Dallas Fort Worth Insurance Lawyer Blog

Life Insurance Case And ERISA

April 12, 2020 | Mark S. Humphreys

Here is a 2020, case from the Southern District of Texas, Houston Division, that deals with life insurance wherein the life insurance plan is subject to the Employee Retirement Income Security Act (ERISA). The case is styled, Wagma Mina Huerta v. Metropolitan Life Insurance Company, et al.

This case, filed by Huerta , is an action pursuant to ERISA seeking equitable relief for alleged breaches of fiduciary duty by the Defendants related to the denial of life insurance coverage for the death of Huerta’s husband.

The opinion is lengthy but only a part will be discussed here. The factual background can be read in the opinion. In this case, MetLife had filed a motion to dismiss pursuant to Federal Rule 12(b)(6), which allows dismissal of an action whenever the complaint, on its face, fails to state a claim upon which relief can be granted. United States, 5th Circuit case law states that when considering a motion to dismiss, the court may consider, in addition to the complaint itself, “any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.” This is discussed in the 2010, opinion, Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC. When a defendant attaches such documents, it “merely assists the plaintiff in establishing the basis of the suit and the court in making the elementary determination of whether a claim has been stated.”

Commercial Insurance Policy

April 11, 2020 | Mark S. Humphreys

Here is a case wherein the owner of a commercial insurance policy sued the insurance company for his personal injuries. This case is from the Western District of Texas, El Paso Division, and is styled, Ismael Pease v. State Farm Lloyds.

State Farm issued a business owners liability policy to Pease Law Office, PLLC. Pease is the sole member of the law office and is an insured under the policy. The policy Declarations Page provides: “If you are designated in the Declarations as[] [a] limited liability company, … [y]our ‘members’ are also insureds, but only with respect to the conduct of your business.”

The Policy’s Coverage L provision, entitled “Business Liability,” provides that State Farm “will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ … to which this insurance applies.” The Policy further provides: “Damages because of ‘bodily injury’ include damages claimed by any person … for care, loss of services or death resulting at any time from the ‘bodily injury. “‘

Can You Sue An Insurance Adjuster?

April 8, 2020 | Mark S. Humphreys

Insurance lawyers know that suing an adjuster when it can be done, is preferable to not suing the adjuster. There are reasons for this that have been discussed in previous blogs. The Southern District of Texas, Brownsville Division, had a case dealing with this issue in February 2020. The style of the case is, Faith Pleases God Church Corporation v. Philadelphia Indemnity Insurance Company, et al.

Church sued Philadelphia and VeriClaim, Inc. and adjuster John Adame stemming from underpayment of the Church’s claim for property damage resulting form a storm. Church filed a claim with Philadelphia who assigned VeriClaim to the claim and Adame is their employee who investigated the claim.

Church alleges VeriClaim and Adame prepared an undervalued damages report allowing Philadelphia to underpay the claim.

Insurable Interests – Reasons Required

April 5, 2020 | Mark S. Humphreys

Insurance lawyers know the law about insurable interest goes back to 1866, in a United States Supreme Court opinion styled, Howard Fire Ins. Co. v. Chase. An insurable interest is necessary for the following reasons:

– to prevent gambling

– to reduce intentional loss

What Is An Insurable Interest?

April 4, 2020 | Mark S. Humphreys

Insurance lawyers know that a party must have an insurable interest in the insured property to recover under an insurance policy. This is made clear in the 1993, Dallas Court of Appeals opinion styled, Jones v. Texas Pac. Indem. Co. It is not necessary that the party owns the property to have an insurable interest. An insurable interest is an exposure to financial loss possessed by a person giving rise to a legal interest that the insured possesses a right to protect. An insured who owns a house or auto therefore has an insurable interest in the house or auto because the insured would be hurt financially if the house or auto were damaged or destroyed. This was discussed in the 1963, Texas Supreme Court opinion styled, Smith v. Eagle Star Ins. Co. An insurable interest does not constitute an entitlement to insurance because the insurer is permitted to underwrite and price the risk sought to be insured. Even if an insurance policy is issued, it cannot be enforced by a party who has no insurable interest, even if that party is a named insured. This was discussed in the 1972, Amarillo Court of Appeals opinion styled, North River Ins. Co. v. Fisher.

Insurance Cases In Federal Court – 2

April 1, 2020 | Mark S. Humphreys

Well, Insurance Lawyers, here it is happening again. Knowing the little ways to keep a lower dollar case out of Federal Court are just too simple for it to happen again and again. This 2020, opinion is also from the Southern District, Houston Division, and is styled, Michael Dyll and Remi Dyll v. Palomar Specialty Insurance Company.

