Dallas Fort Worth Insurance Lawyer Blog

Bad Faith Litigation

December 20, 2012 | Mark S. Humphreys

Fort Worth insurance attorneys need to keep up with what is happening in bad faith cases across the country. The Insurance Journal published an article that deals with this issue across the country.

It tells us a rising tide of first-party bad faith decisions is defining the contours of the bad faith cause of action.

Recently, three courts have found first-party insurance companies liable for bad faith claims handling. However, there are also two recent bad faith decisions in favor of the insurance company. Key aspects of each of these important cases are discussed below.

Market Value In Insurance Cases

December 18, 2012 | Mark S. Humphreys

Fort Worth insurance lawyers need to read this case. The style of the case is, Texas Farm Bureau Mutual Insurance Company v. Joseph Wilde. The opinion was issued by the El Paso Court of Appeals.

Texas Farm appeals from a judgment awarding Wilde damages, lost profits, and attorney’s fees resulting from a jury verdict that Texas Farm committed unfair or deceptive settlement practices under Texas Insurance Code Section 541.060. This court reversed a judgment in favor or Wilde and rendered a take-nothing judgment.

Wilde had a policy of insurance with Texas Farm which insured Wilde’s 1999 John Deere 7455 cotton stripper for a maximum value of $90,000. Wilde filed a claim on the policy after the cotton stripper caught fire on December 16, 2005, and was “completely destroyed.” After Texas Farm denied Wilde’s claim, Wilde filed suit for breach of contract, breach of duty of good faith and fair dealing, and unfair settlement practices, and sought to recover damages for the market value of the cotton stripper, lost profits, attorney’s fees, and treble damages.

Insurance Policy Interpretation Issues

December 16, 2012 | Mark S. Humphreys

Grand Prairie insurance lawyers need to be aware of this recent Federal District Court case. It is styled Colony Insurance Company v. Progressive County Mutual Insurance Company. It is an appeal from a summary judgement.

This is an action for breach of contract and associated damages against Defendant arising out of Defendant’s refusal to defend its insured, Bell Tech Enterprises, Inc., d/b/a Bell Tech Training School, and Bell Tech Home Health Care.

Defendant issued a policy of liability insurance to Bell Tech, which is a licensed provider of home and community based services. The policy required that Defendant defend Bell Tech against covered claims arising out of the use of covered automobiles. The policy provides coverage as follows:

Lawyer Needed To Evaluate Bad Faith Claims

December 15, 2012 | Mark S. Humphreys

Weatherford bad faith attorneys need to know about this recent court opinion from the Corpus Christi Court of Appeals. The style of the case is Ruth McGhan v. Farmers Insurance Exchange. Here are some facts.

This is an appeal from a summary judgment granted in favor of Farmers Insurance Exchange, and against Ruth McGhan in a case involving damages to her lake house. By one issue, McGhan claims that the trial court erred in granting summary judgment because Farmers failed to conduct a reasonable investigation of her claim as “no representative from Farmers inspected the damage to McGhan’s 3,500 square foot roof,” which gave rise to McGhan’s statutory, common law and breach of contract claims.

McGhan originally filed suit against Charles Archer, Diana Kees, Archer Development Group, and Bill and Alice Clayton with respect to repairs that allegedly needed to be made to her home. Farmers had not yet been sued, but the pleadings alleged that coverage had been denied. Farmers was not named as a defendant until McGhan’s third amended petition in which she asserted that Farmers denied her claims because the claims were not covered losses. The lawsuit asserted claims of breach of contract, bad faith, deceptive trade practices, and negligence. In McGhan’s fourth amended petition, filed after the summary judgment was heard, McGhan alleged for the first time that no representative of Farmers adequately inspected the roof when she made her claims in 2007. Her causes of action against Farmers remained the same as alleged in the third amended petition.

Mortgage Life Insurance Attorney Needed

December 13, 2012 | Mark S. Humphreys

Fort Worth life insurance attorneys need to know about this case. It is an opinion issued by the U.S. 5th Circuit Court of Appeals in 2005. It is styled, Monumental Life Insurance Company v. Hayes Jenkins.

