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Insurance policy language and the Facts of a situation have to be read together to determine whether or not coverage applies to a claim.

Here is a 2021, opinion from the Southern District of Texas, Houston Division, that originates from a claimed pipe burst and the insurance company denial of the claim.  The opinion is styled Lee & Charletha Henry v. Allstate Vehicle and Property Insurance Company.

The Henry’s had a homeowners insurance policy with Allstate.  The Henry’s claim a pipe burst on the second-floor bathroom, causing damage to the first-floor kitchen area.  Allstate denied the claim asserting the policy does not cover the claimed damage because the damage to the kitchen wall and the interior does not appear to be sudden and accidental but the result of ongoing water intrusion from the expansion joint.  The Henry’s sued for breach of contract and various violations of the Texas Insurance Code, Prompt Payment of Claims Act, and the Texas Deceptive Trade Practices Act.

Being the person or entity that purchased the insurance policy does not mean that you cannot still make a claim under the policy and thus, sue if necessary.

The Texas Insurance Code grants standing to “persons”, the Texas Deceptive Trade Practices Act (DTPA) gives standing to “consumers.”  A consumer is one who seeks or acquires goods or services according to the DTPA, Section 17.45(a).

Pursuant to the 1987, Texas Supreme Court opinion styled, Aetna Casualty & Surity Company v. Marshall, a person suing under the Insurance Code does not have to prove he is a consumer.

Almost all insurance contracts contain appraisal clauses.  These clauses are discussed in a January 2020 opinion from the Southern District of Texas, McAllen Division.  It is styled, Erasmo Gonzalez v. Allstate Texas Lloyds.

In this case, the Court had urged the parties to discuss appraisal early in the case and both parties assured the Court that appraisal would not be necessary.  Months later, Erasmo invoked the appraisal provision in the insurance contract.  This Court Ordered the appraisal and discussed it’s reasoning.

The appraisal process determines the value of damages, and courts decide liability.  Absent illegality or waiver, the Texas Supreme Court has generally held in favor of enforcing appraisal clauses because denying the appraisal would vitiate the insurer’s right to defend its breach of contract claim.  An insured waives its right to appraisal where (1) the parties reached an impasse; (2) there was unreasonable delay between the point of impasse and the insured’s demand for appraisal; and (3) the insurer shows it has been prejudiced by such delay.  Waiver requires intent, either the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right.

Most insurance lawyers understand the distinction between “personal jurisdiction” and “subject matter jurisdiction”.  A recent case from the Northern District of Texas, Dallas Division, explained the difference.  The case is styled, Yakimas Payne, Carmenisha Payne, and Mar’Keyona Ford v. Government Employees Insurance Company.

The Plaintiffs sued GEICO in State Court for uninsured motorist benefits.  GEICO removed the case to Federal Court and the Plaintiffs filed a motion to remand, arguing that diversity jurisdiction existed but that GEICO had “continuous and systematic contacts with the state of Texas sufficient to establish general jurisdiction.

GEICO argued that Plaintiffs have confused personal jurisdiction with diversity jurisdiction.  The Court set forth standards for the two types of jurisdiction.

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.

Whether you are an attorney in a small town like Hamilton or Evant Texas or the Dallas Fort Worth metropolitan area, life insurance lawyers can tell you that the most common reason claims for life insurance benefits being denied is that there was a misrepresentation in the policy application.

A 1932, El Paso court of Appeals opinion is still good law.  The opinion is styled First Texas Prudential Insurance Co. v. John Pipes.

John Pipes brought suit against First Texas for their refusal to pay policy benefits of $132.00 on this life insurance policy that insured his wife Ludie.  John won at trial and this appeal by First Texas followed.

Texas Hill Country life insurance lawyers will tell you that a life insurance policy has to be read carefully.  This even means that the initial application has to also be read very carefully.  This is illustrated in a 1999, San Antonio Court of Appeals opinion.  The opinion is styled, Carolyn Noseff v. Tower Life Insurance Company, et al.

