Proposal for Flood-Prone Areas Would Affect Texas Consumers and Insurance Industry

A bill filed in the Texas Senate would require home sellers to disclose if their property is in a flood-prone area or if it has already flooded, according to a post on the website of Androvett Legal Media & Marketing.

The legislation from Houston-area Sen. Joan Huffman is meant to prevent a repeat of some of the flooding damage from Hurricane Harvey, when many people learned too late that their homes were built in flood plains or in reservoir areas designed to catch floodwaters.

Dallas insurance attorney Stacy Thompson of Perry Law P.C. said she believes the measure, if adopted, could lead to better insurance coverage for consumers, but would also affect insurance companies.

“Knowledge is certainly power. However, the implications of this bill reach far beyond home ownership,” she said. “Undoubtedly disclosing this information would affect property values, increase insurance premiums and have a lasting effect on the housing market in the coastal counties of Texas. Moreover, the bill would allow insurance companies to gain a better understanding of the risk they are insuring and hopefully offer a better overall product to customers. That would result in better coverage and a better outcome when natural disasters inevitably strike.”

 

 




‘An’ Versus ‘Any’: When One Word Makes a Profound Difference in an Insurance Contract

There may be certain circumstances based upon specific policy wording in a commercial general liability insurance policy in which there is coverage for an insured-employer for its vicarious liability arising out of the intentional and excluded conduct of its employees, writes Jeff Collins in an article for Jones, Skelton & Hochuli.

He discusses a case in which the words “the,” “an” and “any” have been assigned significant importance in the case law, and are also at issue in cases examining other liability exclusions.

In the case, a  court held that the phrase “any insured” in an exclusionary clause means something more than the phrase “an insured.”

Read the article.

 

 

 




PG&E’s Legal Exposure to Liability for Fires Could Cost Customers – Or Lead to Bankruptcy

If Pacific Gas and Electric Company is found liable for the devastating California fires now burning, the company’s customers could be on the hook to pay the bill, or even lead to a PG&E bankruptcy, according to The New York Times.

“Many fires in recent years have been caused by downed power lines serving California’s utilities. State officials have determined that electrical equipment owned by PG&E, including power lines and poles, was responsible for at least 17 of 21 major fires in Northern California last fall. In eight of those cases, they referred the findings to prosecutors over possible violations of state law,” write Times reporters Ivan Penn and Peter Eavis.

Some victims of the latest fires have sued PG&E, alleging negligence and health and safety code violations by the utility company.

Read the NY Times article.

 

 




IADC Journal Covers Asbestos, Punitive Damages and Manufacturers’ Legal Hurdles

The International Association of Defense Counsel (IADC), an invitation-only global legal organization for attorneys who represent corporate and insurance interests, has published its fourth quarter 2018 Defense Counsel Journal (DCJ) with articles on current trends in the practice of law.

The current DCJ issue’s articles explore asbestos tort reform on the state level, the growth of punitive damages in Anglo-Canadian contract law, and legal hurdles that manufacturers face when launching products in the United States.

In a release, the organization, said the DCJ is a quarterly forum for topical and scholarly writings on the law, including its development and reform, as well as on the practice of law in general. DCJ articles are written by members of the IADC, which is a 2,500-member, invitation-only, worldwide organization that serves its members and their clients, as well as the civil justice system and the legal profession.

The DCJ is available for free and without a subscription via the IADC’s website.

The current DCJ issue is the first to be overseen by new editor and former IADC board member Kenneth R. Meyer, a partner in the products liability practice group at McCarter & English, LLP, in Newark, N.J. The issue also is the first under the leadership of new IADC president Craig A. Thompson, a partner at Venable LLP.

