Media Coverage
Source: Law360
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Olivia Thomas
01.27.17
Courts in the Lone Star State will make several decisions in 2017 that could set the precedent for insurance litigation. Houston Insurance Recovery & Advisory counsel Tamara Bruno shared her opinion about what two of these cases could mean for litigators with Law360.
In USAA Texas Lloyds Co. v. Menchaca, Texas’s Thirteenth Court of Appeals overturned a lower court ruling that didn’t hold USAA Texas Lloyds Co. liable for Hurricane Ike damages after failing to sufficiently investigate the homeowner’s claims. The case is now going to the Texas Supreme Court, and if that court confirms the appellate panel’s ruling, policyholders might have additional leverage in coverage disputes. One of the criticisms of the case is what can be perceived as an “inconsistent jury verdict in the lower courts,” according to Law360.
Bruno tells Law360 that it would be difficult for the Texas Supreme Court to make the broad ruling on whether a policyholder is able to pursue extra-contractual damages without suffering an injury aside from the denial of policy benefits because of the unique facts of this particular case.
“I would be surprised if the Texas Supreme Court took this case and made a broad-brush finding on independent injury,” she said.
Another big case in the state is Great American Insurance v. Hamel, in which the Texas Supreme Court has agreed to review a lower court’s ruling that holds Great American Insurance Co. responsible for most of the judgement against policyholder Terry Mitchell Builder Inc. in a construction defect suit over storm damage to Glen and Marsha Hamel’s home. A state appellate court has already affirmed the lower court’s ruling.
Bruno told Law360 that an influential factor in the Texas high court’s decision could be how Great American declined to defend TMB in the Hamel’s original suit, which shifted “the cost of a trial and potential excess judgment over to the insured.”
“What it comes down to is that the insured has to have some options when the insurer refuses to defend,” Bruno said.
In her opinion, there needs to be plan for what insureds can do when left without a way to defend themselves, even though she doesn’t believe the Texas courts are interested in “supporting collusive litigation.”
“However this case comes out,” Bruno said to Law360, “we should get a blueprint for what insureds can or can't do when faced with wrongful denials.”