TEXAS LEGISLATURE PASSES HB 1774

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By: Kristine M. Sorenson & David E. Walker

The Texas legislature passed House Bill 1774, which applies to first party property claims in Texas, and is explained in the attached memo.  Governor Abbott has not yet signed it into a law, but he endorsed the bill in his State of the State speech in January 2017, and is expected to sign it.

The legislation creates a new section of the Texas Insurance Code – § 542A.  One highlight is Part 6, which permits an insurer to accept liability for the acts of its agents (i.e. adjuster, third-party claims administrator, managing general agent).  If liability is accepted, all claims against the agents must be dismissed with prejudice.  Another highlight is Part 7, which allows for a reduction in attorneys’ fees awarded to the claimant if the amount of actual damages (property damage) alleged in the pre-suit notice letter is greater than the amount of damages awarded by the jury at trial.

All seven parts of § 542A are explained in the attached client alert.

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WWM Hosts Career Exploration Lunch With YWCA Metropolitan Chicago’s Young Parents Program

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On March 21, 2017, WWM employees in a wide range of positions and with diverse backgrounds shared their stories and advice with a group of young women participating in YWCA Metropolitan Chicago’s Young Parents Program. The Program, available to pregnant or parenting teens on Chicago’s South Side, promotes healthy parenting and one-on-one support including home visitation, peer mentoring, and education and career advice. Over a lively lunch discussion, the group talked about the different roles that make up a law firm ranging from legal and paralegal positions to human resource management and accounting. WWM employees provided beneficial insight into their individual pathways through not only education but also mentorship, networking and prior jobs.

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Related Claims First Made Prior to D&O Policy Period Precludes Coverage, Florida District Court Holds

WWM recently obtained summary judgment on behalf of RSUI Indemnity Company when a Florida federal judge held it had no duty to cover an underlying $40 million consent judgment arising from claims of real estate fraud because every underlying claim asserted against the insured shares the same factual basis as a 2008 counterclaim that was “first made” before the policy’s inception.  RSUI Indemnity Co. v. Attorney’s Title Insurance Fund Inc., No. 13-670, M.D. Fla.

Attorneys’ Title Insurance Fund Inc. and Florida Title Co. (collectively, ATIF) sued Section 10 Joint Venture LLP, Sky Property Venture LLC and CAS Group Inc., seeking to recover $3 million that they paid for an allegedly fraudulently sold property. The underlying lawsuit alleged claims for equitable lien/constructive trust, injunctive relief and unjust enrichment.  Section 10 counterclaimed for slander of title, wrongful lis pendens, declaratory judgment, tortious interference and wrongful injunction.

ATIF sought coverage for the counterclaims from its commercial general liability insurers and RSUI, its directors and officers liability insurer.  Eventually ATIF’s unjust enrichment count was the only remaining claim, and Section 10 filed a claim for malicious prosecution against ATIF. The parties in the underlying dispute reached a settlement that resulted in a $40 million judgment against ATIF. Section 10 agreed to enforce the judgment only against ATIF’s insurers pursuant to Coblentz v. Am. Sur. Co. of New York, 416 F.2d 1059 (5th Cir. 1969).

ATIF’s liability insurer filed suit in the U.S. District Court for the Middle District of Florida, seeking a declaration as to coverage and RSUI intervened.  RSUI moved for summary judgment, arguing that there is no coverage because Section 10’s claim is a single claim that predates any RSUI policy.  The District Court agreed stating:

Contrary to Section 10’s position, the policies’ language is clear and unambiguous. For a claim to qualify for coverage, it must be first made during the respective policy period and it must not be factually or otherwise related to a previous claim. If it is factually or otherwise related to a previous claim, and that claim was first made before the respective policy periods, there is no coverage available. That is what occurred here. Every claim asserted against ATIF in the underlying state court litigation shares the same factual basis as the 2008 Counterclaim, which was ‘first made’ before the respective policy periods began. As such, there is no coverage afforded under the policies for these claims.

The judge added that the “Prior and Pending Litigation Exclusion, even in its modified form, is in harmony with this construction” rejecting Section 10’s argument that there was conflict between the Related Claims Condition and the Prior and Pending Litigation Exclusion.

RSUI was represented by the WWM team of Bill Bila, Robert P. Conlon and Cassandra L. Jones.

WWM Secures Summary Judgment Ruling Significantly Reducing Damages in Illinois Consumer Fraud Act Claim

Neil Holmen and Jeremy Kerman recently obtained a favorable partial summary judgment ruling in the Circuit Court of Cook County that will reduce our clients’ potential damages from nearly $1,000,000 to the low-five figures.