Following are brief summaries of key articles included in the fourth quarter 2018 issue of the DCJ:

— “The More Things Change: Bankruptcy Trust Reform and the Status Quo in Asbestos Litigation” – The article debunks plaintiffs’ lawyers’ arguments that trust transparency reforms would delay litigation, deny compensation to the most sympathetic of plaintiffs, and divest plaintiffs of their traditional control over the trust and tort systems. The authors explain how trust transparency reforms have not delayed litigation and have, in fact, accelerated compensation from the asbestos trusts. The article also describes that, where reforms have been enacted, they have achieved their purpose of fostering communication within the two-tiered system of asbestos compensation so that juries can properly account for all of a plaintiff’s exposures to asbestos.

— “Moving Beyond Uberrima Fides? The General Duty of Honesty in Contractual Performance and Punitive Damage Awards in Anglo-Canadian Contract Law” – The article’s authors suggest that the characterization of punitive damages as “the bane of corporate defendants” has perhaps never been more true under Anglo-Canadian contract law. This article demonstrates that while punitive damages for pure breach of contract are undoubtedly exceptional remedies at common law, they are generally larger and more common than ever before, which marks an extraordinary development in Anglo-Canadian contract law considering that only 30 years ago punitive damages were barred for pure breach of contract.

— “Entering the U.S. Market: Legal Hurdles That Manufacturers Must Overcome” – Investigates the life cycle of a product’s development and marketing and provides insight into some of the most common legal hurdles – especially consumer protection lawsuits – faced by manufacturers entering the U.S. market.

 

 




Company Couldn’t Cut Disabled Worker’s Benefits, So It ‘Went Rogue’ and Had Him Arrested, Lawyer Says

Over the past 15 years, Key Risk Insurance Co. has made multiple trips to courts and before the North Carolina Industrial Commission to argue that Mario Seguro-Suarez has been faking his symptoms from an on-the-job injury and that his benefits should be cut off.

The Charlotte Observer reports documents show that the company disregarded years of medical opinions — including several from its own doctors — that Seguro-Suarez was indeed left disabled from his fall at a Southern Fiber factory. The 2003 head-first fall from 18 feet onto a concrete floor left him disabled.

After years of failing to cut off payments to Seguro-Suarez, the insurance company’s private detective “took what a detective would describe as misleading information to Lincolnton police to accuse Seguro-Suarez of insurance fraud. He was arrested, jailed and later indicted,” reporter Michael Gordon writes.

That attempt drew a withering rebuke from a judge, and now Seguro-Suarez is suing for malicious prosecution.

Read the Charlotte Observer article.

 

 

 




5 Insurance Tips Before the Storm Hits

When a storm is headed in your direction, it’s critical to prepare for an emergency by making sure you have medical supplies and enough food and water to sustain your family. The aftermath of a storm can be devastating. You should be equally prepared on the insurance front to protect your home and get back on your feet as soon as possible.

Dallas insurance litigator Meloney Perry of Perry Law P.C. offers some storm insurance tips to keep in mind before and after a storm hits.

1. Ensure You Have Adequate Amounts of Insurance and Correct Coverage

Unfortunately, insurance is not a “one size fits all” solution. Simply having insurance coverage sometimes isn’t enough. Educate yourself and understand the adequate types and amounts of insurance that fit your needs.

Extra Credit: Research and compare multiple insurance plans while revisiting your coverage often.

2. Talk with Your Insurance Agent

Do this at least twice a year to revisit coverages—this needs to be done before a storm hits or you may find yourself without coverage you thought you had. Tap into your agent’s knowledge and don’t be shy about asking questions.

Extra Credit: Keep agent information in your telephone and in the cloud for easy access in case of an emergency.

3. Don’t Just Take Out ID Cards, Read Your Insurance Policies

Knowledge is power. If you know what your policy does and doesn’t cover, you’ll be in a better position to work with your insurance carrier. If you don’t understand what is included in our policy, call your agent. (See tip No. 2.)

Extra Credit: Research the Texas Department of Insurance Website for easy Q&A and forms. They’re a great resource.

