Bad Faith


Unclean hands don’t muddy excess carrier’s subrogation action.

April 17th, 2023 By Jeffrey C. Glass

In a recent decision, a U.S. District Court held a primary insurer could not assert an equitable unclean hands defense against the excess insurer in response to an equitable subrogation claim in a Stowers case. Westport Ins. Corp. v. Pennsylvania Nat’l Mut. Cas. Ins. Co., No. 4:16-CV-01947, 2023 WL 2574982, at *1 (S.D. Tex. Mar. 17, 2023). A marina in north Texas was damaged in a storm after it contracted with Insurance Alliance (IA) to procure full insurance coverage .
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Severance makes the appellate court’s heart grow fonder.

March 27th, 2022 By Sheila Tan

A recent Thirteenth Court of Appeals opinion reminds us of when it is appropriate to seek a severance and abatement of extracontractual claims from a contract claim for policy benefits, while also clarifying the scope of permissible discovery in such cases. In re Old Republic Ins. Co., 13-21-00264-CV involved a suit filed by Uhr Real Estate, Inc. against Old Republic. The petition alleged that homeowners David and Valerie Fallas had contracted with Uhr to repair damage done by Hurricane Harvey
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The More Things Change …The More They Stay the Same

August 11th, 2020 By Tara Mireur

The San Antonio Court of Appeals recently granted Progressive Insurance Company’s petition for writ of mandamus and directed the trial court to vacate its order denying Progressive’s motion to sever and abate the plaintiff’s extra-contractual allegations. In In re Progressive County Mutual Insurance Company, 2020 WL 3815927 (Tex. App. – San Antonio July 8, 2020, n.p.h.), the plaintiff, after settlement with the tortfeasor, brought a declaratory judgment action for recovery of UIM benefits under her insurance policy and alleged violations
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Chapter 542A and the Importance of the Presuit Notice Letter

December 1st, 2019 By Lauren Burgess

Chapter 542A of the Texas Insurance Code applies to wind and hail claims filed on or after September 1, 2017, as a response to concerns raised regarding the handling of insurance claims arising out hailstorms and other forces of nature. The goal of Chapter 542A was to “mitigate the growing trend of abusive severe weather event lawsuits” and to address the growing number of weather-related lawsuits against property insurers, which “is motivated by profit, not actual damages to real property,
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The Western District Takes a Wrong Turn on the UM/UIM Highway

October 18th, 2019 By David L. Plaut

A new federal UM/UIM “bad faith” decision out of the San Antonio Division of the Western District of Texas – Civil Action No. SA-19-CV-00180-FB-ESC, Trejo v. Allstate Fire and Casualty Ins. – involves claims against an insurance adjuster and allegations of improper joinder remand.  The magistrate’s report in Trejo found an Insurance Code cause of action against the adjuster under Chapter 541 despite the Texas Supreme Court’s decision in Brainard v. Trinity Universal Ins. Co., 216 S.W.3d. 809 (Tex. 2006).
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A Cautionary Tale. . .

September 17th, 2019 By Tara Mireur

In USAA Texas Lloyds Company v. Griffith, 2019 WL 2611015 (Tex.App. –Corpus Christi, June 26, 2019), the Corpus Christi Court of Appeals affirmed a Hidalgo County jury verdict that awarded Plaintiff John Griffith $776,000 after USAA seemingly performed an unreasonable investigation of his roof claim. The case provides insurers with an example of how a simple oversight can turn a bona fide dispute into a bona fide mess. Griffith held a USAA policy on his home in McAllen, Texas.  His
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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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