Dallas Fort Worth Insurance Lawyer Blog

Can An Unauthorized Agent Bind The Insurance Company?

April 22, 2017 | Mark S. Humphreys

The above questions get some attention in a 1994, Texas Supreme Court opinion styled, Celtic Life Insurance Co. v. Coats.

The insured’s owner met with a soliciting agent of Celtic to discuss buying insurance. The owner advised the agent that he wanted a policy providing benefits for psychiatric care equal to or better than the $20,000 coverage provided by the company’s then existing policy. The owner explained to the agent that the coverage was needed because his oldest son had previously required psychiatric care, and he was concerned that his younger son might well require similar care. The agent said he understood. The agent then proposed the purchase of a specific policy written by Celtic with a maximum lifetime hospital benefit of $1,000,000. However, the agent did not point out that the psychiatric benefits under the policy were limited to $10,000. The insured’s business manager noticed the $10,000 limit and questioned the agent about its meaning. The agent assured the business manager that the $10,000 limit applied only to the out-patient psychiatric care. The policy was purchased.

Subsequently, the owner’s son was admitted to the hospital for psychiatric care. The insured filed a claim and was assured by the agent that the in-house hospital treatment was covered. Celtic, however, paid only $10,000 of the $27,000 in medical expenses.

Flood Insurance

April 20, 2017 | Mark S. Humphreys

For those insurance lawyers handling flood claims, a Corpus Christi Court of Appeals opinion issued in 2017, is a must read. It is styled, Housing & Community Services, Inc. and HCS 401, LLC D/B/A Lantana Square Apartments v. Texas Windstorm Insurance Association.

This is an appeal in favor of TWIA

HCS had policies providing coverage with TWIA through December 2012. On May 15, 2012, HCS sustained damage to covered property and on May 28, 2013, filed two claims with TWIA. On July 1, 2013, TWIA denied both claims on the grounds that HCS failed to fulfill its duty to file its claim with TWIA within one year of the loss.

Insurance Fights & Federal Court

April 18, 2017 | Mark S. Humphreys

Many insurance lawyers representing claimants want to avoid Federal Court due to the procedural rules and the court’s interpretation of those rules. These rules and their interpretation generally work in favor of the insurance companies which is why insurance companies always want a case in Federal Court and why lawyers representing insureds generally try to avoid Federal Court.

A 2017, opinion discusses some basic Federal Court rules. The case is styled, Campmed Casualty & Indemnity Company, Inc. v. Specialists on Call, Inc., et al. The opinion was issued by the Eastern District Court, Sherman Division.

This is an insurance coverage dispute related to whether Campmed is obligated to defend Specialists on Call (SOC) in the underlying litigation. On December 19, 2016, Campmed filed its motion for leave to amend its complaint. On December 28, 2016, SOC filed a response. On January 2, 2017, Another Defendant, Dr. Leonard DaSilva filed a response that adopted and incorporated the entirety of SCO’s response.

Flood Insurance – Know Your Policy

April 16, 2017 | Mark S. Humphreys

Coastal Texans – you have to know your flood insurance policies. This is perfectly illustrated in a 2016, Southern District, Galveston Division, opinion. It is styled, Lobeck v. Licatino, et al.

The case was decided on a summary judgment.

In a nutshell, Lobeck bought property that, unknown to her, was located within the boundaries of the Coastal Barrier Resources System (CBRS). Lobeck’s mortgage loan required her to maintain flood insurance on the property so she innocently procured an NFIP through the Defendants in this case. The policy was subsequently reissued and then renewed the following year. During the renewal year Hurricane Ike completely destroyed the building on the property and only then was Lobeck informed that her policy was void and had never afforded overage. She received nothing for her property damage. Consequently, Lobeck filed suit alleging that the Defendants knew or should have known that the property was ineligible for flood insurance under the NFIP, that the policy was void when issued, and that the policy offered absolutely no coverage. According to Lobeck, the express and implicit misrepresentations of the Defendants, upon which she ignorantly, but reasonably relied, caused her losses.

Life Insurance Application

April 15, 2017 | Mark S. Humphreys

Granbury life insurance lawyers need to read this 1975, Texas Supreme Court opinion. It is styled, Johnson v. Prudential Insurance Company of America.