4. In the Event of Damage or Loss, Take Pictures and Keep All Receipts Handy

Insurance carriers want all the supporting evidence for your claim they can get their hands on. This will allow them to assess the situation and process your claim faster than others.

Extra Credit: Make and keep multiple copies. Upload everything to the cloud for easy access and keep hard copies with a relative or in a fire-proof box.

5. Have A Proof of Loss Form Available for Easy Filing

A proof of loss form will identify the value of the items damaged or lost in the storm. Completing this form quickly and accurately can help with the claims process and avoid possible headaches, such as underpayment, delay or denial of your claim.

Extra Credit: Keep a printout of your insurance policy to determine what to include in the form.

 

 




Feds Settle Huge Whistleblower Suit Over Medicare Advantage Fraud

MedCity News reports that one of the nation’s largest dialysis providers will pay $270 million to settle a whistleblower’s allegation that it helped Medicare Advantage insurance plans cheat the government for several years.

Fred Schulte explains:

The settlement by HealthCare Partners Holdings LLC, part of giant dialysis company DaVita Inc., is believed to be the largest to date involving allegations that some Medicare Advantage plans exaggerate how sick their patients are to inflate government payments. DaVita, which is headquartered in El Segundo, Calif., did not admit fault.

Read the MedCity News article.

 

 




Florida Supreme Court Deals Blow to Geico in ‘Bad Faith’ Dispute

In a case stemming from a fatal car accident a dozen years ago, the Florida Supreme Court has backed a jury’s conclusion that GEICO General Insurance Co. acted in “bad faith” in the way it handled a customer’s claim, reports The Daytona Beach News-Journal.

The 4-3 ruling came in a multimillion-dollar case that has been watched by the insurance industry and trial attorneys,” writes reporter Jim Saunders. “The ruling reinstated a bad-faith verdict against GEICO after the 4th District Court of Appeal had overturned the jury’s decision.”

The court’s opinion disputed the appeals court’s conclusion that there was “insufficient” evidence that GEICO had acted in bad faith. It said that the appeals court had not properly applied legal precedents in its decision.

Read the News-Journal article.

 

 




Texas Court Construes Breach of Contract Exclusion Narrowly in Duty-to-Defend Case

In a victory for policyholders, a recent decision from the Western District of Texas narrowly construed a common breach-of-contract exclusion and held that the insurer had a duty to defend its insured against an underlying lawsuit over construction defects, according to the Hunton Insurance Recovery Blog.

“The allegations potentially supported a covered claim, as the conduct of the insured’s subcontractor could have been an independent, ‘but for cause of the property damage at issue, thereby triggering the insurer’s duty to defend’,” explain Lorelie S. Masters and Tae Andrews.

“Many CGL policies have similar or identical breach-of-contract exclusions,” they write. “Longstanding principles of law regarding the duty-to-defend analysis hold that exclusions should be narrowly construed against the insurer and in the insured’s favor, and that when making a duty-to-defend analysis, any doubts or ambiguities should be resolved in the insured’s favor.”

Read the article.

 

 




State Farm Ducks Racketeering Trial With $250 Million Accord

State Farm agreed to pay $250 million on the brink of a trial to customers who claimed the company tried to rig the Illinois justice system to wipe out a $1 billion jury verdict from 19 years ago, Bloomberg reports.

“The customers were seeking as much as $8.5 billion in damages in a civil racketeering trial that was set to start Tuesday in federal court in East St. Louis, Illinois. A judge granted preliminary approval to the accord and set a final fairness hearing for December,” according to the report.

Policyholders had accused the company of leading an effort to recruit a judge friendly to its cause for the Illinois Supreme Court, secretly funding Judge Lloyd Karmeier’s 2004 election campaign by funneling money through advocacy groups that didn’t disclose donors. Under the federal Racketeer Influenced and Corrupt Organizations Act, any damages would have been tripled.

Read the Bloomberg article.

 

 




Parking Garage Collapse: What Car Owners With Damaged Vehicles Should Consider

Authorities say car owners with vehicles inside the collapsed parking garage in Irving, Texas, won’t get to them for several days. No one was hurt, but more than 20 cars have been damaged.

When it comes to repairing their cars, Dallas attorney Micah Dortch of the Potts Law Firm says owners should consider going through their car insurance carriers first, according to a post on the website of Androvett Legal Media & Marketing.

“Individuals should turn in a claim to their own carrier, which should be faster than dealing with the building’s insurer,” says Dortch. “A finger-pointing match is very likely, which is why personal carriers are the best places for the individuals to turn. Then those insurance carriers can go after the general contractor or others responsible for the facility.

“The facility’s general liability insurance should cover any claims and then I expect they would subrogate to the builders of the garage, similar to what has happened with the Allen [Texas] and McKinney football stadiums.”

 

 




Negotiating Commercial Contracts – Insurance Words of Wisdom

Risk signOne of the key insurance policy provisions that is often included in commercial contracts to transfer risk is the requirement that one contracting party make the other contracting party an additional insured on their insurance policy, according a website post for SandRun Risk.

The authors discuss the 2013 Insurance Services Office revisions to the standard additional insured endorsement form.

The three significant changes are:

  • Insurance provided to an additional insured will apply only to the extent permitted by law
  • If additional insured coverage is required in a contract or agreement, the additional insured will not be provided coverage that is any broader than required in that contract or agreement with the named insured
  • The limits available to an additional insured will be the lesser of the limits required by contract or available under the policy

Read the article.

 

 




Lawyer Who Tried to Bilk Insurance Companies Out of $300,000 Sentenced to Prison

A former attorney in Texas has been sentenced to five years in prison after pleading guilty to insurance fraud and barratry, or litigation for profit, The Fort Worth Star-Telegram reported.

The Tarrant County district attorney said that Richard Kent Livesay schemed to bill insurers for fraudulent hailstorm damage to roofs without the knowledge or consent of homeowners.

The DA’s office said Livesay would have received more than $300,000 in fraudulent payments if his fraud hadn’t been discovered first by investigators from the Texas Department of Insurance.

Livesay also had to surrender his law license and to provide restitution to his victims, the report says.

Read the Star-Telegram article.

 

 




Dallas Firm Secures $166M Verdict in Fort Worth Murder-for-Hire Case

Attorneys for Dallas-based Fears Nachawati Law Firm have secured a $166 million verdict against the daughter and son-in-law of a North Texas woman who was killed in 2014 for the proceeds of life insurance policies totaling $5 million.

Jurors in Tarrant County’s 141st Judicial District Court determined Mark and Virginia Buckland were central figures in the conspiracy that led to the stabbing death of Anita Fox that was carried out by two members of a nomadic ethnic clan known as Irish Travellers. The multimillion-dollar verdict is believed to be among the largest in Tarrant County this year, according to the firm.

Though the couple has never been charged criminally in the murder, the jury found that they had crafted an insurance scheme in which they would be the sole beneficiaries of a series of policies, in part without the knowledge of the 69-year-old Ms. Fox.

Read details of the case.

 

 




McKool Smith Wins the Most ‘Top 100 Verdicts’

McKool Smith has racked up some new recognition, including being named again in The National Law Journal‘s “Top 100 Verdicts” list.

The NLJ recognition represents the 18th time the firm had a top 100 verdict, more than any other law firm since the rankings began.

In a release, the firm said: “In 2002, The National Law Journal published its first annual listing of the nation’s ‘Top 100 Verdicts.’ Since that time, no law firm in the country has won more Top 100 Verdicts than McKool Smith.”

Other recent recognition includes being named Trial Group of the Year by Law360, and receiving Band 1 rankings in Chambers USA for Texas commercial litigation and Texas intellectual property.

Law360 also presented the firm its Insurance Practice Group of the Year honor.

