Texas Insurance Code, Section 542A, is being used regularly now by insurance companies to prevent Plaintiffs from defeating diversity jurisdiction.

This Insurance Code Section was discussed by a court in the Southern District of Texas, Houston Division, in a case styled, Robert Ewell v. Centauri Specialty Insurance Company, et al.

Ewell filed a claim with Centauri, who insured Ewell’s home, for property damage alleged to have occurred during a severe storm on August 25, 2017.  Steven Wiley is the adjuster assigned to investigate the claim.  Centauri is alleged to have failed to pay the full amount of the claim.

The vast majority of insurance cases are Ordered by a Court to participate in a mediation.  There is good reason for this.  Most cases, if they do not settle before mediation, will settle at mediation.  The settlement brings an end to the litigation between the parties and saves court time and resources.  For mediation to be successful, the parties with full settlement authority and the attorneys need to be present.  So what if a particular person does not show up at the mediation?  What is that person is the person most knowledgeable about the case?

The El Paso Court of Appeals issued an opinion in a mandamus case styled, In Re: Mary Anne Vinson.  This case arises out of a car wreck between Jaime Soto and Stephanie Dutchover wherein Soto sued Dutchover for negligence in causing a car wreck and the resulting damages.  Dutchover was insured by Allstate and Vinson was the adjuster assigned to handle the claim and the adjuster most familiar with the case.

The trial court signed an order appointing a mediator and further stated:  “All Parties and their representatives with full settlement authority shall attend the mediation process, with their counsel of record.”  Vinson did not attend the mediation but another adjuster did attend.

Like it or not, an insured suing his insurance company has a much better chance of getting a favorable or more favorable result in State Court versus Federal Court.  And, the insurance companies know this.  As a result, an insurance company is always seeking to have a case heard / litigated in the Federal Court.

Here is a case wherein the insured was able to defeat the efforts of the insurance company to have the case heard in Federal Court.  We don’t know whether this was the best way of doing it without knowing more about the Facts in the case but at the least the insured was successful in being able to litigate his case in State Court.

The case is from the Southern District of Texas, Galveston Division, and is styled, Ronald Mason v. Evanston Insurance Company.

Lawyers handling hail damage claims have to prove the claim.  This is illustrated in a Southern District of Texas case styled, Faustina Ortiz v. United States Liability Insurance Group, et al.

Ortiz owns a restaurant in Conroe, Texas.  He had a policy of insurance with United that provided coverage for windstorms and hailstorms wherein the policy period was from January 26, 2016, to January 26, 2017.  On August 23, 2016, a claim was filed with United asserting that on May 26, 2016, a hailstorm caused extensive damage to the building and walls.

United’s adjuster inspected the building on September 6.  He photographed and found (1) deterioration, (2) poor maintenance, (3) numerous gaps in the roof, and (4) earlier repairs.

Insurance lawyers always want to remove cases filed by insured’s to the Federal Courts.  In most instances they are successful in these efforts.  Here is a situation where the insurance lawyers were too late in getting the case removed to Federal Court.

This case is from the Southern District of Texas, Houston Division.  It is styled, Solaiha Enterprises LLC v. Amguard Insurance Company.

Amguard was the insurer for Solaiha when Solaiha made a claim for property damage.  Amguard refused to pay the claim and Solaiha sued Amguard and Ronnie Patel, the agent who sold the policy.  The lawsuit was filed on May 4, 2017, in State Court.  Solaiha dismissed its claim against Patel in late February of 2019.  Amguard filed a Notice of Removal on March 14, 2019, and Solaiha promptly filed this Motion to Remand arguing that Amguard was untimely in filing its Notice of Removal.

Here is an opinion issued by a Magistrate Judge from the Western District, Austin Division, which says that the insurer was too late in accepting responsibility for the acts of its agent, the adjuster, when the company accepted responsibility the day before removal was filed.  The case is styled, Robbins Place West Campus, LLC v. Mid-Century Ins. Co. and Jillian Meghan Sherman.

In this case, Robbins had commercial insurance coverage with Mid-Century when Robbins suffered wind and hail damage.  Robbins was unhappy with the way the claim was handled by the adjuster, Sherman, and sued Sherman and Mid-Century in State District Court for various violations of the Texas Insurance Code and breach of contract.

Pursuant to Texas Insurance Code, Section 542A.006, Mid-Century made an election to legal responsibility for Sherman.  The next day, Mid-Century removed the case to this Federal Court.

Lawyers handling insurance claims run into situations where damages that have occurred to property have to be segregated.  This happens most often in the context of hail and wind damage to property.  The U.S. District Court Northern District of Texas, Dallas Division, issued an opinion that does a good job of discussing how the courts are to look at these situations.  The case is styled, Generation Trade, Inc. v. Ohio Security Insurance Company.

In this case, Generation bought the subject property in 2014, and had it covered by Ohio ever since.  In July 2017, Simon, the owner of the property, observed hail damage and promptly reported the damage to Ohio.  Ohio inspected the roof and acknowledged there was hail damage but after reviewing hail events over a period of time was unable to determine when the loss occurred.

This property was originally built in 1981 and was covered with a 24 gauge metal roof except for a small portion of the roof that was installed in May of 2016, that had 26 gauge roofing.

Here is a situation where the insured won at the trial level of the case but ended up losing on appeal.  The case is from the Amarillo Court of Appeals and is styled, State Farm Lloyds v. Robert MacKeen and Rebecca MacKeen.

The facts in the case are not particularly long or confusing but there were certain aspects of the case wherein State Farm admittedly did not handle the claim properly and as a result State Farm paid the damages incurred plus penalty pursuant to the Texas Insurance Code, Prompt Payment of Claims Act.

However, there were other parts of the claim that were still in dispute and the resulting lawsuit went to trial.  The jury in the MacKeen’s case found in the MacKeen’s favor and this appeal followed.

Lawyers who handle National Flood Insurance Program claims, otherwise known as the National Flood Insurance Act of 1968 (NFIA) need to understand the difference between NFIA claims and other insurance claims.  One of the big differences is the shortened statute of limitations that applies to NFIA claims.

This is illustrated in a U.S. Fifth Circuit Court of Appeals opinion styled, Al Cohen v. Allstate Insurance Company; Rachael G. Ray.

NFIA was created to make flood insurance available on reasonable terms and to reduce fiscal pressure on federal flood relief efforts.  NFIA established the National Flood Insurance Program (NFIP) , which allows private insurance companies such as Allstate, to issue insurance policies on behalf of the federal government.  These companies are called Write Your Own (WYO) carriers.

The Texas Insurance Code, Section 542A, became the law in Texas in September 2017.  The cases involving this law are working their way through the Court system.  This law was recently discussed in a U.S. Southern District, Houston Division opinion styled, Greatland Investment, Inc., a/b/a Southwest Plaza v. Mt. Hawley Insurance Company and Kevin Wilson Mayfield.

Greatland had property insurance with Mt. Hawley when it’s property was damaged in a storm.  Greatland assigned Mayfield to inspect and adjust the claim.  Mayfield found the claim did not fall within Greatland’s policy and Mt. Hawley refused to pay the claim.

On December 3, 2018, Greatland sent a demand letter to Mt. Hawley stating its intent to sue Mt. Hawley and Mayfield and others.  On January 15, 2019, Mt. Hawley responded and notified Greatland that Mt. Hawley was electing to accept liability for all its employees and the adjuster pursuant Texas Insurance Code, Section 542A.006.  On March 1, 2019, Greatland sued Mt. Hawley and Mayfield in Texas state court for breach of contract and Texas Insurance Code violations.