Dallas Fort Worth Insurance Lawyer Blog

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.

Life Insurance And The Named Beneficiary Having Died

August 2, 2020 | Mark S. Humphreys

This case is a dispute over who is entitled to the life insurance proceeds. The case is from the Southern District of Texas, Houston Division, and is styled, John Hancock Life Insurance Company v. Marilyn J. Greer, Individually, As Independent Executor of The Estate of Marilyn B. Greer, and As Trustee of The Marilyn J. Greer Trust; and The Estate of William J. Greer.

William owned and was the sole named beneficiary of the policy at issue, which was a policy insuring the life of his mother Mary. William predeceased Mary. Mary then died.

The executor of William’s estate is Kennedy.

Prompt Payment Of Claims Act After Appraisal

August 1, 2020 | Mark S. Humphreys

Recent Texas Supreme Court opinions have been helpful to Texas insureds. The help comes in the form of the Court deciding that an insurer by merely paying an appraisal award is no longer able to wash their hands of the case. The insured can still seek remedy under the Texas Prompt Payment of Claims Act (TPPCA).

The case is from the Texas Supreme Court and is styled, William Marchbanks v. Liberty Insurance Corporation.

At issue in this insurance dispute is whether an insurer’s payment of an appraisal award bars an insured’s claims under the TPPCA, codified as Chapter 542 of the Insurance Code. The court of appeals concluded it did. Because the court of appeals’ opinion is inconsistent with recent decisions on this issue, this Court now reverses.

Suing The Adjuster On Storm Damage Claims

July 29, 2020 | Mark S. Humphreys

Yet another case after the passage of Texas Insurance Code, Section 542A.006, dealing with suing the adjuster in storm damage claims. This is an issue that will eventually be addressed by the 5th Circuit. For now, this case is from the Northern District of Texas, Dallas Division, and is styled, Grant Stowell v. United Property & Casualty Insurance Company and Samantha Jenkins.

Stowell has a policy of insurance with United Property (UPC). Stowell suffered property damage after a hail storm and filed a claim with UPC. UPC assigned the claim to Jenkins. Stowell was not happy with the way the claim was handled in sued UPC and Jenkins in State Court for various violations of the Texas Insurance Code.

After the lawsuit was filed, UPC filed it’s election of responsibility, pursuant to Section 542A.006(c), in the State Court. UPC then removed the case to this Federal Court. Both Stowell and Jenkins are Texas citizens and thus, the joinder of Jenkins in the lawsuit beats diversity jurisdiction and thus, renders a lack of jurisdiction for this Federal Court.

Suing The Adjuster And Texas Insurance Code

July 26, 2020 | Mark S. Humphreys

Texas Insurance Code, Section 542A.006(c), is being a source of frequent litigation in Texas since it was en-acted. The various Federal Courts are treating it differently. Here is a case from the Western District of Texas, Austin Division, dealing with this issue. The case is styled, Shiv Partners LTD and Shiv Host, LLC D/B/A La Quinta Inn & Suites v. The Ohio Casualty Insurance Company and Kevin M. Witt.

La Quinta had suffered a loss as the result of storm damage. The insurer, Ohio, assigned the claim to Witt. Ohio is not a Texas resident but Witt is. La Quinta was displeased with the way the claim was handled and sued Ohio and Witt in State Court. La Quinta removed the case to Federal Court asserting that Witt had been improperly joined in the lawsuit thus, diversity existed between the parties giving the Federal Court jurisdiction of the lawsuit.

La Quinta failed to provide Ohio or Witt with pre-suit notification of 61 days prior to filing as required by Texas Insurance Code, Section 541.154 and 542A.003. The first notice of the lawsuit was when it was received by Ohio and Witt. Ohio then made immediate election of responsibility for Witt as allowed by Section 542A.006(c).