Good ole insurance defense attorney Steven Badger is going to love reading this post while sitting on his Royal Throne.

Nationwide Insurance made the following argument to a federal judge regarding an appraisal case where the real property loss was appraised to be less than what Nationwide paid, and the remainder was never shown or specifically claimed by the policyholders or their attorney:

Plaintiffs fail to show any dispute of material fact in their response and do not provide any evidence showing that summary judgment is unwarranted. Instead, Plaintiffs devote their response to conclusory arguments without factual support regarding the availability of the claimed contents and Nationwide’s handling of that portion of the claim. Plaintiffs’ arguments about their extra-contractual claims are similarly boilerplate, conclusory, and lack factual support. This Court should therefore grant Nationwide’s summary-judgment motion because Plaintiffs fail to raise a genuine issue of fact. 1

Facts demonstrating and proving the amount of the loss and facts showing that the policyholder responded to the insurer’s pre-suit demand for information in existence before a lawsuit is filed are generally required to prevail so long as the insurer has not denied the claim or otherwise waived those contract requirements. Competent policyholder attorneys know the difference between good sounding rhetoric, which may impress policyholders and others not fully understanding the legal landscape and the development of facts and evidence that backs up that rhetoric. Nationwide’s brief is calling out the Texas policyholder attorney in the case for being “all hat and no cattle.”

The federal judge agreed with Nationwide, finding:

Plaintiffs’ appraiser told Defendant’s appraiser that the damaged personal property was disposed of before the appraisal process was conducted. Plaintiffs’ discovery responses confirm that the property is not available and that there are no photographs or other documentation that would allow for appraisal. Plaintiffs state without evidence that they made the damaged personal property available for inspection. The only exhibit attached to Plaintiffs’ Response is a list of items that Plaintiffs claim were damaged. The list does not satisfy Plaintiffs’ duty under paragraph C.1.e of the Policy to cooperate with Defendant’s investigation, the duty under paragraph C.1.f to submit an inventory supported by bills and receipts, or the duty under paragraph C.1.g(1) to show Defendant the damaged property, and it does not provide evidence that would allow an appraiser to verify the items or the extent of damage.

Plaintiffs argue that Defendant failed ‘to conduct a proper and timely inspection[.]’ But Plaintiffs cite no evidence of when the items were disposed of or when Defendant first requested to inspect the items. Plaintiffs also offer no explanation why they did not photograph the damages before disposal. The court concludes that Plaintiffs failed to comply with the Policy. Plaintiffs’ failure prejudiced Defendant by hindering its ability to verify Plaintiffs’ personal property valuation through appraisal. Defendant has no duty under the Policy to make further payment for the damaged personal property. Defendant’s MSJ will therefore be granted as to Plaintiffs’ breach-of-contract claim.” 2

There are a number of lessons for policyholders, public adjusters, and others trying to help policyholders. First is to pay special attention to whom you pick to get advice from and help you with your claim. Anybody, including attorneys, can make advertisements that falsely indicate their reputation, experience and degree of success in internet advertising. The losing attorney representing the policyholder in this case is Erick Dick. I invite readers to Google his name to see how he advertises.

I wrote and warned about the importance of carefully selecting legal counsel 15 years ago in Experience and Passion Count When Selecting Insurance Lawyers.

The second significant issue is the spoliation of evidence. All policyholders and their representatives must be concerned about complying with policy requirements by showing the damaged and undamaged personal property to the insurer and preparing a list of the damaged personal property with value amounts claimed. These are usually conditions precedent to recovery and are also needed by the policyholder’s appraiser to determine the amount of the personal property loss. In this case, nothing was listed or preserved for some unknown reason, never explained by the policyholder’s attorney in briefings or pleadings.

Reading the implications from yesterday’s post, Mold, Sewage, and Delayed Adjustments or Indecision, insurers cannot just sit back and do nothing about personal property, which is in danger of being damaged or contaminated by already damaged personal property. The insurer’s adjusters must diligently make decisions and investigate what they need to investigate so that they can tell the policyholder to remove and discard the personal property before making a larger loss. Failure to do so is not acting in good faith because the policyholder is reasonably expecting the insurance company to have a sufficient and competent team of adjusters to investigate and make timely decisions on these common claims.

The fourth lesson is for appraisers to ask for and try to obtain all the evidence available to determine a value of the loss. The most difficult is the total fire loss, where nothing is left, and there is no valued policy law. The appraiser must reconstruct the structure with indirect evidence, old public evidence and anything the policyholder or insurer has about the structure, which includes underwriting information that pre-dates the total loss.

In non-total loss situations, the appraisers should attempt to obtain all available information and evidence about the personal property. To ascertain actual cash value, discussions with the policyholder or others familiar with the property may be required.

In this case, the court specifically noted that the policyholder did not even keep photographs of the discarded property. Public adjusters should note this as a key job task to photograph and video the damaged property. Public adjusters and policyholders should also be alert and ask for permission from the insurer to discard the damaged personal property to avoid the possible outcome of this case.

Policyholders have to prove their loss. To do so, evidence needs to be shown and preserved to the extent possible. Picking the right professionals to show this to the insurance company should not be made on simple advertising gimmicks that have no substance but are funny or pithy. Insurance claims are serious and not funny. Picking funny or pithy advertising professionals leads to unfunny and losing results.

Thought For The Day

Take nothing on its looks; take everything on evidence. There’s no better rule.
—Charles Dickens, Great Expectations

1 Ansah v. Nationwide Prop. & Cas. Ins. Co., No. H-23-2488, at 3 (S.D. Tex. [Brief of Nationwide in Support of its Motion for Summary Judgment] filed, Aug. 13, 2024).
2 Ansah v. Nationwide Prop. & Cas. Ins. Co., No. H-23-2488, at 10, 11 (S.D. Tex. Aug. 23, 2024).