Raizner Slania LLP has filed an insurance lawsuit on behalf of Donley County, Texas motel owners against Capacity Insurance Company and Patrick R. Meegan (the “defendants”). The lawsuit was necessary due to the unreasonable denial of the plaintiff’s wind and hailstorm damage claim.
December 2018 Wind and Hailstorm
The allegations in the petition are as follows:
On December 26, 2018, a wind and hailstorm struck the plaintiffs’ property, resulting in significant damage to the structure, including damage to sizeable portions of the property’s roof. As a result, there was also substantial damage to the interior and exterior of the buildings and signage. Immediately after the storm, the plaintiffs filed an insurance claim with their carrier.
The insurance carrier—Capacity—assigned Patrick Meegan as the lead adjuster to handle the claim. Meegan inspected the property in March of 2020, but was unqualified and incapable of adequately assessing the damages to this type of commercial property. As such, he was the source of ongoing delays throughout the claims process. Capacity subsequently engaged Rimkus Consulting Group, Inc. to perform an inspection of the property. Capacity chose Rimkus – an engineering consulting company consistently retained by insurance carriers – to generate a report it could use to deny or severely underpay the claim. Per Capacity’s instructions, a consultant from Rimkus, Kenneth Wong, inspected the property to determine the scope of the loss. Mr. Wong’s report asserted the damage was due to normal wear and tear despite the obvious significant windstorm damage. Capacity issued two denial letters to the plaintiffs in March 2019 and April 2020.
To date, the carrier has failed to issue the full payment owed under the policy covering plaintiffs’ property and instead authorized continued delays and underpayments. Due to Capacity’s outcome-oriented, inadequate, and haphazard investigation, the carrier has refused to pay for covered damages under the policy.
Following Governor Greg Abbott signing House Bill 1774 into law as Section 542A of the Texas Insurance Code, the plaintiffs gave pre-suit notice to Capacity. The pre-suit notice provided a comprehensive outline of plaintiffs’ claims and damages, quantified their loss, and even offered to waive a formal claim for attorneys’ fees if the contractual amounts were paid promptly. Capacity did not respond to the plaintiffs’ demand.
The Carrier Acted in Bad Faith
In addition to the actions mentioned herein, plaintiffs specifically alleged defendants acted in bad faith by:
Failing to attempt to effectuate a prompt, fair, and equitable settlement of a claim with respect to which liability has become reasonably clear
Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under its policies
Failing to provide promptly a reasonable explanation in relation to the facts or applicable law
Refusing to pay the claims without conducting a reasonable investigation
Misrepresenting the insurance policy under which it affords property coverage to plaintiffs by making an untrue statement of material facts
Misrepresenting the insurance policies under which it affords property coverage to plaintiffs by failing to state a material fact necessary to make other statements not misleading
Misrepresenting the insurance policies under which it affords property coverage to plaintiffs by making a statement in such manner as to mislead a reasonably prudent person to a false conclusion of material facts and failing to disclose a matter required by law to be disclosed
Knowingly committing the foregoing acts, with actual knowledge of the falsity, unfairness, or deception
Failing to acknowledge receipt of the claim
Failing to timely commence investigation of the claim or to request from the plaintiffs any additional items, statements, or forms the defendants reasonably believe to be required
Failing to notify the plaintiff in writing of the acceptance or rejection of the claim not later than the 15th business day after receipt of all items, statements, and forms required by the defendants
Delaying payment of the plaintiffs’ claim
The plaintiffs additionally alleged Capacity breached its contract, breached its duty of good faith and fair dealing, acted fraudulently and with malice, and violated the Texas Deceptive Trade Practices Act (DTPA).
Texas Insurance Coverage Lawyers
If you are a commercial property owner and your insurance claim has been wrongfully denied or grossly underpaid, the Texas insurance coverage lawyers at Raizner Law can help. Contact us today for a free consultation to review your case.