Dallas Fort Worth Insurance Lawyer Blog

Life Insurance Beneficiary And Bad Faith

June 29, 2014 | Mark S. Humphreys

Dallas life insurance attorneys need to know about this Federal case. It is a 1996, Southern District of Texas opinion. It is styled, Bates v. Jackson National Life Insurance Company. Here is some of the relevant information.

Bates’ children sued Jackson National for proceeds of a life insurance policy issued to Bates. Plaintiffs asserted causes of action for breach of contract, bad faith, Insurance Code violations and DTPA violations.

On October 31, 1991 and November 1, 1991, Bates was diagnosed with phlebothrombosis and diabetes, respectively. On November 12, 1991, Bates submitted an application to Jackson National in which he represented he had not consulted or been treated by a physician in the last five years and that he had not submitted to an x-ray or any laboratory studies or tests. Furthermore, Bates represented in the application that he had not been told he had any disease, abnormality or diabetes. The policy was issued and the application was attached to and made a part of the policy.

Additional Insured Unable To Make First Party Claim

June 28, 2014 | Mark S. Humphreys

Arlington insurance lawyers need to know the cases where an insured can sue under an insurance policy and where they cannot. It is not always easy to do. A 1996, Beaumont Court of Appeals opinion is a good case to read. The style of the case is, Rumley v. Allstate. Here is some of the relevant information.

Joyce Rumlet, (Wife) sustained personal injuries in a one car vehicle accident in which her husband, Wilburn Rumley, was the driver. Mrs. Rumley filed a claim for benefits under their policy with Allstate. Allstate paid Personal Injury Protection benefits but refused to pay liability because the policy contained a family member exclusion. At the time, the Texas Supreme Court was reviewing a case on this issue but had not yet issued an opinion. In that decision, the Texas Supreme Court invalidated the family member exclusion. Wife sued Allstate and Ted Pate, a senior staff claims representative for Allstate, for breach of duty of good faith and fair dealing, violations of the Texas Insurance Code, Section 541.060 and violations of the Texas Deceptive Trade Practices Act, Section 17.46.

Allstate filed a Motion for Summary Judgment on the grounds that Wife’s claim was a third party claim for which Allstate owed no duty of good faith and fair dealing; there was a reasonable basis for denying the claim in that the family member exclusion was an unsettled issue of law; and there was no special or contractual privity between Pate and Rumley. The trial court granted summary judgment. Wife appealed.

Beneficiary Of Life Insurance Can Assert First Party Claims

June 26, 2014 | Mark S. Humphreys

Life insurance attorneys in Fort Worth know that a beneficiary of a life insurance policy can assert claims against an insurer that denies benefits of a life insurance claim. This is pointed out in 1996, San Antonio Court of Appeals opinion styled, Mendoza v. American National Insurance Co. Here is some of the relevant information.

Jerry Mendoza was the named insured under a $25,000 life insurance policy purchased from American National on August 1, 1991. The October premium, which was due on the first, was not paid. The policy provided for a thirty-one day grace period.

The summary judgment evidence revealed that on Friday, November 1, 1991, the last day to pay under the grace period, American National’s agent and district manager, Leon Sitka, verbally agreed to extend the grace period to Monday, November 4, 1991. This agreement or representation by Sitka was contrary to the terms of the policy, which only authorized American National’s president, vice-president or secretary to extend the time for payment of premiums.

Who Can Sue For A 1st Party Claim?

June 24, 2014 | Mark S. Humphreys

Insurance lawyers in Grand Prairie can answer the above question for you. This issue was also discussed in the 1994, Texas Supreme Court case styled, Allstate Insurance Company v. Watson. Here is brief information relevant to the opinion.

Watson was injured in a car accident. Watson brought suit against the insured under an automobile liability policy issued by Allstate and also brought suit against Allstate alleging unfair claim settlement practices under Texas Insurance Code, Section 541.060, for failing to attempt in good faith to effectuate prompt settlement where liability had become reasonably clear. Watson also brought suit under the Texas Deceptive Trade Practices Act, breach of contract, and the common law duty of good faith and fair dealing. The trial court granted Allstate’s Motion for Summary Judgment against Watson. The Court of appeals reversed and remanded the trial court, holding that Watson, as a third-party beneficiary, could bring an action under Section 541.060 without first proceeding directly against the named insured of the policy.

