Here is an opinion from the United States Fifth Circuit that deals with life insurance. The opinion is styled, Mirna Guzman v. Allstate Assurance Company.
This is an appeal from the District Court wherein the District Court granted summary judgment in favor of Allstate. This is a review of how the Court reviews the granting of a summary judgment.
Here is some basic background in the case:
Insurance agents misrepresenting the terms and conditions of an insurance policy is a common complaint. Here is a 1994, Texas Supreme Court opinion styled, Celtic Life Insurance Company v. John D. Coats, Jr.
This case presents three issues relating to an insurance company’s liability for its agent’s representations: first, whether the company’s liability depends on its authorization of misrepresentations; second, whether reliance on the representations is an element of recovery; and third, whether the insured’s damages should be trebled when the misrepresentations were not committed “knowingly.”
This blog will focus on the first issue regarding the agents misrepresentations and the liability of insurance company.
Filing a lawsuit is not as simple as saying the words. One common reason for suing an insurance company is based on allegations of fraud. A 2021, opinion from the Southern District of Texas, Galveston Division, shows that pleading fraud an insurance company has to meet certain criteria or the case will be dismissed. The style of the case is, Smiley Team II, Inc. v. General Star Insurance Company.
Smiley carried commercial property insurance with General Star. A vehicle crashed into Smiley’s covered property and a claim was made. Smiley complains that General Star failed to properly adjust the claim, issuing a payment that substantially undervalued the damages.
Smiley’s First Amended Complaint asserted causes of action for breach of contract and various violations of the Texas Insurance Code and the Texas DTPA.
The vast majority of insurance claims that get denied are settled. Less than 2% of these cases actually result in trial. When there is a trial, the odds are typically with the insurance company prevailing. That is what happened in this 2021, verdict in a case from the Southern District of Texas, Houston Division. The case is styled, Shane and Shannon Richardson v. Liberty Insurance Co.
The Richardson’s claimed damage to their roof and part of the interior of their home from a storm. Liberty inspected the damage and denied the claim based on their assertion that the covered damages were less than the deductible.
The case was tried to a jury and the jury found in favor of Liberty on the breach of contract damages but found that Liberty engaged in “false, misleading and deceptive acts or practices in the business of insurance in this case” and “misrepresented to the Richardsons the scope or cause of the damage from wind or hail,” in violation of the Texas Insurance Code, Section 541.001 et seq. The jury awarded no damages for any claim, but, based on finding that Liberty’s violation of the Insurance Code was “knowing,” the jury awarded the Richardson’s $7,082.54 in “additional” damages.
Here is an insurance law situation not seen very often. This is a 2021, opinion from the Western District of Texas, San Antonio Division. It is styled, Amali Obaya v. Allstate Vehicle & Property Insurance Company.
Obaya owned property in San Antonio that was insured by a policy of insurance, when the property was damaged in a wind/hailstorm. A claim was submitted. Obaya asserts that her claim was unreasonably investigated, improperly adjusted, and that the Defendant wrongfully denied the claim. Obaya sued Allstate Vehicle and Property Insurance Company for violations of the Texas Insurance Code, DTPA, breach of contract, and other causes of action. The lawsuit was filed in State Court. No claims were asserted against Allstate Texas Lloyd’s in State Court, nor did Allstate Texas Lloyd’s utilize procedural means to become an actual party to the lawsuit.
Allstate Texas Lloyd’s removed the case to this Federal Court. Plaintiff timely moved to remand, arguing that Allstate Texas Lloyd’s was not an actual party to the state court action and thus lacked the power to remove the case to federal court.
Life insurance through an employer is common. Most people do not realize the differences between regular life insurance that is purchased from a local agent or through a mail solicitation and life insurance that is purchased through their employer. The major difference is that life insurance purchased through their employer is often governed by the Employee Income Security Act of 1974 (ERISA), which is a life insurance plan governed by federal rules versus state rules otherwise.
Here is a case that is worth reading for anybody dealing with ERISA. It is a 2021, opinion from the 5th Circuit Court of Appeals. It is styled, Erica Talasek v. National Oilwell Varco, L.P.
Ben Talasek had purchased life insurance through his employer. He died and a claim was made by Erica for benefits. The actual facts of the case and the procedural history can be read in the opinion.
Here, an insurance company refused to pay a claim based on their assertion that the insured customer failed to segregate damages. The Judge agreed with the insurance company. The opinion is from the Northern District of Texas, Dallas Division. It is styled, Svetlin Tchakarov and Popova Rossitza v. Allstate Indemnity Company.
The plaintiffs filed suit to recover damages from Allstate for wind and hair damage to the roof of their property. Allstate moved for summary judgment based on Allstate’s assertion that Plaintiff’s have not provided evidence that would allow a jury to reasonably apportion the harm from the covered and non-covered causes of loss.
The relevant portion of the policy reads:
Claims against adjusters for violations of the Texas Insurance Code must be very specific. This is illustrated in a 2021, opinion from the Eastern District of Texas. The opinion is styled, Fred Vernon, II v. Palomar Specialty Insurance Company, Wellington Claim Services, Inc., One Call Claims, David Cardenas, and Tanya Spalding.
This case was filed in State Court and Palomar caused the case to be removed to Federal Court asserting that the adjusting companies were improperly joined in an effort to defeat diversity jurisdiction. Vernon filed a motion to remand which is the subject of this opinion.
Pursuant to 28 U.S.C., Section 1332, in removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75,000.00.
Life insurance claim denial cases are usually based on the insurance company’s assertion that the insured made misrepresentations in the life insurance application. A 2021, opinion from the United States 5th Circuit needs to be read when handling these types of cases. The opinion is styled, Mirna Guzman v. Allstate Assurance Company.
In this case, Saul Guzman died after suffering a seizure. He was 28 years old. Mirna, Sauls wife and the beneficiary of the policy made a claim for policy proceeds. Allstate rescinded the policy and refused to pay and a lawsuit resulted. Allstate filed a motion for summary judgment and the District Court granted the motion in favor of Allstate. This Court reversed that ruling.
In the life insurance application process, Saul answered a question in the negative about using tobacco or nicotine. Evidence appears to show the answer should have been yes.
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