Bad Faith Insurance – It’s been said that if you need an expert to explain bad faith, then you probably don’t have a case.  However, there may be an expert needed on other aspects of the case.  Our last Blog explained part of the way that courts look at experts.  This is some more of that opinion.  The case is styled, Richard Kim D/B/A Centre Cleaners v. Nationwide Mutual Insurance Company.  The opinion is issued by the Northern District of Texas, Dallas Division.

Plaintiff had hail damage coverage for his property through Nationwide.  Plaintiff made a timely claim for damages and Nationwide inspected the claim and asserted that the damage amount was below the deductible amount.

Plaintiff filed suit under the Texas Insurance Code, Sections 541 and 542, and for various violations of the Texas Deceptive Trade Practices Act. and breach of the duty of good faith and fair dealing.

Insurance attorneys who get involved in very many lawsuits will have situations where an expert is required.  When that happens, it is vital to understand what the courts will accept and not accept as it relates to experts.  This is discussed in a 2022, opinion from the Northern District of Texas, Dallas Division.  The opinion is styled, Richard Kim D/B/A Centre Cleaners v. Nationwide Mutual Insurance Company.

Plaintiff had an insurance policy with Nationwide that covers hail damage claims.  Plaintiff filed a claim asserting that his roof had been damaged by hail.  Nationwide denied the claim.  Plaintiff had an expert and named his as someone who would testify in the lawsuit and filed the appropriate experts’ report.  Nationwide filed a motion to strike the expert.  The Court granted Nationwide’s motion.

Under Rule 26(a)(2)(B)(i) and (ii), the disclosures of an expert witnesses who is retained or specially employed to provide expert testimony in the case or whose duties as the party’s employee regularly involve giving expert testimony must be accompanied by a written report that contains “a complete statement of all opinions the witness will express and the basis and reasons for them” and “the facts or data considered by the witness in forming them.”  The Advisory Committee’s Note to Rule 26 provides that expert witnesses “must prepare a detailed and complete written report, stating the testimony the witness is expected to present during direct examination, together with the reasons therefor.  These Notes also explain that the purpose of the reports is to avoid the disclosure of ‘sketchy and vague’ expert information, as was the practice under the former rule.  The purpose of a ‘detailed and complete’ expert report as contemplated by Rule 26(a) . . . [is to] prevent an ambush at trial.  The test of a report is whether it was sufficiently complete, detailed and in compliance with the Rules so that surprise is eliminated, unnecessary depositions are avoided, and costs are reduced.

When experts are needed in a homeowners claim, it is good to see how courts look at experts.  The United States District Court for the Western District of Texas, San Antonio Division, issued an opinion on July 1, 2022, that deals with experts.  The opinion is styled, FB & SB Leasing, LLC vs. Chubb Lloyds Insurance Company of Texas.

Chubb filed a motion to exclude the testimony of Michael B. Couch, who had been named by the Plaintiff as an expert.  The court denied Chubbs motion and stated as follows.

In this firstparty insurance dispute involving a property experiencing plumbing problems
and foundation issues, Chubb presents two reliability arguments to support excluding the opinion testimony of Plaintiff FB &SB Leasing’s sole causation expert, Michael B. CouchChubb urges first that Couch’s report provides insufficient information about his methodology. Second, Chubb argues Couch relied on mistaken or incorrect underlying data when opining that there were multiple leaks at the property.  There’s no dispute that Couch’s testimony, if reliable, would be relevant.  Chubb also doesn’t dispute Couch’s qualifications.  As argued, and on this record, Chubb’s complaints go to the eventual weight a jury might afford the testimony and are most appropriately addressed at trial via cross-examination or through introduction of competing expert testimony.

Insurance lawyers live on the Texas Insurance Code, Section 541.060.  There is disagreement among the Federal Courts about which of the sub-sections under 541.060 require the specifics of a “fraud” pleading.  This issue is discussed in a 2022, opinion from the Northern District of Texas, Dallas Division.  The style of the opinion is UGM Of Dallas, Inc. d/b/a Union Gospel Mission Of Dallas, Inc. v. Harleysville Insurance Company And Laura Jones.

UGM has a insurance policy with Harleysville that covers hail damage to the insured property.  UGM claimed a loss that was eventually adjusted by Jones.  The facts of the case can be read in the opinion.  What is discussed here is the courts coverage of whether or not the requirements of a fraud pleading applied to the section of the insurance code that was pled by UGM when a lawsuit resulted against Jones.

