Texas Insurance Law Newsbrief

CLAIMS OF NEGLIGENT FAILURE TO PROVIDE CHAPERONE AGAINST EMPLOYER “ARISE OUT OF” EMPLOYEE’S SEXUAL MISCONDUCT – EXCLUSION APPLIES

The Fifth Circuit recently addressed whether negligence claims against the named insured, Radiology Associates, asserted after an employee inappropriately touched a patient while performing an ultrasound, were covered under a professional liability policy and determined that coverage was excluded. In National Fire Insurance Company of Hartford v. Radiology Associates, L.L.P., 2011 WL 3444213 (5th Cir. (Tex.) August 8, 2011), the trial court granted summary judgment in a declaratory judgment action finding that the insurer had a duty to defend claims that Radiology Associates was negligent in failing to provide a chaperone during the examination and for failing to monitor its employee.

TRIAL COURT’S PREEMPTIVE SANCTIONS IN QUESTIONING WITNESS IN UNDERINSURED MOTORIST CLAIM HELD TO BE ABUSE OF DISCRETION

The Dallas Court of Appeals recently concluded that a trial court’s limitation of deposition questions to an insured seeking underinsured motorist benefits regarding the any diagnosis and treatment received after his deposition in the tort underlying case, combined with a preemptive sanction of $100 for every question asked that was covered in the prior deposition, was an abuse of discretion.

In In re State Auto Property & Casualty Insurance Company, 2011 WL 3528266 (Tex. App. – Dallas, August 12, 2011), the insured settled with the other party after giving his deposition but before trial.

MORTGAGOR LACKS STANDING TO SUE INSURER UNDER LENDER-PLACED COMMERCIAL POLICY

Last Tuesday, a U. S. District Court judge in the Houston Division of the Southern District of Texas granted summary judgment to an insurer after finding that the mortgagor lacked standing to bring a bad faith lawsuit for claims related to hurricane damage to the insured property under a lender-placed policy. In Barrios v. Great American Assurance Company, No. H-10-3511 (S.D.Tex., August 16, 2011), the mortgage company secured insurance coverage to protect its interests after the owner failed to maintain coverage.

STATE FARM WINS ARSON TRIAL IN DALLAS

Last week, a jury in a Dallas federal court found State Farm Mutual Automobile Insurance Company did not breach its policy and did not commit unfair claims settlement practices under Article 542 of the Texas Insurance Code in handling an alleged theft and fire claim under its auto policy with the insured. In Nunn v. State Farm Mutual Automobile insurance Company, No. 3:08-CV-1486-D, the insured sued State Farm alleging a host of contractual and extra-contractual claims arising out of State Farm’s refusal to pay for damages to an expensive Range Rover allegedly caused by the theft and attempted burning of the vehicle in June 2007. Prior to trial, all but one of the extra-contractual claims were dismissed through dispositive motions. The jury trial focused on the insured’s claims of breach of contract and inappropriate claims handling delays by State Farm. State Farm defended the case alleging the insured made material misrepresentations in the claims investigation, the insured failed to fully cooperate in the claims investigation, and a person seeking coverage (the insured’s adult daughter) was involved in the alleged theft and fire to the vehicle. After a week-long trial, the jury found State Farm did not breach the contract and did not commit any unfair claim settlement practices. After the jury rendered its verdict, Judge Sidney Fitzwater promptly entered judgment in favor of State Farm.

Chris Martin, Debbie Rank and Vasilia Wilkes of our firm had the privilege of representing State Farm in this case. We congratulate State Farm on this victory, appreciate its willingness to take the case to trial, and recognize the invaluable assistance provided by its SIU team during the claim and the trial of this matter.

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Published In: Civil Procedure Updates, Finance & Banking Updates, Insurance Updates, Labor & Employment Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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