Texas Appeals Panel Affirms Wind Pool’s Right to Day in Court
Comparing the Texas Windstorm Insurance Association to a platypus — a creature native to Australia that appears to be a cross between a duck and a beaver — a Texas appeals court said it’s not always clear what Texas’ insurer of last resort for wind and hail insurance along the Texas coast is — a private entity or a government agency.
In a case that asked the court to decide whether or not TWIA can pursue legal proceedings in order to protect its interests, the Texas Court of Appeals for the 7th District of Texas noted that while TWIA may have been initiated by the Texas legislature and has “some earmarks of a governmental agency,” its members are private insurance companies and it conducts business like a private insurer. Therefore, the court reasoned, it should have access to the legal system for resolving disputes just like any other insurance company.
Siding with TWIA in Texas Windstorm Association v. Renetta Poole and Walter Poole, (NO. 07-07-0061-CV) the appeals panel remanded the case back to the trial court.
Justices Quinn, Campbell and Hancock considered the case. According to the opinion written by Quinn, the Pooles’ Port Arthur home was damaged when Hurricane Rita hit in 2005. TWIA paid the Pooles $12,472.75 for repairs. About eight months later, however, the association received a letter from a public adjuster saying the Pooles disagreed with the assessment and requested “an appraisal of the property be undertaken under the policy terms.” Disagreeing it was obligated to provide an appraisal TWIA filed suit.
The Pooles sought to dismiss the suit on grounds that TWIA lacked statutory authority to sue. The trial court agreed and dismissed the suit; TWIA appealed.
Quinn wrote that the appeals court found “it difficult to picture a scenario wherein an entity authorized to acquire property, execute contracts, hire and fire personnel, collect and disburse monies, and otherwise delve into the insurance business will avoid legal entanglements necessitating resolution. … [F]inding success in the realm of business is often dependent upon the ability to petition the state’s judiciary to resolve disputes that defy private disposition. Consequently, to deprive the Association of this opportunity would be tantamount to placing an obstacle before it that does not stand before like businesses and that obstacle could only but impede its ability to fulfill the purpose or charge placed on it by the legislature.”
The court also noted that the legislation establishing the windstorm pool “says nothing about the Association being barred from initiating a lawsuit.”
The appeals court decision can be found online at www.7thcoa.courts.state.tx.us/opin
ions/htmlopinion.asp?OpinionId=12575.