Life Insurance And Lawsuits

Life Insurance Attorney need to read this 2023 opinion from the Southern District of Texas, Houston Division.  The opinion is styled, Sue Williams v. Minnesota Life Insurance Company.
Sue Williams is the beneficiary of an accidental death insurance policy issued by Minnesota Life.  Michael Williams is alleged to have died due to accidental asphyxia.
Sue sued Minnesota Life for various violations of the Texas Insurance Code and Breach of Contract.
Minnesota Life filed a Rule 12(b)(6) Motion to Dismiss, stating that Sue failed “to state a claim upon which relief can be granted.”
The parties do not dispute that Williams’s claims for certain violations of the Texas Insurance Code and are subject to the heightened pleading standard of Rule 9(b), as is her fraud claim.
The second amended complaint alleges the following with respect to these fraud-based claims:

13. Defendants Insurer misrepresented to Plaintiff the insured person was not covered for such peril even though the death was a covered occurrence, specifically, accidental death as a result of asphyxia from choking. Defendants Insurer misrepresented to Plaintiff the insured person was covered for such peril of accidental death resulting from asphyxia caused by choking although Defendant Insurer denied such coverage.

… .

49. Defendant Insurer committed fraud in addition to other counts. Defendant Insurer made a representation to Plaintiff that the policy covered the loss of accidental death resulting from asphyxia caused by choking. Defendant Insurer’s representation was material. Defendant Insurer’s representation was false.

… .

50. Defendant Insurer knew Defendant Insurer’s representation was false or made Defendant Insurer’s representation recklessly as a positive assertion and without knowledge of the truth of the representation when Defendant Insurer made Defendant Insurer’s representation. Defendant Insurer made Defendant Insurer’s representation with the intent that Plaintiff act on Defendant Insurer’s representation. Plaintiff relied on Defendant Insurer’s representation and Defendant Insurer’s representation caused Plaintiff injury.

These allegations fail to plead fraud with particularity; nowhere does Williams allege when, where, or by whom the statements were made.  In her brief, Williams argues that Minnesota Life “made its actions and representations to mislead Plaintiff on the true amount of Plaintiff’s damages and obfuscate Plaintiff’s knowledge of Plaintiff’s rights and remedies” afforded by the policy at issue.  The allegations of the second amended complaint do not mention any misrepresentation with respect to the claim amount; in any event, it is doubtful whether these causes of action based on the claim amount could be maintained.  The second amended complaint alleges only that Minnesota Life falsely represented that the policy covered “accidental death as a result of asphyxia from choking.”

The court dismisses the fraud-based causes of action.
Williams suggests that she purchased the policy “based on Minnesota Life’s representations and assurances” that the policy “covered Plaintiff for all perils including that of accidental death as a result of asphyxia from choking.”  It is implausible that the parties discussed before the policy purchase and issuance the specific manner of Williams-Few’s future death, especially given the absence of allegations about these discussions.  Williams may replead, but only if she can allege consistent with Rule 11 that before the policy was purchased, Minnesota Life represented to her that the policy covered death from asphyxia from choking in the type of accident in which Williams-Few would later perish.
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