Allstate Texas Lloyds v. Johnson

OPINION

MEANS, Justice.

I. FACTUAL BACKGROUND

Rebecca Hamilton’s house burned to the ground on September 5, 1988. Her home was insured against fire loss by Allstate Texas Lloyds (“Allstate”). Ron O’Brien, Allstate’s adjuster, investigated the fire beginning the next day and, after calling in expert assistance, concluded that the fire was the work of an arsonist.

On or about September 21, O’Brien communicated his findings to his employer along with his prediction that Hamilton would sue Allstate if it refused to pay her under the policy. He proved prophetic. Allstate formally denied Hamilton’s…