Dallas Fort Worth Insurance Lawyer Blog

Definition Of Residence Premises In Homeowners Policy

January 24, 2017 | Mark S. Humphreys

For lawyers handling homeowners claims, a 14th Court of Appeals opinion needs to be read. The case is styled, American Risk Insurance Company, Inc. v. Veronika Serpikova.

Veronika purchased a house in Houston (the Property). She purchased a policy to insure the house from American. At first, Veronika and her husband lived in the house but in May 2012, they moved to another location. They leased the Property to two tenants, and did not move back into the Property.

On September 6, 2012, a renewal homeowner’s insurance policy became effective. American issued the policy and Veronika was the named insured. In November 2012, a fire severely damaged the Property. Veronika made a claim and it was denied. The denial was based on the fact that Veronika did not reside at the Property at the time of the loss and thus, the Property did not fall within the Policy’s definition of “residence premises” as required for dwelling coverage under the Policy.

Federal Court And Suing The Adjuster

January 22, 2017 | Mark S. Humphreys

Any insurance lawyer who has filed very many lawsuits knows that one key to helping their client have a good result is to be able to keep their case out of Federal Court. One way of doing this is by properly suing the claim adjuster. One successful way of doing this is illustrated in a Northern District of Texas, Amarillo Division opinion. The opinion is styled, Sparky’s Storage Solutions Ltd. v. Lexington Insurance Company, et al.

Sparky’ sued Lexington and their adjuster, Tim Fitzgerald for violations of the Texas Deceptive Trade Practices Act (DTPA) and Insurance Code violations. The suit was filed in State District Court. Lexington and Fitzgerald had the case removed to Federal Court due to the amount in controversy and alleging that Fitzgerald was improperly joined in the lawsuit in order to prevent diversity of citizenship which is required pursuant to 28 U.S.C. 1332(a).

Sparky’s filed a motion to remand the case back to the State District Court asserting that the joinder of Fitzgerald was proper.

Uninsured Claim And Extra-Contractual Damages

January 21, 2017 | Mark S. Humphreys

Most insurance lawyers already know the law regarding uninsured (UIM) claims and extra-contractual damages. A Dallas Court of Appeals opinion restates it. The opinion is, In Re Geico Advantage Insurance Company and Celia Stefl.

This is a mandamus proceeding wherein the real party in interest, Marion Thorpe, sued Geico and Stefl to recover uninsured motorist benefits and extra-contractual damages following a motor vehicle accident. The trial court denied Geico’s request for a bifurcated trial and this mandamus action resulted.

Mandamus relief is appropriate when a trial court abuses its discretion in denying a motion to sever and abate extra-contractual claims in an UIM case.

ERISA – Is It Or Not?

January 19, 2017 | Mark S. Humphreys

Whether an insurance plan falls under ERISA (Employee Retirement Income Security Act) or not, is a question routinely asked. However, it is not a question easily answered. A Southern District, Galveston Division opinion helps. The opinion is styled, Kirstin Walker v. Regence Blue Cross Blue Shield of Texas.

The is a summary judgment opinion dealing with the issue of whether or not the Blue Cross is an ERISA plan.

ERISA applies to any employee benefit plan if it is established or maintained (1) by an employer …; or (2) by an employee organization …; or (3) by both an employer and an employee organization according to 29 U.S.C 1003(a). Section 1102 defines an employee welfare benefit plan as any plan, fund, or program established or maintained by an employer or by an employee organization, or by both, for the purpose of providing its participants or their beneficiaries with certain benefits through the purchase of insurance or otherwise.

ERISA – Lawyers Fees

January 17, 2017 | Mark S. Humphreys

Lawyers who handle ERISA (Employee Retirement Income Security Act) claims need to read this opinion from the U. S. Western District, Austin Division. The opinion is styled, Genevie Ilene Maley, et al. v. Minnesota Life Insurance Co.

In this case, the insured had, at various times named two beneficiaries. When the insured died, both the beneficiaries sought benefits. They eventually agreed to split the policy proceeds and entered into an agreement with Minnesota for them to be paid half each. Later, Minnesota then asserted a policy defense of suicide and refused to pay. The insureds sued for breach of contract. In the breach of contract claim, the Court ruled in favor of Minnesota. Minnesota then sued for attorney fees under 29 U.S.C. 1132(g)(1).

ERISA provides that: in any action under this subchapter … by a participant, beneficiary, or fiduciary, the court in its discretion may allow reasonable attorney’s fees and costs of action to either party. Any party who achieves some degree of success on the merits may request attorney’s fees, not merely the prevailing party. This success cannot be merely trivial success on the merits or a purely procedural victory. Instead, the party satisfies this standard when the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether the particular party’s success was established or occurred on a central issue. Here, the parties agree that the judgement qualifies as some degree of success on the merits for Minnesota.

Concurrent Cause

January 15, 2017 | Mark S. Humphreys

Lawyers who handle hail damage claims understand all too well that in Texas the law regarding concurrent cause is against home owners. But there may be light at the end of the tunnel. An article in The National Law Review is encouraging. The article is titled “Florida Property Insurers Must Pay All Losses If Any Concurrent Cause Is Covered.”

