Dallas Fort Worth Insurance Lawyer Blog

Life Insurance Benefits And Spouses

January 9, 2023 | Mark S. Humphreys

Are spouses always entitled to life insurance benefits when the other spouse dies? Life insurance lawyers need to be able to discuss this with prospective clients.

One spouse can designate his or her estate as the beneficiary of the policy, at the expense of the other spouse, absent any showing of actual or constructive fraud. This was discussed and made clear in the 1994 Fort Worth Court of Appeals opinion styled, Street v. Skipper.

Policies may contain provisions automatically divesting a spouse of any interest in the proceeds, if the parties are “legally separated” or divorced. This was discussed in the 1981 Eastland Court of Appeals decision styled, Pilot Life Insurance Co. v. Koch. Also, the divorce decree may divest the former spouse of any right to the insurance proceeds. This was discussed in the 1987 14th District Court of Appeals in an opinion styled, Novotny v. Wittner. By statute, a divorce invalidates any pre-divorce designation of the former spouse as beneficiary, unless the former spouse is redesignated. If the pre-divorce designation is invalidated, the proceeds go to any alternate beneficiary or to the insured’s estate. If the insurer pays the former spouse based on an invalidated designation, the insurer is liable to pay the proper beneficiary. This is found in the Texas Family Code, Section 9.301.

Hail Claims – What Caused The Damage

January 7, 2023 | Mark S. Humphreys

Hail damage claims are a frequent source of litigation. The insured says the damage occurred in the last storm. The insurance company says the damage is wear and tear or occurred in another storm under a different insurance policy.

The argument about when and how the hail damage occurred generally deals with the legal question known as “concurrent causation.” This is discussed in a 2022, opinion from the Western District of Texas, Austin Division. The opinion is styled, Marina Club Condominium Association vs. Philadelphia Indemnity Insurance Company.

This is a summary judgment opinion. Plaintiff has sued for breach of contract and for insurance code violations. The Court ruled in favor of Defendant on the insurance code violations but denied the summary judgement for the breach of contract claim.

Suing Adjuster And 543A.006(b)

January 2, 2023 | Mark S. Humphreys

Suing insurance adjusters has been made clearer after the courts have made rulings interpreting Texas Insurance Code, Rule 542A.006(b). This is addressed further in a 2022, magistrate’s ruling from the Northern District of Texas, Abilene Division. The opinion is styled, David Buttross d/b/a FL20, Inc. vs. Great Lakes Insurance SE.

This opinion arising from a Rule 12(b)(6) motion to dismiss. The motion is based on 5th Circuit rulings regarding the interpretation of Texas Insurance Code, Section 542A.006(b).

Valdez does not attack the sufficiency of the factual allegations in Plaintiff’s Complaint, but rather argues that the Plaintiff’s claim against her is foreclosed by state law, specifically because of Great Lakes’s election under Section 542A.006. As a general matter, the Fifth Circuit has determined that Rule 12(b)(6) motions to dismiss typically cannot be granted on affirmative defense grounds unless a successful affirmative defense appears clearly on the face of the pleadings.

Suing Insurance Agent

December 31, 2022 | Mark S. Humphreys

Suing insurance agents who do wrong is something an insurance lawyer needs to look at closely. Here is a 2022, opinion from the Southern District of Texas, McAllen Division, that deals with an insurance agent. The opinion is styled, J & G Trejo Enterprises, Inc. d/b/a Best Medical Supply vs. Western World Insurance Company.

This is an opinion decided on a motion for summary judgment.

The loss here is an MRI machine held off premises that was destroyed in a fire on August 21, 2021. Due to a sub–limit of liability for business personal property held off–premises, Defendant paid only the cap ($10,000.00) on the claim, whereas Plaintiff assessed its own actual loses at around $200,000.00.

Attorney Handling Life Insurance Claims That Are Denied – Beneficiary?

December 26, 2022 | Mark S. Humphreys

For attorneys handling life insurance claim, a 1998, opinion from the Corpus Christi Court of Appeals is a good read. The opinion is styled, Camp v. Camp.

In this opinion, Rebecca Camp (“Rebecca”) appeals a summary judgment denying her the proceeds of her deceased husband’s term life insurance policy. Rebecca alleges the trial court erred in applying the “inception of title” rule to award the life insurance proceeds to the beneficiary named in her husband’s policy, which was purchased before his marriage to Rebecca.

John Camp (“John”) received the life insurance policy at issue as an employment benefit while he was still single and without children. He named his mother, Mary E. Camp (“Mary”), beneficiary of the policy. He did not change the insurance policy’s beneficiary designation to wife Rebecca after they were married. Premiums from the policy were paid from John’s employment earnings during the years of his marriage to Rebecca until his death. Rebecca sued for a declaratory judgment against Mary as to the ownership of the policy. She claimed John’s failure to name her as a beneficiary under the policy constituted a constructive fraud on the community estate.

