BAD FAITH:
1.Nguyen v. State Farm Lloyds, Inc., 947 S.W.2d 320 (Tex. App. - Beaumont, June 26, 1997, writ denied): The court affirmed a summary judgment in favor of a homeowner's insurer, holding that the affidavit of the insurer's claims supervisor stating that he sent two disclaimer letters to the insured, that the insured never objected to the denial of coverage, and that the insurer made an independent investigation, established that the insurer did not violate Tex. Ins. Code Art. 21.21 which prohibits unfair insurance practices.
2.Rocor International, Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., ______ S.W.2d _____, 1997 WL 730694 (Tex. App. - San Antonio, November 26, 1997) (not yet reported): The court reversed a judgment notwithstanding the verdict in favor of an excess insurer, holding that the insured could sue the insurer for failing to settle a claim in good faith under Tex. Ins. Code Art. 21.21 and for common law negligence, where the excess insurer took over settlement negotiations but delayed for over a year in effecting a settlement on the same terms for which the claim could have been settled earlier. The court held that the insured was entitled to damages in the form of defense costs which it incurred in preparing the case for trial.
B. STOWERS CLAIM:
State Farm Lloyds, Inc. v. Williams, ______ S.W.2d ______, 1997 WL 531027 (Tex. App. - Dallas, August 29, 1997, review requested) (not yet reported): The court held that a homeowner's insurer which breached its duty to the insured by not accepting a settlement offer within policy limits, resulting in the entry of an excess judgment, was liable to the insured under the Stowers doctrine even though the insured had signed a covenant not to execute. The court stated that the fact that the insured was subject to execution on the judgment for a two-month period prior to the execution of the covenant presented some evidence of harm during the two-month period. The court also held that the amount of damages, if any, sustained by the insured presented a fact issue which required a determination of the existence and value of the insured's assets.
C. AUTO:
1.Farmers Texas County Mut. Ins. Co. v. Griffin, 955 S.W.2d 81 (Tex., November 13, 1997): The Texas Supreme Court held that a claim brought by a pedestrian for injuries he sustained when he was struck by a gunshot fired by a passing vehicle was not covered by the vehicle owner's auto liability policy due to the policy's exclusion of intentional acts and the fact that the petition did not allege that the plaintiff's injuries resulted from an auto accident.
2.Home State County Mut. Ins. Co. v. Acceptance Ins. Co., _____ S.W.2d _____, 1997 WL 706531 (Tex. App. - Amarillo, November 13, 1997) (not yet reported): The court held that a trucking company's auto liability policy, which covered damages caused by accident and resulting from "the ownership, maintenance or use of a covered auto," provided no coverage for injuries incurred in a collision between the plaintiff's vehicle and a load of rock and sand delivered by the insured to a construction site for use as road base. The evidence was that the sand and rock had been delivered and dumped by the insured truck before the collision, which occurred after the load had reached its final destination.
3.Safeway Managing General Agency v. Cooper, 952 S.W.2d 861 (Tex. App. - Amarillo, August 19, 1997): The court held that a named driver exclusion evidenced by the declarations page of a month-to-month auto policy was retained when the policy was renewed each month even though the renewal notices sent to the insured by the insurer were virtually identical to the declarations page of the initial policy but omitted any reference to the exclusion. There was no evidence of an agreement between the parties to change the initial policy by deleting the exclusion.
D. GENERAL LIABILITY:
1.Data Specialities, Inc. v. Transcontinental Ins. Co., 125 F.3d 909 (5th Cir., October 27, 1997): The court held that a general liability policy which provided coverage for those sums which the insured becomes "legally obligated to pay as damages" applies only to tort-based obligations. Therefore, no coverage was provided for expenses incurred by an insured electrical contractor for repair work performed after a defective circuit breaker, installed during an electrical system reconstruction job, caused an explosion. The insured was not at fault and no third party claims were made against it.
2.Highlands Ins. Co. v. Kelley-Coppedge, Inc., 950 S.W.2d 415 (Tex. App. - Fort Worth, July 17, 1997, review requested): The court held that the standard pollution exclusion of a general liability policy applied to bar coverage for the costs of cleaning up property contaminated by an oil spill resulting from the rupture of a crude oil pipeline by equipment operated by the insured's employee on an easement owned by the insured's client. The court held that the portion of the exclusion stating that coverage does not apply to property damage arising out of the release of pollutants at or from any premises occupied by any insured applied because the insured "occupied" the property upon which it was performing operations pursuant to its contract with its client.
3. Home State County Mut. Ins. Co. v. Acceptance Ins. Co., _____ S.W.2d _____, 1997 WL 706531 (Tex. App. - Amarillo, November 13, 1997) (not yet reported): The court held that an exclusion in a trucking company's general liability policy for damages arising out of the loading or unloading of automobiles did not apply to injuries sustained by the plaintiff in a collision with road base material delivered by the insured to a construction site where the particular unloading operation had been completed prior to the collision, even though not all of the road base necessary to complete the project had been delivered.
