Dallas Fort Worth Insurance Lawyer Blog

Who does the attorney work for, the insured or the insurer?

December 28, 2014 | Mark S. Humphreys

Insurance Law Lawyers all know that in many instances an insurance company hires the attorney who represents a person or entity being sued. The issue comes up, “who does the attorney work for, the insured or the insurer?” A 1973, Texas Supreme Court case discusses this issue and is still good law. The style of the case is, Employers Casualty Company v. Tilley.

This is a declaratory judgment action.

Prior to filing the instant suit, Employers, secured a standard non-waiver agreement from Tilley and engaged an attorney to represent Tilley as his attorney in the Starky personal injury suit. For a period of nearly 18 months, the attorney not only performed such services for Tilley in defending against Starky, but he also performed services for Employers which were adverse to Tilley on the question of coverage. Tilley claimed that he had no knowledge of the Starky accident which occurred on November 25, 1967, until he was sued on September 19, 1969. This was his excuse for not notifying Employers before the suit was filed.

Consent To Settle Provision In Insurance Policy

December 27, 2014 | Mark S. Humphreys

Most Garland insurance law lawyers can tell you how important the “consent to settle” provision is in an insurance policy. This provision is addressed in a 2006, 5th Circuit Court of Appeals opinion. It is styled, Motiva Enterprises, LLC v. St. Paul and Marine Insurance Company. Here is what it says.

Motiva settled an action brought against it for damages without notice to National Union, its insurer, and without obtaining National Union’s consent. Motiva sued National Union to recover the amount Motiva paid in settlement, contending that it had no obligation to comply with the condition in the policy to obtain its insurer’s consent to settle because National Union refused to tender an unqualified defense to Motiva. This Court agreed with the district court that National Union’s tender of a defense with a reservation of rights to later deny coverage did not excuse Motiva’s breach of the consent-to-settle clause. The Court also conclude that National Union suffered prejudice as a matter of law and had no obligation to reimburse Motiva for the settlement.

A sulfuric acid storage tank exploded at Motiva’s Delaware refinery, killing one employee and injuring several others. Motiva had approximately $250 million in liability insurance which Motiva contended covered its liability for injuries and litigation costs related to the explosion. The policy contained standard “consent-to-settle” and “cooperation” clauses. The consent-to-settle clause required National Union’s advance consent to any settlements that it would be funding, and the cooperation clause required Motiva to cooperate with National Union in the investigation, settlement, and defense of claims.

Consent To Settle

December 25, 2014 | Mark S. Humphreys

North Richland Hills insurance attorneys should be aware of the “consent to settle” provision in most insurance policies. This is discussed in a 2006, United States 5th Circuit Court of Appeals opinion. The style of the case is, Motiva Enterprises, LLC v. St. Paul Fire and Marine Insurance Company. Here is what the case tells us.

In July 2001, a sulfuric acid storage tank exploded at Motiva’s Delaware refinery, killing one employee and injuring several others. A number of civil suits ensued, including a lawsuit by John and Pamela Beaver for injuries John sustained in the explosion (the “Beaver” suit).

Motiva had approximately $250 million in liability insurance which Motiva contended covered its liability for injuries and litigation costs related to the explosion. The coverage was divided into two “towers,” referred to as the Continental Tower and the St. Paul Tower, and consisted of seven insurance policies in all. National Union supplied $25 million of umbrella coverage, providing for both the duty to defend and the duty to indemnify once the underlying insurance was exhausted. The policy contained standard “consent-to-settle” and “cooperation” clauses. The consent-to-settle clause required National Union’s advance consent to any settlements that it would be funding, and the cooperation clause required Motiva to cooperate with National Union in the investigation, settlement, and defense of claims.

Exclusions Effecting Coverage In An Insurance Policy

December 23, 2014 | Mark S. Humphreys

Irving insurance lawyers should be able discuss with clients how exclusions in an insurance policy effect coverage. A 1994, Fort Worth Court of Appeals case is worth knowing about on this issue. The style of the case is, Union Pacific Resources Co. v. Aetna Casualty & Surety Co. Here is relevant information from that case.

