The doctrine of concurrent causes is discussed in a 2020, opinion from the Southern District of Texas, Corpus Christi Division.  The opinion is styled, Claude Hooker v. United Property & Casualty Insurance Company.

Hooker sued his insurance company, United Property & Casualty Insurance Company (UPC) for windstorm benefits after Hurricane Harvey cause damage to his home.

UPC counters Hooker by claiming that the damages to Hooker’s home are the result of wear and tear.  As a result of this defense, UPC filed a motion for summary judgment based on the concurrent cause doctrine.

Here is an opinion for lawyers handling Employee Retirement Income Security Act (ERISA) cases.  The opinion is a 2020, opinion from the Southern District of Texas, Houston Division, and is styled, Kimberly Holick v. Aetna Life Insurance Company.

Holick was an employee of Parkway Chevrolet and covered under its Aetna issued group insurance policy.  After an alleged injury, Holick’s doctor ordered an MRI and Aetna denied coverage.  Aetna later reversed its decison and Holick eventually received the MRI.

Holick claims Aetna wrongfully denied her treatment and failed to timely reverse its denial of coverage and the delay prevented timely repair and caused her pain and deformities.

For insurance lawyers this post points out an area where frequent mistakes are made.  This has to do with the pleading standards in Federal Court and necessity of pleading proper facts to support a claim in Federal Court.

A 2020, opinion from the Northern District of Texas, Fort Worth Division, illustrates this problem.  The opinion is styled, Benjamin Lester, Et Al. v. Unitrin Safeguard Insurance Company.

Lester was insured by Unitrin at a time when Lester suffered a hail damage loss to his property.  A claim for benefits was made and Unitrin denied the claim based on its assertion that the damage to Lester’s roof is simple wear and tear.

Suing an insurance properly is not as easy as it might first seem.  This is illustrated in a recent opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Finger Oil & Gas, Inc. v. Mid-Continent Casualty Co., Et Al.

Finger Oil sued Mid-Continent, Marsh USA, Inc., and Karen Olivia in State Court.  Mid-Continent removed the case to Federal Court alleging that the non-diverse defendant, Olivia, was improperly joined and thus her citizenship may be disregarded.  Finger Oil filed this motion to remand contending that Olivia is not improperly joined.

Finger Oil’s original petition alleges that one of its oil wells blew out and that it contacted Desiree Scrimger, the commercial lines account manager with Marsh, Finger Oil’s insurance agent.  Scrimger allegedly advised Shelli Finger and others that blowout and cratering were included within the limit of insurance of $1,000,000 and sent an email from the underwriter, Olivia, confirming the coverage.  Finger Oil alleges that, based on that representation, costs were incurred for services totaling approximately $641,000.  However, Mid-Continent later issued reservation of rights letters and denied coverage.  Finger Oil sues under Texas Insurance Code, Section 541.051 for misrepresentation of the benefits or advantages of the insurance policy in question, as well as violations of the DTPA §17.46(b) for representing that the policy coverage had characteristics it did not have, representing the policy conferred or involved rights, remedies, or obligations that it did not have, and breaching the duty of good faith and fair dealing.

Whenever an insured is sued, the insured must provide notice to the insurance company.  Here is a case where the insured did not do so.  The 2020, opinion is from the 14th Court of Appeals and is styled, Krystle D. Lewis, Individually and as Next Friend of Eliseo Lewis and Chrishelle Wortham v. ACCC Insurance Company.

After obtaining a default judgment against another driver for her injuries, Lewis sued the other drivers insurance company, ACCC.  The trial court granted summary judgment in favor of ACCC on the fround that the insurer was prejudiced as a matter of law by the insured’s failure to notify ACCC of the lawsuit and request a defense.  Lewis maintains that ACCC was  not prejudiced as a matter of law because she, as a third-party beneficiary of the policy, gave ACCC actual notice of the lawsuit, notice of the pending motion for summary judgment, and notice of the hearing on unliquidated damages.  This Court affirmed the trial court and explained why.

