Life Insurance

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.

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.”

What Are Insurance First Party Policy’s?

March 4, 2020 | Mark S. Humphreys

What is a First Party claim versus a Third Party claim?

A “first party” policy typically involves insurance that provides policy benefits directly to the insured or beneficiary in the event of a loss. The Texas Insurance Code, Section 541.051(2) defines “first party claim” as a claim “by an insured or policyholder under an insurance policy or contract or by a beneficiary named in the policy or contract that must be paid by insurer directly to the insured or beneficiary. These types of policies generally include health insurance, life insurance, disability insurance, auto policy insurance, homeowner’s property insurance, and commercial property insurance.

In contrast, “third party coverage” is generally considered to include all forms of liability insurance. This type of insurance is designed to insure against loss to third parties caused by the insured or another covered person for whom the covered person may be legally responsible.

ERISA – Life Insurance

January 19, 2020 | Mark S. Humphreys

Employee Retirement Income Security Act (ERISA). These cases are tough even under the best of circumstances. Lawyers who handle ERISA cases do not spend time advertising their great results. The reason is the ERISA law prohibits “great” results. A win is just getting what you should have received in the first place. But wins are few and far between, especially in the United States Fifth Circuit.

Here is a case from the Northern District of Texas, Wichita Falls Division. It’s styled is, Edythe Koch v. Metropolitan Life Insurance Company.

In this case, the Court denied MetLife’s motion for summary judgment which is unusual in these cases, thus, at first blush one thinks a win is coming. But when the Judge conducted it’s own review of the record, the Court upheld the plan administrator’s denial of accidental life insurance benefits.

Life Insurance Claim And ERISA

November 17, 2019 | Mark S. Humphreys

Many employer based insurance plans fall under ERISA. Understanding how the courts look at ERISA cases is important for life insurance lawyers to be able to discuss a case with a client.

The United States Court of Appeals for the Fifth Circuit recently ruled on a case that involved a life insurance policy that was governed by ERISA. The styled of the case is Jason Freeman v. Securian Life Insurance Company.

Jason Freeman was the father of 17 year old Adrian. Adrian died instantly when he pulled the trigger of a revolver, the barrel of which he had inserted in his mouth immediately after he had spun the gun’s cylinder and twirled the gun around his finger. Soon after the death of Adrian, it was determined that the revolver had only one cartridge in the cylinder. The conclusion by the Deputy Medical Examiner of Bexar County, Texas, was that Adrian’s death was the result of a suicide.

Live Insurance Policies – Incontestability Clauses

August 4, 2019 | Mark S. Humphreys

The Texas Insurance Code requires that life insurance policies contain incontestability clauses. These are a provision that a policy will be incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums. This is found in Section 1131.104 for individual life insurance policies and Sections 705.101 – 705.105 for group life policies. The effect of these clauses is to limit defenses so they can apply only during the first and second policy years.

The Texas Supreme Court, in 1972, stated the purpose of an incontestability clause is to protect the insured from a contest as to the validity of the policy after the set period has expired. The opinion is styled, Minnesota Mutual Life Insurance Company v. Morse.

A problem has arisen from the statutes in that they do not specify whether the policy date or the effective date is considered its date; this creates an ambiguity that must be construed against the insurer. And an insurer may not place a more onerous incontestability clause in the policy than the one prescribed by statute, although it may provide a shorter period than that prescribed. This was made clear in the 1982, Houston 14th Court of Appeals opinion styled, Parchman v. United Liberty Life Insurance Co.

Life Insurance Claim Denial – Knowledge of Misrepresentation

August 3, 2019 | Mark S. Humphreys

Life insurance lawyers need to be know this 1990, opinion from the Texas Supreme Court. It is styled, Koral Industries v. Security-Connecticut Life Insurance Co.

It is not uncommon for a beneficiary of a life insurance policy to concede that misrepresentations regarding health were made on an application for life insurance. What they will contest is that the insurance company should have known of the misrepresentations.

In the Koral case, Koral sought insurance on one of its key employees, Lewis Lindsey. Lindsey did not disclose on the insurance application his medical history regarding treatment over the previous five years a history which included hospitalization in 1981, 1982, and 1983, and counseling and treatment for depression and excessive use of alcohol. Further, he had been treated for mental or nervous disorders from 1976-78, and his physician had treated him for anxiety.

Life Insurance And Interpleader Action

June 22, 2019 | Mark S. Humphreys

Life insurance lawyers will get calls from people who may or may not be entitled to life insurance proceeds after someone has died. In these situations, that being situations where more than one person is making a claim for life insurance benefits, the insurance company will usually file a lawsuit against the claimants. In the lawsuit the insurance company will inform the Court that a person has died, that the life insurance company is unsure who the correct person is to receive the life insurance proceeds, and then asks the Court to make the determination and to allow the insurance company to get out of the lawsuit while the people contesting for the insurance benefits remain in the lawsuit. This is called an Inter-Pleader Action.

This was situation in a lawsuit in the U.S. Southern District of Texas, Houston Division, recently. The case is styled, Colonial Life & Accident Insurance Company v. Aletha Burke Wade, Serbrina Wade, Lekisha Wade, and Frank Hollingsworth.

Kendrick Wade purchased a Life Policy in 2012 and designated his mother, Helen Wade, as beneficiary. In 2014, Kendrick purchased an Accidental Death Policy designating his sisters, Lekisha and Serbrina, as co-equal beneficiaries. Kendrick married Aletha Wade in 2015 and never amended the policies to name her as a beneficiary. Kendrick was killed in December 2017. Helen pre-deceased Kendric and the terms of the Life Policy made Kendrick’s estate the primary beneficiary.