Practice Areas:
Insurance Law
For
Insurers
Skelton & Woody's
clients call
upon us to address regulatory concerns, coverage questions
under a broad spectrum of policy forms, extra-contractual
litigation and appeals. We provide coverage opinions, file
declaratory judgment actions, and handle all manner of "bad
faith" litigation in state and federal courts throughout
Texas. Please see the Skelton & Woody News for a summary of recent trials and other decisions in insurance cases.
A.
Litigation
Our
trial practice encompasses the broadest spectrum of extra-contractual
and commercial cases, from the most complex antitrust
and class action matters to more routine bad faith disputes.
In recent years, this work has been fairly evenly divided
between CGL coverage disputes between large commercial
entities, and homeowners' suits involving mold and foundation
loss claims filed under the Texas Insurance Code and Deceptive
Trade Practices Act. While our first goal is to defeat
such claims on motions to dismiss or for summary judgment,
we are prepared to conduct cost-effective trials in the
cases that need to be tried.
Our jury trial experience
ranges from a $106 million bad faith coverage case tried
in San Antonio (complete "take nothing" judgment
entered after a three-week trial), to arson/bad faith
suits, to a recent flood of extra-contractual cases involving
coverage for foundation and mold damage to a variety of
structures. Please see Skelton & Woody News for trial and summary judgment victories in 2005.
Summary Judgment for State Farm in March 2009
The firm prevailed on a summary judgment motion in state district court in Travis County on March 10, 2009 in Cause No. D-1-GN-08-000897; Angelia Davidson v. State Farm Lloyds and Buddy Henderson; in the 261st Judicial District Court, Travis County, Texas. The lawsuit alleged breach of contract and bad faith in connection with a fire loss claims.
Summary Judgment for Continental Casualty on February 9, 2009
The firm won summary judgment for Continental Casualty Co., a Hartford Company, in February 2009 in a coverage case involving accidental death benefits. The decision turned on contractual limitations, statutory limitations and coverage issues. Here is a link to this order: Mildred Dick Opinion
Summary Judgment for Travelers on February 21, 2007
The firm won a summary judgment in Travelers favor in state court in Austin on February 21, 2007 in Olga Palacios v. AIC-Sunbelt Group, Inc. and Travelers Lloyds of Texas Insurance Company. The case involved a frequent litigant who sued Travelers and Plaintiff's insurance agent for allegedly failing to bind new coverage after the cancellation of her policy. Plaintiff also alleged that her signature had been forged on a policy cancellation request. She sued for a variety of contractual and extra-contractual theories, including fraud, and asserted a large mental anguish claim. Travelers prevailed on limitations grounds as to all but one claim asserted, enforcing a contractual limitations period that was shorter than the one provided for by statute, and prevailed on a "no evidence" summary judgment on the only claim not barred by limitations, fraud.
Victory in Texas Supreme Court in February 2007
On February 9, 2007, The Texas Supreme Court issued its opinion in State Farm Life Insurance Company v. Martinez, 2007 WL 431043 (Tex. Feb. 9, 2007), __S.W.3d__ (Tex. 2007), reversing the Tenth Court of Appeals’ opinion that unfairly penalized State Farm for not choosing and apportioning among three competing claimants to the same $500,000 life insurance proceeds. Eva Ramos and Hamp Skelton split the oral argument, held in December 2006. The unanimous opinion vindicated our client's decision to file an interpleader action, paying the policy proceeds into the registry of the court, in the face of conflicting claims by the deceased's daughter, former wife (whose divorce decree made her “irrevocable beneficiary”) and widow whom the deceased had attempted to designate as sole beneficiary. The opinion clarified how the Texas prompt payment statute (the former Tex. Ins. Code Art. 21.55) applies when insurers who face rival claims for the same benefits interplead the funds.
