Case Notes


Consent to Settle Does Not Establish UM/UIM Coverage

February 12th, 2018 By Sheila Tan

A recent federal case out of the Eastern District of Texas, Sherman Division, highlights an important but occasionally misunderstood rule in UM/UIM litigation – that the insurer’s consent to an insured’s settlement with the third-party driver is no substitute for a legal judgment establishing liability and damages, which remains a condition precedent to coverage.   The phrase “legally entitled to recover” under the UM/UIM section of the auto policy means that a plaintiff must obtain a judgment against the third-party driver
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Fifth Circuit Further Expands Additional Insured Coverage for General Contractors

February 5th, 2018 By Eric S. Peabody

In December 2017, the Fifth Circuit gave general contractors an early holiday gift wrapped in the opinion styled Lyda Swinerton Builders, Inc. v. Oklahoma Surety Co., 877 F.3d 600 (2017).  Swinerton was hired in 2003 as the general contractor on a ten-story office building in College Station, Texas, and contracted with several subs, including A.D. Willis Company, whose scope of work was identified in the subcontract as “ROOFING, ORNAMENTAL METAL, METAL WALL PANELS, And ROUGH CARPENTRY.”  Id. at 605. The
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Texas Supreme Court Broadly Construes Scope of Judicial Review of Workers’ Compensation Decisions

January 30th, 2018 By Robert Josey

    At the tail end of 2017, the Texas Supreme Court issued a decision which has rather far-reaching implications for the various participants in the Texas Workers’ Compensation appellate and judicial review systems.  In State Office of Risk Management v. Edna A. Martinez  the court held that: An “issue” for purposes of dispute resolution is broadly construed as the disputed matter related to a workers’ compensation claim (i.e. compensability, disability, extent-of-injury, etc.) An “issue” is not a legal argument advanced
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Court Hammers Roofer Who Was Acting as an Adjuster

September 25th, 2017 By Sarah Scott

Insurers have frequently battled with sometimes-unscrupulous parties who encourage homeowners to file claims for unneeded repairs. (These battles, in fact, spurred recent legislation that you can read about on our blog here and here.) A recent decision out of the Fort Worth Court of Appeals makes it clear that contractors who try to get around regulations for public adjusters – in other words, who offer to do work and seek payment from insurance companies – do so at their own
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Anti-Concurrent Causation Clause Renders “Status” Analysis in Surface Water Exclusion Largely Immaterial

September 6th, 2017 By Jeffrey C. Glass

Unfortunately for many homeowners recovering from Hurricane Harvey-related flooding, most Texas homeowners’ policies will not provide coverage for their claims. Damage caused by floods and surface water is excluded regardless of any other contributing cause of the loss. This was not always the case. In State Farm Lloyds v. Marchetti, 962 S.W.2d 58, 61 (Tex. App.–Houston [1st Dist.] 1997, pet. denied), the Court ruled that a surface water or flood exclusion did not apply to damage to a house resulting
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BBQ Season Brings Coverage Conundrum

July 26th, 2017 By Anne-Marie Abarado

It’s camping and barbecue season, and that usually involves more propane gas usage.  Injuries resulting from the emission of propane gas may not be covered under certain insurance policies.  Commercial general liability, homeowner, and auto insurance policies often have a pollution exclusion which excludes coverage for damage to property or injuries resulting from certain pollutants. Propane is classified as an asphyxiant gas and exposure to levels above 2,100 ppm is considered immediately dangerous to life or health. See The National
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Menchaca At Work: Houston Court Strengthens Appraisal Defenses, Requires Independent Injury for EC Claims

July 11th, 2017 By Eric S. Peabody

Even before the dust has settled on the Texas Supreme Court’s decision in USAA v. Menchaca, — S.W.3d —, 2017 WL 1311752 (Tex. Apr. 7, 2017, mot. reh’g filed), Texas intermediate appellate courts are busily construing its holdings. In National Security Fire & Casualty Co. v. Hurst, No. 14-15-00714-CV, 2017 WL 2258243 (Houston [14th Dist.] May 23, 2017, n.p.h.), the court used Menchaca to reverse a judgment in favor of the insured and render judgment for the carrier in a
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Great American Ins. Co. v. Hamel: The “Fully Adversarial Trial” On Trial

June 27th, 2017 By Jeffrey C. Glass

In the much-anticipated Hamel decision, the Texas Supreme Court finally addressed the definition of a “fully adversarial trial” under the Gandy rule, holding that a reviewing court must focus on the insured’s incentives to contest liability, rather than on retroactive evaluation of tactical trial details.   Great American Ins. Co., et al v. Hamel, — S.W.3d –, No. 14-1007, 2017 WL 2623067  (Tex. June 16, 2017) (citing State Farm Fire & Casualty Co. v. Gandy, 925 S.W.2d 696, 714 (Tex. 1996)). The decision
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Who’s on First – The Continuing Dilemma of Primary/Excess Issues

June 8th, 2017 By Jeffrey C. Glass

In a recent decision, Judge Sparks of the Western District of Texas addressed allocation of insurance coverage among purportedly primary and excess policies. Starnet Ins. Co. v. Fed. Ins. Co., A-16-CA-664-SS, 2017 WL 1293578, at *5 (W.D. Tex. Apr. 6, 2017). Three policies were relevant to coverage for local pollution damage caused by an oil well blow-out for which the insured, BBX, was responsible. Two of the policies were not typical CGL policies but were specialty coverages written for oil
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Indemnity: Don’t get harmed by your “hold harmless” agreement!

May 23rd, 2017 By Eric S. Peabody

At a certain level of sophistication, contracting parties begin incorporating indemnity provisions in their contracts as a risk-assignment mechanism. Without input from knowledgeable counsel, these provisions can impose an unexpected burden on unsuspecting parties, fail to offer the protection sought by the provision’s proponent, or lull the parties into believing that insurance is unnecessary or redundant. The arcane rules governing the enforcement of indemnity agreements and the continuing confusion surrounding their application make them the ultimate “trap for the unwary.”
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