Here are some facts:

In November 2000, the insureds, husband and wife, purchased a house executing a mortgage note and an escrow agreement with the lender. Two months later the lender, by agreement with the insurer, mailed an unsolicited application for a mortgage life insurance policy underwritten by the insurer. All the enclosed materials promised a payoff of the mortgage balance up to $300,000 in the event of one of the insured’s death and emphasized a “no risk” 30 day trial period. The insureds promptly completed and mailed the application. The husband died four days after the policy became effective, but before the mortgage company issued the first month’s premium payment and the wife demanded that the proceeds of the mortgage life policy be applied to liquidate the remaining loan balance pursuant to the terms of the policy. The insurer refused and filed a declaratory judgment action seeking a ruling that at the time of the husband’s death the policy was not in force for failure by the insureds to pay the required premium. The wife counterclaimed against the insurer for breach of contract and violations of the Texas Insurance Code and DTPA. She also filed a third party complaint against the mortgage lender asserting claims for breach of the escrow agreement, negligence, and violations of the DTPA and Insurance Code. The district court granted the insurer and the lender’s motions for summary judgment, dismissing all of the wife’s counterclaims and third party claims and this appeal followed.

Life Insurance Lawyer Needed

December 11, 2012 | Mark S. Humphreys

Dallas life insurance attorneys need to read and know this case. It is an opinion issued by the Texas Supreme Court in 1990. The style of the case is Koral Industries v. Security Connecticut Life Insurance Co.

Here are some of the facts:

Koral Industries sought a new life insurance policy for one of its key employees, Lewis Lindsey, in 1984. Lindsey did not disclose damaging medical history regarding treatment over the five years prior to his application, a history which included hospitalization in 1981, 1982, and 1983, and counseling and treatment for depression and excessive use of alcohol. A medical information agency had reported treatment for mental or nervous disorders from 1976-78, and Lindsey’s physician reported treatment for anxiety.

Life Insurance Misrepresentations

December 9, 2012 | Mark S. Humphreys

Dallas life insurance lawyers need to know this case. The case is styled Lilly Sharp v. Lincoln American Life Insurance Company. The opinion was issued by the Corpus Christi Court of Appeals in 1988.

This lawsuit was filed by Lilly Sharp after the death of her daughter.

Lincoln had denied the claim based on misrepresentations by the insured in the policy application. The trial judge ruled in favor of Lincoln and this appealed followed.

Life Insurance Denied

December 8, 2012 | Mark S. Humphreys

Fort Worth life insurance attorneys need to know this case. The case is styled Republic-Vanguard Life Insurance Company v. Beth Walters. It is a 1987, opinion from the 1st District Court of Appeals. Here is some background.

In 1981, the deceased, James Walters, applied to Republic for mortgage protection insurance. On his application, he stated he knew of no impairment to his health. Republic requested an examination by a registered nurse. He told her of various ailments, and that he had gained 50 pounds in the previous year “due to beer drinking,” that he had been wounded in Viet Nam.

When the nurse asked about impaired sight or hearing, mental illness, cancer, growth, rupture or syphilis, James said no. James provided names of his doctors and the hospital he had been in.

Omnibus Clause In Auto Policy

December 6, 2012 | Mark S. Humphreys

Weatherford attorneys and those in Aledo, Hudson Oaks, Willow Park, Millsap, and other places in Parker County need to know and understand the “Omnibus Clause” in an auto insurance policy.

The Corpus Christi Court of Appeals issued an opinion in 1967, in the case styled Phoenix Insurance Company v. Allstate Insurance Company. The case is still good law.

This is an appeal that arises from a declaratory judgement action and discusses the omnibus clause in Phoenix’s auto policy.

Who is “Any Person” In An Auto Insurance Policy

December 4, 2012 | Mark S. Humphreys

Weatherford attorneys and those in Springtown, Willow Park, Aledo, Hudson Oaks, Brock, and other places in Parker County need to have an understanding of how to interpret an auto insurance policy.

Most auto insurance policies will have wording to the effect that there is coverage provided by the policy for “any person” using the covered auto.

An individual covered under this clause (that is, a non-family member using the covered auto) is referred to in Texas case law as an omnibus insured, covered person or an insured by definition. These types of clauses are sometimes referred to as omnibus clauses. Texas cases using it this way include cases from the Texas Supreme Court as far back as 1979. Various other Courts of Appeal have said the same in 1972, 1973, and 1994. A Dallas Court of Appeals opinion issued in 1962 said, “A named insured is the one who purchases the policy, presumably has it in his possession and is deemed to know the contents of the contract he made. On the other hand an ‘omnibus insured‘ under a comprehensive policy stand in the position of a third party beneficiary of a contract to which he is not a party, but is a stranger.” The style of the Dallas case is, Standard Acc. Ins. Co. V Employers Cas. Co. Here is some background for reference: