After being accused of violating the Insurance Code, Federal Insurance Company had its summary judgment win affirmed in the Fourteenth Court of Appeals on March 26.
Junious Valentine, who previously won a default judgment against his former hospital employer, then sued the hospital’s insurance company, Federal for breach of contract, conspiracy and Insurance Code violations. He alleged that Federal was responsible for paying the $87,598 judgment he was awarded against the hospital. Justices Ken Wise, Jerry Zimmerer and Charles A. Spain affirmed the judgment for Federal.
The judges granted summary judgment on the breach of contract claim after disagreeing with Valentine that Federal had to show prejudice via Texas law when it comes to an untimely notice from the hospital.
“Federal adduced undisputed evidence that Federal did not receive notice of Valentine’s claim within the policy period or the additional 180-day period,” wrote Judge Wise. “Timely notice under this policy is essential to coverage. Because there was no timely notice, there is no coverage, regardless of showing any prejudice.”
He also lost in his Insurance Code claim as the judges pointed out that the lower court didn’t make any mistakes when it granted summary judgment against Valentine. Plus, Valentine didn’t claim he suffered any injury outside of his right to being entitled to policy benefits, so the Insurance Code ruling stands.
Even though Federal didn’t file a motion for summary judgment on the conspiracy claims, the judges affirmed the ruling for Federal anyway, even if the lower court erred. “Assuming without deciding that the trial court erred, any error in this case was harmless because the trial court properly granted summary judgment on the underlying claims,” wrote Justice Wise.
While Federal covered the hospital for employment discrimination claims, a section of the policy required the hospital to provide Federal with written notice of an employment lawsuit no more than180 days after the end of the policy. The policy lasted from Nov. 3, 2013, to Nov. 3, 2014. During this timeframe, Valentine sued the hospital. Then, on Feb. 27, 2015, the hospital filed for Chapter 11 bankruptcy, and the court dismissed the case, but it was reinstated after an automatic stay was lifted. Still, just after the case was revived, the hospital issued a “notice of denial of insurance coverage and reinstatement of stay,” according to the opinion, arguing that Federal told the hospital that it was denying Valentine’s claim. The hospital then issued a letter that said the coverage was refused since the 180-day deadline wasn’t met. Valentine was subsequently granted $87,598 in a default judgment, before suing Federal. Federal was granted its motion for summary judgment that Valentine should take nothing from the insurance company, and the appeals court has affirmed.