Dallas Fort Worth Insurance Lawyer Blog

Fallen Tree Damage To Roof – Damage Segregation

January 21, 2023 | Mark S. Humphreys

The law clearly in Texas clearly places the burden on segregating damages on the insured. This issue is discussed in a 2022 opinion issued by the Northern District of Texas, Dallas Division. The styled of the opinion is Benham Bagheri v. State Farm Lloyds.

This is a first-party insurance coverage action by Bagheri alleging a claim for breach of a homeowners insurance policy and extra-contractual claims in connection with damage to his residence caused by a large falling tree. State Farm moves for summary judgment, contending that Bagheri’s breach of contract claim must be dismissed because he has not provided the jury a reasonable basis to segregate damage attributable solely to the covered event, as Texas law
requires, and that he has failed to produce evidence of actions by State Farm that, absent a
breach of contract, are sufficiently extreme to enable a reasonable jury to find in his favor on his extra-contractual claims. For the reasons explained, the court grants State Farm’s
motion and dismisses this action with prejudice.

Bagheri, a homeowner and State Farm policyholder, filed a claim in 2020 after his residence was damaged by a large falling tree. State Farm inspected the residence and issued a payment that Bagheri deemed insufficient. Bagheri retained a public adjuster to prepare another estimate and requested that State Farm perform a second inspection. During the second inspection, State Farm determined that some of Bagheri’s claimed damage originated from a 2015 incident in which limbs from the same tree fell and damaged the same part of the house that Bagheri claimed was damaged in 2020. In 2015 Bagheri was insured by Farmers and filed an insurance claim, which Farmers paid, for the damage caused to his residence by the fallen tree limbs.

Is Your Insurance Plan Governed By ERISA?

January 16, 2023 | Mark S. Humphreys

How does an insurance lawyer know whether or not his insurance plan is governed by the Employee Retirement Income Security Act of 1974?

Here is a November 2022 opinion that discusses how to determine whether or not an insurance plan is governed by ERISA. The opinion is from the Western District of Texas, Austin Division, and is styled, Robert Abraham v. Blue Cross And Blue Shield of Texas.

This case is in this Federal Court after being removed there by BCBS. The lawsuit was originally filed in a Justice of the Peace Court.

Life Insurance Policies And Beneficiaries

January 14, 2023 | Mark S. Humphreys

Who is the named beneficiary primary beneficiary under the policy and will that person always be the person who receives the policy benefits is a question many life insurance attorneys are asked by prospective client.

This issue is discussed in a 1981 Eastland Court of Appeals opinion styled, Pilot Life Insurance Company v. Koch. This is a declaratory judgement case.

Pilot sought a judgment declaring it had no duty to pay life insurance proceeds to Lawrence Koch because of the death of his wife. Pilot has issued a group policy to Koch’s employer. The policy afforded life insurance coverage for employees and their eligible dependents. Eligible dependents were defined to include “your husband or wife, unless you were legally separated or divorced.” Pilot alleged that Mr. and Mrs. Koch were legally separated on the date of her death. Koch filed a counterclaim seeking the policy proceeds. The jury found that Mr. and Mrs. Koch were separated at the time of her death. Although that separation was pursuant to a “temporary” court order entered in the pending divorce proceedings between the Koch’s, the trial court entered judgment for Koch notwithstanding the verdict on the theory that under Texas law there is no status of legal separation of a husband and wife before the marriage is dissolved by a decree of divorce.

Life Insurance Benefits And Spouses

January 9, 2023 | Mark S. Humphreys

Are spouses always entitled to life insurance benefits when the other spouse dies? Life insurance lawyers need to be able to discuss this with prospective clients.

One spouse can designate his or her estate as the beneficiary of the policy, at the expense of the other spouse, absent any showing of actual or constructive fraud. This was discussed and made clear in the 1994 Fort Worth Court of Appeals opinion styled, Street v. Skipper.

Policies may contain provisions automatically divesting a spouse of any interest in the proceeds, if the parties are “legally separated” or divorced. This was discussed in the 1981 Eastland Court of Appeals decision styled, Pilot Life Insurance Co. v. Koch. Also, the divorce decree may divest the former spouse of any right to the insurance proceeds. This was discussed in the 1987 14th District Court of Appeals in an opinion styled, Novotny v. Wittner. By statute, a divorce invalidates any pre-divorce designation of the former spouse as beneficiary, unless the former spouse is redesignated. If the pre-divorce designation is invalidated, the proceeds go to any alternate beneficiary or to the insured’s estate. If the insurer pays the former spouse based on an invalidated designation, the insurer is liable to pay the proper beneficiary. This is found in the Texas Family Code, Section 9.301.

Hail Claims – What Caused The Damage

January 7, 2023 | Mark S. Humphreys

Hail damage claims are a frequent source of litigation. The insured says the damage occurred in the last storm. The insurance company says the damage is wear and tear or occurred in another storm under a different insurance policy.

The argument about when and how the hail damage occurred generally deals with the legal question known as “concurrent causation.” This is discussed in a 2022, opinion from the Western District of Texas, Austin Division. The opinion is styled, Marina Club Condominium Association vs. Philadelphia Indemnity Insurance Company.

This is a summary judgment opinion. Plaintiff has sued for breach of contract and for insurance code violations. The Court ruled in favor of Defendant on the insurance code violations but denied the summary judgement for the breach of contract claim.

Suing Adjuster And 543A.006(b)

January 2, 2023 | Mark S. Humphreys

Suing insurance adjusters has been made clearer after the courts have made rulings interpreting Texas Insurance Code, Rule 542A.006(b). This is addressed further in a 2022, magistrate’s ruling from the Northern District of Texas, Abilene Division. The opinion is styled, David Buttross d/b/a FL20, Inc. vs. Great Lakes Insurance SE.

This opinion arising from a Rule 12(b)(6) motion to dismiss. The motion is based on 5th Circuit rulings regarding the interpretation of Texas Insurance Code, Section 542A.006(b).

Valdez does not attack the sufficiency of the factual allegations in Plaintiff’s Complaint, but rather argues that the Plaintiff’s claim against her is foreclosed by state law, specifically because of Great Lakes’s election under Section 542A.006. As a general matter, the Fifth Circuit has determined that Rule 12(b)(6) motions to dismiss typically cannot be granted on affirmative defense grounds unless a successful affirmative defense appears clearly on the face of the pleadings.

Suing Insurance Agent

December 31, 2022 | Mark S. Humphreys

Suing insurance agents who do wrong is something an insurance lawyer needs to look at closely. Here is a 2022, opinion from the Southern District of Texas, McAllen Division, that deals with an insurance agent. The opinion is styled, J & G Trejo Enterprises, Inc. d/b/a Best Medical Supply vs. Western World Insurance Company.

This is an opinion decided on a motion for summary judgment.

The loss here is an MRI machine held off premises that was destroyed in a fire on August 21, 2021. Due to a sub–limit of liability for business personal property held off–premises, Defendant paid only the cap ($10,000.00) on the claim, whereas Plaintiff assessed its own actual loses at around $200,000.00.

Attorney Handling Life Insurance Claims That Are Denied – Beneficiary?

December 26, 2022 | Mark S. Humphreys

For attorneys handling life insurance claim, a 1998, opinion from the Corpus Christi Court of Appeals is a good read. The opinion is styled, Camp v. Camp.

In this opinion, Rebecca Camp (“Rebecca”) appeals a summary judgment denying her the proceeds of her deceased husband’s term life insurance policy. Rebecca alleges the trial court erred in applying the “inception of title” rule to award the life insurance proceeds to the beneficiary named in her husband’s policy, which was purchased before his marriage to Rebecca.

John Camp (“John”) received the life insurance policy at issue as an employment benefit while he was still single and without children. He named his mother, Mary E. Camp (“Mary”), beneficiary of the policy. He did not change the insurance policy’s beneficiary designation to wife Rebecca after they were married. Premiums from the policy were paid from John’s employment earnings during the years of his marriage to Rebecca until his death. Rebecca sued for a declaratory judgment against Mary as to the ownership of the policy. She claimed John’s failure to name her as a beneficiary under the policy constituted a constructive fraud on the community estate.

Life Insurance Denial Attorney – Exclusions

December 24, 2022 | Mark S. Humphreys

Life Insurance cases run a wide gamut of issues. Here is a 1997, Austin Court of Appeals decision that deals with the denial of life insurance benefits due to an aviation exclusion. The style of the case is, Board of Trustees of the Employees Retirement System of Texas v. Linda Benge.

Linda is the beneficiary under the life insurance policy at issue in this case. The policy is an Accidental Death policy and contained an exclusion for air travel or flight. The insured, Mr. Hury, flew his plan in an air show and upon landing his plane, went into a “ground loop” before stopping on an adjoining runway. Another plane, while landing, collided with the plane of the insured killing the insured.

The beneficiary of the insured made the claim for benefits which was denied due to the exclusion. A Judge ruled in favor of Linda and this appealed followed. This Court ruled in favor of the insurer.

Attorneys Who Handle Bad Faith Claims – What The Court Looks At

December 19, 2022 | Mark S. Humphreys

“Bad Faith” attorneys need to read this 2020 opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Macklin Keller v. State Farm Lloyds.

Keller had property insurance with State Farm. Keller made a claim for hail storm damage. Keller sued State Farm alleging, among other things, improper handling of the claim and for allegations of bad faith and statutory violations of the Texas Insurance Code. State Farm filed a motion for summary judgment on the bad faith and statutory violations.

An insurer holds a duty to deal fairly and in good faith with its insureds. An insurer breaches this duty and will be liable if it knew or should have known that it was reasonably clear that the claim was covered. Consequently, under this reasonably-clear standard for determination of liability, an insurer breaches its duty of good faith and fair dealing by denying a claim when the insurer’s liability has become reasonably clear.