On Friday, April 13, 2018, by avoiding black cats, ladders, and breaking mirrors, seven members of the Texas Supreme Court1 managed to issue a new, sixty-six page opinion in USAA Texas Lloyds Company v. Menchaca (“Menchaca II”).2 Withdrawing its April 7, 2017, opinion3 —”Menchaca I”—the court unanimously reaffirmed the five legal principles and rules announced in that opinion which addressed the relationship between contract claims under an insurance policy and tort claims under the Texas Insurance Code.4 The court issued the same disposition in Menchaca II —reversal and remand for a new trial—as it had in Menchaca I. So, one asks: “What is the difference in the two opinions? Which party suffered an unlucky day?” This article will attempt to answer those questions.
Continue Reading An Unlucky Day? Friday, April 13, 2018, the Texas Supreme Court Issued a New Opinion in USAA Texas Lloyds v. Menchaca

It has been over 30 years since Florida lawmakers enacted section 624.155, which was designed to provide a civil remedy when an insurer fails to settle their policyholder’s claim in good faith or commits any one of the unfair claims handling practices identified in section 626.9541(1)(i). Yet, to this day, questions still arise on one basic question: When is an insured legally entitled to bring a civil action against their property insurance carrier for failing to meet its statutory obligations?
Continue Reading Better Late Than Never? Don’t Think So – Voluntary, Untimely Payment of Benefits Does Not Absolve Carrier from Liability for Bad Faith in Florida

On April 7, 2017, the Texas Supreme Court in USAA Tex. Lloyds Co. v. Menchaca,1 answered several issues that had continually swirled around litigation arising out of Hurricane Ike policy disputes. Unresolved issues included among others:

  1. Whether an insured is required to obtain a breach of contract finding as a prerequisite to a recovery for an insured’s extra-contractual claims such as an insurer’s violations under the Texas Insurance Code; and
  2. if an insured can show entitlement or a right to policy benefits, whether those policy benefits can serve as actual damages for extra-contractual claims even if the insured cannot establish a breach of contract claim.

Continue Reading Nearly Ten Years Later, Hurricane Ike’s Stormy Winds Are Still Churning in the Texas Supreme Court — USAA Tex. Lloyds V. Menchaca

Many property insurance policies have a provision that states something similar to the following: “we do not insure…for loss…caused by…constant or repeated seepage or leakage of water…over a period of 14 or more days.” Insureds may find their claims for water loss under their homeowners’ policy denied on the grounds that the leak was present for a period of two weeks or more. However, Florida courts have ruled that the first thirteen days of damage may be covered, due to ambiguity in the language of the policy.
Continue Reading My Insurance Claim Was Denied Because My Water Leak Lasted Over a Period of 14 Days or More – Was the Denial Proper?

Back on November 7 of last year (2017), I wrote about an important opinion in the world of property insurance litigation, Joyce v. Federated National Insurance Company,1 where the Florida Supreme Court reaffirmed that you could still obtain a contingency-fee multiplier where justified under Quanstrom and in so doing reversed the Fifth District Court of Appeal finding that such a multiplier should be limited to “rare” and “exceptional” circumstances. Tom Elligett and Amy Farrior represented the Joyces in this landmark case.
Continue Reading Policyholder Attorneys Beware: Make Sure Your Contingency Fee Multiplier Awards Are Airtight and “Anderson” Proof

Most property insurance policies require that the insured must provide “prompt” notice of a loss as soon as possible after a covered loss. While many states throughout the country have adopted the Notice-Prejudice Rule which prevents an insurer from denying a claim unless it can demonstrate actual prejudice resulting from the delayed notice of loss, the District Court of Colorado recently issued an opinion rejecting this majority rule in first-party insurance contracts and instead applying the Traditional Notice Rule:
Continue Reading The Importance of Promptly Providing Notice of Loss

In December of 2016, I wrote about Sebo v. American Home Assurance Company,1 where the Florida Supreme Court reversed the appellate court’s adoption of the “Proximate Efficient Cause” doctrine and found that instead, the lower court should have applied the “Concurrent Causation Doctrine,” as laid out in Wallach v. Rosenberg,2 in a situation where both the excluded cause of faulty construction, combined with the covered causes of rain and wind resulted in a total loss to Sebo’s property.
Continue Reading Court Rejects Jury Instruction Inconsistent with Concurrent Causation Doctrine; Remands for New Trial

The saying goes like this, “Say what you mean, and mean what you say.” We all know the business of contract construction is no easy task. But underwriters should go the extra mile to ensure a property insurance policy reads as the carrier intends or steep consequences may ensue. Something as minor as a misplaced comma or semicolon could be consequential in deciding whether an insured is entitled to coverage under the policy.
Continue Reading Punctuation Placement Could Lead to a Policyholder’s Next Victory

William and Judith Joyce filed a claim with their insurer, Federated National, after suffering water damage to their home. Instead of agreeing to cover the loss, Federated National denied the Joyces’ claim alleging they made material misrepresentations on their insurance application by failing to disclose prior losses they had with their previous carrier.
Continue Reading Court Reaffirms on Contingency Fee Multipliers in Joyce v. Federated National