906 S1 - 906 S.W.2d 218; MARYLAND INSURANCE COMPANY,...

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906 S.W.2d 218; MARYLAND INSURANCE COMPANY, Appellant, v. HEAD INDUSTRIAL COATINGS AND SERVICES, INC., Appellee. (Tex. App.); Page 218 MARYLAND INSURANCE COMPANY, Appellant, v. HEAD INDUSTRIAL COATINGS AND SERVICES, INC., Appellee. No. 06-94-00071-CV. Court of Appeals of Texas, Texarkana. August 31, 1995. Page 219 Page 220 Page 221 Page 222 Portia J. Bott, R. Brent Cooper, Cooper, Huddleston, Aldous, Dallas, for appellant. Scott Patrick Stolley, Thompson, Coe, Cousins, Irons, Dallas, for Gans & Smith. Winford L. Dunn, Jr., Smith, Stroud, McClerkin, Dunn, Texarkana, for Head Industrial. Before CORNELIUS, C.J., and BLEIL and GRANT, JJ. OPINION GRANT, Justice. This is a bad faith insurance case with liability premised on violations of the Insurance Code. Maryland Insurance Company appeals from a judgment rendered in favor of its insured, Head Industrial Coatings and Services, Inc., and also appeals from a take-nothing judgment rendered against it on its third-party action against Gans & Smith Insurance Agency. The primary issues on appeal Page 223 involve the existence of a viable cause of action under the Insurance Code for unfair claims settlement practices and bad faith conduct by an insurer on a third-party liability policy, the sufficiency of the evidence to support the jury's determination that Maryland engaged in unfair or deceptive acts, the amount of the jury finding of damages, the effect of a settlement agreement, and the assessment of a statutory interest penalty against Maryland because of its tardy payment of a claim. Head Industrial Coatings and Services, Inc. is one of two family-owned businesses that together provide vacuuming, sandblasting, and coating services to various industries,
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including Texas Utilities (TU), that utilize storage tanks and towers. As a prerequisite to working for TU, Head agreed to indemnify TU for any injury claims arising out of services Head performed and to purchase contractual liability insurance coverage to protect TU against claims arising out of work performed by Head at TU facilities. Head contacted its local insurance agent, Hermes Payne of Gans & Smith Insurance Agency, and purchased a commercial general liability policy with a $500,000 policy limit. Maryland Insurance Company was the insurance carrier. Head intended to purchase contractual liability insurance as part of the policy and communicated this intent to Payne, who is one of the owners of Gans & Smith. There is evidence indicating that Head paid the premiums for a policy that included the contractual liability insurance. Payne committed a clerical error, however, and the policy actually issued to Head did not include the proper endorsement to create such coverage. The underlying cause of the present litigation is a suit filed in 1989 against TU and
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This note was uploaded on 09/30/2011 for the course EMGT 5130 taught by Professor Jeong during the Fall '11 term at UH Clear Lake.

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906 S1 - 906 S.W.2d 218; MARYLAND INSURANCE COMPANY,...

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