Dallas Fort Worth Insurance Lawyer Blog

ERISA Accidental Death Benefits

January 16, 2016 | Mark S. Humphreys

Dallas area attorneys handling life insurance benefits under an ERISA plan need to read this 5th Circuit opinion. It is styled, Judy Hagen v. Aetna Insurance Company; Hewlett Packard Company.

David Hagen was an employee of Hewlett and had life insurance coverage under a company benefits plan administered by Aetna.

The terms of the Policy state that to receive payment under the accidental death benefit provisions, Aetna must receive proof that, inter alia, death “was a direct result of a bodily injury suffered in an accident.” The Policy states that an “accident” is “a sudden and external trauma that is; unexpected; and unforeseen; and is an identifiable occurrence or event producing, at the time, objective symptoms of an external bodily injury.” To qualify as a covered “accident,” an occurrence or event “must not be due to, or contributed by, an illness or disease of any kind including a reaction to a condition that manifests within the human body or a reaction to a drug or medication regardless of the reason the insured has consumed the drug or medication.” The Policy defines “injury” as “an accidental bodily injury that is the sole and direct result of . . . an unexpected or reasonably unforeseen occurrence or event . . . or the reasonable unforeseeable consequences of a voluntary act by the person.” The Policy specifies that “an injury is not the direct result of illness,” and defines illness as “[a] pathological condition of the body that presents a group of clinical signs and symptoms and laboratory findings peculiar to it and that sets the condition apart as an abnormal entity differing from other normal or pathological body states.”

ERISA And Efforts To Avoid It

January 14, 2016 | Mark S. Humphreys

Lawyers handling ERISA claims can tell horrible stories of the injustice that has occurred in the handling of ERISA claims. The State Bar of Texas, Insurance Section published an article that discussed some of the issues harming people.

Although the Act’s purpose was to promote the creation of employee benefit plans and protect those benefits for employees, since ERISA’s enactment most employees with pension or welfare benefit claims do whatever they can to escape the “protections” of the Act, while insurance carriers and employers that fund and administer the benefit plans push to have the claims governed by ERISA. Case law portraying an employee’s struggle to have his or her pension or welfare benefit claim governed by ERISA is almost non-existent. Instead, ERISA benefit case law over the last forty years reveals a common theme: the employee’s Sisyphean struggle to avoid ERISA.

The mountain of cases finding preemption is tall and imposing. The employee stands in the valley with her claim, her rock, using every ounce of physical energy and creative power to push her rock up and over the mountain, to free herself from the Act designed for her benefit. The fiduciary stands calmly upon the side of the mountain, seeking to return the rock to the valley where the protections of the Act lie, pressing the already heavy rock against the employee’s skin, muscle, and bone, forcing it back downhill. Naturally, given the slope of the mountain and the application of pressure by the fiduciary, the rock almost always returns to the valley. The employee watches hopelessly as her heavy burden crashes back down the hill, seeing with despair that all of her toil was for nothing. She is confined to the valley. Many claimants, especially those who are already impaired when they began their quixotic ascent, remain beaten.

Allegations Of Fraud Against Adjusters – Insurance Lawsuits

January 12, 2016 | Mark S. Humphreys

When suing an adjuster, the requirements are very specific to keep a case out of Federal Court. This is illustrated in a U.S. Northern District, Fort Worth Division, opinion. The case is styled Southlake Campus, Inc. v. Allstate Insurance Company, et al.

This action arises from a dispute over insurance coverage of a property damaged during a storm. Southlake alleges various causes of action which are specifically asserted against Allstate only. The only part of the petition that includes allegations against the adjuster is the section requesting a declaratory judgment.

This case was removed to Federal Court by Allstate under 28 U.S.C. 1332, for reason of diversity of citizenship and the amount in controversy exceeding $75,000.00. Allstate contends the adjuster was not properly joined as a defendant.

Insurance – Breach Of Contract – Hail Damage

January 10, 2016 | Mark S. Humphreys

Hail damage claims are a big source of litigation for insurance attorneys in the Dallas and Fort Worth areas. An opinion from the Federal Court , Southern District of Texas, McAllen Division is worth reading. It is styled, Armando Martinez, et al v. State Farm Lloyd’s, et al.

This is a granting of summary judgement in favor of State Farm.

Martinez’s claims arise from damage sustained to their property as the result of hail storms in April 2012. On May 7, 2012, Martinez reported an insurance claim for property loss and State Farm inspected the property of May 14, 2012, estimating the loss to the dwelling at $10,802.78. The adjuster found damage to the dwelling roof, shed roof, gutters, and a metal carport. On the same day, State Farm issued a check for $8,325.08, after applying depreciation and deductible.

Insurance Regulation

January 9, 2016 | Mark S. Humphreys

Duncanville insurance lawyers keeping abreast of insurance laws may find this article from the Insurance Journal interesting. The title is, “Best, Worst States For Insurance Regulation.”

Vermont, Utah, Iowa, Virginia and Kentucky get an “A” and North Carolina an “F” in one think tank’s annual grading of states on how they regulate the property/casualty insurance industry.

