Texas Insurance Law Newsbrief

by Martin, Disiere, Jefferson & Wisdom, LLP

Recently, Union Insurance Company successfully defended, and recovered its attorneys’ fees, in an adversary proceeding in bankruptcy court brought by the debtor in possession for building damages allegedly caused by Hurricane Ike. Union successfully defended the adversary proceeding by obtaining a dismissal of all claims against it. Union sought dismissal on the basis that the debtor should be judicially estopped from pursing the adversary proceeding because it failed to disclose the claim to the bankruptcy court in its schedules, because it caused a related entity to bring a lawsuit outside of the bankruptcy against Union, and because the corporate representative of both entities gave conflicting testimony in the two lawsuits regarding the claim.

In an appeal of a maritime-insurance dispute between the owner of a large fleet of vessels, a ship repair company, and the repair company’s insurer, the Fifth Circuit held last week that the repair company had agreed to defend, indemnify, and procure insurance for the fleet owner, but that the fleet owner was not covered by the policy at issue. The appellate court’s opinion focuses primarily on the dispute between Crowley and Tubal-Cain, in which Crowley contended that the repair service order (“RSO”) that it sent to Tubal-Cain incorporated certain language maintained at Crowley’s website that purportedly required Tubal-Cain to obtain certain insurance, and to name Crowley as an additional insured.

The San Antonio Court of Appeals last week reversed a trial court judgment on a jury verdict awarding $154,251.31, and entered a take-nothing judgment based in large part on the insured’s misrepresentation of her criminal history. The Court of Appeals held that the misrepresentation rendered the policy void but the void policy was not susceptible to ratification.

Last week, Federal District Court Judge Melinda Harmon from Houston quickly dispatched a motion brought by the Mostyn Law Firm seeking a remand to state court based on the allegations against adjusters contained in the Mostyn firm’s form Hurricane Ike pleadings. . Specifically, while the Plaintiff argued that the adjuster “created a wholly deficient report as a result of his substandard inspection of the claim, which was in part the cause of much of the Plaintiff’s damages complained about in this suit,” the pleadings did not contain any specific facts to “explain the what, where, when, and how, to support these allegations.”

Liberty Mutual was dismissed last week from a large Hurricane Ike commercial breach of contract and bad faith case and the remainder of the case was stayed pending appraisal. Last week, Federal District Court Judge Melinda Harmon (from the Houston Division of the Southern District of Texas) ruled on several related motions urged by the carriers. Among other issues, the defendant insurers — American Economy, Liberty Mutual and Safeco — moved that Liberty Mutual be dismissed because it was not a party to the insurance contract, and contended that there could be no breach of contract by the remaining insurers because they timely and properly invoked the appraisal provision of the insurance contract.

The renovation of Martin, Disiere, Jefferson & Wisdom’s office space in downtown Houston’s historic Niels Esperson Building was recently completed and, after a 6-month temporary relocation while repairs were completed, the firm recently returned to its permanent facilities. The firm has committed to another 10 years in the downtown space it has occupied since the firm’s opening 12 years ago, but we’ve added a new floor to serve as our main reception area and conference center. Clients and visitors will enjoy the new amenities and opportunities for conferences, mediations, depositions, arbitrations, and continuing education that the wonderful new space provides.

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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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