State Farm Life Insurance Company v. Martinez, 2007
Victory on Appeal on April 19, 2006
In Estate of Hunt v. St. Paul Fire and Marine Ins. Co, 2006 WL 1004870 (Tex. App.--San Antonio), Hunt's estate sought $5 million in actual damages plus various extra-contractual measures of damage in connection with coverage for a fatal collision between two commercial trucks. St. Paul won summary judgment on all theories and the San Antonio Court of Appeals affirmed in an opinion containing language clarifying the appropriateness of summary disposition when a plaintiff seeks to continue the hearing.
Victory on Appeal on January 12, 2006
In Jennings v. State Farm Lloyds, 2006 WL 66408 (Tex. App.--Austin), the Austin Court of Appeals affirmed a case that clarified the scope of coverage afforded under homeowners' policies. The policyholders, who had been sued by the buyers of their house for failures to disclose defects, sought what amounted to "seller's errors and omissions" coverage under their homeowner's policy. The Jennings opinion clarified the difference between property damage covered by homeowner's insurance and "economic damages" flowing from failures to disclose or failure to live up to promises to the buyers.
Victory on Appeal on September 7, 2005
In State Farm Lloyds v. Blacklock , (2005 WL 2155635 Tex. App.-- Waco, September 7, 2005) the Waco Court of Appeals agreed with State Farm’s Daubert/Robinson challenges to all three of Plaintiffs’ expert witnesses, reversed the trial court’s judgment and rendered judgment for State Farm. This was an important win for State Farm in that these three experts had appeared in scores of cases against the company. Skelton & Woody won a similar “reverse and render” against the same plaintiff’s lawyer in State Farm Lloyds v. Mireles, 63 S.W.3d 491 (Tex. App.--San Antonio 2001), also prevailing on a Daubert/Robinson argument to the effect the trial court abused its discretion in permitting an engineering expert’s testimony. Rehearing was overruled November 29, 2005.
Summary Judgment for St. Paul in Medina County in 2005
The Estate of Geneva Hunt sued St. Paul and broker, Marsh, Inc., claiming $5 million in underinsured motorist (UIM) coverage in connection with a fatal accident between two 18-wheeler trucks. Hunt's employer, Reynolds Trucking, had purchased a $5 million liability policy from St. Paul, but had only bought the $55,000 statutory minimum UIM coverage. Hunt's estate sued for failure to procure proper coverage and a host of extra-contractual theories. The case was heard in Hondo, Texas by an excellent judge who "rides the circuit," sitting in several counties west of San Antonio. Hamp Skelton successfully argued for summary judgment, which was entered at the hearing on April 21, 2005.
On February 14, 2001, we won a $30 million summary judgment on a Travis County extra-contractual case involving extensive structural damage to apartment buildings.
On February 12, 2001, we won a major summary judgment for St. Paul against Phillips Petroleum Company in a construction coverage issue involving a work site explosion in Brazoria County. A unanimous panel of the Houston Court of Appeals affirmed in 2003 and the Texas Supreme Court denied Phillips' petition for review in 2004.
A representative sample
of corporate litigation we have handled for insurer clients includes:
-
Defense
of one of the nation's largest carriers in class litigation brought in El Paso by chiropractors against workers'
compensation insurers. Plaintiffs sued under RICO,
the antitrust laws, as well as a variety of state
common law and statutory theories.
- Defense
of life insurance companies in suits involving multiple
claimants for the same benefits.
- Defense
of a large insurer in massive "destruction of
business" litigation brought in Barbour County,
Alabama alleging bad faith in the handling of hundreds
of fraud claims against insured.
- Declaratory Judgment suit brought on behalf of over
100 insurers organized by the AIA challenging state
regulatory rulings concerning assigned risk pool allocations.
- Defense of three insurer groups in related antitrust
and conspiracy litigation brought by Milberg Weiss
and others in fifteen states.
B.
Appeals
Skelton & Woody has had a major role in shaping coverage and
bad faith law in the Texas courts of appeal and Texas
Supreme Court. We handle appeals not only of the cases
we try, but are frequently called upon to take over a
file at the post-trial level. Recent reported decisions
include:
Phillips Petroleum Co. v. St. Paul Fire & Marine
Ins. Co., 113 S.W.3d 37 (Tex. App.--Houston [1st
Dist.] 2003, pet. denied) (upholding summary judgment
in favor of St. Paul and validating its interpretation
of its CGL "fronting" policy.)