The April 1, 2016 summary judgment victory, and the Court’s August 3, 2016 denial of plaintiffs’ motion to reconsider came in a class action lawsuit brought on behalf of the tenants of an apartment complex in the South Loop neighborhood of Chicago. The plaintiff, on behalf of a proposed class of building tenants, sought the recovery of all sums paid by all tenants to the building owner and authorized management agent for gas, water and sewer utility services. The basis of the claim was that from mid-2011 to the time of the filing of the lawsuits, the owner and/or the authorized management agent allegedly failed to provide the tenants with the formula used to allocate utility charges amongst the tenants as required by the Illinois Tenant Utility Payment Disclosure Act (“TUPDA”). Specifically, plaintiff claimed that that the defendants’ failure to comply with the TUPDA was a violation of public policy, which in turn was a violation of the Illinois Consumer Fraud Act (“ICFA”), and that the purported class was therefore entitled to damages in the full amount of all utility payments ever made to defendants.

On behalf of the defendants, our firm prepared a partial summary judgment motion asking the court to find that plaintiff’s damages were limited to only those actually suffered (i.e. the overbilling for utilities, if any such overbilling even existed). The court agreed that plaintiff’s damages should be limited, noting that plaintiff’s complaint sought a refund of all amounts tenants paid for utilities during the purported class period, not just overcharges. Significantly, the court also recognized that one of the requirements to succeed on a cause of action under the ICFA is that a plaintiff must suffer actual damages, which the court defined as “actual pecuniary loss.” The court held then that the damages sought by the plaintiff were not “actual pecuniary loss,” but amounted to a penalty against the landlord, and that the terms of the TUPDA does not allow for any such penalty. The effect of the court’s ruling was to limit the plaintiffs’ damages to amounts paid by tenants in excess of the correct prorata share for each tenant, if any.

Walsh v. McCaffery Interests, Inc. and CJUF III McCaffery Roosevelt Residential I, LLC, No.2014 CH 16257, Circuit Court of Cook County, Illinois

 

WWM Hires Five New Attorneys

Walker Wilcox Matousek LLP (WWM) is pleased to announce the hiring of five new attorneys: Christopher J. Shannon; Mike J. Prather; Gauri Chopra, Kaitlin M. Calov and Nick Hamblen.

Christopher J. Shannon comes to the firm from Colorado where he represented clients in claim investigation, coverage analysis, examinations under oath, arbitration and litigation.  He has experience in various matters including professional liability, insurance coverage, bad faith, construction defect, personal injury and employment.  In addition, Chris routinely writes and speaks to insurers regarding developments in insurance law and bad faith claims.

Mike J. Prather regularly represents and advises clients from individuals to multi-national companies, on a wide range of matters including product liability, construction defects, professional negligence, oil and gas, insurance bad faith and catastrophic injury and death.  He has investigated, defended and prosecuted claims through the United States as well as Latin America and Europe.  In addition to his extensive experience Mike has an AV Preeminent® rating.

Gauri Chopra represents domestic and international insurers in complex insurance coverage disputes involving environmental, asbestos, product liability and professional liability claims.  In addition to practicing in Chicago, she has worked in house for Insurers in Bermuda and New Jersey.  Gauri is admitted in Illinois, New York, and Solicitor, England and Wales.

Kaitlin M. Calov graduated cum laude from Notre Dame Law School graduate (2013).  During law school she externed for the Illinois Appellate Court.  She focuses her practice in the areas of complex insurance coverage litigation and claims analysis.  Kaitlin has experience representing clients in matters involving environmental contamination, construction defects and third-party claims arising out of mass tort litigation.

Nick Hamblen is a recent JD/MIEBL graduate of DePaul University Law School (2016).  In addition to clerking for WWM before graduation, Nick interned in the Franklin County Circuit Court in Kentucky. While in law school, Nick completed a semester oversees studying at Universidad Pontificia Comillas and also received Honorable Mention for the Best Claimant Brief in the Vis East Moot Arbitration Competition in Hong Kong.

The addition of Christopher, Mike, Gauri, Kaitlin and Nick are vital in WWM’s efforts to continue providing exceptional, client-centric services to both our domestic and international clients.

