Dallas Fort Worth Insurance Lawyer Blog

Suing The Insurance Agent Who Sold The Policy

November 9, 2020 | Mark S. Humphreys

Insurance lawyers learn quickly that when suing an insurance agent who sold a policy that the allegations against the agent must be specific. Being too general with allegations can result in a battle being fought in Federal Court when usually the lawyer would want the fight to be in State Court. This is illustrated ina 2020, opinion from the Eastern District of Texas, Sherman Division. The opinion is styled, Oscar Bermudez and SA Polo, Inc. v. Indemnity Insurance Company of North America and Tin Top Insurance Agency, LLC.

Plaintiffs, Bermudez and SA Polo are residents of Texas. Plaintiffs engaged Tin Top, a Texas citizen, to help them get insurance to cover property owned by Plaintiffs. Indemnity, a resident of Indiana, issued and sold a policy to Plaintiffs. After a storm that caused damage to their property, Plaintiffs submitted a claim to Indemnity. The claim was denied.

A lawsuit was filed in State Court and Indemnity removed the case to Federal Court, citing lack of diversity in that the agent, Tin Top, was not properly joined. In so doing, Indemnity filed a Rule 12(b)(6) motion to dismiss Tin Top. Plaintiffs filed a Motion to Remand.

Penalty For Not Timely Paying A Claim

November 7, 2020 | Mark S. Humphreys

Insurance lawyers need to read this 2020, opinion from the United State Fifth Circuit Court of Appeals. It is a good opinion for attorneys who represent policy holders. The opinion is styled, Jesus Agredano: Margaret Agredano v. State Farm Lloyds.

The Agredando’s sued State Farm after State Farm denied their claim for windstorm damage to their home. The District Court granted summary judgment in favor of State Farm on various causes of action but allowed the Agredano’s breach of contract claim to be presented to a jury, which granted a verdict in the Agredano’s favor. Althoughm the Agredano’s had sought attorney’s fees and statutory interest of 18%, the District Court ruled that the failure to specifically plead relief under Texas Insurance Code, Section 542.060 barred the requested relief and entered judgment only in the amount of the breach of contract damages found by the jury, together with pre-judgment and post judgment interest. This appeal was filed. This Court reversed and remanded to the District Court for reconsideration consistent with this opinion.

Two provisions of the Texas Insurance Code are relevant. Section 542.058 provides a cause of action against insurers who delay paying claims:

Life Insurance – ERISA – Alcohol

November 2, 2020 | Mark S. Humphreys

Here is a life insurance case which is governed by the Employee Retirement Income Security Act (ERISA). The opinion is from the Southern District of Texas, Houston Division. It is styled, Heidi Ballard v. Lincoln Life Assurance Company of Boston.

The deceased had an accidental death life insurance policy which was governed by ERISA. The death resulted when the deceased, riding as a passenger in a golf cart, was thrown out of the car after the driver of the cart suddenly and unexpectedly accelerated the cart. This was witnessed by others.

Lincoln Life denied the claim based on an exclusion in the policy excluding an accidental death that is the result of consuming alcohol.

Turning In An Insurance Claim

October 31, 2020 | Mark S. Humphreys

Properly notifying an insurance company about a claim is not always as simple as it might seem. This is illustrated in a 2020, opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Vela Wood PC, et al v. Associated Industries Insurance Company, Inc.

This case is before the Court on competing motions for summary judgment. Because the Plaintiff’s notice of this claim was ruled to be untimely, the Court founds against Plaintiffs and in favor of Associated.

The pertinent part of the two policies at issue, a 2017 and 2018 policy, in this case states that as “a condition to coverage, the Insured shall provide the company written notice of any Claim made against any Insured as soon as practicable, but in no event later than: (i) the expiration date of this Policy; (ii) the expiration of the Automatic Extended Reporting Period; or (iii) the expiration of the Optional Extended Reporting Period, if purchased. Under the terms of the policies, a “Claim” is defined as “a written demand received by the Insured for monetary Damages which alleges a Wrongful Act,” including “the service of suit or any civil proceeding in a court of law or equity, including any appeal therefrom, which is commenced by the filing of a complaint, motion for judgment, or similar proceeding.”

ERISA – Long Term Disability Benefits

October 26, 2020 | Mark S. Humphreys

Here is a case worthy of all attorneys handling Employee Retirement Income Security Act (ERISA) cases should read and take note about. The opinion is from the Northern District of Texas, Dallas Division. It is styled, James W. Newsom v. Reliance Standard Life Ins. Co.

The most noteworthy aspect of this case is that it is a win for the employee. A win for an employee in an ERISA case is extremely rare.

The Facts of the case are somewhat complicated and convoluted. The focus here will be the Court’s interpretation of the policy language.

