Dallas Fort Worth Insurance Lawyer Blog

Beneficiary Causing The Death Of The Insured

March 17, 2016 | Mark S. Humphreys

Arlington life insurance lawyers should read this 1918 case. It is still good law with good reasoning. It is from the Beaumont Court of Appeals and is styled, Murchison et al. v. Murchison et al. The case says:

It was alleged in the petition that G.R. Murchison was the father, and Dailey Murchison and Ross Murchison, Jr., were the brothers, and said Dora Faris the sister, of the said R.H. Murchison, who, it was alleged, died on the 14th of April, 1915; and it was further alleged that the said Margurite Murchison was the wife of said R.H. Murchison at the time of his death. It was further alleged that the said R.H. Murchison left no child or children surviving him. It was further alleged that the policy of insurance made the basis of the suit was issued by the Royal Indemnity Company and was in full force and effect at the time of the death of said R.H. Murchison. It was further shown by the petition of plaintiffs that said policy provided that upon the death of said R.H. Murchison, the proceeds thereof should be paid to the said Margurite Murchison as sole beneficiary. It was further alleged in the petition that the said R.H. Murchison met his death at the hands of his said wife, Margurite Murchison, who feloniously killed and murdered him with the intention and for the purpose of securing and obtaining the money which it was provided by the terms of said policy should be paid to her upon the death of said R.H. Murchison.

It was then alleged, substantially, that because of the fact that the said Margurite Murchison did feloniously kill and murder the said R.H. Murchison, she forfeited all right and interest that she otherwise might have had in and to the proceeds of said policy of insurance as the beneficiary named therein; and, further, it was substantially alleged that because of the fact that the said Margurite Murchison feloniously killed and murdered said R.H. Murchison, she was not only prevented from claiming and recovering from the Royal Indemnity Company the amount of money stipulated to be paid her as beneficiary in said policy, but also that she thereby forfeited any and all right and interest in and to the proceeds of said policy in the hands of said Royal Indemnity Company, and was not, in law, entitled to have said proceeds or any part thereof under the law of descent and distribution of this state, but that plaintiffs, as the father, brothers, and sister of said R.H. Murchison, by reason of such relationship to him, immediately upon the death of said R.H. Murchison became and were entitled to recover of said Royal Indemnity Company the proceeds of said policy still in its hands, as the heirs and next of kin of the said R.H. Murchison. The petition is quite lengthy, and for the purposes of this opinion it is entirely unnecessary to quote the same in full, and we think that the foregoing substantial statement of the material allegations will be sufficient for the disposition here.

Business Owners And Their Legal Entity

March 15, 2016 | Mark S. Humphreys

Insurance attorneys, when looking at an insurance policy, want to know who is covered under the policy. You have the named insured and then you have those who are assumed to be covered under the policy. What about a situation where a business changes it’s legal status by incorporating or becoming a partnership rather than what it was when the policy originated? The answer may depend on the state you are in.
Justia US Law circulated a story dealing with this issue. It is from a U.S. Tenth Circuit opinion in a opinion styled, Christy v. Travelers Indemnity.
Plaintiff-Appellant Corey Christy purchased a commercial general-liability insurance policy from Travelers in the name of his sole proprietorship, K&D Oilfield Supply. Subsequently, Christy registered his business as a corporation under the name K&D Oilfield Supply, Inc. Christy renewed his CGL Policy annually, but did not notify Travelers that he had incorporated his business. After Christy formed K&D, Inc., he was in an accident and made a claim under the CGL Policy. Travelers denied coverage based on Christy’s failure to inform it of the change in business form, and Christy filed this action. On cross motions for summary judgment, the district court found in favor of Travelers. Because there was a material factual dispute as to whether Christy knew or should have known Travelers would have considered the formation of K&D, Inc. material to its decision to renew the Policy, summary judgment based on Christy’s legal duty to speak was inappropriate. And because the existence of a legal duty governs whether Christy engaged in a material misrepresentation by not informing Travelers he had formed K&D, Inc., the Tenth Circuit held the district court erred in reforming the Policy on that basis at this stage of the proceedings. Accordingly, the Court reversed the district court’s grant of summary judgment and remanded for further proceedings. But because Christy had not met his burden to come forward with evidence in support of his claim for breach of the implied covenant of good faith and fair dealing, the Tenth Circuit affirmed the district court’s grant of summary judgment on that claim.

