Potential Recovery In Insurance Cases

Weatherford insurance attorneys need to be able to discuss with clients what the value of their claim might be. Here is some food for consideration.
Texas Insurance Code, Section 541.152 tells us a person who prevails in a lawsuit may obtain the following:
– the damages actually suffered;
– exemplary damages if the insurance company or their agent or adjuster committed their wrongs “knowingly” as that term is defined in the Insurance Code;
– taxable court costs incurred;
– reasonable and necessary attorney fees.
The Texas Supreme Court, in the 1997 case, Arthur Andersen & Co. v. Perry Equipment Corp. set out the following principles that govern recovery of “actual damages” under the similar language that existed under the Texas DTPA before 1995. This same analysis should apply to Section 541.152.
The amount of actual damages recoverable is “the total loss sustained as a result of the deceptive trade practice.”
Actual damages are those damages recoverable under common law. At common law, actual damages are the necessary and usual result of the defendant’s wrongful act; they flow naturally and necessarily from the wrong. Direct damages compensate the plaintiff for the loss that is conclusively presumed to have been foreseen by the defendant from his wrongful act.
Consequential damages, on the other hand, result naturally, but not necessarily, from the defendant’s wrongful acts. Under the common law, consequential damages need not be the usual result of the wrong, but must be directly traceable to the wrongful act and result from it. Of course, foreseeability is not an element of producing cause under the DTPA. Still, if damages are too remote, too uncertain, or purely conjectural, they cannot be recovered.
Under Texas common law, direct damages for misrepresentation are measured in two ways. Out-of-pocket damages measure the difference between the value the buyer has paid and the value of what he has received; benefit-of-the-bargain damages measure the difference between the value as represented and the value received. Under the DTPA, a plaintiff may recover under the damage theory that provides the greater recovery. Both measures of damages are determined at the time of sale.
One example of this is found in the 1989, Houston Court of Appeals [14th Dist.] case, Paramount National Life Insurance Company v. Williams. In this case, Williams recovered actual damages for loss of credit or injury to credit reputation based on receiving notice letters from bill collectors arising from medical expenses the insurer misrepresented would be paid.

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