Saunders, Walsh & Beard is proud to announce J. Brantley Saunders, Mark A. Walsh, Alexander N. Beard, Lewis L. Isaacks, David N. Kennedy, and Jacob D. Thomas as Texas Super Lawyers for 2021.


Super Lawyers is a rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Attorneys are selected through a multi-phased process including independent research, peer nominations, and peer evaluations. Each year, no more than 5% of the lawyers in Texas are selected by the research team at Super Lawyers to receive this honor. To learn more, visit

Texas Supreme Court Provides New Procedure for Pursuing UIM Claims Under Auto Policies

Texas Supreme Court ruling on UIM by SWB


Last Friday, the Texas Supreme Court issued a decision that will substantially impact how underinsured motorist (UIM) claims will now be litigated in Texas.  In Allstate Ins. Co. v. Irwin, Case No. 19-0885, a sharply divided court (5-4) held that an insurance carrier’s liability for UIM benefits may now be established in a declaratory judgment action.  The Court’s ruling signals a departure from the traditional manner in which these claims have typically been litigated, and will likely have a drastic impact on how they are litigated in the future.

In Brainard v. Trinity Universal Ins. Co., 216 S.W.3d 809 (Tex. 2006), the Court held that an insurance carrier has no legal obligation to pay UIM benefits until the insured obtains a judgment establishing the liability and underinsured status of the other motorist.  These are conditions precedent to recovery of contractual UIM benefits.  Until those determinations are made, the Court explained, “no contractual duty to pay” arises and “no just amount [is] owed.”  Id.  at 818.  Simply put, there can be no breach of the policy until these conditions have been satisfied.

In Allstate v. Irwin, the Court gave plaintiff attorneys a new procedural remedy for having UIM   claims decided.  Noting that UIM claims are contractual in nature, the Court held that the Declaratory Judgment Act can be used to determine the prerequisites for, and existence of, a valid UIM claim.  The Court reasoned that the issues to be decided were about coverage, rather than breach of the policy contract, and thus were proper subjects for declaratory relief.

The Court’s decision in Allstate v. Irwin signals a sea change in how UIM claims will likely now be litigated in Texas.  One major impact that the Court’s decision will have is on the recovery of attorneys’ fees.  In a typical breach of contract action, recovery of attorneys’ fees is not authorized unless there has been a breach of the contract.  Therefore, in a UIM context, those fees ordinarily would not be recoverable until there has been a refusal by the carrier to pay UIM benefits after liability and damages have been established.  Under the Declaratory Judgment Act, however, fees are discretionary with the court, but are typically awarded to the prevailing party.  Consequently, counsel representing claimants in these cases will likely be able to recover their fees before there has even been a breach or refusal by the carrier to pay policy benefits.  The potential ability to recover fees before there has been a breach will no doubt be the driving force behind the initiation of new UIM suits under the Declaratory Judgment Act.

Alex Beard has 30 years of experience representing individuals and businesses, with a practice focusing on liability insurance coverage, property damage insurance, and civil appeals. He has extensive experience with liability insurance claims, and enjoys analyzing coverage issues under numerous types of insurance, including commercial general liability, commercial auto and life. Read more about Alex and his insurance-related practice here:

McKinney Tea Shop Takes COVID Insurance Battle to Fifth Circuit


Alex Beard argues case in Fifth Circuit

One of the hottest insurance issues stemming from the COVID pandemic is whether business interruption losses resulting from governmental shut-down orders are covered under standard commercial property insurance policies. Under most policies, the issue boils down to whether the shutdown of the business constitutes “direct physical loss of or damage to the property” so as to be covered. Courts across the country continue to grapple with this issue, primarily because the typical policy does not include definitions for the words “direct,” “physical,” and “loss,” leaving the meaning of those words (and thus the scope of coverage) unclear.

One of my clients, Aggie Investments, LLC, operates a small spice and tea shop located in downtown McKinney. The shop, Spice and Tea Merchants of McKinney, was forced to close its doors for a brief period last year in response to the Mayor of McKinney’s “shelter in place” order. The tea shop submitted a claim for its losses to its property insurer, and the insurance company promptly denied the claim, contending there was no “physical loss of or damage to” the property.

As a result of the denial of coverage, my client was forced to file a lawsuit against the insurer in Aggie Investments, LLC v. Continental Casualty Company, Case No. 4:21-cv-0013, in the United States District Court for the Eastern District of Texas, Sherman Division. The insurer then filed a motion to dismiss the case on the basis that no coverage was afforded by the tea shop’s policy. In ruling on the motion, U.S. District Judge Amos Mazzant followed what he believed to be mandatory authority from the Fifth Circuit. In this connection, he stated that “the Policy’s provisions require demonstrable harm to property to trigger coverage.” Applying this standard, he concluded that the tea shop did not sustain “direct physical loss” of the property, and dismissed the tea shop’s case.

We believe that Justice Mazzant’s decision is in error, and is contrary to well-recognized Texas principles of contract interpretation. We also believe that the Fifth Circuit “authority” he and other Texas federal judges have relied upon in dismissing similar COVID coverage cases is flawed and does not accurately reflect Texas law. Therefore, earlier this week my client filed its notice of appeal to the U.S. Fifth Circuit Court of Appeals.