The Dylls sued Palomar in State Court and Palomar properly removed the case to Federal Court pursuant to 28 U.S.C., Section 1441(a). A defendant has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists. The operative facts and pleadings are evaluated at the time of removal.

Federal Courts have jurisdiction when the parties are from different states and the amount in controversy exceeds $75,000. The amount in controversy is ordinarily determined on the basis of the sum demanded in good faith in the initial pleading. A demand is made in bad faith if its purpose is to defeat Federal jurisdiction. The removing defendant must show by a preponderance of the evidence that the amount in controversy exceeds $75,000. A Plaintiff must make a showing that his recovery will not exceed the amount stated in the complaint if the amount is less than $75,000. To make such a showing of legal certainty, Texas plaintiffs must file a binding stipulation or affidavit with the original state petition. A stipulation filed after removal is irrelevant to the court’s analysis.

Insurance Cases In Federal Court

March 29, 2020 | Mark S. Humphreys

Insurance lawyers should know ways that work to stay out of Federal Court. Not knowing how to properly plead the case will result in the case being in Federal Court. This is illustrated in a January 2020 opinion from the Southern District of Texas, Houston Division, styled, Mario Rodriguez v. Ocean Harbor Casualty Insurance Company.

Mario had filed suit in State Court based on a property claim dispute with Ocean Harbor. Ocean Harbor removed the case to this Federal Court based on diversity jurisdiction. Mario filed this motion to remand.

When a defendant removes a case to Federal Court the defendant has the burden of proving by a preponderance of the evidence that subject matter jurisdiction exists. Operative facts and pleadings are evaluated as they exist at the time of removal.

Accusing Insurance Company Of Fraud

March 28, 2020 | Mark S. Humphreys

Lawyers who handle insurance claims have to know the pleading requirements for alleging fraud when a lawsuit ends of in Federal Court. Otherwise, the fraud allegations can be thrown out of Court. This is illustrated in a February 2020 opinion from the Southern District of Texas, Houston Division. The opinion is styled, Nancy Roberson v. Allstate Vehicle and Property Insurance Company.

This is a claim for roof damage alleged to have resulted from storms in Houston. Roberson had filed two previous lawsuits which she had voluntarily dismissed. In this third lawsuit, Allstate has moved for summary judgment and for a judgment on the pleadings. This Court granted the motion for summary judgment in favor of Allstate.

Roberson’s common law fraud claim must satisfy Federal Rule of Civil Procedure 9(b). This Rule requires a plaintiff to state the circumstances of an alleged fraud with particularity. The elements of Texas common law fraud are (1) that a material representation was made; (2) the representation was false; (3) when the representation was made, the speaker knew it was false or made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker made the representation with the intent that the other party should act upon it; (5) the party acted in reliance on the representation; and (6) the party thereby suffered injury. Roberson must state the who, what, when, where, and how of the alleged fraud by pleading the time, place, and contents of the false representation, as well as the identity of the person making the misrepresentations and what that person obtained thereby.

ERISA Clain Or Not?

March 25, 2020 | Mark S. Humphreys

ERISA stands for Employee Retirement Income Security Act. When making an insurance claim related to employment, it is important to know it the claim is subject to ERISA, which is governed by Federal Law, or not ERISA, in which case the claim is governed by State Law.

Plus, there are employee benefit plans that would be governed by ERISA however, elements of the employee benefit plan may fall outside of ERISA. This is discussed in a 2020 opinion from the Western District of Texas, Austin Division. The opinion is styled, Stephen Burrell v. Metropolitan Life Insurance Company and Deloitte LLP.

Burrell’s lawsuit was for short term disability (STD) benefits that had been denied and for long term benefits (LTD) that had been denied. This discussion will focus on the STD benefits claim.

Insurance Claims And Examinations Under Oath (EUO)

March 22, 2020 | Mark S. Humphreys

Almost all insurance policies contain a requirement that the insured submit to an examination under oath (EUO) as often as is necessary for the insurance company to complete its investigation of the claim.

EUO”S were the topic in a Western District of Texas, Austin Division, opinion recently. The opinion is styled, AXO Staff Leasing, LLC v. Zurich American Insurance Company, McCreadie & McCreadie, Inc., and Lassiter Ware Insurance.

The lawsuit is an insurance coverage dispute between Zurich and AXO. Briefly, AXO contends that its former Chief Financial Officer (CFO), John Herzer, embezzled $4.7 million, and that the loss is covered by the Zurich policy.