Dallas Fort Worth Insurance Lawyer Blog

Vacancy Clause In Homeowners Policy

June 5, 2016 | Mark S. Humphreys

Colleyville insurance lawyers should be able to discuss “vacancy” clauses in homeowners policies. A 1997, San Antonio Court of Appeals case discusses the vacancy clause found in a USAA homeowners policy. The style of the case is Lynn v. USAA Casualty Insurance Company.
Mr. and Mrs. Lynn’s country home was insured by USAA. The house was completely destroyed by fire and USAA denied coverage based on vacancy and arson. The Lynn’s brought suit against USAA for breach of contract and breach of duty of good faith and fair dealing. The trial court granted USAA’s Motion for Summary Judgement and this court affirmed the ruling.
Although there were some contents in the house six months before the fire, the testimony established that the house was vacant when it burned. The Court of Appeals stated that the house was “without contents of substantial utility” due to the lack of heating equipment, air conditioning, appliances, sleeping accommodations or efforts to preserve the contents for several months. Therefore, the “vacancy” clause precluded recovery. Furthermore, although the illegal acts (such as arson) of a co-insured do not bar recovery under an insurance policy, the “vacancy” clause, on the other hand, does not have a limitation for who “caused” or was aware of the “vacancy.” The clause excludes coverage regardless of the innocent spouse’s knowledge of the “vacancy.” Finally, a bad faith claim is established by showing that the insurer had no reasonable basis for denying the claim or that the insurer failed to investigate. In this case, USAA was justified in denying the claim under the “vacancy” clause. Therefore, there was no bad faith.

Life Insurance – Intentionally Killing Insured

June 4, 2016 | Mark S. Humphreys

A Texas life insurance lawyer will want to keep this case in his file. It is a 1941, opinion from the Waco Court of Appeals and is styled, National Life & Accident Ins. Co., Inc., et al. v. Thompson.

Velma Thompson instituted this suit for the recovery of $200 and statutory penalties alleged to be due her as beneficiary in a policy of insurance on the life of her husband, Era Thompson. Defendant answered with a plea in abatement on the ground that plaintiff had assigned the policy sued upon to one Braswell, and, subject thereto, with general demurrer and general denial. The brother and sisters of the insured filed their plea of intervention, asserting their right to recover the proceeds due under said policy, by reason of their allegation that plaintiff wilfully brought about the death of her husband. Defendant answered further, alleging that it was unable to determine who was entitled to receive the proceeds due under said policy and that it was paying into the registry of the court the sum of $200 to abide the judgment in the cause, and it prayed that it be dismissed from further liability with its costs.

The case was submitted to a jury on special issues, in response to which they found that plaintiff did not wilfully bring about the death of the insured; that a common-law marriage was in existence between plaintiff and the insured at the time of the latter’s death; and that $100 would be a reasonable attorney’s fee for the legal services rendered in prosecuting plaintiff’s case. Interveners and defendant each presented separate motions for judgment in their favor, respectively, non obstante veredicto. The court rendered judgment in favor of plaintiff and against defendant for the sum of $200, with interest and court costs, and that interveners take nothing. Each of the parties filed separate motions for new trial, all of which were overruled, and to which each duly excepted and gave notice of appeal.

Hail Damage And Prompt Notice Of Claim

June 2, 2016 | Mark S. Humphreys

Lawyers handling hail damage claims will tell you to immediately check for damage after a hail storm and immediately report any damage to your insurance company. The reasons for doing this are illustrated in an opinion from the U.S. District Court, Dallas Division. The style of the case is, Hamilton Properties v. American Insurance Company.

This case arises out of a dispute regarding an insurance company’s decision to disclaim coverage and deny its customer’s claim for property damage following a hailstorm. Plaintiffs are suing for:

(1) breach of contract; (2) violations of the Texas Deceptive Trade Practices Act; (3) violations of the Texas Insurance Code; (4) breach of the duty of good faith and fair dealing; (5) breach of fiduciary duty; (6) misrepresentation; and (7) common law fraud by misrepresentation. Defendant The American Insurance Company (“AIC”) has moved for summary judgment with respect to all of these claims. This Court granted the motion.

Federal Court – Paying Attention To Detail

May 31, 2016 | Mark S. Humphreys

Insurance lawyers in the Dallas and Fort Worth areas can tell you that paying attention to detail is most important. A McAllen Division opinion illustrates this point. The style of the case is, Mark Dizdar et al v. State Farm Lloyds, et al.

