Dallas Fort Worth Insurance Lawyer Blog

ERISA And Contributing To Impairment

March 12, 2015 | Mark S. Humphreys

North Richland Hills insurance lawyers who handle ERISA claims need to read the 2015, 5th Circuit Court of Appeals opinion styled, George v. Reliance Standard Life Insurance Company. There are a couple of issues in the case but only the issue in the title above will be discussed here.

George served as an Army helicopter pilot. In 1985 George was injured in a helicopter crash, and doctors were forced to amputate one of his legs at the knee. George retired in 1987. After retiring, George began flying helicopters for PHI, Inc. PHI purchased a long-term disability insurance policy for George from Reliance (“RSL”). George flew for PHI for more than twenty years. But in 2008 he began experiencing severe pain at the site of his amputation, which prevented him from safely wearing his prosthetic limb. As a result, he was no longer able to operate the foot controls of a helicopter, and he was forced to retire from flying. George filed a claim for long-term disability benefits with RSL.

The Policy contains two definitions of “Totally Disabled” and “Total Disability,” which apply during different time periods. The Policy also contains a relevant limitation provision (the “Exclusion Clause”). The Exclusion Clause provides that “Monthly Benefits for Total Disability caused by or contributed to by mental or nervous disorders will not be payable beyond an aggregate lifetime maximum duration of twenty-four (24) months.” The Policy defines “Mental or Nervous Disorders” to include “anxiety disorders” and “mental illness.”

Disability Claims And ERISA

March 10, 2015 | Mark S. Humphreys

De Sota insurance lawyers who handle ERISA claims need to read this opinion issued by the United States 5th Circuit Court of Appeals. It is styled, Robert George v. Reliance Standard Life Insurance Company.

Reliance denied George’s claim for benefits for two reasons, one of which will be discussed here.

George served as a helicopter pilot in the United States Army. In 1985 George was injured in a helicopter crash, and doctors were forced to amputate one of his legs at the knee. George retired from military service in 1987. After retiring, George began flying helicopters for PHI. PHI purchased a long-term disability insurance policy for George from Reliance (“RSL”). George flew for PHI for more than twenty years. But in 2008 he began experiencing severe pain at the site of his amputation, which prevented him from safely wearing his prosthetic limb. As a result, he was no longer able to operate the foot controls of a helicopter, and he was forced to retire from flying. At that time, he was earning $75,495 per year. George filed a claim for long-term disability benefits with RSL.

Underinsured Coverage And Pain And Suffering

March 8, 2015 | Mark S. Humphreys

Mansfield lawyers who handle underinsured motorist claims will make claims for medical bills, lost wages, and paid and suffering. So,what about the paid and suffering aspect of a claim – is it compensable? The general rule is Yes. However, a Houston Court of Appeals case styled Calderon v. Home State County Mutual Insurance Company is worth reading with regards to pain and suffering as an element of damages.

After he was involved in a car accident, Cesar Calderon sued Home State to recover under his underinsured motorist policy. A jury awarded Calderon some of the medical expenses that he claimed to have incurred following the accident, but it denied his request for past and future pain and mental anguish. Calderon contested the jury award of zero damages for pain and mental anguish as against the great weight and preponderance of the credible evidence. Finding no error, this court affirmed the jury finding.

Christine Verhardt was driving when took her eyes off the road for four to five seconds, and rear-ended Calderon, who had stopped due to traffic congestion. Immediately after the accident, Calderon was dizzy and felt pain in his shoulder, neck, and legs. About 20 minutes later, he felt pain in his back, and had trouble standing. An ambulance transported him to the emergency room. The EMS report noted lower back pain with no abnormalities, and upper right leg pain. The damage to Calderon’s car cost $3,610.92 to repair.

Hail Claims – Removal To Federal Court

March 7, 2015 | Mark S. Humphreys

Mansfield attorneys handling hail damage claims can tell you that the insurance companies are always trying to have lawsuits in Federal Court rather than State Court. Here is another opinion on that issue from the US Court, Northern District, Dallas Division. The style of this case is Ocotillo Real Estate Investments I, LLC, v. Lexington Insurance Company, et al.

This action arises from an insurance claim Ocotillo submitted to Tudor Insurance and Lexington Insurance Company regarding property loss from hail. Ocotillo filed suit against Defendants in state court. Ocotillo alleged claims for violations of the Texas Insurance Code, violations of the Texas Deceptive Trade Practices Act, breach of contract, and negligence. The carriers removed the state court action to Federal Court. Ocotillo moved to remand.

