Florida Enacts Broad Insurance Reforms Focusing on Bad Faith

Posted on March 29, 2023 by Chad A. Pasternack, John David Dickenson

From 2019 to 2022, the Florida Legislature enacted four separate property insurance reforms that sought to rein in abusive property insurance litigation fueled by one-way attorney’s fee shifting and an army of professional plaintiffs filing lawsuits pursuant to assignments of benefits. In its latest reform, the Legislature has shifted its focus to the broader insurance market and to tort reform. For many years now, Florida has significantly led the nation in tort costs per household. This metric has been driven by a high octane litigation environment, ever growing personal injury verdicts, and a gradually sharpened focus on setting up insurers for bad faith claims.

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Tagged with: 86.121, Bad Faith, Florida, hb 837, safe harbor
Posted in Uncategorized

Louisiana Supreme Court Reverses a Rare State Court of Appeals Win for COVID-19 Business Interruption Claimant

Posted on March 27, 2023 by Karl A. Schulz

COVID-19 business interruption claimants have had few state appellate court decisions upon which to rely. Louisiana produced one such decision in Cajun Conti, LLC v. Certain Underwriters at Lloyd’s, 2022 La. App. LEXIS 939 (La. App. 4 Cir., June 15, 2022). The insurer prevailed in the trial court in a dispute over whether coronavirus constituted “direct physical loss of or damage to” insured property. The insured restaurant appealed. Louisiana’s Fourth Circuit Court of Appeal reversed the trial court. The Court of Appeal’s opinion became widely-cited by other COVID-19 business interruption claimants. The insurer appealed to the Louisiana Supreme Court and Cajun Conti became a widely-followed dispute. As discussed below, the Court of Appeal’s analysis was out of step with the analysis undertaken by courts across the country.

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Tagged with: Coverage, covid, interruption, loss, Louisiana, Texas, use
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Florida Appellate Court Holds that Deadline to Report Claims Does Not Nullify Prompt Notice Provision

Posted on February 03, 2023 by Chad A. Pasternack, Evan Holober

Florida’s Third District Court of Appeal recently affirmed a summary judgment entered in favor of a property insurer, holding that there is no conflict between the policy’s three year limitation for reporting hurricane claims and the requirement that the insured give prompt notice. In Navarro v. Citizens Property Insurance Corporation, No. 3D22-0032, 2023 WL 219032, — So.3d —- (Fla. 3d DCA Jan. 18, 2023), the insured sought coverage for Hurricane Irma damage nearly three years after the storm. The court found that the policy unambiguously required prompt notice, and that the insured failed to rebut the presumption of prejudice against the insurer.

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Posted in Hurricane, Notice

Florida Begins New Era with Major Property Insurance Reforms

Posted on December 16, 2022 by John David Dickenson, Chad A. Pasternack

For the fourth time since 2019, the Florida Legislature has enacted property insurance reforms aimed towards stabilizing a beleaguered insurance market. The bill, S.B. 2-A, creates a reinsurance assistance program, establishes additional oversight for insurers with high volumes of hurricane claims, and reforms many aspects of the claims process, including the timing for paying and adjusting claims. The reforms further eliminate one-way attorney fee awards to policyholders and ban assignment-of-benefits agreements. In this article, we will focus on the changes to the claim adjustment process and coverage and bad faith litigation.

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Tagged with: 624.1551, 626.9373, 626.9541, 627.428, 627.70131, 627.70132, adjustment, attorney's fees, Bad Faith, Florida, H.B. 1-A, notice, property insurance, reform, S.B. 2-A
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Texas Court of Appeals Nixes Plaintiff’s Attorney’s Fees Award Because Offsets Preclude Prevailing Party Status

Posted on December 9, 2022 by Karl A. Schulz

The First Court of Appeals in Houston affirmed an analysis that involved math and application of the Texas Insurance Code. In Jones v. Allstate Vehicle & Property Insurance Company, 2022 Tex. App. LEXIS 8896 (Tex. App.—Houston [1st Dist.] Dec. 6, 2022, no pet.), the policyholder appealed a take-nothing judgment in favor of the insurer in a dispute over a partial denial of a homeowners claim. The policyholder sued her insurer for breach of contract, violation of the Texas Insurance Code, and breach of the duty of good faith and fair dealing. At trial, the jury found that the insurer failed to comply with the policy, engaged in unfair and deceptive trade practices, and failed to comply with the duty of good faith and fair dealing. The jury found that $6,935 would fairly and reasonably compensate the policyholder for the insurer’s conduct. The jury also found that the policyholder incurred $27,000 in reasonable and necessary attorney’s fees.