Willful Killing Of The Insured

March 13, 2016 | Mark S. Humphreys

Life insurance attorneys will someday see a situation where the beneficiary on a life insurance policy is also the person who killed the insured. Can they recover the life insurance benefits? The Texas Supreme Court addressed that situation in a 1949 case styled, Greer et al. v. Franklin Life Insurance Co.

This controversy relates to ordinary death benefits under an insurance policy issued by Franklin Life. The insured, James Greer, met his death from a knife welded by his wife Margaret, who is also the named beneficiary under the policy. The next of kin of James are asserting their rights under the policy, claiming that Margaret forfeited her rights in willfully bringing about the death of James. Today, this is the “Slayer Statute” found in the Texas Insurance Code, Section 1103.151.

Texas courts have recognized the injustice of allowing the beneficiary to recover on a policy when they have murdered the insured.

Misrepresentation Defense By Insurance Company

March 12, 2016 | Mark S. Humphreys

Insurance attorneys in Texas need to know how the “misrepresentation defense” works. A good illustration in found in this January 2016, opinion from the Waco Court of Appeals. The case is styled, Karl Wallace v Amtrust Insurance Company of Kansas, Inc.

Until the time of his death in 2007, Wallace’s father lived on property located at 1100 Lone Oak Drive in Oakhurst, Texas–a few hundred miles from Fort Worth, Texas. This property included both a mobile home and 130 acres of land. Because he had been granted a life estate in the property, Robert Guenther began living in the mobile home until he died in 2009. Wallace, a resident of Fort Worth, subsequently took sole ownership of the property in late 2009.

Realizing that the property was left vacant and that the mobile home was deteriorating, Wallace decided to sell the property. However, to protect his interest in the interim, Wallace contacted John Cole Insurance Agency, Inc. to procure insurance. Wallace transacted with Cole because Cole’s company had insured the property for Wallace’s father.

Water Damage And Lawsuits

March 10, 2016 | Mark S. Humphreys

Insurance lawyers can tell you that the process of a lawsuit on a claim can be complicated and confusing. But, understanding how the courts look at the process will help. A recent case from the Houston Court of Appeals [1st. Dist.] is a good read. It is styled, In Re Interinsurance Exchange Of The Automobile Club.

This is a mandamus action resulting from a trial court ordering Auto Club to turn over all reports of its retained engineer, Derrick S. Hancock, between the years 2000 and 2012, which relate to insurance claims.

The homeowners, John and Melanie Amponsah, had a homeowner’s policy with Auto Club. In 2012, they made a claim for foundation problems. Auto Club denied the claim base on the findings of Hancock saying the foundation problems were the result of settling and not a water leak. A lawsuit resulted claiming violations of the Texas Insurance Code and breach of contract.

Flood Claims

March 8, 2016 | Mark S. Humphreys

Flood claims are a big part of insurance law. Knowledge of how these claims are looked at by the courts is important to an insurance lawyer. The United States 5th Circuit Court of Appeals issued an opinion in January 2016, that should be read. The style of the case is, Construction Funding, L.L.C. v. Fidelity National Indemnity Insurance Company.

Construction Funding filed a flood insurance claim against Fidelity after Hurricane Isaac struck in August 2012. The district court granted summary judgment in favor of Fidelity and Construction Funding appealed.

The National Flood Insurance Act of 1968 created the National Flood Insurance Program (“NFIP”) to provide affordable flood insurance on fair terms. The NFIP is administered and regulated by the Federal Emergency Management Agency (“FEMA”). Fidelity participates in the NFIP as a Write-Your-Own Program (“WYO”) carrier. As a WYO carrier, Fidelity issues Standard Flood Insurance Policies (“SFIP”) to NFIP participants and is responsible for handling all claims that arise under the SFIPs it issues. The terms of the SFIP are set by FEMA.

