Case Notes

To err is human. To disagree on an appraisal award is not grounds to set it aside.

June 28th, 2018 By Anne-Marie Abarado

In Abdalla v. Farmers Ins. Exchange, No. 07-17-00020-CV, 2018 WL 2220269 at * 1 (Tex. App.—Amarillo May 14, 2018, no pet. h.), the Amarillo Court of Appeals rejected an insured’s attempt to convert a disagreement among appraisers regarding the extent of damage into a reason to set aside a valid appraisal award. The court of appeals affirmed the trial court’s decision denying Abdalla’s motion to vacate the umpire’s award and granting summary judgment in favor of Farmers.   Abdalla sued Farmers alleging breach
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Appraisal Payments: Don’t be late for this very important date.

June 26th, 2018 By Todd Key

A recent opinion out of the Western District of Texas, Kezar v. State Farm Lloyds, 1:17-CV-389-RP, 2018 WL 2271380, at *1 (W.D. Tex. May 17, 2018), adds further support for post-appraisal summary judgments on extra-contractual claims, but also suggests a strict analysis of whether or not appraisal payments are timely. The Kezar plaintiffs filed their lawsuit against State Farm asserting causes of action for breach of the insurance policy, statutory and common law bad faith, unfair settlement practices, negligence and
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The Burden of Allocation

June 17th, 2018 By Jeffrey C. Glass

Insured cannot arbitrarily allocate settlement proceeds to non-covered damages in order to preserve coverage claims against a non-contributing insurer. Judge Lee Rosenthal, of Texas’ U.S. Southern District, recently prohibited an insured from unilaterally allocating general settlement amounts from its subcontractors to uncovered damages, in order to preserve claims against insurers “that would cover the damages if the loss was properly allocated to that policy.”  In  Am. Guarantee & Liab. Ins. Co. v. United States Fire Ins. Co., 255 F. Supp.
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Insurance Coverage for Punitive Damages – The Discussion Continues

May 15th, 2018 By Tara Mireur

The Court of Appeals of Texas, Fourth District, sitting en banc, has denied a motion for en banc reconsideration.  The case, Farmers Texas County Mutual Insurance Company v. Zuniga, 2018 WL 1310157, involved the question of whether or not a form automobile insurance policy covered exemplary damages.  In November 2017, the San Antonio Court of Appeals held that the policy, under which the insurer agreed to “pay damages for bodily injury,” did not provide coverage for a claim for punitive
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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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Punctuation Station: The Saga of the Oxford Comma

April 20th, 2018 By Rachel Shores

“For want of a comma, we have this case.” This is the First Court of Appeals’ opening sentence to a thirteen-page opinion analyzing the effect that a little piece of punctuation, or lack thereof, had on its interpretation of a legislative provision. That “little piece of punctuation” is commonly known as the Oxford comma, and its absence ultimately led to a steep damages award. Before we turn to the opinion itself, let’s re-cap what the Oxford comma is. Also called
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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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Insurer Entitled to Summary Judgment in Post-Menchaca Appraisal Case

April 9th, 2018 By Anne-Marie Abarado

In Wellington Ins. Co. v. Banuelos, No. 04-17-00365-CV, 2018 WL 626534, at * 2 (Tex. App.—San Antonio Jan. 31, 2018, no pet. h.) the San Antonio Court of Appeals reaffirmed its decisions in Garcia v. State Farm Lloyds and Ortiz v. State Farm Lloyds that “an insurer’s payment of an appraisal award entitled an insurer to summary judgment on the insured’s contractual and extra-contractual claims” and that the Supreme Court’s decision in USAA Tex. Lloyds Co. v. Menchaca did not require them
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Plaintiff Cannot Checkmate Carrier With Pre-Suit Appraisal Reference

March 20th, 2018 By Todd Key

In the recent case of In re Allstate Vehicle & Prop. Ins. Co., 09-18-00024-CV, 2018 WL 1003794, (Tex. App.—Beaumont Feb. 22, 2018, no pet. h.), the Beaumont Court of Appeals confirmed per curiam that insurance carriers do not waive their right to appraisal in response to pre-suit demands by claimants. With the exception of an unusual reference to appraisal by the claimant, the facts of the case were relatively typical. After an initial inspection and payment on a claim for
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Defining Damages in a CGL Policy – Do Attorney’s Fees Make the Cut?

March 13th, 2018 By Sarah Scott

Given the broad nature of most commercial general liability (CGL) policies, it’s not surprising that creative attorneys continue to press new arguments about costs and fees that should (or should not) be covered. In most CGL policies, the insuring agreement says the carrier will pay “those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies…” Problematically, many policies don’t define the term “damages,” which leaves wiggle
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