2009 Houston Marine Insurance Seminar
Vincent E. MorganPillsbury Winthrop Shaw Pittman [email protected]
Ten Things About Texas Insurance Law You Should Know
Overview
Changes to the Insurance Code
Myths, Mistakes & Misconceptions
Some (Sort of) Interesting Historical Facts
Preview of Coming Attractions
Two Take-Aways
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now (and it has more volumes than any other except the Texas Government Code).
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
5. Clients and lawyers have new reasons to talk.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
5. Clients and lawyers have new reasons to talk.
6. The Texas Department of Insurance gets to update its regulations.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
5. Clients and lawyers have new reasons to talk.
6. The Texas Department of Insurance gets to update its regulations.
7. Insurers get to update their forms.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
5. Clients and lawyers have new reasons to talk.
6. The Texas Department of Insurance gets to update its regulations.
7. Insurers get to update their forms.
8. We get to say “case of first impression.”
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
5. Clients and lawyers have new reasons to talk.
6. The Texas Department of Insurance gets to update its regulations.
7. Insurers get to update their forms.
8. We get to say “case of first impression.”
9. We get to argue the Code Construction Act all over again.
Changes to the Texas Insurance Code
1. From 4 numbers to 6.
2. The Insurance Code is actually a code now.
3. Help is now available – Annotated Texas Insurance Code.
4. All (or almost all) of your old citations are now outdated.
5. Clients and lawyers have new reasons to talk.
6. The Texas Department of Insurance gets to update its regulations.
7. Insurers get to update their forms.
8. We get to say “case of first impression.”
9. We get to argue the Code Construction Act all over again.
10. We get to read the “derivation tables” once more.
Changes to the Texas Insurance Code
Supposed to be non-substantive revisions
Tex. Ins. Code §30.001 – no substantive changes intended
But revisions are substantive
Fleming Foods v. Rylander (Tex. 1999)
Changes to the Texas Insurance Code
Example – 21.55 542.051
Remedy
542.060 describes the 18% remedy as “interest” does this negate the “penalty” argument? does this affect “interest on interest”?
10 Myths, Mistakes & Misconceptions
Myths, Mistakes & Misconceptions
Myth #1 – Putting negligence in the pleading makes it covered
Duty to defend determined by pleaded facts, not causes of action
Some intentional conduct is still not covered
Farmers v. Griffin (Tex. 1997)(drive-by shootings are not accidental)
Inferred intent for sexual abuse of minors
Myths, Mistakes & Misconceptions
Myth #2 – Intentional conduct is never covered
Intentional conduct vs. “intended or expected” injuries
Very intentional vs. very injurious
Coverage B
Myths, Mistakes & Misconceptions
Myth #3 – 21.55 only applies to 1st party coverage
Lamar Homes (Tex. 2007)
“Lawsuit Insurance” vs. “Liability Insurance” Gray v. Zurich (Cal. 1966)
Definitions in the statute
Focus on the coverage at issue
Myths, Mistakes & Misconceptions
Myth #4 – Extrinsic evidence can never be used to determine the duty to defend
Defense limited by complaint allegation rule:
Fielder Road Baptist Church (Tex. 2006)
but see
Allstate Ins. Co. v. Hallman (Tex. 2004)(profit motive inferred from nature of activity)
Or any Additional Insured Case
Evanston Insurance Company v. Atofina Petrochemicals, Inc. (Tex. 2008)
Atofina Petrochemicals, Inc. v. Cont'l Cas. Co. (Tex. 2005)
Distinction between “coverage only” facts, “liability only” facts and overlapping facts
And recently used to determine date
Boss Mgmt. Servs., Inc. v. Acceptance Ins. Co. (S.D. Tex. 2007)(referring to certificate of occupancy to determine earliest possible date of damage)
Myths, Mistakes & Misconceptions
Myth #5 – If there is no duty to defend, there can never be a duty to indemnify
Duties to defend and indemnify are “separate and distinct.”
8 Corners Rule vs. Actual Facts
Free Amendment of Pleadings
Trial by Consent
Trinity v. Cowan (Tex. 1997) – Footnote 5 Texas Supreme Court held no duty to defend, but did not address whether the
facts proved at trial might be sufficient to trigger the duty to indemnify Hartford v. Litchfield (Conn. 2005) – Connecticut case holding duty to indemnify
existed even where duty to defend did not
Myths, Mistakes & Misconceptions
Myth #6 – If there is an ambiguity, the insured wins
Insured’s interpretation must be reasonable
Insured’s interpretation must actually support coverage
Insured’s interpretation can be less reasonable
Insurer’s interpretation can be more accurate reflection of parties’ intent Ultimate test is whether insured’s interpretation is reasonable
Myths, Mistakes & Misconceptions
Myth #7 – Waiver and estoppel cannot be used to create coverage where none exists
“Coverage cannot be created by waiver.”
Texas Farmers Ins. Co. v. Mc Guire (Tex. 1988)
But, coverage can be created by failing to reserve properly and causing prejudice
Farmers v. Wilkinson (Tex. Civ. App. – Austin 1980) Ulico Cas. Co. v. Allied Pilots Ass’n (Tex. 2008)
Waiver requires a known right What insurance company can defeat this?
Estoppel requires some prejudice or detrimental change in position
Quasi-Estoppel does not require detrimental reliance
Myths, Mistakes & Misconceptions
Myth #8 – Certificates of insurance have any legal effect
ACORD language — does not amend, extend, or alter the terms of the policy
TIG Ins. Co. v. Sedgwick James (S.D. Tex. 2001)
Reliance on certificates may be unreasonable, but they still have some value on a business
level
Myths, Mistakes & Misconceptions
Myth #9 – Bad faith is dead
Individual vs. institutional claimantsMental anguish
Independent injuryCastaneda (Tex. 1999) & Parkans (5th Cir. 2002)
v.
Vail (Tex. 1988) & Waite Hill (Tex. 1998)
Whether coverage exists is the key
Myths, Mistakes & Misconceptions
Myth #10 – You’ve read Stowers
Stowers (Tex. Comm’n App. 1929) was a 2-1 opinion
The dissent was never published
Stowers
Accident scene at Austin & Capitol
Stowers Furniture Building
2-1 Decision
Reasonable person vs. reasonable insurer
Very clear in Stowers
Not so clear in later cases – APIE v. Garcia (Tex. 1994)
“Both statements are correct.” – Excess Underwriters v. Frank’s Casing (Tex. 2008)
Overview
Changes to the Insurance Code
Myths, Mistakes & Misconceptions
Some (Sort of) Interesting Historical Facts
A Preview of Coming Attractions
Two Take-Aways
Overview
Changes to the Insurance Code
Myths, Mistakes & Misconceptions
Some (Sort of) Interesting Historical Facts
A Preview of Coming Attractions
Two Take-Aways
Two Take-Aways
Continuing education credit
The Stowers dissent
2009 Houston Marine Insurance Seminar
Vincent E. MorganPillsbury Winthrop Shaw Pittman [email protected]
Ten Things About Texas Insurance Law You Should Know
Top Related