USAA Texas Lloyds Co. v. Menchaca (Opinion)Annotate this Case
After Hurricane Ike struck Galveston island, Insured contracted her Insurer and reported that the storm had damaged her home. Insurer determined that its policy covered some of the damage but declined to pay Insured benefits because the total estimated repair costs did not exceed the policy’s deductible. Insured sued Insurer for breach of the insurance policy and for unfair settlement practices. As damages, Insured sought only insurance benefits under the policy, plus attorney’s fees and costs. The jury found that Insurer violated the Texas Insurance Code, and the violation resulted in Insured’s loss of benefits Insured should have paid under the policy but did not find that Insurer failed to comply with its obligations under the policy. The trial court entered final judgment in Insured’s favor. The court of appeals affirmed. The Supreme Court reversed the judgment of the court of appeals and remanded the case to the trial court for a new trial in the interest of justice after announcing five rules that address the relationship between contract claims under an insurance policy and tort claims under the Insurance Code.