Defendants respond that Plaintiff fails to state a claim against Defendant Jones
that is cognizable under Texas law and also fails to satisfy the higher federal pleading
standard under Federal Rule of Civil Procedure 9(b) because these claims are “grounded
in fraud”

Insurance lawyers find it helpful, in the right case, to use an expert.  What is important to understand is the criteria courts look at to determine whether someone qualifies as an expert.  This issue is discussed in a 2022 opinion from the Western District of Texas, San Antonio Division.  The opinion is styled, Craig Janssen v. Allstate Vehicle & Property Insurance Company.

This case arises out of a hail and wind storm event alleged to have caused damage to Plaintiff’s property.

Allstate filed a Daubert Motion to Exclude and/or Limit Testimony of Plaintiff’s Designated Expert.  This motion seeks to exclude the proposed testimony of Plaintiff’s designated handling expert, Gary Johnson.

Lawyers who handle claims related to the Employee Retirement Income Security Act of 1974 know how hard this cases can be.  Unlike other types of claims, such as personal injury, auto wrecks, on the job injury, and medical malpractice, under ERISA, a prevailing claimant is only entitled to actual benefits and in some situations, attorney fees.  Those other types of claims will generally have attorneys bragging and boasting about the excellent work they did on behalf of their client.  This is illustrated by large recoveries that go beyond the actual medical bills or lost wages.  There are punitive damages and damages related to intangibles such as pain and suffering and mental anguish, impairment, disfigurement, etc.

The Northern District of Texas, Dallas Division issued an opinion in June 21, 2022, that opened the door for “equitable relief” for a claimants.  While that remedy has long been available, it is rare to see it occur.

The opinion is styled, David Corsaro v. Columbia Hospital At Medical City Dallas Subsidiary LP, et al.

Lawyers who handle Employee Retirement Income Security Act cases will want to know about this June 2022, opinion from the Northern District of Texas, Dallas Division.  The opinion is a win for ERISA cases.  It is styled, Michael Cloud v. The Bert Bell/Pete Rozelle NFL Player Retirement Plan.

This case represents the first time in many years where a court has ruled in favor of a claimant.  For reference, there are many good cases that resolved/settled prior to a court rendering an opinion.  But, for those cases that do not get resolved it is rare for the person making the claim to prevail.

The opinion in this case is 84 pages long.  Very little of the opinion will be cited here but for attorneys handling ERISA cases, it is a must read.

Is there such a thing as an oral insurance contract?  Well, according to the 1949, Texas Supreme Court opinion styled, Pacific Fire Insurance Company v. Donald, …, Yes.

In the Donald case, Paul Donald sued Pacific Fire to recover for the loss of 5500 bales of hay which were destroyed by fire.  The lawsuit is based on an alleged oral contract between himself and agent Henry Moore, who represented Pacific Fire.

The controlling question presented here is whether there was any evidence to sustain the trial court’s finding that Pacific Fire and Donald entered into a valid parol contract to insure respondent’s hay.

Insurance policies are contracts, and as such are subject to rules applicable to contracts generally.  This is stated in the 1994, Texas Supreme Court opinion styled, Hernandez v. Gulf Group Lloyds.

An insured seeking to recover on an insurance contract must prove that the contract was in force at the time of the loss.  Also, as discussed in the 1975, Tyler Court of Appeals opinion, Hartford Acc. & Indem. Co. v. Spain, a party who claims under a policy is required to produce the insurance contract upon which he sues or to prove the terms.  To prove a breach of contract, the insured must establish:

(1)  the existence of the contract sued upon

The incontestability period of an insurance policy is one of the most important parts of a life insurance contract.

Life insurance policies must contain an incontestability clause — a provision that the policy will be incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums.  This requirement is found in Texas Insurance Code, Section 1131.104.  It is also found it sections 705.101 thru 705.105.  The effect of these clauses is to limit the misrepresentation defenses so they can apply only during the first and second years.

As stated in the 1972, Texas Supreme Court opinion styled, Minnesota Mutual Life Insurance Company v. Morse, the purpose of the incontestability clause is to protect the insured from a contest as to the validity of the policy after the set period has expired.

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