In the latest of a string of recent decisions adverse to insurers, the Florida Supreme Court (not Texas – yet) held that, where a residential property incurs damage due to the cumulative or combined effects of multiple “concurrent” causes, any of which a homeowners policy covers, the insurer must pay the entire loss even if its policy expressly excludes the other causes. The same rule will presumably be applied to other property lines and by analogy to liability policies also.

A homeowner’s luxury home was insured for over $8 million under a manuscript “all risk” policy with various exclusions. The exclusion for loss due to “design, specifications, workmanship, repair, construction” and materials so used became crucial to the dispute. Soon after purchase, the house suffered numerous rainstorm leaks; a few months later, a hurricane damaged it more; and eventually it was demolished. The policy covered rain damage. Neither the Supreme Court nor intermediate appellate opinion state whether it covered windstorm, but that seems likely. After the insured settled litigation against the seller, architect, and builder, he prevailed at trial in a declaratory action against the insurer, which had denied coverage beyond $50,000 for mold.

Allstate And Warranties

January 14, 2017 | Mark S. Humphreys

Insurance attorneys have to have an understanding of how warranties work. Sometimes it is hard to tell the difference between insurance and a warranty. An article in the Insurance Journal about Allstate purchasing a warranty company shows how the two can be connected. The title of the article is “Allstate to Pay $1.4 Billion for SquareTrade, Seller of Warranties for Mobile Devises, Appliances.”

The Allstate Corp. agreed to acquire SquareTrade, a consumer electronics and appliance protection plan provider that distributes through many of America’s major retailers.

SquareTrade’s plans protect mobile devices, laptops and tablets, and other consumer electronics and appliances from malfunctions, accidental damage and mishaps. It promises that its technology delivers “a zero hassle claims process.”

Life Insurance Application

January 12, 2017 | Mark S. Humphreys

Life insurance attorneys can tell you that the life insurance application is very important. This is illustrated in a 1997, United States 5th Circuit opinion. The case is styled, Riner v. Allstate Life Insurance Company.

Following his divorce in 1994, Mr. Marriott wanted to replace his life insurance policy, which named his ex-wife as beneficiary, with a new policy naming his daughters (Riner and Ms. Marriott) as beneficiaries. Mr. Marriott had endured five back surgeries and was in chronic pain at the time the Allstate agent took his application. In the application, Mr. Marriott disclosed that he had chronic back problems and certain other medical problems. The application, however, was marked “no” with respect to whether he had ever received treatment for the use of alcohol or depression within the last three years.

After completing the application, the agent accepted an initial premium check which was completed by the agent because Mr. Marriott was too affected by the pain killers to do so. The agent then issued a “Receipt and Temporary Insurance Agreement” which he left with Mr. Marriott. The agent did not leave a copy of Mr. Marriott’s application with Mr. Marriott. The Agreement provided that the temporary coverage would start when Mr. Marriott’s medical examination was completed. The medical examination was completed on July 26, 1994. Six days later, Mr. Marriott died of either an aneurysm or heart disease. Allstate refused to pay under the Agreement because Mr. Marriott failed to reveal his prior treatment for the use of alcohol and depression.

Suicide Or Accident – Life Insurance

January 10, 2017 | Mark S. Humphreys

Life insurance lawyers will see a situation where a client’s life insurance claim is denied due to a suicide exclusion in the policy. The 1998 Austin Court of Appeals issued an opinion that deals with this issue. The case is styled, Butler v. Group Life and Health Insurance Company.

During a social occasion, the decedent and a number of his friends picked up an unloaded gun, and began to point the gun into their mouths and pull the trigger. At some point, ammunition was placed in the gun. Decedent did not know this. After the gun was loaded, but while decedent still believed it was not loaded, decedent picked up the gun, pointed it in his mouth, pulled the trigger and killed himself. Decedent’s beneficiary made a claim for life insurance benefits, accidental death benefits and attorney’s fees and interest as provided by the Prompt Payment of Claims Act. The policy in question was issued by Group Life and Health Insurance Company under the terms of the Texas Employees Uniform Group Insurance Act. The Board administering the policy denied the claim because decedent died as a result of intentionally self-inflicted injuries and because his death was not accidental. The district court affirmed and Butler appealed.

The Court ruled accidental death and life insurance benefits are payable but because the Prompt Payment of Claims Act is inapplicable the trial court’s denial of attorney’s fees and statutory interest is affirmed.

Claim Denied Due To Misrepresentation

January 8, 2017 | Mark S. Humphreys

The reason someone is going to visit with an insurance lawyer is because a claim the person has made is being denied by their insurance company. One of the most common reasons for denial of insurance policy benefits in life insurance situations is that there has been a misrepresentation in the life insurance policy application.

So what is the law in Texas as it relates to misrepresentations in life insurance policies?

The Texas Insurance Code, Section 705.004 reads as follows: