Dallas Fort Worth Insurance Lawyer Blog

Life Insurance Claims Denied Based On A Misrepresentation

January 8, 2022 | Mark S. Humphreys

Life Insurance lawyers have to know this case. It is an opinion that has been discussed here recently. The opinion was issued on November 10, 2021, by the United States Fifth Circuit and is styled, Mirna Guzman v. Allstate Assurance Company.

Saul Guzman died after suffering a seizure at age 28. Mirna, his wife and beneficiary file to collect on a life insurance policy issued by Allstate. Allstate denied the claim. A lawsuit was filed and the local district court granted summary judgment in favor of Allstate. This Court reverses that decision.

When applying for the insurance policy, Saul disclosed his history of seizures but denied using tobacco or nicotine products.

Bad Faith Insurance – How Do You Get There

January 3, 2022 | Mark S. Humphreys

Lawyers handling insurance claims that have been denied frequently have a conversations with clients about “bad faith” insurance. Bad faith, generally speaking, often times centers around whether or not an insurance company has committed a fraud.

If allegations of fraud are going to be alleged, insurance lawyers need to understand that those claims that end up in a Federal Court are subjected to a higher pleading standard than those claims that are litigated in State or County Courts. This is illustrated in a 2021, opinion from the Southern District of Texas, Galveston Division. The opinion is styled, Smiley Team II, Inc. v. General Star Insurance Company.

Smiley made a claim against General Star after a vehicle was alleged to have crashed into Smiley’s building. A lawsuit was eventually filed containing allegations that General Star failed to properly adjust the claim which resulted in an alleged underpayment of the claim.

Life Insurance Claim Denial – Are They Really Dead

January 1, 2022 | Mark S. Humphreys

Life insurance claims denial attorneys will rarely see this situation, but it is worth knowing about. This is a 1987, Texas Supreme Court opinion styled, Davidson v. Great National Life Insurance Company.

Davidson is the beneficiary of life insurance policy insuring Dauod Alquassab. Davidson filed suit after Great National denied the claim for benefits. The trial trial found in favor of Davidson. An appeal resulted in the verdict being reversed. This Texas Supreme Court reversed the appeals court and remanded the case for further consideration.

In May 1980, a man identifying himself as Dauod Alquassab applied for an insurance policy on his life from Great National. Although unknown to Great National at the time of the application, Alquassab had previously used the names of David Kassab and David Kay; he was convicted of felony fraud charges under each previous name. Alquassab named Ilan Eiger, his partner in a real estate business, as the beneficiary when Great National issued the policy in June 1980. In September 1980, Alquassab changed the beneficiary designation from Eiger to Phyllis Davidson, his former wife from whom he was divorced in 1968. Alquassab then traveled to Tel Aviv, Israel, in February 1981. Prior to his departure, the record indicates that Alquassab allegedly defrauded First City Bank in Houston, of approximately $1.5 million dollars, and committed additional acts of fraud upon other banking institutions.

Insurance Claim Denial And Remand

December 27, 2021 | Mark S. Humphreys

Insurance lawyers need to understand every way possible for maintaining their case in State Court whenever possible. It is not possible too often, so when it is possible it needs to be done.

This 2021, opinion from the Northern District of Texas, Dallas Division, shows how one case was allowed to be in State Court. The opinion is styled, Richard Conrad and Brenda Conrad v. Cincinnati Insurance Company and John W. Schuster.

This is a property insurance coverage dispute. The Conrads sued Cincinnati and Schuster, an employee of Cincinnati who adjusted the claim, for various violations of the Texas Insurance Code and breach of contract after the Defendants concluded there was minimal damage to the property. Suit was filed in State Court and the Defendants had the case removed to Federal Court based on diversity jurisdiction and the assertion that Schuster was improperly joined in the lawsuit. The Conrads filed a Motion to Remand the case back to the State Court.

Life Insurance Denial And Material Fact

December 25, 2021 | Mark S. Humphreys

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 Agent – Misrepresentation

December 20, 2021 | Mark S. Humphreys

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.

Suing Insurance Company Based On Fraud

December 18, 2021 | Mark S. Humphreys

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.

Insurance Company Denies Claim And Wins At Trial – Recourse?

December 13, 2021 | Mark S. Humphreys

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.

Suing Wrong Insurance Company – Removal

December 11, 2021 | Mark S. Humphreys

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.

Employer Life Insurance (ERISA)

December 6, 2021 | Mark S. Humphreys

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.