Court clarifies treatment of deductibles and attorneys’ fees in Texas insurance cases

A Dallas appellate court has affirmed a jury verdict and attorneys’ fees award in a homeowners insurance dispute, rejecting an insurer’s attempt to erase the verdict by arguing that damages awarded below a policy deductible required a take-nothing judgment.

The Fifth Court of Appeals at Dallas held that a jury may reasonably account for a policy deductible when calculating damages and confirmed that homeowners who prevail at trial are entitled to recover attorneys’ fees. The decision provides important guidance on post-verdict challenges frequently raised by insurers in Texas coverage disputes.

“The court made clear that insurers cannot erase jury verdicts by relying on deductibles after the fact,” said Chad Baruch, the managing shareholder at Johnston Tobey Baruch who argued the appeal. “This opinion gives trial courts and policyholders clear guidance on how to interpret the court’s charge in this situation.”

The 5^th Court upheld the trial court’s judgment in favor of Meagan Novak and Adam Wright, who sued the Texas FAIR Plan Association after it denied coverage for sudden and accidental water damage to their home. A Dallas County court at law jury awarded $1,126 in actual damages and $60,000 in attorneys’ fees.

The insurer sought to overturn the verdict by arguing that the jury’s damages award fell below the policy deductible and that it therefore owed no attorneys’ fees. The trial court rejected those arguments, and the Fifth Court of Appeals has now affirmed that ruling in full.

About Johnston Tobey Baruch

Johnston Tobey Baruch is a dynamic law practice based in Dallas. Its trial and appellate attorneys have a broad range of litigation, arbitration and appellate experience. They are pioneers in the handling of legal and accounting malpractice, investment fraud and business disputes. They also have an enviable track record with insurance bad faith matters, commercial litigation and fiduciary litigation, and civil, family and criminal appeals for many prominent Texas companies and individuals.

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