Texas Insurance Law Newsbrief - April 5, 2021

April 5, 2021

SUPREME COURT OF TEXAS FINDS ALLEGED INSURANCE CODE VIOLATIONS ARE NOT “TRULY INDEPENDENT” OF RIGHT TO RECEIVE UNDERINSURED MOTORIST BENEFITS – BIFURCATED TRIAL REQUIRED

The Supreme Court of Texas recently examined an insured’s ability to pursue recovery for alleged unfair claims handling under the Texas Insurance Code without first establishing a contractual right to receive underinsured motorist benefits and determined that the insured could not absent a “truly independent” injury.  Read more...

SUPREME COURT OF TEXAS HOLDS PROMPT PAYMENT OF APPRAISAL AWARD DOES NOT PRECLUDE PROMPT PAYMENT PENALTIES, BUT INSURED MUST STILL ESTABLISH CONTRACTUAL LIABILITY FOR DAMAGES

The Supreme Court of Texas recently considered whether an insurers prompt payment of the additional amount of loss determined through appraisal, after its initial timely payment based on its own damage estimate, precluded liability for statutory interest under Texas Prompt Payment of Claims Act on the additional amount, and determined that statutory interest may be recovered.  Read more...

FOR WANT OF A SWORN PROOF OF LOSS, A $600,000 APPRAISAL AWARD IS OVERTURNED

Last week, a federal judge in Wichita Falls granted summary judgment for an insurer after it challenged a large appraisal award.  Read more...

INSURER WINS SUMMARY JUDGMENT ON BURST PIPE CLAIM DUE TO FAILURE TO SEGREGATE DAMAGES

A federal judge in Houston recently granted summary judgment for a property insurer after the insured failed to demonstrate its claimed damages were actually caused by a burst pipe during the policy period, rather than the long history of other losses.  Read more...

U.S. DISTRICT COURT CONCLUDES THAT INSURER HAD NO DUTY TO DEFEND OR INDEMNIFY BUS COMPANY AGAINST CLAIM THAT IT FAILED TO RENDER AID TO PASSENGER INJURED ELSEWHERE

Recently, the United States District Court for the Southern District of Texas concluded that insurer had no duty to defend or indemnify its insured, a bus company operating in the United States, against claim of failure to render aid to bus passenger injured in Mexico, because the insurance policy’s territory-coverage provision and definition of “accident” excluded coverage.  Read more...

U.S. DISTRICT COURT HOLDS THAT INSURER’S POST-SUIT ELECTION OF ACCEPTANCE OF ITS AGENT’S LIABILITY RESULTS IN IMPROPER JOINDER

Recently, the United States District Court for the Western District of Texas concluded that insurer’s post-suit acceptance of its agent’s liability resulted in improper joinder of the agent.  Read more...

FIFTH CIRCUIT UPHOLDS DISTRICT COURT DECISION THAT INSURER’S STOWERS DUTY APPLIED TO POST-JUDGMENT SETTLEMENT OFFER AND THE INSURER VIOLATED THAT DUTY

Recently, the U.S. Appeals Court for the Fifth Circuit upheld a decision by the U.S. District Court for the Southern District of Texas that ACE American Insurance Company (“ACE”) violated its Stowers duty by not accepting a settlement offer at trial before the jury rendered a verdict and therefore had to contribute to the amount the excess insurer, American Guarantee and Liability Insurance Company (“AGLIC”), paid towards the post-judgment settlement amount.  Read more...

FEDERAL COURT UPHOLDS TESTIFYING EXPERTS, INCLUDING MDJW’S CHRISTOPHER MARTIN, IN CASE INVOLVING DISPUTE BETWEEN A LAW FIRM AND ITS MALPRACTICE INSURER

A federal judge in Austin recently denied competing motions to strike filed by a law firm and its malpractice insurer, New York Marine and General Insurance Company (“NYM”). Ryan Law Firm v. New York Marine and General Insurance Company, No. A-19-CV-629-RP, 2021 WL 828494 (W.D. Tex. March 3, 2021) involved allegations by a law firm that NYM wrongfully failed to settle a malpractice suit and thus breached its contract with the law firm and acted in bad faith in handling the claim.  Read more...

FIFTH CIRCUIT AFFIRMS DISTRICT COURT’S RULING GRANTING SUMMARY JUDGMENT IN FAVOR OF INSURED IN HURRICANE HARVEY DISPUTE

Recently, the U.S. Appeals Court for the Fifth Circuit affirmed the summary judgment the district court granted in favor of Playa Vista Conroe (“Playa Vista”) regarding a Hurricane-Harvey related property damage claim made by Playa Vista with its insurer.  Read more...