The Texas Supreme Court held that Section 541.060 does not confer upon third-party claimants a direct cause of action against an insurer for unfair claim settlement practices. Under Section 541.060 is an exclusive list of statutory unfair or deceptive acts or practices. However, this section does not define unfair claim settlement practices as an unfair or deceptive act or practice. It provides a private cause of action for any practice defined by Section 17,46 of the DTPA as an unlawful deceptive trade practice. However, unfair claim settlement practices is not among the enumerated items defined by Section 17.46.

Uninsured Due To Lack Of Cooperation?

June 22, 2014 | Mark S. Humphreys

For Dallas attorneys handling uninsured motorist cases, this 1974, Houston Court of Appeals [14th Dist.] needs to be read. The style of the case is, Milton v. Preferred Risk Insurance Company. Here is some of the relevant information.

On January 18, 1969, Milton, was a passenger in a car driven by Iris Simonis and owned by Helen Bastin. This vehicle was involved in a collision with a car driven by Cathy Ann Lewis. The Lewis car was covered by an automobile liability policy issued by Allstate Insurance Company. The Bastin vehicle was covered by a policy issued by Preferred and Miss Milton had insurance on her personal automobile issued by American Economy Insurance Company. Both of the policies contain uninsured motorist protection (UM).

On March 2, 1970, Mrs. Simonis and the injured passengers in the car, other than Janice Sue Milton, filed suit against James L. Lewis, the owner of the Lewis vehicle. That suit was settled by a compromise agreement with Allstate in May of 1972. On July 14, 1970, Milton acting through an attorney different from the one representing her on appeal, filed suit against James Lamar Lewis, ‘individually and as next friend of CATHY ANN LEWIS, a minor.’ At this point Milton was under the misconception that Cathy Lewis was the daughter, rather than the wife, of Mr. Lewis. Service was not attempted on Mr. Lewis until October 6, 1970, and it was returned unexecuted. Service on Mr. Lewis was finally executed on April 15, 1971. On January 27, 1972, the petition was amended so as to properly name Cathy Lewis as defendant . Milton also named Preferred as defendant in this pleading, seeking recovery under the UM clause of the policy issued by it. On May 17, 1972, American Economy was named as a defendant in another amendment. Cathy Lewis was served on March 14, 1972, and default judgment was entered against her on April 10, 1972.

Homeowners Policy And Mortgagee

June 21, 2014 | Mark S. Humphreys

Insurance attorneys in Fort Worth will deal with homeowners policies at some point. With that in mind, a 2014 opinion from the Houston Court of Appeals [14th Dist.] is important to read. The style of the case is, SWE Homes, LP v. Wellington Insurance Company. Here is some of the relevant information.

There is very little dispute regarding the facts in this case. Edgar Sadberry purchased a residential property with a mortgage from SWE. He bought a Texas Dwelling Policy from Wellington covering the property and naming SWE as the mortgagee. The effective dates of the policy ran from August 11, 2010 until August 11, 2011. The policy covered losses from various hazards including fire. It further contained a Mortgage Clause, which reads in pertinent part as follows:

19. Mortgage Clause . . . .

Negligent Entrustment And Permission To Drive

June 19, 2014 | Mark S. Humphreys

Dallas attorneys handling auto insurance cases would want to know of this 1960 case. It is from the Texarkana Court of Appeals and is styled Hanson v. Green. Here is some of the relevant information.

This is an automobile collision suit wherein Jerry R. Hanson and wife were plaintiffs and Roy Green was defendant. The trial court instructed a verdict in favor of defendant Green and the Hansons have appealed.

The material undisputed facts are briefly in effect as follows: Appellee Roy Green was the owner of a 1955 Chevrolet automobile which was in good mechanical condition. On May 19, 1957, his daughter, Nancy, requested and received permission from her father to drive the automobile over to a friend’s house, the Brownings, for a social visit, and the father cautioned her to be careful. No one accompanied her. Nancy then lacked about two months being 15 years of age, she had no driverhs license, and had been driving ‘close to a year’ prior thereto. At no time prior to May 19, 1957, did appellee have any knowledge that Nancy would permit anyone else to drive the automobile, and if appellee had known on the occasion of May 19, 1957, that Nancy would have permitted any other person to drive the car he would not have let her the car. Nancy permitted one of her friends, Gerald Lee Hunt, a minor, who had no driver’s license, to drive the automobile, and Hunt was driving the automobile at the time of its collision with the vehicle operated by appellant Jerry R. Hanson. Mrs. Hanson was riding in the Hanson car and alleged receipt of personal injuries in the collision for which suit was brought, as well as for property damages to the Hanson automobile.