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Tagged with: attorney, faith, fees, prevailing
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Fifth Circuit Resolves Split Over Chapter 542A Election of Liability for Agents

Posted on October 11, 2022 by Karl A. Schulz

In Advanced Indicator & Manufacturing v. Acadia Insurance Company,[1] the Fifth Circuit resolved a thorny split in Texas federal district courts regarding Texas Insurance Code Chapter 542A by returning to a bedrock principle governing removal. Now as long as the insurer has elected to accept the adjuster’s liability any time before removal – even when after suit is filed – there is no possibility of recovery against the adjuster and removal will be proper.

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Posted in Uncategorized

Oklahoma Supreme Court Rejects “Loss of Use” Argument, Nixes COVID-19 Business Interruption Suit

Posted on September 19, 2022 by Karl A. Schulz

There is a clear nationwide trend of federal courts disposing of COVID-19 business interruption suits.[1] Insureds are not clearing their initial burden to establish direct physical loss or damage to property, or they are running afoul of virus and contamination exclusions. Relatively few state supreme courts, however, have weighed in to resolve the issue, thereby providing guidance to their own lower courts and federal courts that must follow state law.[2] Insurers and insureds alike have been watching to see which way the Oklahoma Supreme Court would hold. In Cherokee Nation v. Lexington Ins. Co., 2022 OK 71, the Court joined the national mainstream and ruled against the insured.

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Tagged with: Cherokee, covid, damage, Insurance, interruption, Oklahoma, physical, policy, use
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Texas Court of Appeals Adds Confusion to Post-Appraisal Litigation Under the TPPCA

Posted on August 30, 2022 by Karl A. Schulz, Donnie Mike Apodaca, II

Ever since the Texas Supreme Court changed the landscape of Texas law regarding appraisal in 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), practitioners and courts have been struggling to apply the Texas Supreme Court’s holdings. Barbara Technologies and Ortiz answered some questions but raised others.

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Tagged with: Attorney’s Fees, Bad Faith, Insurance, Prompt Payment, property, TCPPA, Texas
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Florida Appeals Court Reverses Appraisal Ordered In Storm Suit

Posted on August 02, 2022 by Tiffany Bustamante O'Quinn, Alycen A. Moss

On July 20, 2022, Florida’s Third District Court of Appeal reversed and remanded a trial court’s decision compelling the parties to proceed with appraisal and staying litigation until that appraisal was completed. Florida’s appellate court held that trial court erred in granting the motion to compel appraisal without first conducting an evidentiary hearing to determine compliance with post loss obligations.

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Tagged with: appraisal, Bad Faith, claims handling, estimate, Evidentiary Hearing, Florida Bad Faith, Florida property damage, Meaningful Exchange, Motion to Compel Appraisal, Post-Loss Obligations, Scope of Loss Estimate, Setup, Sworn Proof of Loss
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Intentional Loss Exclusion Could Apply Even to Unintended Damage, Says the Tenth Circuit

Posted on July 28, 2022 by Alycen A. Moss, Elliot Kerzner

The Tenth Circuit recently held that, under Kansas law, an intentional loss exclusion precludes coverage for damage caused by an intentionally set fire even if the actual resulting damage is unintended. In Taylor et al. v. LM Insurance Corp., Case No. 20-3166 (10th Cir. Jul. 11, 2022), the named insureds’ 18-year-old daughter (who was also an “insured” under the policy) was home alone and used a lighter to ignite her father’s side of her parents’ bedspread, intending to “make him mad.” Though she intended to, and believed she had, put out the fire, the fire spread and caused damage to the insureds’ home.

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Tagged with: fire, homeowners insurance, intentional loss exclusion, lm insurance corp., taylor, tenth circuit, unintended damage
Posted in Uncategorized