Life Insurance Claims And Insurance Code Sections 541.051 And 541.061

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.

Farmers filed the Motion for Partial Dismissal on various causes of action and the Insurance causes of action are discussed here.

Sections 541.051and 541.061 of the Texas Insurance Code prohibit misrepresentations made in connection with an insurance policy.   Additionally, the elements of a DTPA claim are: (1) the plaintiff is a consumer; (2) the defendant committed acts in connection with the purchase or lease of any goods or services; (3) the defendant’s acts were false, misleading or deceptive; and (4) the acts were a producing cause of plaintiff’s injuries.”

Wharlest’s factual allegations are insufficient to state a claim under the DTPA or Sections  541.051 or 541.061 of the Texas Insurance Code because Wharlest has not sufficiently alleged a deceptive actor misrepresentation.  For one, some of the factual allegations Wharlest relies upon do not appear in Wharlest’s amended complaint—for example, the complaint does not allege that Farmers “disregarded the answers and information provided in” Crystal Jackson’s life insurance application; nor does it allege that Wharlest and Crystal Jackson made payments in reliance on Wharlest’s acceptance of the application for the Policy.

What the amended complaint does say is that “Defendant conducted an outcome-oriented investigation,” and that “had Defendant bothered to conduct a proper and reasonable investigation, it would have learned that there was no legal and/or factual basis to delay and refuse payment to Plaintiff and/or seek to void/cancel the Policy.”  The amended complaint further alleges various misrepresentations and failures on the part of Farmers, but these allegations are devoid of facts detailing the misrepresentations allegedly made.  These allegations are largely composed of legal conclusions couched as factual allegations, formulaic recitations of the elements of a cause of action, generic paraphrases of statutory language, and conclusory statements without supporting facts.

Thus, because he has not alleged a misrepresentation or deceptive act, Wharlest has failed to state a claim under the DTPA or Texas Insurance Code Sections 541.051 and 541.061.  These claims are Dismissed Without Prejudice.


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