A defendant may remove a state court action to federal court if he establishes the federal court’s original jurisdiction over the action. It is the defendant’s burden to establish the existence of federal jurisdiction. Thus, to remove a case, a defendant must show that the action either arises under federal law or satisfies the requirements of diversity under 28 U.S.C. § 1441(b). Because removal raises significant federalism concerns, the removal statute is strictly construed and any doubt as to the propriety of removal should be resolved in favor of remand. A district court must remand a case if, at any time before final judgment, it appears that the court lacks subject matter jurisdiction. 28 U.S.C. § 1447(c).

Hail Claim – Declaratory Judgment

March 5, 2015 | Mark S. Humphreys

Burleson lawyers handling hail damage claims will know that insurance companies try to get cases into Federal Court. The US District Court, Northern District of Texas, Dallas Division issued an opinion in a case, illustrative of this tactic. The style of the case is, Tudor Insurance Company, et al. v. Ocotillo Real Estate Investments I, LLC.

This is declaratory judgment action in which Tudor and Lexington Insurance Company seek a declaration that they have no duty to provide coverage to Ocotillo for losses resulting from alleged hail damage to Ocotillo’s property. In its motion to dismiss, Ocotillo argues that because it has filed a state court action that will resolve all issue between the parties, the Court should abstain from considering this case.

Ocotillo filed the State Court Action on August 1, 2014. In the State Court Action, Ocotillo alleges claims against Carriers and additional defendants for violations of the Texas Insurance Code, violations of the Texas Deceptive Trade Practices Act, breach of contract, and negligence. Carriers timely removed the State Court Action. By separate order of this date, the Court denied the motion to remand on the grounds that Ocotillo had improperly joined in-state defendants.

Storm Damage Claims

March 3, 2015 | Mark S. Humphreys

Dallas insurance lawyers handling storm damage claims need to dread a recent opinion from the US District Court, Southern Division Texas, Houston Division. The opinion is styled, Nasti v. State Farm Lloyds, et al.

This is an insurance case arising from alleged storm damage to Nasti’s home which State Farm has filed a motion for summary judgment regarding. After the storm, Nasti was approached by Manley of Mac Roofing, who was offering free roof inspections to storm victims in the neighborhood. Both of Nasti’s neighbors on each side already had roofs replaced because of the storm. Nasti reported his claim to State Farm and requested an inspection with Mr. Manley present. State Farm adjuster Stewart Brown inspected Nasti’s roof and reported: “Reviewed 30yr fiberglass shingles for wind and hail damage with Mac’s Roofing present…. I did find damage that would be consistant w/ wind damage to the back left slope…. Inspected interior gameroom /entry and dining room and found water damage to ceilings.” Brown estimated the covered damage to be $3,107.54, less than the deductible of $6,584.00. Nasti requested a reinspection with a different adjuster. State Farm adjuster Dwight Johnson inspected Nasti’s roof and reported: “I inspected the roof with the contractor. My inspection revealed no evidence of storm related damage to the roof system…. The Shingle is a heavier 40 year shingle.” Despite finding no storm damage, Johnson did not alter Brown’s estimate of $3,107.54 damage. Nasti’s expert adjuster Shannon Kimmel inspected Nasti’s roof and reported:

I have visited Mr. Nasti’s home and inspected the damage to his roof. There is no question that Mr. Nasti’s roof was damaged by the severe wind and hail storm that hit The Woodlands, Texas, in June 2012…. I have adjusted thousands of these types of claims for various insurance companies, including State Farm…. In my opinion and based on my extensive experience as a former State Farm adjuster, inspections by Stewart Brown and Dwight Johnson were inadequate and unreasonable…. Photographs in the claim file clearly prove up covered damages resulting from wind and hail…. Mr. Brown’s and Mr. Johnson’s inspections and Mr. Brown’s damage estimate that was essentially rubber- stamped by Mr. Johnson-despite the fact that his findings contradicted Mr. Brown’s estimate-underestimated and/ or ignored obvious covered damaged [sic] that a reasonable adjuster, acting in good faith, would not have ignored.

ERISA Claims

March 1, 2015 | Mark S. Humphreys

Fort Worth insurance attorneys handling ERISA claims need to read this case from the US 5th Circuit Court of Appeals. It is styled, Killen v. Reliance Standard Life Insurance Company.

Killen worked for Covenant from 2002 until March 2009, when she claimed that neck, shoulder and upper back pain made it too difficult for her to continue. Reliance Standard administered Covenant’s long-term disability plan which is governed by ERISA.