Mark Dizdar, et al (Plaintiffs’) claims arise from damage sustained to their property as a result of an alleged March 29, 2012 storm event in Hidalgo County, Texas. Shortly after the storm, Plaintiffs reported an insurance claim to State Farm for the damages sustained to their property.

Thereafter, Mr. Wallis inspected the property on behalf of State Farm on June 22, 2012, estimating the loss to the property at $8,654.13. Consequently, State Farm issued to Plaintiffs a payment of $4,955.60, after applying depreciation and deductible.

ERISA Disability Claims

May 29, 2016 | Mark S. Humphreys

This 5th Circuit Court of Appeals opinion is a must read for ERISA attorneys. The case is styled, Burell v. Prudential Insurance. The facts will be given here. The case needs to be read to understand how the Court affirmed the findings of the lower Court in denying benefits to Burell.

In 1985, Burell began working as an entry-level technician for Methodist Healthcare Systems (“MHS”). After 26 years, he ended his career as Director of Biomedical Services for all San Antonio MHS facilities. As an employee of MHS, Burell participated in the company’s insurance plan (“the Plan”), which is provided through HCA Management Services, L.P. Prudential acts as both administrator and insurer of the Plan. In order to qualify for long-term disability benefits, a claimant must meet the following definition of “disabled”: the claimant must (1) be “unable to perform the material and substantial duties of [his or her] regular occupation due to [his or her] sickness or injury “; (2) be “under the regular care of a doctor “; and (3) suffer “a 20% or more loss in [his or her] monthly earnings due to that sickness or injury.”

Burell was diagnosed with multiple sclerosis (“MS”) in 2008. Citing worsening symptoms of MS, in September 2011, Burell went on medical leave and filed for long-term disability benefits with Prudential, claiming that he qualified for benefits under the Plan due to MS, headaches, depression, and anxiety. In January 2012, he stopped working altogether, ending his employment with MHS. In support of his claim, Burell submitted medical records from his treating physicians and a psychiatrist. Prudential hired Heidi Garcia, a registered nurse, and Dr. Alan Neuren, who is board certified in neurology, to review Burell’s claim. Dr. Neuren found that Burell’s diagnosis of MS was unsupported by his medical records. He also found it unlikely that Burell suffered any cognitive impairments, opining that job stress is “likely the source of his complaints as opposed to a neurological disorder.” Garcia focused her review on Burell’s claim of depression and anxiety, ultimately finding that any cognitive symptoms he was experiencing were not sufficient to prevent him from working. Based on their reports and the medical records submitted, Prudential denied Burell’s claim for long-term disability benefits.

Bad Faith State Farm

May 28, 2016 | Mark S. Humphreys

Here is a case that discusses bad faith accusations against State Farm. Insurance attorneys need to read the case. It is from 14th Court of Appeals. The style of the case is, State Farm Lloyds v. Candelario Fuentes and Maria Fuentes. The facts are set out here.

Hurricane Ike struck the Gulf Coast on September 12 and 13, 2008. The Fuenteses evacuated prior to the storm. When the Fuenteses returned home, they discovered that a tree had fallen through their roof over their master bedroom. Their home sustained exterior damage. According to the Fuenteses, their home also sustained interior damage from water leaking into their bedroom, as well as into their bathroom and laundry room.

On September 22, 2008, the Fuenteses’ daughter reported an insurance claim to State Farm for her primarily Spanish-speaking parents. State Farm assigned adjuster Dustin Namirr, who inspected the Fuenteses’ home on November 12, 2008. Namirr allowed for total replacement of the roof and covered damage to a backyard shed, the fence, a window, and a screen. Namirr inspected the interior of the home with the Fuenteses. The Fuenteses pointed out several areas of interior water damage from Hurricane Ike. Namirr’s log entry and notes do not mention an interior inspection, and he destroyed the two or three photos he took of the home’s interior. Namirr claimed that, based on his inspection, he determined that the interior damage was not caused by Hurricane Ike. He went to his truck, printed out an estimate of damages in English, and provided the Fuenteses with a check for $4988.63 for the exterior damage, as well as a check for $350 in “food loss.” State Farm closed its file on the same day. The Fuenteses did not receive any written explanation for State Farm’s denial of the claim for interior damage.

