Insured persons with life insurance in Grand Prairie, Fort Worth, Arlington, Dallas, Mesquite, Richardson, Carrollton, Farmers Branch, and other places in the DFW metroplex area will find this case informative.
In 2006, the Texas Supreme Court issued an opinion in the case styled, Minnesota Life Insurance Company v. Vasquez. Here are some of the facts.
Minnesota Life issued a Mortgage Accidental Death Insurance policy to the Vasquezs’, promising to pay their home mortgage in the event either died due to an accident. The insured husband later apparently fell, hit his head, and died. The insured wife filed a claim with Minnesota Life requesting payment of the balance due on the mortgage and submitted copies of the death certificate and autopsy report. Minnesota Life took six months to pay the claim because the death certificate made coverage unclear and the hospital was slow to produce the remaining medical records that had been requested. Ms. Vasquez filed a lawsuit alleging that Minnesota Life had knowingly engaged in an unfair and deceptive act, in violation of the Texas Insurance Code. The jury found that Minnesota Life knowingly violated the Insurance Code and that Ms. Vasquez was entitled to $60,000 for mental anguish, $250,000 in additional damages, and $37,000 in attorney fees. The court of appeals affirmed and Minnesota Life appealed to the Texas Supreme Court.
The Texas Supreme Court reversed the lower court and trial court on the award of extra-contractual damages, holding that there was no evidence that Minnesota Life was “actually aware” that it was handling the claim in a way that was false, deceptive, or unfair. The Supreme Court agreed with Minnesota Life that liability was not reasonably clear due to the conflicting information contained in the autopsy report and death certificate that described the insureds’ death as both caused by an accident and a seizure disorder. The court noted that the policy provided coverage if “death results directly and independently of all other causes … from an accidental injury.” The court reviewed the appellate court’s standard of review in insurance bad-faith cases and concluded that the appropriate standard is for the appellate courts to look at all the evidence in such cases, crediting favorable evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. The court applied the standard of review, and held that there was no evidence that Minnesota Life failed to pay the claim after coverage had become reasonably clear. In addition, the Supreme Court held that there must be evidence that Minnesota Life was actually aware that it was handling the claim in a way that was false, deceptive, or unfair in order for Minnesota Life to be liable for violation of the Texas Insurance Code.
These cases are fact specific. It is hard, even for an experienced Insurance Law Attorney, to accurately predict an outcome on a case. However, the life insurance companies must be held accountable to keep them from taking advantage of their insureds on a regular basis.
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