Dallas Fort Worth Insurance Lawyer Blog

Can Someone In Fort Worth Sue An Insurance Company

March 23, 2017 | Mark S. Humphreys

To sue an insurance company, a person must have “standing.”

Texas is not a direct action state. In other words, when Fred and Ted collide in their cars, the resulting lawsuit is styled Fred vs Ted, and their respective liability insurers are not named parties. Fred can’t sue Ted’s insurer; he has to sue Ted. Because of the lack of privity between a liability insurer and a third-party claimant, an insurer had no duty to a third party to settle a claim brought against its insured until the insured’s liability has been established. This was made clear by the Texas Supreme Court in 1997, in a case styled, Farmers Texas County Mutual Insurance Co. v. Griffin. Indeed, until the liability of the insured is judicially established, a third-party plaintiff does not have standing to bring a direct action against the insurer to recover for the liability of the insured. For further guidance there is more case law.

This rule of law is so well ingrained in the jurisprudence of the State that it is embodied within the Texas Rules of Civil Procedure. Rule 51(b) regarding the Joinder of Claims and Remedies provides:

Fort Worth – Delay In Paying Claim

March 21, 2017 | Mark S. Humphreys

The Fort Worth Court of Appeals delivered an opinion in 2006, that is relevant to all insurance lawyers in Texas. The case has to do with who can assert a claim under the Texas Prompt Payment of Claims Act. The opinion is styled, American National Fire Insurance Company v. Hammer Trucking, Inc.

In November 2006, the Fort Worth Court of Appeals held that the Prompt Payment of Claims Act doe not apply to an indemnity claim against an excess carrier for payments made to settle a liability claim. In so holding, the Court stated that this Act only applies to first party claims between the insurance company and their customer. However, the Texas Supreme Court recently held, in response to a certified question from the Fifth Federal Circuit on a CGL case, that the Prompt Payment of Claims Act applied to the insurance company’s obligation to pay third party claims.

The prompt-payment statute provides that an insurer, who is “liable for a claim under an insurance policy” and who does not promptly respond to, or pay, the claim as the statute required, is liable to the policyholder or beneficiary not only for the amount of the claim, but also for interest on the amount of the claim at the rate of eighteen percent a year as damages, together with reasonable attorney’s fees pursuant to Texas Insurance Code, Section 542.060(a). “Claim” is defined as “a first party claim made by an insured or policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by the insurer directly to the insured or beneficiary.” This is found in Texas Insurance Code, Section 542.051(2). The statute does not separately define “a first party claim,” and Texas cases are divided as to its meaning.

Life Insurance And Citizenship Status And ERISA

March 19, 2017 | Mark S. Humphreys

Llano life insurance agents need to know about this case from the United States 5th Circuit. It is a 2011 opinion styled, Araceli Medina Garcia v. American United Life Insurance Company.

Araceli’s husband, Salvador, died in a car accident. He had a policy with American through his employer. The policy was an ERISA plan. American’s plan administrator denied Araceli’s claim for benefits because Salvador was living illegally in the U.S. Araceli filed a lawsuit seeking benefits. On Salvador’s policy enrollment form he indicated his date of birth and social security number.

When Araceli made a claim for benefits, she submitted a proof of death form, her Mexican identification card, and Salvador’s death certificate, identifying his date of birth as above and his place of birth as Mexico City and the above social security number. No documents reflected Salvador being a U.S. citizen. American was then sent Araceli’s alien registration card and a copy of Salvador’s I-9 form, which was expired.

Misrepresentation In Life Insurance Application

March 18, 2017 | Mark S. Humphreys

Dallas Texas life insurance lawyers will know this case and use it where necessary. The case is from 1938, and was issued by the El Paso Court of Appeals. It’s style is, National Life & Accident Co. v. Dickinson.

This is a judgment case wherein National Life sued Vera Dickinson, to cancel a life insurance policy issued on Vera’s husband, Fred. National Life alleged that Fred made misrepresentations in his application for life insurance. Fred later died.

The particular matters about which it was alleged Fred gave untrue and false answers were: (a) If he had ever had syphilis, and he answered “No,” whereas he did have; (b) he was asked about consulting a physician, and he answered “No,” whereas he had consulted a physician for various ailments; (c) whether he had been an inmate of a hospital, and answered “No,” when he had been an inmate of a hospital; (d) he was asked to give the names of physicians consulted, and he gave the name of only one, when he had consulted several; (e) he was asked if any physician ever gave unfavorable opinion of his health with reference to military or naval service, to which he answered “No,” when he had appeared before a medical board in 1933, and on examination was disqualified for active duty in the navy on account of his health, and he was then so advised; (f) it was alleged that the policy and application provided that the policy should not become effective unless it was delivered to Fred while he was in good health, and that Fred was not in good health when the policy was delivered to him. National Life alleged that by reason of the matters stated the insurance contract never took effect, and rescission was sought on that ground.