Over a three year period Union Pacific (UP) disposed of potentially polluting waste in an industrial landfill. Even though dumping of such waste was legal and an accepted form of disposal at the time the EPA subsequently sued UP and others to recover clean up costs at the landfill site. UP entered into a partial consent degree agreeing to participate in limiting pollution hazards at the landfill. UP alleged that it had received third-party claims regarding the landfill and anticipated further claims.

Aetna denied coverage on the basis that the depositing of the waste in the landfill violated the various policies’ pollution exclusion clauses. Some of the policies contained a “sudden and accidental” exclusion which excluded liability for property damage arising out of the discharge, disbursal, release, or escape of waste materials or other irritants, contaminants, or pollutants into or upon the land, the atmosphere, or any water, course, or body of water.

Exclusions In Insurance Policy’s

December 21, 2014 | Mark S. Humphreys

Arlington insurance attorneys will tell their clients they need to be aware of exclusions in insurance policies and how they are interpreted. Just reading the declarations page is not enough. The entire policy needs to be including the exclusions. A 1998, Texarkana Court of Appeals case serves as an example. The style of the case is, Allen V. St. Paul Fire & Marine Insurance Company. Here is some of the relevant information from that case.

This suit alleged damages arising out of Tawakoni Water System’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 denied coverage and refused to provide a defense for Tawakoni. St. Paul based its denial of coverage on pollution exclusions allegedly included in the five policies upon which the Allens sued. Following a bench trial, a judgment of $17,326,174 was rendered in favor of the Allens. Tawakoni then assigned to the Allens its claim against St. Paul for wrongful refusal to defend in return for a covenant not to execute.

Hail Damage And Appraisals

December 20, 2014 | Mark S. Humphreys

Fort Worth insurance lawyers who handle hail damage claims need to be know how courts interpret appraisal clauses in insurance policies. A 2009, Texas Supreme Court case is a must read for helping to understand the appraisal process. The style of the case is, State Farm Lloyds v. Johnson. Here is some of the relevant facts and information to be taken from the case.

A hailstorm moved through Plano, Texas in April of 2003, damaging the roof of Johnson’s home. She filed a claim under her homeowners insurance policy with State Farm Lloyds. State Farm’s inspector concluded that hail had damaged only the ridgeline of her roof, and estimated repair costs at $499.50 (less than the policy’s $1,477 deductible). By contrast, Johnson’s roofing contractor concluded the entire roof needed to be replaced at a cost of more than $13,000.

To settle this difference, Johnson demanded appraisal of the ” amount of loss” under the following provision in her standard-form policy:

Interpreting An Insurance Policy – What Dallas Lawyers Need To Know

December 18, 2014 | Mark S. Humphreys

Dallas insurance lawyers need to know how the Courts look at policy language when deciding how to rule on cases involving insurance. A 1997, Amarillo Court of Appeals case is a good one to read to help understand how the Courts interpret certain policies. The style of the Amarillo case is, Home State County Mutual Insurance Company v. Acceptance Insurance Company. Here is some of the relevant information.

Esquival was engaged to deliver rock and sand, called “base,” for a road construction project. Esquival had a commercial auto liability policy issued by Home State and a CGL policy issued by Acceptance. Pritchard, an employee of Jordan Paving, another subcontractor responsible for leveling and spreading the base, collided with a load of base which had previously been unloaded at the site by Esquival. Pritchard sued Esquival and Esquival brought a declaratory judgment action against Acceptance. Acceptance likewise sought a declaratory judgment that Home State’s auto policy provided coverage for Pritchard’s injuries. The trial court held that the auto policy provided coverage and granted Acceptance a summary judgment.

When this Amarillo Court of Appeals made its’ ruling it held that the judgment of the trial court be reversed and judgment be rendered in favor of Home State. The CGL policy, not the auto policy, provides coverage for Pritchard’s injuries. Texas courts have rejected the “coming to rest” rule to interpret the “loading and unloading” clause contained in the “used” provision of a standard auto liability policy. Instead, Texas courts have adopted the “completed operation” rule which holds that loading and unloading not only includes the immediate transport of goods to and from the vehicle, but the complete operation of transporting the cargo between the vehicle and the place to or from which the cargo is being delivered.