Concurrent Causes And Insurance Policy

October 24, 2020 | Mark S. Humphreys

The doctrine of concurrent causes is discussed in a 2020, opinion from the Southern District of Texas, Corpus Christi Division. The opinion is styled, Claude Hooker v. United Property & Casualty Insurance Company.

Hooker sued his insurance company, United Property & Casualty Insurance Company (UPC) for windstorm benefits after Hurricane Harvey cause damage to his home.

UPC counters Hooker by claiming that the damages to Hooker’s home are the result of wear and tear. As a result of this defense, UPC filed a motion for summary judgment based on the concurrent cause doctrine.

ERISA – State Law Versus Federal Law

October 19, 2020 | Mark S. Humphreys

Here is an opinion for lawyers handling Employee Retirement Income Security Act (ERISA) cases. The opinion is a 2020, opinion from the Southern District of Texas, Houston Division, and is styled, Kimberly Holick v. Aetna Life Insurance Company.

Holick was an employee of Parkway Chevrolet and covered under its Aetna issued group insurance policy. After an alleged injury, Holick’s doctor ordered an MRI and Aetna denied coverage. Aetna later reversed its decison and Holick eventually received the MRI.

Holick claims Aetna wrongfully denied her treatment and failed to timely reverse its denial of coverage and the delay prevented timely repair and caused her pain and deformities.

Alleging Facts In An Insurance Case

October 17, 2020 | Mark S. Humphreys

For insurance lawyers this post points out an area where frequent mistakes are made. This has to do with the pleading standards in Federal Court and necessity of pleading proper facts to support a claim in Federal Court.

A 2020, opinion from the Northern District of Texas, Fort Worth Division, illustrates this problem. The opinion is styled, Benjamin Lester, Et Al. v. Unitrin Safeguard Insurance Company.

Lester was insured by Unitrin at a time when Lester suffered a hail damage loss to his property. A claim for benefits was made and Unitrin denied the claim based on its assertion that the damage to Lester’s roof is simple wear and tear.

Suing An Insurance Company Employee Who Is Not An Adjuster, Underwriter, Or Agent

October 12, 2020 | Mark S. Humphreys

Suing an insurance properly is not as easy as it might first seem. This is illustrated in a recent opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Finger Oil & Gas, Inc. v. Mid-Continent Casualty Co., Et Al.

Finger Oil sued Mid-Continent, Marsh USA, Inc., and Karen Olivia in State Court. Mid-Continent removed the case to Federal Court alleging that the non-diverse defendant, Olivia, was improperly joined and thus her citizenship may be disregarded. Finger Oil filed this motion to remand contending that Olivia is not improperly joined.

Finger Oil’s original petition alleges that one of its oil wells blew out and that it contacted Desiree Scrimger, the commercial lines account manager with Marsh, Finger Oil’s insurance agent. Scrimger allegedly advised Shelli Finger and others that blowout and cratering were included within the limit of insurance of $1,000,000 and sent an email from the underwriter, Olivia, confirming the coverage. Finger Oil alleges that, based on that representation, costs were incurred for services totaling approximately $641,000. However, Mid-Continent later issued reservation of rights letters and denied coverage. Finger Oil sues under Texas Insurance Code, Section 541.051 for misrepresentation of the benefits or advantages of the insurance policy in question, as well as violations of the DTPA §17.46(b) for representing that the policy coverage had characteristics it did not have, representing the policy conferred or involved rights, remedies, or obligations that it did not have, and breaching the duty of good faith and fair dealing.

Notice To Insurance Company Is Required

October 10, 2020 | Mark S. Humphreys

Whenever an insured is sued, the insured must provide notice to the insurance company. Here is a case where the insured did not do so. The 2020, opinion is from the 14th Court of Appeals and is styled, Krystle D. Lewis, Individually and as Next Friend of Eliseo Lewis and Chrishelle Wortham v. ACCC Insurance Company.

After obtaining a default judgment against another driver for her injuries, Lewis sued the other drivers insurance company, ACCC. The trial court granted summary judgment in favor of ACCC on the fround that the insurer was prejudiced as a matter of law by the insured’s failure to notify ACCC of the lawsuit and request a defense. Lewis maintains that ACCC was not prejudiced as a matter of law because she, as a third-party beneficiary of the policy, gave ACCC actual notice of the lawsuit, notice of the pending motion for summary judgment, and notice of the hearing on unliquidated damages. This Court affirmed the trial court and explained why.

Like many liability policies, ACCC’s policy requires the person covered by the policy to promptly send the insurer “copies of any notices or legal papers received in connection with [an] accident or loss” and cooperate with the insurer “in the investigation, settlement or defense or any claim or suit.” The policy states that ACCC may deny coverage if ACCC can show that the covered person’s failure to comply with those terms materially prejudiced the insurer.