Dallas Fort Worth Insurance Lawyer Blog

Courts Interpreting Insurance Law

March 23, 2014 | Mark S. Humphreys

Attorneys handling insurance cases need to keep up with developments in the law. The Insurance Journal published an article worth reading on February 3, 2014. Here is what it tells us.

On Jan. 17, 2014, the Texas Supreme Court in Ewing Construction Company v. Amerisure Insurance Co. issued another surprising and controversial decision in a construction defect coverage case.

For many years the Texas Supreme Courts had largely been a model of restrained and plain-meaning interpreter of insurance policies. While there were anomalies, such as the broadly criticized Mid-Continent v. Liberty Mutual, where the longstanding practices of carrier contribution were undermined, the Court still steered a generally reasonable course in protecting the rights of policyholders and carriers.

Force Placed Insurance

March 22, 2014 | Mark S. Humphreys

Force-place insurance is a very mis-understood type of insurance. What most people do not understand that force-place insurance protects the mortgage owner only. A homeowner does not have his own interests protected.

Reuters ran an article on February 6, 2014, titled, “Citi T Pay $110 mln in a Lawsuit Over Force-placed Insurance.” Here is what it tells us.

Citigroup Inc has agreed to pay $110 million to thousands of homeowners who were forcibly charged expensive property insurance premiums, a court filing showed, as several U.S. banks and insurers were criticized by regulators over such practices.

Vehicle Insurance Policies

March 20, 2014 | Mark S. Humphreys

Insurance law lawyers need to be able to distinguish cases where they can help someone and cases where they cannot. Understanding how courts look at different situations is important. A 1992, Texas Supreme Court is a good case to know. The style of the case is, LeLeaux v. Hampshire-Fannett ISD. Here is some of the relevant information.

Monica LeLeaux, a sixteen-year-old high school junior, hit her head while trying to close the back door of a school bus. She and her mother sued the owner of the bus, the Hamshire-Fannett Independent School District, and the bus driver for damages. The trial court granted summary judgment for defendants.

Monica’s accident occurred on a school band trip, the events of which are summarize here based solely upon Monica’s deposition testimony. She and the other band members had traveled in school buses to another school to compete in a marching contest. Once they finished, Monica and some of her schoolmates, along with the band director, stayed to watch other bands perform. At some point Monica returned to the bus she had ridden to the contest. The bus was parked and empty, and the rear emergency door was open. Monica did not open it, and she does not know who did. She and a friend, J.R. Thompson, sat together on pillows in the rear doorway of the bus, dangling their feet out the back, talking. No one else was in the bus while they were there.

What Is An Accident

March 18, 2014 | Mark S. Humphreys

Dallas insurance attorneys need to be able to answer the above question in the context of an insurance policy. A 1997, Texas Supreme Court case provides some guidance for the question. The style of the case is, Farmers Texas County Mutual Insurance Company v. Griffin. Here is some of the relevant information.

This is a declaratory judgment action. Farmers sought a declaration that it had no duty to defend or indemnify its insured, James Royal III, in a suit brought by Robert Griffin. The trial court granted summary judgment for Farmers. This Court affirmed the judgment for Farmers.

Gunshots from a passing vehicle hit and injured Robert Griffin as he walked down the street in Beaumont, Texas. Griffin sued the driver of the vehicle, James Royal III, and others for negligence and gross negligence resulting in injury to his right leg. Griffin alleged that Royal drove the vehicle while his two passengers fired the shots. Royal invoked Farmers’ duty to defend him under his personal automobile liability insurance policy. Farmers defended Royal subject to a reservation of rights and then filed this declaratory judgment action to challenge its duty to defend and indemnify Royal.

Who Does A Policy Cover

March 16, 2014 | Mark S. Humphreys

Grand Prairie insurance lawyers need to be able to look at an insurance policy and determined who is insured by the policy. A 1997, Texas Supreme Court case provides some guidance for an answer. The style of the case is, Grain Dealers Mutual Insurance Company v. McKee. Here is some of the relevant information.

In this case the court must determine whether the Business Auto Policy that Grain Dealers issued to Future Investments, Inc. (“Future Investments”), a corporation of which Gerald McKee is the president and sole shareholder, provides coverage for McKee’s daughter. The court concluded that it does not.

McKee’s eleven-year-old daughter, Kelly, was injured in a one-car accident while riding as a passenger in a car driven by her adult step-sister, Delane Aranda. Delane’s husband owned the car. The parties stipulated that neither Delane nor the car involved in the accident was covered under the Grain Dealers policy and that the accident occurred during an outing unrelated to any business purpose of Future Investments. Kelly resided with McKee when the accident occurred; Delane did not.

Is There Negligent Claim Handling?

March 15, 2014 | Mark S. Humphreys

Most Parker County attorneys who handle insurance claims know that there is not a claim for “negligent claim handling,” that the claim that probably exists has to fall under one of those listed in the Texas Insurance Code. A 1991, San Antonio Court of Appeals case styled, United Services Automobile Association v. Pennington, helps explain the difference between negligent claim handling and simple breach of contract.

