NEW BOSTON, Texas – Republic Lloyds is the latest insurer to come out on top after taking a civil suit all the way to trial, recently defeating a claim for underpayment – a string of industry victories that leave Texas policyholders paying the price, says one expert.
Through Speights & Worrich, plaintiffs Bobby and Mary Jane McCoy filed suit against Republic and adjuster Karl Kiehl, alleging the defendants failed to fully reimburse them for property damage caused by plumbing leaks on Feb. 27, 2011.
As previously reported, Speights & Worrich, which claims to specialize in insurance disputes, was named in a May lawsuit accusing the firm of barratry.
At trial, jurors were asked to find by a preponderance of evidence that the McCoys sustained damage or loss to their New Boston home that was caused solely by plumbing leaks, to which they answered “No,” according to the charge of the court, filed July 15.
Steve Badger, a commercial insurance attorney and partner at Zelle LLP, called the result “predictable.”
“The insurance industry is winning the vast majority of these matters taken to trial,” Badger said. “Juries across Texas are realizing that these lawsuits are not about insurance companies failing to pay for covered damage.”
Badger says “sadly” contractors, public adjusters, and attorneys are misleading homeowners into believing they were underpaid.
“Lawyers are filing lawsuits with little investigation of the facts and with the expectation that the insurance company will make some nuisance value settlement offer,” he added. “And when they don’t, the plaintiff’s lawyer is in a pickle. He has no choice but to take the case to trial.
“And not surprisingly the insurance companies that have stopped settling these meritless cases are prevailing at trial.”
The downside, Badger says, is the cost of taking all those cases to trial is “enormous” and directly impacts the Texas consumer.
“The Texas insurance industry is passing along this cost by way of premium increases and reduced coverage,” Badger said. “It’s the cost of these meritless lawsuits that is driving up insurance premiums for all Texans.”
In their first amended petition, the McCoys accused Republic and Kiehl of Texas Insurance Code and Deceptive Trade Practice Act violations.
Specifically, the couple accused Kiehl of improperly adjusting their claim and conducting a “substandard” inspection, “which failed to include all of Plaintiffs’ damages,” the suit states.
“His estimate did not allow adequate funds to cover repairs to restore Plaintiffs’ home.”
The McCoys claimed their damages exceeded $29,000 and should have been paid for by Republic.
The couple’s policy had limited foundation coverage, court records show.
The McCoys further alleged the defendants’ conduct was committed knowingly, entitling them to exemplary damages.
Speights & Worrich attorneys Shelly Enyart and Jake Rogiers represented them at trial.
Republic was represented by Thompson Coe attorneys Rick Harmon, Linda Ressetar and David Taylor.
The case was filed in Bowie County, cause No. 12C1684-202.