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The law in Texas regarding who is excluded from receiving life insurance benefits when the insured has been killed is clear.  Texas Insurance Code, Section 1103.151, says that the named beneficiary forfeits their rights in the life insurance proceeds if the beneficiary is a principal or accomplice in willfully bringing about the death of the insured.

This issue is discussed in this 2019, Southern District of Texas, Houston Division opinion styled, Reliastar Life Insurance Company, P.T., a minor, and D.T., a minor v. Itani Milleni f/k/a Trang Vu.

This is an interpleader case filed by Reliastar, who insured the life of Tuyet Tran.  Reliastar needed this Court to decide whether Trang Vu, Tuyet’s husband and primary beneficiary, or P.T. and D.T., Tuyet’s children and contingent beneficiaries, are entitled to the proceeds.  This suit was instigated because Vu was suspected of murdering Tuyet, which if true, would disqualify him from receiving the insurance proceeds.  Vu was never prosecuted for the death of Tuyet, but a criminal conviction is not a prerequisite for forfeiting the insurance proceeds.

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When a claim is denied and the insured has to file a lawsuit against the insurance company, most insurance lawyers prefer to litigate cases in the State or County courts while insurance companies prefer to litigate the cases in Federal Court.

When the insurance company is sued in State Court, the attorney for the insured will also sue the adjuster in an effort to beat the required “diversity jurisdiction” of the Federal Court which is found at 28 U.S.C., Section 1332(a).

This issue was the topic in the 2019, Western District of Texas, Austin Division, opinion styled, Susan Swire and Philip Swire v. Alyssa Kempf f/k/a Alyssa Hodge and Geico County Mutual Insurance Company.  The case was filed in State Court and then removed to Federal Court based on diversity jurisdiction.  The Swire’s argued that Kempf is in fact a Texas citizen and therefore, removal is improper.

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Lawyers who handle ERISA cases always have to explain to their clients that in ERISA cases, the administrative process has to be completed before a lawsuit can be filed.  This is illustrated in this 2019 opinion from the Southern District of Texas, Houston Division case styled, Lisa K. Bunner v. Dearborn National Life Insurance Company, et. al.

This case arises out of denial of long-term disability benefits to Lisa contained in her employee welfare benefit plan.  This case is governed by the Employee Retirement Income Security Act of 1974 (ERISA).

The details of this case can be read in the opinion.  What is relevant here is the Court stating / emphasizing the requirement that the administrative process be exhausted prior to filing a lawsuit.

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Insurance companies prefer to litigate cases in Federal Court.  Insurance lawyers representing insureds prefer to litigate their cases in State Court.  In the appropriate situation, here is a way to stay in State Court.

This is from the Southern District of Texas, Houston Division, and the case is styled, WEN WIRELESS, INC. d/b/a Cell Spot, Kick Back Wireless v. Amguard Insurance Company.

Wen sued Amguard in County Court and Amguard timely removed the case to Federal Court based on diversity jurisdiction.  Wen filed a Motion for Remand under 28 U.S.C., Section 1441(a) asserting that the Court did not have federal jurisdiction.

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The Law Office of Mark S. Humphreys, P.C. is pleased to announce the settlement of a life insurance case wherein Mark was able to recover life insurance benefits for his client.

Mark’s client was the common-law wife of man who had a life insurance policy through his employer.  Texas recognizes these informal marriages in the Texas Family Code, Section 2.401.

Upon the death of the man, Mark’s client made a claim for the life insurance proceeds.  No one had been named as the beneficiary of the life insurance policy  This claim was denied.  The employer asserted there was no formal marriage and any life insurance proceeds went to the estate of the employee.  This man did not have kids and his parents were deceased.  If this man were married to Mark’s client, then all the proceeds would go to Mark’s client.

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The Southern District of Texas, Houston Division was presented with an issue that is not seen very often in insurance cases except cases involving uninsured motorist benefits.  The case is styled Lamar Donald, Sr. and Diane Cottrell Donald v Metropolitan Lloyds Insurance Company of Texas.

Lloyds filed a Motion to Sever and Abate.  This Court denied the motion.  Here is why.

Plaintiff’s assert that Lloyds improperly denied or paid their claim for benefits after suffering damage from Hurricane Harvey.  The Plaintiff’s sued sued for breach of the insurance contract and for extra-contractual claims based on the Texas Insurance Code.

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For attorneys handling life insurance cases here is news:

In early November, the Law Offices of Mark S. Humphreys, settled another life insurance case. The details are confidential as part of the agreement but here is what can be discussed.

The case involved a lady who had purchased coverage on herself years ago but when she moved from one state to another, she changed banks without forwarding the information to the insurance company and thus, the automatic bank drafts ceased and she had a lapse in coverage. She corrected the lapse within three months but as part of renewal of the policy she had to re-affirm her health conditions. In doing so, the insurance company claimed that her health condition had changed for the worse and that this change was not truthfully disclosed in the renewal application. When the lady died eight months later, her daughter, the beneficiary under the policy, made a claim for benefits. The life insurance company began an investigation and discovered the health conditions that had not disclosed in the renewal application and denied the daughter the life insurance benefits.

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Not paying on an insurance claim is in simple terms, a breach of contract.  The difference is that the contract breached is an insurance contract.  The Texas Insurance Code provides for damages beyond the simple breach of contract damages.  However, as is pointed out in the 2019, opinion from the Southern District of Texas, Victoria Division, you still have to prove the insurance contract was breached.   The style of the case is, Deborah Gonzalez v. Allstate Vehicle and Property Insurance Company.

Deborah’s claim arose out of damage suffered in Hurricane Harvey in August of 2017.  Deborah filed a claim against Allstate on August 28, 2017.  Allstate’s adjuster reported damages totaling $8,596.63.  After adjustments, Allstate paid Deborah $6,062.63.

Deborah did not agree with the amount paid and on August 13, 2018, Deborah and Allstate designated appraisers.  The appraisers evaluated the loss at $23,822.72.  After applying adjustments, Allstate paid the remainder of the claim.

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The Southern District of Texas, Houston Division issued an opinion in an unusual case in February 2019.  The case is styled, Patricio Delgado v. Allstate Texas Lloyds.

The case had been removed to federal court based on diversity jurisdiction.  Four parties sued Allstate on four properties in four states.  Allstate asked that the improperly joined parties by dismissed and the case severed into four separate lawsuits.  The Judge has found that the four claims are “factually unrelated” and severed the claims.  The Judge ordered that each plaintiff file an amended compliant related solely to his or her claims.  The Judge also ordered that each of the cases be remanded.

Allstate argues that the remand is improper because of the amount in controversy exceeding $75,000, because the amount originally sought by Delgado and the others exceeded $200,000.

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Here is another case for life insurance lawyers to read and make part of their knowledge of life insurance cases involving ERISA.  The case is from the Northern District of Texas, Dallas Division.  The case style is, Stephanie Taylor v. Metropolitan Life Insurance Company.

This ERISA life insurance case was decided on motions for summary judgment in favor of MetLife.

Stephanie is the beneficiary under a policy of life insurance insuring her husband, Jonathan.  They had a policy of Basic Employee Life Insurance for $136,000 and $271,000 of Supplemental Employee Life Insurance.

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