Case Notes


Is Eight Enough, Part 2 – Texas Supreme Court Justices Signal Skepticism of Extrinsic Evidence Exception

February 9th, 2020 By Eric S. Peabody

On January 8, 2020, the Texas Supreme Court heard argument on a certified question from the U.S. Court of Appeals for the Fifth Circuit in State Farm Lloyds v. Richards, 784 Fed. App’x 247 (5th Cir. 2019), certified question accepted (Sept. 13, 2019), which asks: Is extrinsic evidence permissible—and the strict eight-corners rule inapplicable—in determining the duty to defend if the policy does not require defense of groundless, false or fraudulent allegations? Jeff Glass previously blogged about this certified question here.
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A Judicially Created Catch 22? The Settlement Without Consent Clause

February 3rd, 2020 By Karla Huertas

The uninsured/underinsured (UM/UIM)  coverage portion of Texas automobile insurance policies contains a “settlement without consent” provision which requires an insurer to obtain the consent of its insured before settling any claim. This condition exists to protect the interests of insurance carriers in recovering from a responsible party money paid to the insured in connection with an accident. Recently, in Davis v. State Farm Lloyds, Inc., 2019 WL 5884405 (Tex. App.—Dallas Nov. 12, 2019, no pet. h.), the Fifth Court of
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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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Is Eight Enough? The Texas Supreme Court may answer that question when it tackles the eight-corners rule.

September 24th, 2019 By Jeffrey C. Glass

The Fifth Circuit Court of Appeals recently certified to the Texas Supreme Court, and the latter accepted, a question that could end up undermining the “eight corners” rule.  State Farm Lloyds v. Richards, 18-10721, 2019 WL 4267354, at *3 (5th Cir. Sept. 9, 2019), certified question accepted (Sept. 13, 2019) Jayden Meals was killed in an all-terrain vehicle accident while under the temporary care of his grandparents, the Richards. Jayden’s mother sued the Richards in state court alleging they were
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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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In Win for Insurers, Court Rejects Prejudice Limitation on Express Claim Reporting Condition

August 18th, 2019 By Eric S. Peabody

Following a hail storm in April 2016, insured Blanco West Properties failed to discover and report damage to the roof of its commercial building until October-November 2017. Blanco West’s insurer, Arch, denied the claim based on a policy endorsement that required hail-related claims to be brought within one year of the event. Appealing the district court’s grant of summary judgment in favor of Arch, the insured argued that Arch was required to demonstrate it was prejudiced by Blanco West’s failure
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“You Can’t Make Me”—Court Recognizes Limits on Authority to Order Specific Adjuster’s Mediation Attendance

July 12th, 2019 By Eric S. Peabody

In the course of litigation stemming from a motor vehicle accident, an El Paso trial court ordered the parties and their representatives “with full settlement authority” to mediation.  The defendant’s insurer, Allstate, sent a representative who was not the handling adjuster to the mediation.  The mediation was unsuccessful.  The plaintiff subsequently filed a motion to compel attendance of the adjuster handling the claim at a second mediation, which the court granted.  The adjuster sought mandamus relief from the trial court’s
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Barbara Technologies and Ortiz Allow Attorneys’ Fees and Late Payment Penalties Despite Insurer’s Payment of Appraisal Award.

July 1st, 2019 By David L. Plaut

“I come, then, to bury appraisals, not praise them.” -Chief Justice Nathan Hecht, Barbara Technologies (dissenting). In its Barbara Technologies and Ortiz decisions last Friday, the Texas Supreme Court resolved the troublesome question of whether an insurer’s payment of an appraisal award necessarily precludes common law and statutory “bad faith,” as well as prompt payment penalties under the Texas Insurance Code.  Writing for a 6-3 majority in Barbara Technologies, Justice Paul Green found in favor of the policyholder and held
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You Can’t Always Get What You Want (if what you want is a declaratory judgment on non-liability)

June 16th, 2019 By Jeffrey C. Glass

In re Houston Specialty Insurance Co., 569 S.W.3d 138 (Tex. Jan. 25, 2019) is a mandamus case involving an insurer’s motion to dismiss a declaratory judgment action by a law firm seeking a declaration of non-liability for malpractice in representing the insurer and advising it did not owe a defense in an underlying suit.  The Texas Supreme Court ultimately held the Rule 91a motion was proper because the declaratory judgment action seeking non-liability was without merit. [Ed. Note – Rule
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