Dallas Fort Worth Insurance Lawyer Blog

Accidental Death Insurance Policy – ERISA

May 29, 2021 | Mark S. Humphreys

Life insurance lawyers will have situations where a person has died and the issue is whether or not the death was an “accidental death” and did any exclusion apply to the accidental death.

Here is a 2021, opinion that deals with an accidental death policy with an exclusion and on top of that, the policy is governed by the Employee Retirement Income Security Act (ERISA). The opinion is from the United States Court of Appeals, 5th Circuit. It is styled, Luis Lebron v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania; AIG Claim, Incorporated.

Luis had an accidental death policy he purchased through his employer that insured himself and his wife, Barbara. The policy was issued by National Union and contained an exclusion for death caused “in whole or in part” by “illness, sickness, disease, bodily or mental infirmity, medical or surgical treatment (unless treating a covered injury), or bacterial or viral infection, regardless of how contracted (except when bacterial infection results from an accidental cut or wound or accidental food poisoning).” Under this ERISA plan National Union had authority to determine benefit eligibility as the plan administrator.

Bad Faith Insurance Claim – Breach Of Contract

May 24, 2021 | Mark S. Humphreys

An argument that insurance companies make in many “bad faith” claims is that there can be no bad faith unless or until there is a breach of the insurance contract. To reach the level of bad faith insurance, most of the time there has to be a breach of the insurance contract – but not all the time.

The Dallas Court of Appeals says there it is not necessary to have a breach of the insurance contract for there to be a bad faith claim. And the Court backs up his decision by citing the Texas Supreme Court. The opinion is styled, In Re Allstate Fire And Casualty Insurance Company and Latina Foster.

Before the Court are relators’ petition for writ of mandamus, real party’s response, and relators’ reply to the response. Relators contend they are entitled to mandamus relief because the trial court abused its discretion by denying their special exceptions complaining about real party’s failure to plead a claim for breach of contract, and by failing to quash relator Latina Foster’s deposition because it is premature. Entitlement to mandamus relief requires relators to show both that the trial court clearly abused its discretion and that relators have no adequate appellate remedy. Although the Court questions the scope of the identified deposition topics, based on relators’ arguments and the record, we conclude relators have failed to show a clear abuse of discretion. Further, in light of the Texas Supreme Court’s recent opinion in, In re State Farm Mutual Automobile Insurance Co., from Mar. 19, 2021, the trial court did not abuse its discretion by denying relators’ special exceptions. In that opinion the Texas Supreme Court concluded the insurer was not required to plead a breach of contract claim to recover for extra-contractual claims.

Life Insurance Claims – Interpleader

May 22, 2021 | Mark S. Humphreys

Life insurance claims attorneys will eventually have a case where the life insurance company knows they owe the life insurance benefits on a policy but are unsure about who to pay. When this situation arises the Texas Insurance Code, Section 542.058(c), has specific provisions for how the situation should be handled. Specifically, the life insurance company, when it is unsure who it should pay the policy benefits, has 90 days to interplead the funds into the registry of the Court.

A 2021, from the Northern District of Texas, Dallas Division, discusses how the Federal Courts handle interpleader cases. This case is styled, American General Life Insurance Company v. Carol Corzo, Brenda Lizbeth Melgar Cruz, Adan Alberto Melgar Cruz, and Daniel Melgar Cruz.

This interpleader action concerns the proceeds of a life-insurance policy issued by American General. In September 2016, Ottoniel Melgar Perez purchased a $300,000 life-insurance policy from American General. He named Defendants, who are his relatives, as primary beneficiaries on the Policy. A few years later, Perez married Blanca Nelis Chicas (Chicas). Subsequently, Perez passed away, leaving his $300,000death benefit from the Policy behind. Chicas and Defendants both submitted claims to American General for the death benefit.

Insurance Law Case – A Laugh At The End

May 17, 2021 | Mark S. Humphreys

Maybe the title of this blog should be a little different but for insurance lawyers dealing with insurance companies all the time the comment by the Judge at the end of the case is worthwhile.

As all insurance lawyers know, the insurance companies prefer to litigate denied claims in Federal Court rather than the State and County Courts. It’s really simple to understand, the rules and handling of cases in Federal Court tend to favor insurance companies.

The case here is from the Northern District of Texas, Fort Worth Division. It is styled, Gina Lewis et al. v. Safeco Insurance Company of Indiana et al.

Hail Damage Claims – Segregating Damage

May 15, 2021 | Mark S. Humphreys

Insurance attorneys are well aware of the changes in the Texas Insurance Code statutes that effect hail damage claims and other damages resulting from Mother-Nature. What cannot not be overlooked is the responsibility to make clear what caused the claimed damages. In other words are all the damages from a particular event or are some of the damages being claimed the result of another event or are simply wear and tear.

