Q: How will a new Texas insurance law impact Hurricane Harvey victims?

“Texas” and “Big” have always gone together. So, it didn’t surprise any locals that in response to the catastrophic damage Hurricane Harvey dealt with the Houston area, Texans showed the world how big our hearts are by coming together to help our neighbors.

But will our insurance companies be there for us?

What frantic homeowners and business owners likely did not realize in the post-storm mayhem was that a new insurance law was going into effect on September 1st–just a few days after Harvey hit. But skilled Houston insurance law attorneys knew about it.

What is the law and how does it affect Texas weather-related property damage insurance claims?

Before Harvey was even a breeze, HB 1774 was signed into law back in May, with a September 1st effective date. So, even though the timing makes it look like it was specifically related to Harvey, it’s merely coincidental. Still, as purchasers of insurance, homeowners and business owners are entitled to consumer law protection from abuse by insurance companies with which they contracted.

These are the three primary changes in the law:

1. Pre-suit notice. In an effort to encourage mediation and out-of-court settlements and to prevent claimants from rushing to court without giving the insurer adequate time to consider the claim and offer a settlement, an insured person must provide their insurer with written notice at least 60 days before initiating litigation. The notice must be specific with respect to the damage alleged and attorney’s fees claimed.

2. Attorney’s fee awards will be based on a “claim recovery threshold”. In an effort to discourage the insureds from suing for “grossly exaggerated” claims, attorney’s fees will now be 100% recoverable if the insured wins at trial and is awarded 80% or more of the amount demanded in the lawsuit. On the other hand, if the award is 20% or less of the amount demanded, no attorney’s fees will be awarded.

3. Penalty interest rate reduction. Prior to the new law, insurers that were found guilty of being “slow pay, low pay, or no pay” on claims made would be subjected to pay 18% interest on the amount of the award if the insured prevailed in court. Now, the penalty interest rate has been reduced to a market-based rate– which is presently calculated at 10%. There is no denying that this is a blow to the insured and a benefit to the insurance companies who have less incentive to pay quickly due to the reduced penalty.

The new legislation does not impact a homeowner’s ability to file– or the process by which they would file– a weather-related property damage claim.  Nor does it impact claims which are settled without litigation.

But since the pre-suit notice requirement now imposes a two-month delay on the ability to commence legal action, seeking advice from a skilled insurance law attorney sooner rather than later may reduce the time it takes to get paid in the event litigation is needed.

However, there are Harvey-related claims that may not be substantially impacted by the new state law because the law does not apply to claims under the Texas Windstorm Insurance Association “TWIA” or the National Flood Insurance Program “NFIP”. An attorney can counsel you with respect to if and how the new law impacts your particular claims.

If you are a homeowner or business owner who has suffered weather-related property damage due to Hurricane Harvey, or any other weather phenomenon, the attorneys of Chandler, Mathis, and Zivley will fight to get you full and fair compensation for your medical, physical, or financial losses and damages when your insurance company violates your insurance law rights.

With offices in Houston, Lufkin, and Nacogdoches, we’ve been serving clients throughout Texas for over 40 years. Contact us today to request a consultation.

What is the fallout from VW’s diesel emission controversy?

As has been widely reported, Volkswagen Group was found to have rigged its line of diesel vehicles with computer software designed to cheat emissions tests. The German automaker has been the target of a criminal investigation, as well as a wave of lawsuits. Now, the Federal Trade Commission is also on the case having accused VW of deceptive practices for falsely advertising its diesel vehicles’ significantly reduced emissions.

Deceptive and Unfair Practices

The FTC has enforcement authority to protect consumers from deceptive and unfair practices. These practices include misrepresentation, false advertising and other deceptive, fraudulent or unethical methods utilized to obtain business. The Commission filed a civil complaint against the automaker in the U.S. District Court in California.  The court is also handling a consolidated litigation from consumers seeking financial damages. In addition to permanent injunctive relief, rescission, restitution and disgorgement of ill-gotten gains, the FTC is said to be seeking $15 billion in damages.

