal Courts look at these situations really close. This is illustrated in the 2014, US Northern District Court, Dallas Division, case, One Way Investments, Inc. v. Century Surety Company, et al. Here is some information from that case.

One Way sued the insurance company and the adjuster, Mattoni. One Way asserts that its own roofing contractor and public adjusters determined, after conducting a thorough inspection of the exterior and interior, that hail had caused extensive damage requiring urgent repairs and replacement of the roof and building appurtenances, and that Mattoni under-scoped the damages during his investigation. One Way also avers that Century, VeriClaim, and Mattoni misrepresented that the damage to the property was not covered under the Policy, even though the damage was caused by a covered occurrence, thereby violating Section 541.060(a)(1); failed to make an attempt to settle One Way’s claim in a fair manner, although they were aware of their liability under the Policy, thereby violating Section 541.060(a)(2)(A); failed to affirm or deny coverage of One Way’s claim within a reasonable time, thereby violating Section 541.060(a)(4); refused to fully compensate One Way under the Policy, even though Mattoni failed to conduct a reasonable investigation, thereby violating Section 541.060(a)(7); and knowingly or recklessly made false representations as to material facts and/or knowingly concealed all or part of material information from One Way. One Way sued Mattoni under Section 541.151 based on the alleged violations of Section 541.060(a). The case was filed in State Court and the insurance company had the case removed to Federal Court.

Ome Way filed for remand back to the State Court.

Coverage Or No Coverage

February 5, 2015 | Mark S. Humphreys

Dallas insurance attorneys will tell you that in order to determine coverage or no coverage under an insurance policy that the entire fact situation needs to be examined. In a 2014, Fort Worth Court of Appeals opinion, in a case styled, City of Carrollton v. Fred Loya Insurance Company, reversed a trial court that said there was no issue to be decided. Here is the relevant information from that case.

This case revolves around whether an insured, Danelle Butts, validly added her daughter, Donna, back to her insurance policy so that the daughter’s car accident with a pedestrian was covered by the policy.

Danelle had an automobile insurance policy through Fred Loya Insurance. On August 3, 2007, Danelle amended her policy to exclude her daughter Donna from coverage under the policy because Donna moved out of the family home.

Insurance And Maintaining Vehicle

February 3, 2015 | Mark S. Humphreys

Fort Worth insurance lawyers need to be able to understand when coverage is afforded under a policy and when it is not. A 1994, Dallas Court of Appeals case is a good opinion to know about. It is styled, Nationwide Property & Casualty v. McFarland. Here is the relevant information from that case.

Nationwide and McFarland both filed motions for summary judgment. After a hearing, the trial court granted McFarland’s motion and denied Nationwide’s. In this appeal Nationwide argued the trial court erred in granting summary judgment for McFarland and denying Nationwide’s motion because Mashewske was not a “covered person” under the policy. This Appeals Court disagreed and upheld the trial court ruling.

McFarland was working underneath his Toyota. The car was sitting up on jacks. While McFarland was underneath the car, Mashewske got in the car to see if it would start. When Mashewske shifted the car into neutral, it rolled backward, fell off the jacks, and landed on McFarland. McFarland sustained injuries from the accident.

Insurance Company Duty To

February 1, 2015 | Mark S. Humphreys

Irving insurance lawyers will tell you that an insurance company’s duty to defend one of their insureds in a lawsuit depends on several factors. This is discussed in a 1997, Austin Court of Appeals opinion styled, State Farm v. White.

State Farm filed a suit for declaratory judgment that it owed no duty to defend its insureds.

Sean and Sandra Nash, sued numerous defendants, including White, on behalf of themselves and their minor children, for the sexual abuse of their children which occurred at the day care center operated by Daniel Keller and his wife, Francis Keller. The lawsuit papers allege that Daniel Keller physically and sexually abused the Nash children, as well as other children attending the day care center, while the children were in the center’s care and custody. Such abuse occurred on a regular basis throughout the Nash children’s attendance at the facility. The petition further alleges that the children were taken from the day care center’s premises to other nearby locations where Daniel Keller abused them and sometimes allowed others to witness or participate in the abuse.

Pollution Exclusions

January 31, 2015 | Mark S. Humphreys

Dallas insurance lawyers need to have some familiarity with pollution exclusions in insurance policies. A 1998, Texarkana Court of Appeals case is worth reading. The style of the case is, Allen v. St. Paul Fire & Marine Insurance Company. Here is some information from that case.

