Gary Beck was the defense expert who testified as the reasonableness standard in Texas according to the Stowers Doctrine in the case of Westchester Fire Insurance Co. v. Admiral Insurance Co.
What is your view of the standard that you hold the insurance
It’s a duty of reasonable care for what a reasonable and prudent
insurance company should do, and, of course, in handling a claim.
So, it’s a reasonableness standard.
If you would, explain for us, generally speaking, from an insurance
context what is it that you believe is contained within this Stowers
The Stowers Doctrine is a standard that says that if an insurance
company is presented with a claim and a chance to settle within the
policy limits, that it’s obligated to make its best efforts to settle
that claim because they’re in control of the claim and the insured’s
Based on your – the materials that you reviewed, what would have
been a reasonable thing for Admiral to do in terms of approaching
this mediation and conducting themselves in this mediation?
Well, I think they should have gone in with some kind of a – at
least not an insulting offer, for an opener, that’s going to be the first
thing out of their mouth in terms of what the settlement offer is.
* * *
Do you hold an opinion that they should have started the negotiation
And do you have an opinion that if they had began the negotiation
process at a better figure, it would have been more or less probable
that the case would have got to a resolution?
It would have been more probable.
All right. Now, do you believe that there – that they — Do you hold
an opinion as to whether or not they should have tried to negotiate
Well, I think their obligation, their duty is to settle the claim, and
to settle a claim, I think that necessarily implies that there has to
be some negotiations, or there typically is some negotiation.
Do you have to understand the Stowers Doctrine before you can give
testimony on it?
Well, what I think I have to understand is the custom and practice in
the industry and the standard that we’re held to. We’re held to a
standard that certainly derives from the Stowers Doctrine, which is a
legal doctrine, but we take those legal standards and apply them
to the every day workaday world so that we’re in compliance
with the law. So, it’s the latter. It’s the every day workaday that I
have to understand, or any claims adjuster has to understand, in
looking at whether you’ve been Stowerized by a – by a demand
And would you agree with me, Mr. Beck, that there is no duty on the
part of an insurance company to make an offer under the Stowers
As a counter?
As a counter or anything?
I think the doctrine calls for them to make reasonable, good faith
attempts to settle the claim. To the extent that encompassing
them maybe necessarily needing to make an offer, then perhaps
What do you based that opinion on?
Custom and practice in the industry.
Would you agree with me that the focus of the Stowers Doctrine is
on the reasonableness of the claimant’s offer?
The way I look at it from a lay standpoint is the focus is on the
reasonable conduct of the insurance company, given all the facts
and the power to gather the facts.
* * *
Is it your understanding in the claims – from your experience in the
claims industry and the custom and practice in the claims industry, is
that once in a setting where a demand is in – within limits, is it your
opinion one way or another whether a negotiation is implicit in the
I think negotiations are implicit because – I mean, apart from the
legal niceties of it, if you get the Stowers letter, your obligation is
to make reasonable attempts to settle the claim to protect your
insured, and I think settlement attempts just necessarily involve
some level of negotiations. I mean, I don’t know what the case
law says on that, but that’s the way we do it.
Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.