Bill Wendlandt, 120-MP Victoria Ltd, and Laurent Tower, LLC v. Certain Underwriters at Lloyd's, London, Subscribing to Policy Nos. AOP-170109 and AQS-170213, HDI Global Specialty, SE, F/K/A International Insurance Company of Hannover, SE, General Security Indemnity Company of Arizona, and Peninsula Insurance Bureau
13-21-00323-CV
Tex. App.Mar 30, 2023Background
- Wendlandt bought an insurance policy effective March 2017; the issued policy initially had no hurricane/"Named Storm" exclusion.
- Underwriters’ broker (AmWINS) later prepared a Change Endorsement adding the "Named Storm" exclusion and sent it in April 2017 to Stephens Insurance (Wendlandt’s retail agent) to forward to Wendlandt.
- Stephens Insurance did not forward the endorsement; Wendlandt never received it.
- Hurricane Harvey damaged Wendlandt’s property in August 2017; PIB (third-party claims administrator) denied the claim invoking the "Named Storm" exclusion.
- Wendlandt sued multiple defendants; the trial court granted summary judgment for the insurers based on the exclusion. On appeal the Court of Appeals reversed and remanded, concluding genuine fact issues exist about delivery and agency.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the endorsement was delivered to make the exclusion effective | Wendlandt: he never received the endorsement; no delivery to insured | Appellees: delivery to Stephens (the broker) effectuated delivery to insured | Court: Reversed summary judgment; factual dispute on delivery precludes summary judgment |
| Whether Stephens Insurance was Wendlandt’s agent for delivery | Wendlandt: Stephens acted for insurers and not as his agent for this purpose | Appellees: an insurance broker is generally the insured’s agent, so delivery to broker binds insured | Court: Agency is a fact question here; cannot resolve on summary judgment |
| Bad-faith denial of coverage | Wendlandt: insurers denied coverage in bad faith | Appellees: denial based on the (effective) Named Storm exclusion | Court: Not reached—disposition rests on delivery/agency issue |
Key Cases Cited
- Liberty Mut. Ins. Co. v. Am. Emp. Ins. Co., 556 S.W.2d 242 (Tex. 1977) (purpose of exclusions is to remove otherwise covered risks)
- Fidelity Union Life Ins. Co. v. Methven, 346 S.W.2d 797 (Tex. 1961) (failure to attach endorsement does not invalidate it)
- Urrutia v. Decker, 992 S.W.2d 440 (Tex. 1999) (separate contract can be incorporated by explicit reference)
- French v. Ins. Co. of N. Am., 591 S.W.2d 620 (Tex. App.—Austin 1979) (endorsements delivered with policy are part of the policy)
- Awad Tex. Enters., Inc. v. Homart Dev. Co., 589 S.W.2d 817 (Tex. App.—Dallas 1979) (delivery is mixed question of law and fact)
- Duzich v. Marine Office of Am. Corp., 980 S.W.2d 857 (Tex. App.—Corpus Christi–Edinburg 1998) (broker generally insured’s agent, but insurer may be estopped to deny broker’s agency if broker acts for insurer)