Case Notes


In Re State Farm Requires Resolution of the “Car Crash” Case Before Consideration of any “Bad Faith” Claims

March 30th, 2021 By David L. Plaut

On March 19, 2021, the Texas Supreme Court issued an Opinion by Justice Blacklock reaffirming the continuing importance of its Brainard decision in the uninsured/underinsured (“UM/UIM”) motorist context. See In re State Farm Mutual Auto Ins. Co. et al. Without dissent, the Court held that UM/UIM claimants “must first obtain determinations of the third-party drivers’ liability and the amount of damages” in order to establish coverage. Slip Op. at *10. Because there was no judgment establishing the liability of the
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Talking about Covid-19 and the car wash: Agent was improperly joined and virus exclusion applied to bar business interruption coverage.

January 31st, 2021 By Sheila Tan

The joinder of an insurance adjuster or agent as a defendant, in a case against an insurance carrier, is a commonly used strategy to defeat diversity. Many attorneys for insurance practitioners have found that challenging joinders of insurance agents and adjusters can be an exercise in futility given the broad reach of the Texas Insurance Code. But a district court in the Western District of Texas recently affirmed the importance of challenging a plaintiff’s failure to allege specific, affirmative misrepresentations
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Texas Supreme Court Hears Oral Argument on Allstate v. Irwin

January 7th, 2021 By David L. Plaut

The Texas Supreme Court heard oral argument on Thursday, January 7, 2021 in Allstate v. Irwin, an underinsured motorist case out of San Antonio addressing the availability of attorneys’ fees in such cases.  Plaintiff Daniel Irwin sued Allstate seeking a declaration that he was entitled to recover damages resulting from the wreck under his UM/UIM benefits policy and attorneys’ fees.  On appeal, Allstate argued the trial court abused its discretion in awarding Irwin declaratory relief and attorneys’ fees. Oral argument
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Federal court holds pollution exclusion does not apply to injuries caused by direct, personal exposures

October 11th, 2020 By Jeffrey C. Glass

In Canal Indemnity Company v. CalJet II, 4:2019cv02945  (opinion available on PACER), a Texas federal judge recently held pollution exclusions did not bar coverage for a suit involving a truck driver who allegedly died from cancer caused by exposure to the carcinogen benzene in gasoline, a cargo the driver loaded and unloaded. Although Texas courts have previously held that pollution exclusions are not limited to typical cases of environmental pollution, U.S. District Judge Alfred H. Bennett of the Southern District
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Fifth Circuit Affirms No Duty To Defend Against Criminal Charges Under Pollution Liability Policy

September 27th, 2020 By Erin Holmes

On September 4, 2020, the United States Court of Appeals for the Fifth Circuit upheld a district court’s decision that AIG Specialty Insurance Company (“ASIC”) was not liable for more than $12 million dollars in legal expenses incurred by Waste Management, Inc. (“Waste”) for defending criminal charges that were brought against the company for environmental contamination, agreeing with the lower court that there was no duty to defend the criminal case under the insurer’s pollution liability policy.  See Waste Management
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COVID-19 Case Note: Government mandated shutdown did not cause direct physical loss required to trigger business interruption coverage.

September 13th, 2020 By Sheila Tan

For many businesses in Texas that have been shut-down or restricted by state and local government orders due to the ongoing Covid-19 pandemic, one of the most pressing questions raised is: is there business interruption coverage? And for at least some barber shops in Bexar County, the Western District has answered with a definitive no. In Diesel Barbershop et al. v. State Farm Lloyds, No. 5-20-CV-461-DAE, Plaintiffs run barbershop businesses that were classified as “non-essential businesses” and forced to cease
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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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Court nixes attempted end-run around Brainard.

July 20th, 2020 By Lauren Burgess

The Southern District of Texas, McAllen Division recently issued an opinion in a UIM case that precludes the recovery of extra-contractual damages absent a finding that the insured was entitled to benefits. In Garza v. Allstate, the plaintiff brought suit against Allstate for violations of Chapter 541 of the Texas Insurance Code on the basis that Allstate denied his underinsured motorist claim “without providing any explanation.” Plaintiff specifically alleged that he was “not seeking any of the proceeds of the
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Texas Supreme Court finds for carriers in Air Ambulance decision.

July 6th, 2020 By Robert Josey

On June 26, 2020, in a 7/2 ruling, the Texas Supreme Court issued its decision in Texas Mutual Insurance Company v. PHI Air Ambulance, reversing the Austin Court of Appeals and holding that: (1) federal law does not pre-empt the Texas Department of Insurance – Division of Workers’ Compensation (the Division) from determining fair and reasonable rates for air ambulance services; and (2) federal law does not require the Division to mandate Carriers pay more than a fair and reasonable
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Fourth Court of Appeals Imposes New Post-Accident Duty on Auto Insurers

May 31st, 2020 By Catherine Hanna

            On April 1, 2020, a divided en banc Fourth Court of Appeals imposed a new post-accident duty on auto insurers. In a case of first impression, the Court reversed a Bexar County trial court’s summary judgment in favor of an auto insurer. The Appellate Court found that the auto insurer had a duty to exercise reasonable care when it instructed its insured driver to take photographs of her vehicle immediately following a one-car accident because of the special relationship
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