Dallas Fort Worth Insurance Lawyer Blog

Life Insurance – State Law Versus Federal Law

October 26, 2024 | Mark S. Humphreys

Most life insurance policies are regulated by State Law. But, what if the life insurance policy at issue is governed by Federal Law? It’s simple, Federal Law pre-empts State Law. This is illustrated in the 2001, United States Supreme Court opinion styled, Egelhoff v. Egelhoff.

The Egelhoff opinion, the Supreme Court held that the Employee Retirement Income Security Act (ERISA) preempts a state law that revokes a life insurance policy beneficiary designation when spouses divorce. The state statute as issue in the Egelhoff opinion provided that if the life insurance beneficiary designation of an ex-spouse was made before the divorce, that designation was considered revoked. Because the insurance was part of an employee benefit plan, the Supreme Court held that ERISA preempted state law so that the benefits would be paid in accordance with the plan documents. The insured had not changed the beneficiary designation according to the plan, so his ex-wife received the benefits. Texas has a statute which would be prevented, that statute being Texas Family Code, section 9.301.

Homeowners Claim Where Insurance Company Says It’s Arson

October 19, 2024 | Mark S. Humphreys

Here is a 2024 opinion from the Southern District of Texas, Houston Division, wherein the insurance company, State Farm Lloyd’s, is refusing to pay the claim because State Farm believes the insured cause the fire on purpose in an effort to collect insurance monies. The opinion is styled, Raynelle King v. State Farm Lloyds.

On November 18, 2018, a late-night fire broke out in King’s home, and King filed a claim with State Farm. Arson investigators later found gasoline residue in debris samples from the room where the fire started. King was apparently in considerable financial distress at the time. As a result, State Farm denied King’s claim alleging that she had set fire to her own home. King sued, arguing that State Farm wrongfully denied her claim. State Farm has now filed a Motion for Summary Judgment. State Farm asks the Court to find that King committed arson and therefore cannot recover under the policy. After careful review, the Court finds that there is a genuine dispute of material fact, and State Farm is not entitled to judgment as a matter of law. The Court, therefore, DENIES the Motion.

On the night of November 18, 2018, Plaintiff King’s house caught fire, which caused extensive damage. At the time, King held a homeowner’s insurance policy from State Farm that covered fire loss, among other things. King submitted a claim for damages under her policy, which State Farm denied. King sued State Farm for failing to pay out her insurance policy. She asserts various causes of action under

Statute Of Limitations On First Party Insurance Claims

October 12, 2024 | Mark S. Humphreys

It is important to understand the time frame under which lawsuits must be filed. As part of that, reading the insurance policy is vital. A 2024 opinion from the Western District of Texas, Del Rio Division, discusses limitation periods written into insurance policies. The opinion is styled, Antonio Caballero v. Allstate Vehicle And Property Insurance Company .

This case was decided on the summary judgment motion filed by Allstate.

This matter arises from an insurance claim. The Plaintiff alleges hail storm property damage in excess of $20o,000. The Plaintiff filed a claim with the Defendant on December 13, 2018. The Defendant denied the Plaintiff’s claim on October 11, 2019. The Plaintiff filed suit in Texas state court on August 21, 2023, asserting: violations of the Texas Insurance Code and breach of contract among other causes of action.

Life Insurance – Who Gets The Benefits

October 5, 2024 | Mark S. Humphreys

Here are a few cases discussing who is entitled to life insurance benefits. All life insurance attorneys have to know these cases.

The Forth Worth Court of Appeals said in a 1994 opinion styled, Street v. Skipper, that one spouse can designate his or her estate as the beneficiary of the policy, at the expense of the other spouse, absent any showing of actual or constructive fraud.

According to the Eastland Court of Appeals in a 1981 opinion styled, Pilot Life Insurane Co v. Koch, policies may contain provisions automatically divesting a spouse of any interest in the proceeds, if the parties are “legally separated” or divorced.

Claims Denial For Failure To Cooperate

September 28, 2024 | Mark S. Humphreys

An insured under an insurance policy has a duty to cooperate with an insurance company investigation of a claim. This issue is discussed in the 2024 opinion, Henry & Lydia Ansah v. Nationwide Property and Casualty Insurance Company. The opinion is from the Southern District of Texas, Houston Division.

The Plaintiff’s allege that Nationwide underpaid their property insurance claim. Nationwide ended up filing a motion for summary judgement arguing the Plaintiffs are not entitled to further coverage because they failed to make the damaged property available for inspection or to document the damages.

On February 18, 2021, Defendant received from Plaintiffs a claim for damages to their dwelling and personal property caused by a freeze event that occurred the day before. On March 5, 2021, Defendant contacted Plaintiffs to discuss their claim and the claims process. Defendant began investigating Plaintiffs’ claim and paid $87,122.07 for dwelling damage and at least $35,984.83 personal property damage. Plaintiffs disputed Defendant’s valuation of their loss and invoked the Policy’s appraisal provision. The appraisers determined that the actual cash value of the dwelling damage was $78,936.05 less than what Defendant had paid.