ERISA Wants All The Money

March 6, 2016 | Mark S. Humphreys

Attorneys handling ERISA claims can tell you that the ERISA plan wants back all the money they spend on their beneficiary’s claim. The United States Supreme Court rendered a notable opinion in January 2016. The case is styled, Board of Trustees of the National Elevator Industry Health Benefit Plan v. Robert Montanile. Here is what the Courthouse News Service has to say.

The Supreme Court threw out a decision Wednesday that would have a car-accident victim who settled with the other driver reimburse medical coverage.

The Board of Trustees of the National Elevator Industry Health Benefit Plan paid more than $121,000 after Robert Montanile, a covered employee, suffered injuries in a Dec. 1, 2008, car accident.

Loss Of Use – A Look

March 5, 2016 | Mark S. Humphreys

Texas insurance lawyers have to read the recent Texas Supreme Court case, J&D Towing, LLC v. American Alternative Insurance Corporation. The facts are set out in the March 3 writing. This is an appeal from the Waco Court of Appeals.

The Court starts out: We begin with first principles. Compensation is the chief purpose of damages awards in tort cases. Indeed, we have long held that the basic reason underlying rules for the ascertainment of damages for any tortious act is a fair, reasonable, and proper compensation for the injury inflicted as a proximate result of the wrongful act complained of. Reasonable and proper compensation must be neither meager nor excessive, but must be sufficient to place the plaintiff in the position in which he would have been absent the defendant’s tortious act. In this way, compensation through actual-damages awards functions as an instrument of corrective justice, an effort to put the plaintiff in his or her rightful position.

Actual damages must be either direct or consequential. Direct damages compensate for a loss that is the necessary and usual result of the tortious act. By contrast, consequential damages, also known as special damages, compensate for a loss that results naturally, but not necessarily, from the tortious act. Although consequential damages need not flow from the act, they must be both forseeable and directly traceable to the act. If the purported consequential damages are too remote, too uncertain, or purely conjectural, they cannot be recovered.

Loss Of Use – New Law In Texas

March 3, 2016 | Mark S. Humphreys

Arlington attorneys handling claiming involving “loss of use” have long had to tell clients the following: “If your car is repairable, the insurance company will pay for the loss of the use of the car for as long as the car is reasonably in the shop being repaired. But if your car is a total loss, there is no recovery for the time you are without the use of the car.” This loss of use normally involves payment of the cost of a comparable rental car. However, if the car is used for business purposes, it also involves the income lost. An example might be a car used for delivery purposes.

A new case from the Texas Supreme Court has changed this law. The case is styled, J&D Towing, LLC v. American Alternative Insurance Corporation. This case will be told in two parts. Today, is the set-up and next will be the case law.

Nearly a century ago, a Texas attorney argued that the rule at issue in this case made it “cheaper to kill a mare in Texas than it is to cripple her.” No American Pharoah herself, (American Pharoah became the first horse since 1978 to sweep the Triple Crown) this one-eyed, underfed mare lived a simple life. One night, however, she was caught roaming the city streets in search of food and was placed in the city pound. Her owner failed to pay her board bill. Thus, the city marshall hired a man known as Panhandle Pete to put her out of her misery. As the court of appeals then put it, “when Panhandle Pete’s pistol popped, she petered, for which the pound-keeper paid Pete a pair of pesos.” Her owner protested her death and sued for damages, including $350 for the loss of her services in his occupation of hauling. The court rejected that claim, holding that although “damages occasioned by the loss of the use and hire of an animal are recoverable where the animal is injured,” “no such damages are recoverable for the total loss or death of an animal.” Rather, the measure of damages in the case of a wrongful killing of an animal is its market value, if it has one, and if not, then its actual or intrinsic value, with interest.” That rule, the owner’s attorney responded, makes it “cheaper to kill a mare in Texas than it is to cripple her.”

Delay In Paying Claim After An Appraisal

March 1, 2016 | Mark S. Humphreys

Insurance lawyers in Mansfield and elsewhere should be able to explain to clients when payment is due under a claim. There are many situations and the situation determines when the claim should be paid and if a penalty applies.

The U.S. Western District Court of Texas, Waco Division issued an opinion in Cater v. State Auto Property & Casualty Insurance that needs to be read.

This is a case that was decided on two dueling motions for summary judgment.