Dallas Fort Worth Insurance Lawyer Blog

Life Insurance – Duty Of Good Faith And Fair Dealing

June 27, 2020 | Mark S. Humphreys

This life insurance claim opinion is from the Northern District of Texas, Dallas Division, and is styled, Wharlest Jackson v. Farmers New World Life Insurance Company.

Among other causes of action, Jackson has sued Farmers under an insurance policy for violation of the “duty of good faith and fair dealing.” Farmers has filed a Partial Motion to Dismiss the lawsuit based on the allegation that Jackson has not properly pled a violation of the duty of good faith and fair dealing against Farmers. The Court reviewed the papers filed with the Court and discussed and ruled as follows.

Crystal Jackson purchased a life insurance policy from Farmers. Wharlest Jackson was the sole beneficiary of the policy. Crystal died in a motorcycle accident and Wharlest made a claim which Farmers denied based on alleged misrepresentations in the policy application.

Life Insurance Lawsuits And Texas Insurance Code, 541.060

June 24, 2020 | Mark S. Humphreys

This life insurance claim opinion is from the Northern District of Texas, Dallas Division, and is styled, Wharlest Jackson v. Farmers New World Life Insurance Company.

Among other causes of action, Jackson has sued Farmers under an insurance policy for violations of the Texas Insurance Code. Farmers has filed a Partial Motion to Dismiss the lawsuit based on the allegation that Jackson has not properly pled violation of Texas Insurance Code, Section 541.060 against Farmers. The Court reviewed the papers filed with the Court and discussed and ruled as follows.

Crystal Jackson purchased a life insurance policy from Farmers. Wharlest Jackson was the sole beneficiary of the policy. Crystal died in a motorcycle accident and Wharlest made a claim which Farmers denied based on alleged misrepresentations in the policy application.

Life Insurance Claims And Insurance Code Sections 541.051 And 541.061

June 21, 2020 | Mark S. Humphreys

This life insurance claim opinion is from the Northern District of Texas, Dallas Division, and is styled, Wharlest Jackson v. Farmers New World Life Insurance Company.

Among other causes of action, Jackson has sued Farmers under an insurance policy for violations of the Texas Insurance Code. Farmers has filed a Partial Motion to Dismiss the lawsuit based on the allegation that Jackson has not properly pled violations of Texas Insurance Code, Sections 541.051 and 541.061 claim against Farmers. The Court reviewed the papers filed with the Court and discussed and ruled as follows.

Crystal Jackson purchased a life insurance policy from Farmers. Wharlest Jackson was the sole beneficiary of the policy. Crystal died in a motorcycle accident and Wharlest made a claim which Farmers denied based on alleged misrepresentations in the policy application.

Life Insurance Claim And Texas DTPA

June 20, 2020 | Mark S. Humphreys

This life insurance claim opinion is from the Northern District of Texas, Dallas Division, and is styled, Wharlest Jackson v. Farmers New World Life Insurance Company.

Among other causes of action, Jackson has sued Farmers under an insurance policy for violations of the Texas Deceptive Trade Practices Act (DTPA). Farmers has filed a Partial Motion to Dismiss the lawsuit based on the allegation that Jackson has not properly pled a DTPA claim against Farmers. The Court reviewed the papers filed with the Court and discussed and ruled as follows.

Crystal Jackson purchased a life insurance policy from Farmers. Wharlest Jackson was the sole beneficiary of the policy. Crystal died in a motorcycle accident and Wharlest made a claim which Farmers denied based on alleged misrepresentations in the policy application.

Insurance Policy Interpretation

June 17, 2020 | Mark S. Humphreys

Interpreting an insurance policy is sometimes difficult at best. Different people will read the same words in an insurance policy and believe the words say different things. What is important to an insurance lawyer is how the Courts read and interpret insurance policies. The Northern District of Texas, San Angelo Division, issued an opinion in May of 2020 that deals with this topic. The case is styled, National Liability & Fire Insurance Company v. John Young d/b/a Rio Restaurant Group, et al.

This case is a declaratory judgement action filed by National. National filed a motion for summary judgment which was denied.

In this case, National is being asked by Young to defend a lawsuit. National asserts it does not have a duty to defend or indemnify. Under Texas law, the “eight corners rule” governs whether an insurer has a duty to defend or indemnify in an underlying lawsuit.

Renters Insurance

June 14, 2020 | Mark S. Humphreys

Insurance Lawyers who who handle claims made through Renters Insurance policies should know there is a new kind of renters insurance coming into the marker. Traditional Renters Insurance covers break-ins, thefts, floods, and various other types of claims to the personal property of a renter. The new kind of renters policy is coverage for the rent.

