Dallas Fort Worth Insurance Lawyer Blog

ERISA And Medical Necessity And Short Term Disability Benefits

July 9, 2017 | Mark S. Humphreys

ERISA lawyers will fight whether a prescribed treatment is medically necessary on a routine basis. The courts will interpret the policies in favor of the insurer. This case is from the Northern District, Dallas Division. It is styled, Charlize Marie Baker v. Aetna Life Insurance Co., et al.

Baker, who is undergoing the process of gender transition from male to female, sued Aetna to recover short-term disability (STD) benefits following breast augmentation surgery, under the employer’s ERISA plan. The Court denied Baker’s claim for benefits.

In considering Baker’s claim, Aetna relied on her medical records, including records from her plastic surgeon, Dr. Harris. The claim documentation forms asked Baker, “What is the primary medical condition that keeps you from working?” Baker responded, “cosmetic procedure.” Aetna denied Baker’s claim on the ground that her surgery was not caused by an illness, injury, or pregnancy-related condition, as required under the STD plan. Baker appealed this decision.

A Person Has To Ask For Policy Benefits To Get The Benefits

July 8, 2017 | Mark S. Humphreys

As strange as this one may seem, it is actually fairly common. This is a Southern District, Houston Division opinion styled, Gavion et al v. ACE American Insurance Company.

In 2009, Gavion swerved into the path of a train. He was driving under the policy of his mother’s employer. A passenger in the vehicle, Jackson, sued Gavion and ACE. ACE was later dismissed from the lawsuit and Gavion never appeared in the lawsuit to fight the claim of negligence against him. ACE was Gavion’s insurance company. Gavion never asked for ACE to defend him in the lawsuit. Jackson then took a default judgment against Gavion and Gavion assigned to Jackson the rights Gavion may have against ACE for not defending him in the lawsuit and then Jackson filed suit against ACE for not defending Gavion.

ACE filed a motion for summary judgment stating they had no duty to defend Gavion because Gavion never asked for help.

ERISA – Role Of Plan Administrator – Discretion

July 6, 2017 | Mark S. Humphreys

The case discussed here is from the Houston Division, Southern District. The style of the case is Connecticut General Life Insurance Company, et al v. Elite Center For Minimally Invasive Surgery LLC, et al. This is a Motion for Clarification.

Connecticut (Cigna) sued under ERISA, Section 502(a)(3) to enforce and redress violations of the healthcare benefit plan terms at issue in this case. The plans purportedly delegate Cigna to serve as the authorized claims fiduciary “to interpret and apply Plan terms,” including “the determination of whether a person is entitled to benefits under the plan and the computation of any and all benefit payments.” The plans also authorize Cigna to collect overpayments made on behalf of the plans by recovering funds or offsetting the overpayment amount from future benefits claims payments.

The Court applied an abuse of discretion standard, asking first if Cigna’s interpretation of the plan was legally correct and then whether Cigna abused its discretion in interpreting the plan language as it did. The Court found that Cigna’s interpretation of the plan was legally incorrect. Despite this, the Court did not rule on Cigna’s ERISA claim because the abuse of discretion question is fact intensive and inappropriate to decide at the motion to dismiss stage.

How NOT To Support A Claim

July 4, 2017 | Mark S. Humphreys

The Fort Worth court of Appeals issued an opinion in May 2017, that illustrates the wrong way to pursue a claim and lawsuit for storm and hail damage. The opinion is styled, Richard Seim and Linda Seim v. Allstate Texas Lloyds and Lisa Scott.

This a motion for en banc reconsideration.

The Seims sued Allstate and the adjuster, Scott for the denial of benefits after the Seims claim of hail and storm damage to their home. The Seims filed suit claiming damage to their property occurred from a August 2013 storm. They then filed an amended petition removing references to the August 2013 storm and asserted the damage stemmed from an April 2007 storm. They amended their petition again stating the damage occurred in April 2007, April 2008, and May 2012. They amended yet again stating the damage occurred in the August 2013 storm. Allstate filed a motion for summary judgment on numerous grounds.