The 2015 Insurance Regulation Report Card, the R Street Institute’s annual publication, assigns scores in 10 different areas including solvency monitoring, anti-fraud efforts, rating and underwriting freedom, minimizing politicization of regulation, consumer protection and fostering competitive markets.

Cedar Hill, Texas Insurance Lawyer

January 7, 2016 | Mark S. Humphreys

This 2014, Texas Supreme Court opinion should be of local interest. The case is styled, In re National Lloyd’s Insurance Company.

In this narrow holding, the Texas Supreme Court held that the trial court abused its discretion by ordering the defendant insurance company to produce evidence related to insurance claims of third parties.

After her Cedar Hill home was damaged by storms, Mary Erving filed claims with her homeowners insurance company, National Lloyds Insurance Company. Although National Lloyds paid the claims, Erving became concerned that her claims had been undervalued. As a result, Erving sued National Lloyds for breach of contract, breach of duty of good faith and fair dealing, fraud, conspiracy to commit fraud, and violations of the Texas Deceptive Trade Practices Act, and Chapters 541 and 542 of the Texas Insurance Code.

Concurrent Causation Clauses

January 5, 2016 | Mark S. Humphreys

Attorneys handling hail damage claims need to read this case. It is a 2015, Texas Supreme Court opinion styled, JAW The Point, L.L.C. v. Lexington Insurance Co.

In this case, the “anti-concurrent causation” (ACC) exclusion reads:

loss or damage caused directly or indirectly by any [excluded cause or event], regardless of any other cause or event that contributes concurrently or in any sequence to the loss.

Rejection Of UIM And PIP Coverages

January 3, 2016 | Mark S. Humphreys

All insurance law lawyers are going to understand how Personal Injury Protection (PIP) and uninsured motorist (UIM) coverage works. For some of the situations that may be confusing, a recent opinion from the Court of Appeals, Houston [14th Dist.] may be helpful to read. It is styled, Donald Cain v. Progressive County Mutual.

This is an appeal from a motion for summary judgment. The main issue is whether the policy at issue falls within the plain meaning of the term “renewal insurance policy” in Texas Insurance Code, Sections 1952.101(c) and 1952.152(b).

Corliss Madison obtained an auto policy from Progressive. At that time, she rejected in writing UIM coverage and PIP coverage. Madison and Larry Bradford were named insureds under the policy. When the policy expired six months later, Madison entered into another insurance policy for the next six-month period. Madison then entered into seven more successive insurance policies every six months over the next four years.

Insurance Company Must Conduct A Reasonable Investigation

January 2, 2016 | Mark S. Humphreys

Grand Prairie insurance lawyers must know what it takes for an insurance company to be found liable for bad-faith. A 5th Circuit Court of Appeals opinion is educational in this respect. It is a 2014 opinion styled, Santacruz v. Allstate Texas Lloyd’s, Inc.

The 5th Circuit reversed a summary judgment in favor of Allstate because the reviewing panel found that Allstate had failed to make a reasonable investigation before denying the claim. The result is unusual not only because Allstate’s bad-faith summary judgment was reversed, but also the reason for reversal was not that Allstate had no reasonable basis for the denial but rather, it failed to conduct a reasonable investigation before denial. Under Texas’ bad-faith standard, the insurer must demonstrate both.

In this case, a rainstorm blew several shingles off Santacruz’s roof, causing leaks and exgensive damage to personal property. The insured promptly reported the incident to Allstate who informed the insured that it could not send an adjuster for several days. However, because more storms were forecast, Santacruz, upon the advice of his contractor, informed Allstate that he had to repair the roof immediately to prevent further damage. Allstate repeated that it needed to inspect the roof before it could be repaired. Santacruz proceeded with repairs that day. A few days later, an Allstate adjuster came and took pictures of the roof and interior but did not further investigation. Allstate denied the Santacruz’s claim, who then sued Allstate for breach of the duty of good faith and fair dealing and intentional infliction of emotional distress.

ERISA – Cooperating With Plan Administrator

December 31, 2015 | Mark S. Humphreys

Attorneys handling ERISA claims will tell you the difficulties of ERISA claims and the ways to make sure those difficulties do not ruin the claim. A 2014, 5th Circuit Court of Appeals case needs to be read to see ways of avoiding some of the difficulties. The style of the case is, Hollingshead v. Aetna Health Inc.

This case reached the 5th Circuit Court of Appeals after the U.S. District Court dismissed the plaintiff’s putative class action complaint for failure to state a claim for violations of the Employee Retirement Income Security Act.

Through his employer, plaintiff Joe Hollingshead participated in a self-funded ERISA benefit plan with Aetna as the Plain’s claims administrator. The Plan included a number of coordination of benefits provisions, indicating how benefits would be paid in the event that Plan participants had medical coverage from more than one source. Under the Plan, certain sources of insurance coverage were considered “primary,” while other sources were considered “secondary.” In the event that the Plan was secondary, its benefits were to be determined after those of the primary plan. Practically, this meant that benefits under the Plan could be reduced. In fact, the Plan contained a provision explaining that failure to provide Aetna with necessary information and documentation could cause payment of benefits to be delayed or even denied. Under the Plan, no-fault auto insurance was considered primary.