Here is some of the relevant information.

Gary Lochte had a homeowner’s insurance policy from USAA . The policy excluded coverage for damages arising out of “business pursuits.” Lochte is a car salesman. He also ran a quarter horse breeding business with his father. Apart from the breeding business, he and Don Rowland, a co-worker at the car lot, purchased a quarter horse in order to experiment with a new training system to condition horses for racing competition. They placed an advertisement in the local newspaper to hire someone to ride the horse. Pennington answered the advertisement. During her interview with Lochte and Rowland she was asked to demonstrate her riding abilities by riding Viking Vanny. The horse reared while Pennington was mounted on her. Pennington slid off the back of the horse and the horse fell on top of her, crushing her pelvis.

What Happens When Insurance Company Will Not Settle Liability Claim

March 13, 2014 | Mark S. Humphreys

Insurance lawyers will tell you that insurance companies can expose themselves to risk by not settling liability claims that they should settle. This relates to what is called the “Stowers Doctrine.” But exposing themselves to risk and and suffering the risk are two different things. The 1960, Amarillo Court of Appeals case, Chancey v. New Amsterdam Casualty Company, is an example where the insurance company did not get in any trouble. Here is some information about the case.

The present case followed Amsterdam’s refusal to compromise and settle the claim of one Walter Van Luit against Chancey which resulted in a jury verdict and judgment against Chancey in the amount of $58,422.83. The policy limits under the liability policy issued to Chancey was $50,000. The record reflects Amsterdam paid Van Luit the amount of the policy limit of $50,000 plus interest and court costs. Chancey has paid the balance of $8,422.83 to Van Luit, and it is this amount Chancey is seeking over and against Amsterdam. The case was submitted to a jury and upon the finding of the jury the trial court entered a judgment that Chancey take nothing. From this judgment Chancey duly perfected this appeal.

Chancey complained of the trial court’s action in sustaining an exception to Chancey’s petition which alleged the failure of Amsterdam to ‘negotiate’ for a settlement of the case, and refusal of the trial court to submit issues based on the above allegation. It is Chancey’s contention that in as much as the policy gives the insurance coompany the right to ‘investigate, negotiate and settle’ any claim arising under the policy, this right is equally accompanied by the duty to negotiate as well as to settle. The landmark case in Texas on this question is the case of Stowers Furniture Co. v. American Indemnity Co., in which is found the following language:

Bad Faith Insurance – What Is Not

March 11, 2014 | Mark S. Humphreys

Knowing what is not “bad faith” insurance is as important as knowing what is bad faith insurance so that a client can be properly advised.

A 1994, Texas Supreme Court opinion helps to understand what is not bad faith. The style of the case is, Allstate v. Watson. Here is the relevant information from that case.

Kathleen Watson was injured in a car accident on March 31, 1989. The driver of the other car was M.D. Townley, an insured under an automobile liability policy issued by Allstate Insurance Company. Watson filed suit on June 28, 1989 against Townley alleging that Townley was negligent and that his negligence was a proximate cause of the accident and her injuries. In the same action, Watson also sued Allstate under the Texas Insurance Code for alleged unfair claim settlement practices in failing to attempt in good faith to effectuate prompt settlement of her claims where liability had become reasonably clear and in denying or unreasonably delaying payment of her claim.

Insurance – Waiver And Estoppel

March 9, 2014 | Mark S. Humphreys

Insurance attorneys need to know legal issues that will help their clients.

Two common defenses relied upon to prevent an insurance company from avoiding coverage when a judgment has been entered against their insured are “estoppel” and “waiver.” While both theories have been applied by courts to avoid forfeiture of a policy, they normally cannot be applied to change, re-write, or enlarge the risks covered by a policy. This was told us by the Texas Supreme Court in the 2008, case styled, Ulico Casualty Co. v. Allied Pilots Association, and other cases. Stated in a different way, neither waiver nor estoppel can be invoked to bring a non-covered loss within coverage of a policy so as to supply coverage where none exists.

To distinguish between estoppel and waiver, it has been explained that “Waiver presupposes full knowledge of existing rights, while estoppel arises where, by fault of one, another had been induced to change his position for the worse.” This was discussed in another Texas Supreme Court case. It was Massachusetts Bonding and Insurance Co. v. Orkin Extermination Co., Inc., decided in 1967.

Liability Insurance Exclusions

March 8, 2014 | Mark S. Humphreys

Attorneys handling insurance law will want to keep up with how the courts are interpreting insurance exclusions. The Austin American Statesman ran an article in January 2014 that is interesting reading. Here is what it tells us.

The Texas Supreme Court issued a key ruling Friday that should boost consumer confidence in the liability insurance coverage that builders and general contractors carry.

Writing for the court, Justice Phil Johnson denied an insurance company’s attempt to avoid paying a claim based on language found in most commercial general liability insurance policies. The court’s decision was one of the most anticipated insurance cases in the country because Texas decisions often influence other courts across the nation, said Randy Maniloff, an insurance law expert at the White and Williams law firm in Philadelphia.