Life Insurance Denial Attorney – Exclusions

December 24, 2022 | Mark S. Humphreys

Life Insurance cases run a wide gamut of issues. Here is a 1997, Austin Court of Appeals decision that deals with the denial of life insurance benefits due to an aviation exclusion. The style of the case is, Board of Trustees of the Employees Retirement System of Texas v. Linda Benge.

Linda is the beneficiary under the life insurance policy at issue in this case. The policy is an Accidental Death policy and contained an exclusion for air travel or flight. The insured, Mr. Hury, flew his plan in an air show and upon landing his plane, went into a “ground loop” before stopping on an adjoining runway. Another plane, while landing, collided with the plane of the insured killing the insured.

The beneficiary of the insured made the claim for benefits which was denied due to the exclusion. A Judge ruled in favor of Linda and this appealed followed. This Court ruled in favor of the insurer.

Attorneys Who Handle Bad Faith Claims – What The Court Looks At

December 19, 2022 | Mark S. Humphreys

“Bad Faith” attorneys need to read this 2020 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Macklin Keller v. State Farm Lloyds.

Keller had property insurance with State Farm. Keller made a claim for hail storm damage. Keller sued State Farm alleging, among other things, improper handling of the claim and for allegations of bad faith and statutory violations of the Texas Insurance Code. State Farm filed a motion for summary judgment on the bad faith and statutory violations.

An insurer holds a duty to deal fairly and in good faith with its insureds. An insurer breaches this duty and will be liable if it knew or should have known that it was reasonably clear that the claim was covered. Consequently, under this reasonably-clear standard for determination of liability, an insurer breaches its duty of good faith and fair dealing by denying a claim when the insurer’s liability has become reasonably clear.

Insurance Company Asking Court To Dismiss Claims – Standards For

December 17, 2022 | Mark S. Humphreys

Here is a 2022 opinion from the Northern District of Texas, Dallas Division, wherein the Court explains the standards for a summary judgment motion to be granted. The opinion is styled, Poonam Hospitality d/b/a Quality Inn & Suites v. Lexington Insurance Company.

The facts of the case can be gleamed from reading the opinion. Here is set out the things that a Federal Court looks at when ruling on a motion for summary judgment. Here, a response to the motion was not provided to the Court.

Pursuant to Federal Rule of Civil Procedure 56(a), summary judgment shall be granted when the record shows that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party. When ruling on a motion for summary judgment, the court is required to view all facts and inferences in the light most favorable to the nonmoving party and resolve all disputed facts in favor of the nonmoving party. Further, a court “may not make credibility determinations or weigh the evidence” in ruling on a motion for summary judgment.

Life Insurance Claim Denial – Exclusions – (Suicide)

December 12, 2022 | Mark S. Humphreys

Life insurance claim denials are more common than most people realize. The majority of denials have to do with the allegation by the life insurance company that the insured misrepresented their health in the life insurance application. The second most common reason has to do with exclusions in the policy.

Here is a 1998, opinion from the Austin Court of Appeals that deals with an exclusion. The opinion is styled, Butler v. Group Life and Health Insurance Company.

During a social occasion, the decedent and a number of 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 the decedent still believed it was not loaded, decedent picked up the gun, pointed it to his mouth, pulled the trigger and killed himself. Decedent’s beneficiary made a claim for life insurance benefits, accidental death benefits and attorney fees and interest as provided by the Texas Insurance Code. The policy in question was issued by Group Life under the terms of the Texas Employees Uniform Group Insurance Act. The Board administering the policy denied the claim because the decedent died as a result of intentionally self-inflicted injuries and because his death was not accidental. The district court affirmed and Butler appealed.

Claim Denial Attorney – Accidental Death

December 10, 2022 | Mark S. Humphreys

Attorneys who handle claim denials in accidental death cases need to know the opinions handed down by the courts on these types of claim. Here is a 1997, opinion from the Dallas Court of Appeals. The opinion is styled, Grant v. Group Life & Health Insurance Company.

Grant used a pry bar to break into the residence of Stokes. When grant entered the residence, Stokes shot him five times, killing him. Grant’s wife sued Group Life to recover benefits under an accident policy for the death of her husband. Group Life moved for summary judgement on the basis that Grant died while committing a burglary and, therefore, his death was not accidental. The trial court granted the summary judgment and Grant appealed.

The Court held that because Grant’s death was not accidental, the trial court correctly granted Group Life’s Motion for Summary Judgement. Grant argues that because Group Life did not furnish her with a certificate of insurance, it is estopped from relying on undisclosed exclusions. Because the policy in question does not provide coverage for Grant’s death the policy’s exclusions are irrelevant.