This will likely be the first case in which the Fifth Circuit squarely addresses this issue, so stay tuned for updates.

Alex Beard has 30 years of experience representing individuals and businesses, with a practice focusing on liability insurance coverage, property damage insurance, and civil appeals. He has extensive experience with liability insurance claims, and enjoys analyzing coverage issues under numerous types of insurance, including commercial general liability, commercial auto and life. Read more about Alex and his insurance-related practice here:

Texas Lien Law | Mechanic’s and Materialmen’s Liens

Texas Lien Law with Saunders, Walsh & Beard

Texas Lien Law

Mechanic’s and Materialmen’s Liens

Mechanic’s and Materialmen’s Liens are legal tools for contractors and suppliers to collect payment for their goods and services. Texas law protects the interests of general contractors, subcontractors, and suppliers by providing them with lien rights against construction projects. A lien is a claim or legal right against assets used as collateral to satisfy a debt. However, the law is complex and full of many hurdles to overcome in order for a claimant to perfect (or secure) its lien.

Chapter 53 of the Texas Property Code is the primary—though not exclusive—source of Texas lien law. Chapter 53 describes the parties who are entitled to a lien, the notices that must be given, the form of the documents that must be filed, and a multitude of related rules, defenses, and restrictions. In fact, Texas lien law is so varied and complex that it poses a challenge to some of the state’s best lawyers. A claimant who chooses to wade into those waters without a lawyer’s assistance should proceed with great caution.

Determining Your Lien Rights

The first step is to determine whether a potential claimant is granted lien rights under the statute.  Not every person who is involved in a construction project has lien rights.  Certain trades, such as architects, engineers, landscapers, and demolition experts are required to have a written contract—a verbal contract will not suffice.  On residential projects, the original contractor must have a written contract, signed by the owners (e.g., both spouses) before the original contractor or any of its subcontractors can assert lien rights.  However, most contractors and subcontractors on a commercial project do not need to have a signed, written agreement with the upstream party in order to claim lien rights. A verbal contract can serve as the basis for a lien claim in most circumstances on commercial projects.

If a potential claimant qualifies (based on the above criteria), the next step is determining the proper notices that must be sent, to whom, and when.  The types of notices necessary to perfect a lien claim, and the accompanying deadlines, depend on a variety of facts. The types of notices are different for specially fabricated materials and claims for retainage (i.e., the portion of the agreed-upon contract deliberately withheld until the work is completed).

The specific wording of the notices will control whether an owner may withhold payment from a general contractor to satisfy a subcontractor’s claim. The deadline for the notices, how many notices the claimant must send, and to whom the notices must be addressed, varies depending upon the following: 1) whether the project is residential or commercial; 2) if the claimant is an original contractor, subcontractor, or supplier; and 3) whether the claim is for a progress payment, final payment, or retainage.

For example, a subcontractor, on a commercial project, must give notice of its intent to file a lien against the owner and general contractor by the fifteen day of the third month after each month in which work was performed for which payment has not been received.  In contrast, the same subcontractor, on a residential project, must send notice by the fifteenth day of the second month after each month in which work was performed, as well as additional, specific notice language.

Filing & Delivering Notice of Your Lien

Drafting and filing the lien affidavit is no less complex than the notices which must be sent in advance. The affidavit (or sworn statement of fact) claiming a lien must contain specific information and, under some circumstances, very specific wording. The information which must be included varies depending, again, upon whether the project is residential or commercial and whether the claimant is an original contractor, subcontractor, or supplier. In addition, the deadline for filing the lien affidavit varies based upon a number of factors (i.e., when the claimant’s work was performed, whether the project was completed, or the original contract terminated, and whether the owner has made a written demand for lien claimants to file their lien affidavits). A claimant may have lien rights, send the proper notices, and still fail to file a valid lien affidavit by the applicable deadline.

Even after a qualified claimant sends proper notices and timely files a valid lien affidavit, the owner of the project may still have defenses against the lien claim preventing a claimant from realizing a full recovery.  The deadline for filing suit to foreclose on a lien varies depending upon whether the project is residential or commercial. Liens against residential projects are only good for one year, while liens against commercial projects have a two-year statute of limitations.  In addition, the owner may have withheld the statutorily required retainage, thereby limiting the owner’s liability and protecting the project from foreclosure. In short, after a valid lien is perfected, the war is not over.

Seek Competent Legal Assistance

The Texas legislature has considered making changes to the Texas lien statutes to simplify the process. As of the writing of this article, no significant changes have occurred.  Perhaps one day the process will be easier, but until that day, it is vitally important for a potential lien claimant to seek the advice and assistance of an experienced construction lawyer.

Jacob D. Thomas is a civil litigation and construction lawyer in McKinney, Texas. Jacob has helped individuals and businesses with their legal needs since 2003. He has the confidence earned only through arduous study, preparedness, and experience.  Jacob competently guides his clients through the complex legal system. Contact Jacob today for assistance with lien claims or claims for payment.