Inn 2017, Texas Lawyer presented the firm its Litigation Department of the Year award, and Managing Intellectual Property named the firm Patent Plaintiff Firm of the Year.

McKool Smith, based in Dallas, also has offices in Houston, Austin, Marshall, Silicon Valley, New York, Washington DC, and Los Angeles.

 

 




Is Your Insurance Provision Meeting Its Full Potential?

It is easy to skim over contracts’ insurance provisions or simply defer to risk experts, but there are a few questions that should be considered during the next review of the insurance section of a contract, advises Morgan, Lewis & Bockius LLP.

The article by Michael L. Pillion and Jessica M. Pelliciotta discusses four such questions:

How do your indemnification and other risk allocation provisions interact with your insurance provisions?

What types of insurances and how much coverage should you require?

Will you know if there are changes to the insurance coverages?

Does your contract require the other side’s insurer to provide a waiver of subrogation?

Read the article.

 

 




Wells Fargo Faces $1 Billion Fine to Settle Loan Abuses

Reuters reports that Wells Fargo & Co. has been offered a penalty of $1 billion by regulators to resolve outstanding investigations related to auto insurance and mortgage lending abuses, the third-largest U.S. bank by assets said on Friday.

The news agency previously had reported that the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency were preparing a fine of up to $1 billion for Wells Fargo’s auto insurance and mortgage lending abuses.

“The U.S. Federal Reserve has also imposed restrictions on the bank’s growth, forbidding it to expand its balance sheet beyond 2017 levels until it makes internal changes that addressed its board and risk management,” according to the latest Reuters report.

Read the Reuters article.

 

 




Berkshire’s National Indemnity Ordered to Pay $43 Million for Asbestos Settlement

Berkshire Hathaway Inc.’s National Indemnity Co. has to pay more than $43 million of Montana’s asbestos-related settlement costs, a state judge has ruled. according to a MarketWatch report.

Reporter Nicole Friedman explains: “Montana had reached a $43 million settlement in 2009 with people injured by asbestos at a vermiculite mining operation in Libby, Mont. The victims claimed the state had knowledge of unsafe conditions at the mine for decades and failed to protect workers.”

National Indemnity  provided general liability insurance to the state at the time of the alleged exposure, but it had argued those insurance policies didn’t cover the asbestos-related claims.

Read the MarketWatch report.

 

 

 




Harvey Weinstein’s Insurer Refuses to Pay for Legal Defense

Variety is reporting that Harvey Weinstein’s insurance company is refusing to defend him against 11 sexual harassment lawsuits, saying that his alleged misconduct is not covered under his personal liability policies.

Chubb Indemnity Insurance Co. sued on Wednesday, asking the New York Supreme Court for a declaration that it is not obliged to fund the disgraced producer’s legal defense, according to reporter Gene Maddaus.

The suit says that some of Weinstein’s policies cover damages he is obligated to pay “for personal injury or property damage.” The damages must arise from “an accident or offense” to be covered.

But Chubb’s position is that Weinstein’s alleged pattern of sexual assault and harassment does not qualify.

Read the Variety article.

 

 




Long-Running Construction Defect Fight in Texas Ends With Defense Win

A decade-long construction defect battle involving a South Padre Island, Texas, luxury condominium complex damaged during Hurricane Dolly has been resolved in a take-nothing defense win secured by attorneys of the West Mermis law firm for the general contractor, G.T. Leach Builders.

The condominium developer, Sapphire, initially sued its insurance brokers for negligence for allowing the builder’s risk insurance policy to expire, leading to claims for extensive damage to the Sapphire condominium project from the 2008 storm. Nearly three years later, G.T. Leach and several of its subcontractors were added to the $30 million lawsuit.

The trial team, led by Lawrence J. West, presented evidence proving that the developer’s allegations of multiple breach of contract claims were unsupported, according to the firm. They demonstrated that the contract contained express provisions that prevented the Developer from recovering the $30 million it was demanding.

Read details of the case.