A 2021, opinion from the Northern District of Texas, Fort Worth Division, explains the necessity of segregating damages in a claim for insurance coverage. The style of the opinion is, Harold Franklin Overstreet v. Allstate Vehicle and Property Insurance Company.

Pursuant to the 1999, San Antonio Court of Appeals opinion styled, Wallis v. United Servs. Auto. Ass’n, an insured can only recover for covered events under his policy; therefore, he bears the burden of segregating the damage attributable solely to the covered event.

Life Insurance Claim Denied Because Policy Was Cancelled

May 10, 2021 | Mark S. Humphreys

Often times when a claim for benefits is denied, the reason for the denial is that the policy has been cancelled.

“Cancellation” refers to the insurer’s termination of coverage before the end of the policy period. A cancellation is in contrast to a non-renewal, which involves an insurer’s unwillingness to reissue the policy following the completion of the policy term of coverage.

Most insurance policies contain provisions regarding cancellation and the Courts honor this provisions as can be seen in the 1994, Waco Court of Appeals opinion styled, Truck Ins. Exch. v. E.H. Martin, Inc. Specific provisions for cancellation of coverage must be precisely followed by the insurer and will be strictly construed by the courts. This was seen in the 2001, Corpus Christi Court of Appeals opinion styled, Jones v. Ray Ins. Agency.

Life Insurance Lawyers – FEGLI

May 8, 2021 | Mark S. Humphreys

What is FEGLI? FEGLI stands for Federal Employee’s Group Life Insurance and is a life insurance program for Federal and Postal employees and annuitants. The law related to FEGLI is authorized by law and can be found in Chapter 87 of Title 5, United States Code. The Office of Personnel Management (OPM) administers the Program and sets the premiums. The FEGLI regulations are in Title 5 of the Code of Federal Regulations, Part 870.

FEGLI is group term life insurance. It does not build up cash value. You cannot take a loan out against your FEGLI insurance.

OPM has a contract with the Metropolitan Life Insurance Company (MetLife) to provide this life insurance. MetLife has an administrative office called the Office of Federal Employees’ Group Life Insurance (OFEGLI). OFEGLI is the contractor that adjudicates claims under the FEGLI Program.

Pipe Burst – Covered?

May 3, 2021 | Mark S. Humphreys

Insurance policy language and the Facts of a situation have to be read together to determine whether or not coverage applies to a claim.

Here is a 2021, opinion from the Southern District of Texas, Houston Division, that originates from a claimed pipe burst and the insurance company denial of the claim. The opinion is styled Lee & Charletha Henry v. Allstate Vehicle and Property Insurance Company.

The Henry’s had a homeowners insurance policy with Allstate. The Henry’s claim a pipe burst on the second-floor bathroom, causing damage to the first-floor kitchen area. Allstate denied the claim asserting the policy does not cover the claimed damage because the damage to the kitchen wall and the interior does not appear to be sudden and accidental but the result of ongoing water intrusion from the expansion joint. The Henry’s sued for breach of contract and various violations of the Texas Insurance Code, Prompt Payment of Claims Act, and the Texas Deceptive Trade Practices Act.

Insurance Law And Summary Judgment

May 1, 2021 | Mark S. Humphreys

Insurance attorneys understand that when a claim gets denied that the majority of the time, the insured will either walk away or will hire an attorney to fight the claim denial. When the claim is denied and an attorney is hired, the case is going to end up a lawsuit. One weapon used by insurance companies in litigation is to litigate the case up to a point and then file a motion for summary judgement.

Understanding how the courts view motions for summary judgment is vital to being able to prepare for and handle these situations. The motion for summary judgment standard is briefly discussed in a case from the Northern District of Texas, Wichita Falls Division. The case is styled, Great Lakes Insurance SE v. Horton Family Trust, LLC.

The facts of this case can be read in the opinion. The focus here is the way the courts look at motions for summary judgment.

– Prompt Payment Of Claims Act –

April 26, 2021 | Mark S. Humphreys

Insurance attorneys need to be know this 2021, opinion from the Texas Supreme Court. It is styled, Louis Hinojos v. State Farm Lloyds and Paul Pulido.

The Texas Prompt Payment of Claims Act, codified in Insurance Code Chapter 542, imposes deadlines on insurers to pay valid claims. If an insurer fails to comply with Chapter 542, then it is liable for statutory interest on the amount of the claim and attorney’s fees. The insurer in this case accepted a homeowner’s claim and paid part of it before the statutory deadline.

Dissatisfied with that amount, the homeowner sued, seeking full payment of the claim plus interest and attorney’s fees under Chapter 542. While suit was pending—and after the statutory deadline for payment had passed—the insurer invoked the policy’s appraisal process. The appraisers awarded the homeowner substantially more than the amount the insurer had paid.