Dallas Fort Worth Insurance Lawyer Blog

ERISA And Abuse Of Discretion Standard

July 1, 2017 | Mark S. Humphreys

Lawyers handling Employee Retirement Income Security Act (ERISA) cases need to read this 5th Circuit opinion. It is styled, Ariana M. v. Humana Health Plan of Texas, Incorporated.

Ariana is a dependent eligible for benefits under the Eyesys Vision Inc. group health plan administered by Humana. The plan’s benefits include coverage for partial hospitalization for mental health treatment. The benefits are payable only for treatments that are “medically necessary.” “Medically necessary” is defined in the plan.

Ariana has a long history of mental illness, eating disorders, and engaging in self-farm. She was admitted to a hospital for various intensive treatment. Humana initially paid for treatment but later refused to do so after having two doctors review the medical treatment using the Mihalik criteria.

Insurance Application – Intent To Deceive

June 29, 2017 | Mark S. Humphreys

Stephenville insurance lawyers know that Credit Life and Disability claims are denied way too often. The reason for denial is almost always the allegation that there was a misrepresentation in the policy application. This issue is discussed in a 1983, Houston Court of Appeals [1st Dist.] opinion. The opinion is styled, Cartusciello v. Allied Life Insurance Company of Texas.

The facts are undisputed. Cartusciello applied for and was issued a policy from Allied Life on March 7, 1978. She died on March 8 from coronary thrombosis with lymphatic leukemia listed as a secondary cause of death. A claim for benefits was made. The claim was denied due to health status misrepresentations in the application.

Allied Life filed a motion for summary judgment which was granted by the Court.

Intent To Deceive – Can Insurance Company Prove It

June 27, 2017 | Mark S. Humphreys

As all insurance attorneys should know, intent to deceive is a requirement that has to be proved for an insurance company to deny a claim based on a misrepresentation. Even when faced with irrefutable evidence of a misrepresentation, intent to deceive still has to be proved. Due to the inherent difficulty in assessing the subjective mental state of an insured, insurance companies have a difficult time establishing this element of the misrepresentation defense. Insurance companies try to take the position that the intent can be proved as a matter of law and rely on two Texas Supreme Court decisions – Odom v Insurance Company of the State of Pennsylvania and Mayes v Massachusetts Life Ins. Co.

Mayes is a declaratory judgment action brought by the insurer based on misrepresentations in the application. The jury in this case concluded that the intent to deceive was not intended. The insurer argued that intent was established as a matter of law because the jury found that the misrepresentations were material to the risk and relied upon by the insurer. The Court agreed with the jury that the misrepresentation was inadvertent.

In Odom, the court made the following statement:

Do Misrepresentations In A Policy Application Make A Difference

June 25, 2017 | Mark S. Humphreys

Whether you are an attorney in a small town like Hamilton or Evant Texas or the Dallas Fort Worth metropolitan area, life insurance lawyers can tell you that the most common reason claims for life insurance benefits being denied is that there was a misrepresentation in the policy application.

A 1932, El Paso court of Appeals opinion is still good law. The opinion is styled First Texas Prudential Insurance Co. v. John Pipes.

John Pipes brought suit against First Texas for their refusal to pay policy benefits of $132.00 on this life insurance policy that insured his wife Ludie. John won at trial and this appeal by First Texas followed.

When Is A Misrepresentation In An Insurance Application Not Material

June 24, 2017 | Mark S. Humphreys

The above question is usually not easy to answer. Aledo insurance lawyers need to read a 1976 case from the Waco Court of Appeals. The opinion is styled, Westchester Fire Insurance Co. v. English.

Posing as husband and wife when in fact they were not married, a couple purchased a house and at closing, also purchased home owners insurance coverage. The house burned down three months later. After the fire, the Westchester learned for the first time that the couple were not married.

The policy provides in part that it ‘shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance, or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.’

Specificity Of Claims Against An Adjuster

June 22, 2017 | Mark S. Humphreys

Tarrant County insurance attorneys will learn real fast that when asserting a claim against an insurance adjuster, the claim needs to be pled with specificity. This is illustrated in a recent case from the Southern District, McAllen Division. The opinion is styled, Ada Elizondo v. Great Lakes Insurance SE. et al.

This is an insurance case for damages to Ada’s property allegedly caused by a storm. Dissatisfied with the adjustment and payment of her insurance claim, Ada filed suit against Great Lakes and their adjuster Jose Lopez. The case was filed in state court and promptly removed to federal court based on diversity jurisdiction. Lopez then filed a motion to dismiss and Ada filed a motion to remand. Both motions concern whether Lopez is a proper party to this suit.

