Claims Denial Lawyer – Life Insurance

When Life Insurance claims are denied, a beneficiary should always have an insurance attorney look over the reasons for denial.  Most the time an experienced life insurance lawyer can find a way to make a recovery on the case.  But, sometimes it doesn’t work out.

An opinion form the Southern District of Texas, Houston Division, is an example where the pleadings were not sufficient to get the Court to consider coverage.  The opinion is styled, JECO Investors Partnership v. Pacific Life Insurance Company.

This is a case where a claim for life insurance benefits was denied.  The case was originally filed in State District Court and removed, by Pacific Life to Federal Court.  Pacific Life was quick to file a Motion for Judgment on the Pleadings and it was granted by the Court.  JECO then filed a Motion to Vacate Judgment and Grant Leave to Amend.  JECO’s motion was denied.

Here is some of the background.

Pacific Life is an insurance company that sells life insurance policies.  On September 24, 2014, JECO purchased two term life insurance policies numbered from Pacific Life to insure the life of one of JECO’s principals.  The relevant terms of the Policies are identical; both had a term of five years and provided JECO with the option to convert them into permanent insurance.  The conversion option was only available before the end of the five-year conversion period and required submission of a written request.  The conversion period’s end date was September 24, 2019.  JECO did not request conversion of the Policies until November 26, 2019, and Pacific Life denied the request as untimely.  JECO alleged that it missed the Conversion Deadline because Pacific Life regularly provided notice when premium payments were due, creating a reasonable expectation that it would send written notice of any deadline, but failed to send notice of the Conversion Deadline.  On June 10, 2020, JECO brought suit against Pacific Life in state court alleging breach of contract, among other causes of action.  Pacific Life removed the action to this court on the basis of diversity jurisdiction on July 14, 2020.  On the same day, Pacific Life filed its Rule 12(c) Motion for judgment on the pleadings.  On August 24, 2020, the court granted Pacific Life’s 12(c) Motion.  The court found that the Policies unambiguously did not require Pacific Life to provide notice of the Conversion Deadline, and thus the parties’ post-contractual conduct was not relevant to determining the intent of the parties as expressed by the Policies.  The court also found that Jeco’s practice of sending regular notices that the annual payments were due did not establish the existence of an implied contract to modify the Policies and require advance notice of the Conversion Deadline.  The court therefore concluded that Pacific Life did not breach its contracts with JECO by failing to provide notice of the Conversion Deadline, and that Pacific Life was entitled to judgment on the pleadings on Jeco’s claims.  The court also held that Pacific Life did not breach its duty of good faith and fair dealing when it cancelled the Policies.  JECO never alleged any extreme conduct by Pacific Life or any injury independent of the expiration of the Policies, and there was no extra-contractual duty to provide the insured notice of a policy’s expiration.  The court noted that JECO had not sought leave to amend or suggested the existence of any facts that could save its claims.  Concluding that JECO had pled its best case and that amendment of the pleadings would be futile, the court found dismissal of the action and JECO’s claims to be appropriate.  JECO moved to vacate the judgment and amend the pleadings.  Pacific Life filed its response in opposition.  This Court ruled in favor of Pacific Life.

A reading of the case will fill in more details and an explanation of the law.

Contact Information