Bad Faith


Advertising full coverage does not establish a misrepresentation where amount of loss is disputed.

May 8th, 2018 By Sheila Tan

Plaintiffs in first-party property insurance cases often include a misrepresentation claim, typically arguing that the carrier’s failure to pay sufficient amount for covered damage to the property constitutes a misrepresentation. While state court judges may sometimes allow these claims to go to a jury, Texas law clearly holds that disputes about the amount of the loss do not constitute misrepresentations of the policy. In Click v. State Farm Lloyds, No. 1:17-CV-00108-BL, 2018 WL 1322167 (N.D. Tex. March 13, 2018) (slip
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Menchaca on Rehearing: Simpler than it Seems!

April 13th, 2018 By David L. Plaut

The opinion on rehearing in Menchaca came out today.  What initially seems like a daunting read, with Justice Boyd authoring the 65-page plurality opinion, is actually quite clear.  A majority of the Court unanimously reaffirmed the legal principles of the prior Menchaca opinion and agreed to reverse the policyholder’s judgment on her Hurricane Ike/homeowner’s claim and to remand for a new trial.  Slip op. at *1.  The debate between the justices on rehearing – with plurality, concurring, and dissenting opinions
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Please Join Us For a Texas-sized Webinar

February 9th, 2018 By Catherine Hanna

Hanna & Plaut is pleased to announce that Catherine will be speaking at an Insurance Council of Texas Webinar on Tuesday, February 13, 2018 on bad faith and assignment issues. Please join us for this exciting presentation. Texas-sized Issues: Assignment of Benefits and Bad Faith Tuesday, February 13, 2018 11:00am Speaker: Catherine Hanna Two important legal topics relevant to many of ICT member companies, assignment of benefits and bad faith, will be detailed and discussed by Austin attorney Catherine Hanna in
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Bad Faith in Texas Survives . . . this Round

April 7th, 2017 By David L. Plaut

The USAA v. Menchaca opinion, which has been eagerly (and anxiously) awaited by insurers and insureds was released today. The Texas Supreme Court reversed and remanded the judgment in the policyholder’s favor in this Hurricane Ike case.  The jury had determined there was no breach of contract, but found an Insurance Code violation, including an unfair or deceptive practice and an unreasonable investigation.  The jury awarded Plaintiff $11,350 in damages. In reversing the judgment, the Court announced the five following important principles
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South Texas Jury Hits USAA with Big Damages in Hailstorm Case

February 28th, 2017 By David L. Plaut

  Five years after a South Texas hail storm, a Hidalgo County jury awarded homeowner John Griffith damages of $1,244,500 against USAA Texas Lloyd’s Co. (“USAA”) and at least $200,000 against claim adjuster AllCat Claims Service, L.P. (“AllCat”).  Griffith – a principal of the McAllen-based Griffith Law Group – filed the lawsuit alleging the defendants intentionally undervalued the cost of damages to his home during the inspection process.  He alleged the 2012 hail storm damaged his roof, pool, pool deck,
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San Antonio Court of Appeals Issues Strong Appraisal Opinion

January 30th, 2017 By Sheila Tan

Adding to a line of Texas cases that found appraisal resolved all issues regarding a dispute over the cost and scope of damage to a homeowner’s property, the Fourth Court of Appeals in San Antonio recently affirmed a trial court’s decision to grant summary judgment after completion of appraisal and payment of the appraisal award by State Farm in Garcia v. State Farm Lloyds. No. 04-16-00209-CV, 2016 WL 7234064 (Tex. App.–San Antonio Dec. 14, 2016, no pet. h.). In Garcia,
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New Fifth Circuit Decision Revisits Stowers Liability in the Multiple-Insured Context

January 7th, 2017 By David L. Plaut

If you were paying attention to friends and family over the holidays and not reading slip opinions, you may have missed the recent Fifth Circuit decision in OneBeacon Ins. Co. v. T. Wade Welch & Assocs., 841 F.3d 669 (5th Cir. 2016).   Wade Welch held that a valid Stowers demand could offer to settle with one and not all insureds under a policy.   Id. at 677-82. Under Texas law, an insurer may be liable for negligently failing to settle within
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