Dallas Fort Worth Insurance Lawyer Blog
Life Insurance Attorneys need to know this 2023 case from the United States Fifth Circuit Court of Appeals.
The law regarding denial of life insurance claims can be tough but for an experienced life insurance attorney there are many aspects of the law in this area of litigation that are favorable. But some favorable laws doesn’t equate to an automatic win at trial. The case at issue is styled, Mirna Guzman v. Allstate Assurance Company. The resulting trial was not favorable to Guzman and an appeal followed. Here is what the appeals court said.
Mirna Guzman sued Allstate after Allstate denied her claim for benefits based on Allstate’s assertion that Mr. Guzman lied on his application for life insurance when he answered in the negative his health history regarding his history of seizures, tobacco and nicotine use.
After Mr. Guzman died, Mirna applied for benefits and Allstate conducted a routine investigation that turned up showing Mr. Guzman was a current smoker. Allstate denied Mirna’s claim for life insurance benefits.
Mirna sued Allstate for breach of contract and DTPA violations and violation of Texas Insurance Code, section 542.003.
The trial court found in favor of Allstate and Mirna filed an appeal raising two arguments: (1) the court committed error in finding Allstate satisfied the intent to deceive element of its claim for rescission; and (2) the court abused its discretion in admitting testimony of Allstate’s chief underwriter.
The trial court held that Mr. Guzman intentionally misrepresented his status as a smoker based on (1) “Mr. Guzman had a history of smoking” which he misrepresented in his application; (2) he “knew his status as a smoker would amount to an increase of the policy premiums;” and (3) medical records show that he also minimized the extent of his epilepsy in his application.
Mirna contends that “other evidence in the record negates an intent to deceive.”
However, the great deference owed to the trial judge’s findings compels the conclusion that where there are two permissible views of the evidence, the fact finder’s choice between them cannot be clearly erroneous. Accordingly, because the trial court’s finding on the intent to deceive prong of Allstate’s counterclaim is not implausible in light of the evidence in the record.
The issue on Allstate’s underwriter can be gleamed from a reading of the case.