Disability Claim Denied

If someone in Dallas, Fort Worth, Grand Prairie, Arlington, Irving, Mesquite, Garland, Richardson, Plano, Coppell, Mansfield, Cedar Hill, or anywhere else in Texas has a claim under their disability insurance policy denied, what can be done?
Start with the legal reality that an insurance policy is a contract. When a party to a contract is obligated by the contract to another, absolutely repudiates the obligation without justification, the obligee is “entitled to maintain his action in damages at once for the entire breach, and is entitled in one suit to receive in damages the present value of all that he would have received if the contract had been performed, and he is not compelled to resort to repeated suits to recover the monthly payments.” This was stated in the 1937, Texas Supreme Court case, Universal Life & Accident Insurance Company v. Sanders.
Here are some of the facts of the Sanders case:
In March, 1928, Universal Life & Accident Insurance Company issued to Sanders a policy of health and accident insurance wherein it bound itself to pay Sanders a stipulated sum per week for sickness resulting in total disability. While such policy was in force and effect Sanders alleges she became totally and permanently paralyzed. She instituted the lawsuit to recover for payments alleged to have accrued and for the value, as of the date of the trial, of all future installments to mature during her life expectancy, which expectancy was alleged to be 27 years from and after January 23, 1933, based upon the American Experience Table of Mortality.
Prior to this case, the Texas Supreme Court had announced the rule that when a party who is obligated by contract to make monthly payments of money to another absolutely repudiates the obligation without just excuse, the obligee is “entitled to maintain his action in damages at once for the entire breach, and is entitled in one suit to receive in damages the present value of all that he would have received if the contract had been performed, and he is not compelled to resort to repeated suits to recover the monthly payments.”
In this case, the court re-interated its prior rule of law and reaffirmed that Sanders could maintain her action against Universal Life for the full amount of monies she would be entitled to under the disability insurance policy even though the future amounts had not actually been due. By virtue of Universal Life denying the benefits, the entire amount became due when Sanders was successful in her lawsuit based on repudiation of the disability policy / contract.
So, what is repudiation?
This is made and reaffirmed in the 1981 case, Group Life And Health Insurance Company, decided by the Dallas Court of Appeals.
This case arose when Group Life And Health Insurance Company (Group Life) discontinued paying monthly disability benefits to an insured on the theory that the insured was no longer disabled. The principle question was whether Group Life repudiated the contract. The jury found repudiation and judgment was rendered in favor of the insured for accrued installments, future installments discounted to present value, statutory penalty, and attorney’s fees.
In discussing this case the court stated, “In Texas, where a party … obligated by contract to make monthly payments of money to another absolutely repudiates the obligation without just excuse, the obligee is entitled to maintain his action in damages at once for the entire breach, and is entitled in one suit to receive in damages the present value of all that he would have received if the contract had been performed.”
They also cited other cases in saying, “Repudiation consists in ‘such words or actions by a contracting party as indicate that he is not going to perform his contract in the future’.” “It is conduct which shows a fixed intention to abandon, renounce, and refuse to perform the contract.”
A 1976, Texas Supreme Court case, Republic Bankers Life Insurance Company v. B. L. Jaeger, says:
“The measure of damages in an action for breach of contract by repudiation is the total of all accrued payments plus interest, plus the present value of all unaccrued payments that the plaintiff would have received if the contract had been performed.”
When someone has their claim for disability benefits denied by an insurance company, it is important that the policy holder seek the advice of an experienced Insurance Law Attorney.