Like many liability policies, ACCC’s policy requires the person covered by the policy to promptly send the insurer “copies of any notices or legal papers received in connection with [an] accident or loss” and cooperate with the insurer “in the investigation, settlement or defense or any claim or suit.”  The policy states that ACCC may deny coverage if ACCC can show that the covered person’s failure to comply with those terms materially prejudiced the insurer.

Insurance lawyers who have cases that could potentially end up in Federal Court need to know and understand Federal pleading standards.  This is illustrated in a 2020, opinion from the Eastern District, Sherman Division.  The case is styled, Angelina’s Restaurant v. Allied Insurance Company of America and Mary Keefer.

Angelina’s suffered wind and hail damage and eventually made a claim against their insurance company, Allied.  Allied assigned adjuster Keefer to handle the claim.  An impasse resulted from the claim and Angelina’s filed suit in State Court against Allied and Keefer for their handling of the claim.  Allied and Keefer had the case removed to Federal Court alleging Keefer had been improperly joined to defeat diversity jurisdiction.  Angelina’s filed a Motion to Remand.

A party seeking removal based on improper joinder bears a heavy burden of proving that the joinder of the in-state party was improper.  The removing party must prove that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court, or that there has been outright fraud in the plaintiff’s pleading of jurisdictional facts.  In deciding whether a party was improperly joined, we resolve all contested factual issues and ambiguities of state law in favor of the plaintiff.  Any doubt about the propriety of removal must be resolved in favor of remand.

Being the person or entity that purchased the insurance policy does not mean that you cannot still make a claim under the policy and thus, sue if necessary.

The Texas Insurance Code grants standing to “persons”, the Texas Deceptive Trade Practices Act (DTPA) gives standing to “consumers.”  A consumer is one who seeks or acquires goods or services according to the DTPA, Section 17.45(a).

Pursuant to the 1987, Texas Supreme Court opinion styled, Aetna Casualty & Surity Company v. Marshall, a person suing under the Insurance Code does not have to prove he is a consumer.

To answer the question above, let’s first look at third parties.  In the 1994, Texas Supreme Court opinion styled, Allstate Insurance Company v. Watson, the Court declined to let a third party tort claimant sue the tortfeasor’s liability insurer.  The Court held that the third party could not sue as a “person” under the statute.  This conclusion was in part based on the court’s construction of the statute, and in part based on the Court’s concern that creating a duty owed by the insurer to the injured third party would conflict with the duties owed by the insurer to the insured.

In 1995, the Texas Legislature codified the holding in Watson.  The unfair settlement practices prohibition, in Texas Insurance Code, Section 541.060(b),  now specifically states that it “does not provide a cause of action to a third party asserting one or more claims against an insured covered under a liability insurance policy.”

What about persons who rely on representations made by the insurance company?

An intended beneficiary of an insurance policy may sue under the Texas Insurance Code for any resulting harm.  This is made clear in the 1996, 5th Circuit Court of Appeals opinion styled, Palma v. Verex Assurance , Inc.  After reviewing Texas cases and other Fifth Circuit cases, the court concluded that “if the Texas Supreme Court were presented with the question before us it would hold that standing under Article 21.21 is satisfied by not only those who can establish privity of contract or reliance on a representation of the insurer, but also by those who can establish that they were an intended third party beneficiary of the insurance contract.”  The court set out the standards under Texas law for third-party beneficiary status this way:

1) the claimant was not privy to the written agreement between the insured and insurer;

2) the contract was made at least in part for the claimant’s benefit; and

Who can sue insurance companies is sometimes obvious to much people but just in case it is not obvious, here is what the laws tell us.

Texas Insurance Code, Section 541.151 grants a cause of action to a person who sustains actual damages caused by another person engaging in any unfair insurance practice or deceptive trade practices.

To assert a cause of action the plaintiff must be: (1) a “person” as defined by the statute; and (2) injured by another’s unfair or deceptive acts.  This is shown in the 2000, Texas Supreme Court opinion styled, Crown Life Insurance Company v. Casteel.

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