Furnished For Regular Use

June 17, 2014 | Mark S. Humphreys

Dallas lawyers who deal with uninsured motorist cases need to be knowledgeable of this case from the San Antonio Court of Appeals. It is a 1990, opinion and is styled, Briones v. State Farm. Here is the relevant information.

Briones appealed a take nothing summary judgment granted in his suit against State Farm seeking recovery on his family automobile insurance policy under the uninsured motorists clause, for bodily injuries suffered in a one vehicle automobile accident.

Briones claims the Trial Court erred in granting Defendant’s Motion for Summary Judgment because there is a genuine issue as to material facts regarding the one remaining issue to be litigated by the parties, namely whether the tractor-trailer in which Briones was a passenger at the time of his bodily injuries was furnished or available for his regular use.

Hospital Liens

June 15, 2014 | Mark S. Humphreys

Dealing with hospital liens is a common experience for attorneys dealing with insurance companies. This recent Texas Supreme Court is a must read. It is styled McAllen Hospitals v. State Farm. Here is what the case tells us.

To assist hospitals with securing payment for medical services provided to accident victims, Texas Property Code chapter 55 (the Hospital Lien Statute) allows a hospital to file a lien on a patient’s cause of action against a person whose negligence caused the injury that necessitated the patient’s treatment. If the hospital’s charges secured by a proper lien are not “paid” within the meaning of the statute, any release of the patient’s cause of action is invalid. In this case, two patients treated at the petitioner’s hospital settled with the negligent third party. That party’s liability insurer made the settlement checks jointly payable to the patients and the hospital and delivered the checks to the patients, who deposited them without the hospital’s endorsement. The issue presented is whether the hospital’s charges were “paid” under the Hospital Lien Statute and the Uniform Commercial Code even though the hospital never received notice that the settlement funds had been delivered to the patients and were never reimbursed for the treatment costs. This court said no.

Gil and Hernandez settled with Benavidez for $5,200 and $2,100, respectively, and released their claims against him. The Hospital was not a party to the releases, nor was it informed the parties had settled. State Farm, aware of the Hospital’s liens, informed Gil that he was responsible for paying the Hospital for its services out of the settlement funds. State Farm issued Gil’s settlement check payable to “Jose Antonio Gil & Rafaela Balderas, Individually and as husband and wife & McAllen Medical Center,” and issued Hernandez’s check payable to “Melinda De La Garza Hernandez, a Single Individual & McAllen Medical Center.” State Farm sent the checks to Gil and Hernandez without notifying the Hospital. Both Gil and Hernandez deposited their settlement checks without the Hospital’s endorsement. The Hospital’s charges for treating Gil and Hernandez remain outstanding.

Home Owners Policy Defininitions

June 14, 2014 | Mark S. Humphreys

Parker County insurance attorneys have to know how courts interpret definitions contained within policies. A recent Houston Court of Appeals [1st Dist.] case helps as it relates to the definition of “you” in a homeowners policy. The case is styled, Hodges v. Safeco. Here is some of the relevant information.

On August 17, 2009, Darrell Lee Hodges, Sr. was assaulted in his home. His son, Darrell Lee Hodges, Jr. [“DJ”], lived at the home with his father. DJ knew the assailants, knew they were looking for his father and that they posed a risk to his safety, but nonetheless failed to warn his father of the men’s presence outside the home and failed to call the police to have the men removed from the premises.

SAFECO had a homeowner’s condominium policy in place at the time of the offense. Mr. Hodges is the named policy holder and DJ is also covered because he lived at the condominium with his father. Mr. Hodges made a claim under the policy for insurance benefits to cover his injuries. SAFECO denied coverage, citing the “homeowner’s exclusion” in the policy, which precludes coverage for “bodily injury to [the named insured] or an insured.”