Dallas Fort Worth Insurance Lawyer Blog

Insurance And Examination Under Oath

August 26, 2020 | Mark S. Humphreys

There is a part of the claims handling process that insureds need to be wary about. That part is when an insurance company asks the person making a claim to submit to an Examination Under Oath (EUO).

If the insurance contract provides for it, the insurance company may require an EUO as a condition to a suit on the policy. The purpose of such EUO clauses has been described this way:

The insured agrees agrees, at reasonable ties and places, as often as required , to submit to examination by an agent of the insurance company, and to submit all relevant books of account, invoices, vouchers, etc. If is clear that the chief purpose of this privilege to the insurance company is the ascertainment and adjustment of the loss which has already occurred. The insurance company, in its policy, evidences in many ways its desire to avoid the necessity of litigation in the settlement of its losses. It reserves the right to have the benefit of the examination provided for before suit can be sustained.

Accelerated Death Benefits Rider

August 23, 2020 | Mark S. Humphreys

Most life insurance policies have a section / rider that allows for an acceleration of the life insurance benefits. It is also a source of litigation because the life insurance companies have a strong tendency to deny claims made for these benefits.

Insure.com published an article on this subject in September 2019. The article is titled, Accelerated Benefit Riders: How Your Life Insurance Can Help You While You’re Still Alive.

The article tells us , as life expectancy creeps to 80 years old, more Americans are turning to life insurance to help them while they’re still alive. One example is an accelerated benefits rider (ABR).

Appraisals And Insurance

August 22, 2020 | Mark S. Humphreys

Most property insurance policies contain appraisal clauses. These clauses define a process for appraising the value of the damaged property, if the parties cannot agree. Common provisions call for each party to choose an appraiser. Those appraisers then choose a neutral third appraiser, called the umpire. If the parties or their appraisers cannot agree on an umpire, either party may petition a court to appoint one. Once the appraisers and umpire are chosen, they value the loss. If all do not agree on the value, the decision of any two will control. A 1938, Waco Court of Appeals opinion describes the process saying the intent is to give the insurer and insured a simple, speedy, and fair means of deciding disputed value. This opinion is styled, Fire Association of Philadelphia v. Ballard.

The San Antonio Court of Appeals in a 1994 opinion styled, Providence Lloyds Insurance Company v. Crystal City, says that when the two appraisers do not agree, the umpire does not simply choose between them. It is the duty of the umpire to ascertain and determine, in the exercise of his own judgment and as the result of his own investigation, the values of the disputed items.

The 14th Court of Appeals tells us in a 1974 opinion styled, Standard Fire Insurance Co. v. Smith, that either party may seek specific enforcement of the appraisal clause, and the court will abate any pending lawsuit and compel the parties to submit to the appraisal process. In 1979, the same court said in, Standard Fire Insurance Co. v. Fraiman, that in addition, an insured may recover consequential damages sustained as a result of the insurer’s failure to comply with the appraisal clause.

Suing The Adjuster Properly In Federal Court Is Tough

August 19, 2020 | Mark S. Humphreys

Here is another one of those cases where an insured sues the insurance company and the adjuster in State Court for various violations of the Texas Insurance Code. The insurance company a adjuster then remove the case to Federal Court alleging that the adjuster has not been properly sued.

This case is from the Eastern District of Texas, Sherman Division, and is styled, Angelina’s Restaurant v. Allied Insurance Company Of America And Mary Keefer.

Angelina’s property sustained wind and hail damage. Allied insured the property and Keefer was assigned to adjust the claim. Angelina eventually sued Allied and Keefer for various violations of the Texas Insurance Code. The case was filed in State Court and then removed to Federal Court by the Defendants. Angelina then filed a motion to remand, which is the subject of this opinion.

Insurance And Proof Of Loss

August 16, 2020 | Mark S. Humphreys

Insurance policies require that the insured cooperate with the insurance company investigation of a claim. Part of that cooperation includes filing a written proof of loss. This filing of a proof of loss is a precedent to enforcement of the policy as explained in the 1926, Texas Supreme Court opinion styled, Commercial Union Assurance Co. v. Preston. The Fort Worth Court of Appeals restated the Texas Supreme Court opinion in the 1954, opinion styled, Whitehead v. National Casualty Company. A “proof of loss” is a statement to the company, stating, among other things, the cash value of each item of property lost or damaged by fire, and the amount of loss. The insurance company may require that the insured swear to the accuracy of the proof of loss.

