Texas Insurance Code Chapter 542A

1. Paula purchases a home via warranty deed from Sal. Paula also purchases a title insurance policy from Friendly Title. Six months after issuing the policy, Paula is sued by the Ronald's Roofing based on a lien it had on the property that had been put in place when Sal refused to pay for roofing repairs. Friendly had not spotted the lien, which had been properly recorded, and thus had not excepted it from coverage. Paula seeks coverage from Friendly. Friendly does not acknowledge receipt of Paula's email for three weeks. It then acknowledges it but does not request any information. Three months later, Friendly asks Paula to provide any information she has on the roof repairs. Paula responds a day later that she has no such information. Friendly then does nothing. One year later, it pays the claim in full. What rights does Paula have under Chapter 542 of the Insurance Code?

2. Red, a resident of Sugarland, Texas, is the insured under an automobile insurance policy issued by Travis Auto Insurance, Co. When he runs his insured vehicle (a 2014 Chevrolet Impala) into a tree, he files a claim with Travis. Travis immediately acknowledges the claim and requests police reports on the incident. It also immediately sends an appraiser to look at Red's car. Travis determines a week later that the car is totaled and offers Red $15,000 to settle the claim. Indeed, it tenders Red, $15,00 and says he can accept it without prejudice to any further claim he might have. Red believes the settlement is inadequate because his Impala was in immaculate condition. The matter is send to arbitration and the arbitrator determines six months later than Travis should have paid $16,000. What rights does Red have against Travis under Chapter 542 of the Insurance Code.

3. Simon has an automobile insurance policy with Travis Auto Insurance, Co. The policy has a $500 deductible for property damage claims. Simon's car is attacked by Virgil, who misread an "Amber Alert" warning and wrongly believed it was being used to kidnap a child. Simon files a claim with Travis for the $6,000 in damage caused by Virgil. Travis does nothing about the claim for six weeks. It then says it will pay Simon $5,500 but withhold $500 for the deductible. Three weeks later, Travis tenders Simon the $5,500. Simon cashes the check. Three years later, Simon sues Virgil for negligence and seeks the $500. He loses on grounds of the statute of limitations. Does Simon have any resource against Travis? Does anyone?

4. Tywin has life insurance with Casterly Rock Life & Health. When he is killed by a shot from a crossbow. Tywin's son Jaime files a claim with Casterly. Jaime does not provide any details about the nature of the death, just proof from a newspaper that Tywin has in fact died.  Casterly does not pay on grounds that it believes Jaime was part of a conspiracy with the killer and that payment is thus barred by the Slayer Statute. Jaime is incensed on hearing Casterly's assertion and immediately files suit against the company.  Two weeks later, Casterly files a verified plea in abatement saying that Jaime did not provide it with proper notice of the intended lawsuit. Jaime does not file any paperwork asserting that he did comply. 11 days from the filing, is the lawsuit abated?

5. Petyr Bailish owns a property in a prestigious community, "The Vale." He insures the property with Lannister Property & Casualty. Petyr files a claim with Lannister asserting that his roof was severely damaged during a recent hailstorm. Petyr submits a detailed report from a "public adjuster" showing the extent of the damage to the roof and claims that it will take $40,000 to replace it. Lannister immediately acknowledges receipt of the claim and asks for any estimates provided for repair costs. Three days later, Lannister tells Petyr it wants to send one of its inspectors to climb up on the roof and look at it. Petyr refuses to grant access to the property on grounds that the roof is too damaged for it to be safely examined. He says he will defend his property against all trespassers.  Two days later, Lannister notifies Petyr in writing that it refuses to pay the claim. It can not verify any damages and its own research of weather shows that there was no hailstorm in Petyr's area on the alleged date. Petyr now sends Lannister a "section 542A" notice specifying (again) how the property was damaged and demanding $40,000. Lannister again demands to see the property. Petyr again refuses. Petyr now sues Lannister for breach of contract, bad faith, violation of Chapter 541 and 542. Lannister files a plea in abatement. Petyr files an affidavit showing that he provided the notice required by Chapter 542A. How should the court resolve the abatement motion?

Assume the court rules against Lannister on grounds that its plea in abatement motion was not properly verified. How should the court resolve the section 541 and 542 claims?

6. Indira purchases homeowner's insurance using Allstar Insurance Agency. Allstar is an independent agency but, in fact, places 98% of its policies with Gigantic Casualty Co. When Indira asked Allstar if the policy would cover her for flood, Allstar said that it would. It turns out, that Allstar made this assertion frequently but the Allstar President said it was told to do this by Gigantic, a fact Gigantic vigorously denies. In fact, the policy placed with Gigantic excluded coverage for most forms of flood. Now, Indira's home has indeed been flooded. Gigantic would prefer not to have a trial in which one of the defendants, Allstar, is pointing fingers at Gigantic. What may Gigantic do to prevent such a trial? Suppose Indira still wants to point blame at Gigantic and impute Allstar's misstatements to Gigantic. What may Indira do to get Allstar's testimony before the trier of fact?

7. Write a formula or computer program in your favorite language -- it can be a spreadsheet -- that captures how Chapter 542A.007 works. Have fun. What incentives does the statute create for attorneys?  Do you see how 542A.007 relates to Chapter 542A.003?

8. Should the notice provisions of Chapter 542A apply when a case is brought (or removed to) federal court based on diversity of citizenship?

9. While speeding and intoxicated, Deborah swerves late one night to avoid a pothole in the road they may have been caused, at least partly, by erosion. She loses control of the vehicle and, due to the terrain, it becomes airborne and lands on the roof of Vic's home, which is close to the road. Substantial damage results to Vic's home. Vic does not have automobile insurance but he does have a homeowner policy with Agrarian Ins. Co. that appears to cover losses of this sort. On learning that Deborah had no auto insurance and had no assets, Vic files a claim with Agrarian for the losses. He does not file a Chapte 542A notice. May Agrarian abate the claim?