Robbie Moehlmann, Travis Erskine and Daniel Ray Join Houston Office

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Walker Wilcox Matousek LLP is pleased to announce that Robbie Moehlmann, formerly a partner with Donato, Minx, Brown & Pool, P.C., has joined the firm in its Houston, Texas office effective March 7, 2016.  Robbie is a seasoned trial attorney with over 18 years of experience representing commercial and insurer clients in commercial, maritime, subrogation and sophisticated insurance coverage litigation throughout Texas and in numerous jurisdictions across the United States.  Joining Robbie are attorneys Travis Erskine and Daniel Ray who worked with Robbie at his former firm and bring additional litigation experience and depth to the firm.  The addition of Robbie, Travis and Daniel significantly increases the depth of the firm’s Houston office and expands the firm’s ability to continue providing high quality, client-centric services to its commercial and insurer clients.

“It is a rare opportunity to attract an attorney with Robbie’s skill and experience at a time when that attorney is just entering the prime of his career.  We are confident that the firm’s existing clients will quite quickly see in Robbie the same traits that attracted us and also his current clients – a driven, highly-capable attorney committed to providing the highest level of service to his clients,” said David Walker, one of the founding members of the firm.

Celeste King is a panel speaker at 7th Annual CALSM-Posium on February 25th

Celeste King is a panel speaker at the 7th Annual Chicago Association of Legal Support Managers Symposium (CALSM-Posium) on February 25, 2016 at the Union League Club. Celeste joins experts in forensic investigation, public relations and the FBI on the topic of Cyber Security. More about the association and program can be found at http://www.calsm.org/CALSM-posium.php?action=default

Giving Back at YMCA & Greater Chicago Food Depository Produce Day

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On Friday October 9, staff and attorneys from WWM volunteered to work the YMCA’s Produce Day at Arthur A. Libby Elementary School.  The monthly event is a collaboration between the YMCA of Metropolitan Chicago and the Greater Chicago Food Depository, created to bring fresh produce to this area of the city known to be a “food desert”.  WWM joined with YMCA workers and other volunteers in unloading, sorting, packaging and distributing donated produce and other perishable items to the area’s low-income seniors and families.  It was hard but rewarding work and WWM was privileged once again to be assisting the YMCA and GCFD in this worthy cause.

WWM Elects Stephen Venable and Hires Four New Associates

Chicago, Illinois, March 19, 2015 – Walker Wilcox Matousek LLP (WWM) announces the election of Stephen O. Venable to Partner in the firm’s Houston office and the hiring of four new associates in the firm’s Chicago office: Bridget M. Curry, Kevin A. Lahm, Scott T. Stirling and Alla Cherkassky.

Stephen O. Venable represents domestic and international insurers in property, general commercial liability and professional liability matters.  Stephen has litigated cases in more than 50 counties throughout Texas as well as Texas federal courts.  He is a 2001 graduate from the University of Texas at Austin, and a 2006 graduate from South Texas College of Law. For more information on some of Stephen’s recent highlights, please see his bio: http://wwmlawyers.com/attorney/stephen-venable/

Bridget M. Curry graduated summa cum laude from Michigan State University College of Law (2010). Prior to becoming an attorney, she worked as an extern for the U.S. Department of Veterans Affairs’ Appellate Litigation Group in Washington, D.C. and at the Office of Financial and Insurance Regulation for the State of Michigan.  Bridget focuses her practice in the areas of litigation, appeals and insurance coverage. 

Kevin A. Lahm graduated cum laude from Chicago-Kent College of Law (2011).  While in law school, Kevin represented Chicago-Kent in the Phillip C. Jessup International Law Moot Court Competition.  He concentrates his practice on insurance coverage and litigation over a wide range of areas including cyber and privacy risks.

Scott T. Stirling graduated cum laude from Washington University School of Law (2011), where he served as an Associate Editor of the Washington University Global Studies Law Review.  After law school, he completed a fellowship serving low-income Chicagoans at the Legal Assistance Foundation of Metropolitan Chicago.  He is admitted to both the Illinois and Arkansas bars, and practices in the areas of commercial litigation and insurance coverage.

Alla Cherkassky is a Notre Dame Law School graduate (2014) and served as a judicial extern to the Honorable Jon E. DeGuilio of the United States District Court for the Northern District of Indiana.  She also interned with the United States Attorney’s Office in the Northern District of Illinois.  Alla practices in the areas of insurance coverage and general litigation.

Walker Wilcox Matousek LLP is proud of their continued growth and is looking ahead as they celebrate their 10-year anniversary on April 18th of this year.  What started as an 8 person firm in 2005 has grown to 40 attorneys providing clients with effective and innovative legal services that deliver value and solutions.