Hail Damage Claims And The Texas Insurance Code

September 21, 2024 | Mark S. Humphreys

Here is a 2024 opinion from the Northern District of Texas, Amarillo Division, that deals with an important procedural in hail damage claims. The opinion is styled, Lotus Sky, LLC v. Lexington Insurance Company and Constitution Insurance Company.

This case arises from a hail damage insurance claim. Lotus Sky sued Lexington for breach of contract and various violations of the Texas Insurance Code. In response Lexington filed a Verified Plea as a Motion to Abate.

Accordingly, because this lawsuit is based on an insurance claim arising from alleged wind and hail damage, this lawsuit triggers compliance with Section 542A.003 of the Texas Insurance Code. Relevant to the Motion before the Court, Lotus Sky was required to provide presuit notice to Lexington at least 60

Claims Denial Due To Misrepresentation

September 14, 2024 | Mark S. Humphreys

A misrepresentation in an insurance application is grounds for denial of a claim but it is not necessarily a win for the insurance company. This issue is discussed in a recent opinion from the Texas 14th Court of Appeals. The opinion is styled, Jose Palma v. Allied Trust Insurance Co.

This case was a summary judgment win for the insurance company but there is a clear distinction with this case and the vast majority of cases regarding misrepresentations.

Palma purchased an insurance policy for his home with appellee. During the policy period, there was a fire at Palma’s home. Palma submitted an insurance claim under the policy. Allied investigated and found that Palma had a prior conviction for insurance fraud that was not disclosed on his application for

Insurance Company Denies Claim Due To Misrepresentation

September 7, 2024 | Mark S. Humphreys

Insurance Claim Denial due to alleged misrepresentations is common in insurance disputes. It is seen most often in life insurance claims. Less common is in homeowners claims. Here is a homeowner’s claim. It is a 2024 opinion from the Western District of Texas, San Antonio Division. It opinion is styled, Sanjay Malhotra, Monesha Gupta v. State Farm Lloyds.

This opinion is the result of State Farm filing a Partial Summary Judgment Motion. The claim arose from alleged damages caused by an April 28, 2021, hailstorm. The Plaintiffs sued State Farm alleging the claim had not been properly handled.

Throughout its Motion, State Farm contends the undisputed evidence shows this case in-volves an honest dispute as to the extent of damage to Plaintiffs’ property caused by the subject hailstorm and the cost of the work necessary to rectify this damage, and therefore, the causes of action for bad faith and unfair settlement practice must fail. As support for its argument that summary judgment should be granted for Plaintiffs’ common law bad faith claims, State Farm states the following: “The inspection included both the exterior and interior of Plaintiffs’ Property. Multiple inspections were done at the property and during those inspections, State Farm noted damage to some of the roof tiles, soft metals, gazebo and interior water damage and subsequently prepared estimates for the covered damages and issued payments to Plaintiffs after application of their deductible.”

Estate As Beneficiary Of A Life Insurance Policy

August 31, 2024 | Mark S. Humphreys

Here is a 1994 opinion regarding whether an estate can be the beneficiary of a life insurance policy. The opinion is from the Fort Worth Court of Appeals and is styled Street v. Skipper.

Here the Court held the surviving wife’s share of proceeds from community life insurance policy that was gifted to husband’s estate was not unfair to surviving wife because husband had bequeathed to wife other portions of his share of community estate that balanced gift of insurance proceeds and that aptly made up the difference.

Here are some relevant facts and law from the opinion.

Life Insurance Policies And Divorce Language

August 24, 2024 | Mark S. Humphreys

Some life insurance policies have language in them regarding divorces. This was the case in the 1981 opinion from the Eastland Court of Appeals. The opinion is styled Pilot Life Insurance Co. v. Koch.

This is a declaratory judgment case. Here are the facts legal conclusion of the Court.

Pilot Life Insurance Company sought a judgment declaring that it had no duty to pay life insurance proceeds to Lawrence A. Koch because of the death of his wife. Pilot Life had issued a policy of group insurance to Koch’s employer. The policy afforded life insurance coverage for employees and their eligible dependents. Eligible dependents were defined to include “your husband or wife, unless you were legally separated or divorced.” Pilot Life alleged that Mr. and Mrs. Koch were legally separated on the date of her death. Koch filed a counterclaim seeking the policy proceeds of $5,000, 12% penalty and reasonable attorney’s fees. The jury found that Mr. and Mrs. Koch were separated at the time of her death. Although that separation was pursuant to a “temporary” court order entered in the pending divorce proceedings between Mr. and Mrs. Koch, the trial court entered judgment for Koch notwithstanding the verdict on the theory that under Texas law there is no status of legal separation of a husband and wife before the marriage is dissolved by a decree of divorce. Pilot Life Insurance Company appeals. We affirm.