“Our lawsuit seeks compensation for the consumers who bought affected cars based on Volkswagen’s deceptive and unfair practices,” FTC Chairwoman Edith Ramirez said in a statement.

If the agency prevails, this has the potential to be one of the largest false advertising cases in history.

This comes after the company has set aside billions to pay for repair costs of about 11 million cars sold around the world. The question remains, however, as to whether the diesel-spewing vehicles can be repaired. If not, Volkswagen may be forced to buy some of the cars back, and the company could be hit with billions more in fines and settlements arising from the diesel-rigging scandal.

VW’s False Advertising

Volkswagen’s TV commercials, advertisements and other marketing materials pitched the cars as so-called “clean diesel” vehicles. The models involved were sold between 2009 and 2015 and the automaker’s marketing strategy highlighted how the cars were eco-friendly and reduced nitrogen oxide emissions by up to 90 percent. This claim proved to be totally false, as tests revealed the diesel cars’ emissions were as much as 40 times greater than permissible U.S. standards.

“For years, Volkswagen’s ads touted the company’s ‘clean diesel’ cars even though it now appears Volkswagen rigged the cars with devices designed to defeat emissions tests,” said Ramirez.

While it is unclear whether or not the FTC will prevail, this case adds to Volkswagen’s woes stemming from the emissions-rigging scandal.  It also highlights how consumers can be harmed by deceptive and unfair business practices, some of which may not occur on as large a scale as the VW caper. If you are a consumer who has been the target of a deceptive practice, you should engage the services of an attorney with expertise in consumer law.

Can a past owner be held liable for an update made to property while under its ownership?

In a recent complex litigation, Occidental Chemical Corporation v. Jason Jenkins, after differing opinions between the trial court and the appellate court, the Texas Supreme court decided for the defendant, concluding that “ a claim against a previous owner for injury allegedly caused by a dangerous condition of real property remains a premises-liability claim, regardless of the previous property owner’s role in creating the condition.”

How It All Began

The story begins with a serious accident in 2006 when Jason Jenkins, the plaintiff, was working at Equistar Chemicals plant in Bayport, Texas, and was partially blinded when an acid-addition system machine sprayed acid into his face. Jenkins and his attorneys became aware that the company that previously owned the premises, Occidental Chemical Corporation, had been responsible for designing and constructing the acid-addition system while it still had ownership of the premises in 1992. Because it was this added-on system that caused Jenkins’ devastating injury, he sued Occidental rather than Equistar.

The plaintiff sued Occidental for both premises liability because it had owned the property until 1998, and had installed the defective equipment, and for negligence since it was a third-party that designed the dangerous system. No lawsuit was filed against Equistar, even though they owned the premises at the time of the accident in 2006.

During the original trial, the jury found Occidental liable for the design and operating instruction of the acid-addition system, but concluded that the suit was prohibited by the statue of repose (something like the statute of limitations) relative to improvement to real property.

Thereafter, the appellate court reversed the decision of the trial court, finding that Jenkins had reasonable claims of both premises and negligence because Occidental had acted as both owner and designer. The appellate court further concluded that the negligence claim remained intact even after the sale of the property and that Occidental’s could not legally support its statue of repose.

When the case finally went before the Texas Supreme Court, however, the Supreme Court found that there was no Texas case to support the appellate court’s decision. The higher court ruled that premises liability only applies to the property owner who creates a dangerous condition on the property.  Therefore, the Supreme Court ruled against the Houston Court of Appeals and rendered a take-nothing judgment against the plaintiff. Their rationale was that Occidental had sold the property several years before the accident occurred and was therefore no longer responsible for a duty of care. Their ruling stated that Occidental had no way to maintain safety on property it no longer owned  and that such responsibility had passed on to Equistar at the time the sale of the property became final.

