Couple receives jury award in trial over windstorm insurance coverage

David Yates Apr. 23, 2008, 9:27am

A local insurance agency was recently ordered by Jefferson County jurors to pay a Nederland couple nearly $47,000 in damages for failing to obtain windstorm coverage for them before Hurricane Rita struck the Golden Triangle area.

The verdict in the trial of Gay Lynn Anderson et al vs. F.B. Taylor Insurance and Real Estate Agency was reached on Wednesday, April 23, in Judge Milton Shuffield's 136th District Court.

Anderson and Dalton Green sued F.B. Taylor Insurance of Nederland in December 2005 after their Hurricane Rita policy claim was denied by the Texas Windstorm Association.

During the trial and in their suit, Anderson and Green said they paid F.B. Taylor Insurance $817 for windstorm coverage just days before Rita hit, and in turn, that the insurance agency confirmed they were protected three days prior to the storm's landfall.

"On Sept. 19, 2005, plaintiffs were informed by employees of F.B. Taylor Insurance that they had coverage for windstorms," the suit reads.

"More specifically, F.B. Taylor Insurance's representatives solicited, received and cashed a … $817.00 check, which was to cover hurricane damage."

"Plaintiffs were informed by (an F.B. Taylor Insurance employee) on Sept. 21, 2005 that they in fact had obtained coverage for a windstorm peril," the suit says.

"However, when the property was damaged during Hurricane Rita, the Texas Windstorm Association denied coverage on the basis that a policy was never written."

The Texas Windstorm Insurance Association has a Binding Exception for applications made prior to a hurricane: "No new or increased coverage applications will be accepted on the day (beginning at 12:01 a.m.) or after a windstorm designated as a hurricane by the U.S. Weather Bureau is in the Gulf of Mexico or within the boundaries of 80 degrees west longitude and 20 degrees north latitude until the General Manager determines that the storm no longer threatens property within the designated catastrophe area of the Texas Windstorm Insurance Association."

According to its archives, the National Hurricane Center first announced that Rita had reached hurricane strength in an advisory issued at 11 a.m. Sept. 20, 2005. At that time, the center of Hurricane Rita was located at 81 degrees west longitude and 23.8 degrees north latitude. The storm entered the Gulf of Mexico by 5 p.m.

Hurricane Rita made landfall at around 4 a.m., Sept. 24, 2005, near Sabine Pass as a Category 2 hurricane, an NHC announcement stated.

In its answer, F.B. Taylor Insurance denied any wrongdoing, claimed the company acted in a "reasonable and prudent" manner, and argued Anderson and Green were the negligent ones because a contract never existed.

"Plaintiffs' conduct constituted … contributory negligence," the insurance company's answer states.

"As an affirmative defense, defendant denies the existence of a contract between plaintiffs and defendant. Alternatively, if a contract were found to exist, this defendant pleads the affirmative defense of impossibility. As an additional affirmative defense, defendant pleads waiver, promissory estoppel and equitable estoppel."

Believing strongly that a solid contract never existed, F.B. Taylor Insurance filed a counterclaim against Anderson and Green in 2006, contending the couples' suit was "groundless and brought for the sole purpose of harassment."

Jurors didn't fully buy F.B. Taylor Insurance's "no contract existed" defense, ruling that the insurance company was 70 percent negligent while Anderson and Green were only 30 percent negligent – awarding the couple $46,500 in actual damages.

In the civil realm, a defendant is negligent if the preponderance of evidence shows he/she is at least 51 percent negligent.

The trial began Monday, April 21.

Anderson and Green were represented by Reaud, Morgan & Quinn attorney John Werner.

F.B. Taylor Insurance was represented by attorney Rick Lee Oldenettel of the Oldenettel & Dies law firm.

Case No. D176-172

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