Another Fort Worth Court of Appeals in 1960, told us that policy provisions requiring a proof of loss are for the insurer’s benefit and may be waived by the insurance company. That case is styled, International Service Insurance Co. v. Brodie. The Court said the requirement was waived where the insurer would only accept proof asking for an amount its adjusters agreed to, although the insurer wanted more.

Compliance with the proof of loss requirement may be excused, for example when the failure to file a proof of loss does not affect the insurer’s exposure, or when the lack of a proof of loss is due to the beneficiary’s non-negligent ignorance of the requirement. This was explained in the Whitehead opinion.

Interpreting An Insurance Policy – Mechanical Breakdown

August 15, 2020 | Mark S. Humphreys

The San Antonio Court of Appeals issued an opinion in a case wherein the facts were similar to what happens all across the State of Texas in auto cases. The opinion is styled, Infinity County Mutual Insurance Company v. Michael Tatsch.

This is a summary judgment opinion wherein the sole issue was whether the trial court erred in concluding the insurance policy exclusion for damage to a vehicle resulting from or caused by mechanical breakdown or failure did not apply to Tatsch’s claim.

The background facts should be read but in the essence is that Tatsch had a truck with a diesel engine that broke down immediately after he had refueled. There was some evidence of the break down being the result of water in the fuel and some evidence of a few other possible fuel issues.

Home Owners Insurance Policy And Collapse

August 12, 2020 | Mark S. Humphreys

Do homeowner insurance policies cover a collapse of the home? It sounds like a simple question but as is illustrated in a 2020, opinion from the Southern District of Texas, Houston Division, it is not as simple as it looks.

The opinion is styled, Beatrice Stewart v. Metropolitan Lloyds Insurance Company of Texas. The case needs to be read to get the facts of the case, however, the facts end up being discussed in the relevant parts of the opinion discussed here.

Metropolitan insured Stewarts home. Stewart experienced some structure problems with her home and turned in a claim to Metropolitan. Metropolitan ultimately denied the claim stating there was no coverage under the wording of the policy.

Filing A Proof Of Loss

August 9, 2020 | Mark S. Humphreys

Attorneys who handle insurance claims know that almost all insurance policies have a cooperation clause in them. This means that the insured has a duty under the policy to cooperate with the insurance company in its investigation of the claim. One of these duties is to file a proof of loss.

As discussed as early as the 1926, Texas Supreme Court opinion styled, Commercial Union Assurance Company v. Preston, policies sometimes require that the insured file a proof of loss, as a condition precedent to enforcement of the policy. This was restated in the 1954, Fort Worth Court of Appeals opinion styled, Whitehead v. National Casualty Company. A “proof of loss” is a statement to the company, stating, among other things, the cash value of each item of property lost or damaged by fire, and the amount of loss. Further, the company may require that the insured swear to the accuracy of the proof of loss.

A 1960, Fort Worth Court of Appeals opinion styled, International Service Insurance Company v. Brodie, says the policy provision requiring a proof of loss is for the insurer’s benefit and may be waived by the company. In the Brodie case, the insurance company was found to have waived the proof of loss requirement where it would only accept proof asking for amount its adjusters agreed to, although the insurer wanted more.

Duty To Cooperate – Not

August 8, 2020 | Mark S. Humphreys

The law is as clear as it can be in the State of Texas. An insured has a duty to cooperate with his insurance company regarding the investigation of a claim.

The next question is – Are there exceptions to this duty? Here is my response.

The insurance contract may impose conditions on the insured. For example, most policies require that the insured give notice of the claim and cooperate with the insurance company. Policies may require that the insured file a formal proof of loss, if the insurer requests one. The Texas Supreme Court in a 1994 opinion said that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from any obligation to perform. The opinion is styled, Hernandez v. Gulf Group Lloyds. It is necessary that the breach be “material.” The Court explained it this way:

Doctrine Of Concurrent Causes

August 5, 2020 | Mark S. Humphreys

Lawyers handling roofing claims and damage to property need to know and understand 2020 case from the Eastern District of Texas, Beaumont Division. The case is styled, Starco Impex, Inc. v. Landmark American Insurance Company.

The legal backdrop to the case and the facts need to be read in the opinion but here is a brief description of the issues.

Starco had a commercial policy with Landmark that was to cover damage caused by wind, hail, hurricane, etc. Starco claims to have suffered damage in a storm that occurred on March 29, 2017.