Justia Insurance Law Opinion Summaries

Articles Posted in Supreme Court of Texas
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In this insurance dispute over whether an insurer's payment of an appraisal award obtained under a unilateral appraisal clause bars an insured's claims under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code chapter 542 the Supreme Court reversed the judgment of the court of appeals concluding that Insured's claims were barred, holding that Insured's claims should be considered in light of this Court's recent decisions on these issues. After Insurer declined to pay for damage to Insured's properties Insured asked to invoke the policy's appraisal process. Insurer refused, asserting that it was the only party that could invoke appraisal under the unilateral appraisal clause. Insured sued Insurer alleging claims for breach of contract, bad faith, and violations of the TPPCA. Insurer then obtained an order compelling appraisal. After Insurer paid the appraisal award the trial court granted summary judgment for Insurer. The court of appeals affirmed. The Supreme Court reversed, holding that remand was required for the trial court to consider Insured's claims in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Biasatti v. GuideOne National Insurance Co." on Justia Law

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The Supreme Court reversed the judgment of the court of appeals concluding that an insurer's payment of an appraisal award bars an insured's claim under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code 542.051-.061, holding that the court of appeals' opinion was inconsistent with this Court's recent decisions on this issue. Insurer issued Insured payment under Insured's insurance policy after Insured's residential property sustained wind and hail damage. Insured later sued, believing that the property damages were undervalued. The trial court compelled appraisal, and the appraisal awarded exceeded Insurer's prior estimates. Insurer paid the award to Insured. The trial court subsequently granted summary judgment on all of Insured's claims. The court of appeals affirmed, concluding that payment of an appraisal award entitles an insurer to summary judgment on all of the insured's claims. The Supreme Court reversed, holding that the court of appeals' conclusion was in error in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Lazos v. State Farm Lloyds" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals concluding that an insurer's payment of an appraisal award bars an insured's claim under the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code 542.051-.061, holding that the court of appeals' opinion was inconsistent with this Court's recent decisions on this issue. Insurer issued Insured payment under Insured's insurance policy after Insured's residential property sustained wind and hail damage. Insured later sued, believing that the property damages were undervalued. The trial court compelled appraisal, and the appraisal awarded exceeded Insurer's prior estimates. Insurer paid the award to Insured. The trial court subsequently granted summary judgment on all of Insured's claims. The court of appeals affirmed, concluding that payment of an appraisal award entitles an insurer to summary judgment on all of the insured's claims. The Supreme Court reversed, holding that the court of appeals' conclusion was in error in light of Barbara Technologies Corp. v. State Farm Lloyds, 589 S.W.3d 806 (Tex. 2019), and Ortiz v. State Farm Lloyds, 589 S.W.3d 127 (Tex. 2019). View "Alvarez v. State Farm Lloyds" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals reversing the trial court's judgment granting Defendant's plea to the jurisdiction and dismissing Plaintiff's suit, holding that the court of appeals erred in concluding that Plaintiff's allegations were sufficient to establish standing. At the time Plaintiff was injured in a car accident he had a personal injury protection (PIP) policy through Farmers Texas County Mutual Insurance Company (Defendant). Defendant paid Plaintiff's incurred medical expenses pursuant to the policy, but the amount Defendant paid was not the medical providers' list rate but, rather, the negotiated rate between Plaintiff's health care insurer and the medical providers. Plaintiff demanded an additional payment amounting to the difference between what Defendant paid Plaintiff and the PIP policy maximum. After Defendant refused, Plaintiff sued. Defendant filed a plea to the jurisdiction, arguing that Plaintiff lacked standing to sue under the PIP policy because Plaintiff alleged no actual or threatened injury. The trial court granted the plea and dismissed the suit. The court of appeals reversed, concluding that Plaintiff's allegations were sufficient to establish standing to sue under the PIP policy. The Supreme Court reversed, holding that the evidence supported Defendant's contention that Plaintiff had not suffered any actual or threatened injury. View "Farmers Texas County Mutual Insurance Co. v. Beasley" on Justia Law

