Policyholder Required to Pay Back Insurer $900,000 Based on Misrepresentations

A Texas appellate court upheld a substantial jury award against a policyholder on fraud claims in Jackson Fulgham v. Allied Property and Casualty Ins. Co.. The insurer counter-sued the policyholder real estate firm over fraudulent claims it had made about hailstorm damage, resulting in a $900,000 jury award in favor of the insurer. The appellate court upheld the verdict claiming that the evidence supported such finding. In 2009, the policyholder made a claim under its property insurance policy for damage to the roof of a building. The policyholder stated that the damage was sustained in a hailstorm, and the insurer paid the policyholder on that claim as well as others resulting from the alleged roof damage in an amount totaling $900,000. The next year, the policyholder submitted another claim for damage of debris removal, business interruption and destruction of documents, among others. The insurer refused to pay this claim and the policyholder sued the insurer. The insurer brought a counterclaim for fraud and unjust enrichment regarding both the new claims and the claims upon which the insurer had already made payment. The policyholder’s claims were dismissed and the jury awarded insurer the $900,000 it had previously paid out to the policyholder. The policyholder appealed, but this court found that the evidence was sufficient for the jury to award such a verdict. The court found that the policyholder hired workers to paint and repair the building after the initial hailstorm to make it appear as if the building had been maintained prior to the hailstorm. Moreover, several of the policyholder’s employed testified that they were instructed to make misrepresentations to the insurer. Accordingly, the verdict was upheld.

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