United States District Court, S.D. Texas
OPINION ON PARTIAL DISMISSAL
N. Hughes, United States District Judge.
Enterprises, LLC, and Itzel Camacho settled a claim brought
by Camacho against Enterprises. Camacho brought the claim on
behalf of Jesus Hernandez. Hernandez had worked for
Enterprises, and he was killed in a accident in a company car
on its business. American Southern Insurance Company paid the
Resources, Inc., issued Enterprises a policy with coverage
for Enterprises by two companies: American and Companion Life
Insurance Company. Assurance was Companion's agent.
authorized the settlement after Assurance told it that
Companion would not be responsible for the entire settlement.
Assurance told American that Companion would pay more than
half of the Camacho settlement. Later, Assurance told
American that Companion would not contribute to the
settlement. Assurance said Companion's policy did not
require it to pay. American presumably paid the settlement.
and American entered an agency in 2010. The agreement had two
parts: general agency and limited agency. Under the general
agency, American (a) authorized Assurance to act as its
general agent, and (b) Assurance was required to report
losses to American within 48-hours.
terminated, if Assurance was current on all payments owed to
American, the limited agency would become effective for a
year. Under the limited agency, unlike the general agency,
Assurance could not manage or settle claims. American does
not say it terminated the general agency, so it governs.
says American's termination of the general agency became
effective in April 2, 013. Camacho filed against Enterprises
in October 2013. Assurance did not tell American about
Camacho's claim or another claim against it until January
2015. By then, American defaulted on the separate claims.
Assurance had accepted service for the claim on behalf of
American, but it did not relay this information to American.
Enterprises and Camacho settled the Camacho claim no earlier
than June 2015.
brings a claim against Assurance on nine legal theories:
Breach of contract
Breach of fiduciary duty
Fraud by nondisclosure
Breach of Contract.
says Assurance breached its contract by not informing
American of the claims against it by Enterprises or Camacho.
is entitled to relief for this claim. A valid, enforceable
contract existed between the parties. Under the general
agency, Assurance must report any losses to American within
48'hours. Assurance waited more than a year to report the
Breach 0/Fiduciary Duty.
alleged that Assurance breached its fiduciary duty by (a)
representing false information to American about the Camacho
and Enterprises lawsuits, and (b) failing to analyze coverage
properly under the Companion policy. American is not entitled
to relief for this claim.
the law of economic loss, tort remedies are not available
when a party does not perform under a contract. Assurance did not
tell American about claims filed against it when it was
required to do so. If American paid more than it ...