This is a suit to collect benefits under a group life insurance policy. Prudential resisted payment based on their assertion that the deceased willfully deceived the company by her statements made in procuring coverage. The beneficiary contends that the statements of the insured were inadmissible and could not be considered because copies of the application were not furnished to the insured in compliance with what is now the Texas Insurance Code, Section 705.103.

Ten years before applying for this insurance, Mrs. Johnson, the insured, had her right breast removed because of cancer. Mrs. Johnson made what she could have regarded as true statements, but they were incomplete and misleading.

Delay In Asserting Misrepresentation Defense

April 13, 2017 | Mark S. Humphreys

How long does an insurance company have to discover and assert the defense of misrepresentation? This is discussed in a 2008, Amarillo Court of Appeals opinion styled, Myers v. Mega Life and Health Insurance Company.

Myers filed suit based upon an insurance contract issued by Mega Life. In addition to a declaratory judgment action, Myers sought damages for breach of contract and violations of the Texas Insurance Code. Mega Life asserted the policy was rescinded due to misrepresentation in the insurance application.

Myers asserted that Texas Insurance Code, Section 705.005 prevents Mega Life from asserting the misrepresentation defense. This section reads:

Life Insurance Misrepresentation – Age

April 11, 2017 | Mark S. Humphreys

The Galveston Court of Appeals issued an opinion in 1938 that is still good law. The case is styled, Texas State Life Insurance Company v. Freeman Barton.

This is an appeal from a trial to the Judge wherein Texas State was ordered to pay the life insurance proceeds to the beneficiary together with the statutory penalty and attorney fees.

The policy had been issued on Marie Clemons on July 10, 1935, with Barton as beneficiary and Marie having died on November 29, 1935. (As a side note, this case points out “both of them being negroes,” – makes you wonder about that time in history).

Life Insurance Sitting Around?

April 9, 2017 | Mark S. Humphreys

Have you ever wondered if someone has left you an insurance policy you do not know about. The Los Angeles Times published an article in March 2017, that you might find interesting. It is titled, How To Score A Piece Of California’s $365 Million In Unclaimed Life Insurance Benefits.

It might surprise you to learn that the state of California is sitting on a pile of cash that belongs to consumers — a big pile of cash — and is having trouble giving it away.

At issue are life-insurance payouts owed to state residents. Under California law, insurers are required to turn over to the state any funds that go unclaimed for three years. But audits of insurers’ books that began in 2008 found that the companies were clinging to billions of dollars that didn’t belong to them.

A Dallas County Claim

April 8, 2017 | Mark S. Humphreys

The Texas Supreme Court issued an opinion in 2014, in a case styled, In Re National Lloyds Insurance Company. For insurance lawyers, this case discusses relevant discovery issues.

This case involves allegations of underpaid insurance claims. In September 2011 and June 2012, storms swept through Cedar Hill and caused damaged to Mary Erving’s home. Erving filed a claim with Nation Lloyds and an adjuster was sent in response to each claim. Following the inspections, National Lloyds paid the claims.

Concerned that National Lloyds had undervalued the claims, Erving sued for breach of contract and violations of the Texas Insurance Code and the Texas DTPA. During the discovery process, Erving requested production of all claim files from the previous six years involving three individual adjusters. She also requested all claim files from the past year for properties in Dallas and Tarrant Counties involving Team On Adjusting, LLC, and Ideal Adjusting, Inc., the two adjusting firms that handled Erving’s claim. Erving sought via interrogatory the names, addresses, phone numbers, policy numbers, and claim numbers associated with the requested claim files.

Credit Life Insurance Policy

April 6, 2017 | Mark S. Humphreys

Insurance lawyers in Menard, Junction, Mason, Fredricksburg, and Kerrville need to read this case from the Southern District Court, Houston Division. It is styled, Ruben N. Saenz, Individually and as Representative of the Estate of Decideria Saenz, Deceased v. Transamerica Life Insurance Company.

This lawsuit arise out of the denial of an insurance claim for credit life insurance purchased at the time a car was purchased and financed. Saenz wife died and Ruben Saenz made the claim for benefits. Transamerica filed a motion to dismiss the case alleging that Saenz does not have proper standing to file the lawsuit.

Because Transamerica’s motion contains factual evidence, the court treats the motion as a factual attack. As a factual attack, there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of power to hear the case.