Top South Central Region Insurance Journal Stories of 2024

Readers of Insurance Journal were drawn to South Central headlines detailing the complexities facing the insurance industry, from legal and regulatory issues to the evolving landscape of cyber threats and natural disasters.

Other popular topics include insurance fraud and unscrupulous lawyers and contractors.

Houston ‘Hire A Dick’ Attorney Faces Another Six Figure Sanctions Order

Houston plaintiffs’ attorney Eric B. Dick was ordered in January to reimburse an insurer over $100,000 for the second time in three months. A Galveston County judge found that a lawsuit Dick filed against Standard Casualty Co. was “frivolous, groundless, and made solely for the purpose of harassment” due to a lack of evidence. This follows a similar sanction in Harris County for a lawsuit against the same insurer. Both courts criticized Dick’s practice of designating expert witnesses without proper investigation or retention. Dick has a history of aggressive litigation tactics and has faced accusations of campaign finance violations.

Louisiana Insurance Producer Arrested for Fraud, Theft

Louisiana State Police arrested Albert Frederick Peterson III, a Baton Rouge insurance producer, for insurance fraud and theft. An investigation revealed that Peterson fraudulently obtained and misappropriated over $30,000 in premiums and insurance refunds intended for members of the Baton Rouge Police Union between 2019 and 2021. Peterson was arrested on March 18, 2024, and booked into the East Baton Rouge Parish Prison.

Southwest Wins Appeal in Cyber Excess Coverage Dispute With Liberty

The 5th U.S. Circuit Court of Appeals ruled that Southwest Airlines can continue to seek reimbursement from Liberty Mutual for costs incurred during a 2016 computer failure. The court disagreed with the lower court’s ruling that Southwest’s costs were discretionary and not covered by the insurance policy. The case centered on a massive computer failure that disrupted Southwest’s flight schedule for three days in 2016. Southwest incurred significant losses, including costs for customer reimbursements, travel vouchers, and advertising. Liberty Mutual denied Southwest’s claim, arguing that these costs were not covered by the insurance policy.

The appeals court found that the district court erred in concluding that Southwest’s costs were entirely discretionary. The court stated that these costs may be recoverable if they were incurred to mitigate the impact of the computer failure. However, the court emphasized that Southwest would need to demonstrate that these costs were necessary and did not put the airline in a better position than it would have been without the interruption.

The case was remanded back to the district court for further proceedings consistent with the appeals court’s ruling.

Louisiana Contractor Charged for Allegedly Damaging Homeowners’ Roof

This story details a case where a roofing contractor, Zechariah Moore, allegedly defrauded homeowners by intentionally damaging their roof and then falsely claiming the damage was caused by wind, in order to file an insurance claim. After inspecting the roof, Moore presented the homeowners with a costly repair estimate and encouraged them to file an insurance claim, promising that their out-of-pocket costs would be minimal. However, a subsequent inspection by another contractor revealed the damage to be manmade. Moore was arrested and charged with felony damage to property with intent to defraud. The Louisiana Department of Insurance issued a cease and desist order against Moore and his company, highlighting the detrimental impact of such fraudulent activities on homeowners and the insurance market.

Stray Dogs Cause Over $350,000 in Damages at Houston Car Dealership

Two stray dogs were captured after causing over $350,000 in damage to vehicles at a Houston car dealership. Surveillance footage showed the dogs scratching paint and tearing bumpers off the cars, likely while chasing stray cats. The dealership contacted animal control, and both dogs are now in their care. The first dog has been deemed adoptable, while the second is still being evaluated. This incident follows a similar case in Italy where a dog with gum disease was found to be responsible for damaging multiple parked cars.

Oklahoma Manufacturer Sued for Firing Employees Over COVID Vaccine Exemptions

The U.S. Equal Employment Opportunity Commission (EEOC) filed a lawsuit against AG Equipment Company, an Oklahoma-based manufacturer, alleging that the company violated federal law by firing 10 employees who refused to receive a COVID-19 vaccination due to religious beliefs or medical restrictions. Despite receiving requests for religious and medical exemptions, the company mandated vaccinations without considering any exceptions and terminated the 10 employees, along with 77 others who were unvaccinated. This alleged conduct violates Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act, which prohibit discrimination based on religion and disability.

Houston Windstorm Causes Preliminary Economic Loss of $5-7B: AccuWeather

A powerful windstorm that swept through southeast Texas in May caused widespread damage, leaving at least seven people dead and hundreds of thousands without power. The storm, characterized by straight-line winds exceeding 80 mph, caused significant damage to homes, businesses, and infrastructure in the Houston area. Preliminary estimates by AccuWeather suggest the total economic impact of the storm could reach $5-7 billion, including both insured and uninsured losses. The damage was so severe that AccuWeather likened the event to a brief “mini-hurricane,” emphasizing its historical significance as one of the most damaging non-hurricane storms in Houston’s history.

Louisiana Lawmakers Pass Auto Insurance Reform Bills to Boost Market Competition

Louisiana lawmakers passed auto insurance reform bills aimed at improving market competition and reducing excessive payouts. These bills, supported by Insurance Commissioner Tim Temple, include provisions like limiting direct action lawsuits, capping damages to actual medical expenses, implementing an offer of judgment rule, and establishing a prescription period for property damage claims. These reforms are expected to make Louisiana a more attractive market for insurance companies by reducing the risk of costly litigation, ultimately improving the availability and affordability of auto insurance for residents.

Wife of Ex-Texas Trucking Magnate Sentenced in $9M Work Comp Fraud Scheme

Frances Hall, the wife of a former San Antonio trucking magnate, was sentenced in July for her involvement in a multi-million-dollar fraud scheme. Hall, a former co-owner of Bill Hall Jr. Trucking, manipulated payroll information to avoid paying $9 million in workers’ compensation premiums to Texas Mutual Insurance Company. This deception involved underreporting payroll and concealing crucial financial documents to obtain lower insurance rates for their gravel hauling business. Hall entered a plea agreement in May, resulting in a 10-year deferred adjudication sentence. As part of the agreement, she is required to pay $150,000 in restitution and undergo treatment recommended by the probation department.

Texas Supreme Court Rules to Cut Out Attorney’s Fees in First-Party Appraisals

The Texas Supreme Court ruled that insurance companies are not liable for attorney’s fees in weather-related property cases if they fully pay the appraisal award plus any statutory interest. This ruling stems from a dispute between a homeowner and Safeco Insurance, where the homeowner sued after receiving a payment but sought additional funds. The court found that since the insurer fulfilled its obligations under the policy, no money judgment was awarded to the homeowner, making attorney’s fees unavailable under state law. While insurance defense attorneys praised the ruling, arguing it discourages the use of appraisal as a litigation tactic, policyholder attorneys expressed concerns about potential unfair practices by insurance companies and called for legislative action to address the issue.

Here’s a video discussing the top 10 South Central articles, produced by Wells Media Group editors and our new-media team.