Dallas Fort Worth Insurance Lawyer Blog

Insurance Company – This Wasn’t Right

January 26, 2016 | Mark S. Humphreys

The Texas Tribune published an article titled, Prosecutors, Insurer Change Controversial Funding Deal. Texas attorneys and all people who buy insurance should sense there was something wrong with this deal.

Responding to a flood of criticism about its unusual financial arrangement with a large insurance company, the Travis County District Attorney’s Office is dramatically restructuring its workers’ compensation fraud unit and implementing new safeguards against potential abuse and conflicts of interest.

The changes come in the wake of a series of reports by The Texas Tribune and the Austin American-Statesman that raised questions about the cozy relationship between government prosecutors and Texas Mutual Insurance Company, the state’s largest provider of workers’ compensation policies.

Life Insurance – Interpleader

January 24, 2016 | Mark S. Humphreys

Fort Worth life insurance lawyers will see situations where a life insurance company admits it owes money under a life insurance policy but is unable to determine who is owed the money. The proper action is for the life insurance company to interplead the money into a court. A 1957, Fort Worth Court of Appeals describes this situation. The style of the case is, Sarah Lou Murray v. American National Insurance Company.

Appellee American National Insurance Company issued a policy on the life of Otis Carl Murray in which his wife, appellant Sarah Lou Murray, was named beneficiary. The insured died on July 24, 1955. Appellant was indicted by the grand jury of Runnels County on August 24, 1955, for the death of her husband.

Appellant, on September 1, 1955, made demand on appellee for payment of the proceeds of the policy. Proof of death submitted did not reveal the cause of death of the insured. Less than thirty days after demand for payment, appellee advised appellant’s attorney it was prepared to pay the amount due under the policy, subject to a valid and satisfactory release of liability, but called attention to the fact it had been put on notice that appellant was under indictment for the death of her husband, and that if suit were filed appellee would pay the money into court and resist payment of costs, penalties and attorney’s fees on the ground it had not denied liability. Through the month of September the appellee corresponded with appellant’s attorney requesting completion of proofs of death.

Life Insurance Interpleader

January 23, 2016 | Mark S. Humphreys

Dallas life insurance lawyers know what an interpleader is and the circumstances under which, cause insurance companies to interplead life insurance proceeds into the court. An old 1931 case illustrates this. The case is styled, McCormick v. Southwestern Life Ins. Co. and is from the Waco Court of Appeals.

This is an interpleader filed by Southwestern in the District Court against Marjorie McCormick and Mike Lively and Ben Sleeper as guardian of the estate of Adelaide McCormick. Southwestern admitted they owed money under the insurance policy but unsure who to pay. Marjorie was the named beneficiary on a policy insuring the life of Andrew McCormick. Adelaide was the only surviving child. Ben was the assignee of the proceeds of the policy from Marjorie. The interpleader resulted from the allegation that Marjorie had intentionally caused the death of Andrew and thus, had forfeited her interest in the insurance proceeds.

The purpose of the remedy of interpleader is to protect an innocent stakeholder, (Southwestern) who is willing and ready to pay the funds int his hands to the party or parties entitled to receive the same. It is an efficacious and wholesome remedy. This is allowed to protect the stakeholder from conflicting claims.

Complying With The Policy

January 21, 2016 | Mark S. Humphreys

Fort Worth lawyers will tell you to comply with the policy provisions when making a claim. In this regard, a case from the U.S. District Court McAllen Division is a good read. It is styled, Belinda Santa Maria v. State Farm Lloyds, et al.

This a summary judgment ruling and there were other motions pending but due to the ruing in favor of State Farm, the Court deemed the other motions of no consequence.

Plaintiff’s claims arise from damage sustained to their property as a result of a storm event on March 29, 2012. Plaintiffs reported the claim on April 11, 2012, and State Farm inspected the property on May 2, 2012, estimating the loss at $7,028.04. On the same day, State Farm issued a check for $2,177.16, after adjusting for depreciation and deductible.

Federal Court And Underinsured Coverage

January 19, 2016 | Mark S. Humphreys

Weatherford lawyers who sue insurance companies need to know how to stay out of Federal Court if they want to properly represent their clients. It cannot always be done but understanding the law in these matters is important. A U.S. Northern District, Dallas Division case is good reading on this issue. The style of the case is, Felecia D.Davis v. Eduardo Vargas Reyes, et al.

Davis filed suit in State Court against Vargas for injuries arising from a car wreck. After Davis settled with Vargas, she amended her petition and added Amica Mutual Insurance (Amica) to this lawsuit, seeking underinsured benefits and she sued the Amica adjuster, Carolina Glenn. She then filed a second amended petition alleging that her claims against Vargas had been settled. Amica properly removed the case and alleged in its removal that Vargas, a Texas citizen, should be disregarded because the claim against him had already been settled. Amica is a citizen of Rhode Island and thus there was diversity of citizenship allowing the removal.

Davis contended that even though she had settled with Vargas, diversity of citizenship is determined as of the time she originally filed suit in State Court, meaning Vargas’ Texas citizenship precludes removal. Davis also contended the State Court had never entered an order dismissing the claims against Vargas so Vargas’ Texas citizenship cannot be disregarded.

Hail Damage Claims

January 17, 2016 | Mark S. Humphreys

Dallas area attorneys who handle hail damage claims need to read this opinion from the 5th Circuit Court of Appeals. The style of the case is, Vincent Stagliano v. The Cincinnati Insurance Company.

This is a first-party insurance dispute over coverage for damage to commercial property allegedly caused by a hailstorm. The District Court granted summary judgment in favor of Cincinnati.

The facts in this case are straightforward. Plaintiffs own a number of properties in and around Dallas, and Cincinnati provided loss protection from August 14, 2010, to August 14, 2011. On June 21, 2011, a claim was submitted for damage to one of the properties that occurred as a result of a hail storm on May 24, 2011. The claim was paid. A year and eight months later, claims for several other properties alleged to have been damaged in the same storm were submitted and Cincinnati denied these claims.

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.