Closner v. State Farm Lloyds, 64 S.W.3d 5 (Tex.
App.--San Antonio 2001, no pet.) (affirming jury verdict
and judgment for insurer based on "first manifestation
of loss" prior to the policy period sued upon)
State Farm Lloyds v. Mireles, 63 S.W.3d 491 (Tex.
App.--San Antonio 2001, no pet.) (reverse
and render decision in insurer's favor based on Daubert/Robinson
challenge to plaintiffs' sole causation expert)
Martin Marietta v. St. Paul Fire and Marine Ins. Co.,
2002 WL 261437 (5th Cir. 2002) (upholding summary judgment
for insurer on novel question under CGL policy concerning
forseeability of damage to downstream water rights owners
by insured's decision to divert creek water: not an "occurrence.")
Sharp v. State Farm, 115 F.3d 1258, 1260 (5th Cir.
1997) (establishing no coverage for foundation damage
and affirming dismissal of all extra-contractual claims)
Performance Improvement Corp. v. State Farm Lloyds,
974 S.W.2nd 135 (Tex. App.--San Antonio 1998, pet. denied)
(establishing that professional services exclusion in
commercial general liability policies is unambiguous and
excludes coverage for business-related activity)
Oram v. State Farm Lloyds, 977 S.W.2d 163 (Tex. App.--Austin,
1998, no writ) (establishing that an erroneous coverage
position that was nonetheless "reasonable" compels
summary dismissal of extra contractual claims)
C.
Regulatory Work
We
represent insurance entities in all phases of regulatory
matters before the Texas Department of Insurance. For
example, in the fall of 2003, Allstate retained
us to challenge a drastic roll-back of homeowners insurance
rates ordered by the Commission of Insurance after a legislative decree. We handled the administrative hearings, challenging the legitimacy and constitutionality of the rate roll-back, until
Allstate reached an agreement on rates with the Department.
Our clients call upon us to respond to investigation and
audits, for representation in administrative litigation,
rule-making proceedings and rate-making applications, and
to resolve regulatory problems of any nature. We also assist
insurers in becoming licensed to conduct business in Texas.
Frequently, we counsel insurers on underwriting and rating
issues on a variety of policies, including the more complex
retrospectively rated and large deductible workers' compensation
policies.
We also handle appeals of administrative agency
decisions and the litigation that can follow. For a separate
discussion of our regulatory work for health insurers, please see
our Health Law section.
D.
Regulatory Appeals
Butler
Weldments v. Liberty Mutual Ins. Co., et al., 35 S.W.3d 654
(Tex. App.--Austin 1999)
On October 7, 1999, the Austin Court of Appeals affirmed
a judgment we obtained in favor of a large group of insurers
organized by the AIA. The dispute began in rulemaking
proceedings at the TDI over allocation of a $200 million
surplus accumulated in a Texas assigned risk pool. Dissatisfied
with the Commissioner of Insurance's ruling, a group of
policyholders filed class litigation, alleging that a
defendant class of insurers conspired to skew the rule-making
process. We obtained dismissal by challenging Plaintiffs'
pleadings. The Plaintiffs appealed and Hamp Skelton argued
for the insurers. The opinion affirming the dismissal
can be found at 35 S.W.3d 654 (Tex. App.--Austin 1999).
E.
Clients
Our
regular clients include The St. Paul Companies, The Travelers, United States Fidelity and Guaranty, State
Farm, Crum & Forster, and Texas Mutual
Insurance Company. We also represent insurance brokers.
In addition to litigation, appeals and regulatory work,
we counsel insurers on the duty to defend, and a wide
variety of coverage concerns.
For Agents and Brokers
Skelton & Woody represents agents and brokers on regulatory matters, litigation and appeals.
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