USAA V Menchaca~USAA Lloyds Seeks Rehearing

Posted by on Apr 18, 2017 in Uncategorized | No Comments

As we previously reported, recently, our Texas Supreme Court issued a major new ruling directly affecting Texas homeowners.  The insurer has let the Court they wish to seek a rehearing as to the Court’s opinion.  The Motion has not yet been filed, but when it is, we will we will update you accordingly.

As we have seen, even since before the days of Hurricane Ike, a new fertile ground has developed for litigation in Texas from the Plaintiff’s Bar. Led by a local Houston law firm, there have been thousands of lawsuits filed since 2005 and Hurricanes Rita and Katrina.  All of these lawsuits have alleged basically the same type things.

First, the insurance company breached the contract of insurance by failing to pay the appropriate amount of repairs.

Second, the insurer was also alleged to be liable for “extra contractual” damages, including such things as mental anguish, additional (punitive) damages, and of course, attorneys fees.

This explosion of litigation led to an inevitable change in the insurance policies including the introduction of increased deductibles, increased premiums, and exclusions on the allowable types of claims.

Guess who paid for these?

The Texas Supreme Court has further limited the ability of the Texas homeowner to recover damages in these First Party Property cases.

In the case of USAA Lloyds v Manchaca, the Court held that an insured cannot recover policy benefits absent a finding that the insured was entitled to policy benefits.  While this sounds simplistic, it will dramatically affect the ability of a Plaintiff’s attorney to recover attorneys fees.

Guess who will shy from these cases now?  While we do not believe the recent opinion will do away with these cases, it will no doubt reduce the amount of litigation.

The Court also allowed for several exceptions to their general Rule and it remains to be seen the type of fact situations which will qualify for these exceptions.  Many writers have already expressed criticisms in the Court’s ruling and have expressly given doubt as to the clarity of the opinion. In fact, the insurer, USAA Lloyds, just filed a request for rehearing with the Court. They have not yet filed the basis for the rehearing, but that will come shortly.

Thomas M. Fountain & Associates, PC have handled literally hundreds of these cases over the past years and successfully defended the first Hurricane Ike case tried in Harris County, Texas.

For questions about these changes, please contact our office with the information listed below.

The law firm of Thomas M Fountain & Associates, P. C. is an AV Preeminent rated law firm located in The Woodlands, Texas which is in the greater Houston metropolitan area. Thomas M. Fountain has 35 years of experience upon which the firm’s clients draw when necessary. The firm prides itself on being proactive rather than reactive. 

For more information see our Website at or call (281) 296-6500. 

*Certifications not Implied.


Thomas M Fountain & Associates PLLC