Appraisal Clauses In Policies

July 2, 2017 | Mark S. Humphreys

Either the insurance company or the insured has a right to demand an appraisal in lots of property insurance contracts. The Waco Court of Appeals issued an opinion recently that discusses these appraisal clauses. The case is styled, In Re GuideOne Mutual Insurance Company.

This case is a writ of mandamus complaining of the trial court’s refusal order appraisal to proceed as allowed in the insurance contract.

Appraisal clauses, commonly found in homeowners, automobile, and property policies in Texas, provide a means to resolve disputes about the amount of loss for a covered claim. These clause are generally enforceable, absent illegality or waiver.

ERISA And Abuse Of Discretion Standard

July 1, 2017 | Mark S. Humphreys

Lawyers handling Employee Retirement Income Security Act (ERISA) cases need to read this 5th Circuit opinion. It is styled, Ariana M. v. Humana Health Plan of Texas, Incorporated.

Ariana is a dependent eligible for benefits under the Eyesys Vision Inc. group health plan administered by Humana. The plan’s benefits include coverage for partial hospitalization for mental health treatment. The benefits are payable only for treatments that are “medically necessary.” “Medically necessary” is defined in the plan.

Ariana has a long history of mental illness, eating disorders, and engaging in self-farm. She was admitted to a hospital for various intensive treatment. Humana initially paid for treatment but later refused to do so after having two doctors review the medical treatment using the Mihalik criteria.

Insurance Application – Intent To Deceive

June 29, 2017 | Mark S. Humphreys

Stephenville insurance lawyers know that Credit Life and Disability claims are denied way too often. The reason for denial is almost always the allegation that there was a misrepresentation in the policy application. This issue is discussed in a 1983, Houston Court of Appeals [1st Dist.] opinion. The opinion is styled, Cartusciello v. Allied Life Insurance Company of Texas.

The facts are undisputed. Cartusciello applied for and was issued a policy from Allied Life on March 7, 1978. She died on March 8 from coronary thrombosis with lymphatic leukemia listed as a secondary cause of death. A claim for benefits was made. The claim was denied due to health status misrepresentations in the application.

Allied Life filed a motion for summary judgment which was granted by the Court.

Intent To Deceive – Can Insurance Company Prove It

June 27, 2017 | Mark S. Humphreys

As all insurance attorneys should know, intent to deceive is a requirement that has to be proved for an insurance company to deny a claim based on a misrepresentation. Even when faced with irrefutable evidence of a misrepresentation, intent to deceive still has to be proved. Due to the inherent difficulty in assessing the subjective mental state of an insured, insurance companies have a difficult time establishing this element of the misrepresentation defense. Insurance companies try to take the position that the intent can be proved as a matter of law and rely on two Texas Supreme Court decisions – Odom v Insurance Company of the State of Pennsylvania and Mayes v Massachusetts Life Ins. Co.

Mayes is a declaratory judgment action brought by the insurer based on misrepresentations in the application. The jury in this case concluded that the intent to deceive was not intended. The insurer argued that intent was established as a matter of law because the jury found that the misrepresentations were material to the risk and relied upon by the insurer. The Court agreed with the jury that the misrepresentation was inadvertent.

In Odom, the court made the following statement:

Do Misrepresentations In A Policy Application Make A Difference

June 25, 2017 | Mark S. Humphreys

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.

When Is A Misrepresentation In An Insurance Application Not Material

June 24, 2017 | Mark S. Humphreys

The above question is usually not easy to answer. Aledo insurance lawyers need to read a 1976 case from the Waco Court of Appeals. The opinion is styled, Westchester Fire Insurance Co. v. English.

Posing as husband and wife when in fact they were not married, a couple purchased a house and at closing, also purchased home owners insurance coverage. The house burned down three months later. After the fire, the Westchester learned for the first time that the couple were not married.

The policy provides in part that it ‘shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance, or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.’