ERISA And Time Limitations For Appeal

May 26, 2016 | Mark S. Humphreys

ERISA lawyers can tell you that the rules with ERISA claims are pretty tough. This is illustrated by a Dallas Division opinion issued in March 2016. The style of the case is, Sharon Smith v. The Boeing Company.

Sharon sued Boeing seeking spousal pension benefits from her deceased husband’s retirement plan. On January 1, 2008, Henry Smith designated his former spouse, Trinette Smith as his primary beneficiary. Henry and Trinette later divorced, and Henry married Sharon in 2011. Henry attempted in a letter dated May 14, 2012, to change the primary beneficiary to Sharon. The request was denied because Henry had already begun receiving his pension benefit.

After Henry’s death in July 2013, Sharon requested that Boeing recognize her as the beneficiary. In a letter dated October 14, 2013, Boeing informed Sharon her request was being denied because she was not the listed spouse at the time of Henry’s retirement. Sharon was also informed of rights under ERISA and under Section 502(a) she had no later than 180 days to appeal the decision which she did.

Insurance Agent Responsibility

May 24, 2016 | Mark S. Humphreys

As any insurance lawyer working in Grand Prairie can tell you, the insurance can be held liable for improper action or inaction. This is illustrated in the 1998, Texas Supreme Court case styled, Liberty Mutual Insurance Company v. Garrison Contractors.

Garrett, an agent of Liberty Mutual whose duties included soliciting and obtaining policy sales for Liberty, as well as explaining policy provisions and premium calculations to customers, sold Garrison a three-year multi-line insurance policy from Liberty. The policy featured a retrospective premium plan. When the policy period ended, Liberty billed Garrison $159,371 in retrospective premiums. Garrison refused to pay and Liberty sued to collect premiums. Garrison asserted a counterclaim against Liberty and filed a third party claim against Garrett, individually, claiming that Liberty and Garrett misrepresented the retrospective premium terms. The trial court granted Liberty’s and Garrett’s Motion for Summary Judgment and entered judgement in favor of Liberty for the premiums sought.

The Court of Appeals affirmed in part and reversed in party. Liberty and Garrett applied to the Texas Supreme Court for writ of error.

Use Of An Automobile

May 22, 2016 | Mark S. Humphreys

Dallas insurance lawyers understand that a key to being able to help a client is understanding how courts interpret insurance policies. A 14th Court of Appeals opinion gives some insight. The style of the case is, Farmers Insurance Exchange and Allstate County Mutual v. Rodriguez.

The following facts are undisputed. Using a trailer hitched to his pickup truck, Woodling transported a deer stand from his deer lease to his residence. He pulled into his driveway and attempted to remove the deer stand from the trailer. He pushed the deer stand out of the trailer until the legs on the stand touched the driveway. He left the stand resting at a 30-degree angle against the trailer. He then attached a come-along 2 to a fence post and to the stand and attempted to raise the stand upright. Realizing he could not accomplish the task alone, he requested assistance from his neighbor, Rodriguez.

Rodriguez and Woodling decided to lift the stand manually by walking forward out of the trailer and onto the driveway. They began in the trailer, each using both hands to push the stand upward. Then they stepped onto the driveway and took “one or two” more steps. When the stand was no longer touching the trailer, Woodling realized it was too heavy and yelled, “Juan, I can’t hold it. Jump.” Woodling then jumped away, leaving Rodriguez alone to hold the stand, which weighed approximately 350 pounds. The stand fell, and Rodriguez was injured.

Life Insurance – Beware

May 21, 2016 | Mark S. Humphreys

Most attorneys who consider themselves very busy life insurance lawyers can tell you all kinds of war stories about the things life insurance companies and their agents do that is illegal and improper. 60 Minutes ran a story titled “Life Insurance Industry Under Investigation” that should be read.

When you take out a life insurance policy, you pay premiums in the expectation that when you die your spouse or your children will receive the benefit. But audits of the nation’s leading insurance companies have uncovered a systematic, industry-wide practice of not paying significant numbers of beneficiaries.

In a little-known series of settlements, 25 of the nation’s biggest life insurance companies have agreed to pay more than $7.5 billion in back-death benefits. However, about 35 insurance companies have not settled and remain under investigation for not paying when the beneficiary is unaware there was a policy, something that is not at all uncommon.