E. HOMEOWNERS:
1.LIABILITY COVERAGE:
a.State Farm Lloyds, Inc. v. Williams, _____ S.W.2d _____, 1997 WL 531027 (Tex. App. - Dallas, August 29, 1997, review requested) (not yet reported): The court held that the undefined term "occurrence" in a homeowners' policy was ambiguous with respect to the insured's liability for the shooting of two persons. Where the insured's liability arose out of two separate shots, each of which independently gave rise to liability, the court held that the shootings constituted two separate occurrences under the policy.
b.Nguyen v. State Farm Lloyds, Inc., 947 S.W.2d 320 (Tex. App. - Beaumont, June 26, 1997, writ denied): The court held that allegations made against the insured for slander, negligent accusation and negligent investigation, which sought general damages for loss of reputation, lost earnings and lost insurance benefits, did not allege "bodily injury" or "property damage" as required for liability coverage under the insured's homeowners' policy.
c.State Farm Gen. Ins. Co. v. White, _____ S.W.2d _____, 1997 WL 687992 (Tex. App. - Austin, November 6, 1997) (not yet reported): The court held that an intentional injury exclusion in a homeowners' policy did not apply to allegations that the insureds negligently failed to report child abuse at a day care center. The court stated that while intent to injure can be inferred in cases involving the actual molester, such intent cannot be inferred from an omission--the failure to report child abuse.
2.PROPERTY COVERAGE:
State Farm Lloyds v. Marchetti, _____ S.W.2d _____, 1997 WL 623803 (Tex. App. - Houston [1st Dist.] October 2, 1997) (not yet reported): The court held that damage to a dwelling and its contents resulting from an accidental discharge from within the insureds' plumbing system caused by the pressure of backed-up water and sewage was within the policy's coverage for water coming "from within a plumbing, heating or air conditioning system or household appliance." The court further held that the damage did not fall within the exclusion for damage resulting from or caused by flood or surface waters, even if an excessive rainfall caused the sewer system to exceed its capacity and direct water back through underground lines into the home. The loss was the consequence of the invasion of the premises by non-flood water, even though the invasion may have been proximately caused by flood water.
F. AGENTS AND BROKERS:
Johnson & Higgins of Texas, Inc. v. Kenneco Energy, Inc., _____ S.W.2d _____, 41 Tex. Sup. Ct. J. 201 (Tex., December 11, 1997) (not yet reported): The court held that an insured's claim against its insurance broker for failing to obtain requested coverage was barred by a finding made in a separate action brought by the insured against the insurer that no agreement was made to procure such coverage. The court also held that to the extent that the insured's fraud claim was based upon an allegation that the broker misrepresented coverage, it was also barred by a finding in the suit brought against the insurer that the broker did not make the alleged representation regarding coverage.
G. NO FAULT:
Ortiz v. State Farm Mut. Auto. Ins. Co., 955 S.W.2d 353 (Tex. App. - San Antonio, September 10, 1997, review requested): The court held that the insured's written rejections of uninsured motorists, underinsured motorists, and personal injury protection (PIP) coverages did not need to be attached to or incorporated into his auto policy in order to be valid. The court pointed out that the only statutory requirement is that the rejection of coverage be in writing.
H. SUBROGATION:
Texas Farmers Ins. Co. v. Seals, 948 S.W.2d 532 (Tex. App. - Fort Worth, July 3, 1997): The court held that the "common fund doctrine" entitled an insured who had been paid medical benefits under her auto policy to reimbursement from the insurer for the insurer's share of contingency fees of the insured's attorney for recovering a common settlement fund through which the insurer satisfied its subrogation interest.
I. REINSURANCE:
Barhan v. Ry-Ron, Inc., 121 F.3d 198 (5th Cir., September 5, 1997): In a suit brought by an ERISA plan beneficiary against the plan and its reinsurer challenging the administrator's denial of benefits, the court held that the beneficiary had no claim against the reinsurer in the absence of proof that the plan contained an exception to the general rule that original insureds have no basis for a claim against the reinsurer.
J. GUARANTY ASSOCIATIONS:
Texas Guaranty v. Boy Scouts of America, 947 S.W.2d 682 (Tex. App. - Austin, June 12, 1997): The court refused to exercise jurisdiction over another state's insurance guaranty association, holding that it did not stand in the shoes of the insolvent liability insurer for purposes of personal jurisdiction and did not have minimum contacts with Texas to maintain personal jurisdiction without violating the Due Process Clause. The court also held that the Texas Property and Casualty Insurance Guaranty Association was potentially liable for a settlement entered into by its insured, even though the insured had admitted in the settlement documents that it was not legally obligated to pay the claim. However, the court held that the Texas Guaranty Association was not bound by the settlement but could challenge its good faith and reasonableness.
K. STATUTORY PENALTIES:
Bekins Moving & Storage Co. v. Williams, 947 S.W.2d 568 (Tex. App. - Texarkana, April 25, 1997): The court held that transit insurance provided by a moving company was "insurance" subject to the Texas Insurance Code, where the contract between the parties specifically provided for insurance protection and for exclusions and limitations of coverage. Thus, the moving company was held liable for the eighteen percent penalty provided by Tex. Ins. Code Art. 21.55 for its failure to settle its customer's claim within the time required by the statute. However, the court held that treble damages under Tex. Ins. Code Art. 21.21 were not available for the violation of Article 21.55 without proof that either Article 21.21 or the State Board of Insurance had defined the failure to promptly pay and handle claims as an unfair or deceptive act or practice in the business of insurance.