If you have suffered a personal injury in a Texas workplace and are seeking just compensation for your medical expenses, lost income, pain and suffering, and possible ongoing disability, it’s time for you to contact the finest personal injury attorneys in the greater Houston area. We have a proven track record of winning substantial compensations for their clients for over 40 years.

What a difference a clause makes

Eager to avoid the expenses and delays associated with litigation, an increasing number of businesses are turning to arbitration to resolve their disputes. Some are finding, however, that arbitration is not always the smooth, cohesive process it is designed to be. Arbitration clauses, for instance, can be troublesome; seemingly insignificant word choices can mean the difference between a few months of arbitration and an extended courtroom battle.

What is the difference between these two common commercial arbitration clauses?

Any dispute, claim or controversy arising out of, or relating to, this agreement shall be determined by arbitration in New York City before one arbitrator.

Any dispute, claim or controversy concerning the interpretation or enforcement of this Agreement shall be determined by arbitration in New York City before one arbitrator.

Not only do these clauses appear to be almost identical during a casual reading, they are barely distinguishable with more careful study. When parties are reading lengthy contracts, the difference between them may seem negligible, but that difference may affect the arena in which the dispute is heard, the legal expenses, and even the extent of liability to which a business is exposed.

In the example shown, the statutory claim might be open to arbitration under the first clause, but not the second. Even though the effect of this distinction would typically be noticed in the context of individual employment, it could affect the ability to arbitrate in any area of law where statutory rights and contractual rights cross paths. Such areas include copyright, trademark, and consumer protection.

Obviously, it is not only in New York that such small discrepancies can make enormous differences. For the protection of your company, it is important that you:

• Do not assume all arbitration clauses are alike
• Carefully review the intricate language of arbitration clauses

• Anticipate potential statutory liability that could result from contractual relationships

• Carefully consider how the wording of arbitration clauses can affect claims in terms of being submitted to arbitration or reserved for the courtroom

Even without such tricky clauses, settling business and commercial disputes is complex and confusing. In order to protect your company, when disputes arise, it is essential that you engage the services of a highly competent and knowledgeable business and commercial litigation attorney.

Can you be compensated if you suffered from the serious side effects of a drug?

You are a type-2 diabetic and you need some help managing your symptoms. So, your doctor recommends a new drug that many of his patients have been having a good experience with. He tells you that there may be some side effects but you think to yourself “not me.” Think again! You start experiencing the symptoms of a blood disorder and having kidney problems and your doctor tells you it is from the medication you have been taking. What are your rights? Well, you can bring a lawsuit like a woman from Texas recently did after being seriously impacted by the new drug Invokana.

Invokana is a new type of diabetes drug that prevents some glucose from being absorbed into the body via the kidneys. The unabsorbed glucose is then released through in the urine. The woman began taking Invokana (canagliflozin) in October of 2013, shortly after it had been approved by the Food and Drug Administration and released onto the market. Soon after beginning the medication she claims that she became afflicted with diabetic ketoacidosis and serious kidney problems. After experiencing these symptoms she discontinued the use of the drug in November of 2013. 

She has since brought a lawsuit in a United States District Court in New Jersey. She named the drugs manufacturers, specifically Janssen Pharmaceuticals and their parent company, Johnson & Johnson, as defendants. She claims that the manufacturers should have been aware of the serious health risks associated with the drug and that they should have included appropriate warnings on the packaging.  It does seem like the manufacturers were aware of the possibility of the side effects after the FDA raised a concern about DKA. A report was also issued in 2014 regarding the kidney issues associated with the drug. The woman even goes as far to allege that she would have never used the drug if she knew of the possibility of these side effects. She is seeking $10 million in damages.

If you suffered personal injury as the result of the use of a defective drug or medical device, you should speak to an experienced Houston, Texas attorney today.