Hail Claims In Texas

March 16, 2017 | Mark S. Humphreys

The Houston Chronicle published an article in February on a topic that lawyers who handle hail damage claims need to know about. The title of the article is, Insurers, Plaintiffs Lawyers Square Off In Austin Over Hail Storm Bill.

Lobbyists representing insurance companies are pushing legislation they say will prevent premium increases by weeding out “abusive” lawsuits over damages caused by hail and other storms in what is shaping up as a battle royal with consumers and plaintiffs’ lawyers.

Gov. Greg Abbott raised the stakes when he used his State of the State address earlier this week to proclaim that “hailstorm litigation is the newest form of lawsuit abuse.” He urged the Republican-controlled legislature to send him a bill that he can sign into law to limit those types of lawsuits.

What Is An Example Of Bad Faith Insurance?

March 14, 2017 | Mark S. Humphreys

Palo Pinto insurance lawyers know the above question can be difficult to answer. Each situation is different. The Stowers doctrine in the law is an example to look toward for some understanding.

The heart of a Stowers claims is the 1929 decision in G. A. Stowers Furniture Co. v. American Indemnity.

In Stowers, the insurance company refused to accept a third party’s offer to settle the asserted claim within policy limits and a judgment in excess of the policy limits resulted. The court imposed a duty for an insurance company to handle settlement demands reasonably.

Life Insurance Policy – Misrepresentation And Cause Of Death

March 12, 2017 | Mark S. Humphreys

Dallas and Tarrant County life insurance lawyers should read this case from 1932. It is important to point out that this case has been disapproved by a later court but the idea behind the case is still relevant to arguing similar facts. The case is styled, First Texas Prudential Insurance Co. v. John Pipes and is out of the El Paso Court of Appeals.

John Pipes was the beneficiary on a life insurance policy insuring the life of his wife. When she died, he submitted a claim for benefits and was denied. Upon trial of the case, judgment was awarded to Pipes and this appeal followed.

First Texas points out that the application for insurance contained the question: Has life proposed ever suffered from consumption? The question was answered “No.” First Texas submits that said answer was false; that the application was signed by Pipes and without the knowledge of the insured; that the uncontroverted evidence shows that if the application for the policy had reflected that the assured had had incipient tuberculosis, though arrested, said application would have been rejected, and that under the evidence the court should have found that said representation was material to the risk as well as false, and, so finding, should render judgment for First Texas.

Mason Life Insurance Lawyers

March 11, 2017 | Mark S. Humphreys

If you are a Mason County Texas life insurance lawyer, here is a 1967, Tyler Court of Appeals opinion you need to know. The opinion is styled, Southern Life & Health Insurance Company v. Gordon Grafton.

This lawsuit resulted from the denial of life insurance benefits from Southern Life to Gordon after the death of his wife. Southern Life denied the claim due to policy language stating: “This policy shall take effect on the date of issue provided the assured is then alive and in sound health and free from accidental injury.”

Southern Life asserts that Gordon’s wife, Marjorie was not in good health. They then returned the paid premiums.

What Is Part Of The Insurance Claim And What Is Not?

March 9, 2017 | Mark S. Humphreys

Rock Springs, Texas insurance lawyers would want to know about this Houston Division, Southern District case. The opinion was issued in January 2017, and is styled, JYC Enterprise Inc. v. Allied Property and Casualty Insurance, et al.

In this case JYC sued Allied, its adjuster (Heller), and Bay Area Fire & Safety, Inc., after a fire destroyed property belonging to JYC. The suit was filed in state court and removed to federal court by the Defendants. The Defendants are alleging the suit against Bay Area is a fraudulent and only brought in order to defeat diversity because Bay Area is a Texas corporation.

JYC asserted claims against Allied and Heller as to the sufficiency of the payment under the policy for Business Income losses and as to disputes about the policy’s coverage. JYC asserted a claim against Bay Area for negligence in its inspection of the fire suppression system. Allied responded, contending that because the claim against Bay Area was fraudulently misjoined, the Bay Area claim should be severed and remanded.

Homeowners Insurance Policy Coverage

March 7, 2017 | Mark S. Humphreys

Persons with homeowners insurance policies are in a better place today than they were before January 27, 2017. Insurance lawyers in Mason Texas, Menard, Junction, Grand Prairie, Arlington, Dallas, Fort Worth, and all over Texas need to celebrate a recent Texas Supreme Court opinion. The opinion is styled, Nassar v. Liberty Mutual Fire Insurance Company, et al.

The Nassars’ suffered losses after Hurricane Ike hit there home and damaged various parts of their property. Disputes arose over the value of various items damaged including the Nassars’ damaged fencing.

In addition to their residence, the Nassars’ property contains barns, outbuildings, and a system of fencing. The system of fencing spans over 4,000 linear feet, includes a white picket fence at the northeast corner of the dwelling, an ornamental iron fence … in front of the dwelling, numerous cross fences, garden fences and pens, and a large perimeter fence constructed of 2′ x 6′ lumber with wooden posts and eight foot intervals, on which welded wire mesh is attached.