Firm News

An April 2016 hail storm near downtown Plano, Texas left a trail of damages to all buildings, houses and structures in its path. Included in the destruction were 13 buildings owned by a TALG client. The claim raised multiple issues. In the property insurance policy, there was an unexplained bundle of 4 buildings on one of the ten damaged premises (the other 9 premises were limited to one building each) that had a profound impact on the sublimits for the coverage for upgrades required by city code. There were also issues involving the insured’s right to be its own general contractor, including the recovery of overhead and profit. Accordingly, after its initial payment, the insurer took the position that it had already overpaid the claim and thus, it did not owe anything more on it.

In August 2017, after several negotiation sessions, a site inspection and an Examination Under Oath, the claim remained unresolved, requiring the client to decide whether to file suit before the September 1, 2017 inception date of the revisions of the Texas Insurance Code for weather related claims, which imposed significant restrictions on parties asserting first party property insurance claims. That decision was averted by securing an agreement from the insurer that a suit, if filed, would be governed by the laws in effect on August 31, 2017.

Nonetheless, the claim as a whole remained unresolved and it became increasingly contentious. This led to a last-ditch attempt to avoid litigation in a mediation presided over by Dallas Mediator Courtney Bass. Although the Mediation was initially unsuccessful, Mediator Bass sponsored a mediator’s proposal, which if accepted would require the insurer to pay a significant amount over its last offer at the Mediation. Fortunately for all involved, both parties accepted the Mediator’s Proposal thereby avoiding protracted and contentious litigation.

“I knew that once a suit was filed, the price for resolution would increase significantly, which might have had the effect of forcing a trial. Our client was a small businessman who could not afford to throw in the towel, but whose resources would have been stretched to the limit during the delay period to litigate a complex 13 building claim with difficult legal issues. As much as we look forward to try lawsuits, a trial was not in the best interests of the client. Accordingly, we were grateful that it was resolved without litigation.”