How did PayPal violate the Texas Deceptive Trade Practices Act

PayPal’s Venmo money transfer app has gained popularity with consumers who prefer to transfer funds on a wide range of transactions rather than relying on credit and debit cards. Unbeknownst to them, however, PayPal was sharing information about their phone contact and user information.

The Texas Attorney General filed a suit against PayPal alleging the company violated the Texas Deceptive Trade Practices Act (DTPA) for not clearly disclosing how it would share information about consumers’ phone contacts, transactions and interactions with other users. Last month, PayPal settled charges with the state for practices that may have publicly exposed personal consumer information.

PayPal has agreed to pay the state $175,000 of which $135,000 is a penalty and the remaining $40,000 will cover the state’s costs and attorneys’ fees. Going forward, the company must conspicuously disclose the type of information that will be accessed from consumers’ PayPal accounts and how the company is authorized to use the information. The company must also provide consumers with an explanation of how its “autofriend” feature works and how it can be disabled. PayPal failed to disclose that this feature enabled the company to gain access to information about how users interacted.

PayPal has also agreed to make a number of additional disclosures about security features, payment procedures, protections available to buyers and sellers, and to implement other transparency measures. The company’s problem’s however, may not end with this resolution or its previous settlement with the Federal Trade Commission related to the Venmo app.

It is unclear at this juncture whether individual consumers plan to take legal action against the company, however. In order to do so, they would need to demonstrate that PayPal committed false, misleading or deceptive practices under the DTPA which caused a financial injury. The settlement with the Texas Attorney General does not indicate whether consumers suffered financial harm due to PayPal’s flawed disclosure and information sharing policy.

While deceptive trade practices claims are not uncommon for large consumer businesses, any outfit that offers good and services to consumers can run afoul of the DTPA. If you believe you were the target of an unfair or deceptive practice, you should engage the services of an experienced consumer law attorney.

Tis the season for toys that break after one use, knockoffs, products that don’t do what the manufacturer says they will, and charity scams. It’s a holly, jolly nightmare out there. Luckily, Texas has strong consumer protection laws and product liability laws that can protect you if you have been taken advantage of, or harmed, this holiday season.

Texas Deceptive Trade Practices-Consumer Protection Act (DTPA)  

The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) protects consumers from bad business owners and outright fraud. The DTPA prohibits a long list of trade practices the legislature has deemed false, misleading, or deceptive, including:  

• Claiming goods or services were made or provided by someone else.
• Claiming that goods or services have qualities which they do not have.
• Selling or advertising deteriorated, reconditioned, reclaimed, used, or second-hand goods as new ones.
• Falsely representing that goods or services are of a particular quality, standard, or grade.
• Falsely claiming that goods are of a particular style or model.
• Advertising goods or services at a particular price in order to draw customers in, without having any such items in stock. And/or failing to say certain items are only available in a limited quantity.
• Making misleading or false statements about discounts.
• Falsely claiming that a business is “going out of business.”
• Knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service.

The failure to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed.

This list is just the tip of the iceberg. If you feel you have been taken advantage of, you should contact our office. Consumers can bring a lawsuit against a business that has violated the DTPA, and if successful, may recover both damages and attorney fees. In some cases, the consumer can get triple damages.

If You Are Injured By A Product, You Should Speak With An Attorney

It is one thing to be tricked into buying shoddy merchandise, but quite another to be injured by a product you had every reason to believe was safe.

It is the responsibility of manufacturers to produce products that are free of defects and safe for users. Furthermore, all manufacturers, distributors, and sellers should warn their customers if the products they are selling are dangerous. When these obligations are not met, the businesses involved can and should be held legally responsible for their negligence.

Our state’s product liability laws are designed to compensate people who have been injured by a defective product, or who have suffered harm because they weren’t warned of the risk of buying and using a dangerous product. The law can also punish the manufacturer/distributor/seller of a dangerous or defective product so they learn that their actions have consequences.

If you or a loved one has been injured by a product, you should seek medical attention and legal advice.