Killen collected benefits from June 2009 to June 2011. During this time, Killen separately qualified for Social Security disability benefits. To continue receiving benefits under the Plan after two years, a claimant must be “totally disabled” such that she is incapable of performing the material duties of any occupation for which she is qualified by way of education, training, or experience. Under the contract, an insured is totally disabled if “due to an Injury or Sickness he or she is capable of only performing the material duties on a part-time basis or part of the material duties on a Full-time basis.”

Proof Of Loss – Must Be Timely Submitted

February 28, 2015 | Mark S. Humphreys

Mansfield insurance lawyers will tell their clients that a proof of loss must be submitted in a timely manner for losses. A 2015, US Southern District, Galveston Division opinion re-interates this point. The style of the case is, Fennelly v.Texas Farmers Insurance Company.

Following flood damage to his property caused by Hurricane Ike, Fennelly submitted two timely Proofs of Loss to Farmers, his insurer under a Standard Flood Insurance Policy issued through the National Flood Insurance Program. In response, Farmers paid Fennelly about $78,000,000. On August 9, 2009, the FEMA-extended deadline for filing a POL expired. On January 11, 2011, Fennelly filed his third POL for about $112,000.00 more in benefits. Farmers adjusted this claim and approved it in the amount of only about $7,000,000. On January 20, 2011, the adjuster’s supplemental report was sent to FEMA with a waiver request. On January 21, 2011, FEMA approved a waiver for the amount of the loss and scope of the damages outlined in the adjuster’s report. On January 25, 2011, Farmers sent Fennelly a letter informing him that it had approved the $7,000.00 supplemental amount, had rejected the remaining $105,000.00 of his claim and was “reserving all rights and defenses under the policy”; the supplemental settlement check was enclosed. On March 15, 2011, Fennelly demanded an appraisal of the remainder of his claim, but Farmers denied his request on March 22, 2011, because, in its opinion, its disagreement with the scope of damages claimed by Fennelly made an appraisal inappropriate. On January 24, 2012, Fennelly sued Farmers in an effort to recover the remainder of his POL under the policy.

The sole, dispositive issue in this case is whether, as Fennelly argues, FEMA expressly waived any challenge to the entirety of his third POL or whether FEMA’s waiver was, as Farmers argues, limited to only the $7,000.00 portion of the POL approved by Farmers’s adjuster. This Court agreed with Farmers.

Suing Insurance Agents

February 26, 2015 | Mark S. Humphreys

Insurance lawyers in the Dallas and Fort Worth area will tell you that being in a position to be able to sue an insurance agent who has committed acts costing their clients money are sometimes easy targets. Not only are they liable for wrongs they may have committed, but they can also be held accountable for things they did not do.

Insurance agents can be important persons/entities to sue in a lawsuit. Most agents do not work by themselves. They work in an office with other insurance agents and have CSR’s working for them. CSR’s are Customer Service Representatives. Almost any of the people working in an insurance office such as the CSR’s, or anybody in a clerical role or who handles money, faxes/mails policies, gives advice, etc can be considered an agent of the insurance company who provides the policy.

Texas Insurance Code, Section 4001.052(a) says, “a person who solicits an application for life, accident, or health insurance or property or casualty insurance is considered the agent of the insurer issuing a policy on the application and not the agent of the insured in any controversy between the insurer and insured, the insured’s beneficiary or the insured’s dependents.”

Taking Responsibility For Getting Insurance

February 24, 2015 | Mark S. Humphreys

Texas insurance lawyers will sometimes find themselves in a situation where there was no insurance on a piece of property. When this happens, the next question is why isn’t there insurance. Then, who is responsible for getting the coverage. This was the issue in a 1976, Texas Supreme Court opinion styled, Colonial Savings Association v. Taylor. Here is what happened.

This controversy arose because a house owned by, Mr. Taylor, which was destroyed by fire, was not insured. Mr. Taylor sued Colonial, contending that Colonial had gratuitously assumed responsibility for insuring the house and had negligently failed to do so. Trial was to a jury, which returned a verdict with answers favorable to Mr. Taylor, but the trial court entered judgment Non obstante veredicto for Colonial.

The property involved is located at 846 East 26th Street in Houston. There are two houses at this address, an older house near the street and a newer house behind it. Taylor purchased the property in 1967 from Mr. and Mrs. James E. Reynolds, taking title subject to a prior outstanding lien held by Colonial. In consideration for the conveyance Taylor made four over-due payments to Colonial on the Reynolds note which the property secured. Pursuant to the conveyance, Colonial transferred the mortgage loan to Taylor’s name, and he was made all subsequent payments thereon.