This appeal arises from a summary judgment rendered in favor of St. Paul in an insurance coverage dispute. The Allens sued St. Paul based on the judgment in a suit by the Allens against Tawakoni Water Utility Corp. The underlying suit alleged damages arising out of Tawakoni’s failure to provide “potable” water, “good quality” water, water “reasonably fit for family residential use,” or water “approved and/or certified by the appropriate State of Texas and federal authorities.” The Allens also alleged that the water received was of “unpalatable quality,” “unfit for human consumption and/or use,” and that the water was contaminated.

St. Paul, an insurer of Tawakoni, denied coverage and refused to provide a defense for Tawakoni. St. Paul based its denial of coverage on pollution exclusions. Following a bench trial, a judgment of $17,326,174 was rendered in favor of the Allens.

Notice Of Claim

January 29, 2015 | Mark S. Humphreys

Arlington insurance lawyers will tell a client that a claim needs to be made to the insurance company as soon as the client knows of the claim. This is illustrated in a 1998, United States, Northern District of Texas case. The style of the opinion is, Chicago Insurance Company v. Western World Insurance Company. Here is some of the relevant information from that case.

Two residents of Avalon Place, a nursing home, were injured during their stay there. The residents left Avalon Place before May, 1995. They sued Avalon Place. Avalon Place gave notice to Chicago Insurance on September 7, 1995. Avalon Place did not notify Western World until May 8, 1996, eleven months later. The Chicago Insurance policy was an “occurrence” policy covering claims arising from occurrences during the period between June 28, 1995 and June 28, 1996. The Western World policy was a “claims made” policy that covered claims made against Avalon Place during the period from June 28, 1994 to June 28, 1995. This policy required Avalon to notify Western World “as soon as practicable” of any “occurrence” that could result in a claim and to notify Western World “as soon as practicable” of any claim made against it. Chicago Insurance and Western World settled the underlying claims and reserved their rights to litigate coverage between themselves. They each filed a declaratory judgment action seeking this Court to declare whether their policies covered liability incurred by a mutual insured and whether the parties were liable to one another for costs incurred in defending and settling that liability.

The Court ruled that Western World’s “claims made” policy does not cover the claims at issue because the insured did not give notice “as soon as practicable.” The Chicago Insurance policy does not cover the claims because they occurred before the effective date of the Chicago Insurance policy. Therefore, Western World has no right to seek reimbursement from Chicago Insurance, and Chicago Insurance has no right to seek reimbursement from Western World.

Misrepresentation In Health Insurance Policy Application

January 27, 2015 | Mark S. Humphreys

Fort Worth insurance lawyers will find the 1995, case, Darby v. Jefferson Life, useful in their insurance law practice. It is from the Houston Court of Appeals [1 Dist.].

On October 5, 1987, Jefferson Life’s agent, Charles Sharp, interviewed Darby in her home after she applied for a major medical insurance policy. Sharp read questions from the application and recorded Darby’s answers on the policy application. In one section of the document, Darby’s recorded answers showed one doctor’s visit and one hospital confinement in the previous 24 months but also showed a denial of past health problems. In another section, Darby’s recorded answers indicated she had a complete checkup during the previous month, a blood clot earlier that year, and was on medication for arthritis. Darby signed the application in two places, affirming that each answer was full, true, and complete, and agreeing that any false statement materially affecting Jefferson Life’s acceptance of the risk would render the policy void.

At trial, Darby testified that she also told Sharp, although the application did not so reflect, that she had a computerized axial tomography (CAT) scan and a magnetic resonance image (MRI) the month before her application; she had been hospitalized for a blood clot and continued to see a physician three times a week; and she had rheumatoid arthritis, which was controlled with medication. She also may have told Sharp she saw a physician once a month.

Life Insurance Beneficiary

January 25, 2015 | Mark S. Humphreys

Arlington insurance attorneys need to know when someone can collect on a life insurance policy as a beneficiary. A 1995, Eastland Court of Appeals opinion is worth reading. The style of the case is, Maris v. McCraw. Here is some information from the case.