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In this insurance dispute, the Supreme Court answered a question of Texas law in a case certified from the United States Court of Appeals for the Fifth Circuit by stating that a "policy-language exception" to the "eight-corners rule" is not a permissible exception under Texas law. The certified question asked about the "eight-corners rule," which is given its name by the "four corners" of the petition and the "four corners" of the policy. Under the eight-corners rule an insurer's "duty to defend is determined by the claims alleged in the petition and the coverage provided in the policy. The instant case concerned a dispute as to whether State Farm must defend its insureds against personal injury claims. According to one federal district court applying Texas law, the eight-corners rule does not apply unless the policy includes language requiring the insurer to defend all actions against its insured, even if the allegations are groundless, fraudulent, or false. The case made its way to the federal district court, which asked whether the "policy-language exception" to the eight-corners rule was a permissible exception under Texas law. The Supreme Court answered that it was not. View "Richards v. State" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals in this insurance dispute, holding that an insurer's payment of an appraisal award bars an insured's breach of contract claim and bad faith claims but that an insured may proceed on his claim under the Texas Prompt Payment of Claims Act, Tex. Ins. Code chapter 542. Insured sued Insurer for breach of contract, violations of the Prompt Payment Act, and statutory and common law bad faith insurance practices. Insurer filed a motion to compel appraisal, which the trial court granted. Insurer then filed a motion for summary judgment, arguing that its payment of the appraisal award resolved all claims in the lawsuit. The trial court granted the motion. The court of appeals affirmed. The Supreme Court affirmed, holding (1) the payment barred Insured's breach of contract claim premised on failure to pay the amount of the covered loss; (2) the payment barred Insured's bad faith insurance practices claims to the extent the only actual damages sought were lost policy benefits; and (3) in accordance with today's decision in Barbara Technologies Corp. v. State Farm Lloyds, __ S.W.3d __ (Tex. 2019), Insured may proceed on his claim under the Prompt Payment Act. View "Ortiz v. State Farm Lloyds" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals in this insurance dispute, holding that an insurer's payment of an appraisal award is neither an acknowledgment of liability under the policy nor an award of actual damages. After Insurer investigated Insured's claim and rejected it, Insurer invoked the policy's provision for an appraisal process and paid Insured in full in accordance with the appraisal. Insured sued Insurer and moved for summary judgment, asserting that State Farm violated the Texas Prompt Payment of Claims Act (TPPCA), Tex. Ins. Code ch. 542, by failing to pay the claim within the TPPCA's time limitation and therefore owed damages. Insurer filed a cross-motion for summary judgment asserting that it timely paid the appraisal award and was not liable. The trial court granted summary judgment for Insurer. The court of appeals affirmed. The Supreme Court reversed, holding that because Insured did not establish that it was entitled to TPPCA prompt pay damages as a matter of law and Insurer likewise did not establish that it can owe no TPPCA damages as a matter of law, the case must be remanded. View "Barbara Technologies Corp. v. State Farm Lloyds" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals reversing the trial court’s judgment in favor of Anadarko Petroleum Corp. and Anadarko E&P Co., L.P. (collectively, Anadarko), minority-interest owners in the Deepwater Horizon operation, on Anadarko’s claim that it was entitled to insurance coverage for the legal fees and related expenses Anadarko incurred defending against liability and enforcement claims, holding that a negotiated policy provision did not limit the excess coverage for defense expenses. In this appeal, Anadarko argued that the insurance policy covered all of its defense expenses, up to the policy’s $150 million excess-coverage limit. The policy’s underwriters (the Underwriters), however, argued that the negotiated policy provision capped the excess coverage, including coverage for defense costs, at twenty-five percent of the policy’s excess-coverage limit. The trial court granted Anadarko’s summary judgment motion in part. The court of appeals reversed and rendered judgment for the Underwriters. The Supreme Court reversed, holding that the provision at issue did not limit coverage for Anadarko’s defense expenses. View "Anadarko Petroleum Corp. v. Houston Casualty Co." on Justia Law

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The Supreme Court denied the defendant hospital’s petition for a writ of mandamus challenging a trial court’s order requiring the hospital to produce information regarding its reimbursement rates from private insurers and public payers for the services provided to the plaintiff, holding that the trial court did not abuse its discretion in compelling production of the information. The plaintiff, who was uninsured, was treated by the hospital, which billed the plaintiff and filed a hospital lien for the cost of its services. The plaintiff sought a declaratory judgment that the hospital’s charges were unreasonable and its lien invalid to the extent it exceeded a reasonable and regular rate for services rendered. The plaintiff served requests for production and interrogatories on the hospital, including information about reimbursement rates from insurers and government payers. The hospital objected to the discovery requests, but the trial court ordered the hospital to produce the information. The hospital then filed a petition for a writ of mandamus, which the court of appeals denied. The Supreme Court affirmed, holding that the requested reimbursement rates were relevant to whether the hospital’s charges to the uninsured plaintiff were reasonable. View "In re North Cypress Medical Center Operating Co., Ltd." on Justia Law

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In this insurance dispute, the Supreme Court held that the issue of whether the trial court properly disregarded some of the jury’s findings should be remanded to the court of appeals for reconsideration in light of this Court’s decision in USAA Texas Lloyds Co. v. Menchaca, __ S.W.3d __ (Tex. 2018). Plaintiffs sued their insurer, State Farm, for breach of contract and Insurance Code violations. The jury found that both parties breached the insurance contract but that Plaintiffs breached first. The jury then awarded damages for State Farm’s breach of the policy and for Plaintiffs’ extra-contractual claims. The trial court disregarded two of the jury’s findings about Plaintiffs’ breach of the insurance contract and rendered judgment for Plaintiffs. The court of appeals affirmed. While State Farm's appeal was pending, the Supreme Court issued its final opinion and judgment in Menchaca, which clarified whether an insured can recover policy benefits based on an insurer’s violation of the Texas Insurance Code even though the jury failed to find that the insurer failed to comply with its obligations under the policy. On appeal, the Supreme Court held (1) State Farm’s first issue should be remanded for reconsideration in light of Menchaca; and (2) as to the remaining issues, the court of appeals’ judgment is affirmed. View "State Farm Lloyds v. Fuentes" on Justia Law