Under Federal Rule 15(a), Ada needs the consent of Lopez to amend her pleading and that is not given. Thus, she must seek approval from the Court. However, she did not attach a proposed amendment to her motion to amend. The purpose of the amendment appears to be to defeat diversity jurisdiction and for that reason the Court will not allow amendment.

Stephenville Homeowner Lawyers

June 20, 2017 | Mark S. Humphreys

Stephenville homeowner lawyers need to read this opinion from the United States 5th Circuit Court of Appeals. The opinion is styled, State Farm Fire & Casualty v. Cedric Flowers.

This is a appeal from a summary judgment granted in favor of State Farm in a declaratory judgement action.

In 2008, Cedric and Renee Flowers purchased a plot of land and asked Ricky and Jennifer Scott to build a house for them on the property. The Flower’s were unable to get financing, so they quit claimed the property to the Scotts, who then obtained a construction loan under their own names, using the property as collateral. The property was to be conveyed back to the Flowers after the house was built. The Scotts eventually defaulted on the loan amid disputes with the Flower’s and a lawsuit resulted over the property.

Prompt Payment Of Claims And Appraisal

June 18, 2017 | Mark S. Humphreys

Does a violation of the Texas Prompt Payment of Claims Act survive an appraisal that is promptly paid? This issue is addressed in an opinion from the San Antonio Court of Appeals. The case is styled, Barbara Technologies Corporation v. State Farm Lloyds.

Barbara Technologies had a policy of insurance with State Farm insuring property that was damaged in a hail storm on March 31, 2013. A claim was made on October 17, 2013 and on October 31, 2013, State Farm inspected the property. On November 4, State Farm sent a letter stating the property sustained damage of $3,153.57, but did not issue payment because the amount was less that the $5,000.00 deductible. On February 21, 2014, Barbara Technologies requested a re-inspection which was done and State Farm did not change it’s earlier statement.

Barbara Technologies filed suit for various violations of the Insurance Code including claims for violation of the Prompt Pay Act pursuant to Sections 542.058(a) and 542.060.

Hail Claims And Trial

June 17, 2017 | Mark S. Humphreys

Hail damage claims often get resolved short of an actual trial. The Houston Court of Appeals [1st Dist.] issued an opinion on a trial from a District Court. The opinion is styled, Mark Groba v. German American Farm Mutual Insurance Company.

After Hurricane Ike hit his area, Groba made a claim for hail and wind damage to his property. His insurer, German American, sent an adjuster who believed the loss totaled an amount slightly above Groba’s deductible. Based on this low estimate, Groba filed a lawsuit against Great American for violations of the Texas Insurance Code.

Groba hired a construction expert and investigator, Daryl Quinney, who concluded the damage was far above the deductible amount. Quinney visited the property twice at least six months after the hurricane. He testified that in conducting his investigation and making his estimate, he assumed that the damages he observed did not exist before Hurricane Ike, saying: “I was there to do a Hurricane Ike investigation so, therefore, my assumption is those damages resulted from the wind of Hurricane Ike.” His estimate of damages was based on his observations, photographs, and loss estimation software.

Filing Insurance Lawsuits

June 15, 2017 | Mark S. Humphreys

Insurance attorneys usually learn the hard way, the correct way to file lawsuits to stay out of Federal Court. Many times there is no way to stay out of Federal Court but when there is, it is usually to the client’s advantage to do so. A Southern District, McAllen Division opinion shows the wrong way. It is styled, Ada Carmona Elizondo v. Great Lakes Insurance SE.

This case arises out of a wind and hail storm damage to Ada’s property and the subsequent claim with Great Lakes. Dissatisfied with the adjustment and payment of the claim, Ada filed suit against Great Lakes in State Court and the adjuster Lopez. The case was removed to Federal Court. Lopez filed a motion to dismiss and Ada filed a motion to remand. Both motions concern whether Lopez is a proper party to the suit.

Under Federal Rule 15(a), a party may amend his pleadings once as a matter of course within 21 days after serving it, or if the pleading requires a responsive pleading, within 21 days after a responsive pleading is served. Thereafter, a party may amend only with written consent of the opposing party or by leave of the Court. Since Ada cannot amend as a matter of course and does not provide written consent of the defendants, Ada requires leave of Court to amend.