Mr. Noseff applied through an agent for a life insurance policy with Tower Life Insurance Company.  He died before the policy was delivered.  It is undisputed that delivery of the policy and collection of the first premium was a valid condition precedent to the policy’s going into effect.  His wife sued alleging that Tower Life failed to use ordinary care in delivery of the policy.  Tower Life moved for summary judgment, which was granted.  Mrs. Noseff, the wife of Mr. Noseff, filed this appeal.

This San Antonio Court of Appeals affirmed the summary judgment in favor of Tower Life.  The policy stated that it would not take effect until “the policy is delivered to the owner and the first full premium is accepted by the Company while the proposed Insured is alive …”.  There is no question that Noseff died without taking delivery of the policy, and signing off on the policy amendments.  While Texas courts have long recognized that an insurance agent owes a duty to a client at the inception of coverage, Texas does not recognize a claim against an insurance company for failure to deliver an insurance policy.  The cases relied upon to establish that an insurance agent can be liable to an insurance applicant if the agent fails to follow through on the promised performance does not pertain to the insurance company’s liability.  An agent or broker undertakes to procure insurance for another is paid therefore.

Dallas Texas life insurance lawyers will know this case and use it where necessary.  The case is from 1938, and was issued by the El Paso Court of Appeals.  It’s style is, National Life & Accident Co. v. Dickinson.

This is a judgment case wherein National Life sued Vera Dickinson, to cancel a life insurance policy issued on Vera’s husband, Fred.  National Life alleged that Fred made misrepresentations in his application for life insurance.  Fred later died.

The particular matters about which it was alleged Fred gave untrue and false answers were: (a) If he had ever had syphilis, and he answered “No,” whereas he did have; (b) he was asked about consulting a physician, and he answered “No,” whereas he had consulted a physician for various ailments; (c) whether he had been an inmate of a hospital, and answered “No,” when he had been an inmate of a hospital; (d) he was asked to give the names of physicians consulted, and he gave the name of only one, when he had consulted several; (e) he was asked if any physician ever gave unfavorable opinion of his health with reference to military or naval service, to which he answered “No,” when he had appeared before a medical board in 1933, and on examination was disqualified for active duty in the navy on account of his health, and he was then so advised; (f) it was alleged that the policy and application provided that the policy should not become effective unless it was delivered to Fred while he was in good health, and that Fred was not in good health when the policy was delivered to him.  National Life alleged that by reason of the matters stated the insurance contract never took effect, and rescission was sought on that ground.

As most Llano insurance  lawyers can tell someone, the answer to the titled questions is:  It Depends!

A 1976, Waco Court of Appeals opinion gives some guidance on an answer.  The case is styled, Westchester Fire Insurance Company v. English.

Posing as husband and wife when in fact they were not married, Reaves Hickey and Carolyn Meadows purchased a frame house and two lots from Fannie English.  English conveyed the property to Hickey and wife Carolyn. by warranty deed with a vendor’s lien note.  These documents were executed in front of and notarized by Westchester agent, Kenneth Logan.  At closing Logan issued a standard homeowners policy on the house and contents.  The premiums were paid and accepted by Westchester.  A few months later and contents were destroyed in a fire.  Westchester failed to make cover the claim, a lawsuit was filed, and prior to trial Westchester learned for the first time that Hickey and Meadows were not married.

Fort Worth life insurance lawyers need to read this case on the Slayer’s Statute. The statute is found at Texas Insurance Code, Section 1103.151. The case is from the Houston Court of Appeals [14th Dist.]. It is styled, Rumbaut v. Labagnara.

Texas law disallows recovery of life insurance proceeds by a beneficiary who is a party to willfully causing the insured’s death. This case requires the court to decide whether gross negligence is subsumed within the notion of willfulness. The court held it is not.

Appellant’s wife Ana Maria Rumbaut was lost at sea, when a sudden storm arose in the Gulf of Mexico where the two of them were sailing. Because Mrs. Rumbaut’s will named appellant as executor of her estate, he applied for probate upon his return. Appellees, Mrs. Rumbaut’s sons by a previous marriage, contested the application and alleged that appellant had willfully caused their mother’s death.

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