The National Law Review published an article in May 2020, that is titled, “Rent Guarantee Insurance — A Solution For Landlors?”. The article tells how the Chinese virus pandemic is having a profound impact on both insurance companies and their insureds with a multitude of claims having already been made and denied. Parties that have been especially hard hit financially by the pandemic are the owners of retail shopping complexes that have multiple tenants, many of which have had to close because they are “non-essential” businesses under government emergency orders. This has resulted in a loss of rental income to these owners as landlords. While these landlords may have business interruption insurance as part of the commercial property, the pandemic is proving that whether business interruption insurance provides coverage is uncertain. This uncertainty may ultimately only be resolved by court rulings made in connection with litigation proceedings. Accordingly, given the fact that events such as the Chinese virus pandemic may occur again, commercial landlords may wish to consider rent guarantee insurance for protection.

Leases often provide that if the leased premises are damaged by a fire or other casualty event, the tenant’s obligation to pay rent will abate during the period that the leased premises are repaired and restored. In this situation, a landlord desires to have a source of funds to replace the rent payments that it does not receive from a tenant during the period the rent abates. Rent loss insurance can be a means to cover the risk associated with the lost rent. As with business interruption insurance, however, there typically must be physical damage, e.g., fire to the landlord’s property. Further, rent loss insurance may exclude coverage for loss of rent due to certain types of damages. For example, some rent loss insurance policies do not cover water damage that creates mold because of a water leak that the landlord failed to repair. Of particular significance is the fact that that rent loss insurance pays the fair market rental value of the leased premises, which may be less than the amount of rent the tenant is obligated to pay under the lease.

Information On Covid-19 And Insurance Claims

June 13, 2020 | Mark S. Humphreys

For the past three months there has been a lot of information about Covid-19. What is not clear is how insurance policies, in particular, commercial insurance policies do or do not provide coverage for losses experienced because of Covid-19 or government reaction to Covid-19.

How these cases and the resulting lawsuits are being handled is discussed in a May 2020 article written in the National Law Review. The title of the article is, When Insurers Deny Claim, Brokers Are Next In Line For Allegations of Wrongdoing.” Here is what the article tells us.

In the wake of government orders shutting down or seriously limiting the operations of businesses to deal with the COVID-19 outbreak, many affected businesses have turned to their insurers for coverage. This has led to a flurry of lawsuits across the nation seeking rulings that such claims are covered and asserting that the failure to accept such claims constitutes breaches of contract, bad faith, and other common law and statutory violations.

Insurance Contracts And Breach

June 10, 2020 | Mark S. Humphreys

Insurance policies are contracts. A violation of an insurance policy is a usually going to be a breach of the contract. A lot of insurance law, simply put, is contract law.

So what about the relationship of breach of contract to other theories of liability?

The 1996, Texas Supreme Court opinion, Liberty National Fire Insurance Co. v. Akin, says that “Insurance coverage claims and bad faith claims are by their nature independent. But, in most circumstances, an insured may not prevail on a bad faith claim without first showing that the insurer breached the contract.”

Insurance Company Accepting Responsibility For Adjuster

June 7, 2020 | Mark S. Humphreys

As most insurance lawyers know by now, an insurance company can accept responsibility for the conduct of it’s adjusters when the claim is caused mother-nature and by doing so will defeat diversity jurisdiction and allow a lawsuit to be litigated in a Federal Court rather than a State Court. The law dealing with this issue is found in the Texas Insurance Code, Section 542A.006.

Another interpretation of this law was at issue in a May 2020, opinion from the Western District of Texas, El Paso Division. The opinion is styled, Project Vida and P.V. Community Development Corporation v. Philadelphia Indemnity Insurance Company and Robert L. Betts.

Plaintiff sued Philadelphia and Betts in State Court after a dispute arose concerning the handling of Plaintiffs claim after a hail storm. Plaintiffs allege that Philadelphia and the adjuster, Betts, mishandled the claim. Philadelphia and Betts removed the case to Federal Court based on diversity jurisdiction and the assertion that Betts was improperly joined in the lawsuit in an effort to defeat diversity and in response Plaintiffs filed a Motion to Remand asserting that Betts was properly joined in the lawsuit..

Bad Faith Claims

June 6, 2020 | Mark S. Humphreys

Bad Faith Claims and proving them have their own set of rules. These rules were discussed in a 2020 opinion from the Eastern District of Texas, Beaumont Division. The opinion is styled, Mt. Javed Ventures, Ltd. v. Mt. Hawley Insurance Company.

This is a summary judgment opinion. The legal history and the facts of the case can be read in the opinion. This writing will focus on the law related to “bad faith claims.”

The Texas Supreme Court has stated in previous case opinions that under Texas law, “an insurer has a duty to deal fairly and in good faith with its insured in the process of payment of claims.” This duty is breached if: “(1) there is an absence of a reasonable basis for denying or delaying payment of benefits under the policy and (2) the carrier knew or should have known that there was not a reasonable basis for denying the claim or delaying payment of the claim.” Whether an insurance company’s liability has become reasonably clear is a question of fact as cited in the 1997, Texas Supreme Court opinion, Universal Life Ins. Co. v. Giles. However, evidence establishing only a bona fide coverage dispute does not demonstrate bad faith. Evidence that shows a bona fide coverage dispute does not, standing alone, demonstrate bad faith.