Insurance attorney need to stay current on the ways the Judges interpret the law and how that law is applied to the facts in a case.

When dealing with insurance contracts and the “covered and non-covered cause of loss” issue, this 2019, Northern District of Texas, Dallas Division opinion is worth reading.  It is styled, 2223 Lombardy Warehouse, LLC, et al. v. Mount Vernon Fire Insurance Company.

The policy language at issue in this case read:

The law office of Mark S. Humphreys, P.C. is pleased to announce the settlement of a case involving a Credit Life & Disability policy.

Mark’s client was the wife of a man who had died and she was the beneficiary named on the policy. The policy, a Credit Life & Disability policy, had been purchased when the husband bought a new vehicle. After his death, she made a claim for benefits which was denied due to the insurance company claim that her husband had misrepresented his health in his application for the policy. The problem for the insurance company was that the client had a copy of the application which did not have the misrepresentations. It appeared that the finance manager for the car dealership had altered the application in order to get commissions for selling the policy. In the end the insurance company paid more than three times the actual benefits.

Automobile dealerships are a source for a lot of Credit Life & Disability policies being sold.  The salesman and finance manager handling the sale are incentivized to sell these policies and often times have quotas they have to meet.  As a result, there is often times a lot of information on the application for these policies that is not entirely accurate.  Some rules governing these policies are found in the Texas Insurance Code, Sections 1153.151 through 1153.161.

The “Offer of Settlement Rule” is relatively new to Texas law and is codified in the Texas Civil Practice & Remedies Code, Section 42.002.  This rule was discussed to a small degree in a case from the Corpus Christi Court of Appeals.  The case is styled, Israel Salinas and Hilda Salinas v. State Farm Lloyds and Truman Dale Crews.

In June of 2014 the Salinas filed suit against State Farm alleging multiple cause of action resulting from hail storm damage to their home.  On September 14, 2014, State Farm offered the Salinas $29,500 under the Offer of Settlement Rule and the Salinas did not respond to the offer.

The case went to trial.  The jury found that State Farm breached the contract with the Salinas and awarded the Salinas $10,500 for breach of contract and $10,500 as punishment due to the knowing and intentional conduct of State Farm.  The Judge signed a judgment awarding those amounts plus, $9,066.82 as prejudgment interest, $10,500 for attorney fees, and $8,097.05 for costs of court, for a total of $38,163.87.

Demand letters to an insurance company can be used as evidence to make even a small case subject to federal jurisdiction.  This is illustrated in a case from the Western District of Texas, San Antonio Division.  It is styled, Veronica Horton v. Allstate Vehicle and Property Insurance Company, Pilot Catastrophe Services, John Suther.

In this case Horton made a claim with Allstate for property damage to her home after a storm.  Allstate hired Pilot and Suther to adjust the claim.  It was alleged that Suther and Pilot did not know what they were doing and made mistakes that can be found in the opinion, and that Allstate accepted their report and ignored Horton’s report.  That this was done intentionally.

Horton sent a demand letter to Allstate requesting payment of $28,384.28 in damages, calculated as follows: (1) $18,554.34 for repairs, (2) $4,629.94 in interest pursuant to the Texas Prompt Payment Act and $1,200 in attorney fees, both incurred up to the date of the letter.  The letter expressed to Allstate that they should pay the offer or risk exposure to a judgment of $100,000 to well over $1 million.

Insurance attorneys get another favorable ruling in a case.  The case is from the Western District of Texas, Austin Division.  It is styled, River of Life Assembly of God v. Church Mutual Insurance Company and Jim Turner Harris.

River of Life suffered storm related damage and made a claim against Church.  Church assigned adjuster Harris to the claim.  When the claim was denied, River of Life sued Church and Harris.

Church elected to take responsibility for Harris arguing that Harris was improperly joined and removed the case to Federal Court citing Texas Insurance Code, Section 542A.006(c) which allowed them to do so since having only Church as a defendant, diversity jurisdiction would not be defeated.

After reporting just a few days ago about a significant victory on an ERISA case, today we are reporting on a loss from the 5th Circuit.  This case is from Eastern District of Lousiana but the appeals court is the 5th Circuit which is the same appeals court for cases out of Texas and the court that Texas courts are to look to in rendering their decisions.  The case is styled, Amanda C. Foster v. Principal Life Insurance Company.

Amanda worked as an attorney when she started experiencing intractable migraine headaches that made work impossible.    Amanda applied to Principal for long term disability (LTD) benefits.  After multiple reviews by various healthcare providers Principal denied her claim, concluding Amanda was not disabled within the meaning of the policy.

As in most disability claims, the reports from various medical providers for the claimant are voluminous and lengthy, as are the reviews by the doctors hired by the insurer to review the claim.

The law office of Mark S. Humphreys, P.C. is pleased to announce a settlement in a case involving a disability policy.

In this case the insured lady had purchased a disability policy through an advertisement she had received in the mail.  The lady paid on the policy for a number of years when one day she was involved in a one vehicle automobile accident.  This lady was severely injured and was in a hospital for about a week.  Her injuries among other things included paralysis to one side of her body.  This paralysis to one side of the body is called hemiplegia.  Another term used to describe this condition is hemiparesis.  However, from a medical perspective, these two terms have distinct meanings.

Hemiplegia is total paralysis to one side of the body, while hemiparesis is a partial paralysis to one side of the body.

Insurance attorney who handle denied claims and in particular insurance attorneys who are willing to take on an insurance claim governed by ERISA claim which has been denied, needs to read this opinion from the Eastern District of Texas, Sherman Division.  The case is styled, Gina Pike v. Hartford Life And Accident Insurance Company.

Pike had received long term disability (LTD) benefits from Hartford from April 24, 2008 through December 14, 2016, the period of time when Hartford determined Pike met the definition of disability in the LTD policy.  Later, after determining Pike was unable to prove she continued to be disabled under the policy, the benefits ceased on December 15, 2016.

This case resulted in a 51 page opinion which is not going to be discussed at any length here.  What is relevant is that it is rare for beneficiaries of these employer sponsored benefit plans and as a result needs to be carefully read to determine what the Court saw that separated this case from other ERISA cases.

Insurance lawyers need to read this recent opinion from the Southern District of Texas, McAllen Division.  It is styled, Federico Flores Cazares, et al v. Allstate Vehicle And Property Insurance Company.

This case / claim arises out of a claim for property damage made by plaintiffs against Allstate.  Allstate sent an adjuster who concluded the property damage was not storm related which would be covered by the policy, rather the damage was wear/tear, and deterioration that occurred over a period of time and not covered by the policy.

Plaintiff’s filed suit in State Court and Allstate had the case removed to Federal Court.

The Penn Record published an article on March 18, 2019, discussing changes in insurance law in Texas.  The article is titled “Texas Lawmakers Say The ALI’s Insurance Law Project Not Worthy Of Recognition By The Courts“.

Legislation has recently been filed by Texas legislators to discourage Texas courts from relying on the controversial passage of the American Law Institute’s Restatement of the Law of Liability Insurance.

Philadelphia based, ALI has a history of publishing Restatements with the goal of providing summaries to judges who deal with these types of legal issues.  People question whether the group has started proposing new laws rather than restating existing ones.  As a result the Texas legislature has filed three measures this year in response.