Big Freeze - TX'21 - FAQ

Q: Are the courts going to be able to handle a lot of new litigation on top of COVID-19 and backlog? Will that cause courts to order mandatory mediation, MDL, other?

A: There is a backlog due to orders banning jury trial and criminal backlog. There is a precedent – Bexar County issued mandatory standing order during the 2016 hail storm litigation including mandatory discovery and mediation.

 

Q: How do commercial and residential claims vary?

A: In terms of complexity, business interruption, more likely to involve public adjusters.

 

Q: Can adjusters still be sued in Texas?

A: Yes, even under 542A. Removal depends on amount in controversy and election.

 

Q: Are there extensions to the claim-handling deadlines?

A: Yes for CAT claims.

 

Q: Are suits going to be litigated in federal or state court or both?

A: Both

 

Q: As it seems the majority of claims being filed are covered by the respective policies. Are there any anticipated uncovered losses expected?

A: That will depend on the claim and policy of course, but very generally speaking, mold is commonly excluded or subject to very specific provisions relative to accidental water loss, typically with sub-limits. Anti-concurrent causation exclusions could come into play (e.g., defective work/construction) on roofing claims, partial denials with respect to Building Code requirements depending on limits, and “other structure” issues such as damage to fencing, swimming pools.

 

Q: What are the differences between a DTPA claim and an Insurance Code claim?

A: Insurance Code specific to insurance policy claims; DTPA is for “consumers” in sales/services transactions, including insurance. The DTPA provisions are directed at deceptive trade practices, typically occurring at the time of sale as opposed to claims servicing. However, unlike the Ins. Code, the DTPA includes a cause of action for unconscionability. A violation of one can be brought under the other.

 

Q: Are there different damages? (Code versus DTPA)

A: Essentially yes: actuals/economics, plus fees, plus mental anguish and up to trebling for knowing/intentional violations.

 

Q: What makes the DTPA concerning? Unconscionability, attorney’s fees. For breach of common law, no fees, no trebling, and punitive damages subject to clear and convincing evidence, other statutory limitations for punitive damages.

A: What is a pretextual denial? Recent case: Tex. Windstorm Ins. Ass’n v. James, 2020 Tex. App. LEXIS 6719 (Tex. App.—Corpus Christi-Edinburg 2020, pet. filed). Insurer’s basis for ignoring insured’s estimates --the fact that its adjuster hadn’t viewed reported damages—was not reasonable and contradicted inclusion of some of the same damage in a prior estimate by the adjuster.