Articles Posted in Bad Faith Insurance

Fort Worth insurance lawyers need to have an understanding how the courts look at mental anguish damages as compensation for insurance code violations.

The 1995, Texas Supreme Court case, State Farm Life Ins. Co. v. Beaston case is a reference point. Here is some of the relevant information from that case.

Terri and David Beaston bought life insurance policies from State Farm. The Beastons failed to pay the premium on David’s policy due. His policy lapsed and the thirty-one day grace period expired. Three days after the expiration of the grace period, David died in an automobile accident. State Farm refused to pay the benefits under his life insurance policy, claiming that coverage had expired before his death.

Fort Worth insurance lawyers need to be able to recognize a claim wherein conduct arises to a level allowing recovery for mental anguish damages. The 1999, Fort Worth Court of Appeals case styled, “Mid-Century v. Foreman” is helpful. Here is some of the relevant information.

Joyce Foreman was involved in a car accident with Karl Buehner. Foreman’s policy included $250,000 in underinsured (UIM) benefits. Foreman settled with Buehner’s insurance for the limits of $20,000. Because of extensive medical bills, Foreman filed an UIM claim with Mid-Century. Fisher, the Mid-Century adjuster, mailed an acknowledgement of the claim and a request for information. Foreman told Fisher that they had previously settled their liability claim and that they had hired a lawyer. As a result, Fisher stopped all contact with Foreman.

Foreman sued Mid-Century to recover contractual and extra-contractual damages. After reviewing Foremans’ medical records, the claim was denied.

Dallas insurance attorneys know that misrepresentations in insurance are essentially the same as misrepresentations in any other area of law.

The Texas Supreme Court told us in 1990, that a false representation must involve an existing or past material fact, rather than a statement of opinion, judgment, probability, or expectation in order to constitute actionable fraud. This is from the case styled, DeSantis v. Wackenhut Corp.

The Tyler Court of Appeals in 1978, said that statements concerning future contingent events, sales talk, “puffing,” and other similar statements are not considered actionable misrepresentations. The Tyler case is styled, Hicks v. Wright.

Grapevine insurance attorneys need to be able to recognize when fraud or misrepresentation occurs in the insurance context.

To accuse an insurance agent or insurance company of fraud there needs to be proof of the following elements:

1) a material representation was made;

Tarrant County lawyers need to be able to understand the case facts that will get them to exemplary damages. To know the difference between the threat of and the reality of getting them based on what transpired in the case.

Texas case law clearly allows for the recovery of exemplary damages in cases involving violations of the Texas Insurance Code and violations of the Texas Deceptive Trade Practices Act (DTPA). In 1994, the Texas Supreme Court issued an opinion in the case styled, Transportation Insurance Co. v. Moriel.

In Moriel, which was a “bad faith” case, the court held that the plaintiff must show that the insurance company had “no reasonable basis” to deny or delay payment of the claim and that the insurance company committed an act that was likely to cause serious injury beyond the injury associated with the underlying breach of the insurance contract. The court suggested that punitive damages could be recovered if the insurance company denied coverage for medical care knowing the insured would suffer serious injury, or denied disability coverage with the inherent extraordinary degree of hardship that would result.