Hail Claims

December 16, 2014 | Mark S. Humphreys

Insurance lawyers in the Dallas / Fort Worth area will see lots of hail claims. An article this year from the “Claims Journal” needs to be read by those lawyers to keep informed. The title of the article is, The Emerging Hail Risk: What The Hail Is Going On? Here is what the article tells us.

The number of reported claims involving hail damage to residential and commercial roofing products has increased dramatically over the past few years. Some reports place the increase at almost double historical claim totals.

What is the cause of this significant increase? There is no disputing that in recent years there have been significant hail events in large metropolitan areas. But does this alone account for the near-double increase in claim filings? Plus, in addition to the increase in the number of claims, an abnormally high percentage of these claims are ending up disputed and ultimately in appraisal or litigation. In Texas, hundreds, literally hundreds, of lawsuits are being filed each week in Dallas, Tarrant, Potter, Hidalgo, and other counties involving alleged underpayment of hail related roof damage claims – far, far more than has ever previously been the case.

Fort Worth Insurance Lawyers – Read The Policy

December 14, 2014 | Mark S. Humphreys

Read the policy. Understand what it says. The United States 5th Circuit issued a 1998 opinion that shows how courts will interpret policies. The style of the case is, Lubbock County Hospital District v. National Union Fire Insurance Company of Pittsburg. Here is some relevant information from the case.

Approximately 1,000 gallons of fuel escaped from the fueling system at University Medical Center’s helipad. UMC sued Rocky Mountain Helicopters, Inc., the operators, for the costs of clean up and monitoring. UMC recovered a judgment of nearly $500,000 against Rocky Mountain.

UMC brought suit against National Union seeking a declaration that the insurance policy it issued to Rocky Mountain covered damages for the fuel spill. National Union removed the case to Federal District Court on the basis of diversity. Both parties filed motions for summary judgment. The district court granted summary judgment in favor of UMC finding coverage under two endorsements to the policy.

What Does A Policy Cover

December 13, 2014 | Mark S. Humphreys

Aledo insurance attorneys will have clients who have commercial and business related insurance. When an occasion arises wherein it is necessary to make a claim, it is a sad time when they find out the policy does not cover all they believed it covered. It is important to sit down with your agent and make sure what the policy covers and what you want it to cover. Keeping in mind the discussion with the insurance agent helps if all or part of a claim is denied. Relating to an attorney the substance of those conversations, reading the policy, and knowing the facts of the situation allows the insurance attorney to suggest an appropriate course of action. This is illustrated somewhat in a 1998, Dallas Court of Appeals case styled, Fidelity and Casualty Company of New York v. Thompson, et al. Here is some of the relevant information from the case.
Thompson was a licensed, practicing optometrist who also owned and operated an optical clinic. A fire destroyed all of the property. Thompson was insured by Fidelity and made a claim demanding payment of the entire $250,000 policy proceeds. Fidelity paid Thompson $205,342.92 for losses to his medical equipment, office furniture and fixtures, and other “improvements and betterments.” Fidelity denied coverage for the value of Thompson’s optical clinic inventory which included, eyeglass frames, corrective lenses, contact lenses and other items held for sale. Thompson filed a declaratory judgment action seeking a declaration that the policy he purchased from Fidelity afforded coverage for inventory of his optical business. Both Thompson and Fidelity filed motions for summary judgment. The trial court granted Thompson’s motion and denied Fidelity’s. Fidelity filed this appeal.
This Dallas Court of Appeals held that the judgment in favor of Thompson was improper and reversed and rendered in favor of Fidelity. This case involved an optometrist’s professional liability policy. Optometry is the “art of occupation consisting of the examination of the eye for defects or faults of refraction and the prescription of correctional lenses and exercises.” An optometrist prescribes eyewear while an optician dispenses or sells the eyewear. Looking to the definitions of optometrists in Webster’s International Dictionary and the definition of supplies in Black’s Law Dictionary, this Appellate Court found that none of these definitions carries the meaning that supplies usual to the practice of optometry include inventory or prescriptive eyewear held for sale. The policy does not cover items held as inventory for the purpose of sale. Thompson’s medical profession as an optometrist is not, by definition, involved in the sale of frames, contact lenses, or other eyewear.