The controlling issue in this circumstantial evidence case is whether there is sufficient evidence to show that the insured, a federal employee, filed before her death a signed beneficiary designation form with her employer. The policy provides that the life insurance proceeds are to be paid to the beneficiary designated by the employee in a signed and witnessed writing received before death “in the employing office.” If there is no designated beneficiary, the proceeds are to be paid to the widow or widower of the employee.

Donna Ann Maris died in 1987. Her personnel file did not contain a written beneficiary designation form signed by Maris designating any person as the beneficiary of her life insurance proceeds. Maris was survived by her husband, Jimmie Maris, and by her two children from a prior marriage, Tracy and Kristina. The children filed a declaratory judgment suit against the husband contending that they were entitled to the insurance proceeds because their mother signed and filed the appropriate form with the employing office designating them as beneficiaries and because the beneficiary designation form was subsequently lost. The husband counterclaimed asserting that he was entitled to the life insurance proceeds.

Stowers Claims

January 24, 2015 | Mark S. Humphreys

Every Dallas and Fort Worth insurance lawyer has to have an understanding of “Stowers” claims.

Under Texas law, a demand for policy limits is generally referred to as a Stowers demand and can give rise to a suit against the insurance company to collect any excess judgment under the Stowers doctrine. Under the Stowers doctrine, an insurance company owes an implied duty of ordinary care to its insured/customer to accept a reasonable settlement demand that is within policy limits. This is from a case every law school student learns about in law school. The style of the case is G.A. Stowers Furniture Co. v. Am. Indem. Co. It is a Texas Supreme Court case from1929, holding that an insurance company “is held to that degree of care and diligence which a man of ordinary care and diligence would exercise in the management of his own business.” Physicians Ins. Exchange v. Garcia, is a 1994, Texas Supreme Court case that further supported the Stowers ruling. The Stowers duty is not activated by a settlement demand unless three prerequisites are met: (1) the claim against the insured is within the scope of coverage, (2) the demand is within the policy limits, and (3) the terms of the demand are such that an ordinarily prudent insurer would accept it, considering the likelihood and degree of the insured’s potential exposure to an excess judgment.

Another case, the case of Bramlett v. the Medical Protective Company of Fort Wayne, Indiana, which was written by one of the most respected and conservative Republican federal judges in Texas, the Hon. Sidney Fitzwater, contains key holdings which are particularly instructive as to insurance company’s duties in response to this demand and essentially negates any potential defenses that could be asserted in our future Stowers doctrine case. Bramlett also addresses the common Stowers defendant insurance company plea that they should not be liable because they did not have sufficient knowledge of the case at the time the demand was made. The Bramlett Court held: “There is no per se requirement that an insurer know all, or even most, of the facts of the case in order to have a Stowers duty. Indeed, early settlement is encouraged.” Here, there is ample evidence to support our negligence claim against a defendant such that te insurance company must either accept the demand or assume the risk that it will not be able to do so later. If a claimant makes such a settlement demand early in the negotiations, the insurance company must either accept the demand or assume the risk that it will not be able to do so later. In cases presenting a real potential for an excess judgment, insurance companies have a strong incentive to accept.

Allstate Sues Medical Providers For Fraud

January 22, 2015 | Mark S. Humphreys

Most Fort Worth insurance lawyers will be aware of this case. It is a Houston Court of Appeals [14th Dist.] case styled, Allstate v. Rehab Alliance of Texas. This Court upheld the trial Court summary judgment in favor of Rehab Alliance. The opinion is long but here is a little of what it says.

Rehab Alliance is a chiropractic clinic which provided services including chiropractic care, orthopedic and pain management, epidural steroid injections, and radiologists’ services to persons injured in car accidents. As part of its services, Rehab Alliance also provided reports to attorneys outlining injuries and treatment plans for its patients in order to facilitate settlements of their claims for damages.

Allstate claims that Rehab Alliance solicited referrals from attorneys representing such claimants. In those situations, Rehab Alliance would treat the injured parties under a “letter of protection” with the patients’ attorneys. According to Allstate, these letters provided that Rehab Alliance would seek to recover payment of its bills from its patients only if there were a recovery reached by way of settlement or judgment; that is, the patients were released from financial responsibility for health care services if there was no settlement or judgment with an insurer. Allstate alleged these “letters of protection” were concealed from it because they were not included as a part of the settlement packages that attorneys for the various claimants presented to Allstate.