Insurance policies need to be read carefully and complied with.  The reason is that most times the courts are going to enforce the insurance policy provisions.  This is illustrated in a 2019 opinion from the Southern District of Texas, Galveston Division.  The case is styled, Benjamin Ford, et al v. United Property & Casualty Insurance Company, et al.

The Fords had a homeowners policy with United.  The Fords filed a claim with United for damage to their home resulting from a hurricane.  United inspected the claim and offered a cash settlement of $7,105.74.  The Fords rejected the offer and sought another inspection, after which, United made a “supplemental payment of $31,053.89.  This payment was also rejected causing United to invoke the appraisal provision in the homeowner’s policy on January 18, 2018.

Two months later, the Fords sent a pre-suit demand letter to United.  United responded by invoking the appraisal right again.  The Fords then filed this lawsuit.  United filed a motion with the court seeking an Order that appraisal be compelled.

One of the responsibilities for an insured who has a claim is to promptly report the claim to his insurance company.  This is illustrated in this 2019, Southern District of Texas, Houston Division, opinion styled, Bobwhite Rentals, LLC v. National Liability & Fire Insurance Company.

This is a summary judgment case in favor of National.

One of Bobwhite’s customers had property destroyed by a fire on March 6, 2015, while the property was on Bobwhite’s premises.  Bobwhite reported the fire to its insurance broker the same day.On April 30, 2015, Bobwhite paid $50,000 to settle the customer’s claim.  Over a year later, the fire and the damage to the customer’s property was reported to National.  National issued a reservation of rights letter on July 14, 2016 and began its investigation of the claim and on November 1, 2017, denied the claim saying:

Filing a proof of loss as part of a claim is very basic to all insurance claims.  This issue was a topic in a recent Fifth Circuit opinion styled, Andre Yanez v. American Strategic Insurance Coporation; E-Ins., L.L.C.; FKS Insurance Services, L.L.C.

The lower court granted the insurers motion for summary judgment based on Yanez not submitting a proof-of loss form as required by the federal flood program policy.

This claim arose out of storm in 2016, causing flood damage to Yanez’s property.  Yanez filed a claim and adjusters were assigned to the claim.  Yanez completed a flood field survey and filed a proof-of-loss and was paid for the 2016 flood consistent with the proof-of-loss that was filed.

The Law Office of Mark S. Humphreys, P.C. was able to get a settlement in a life insurance case recently that was not a normal situation.

Texas has a law referred to as the “Slayer Statute.”  This law which is found in the Texas Insurance Code, Section 1103.151, states that if a person named as the beneficiary in a life insurance policy intentionally causes the death of the insured, then that beneficiary is excluded from recovery of the life insurance benefits.  If this happens then according to Texas Insurance Code, Section 1103.152, the life insurance benefits then go to the next person entitled to the proceeds of the policy.

Mark represented the daughter of the insured.

The law in Texas regarding who is excluded from receiving life insurance benefits when the insured has been killed is clear.  Texas Insurance Code, Section 1103.151, says that the named beneficiary forfeits their rights in the life insurance proceeds if the beneficiary is a principal or accomplice in willfully bringing about the death of the insured.

This issue is discussed in this 2019, Southern District of Texas, Houston Division opinion styled, Reliastar Life Insurance Company, P.T., a minor, and D.T., a minor v. Itani Milleni f/k/a Trang Vu.

This is an interpleader case filed by Reliastar, who insured the life of Tuyet Tran.  Reliastar needed this Court to decide whether Trang Vu, Tuyet’s husband and primary beneficiary, or P.T. and D.T., Tuyet’s children and contingent beneficiaries, are entitled to the proceeds.  This suit was instigated because Vu was suspected of murdering Tuyet, which if true, would disqualify him from receiving the insurance proceeds.  Vu was never prosecuted for the death of Tuyet, but a criminal conviction is not a prerequisite for forfeiting the insurance proceeds.

When a claim is denied and the insured has to file a lawsuit against the insurance company, most insurance lawyers prefer to litigate cases in the State or County courts while insurance companies prefer to litigate the cases in Federal Court.

When the insurance company is sued in State Court, the attorney for the insured will also sue the adjuster in an effort to beat the required “diversity jurisdiction” of the Federal Court which is found at 28 U.S.C., Section 1332(a).

This issue was the topic in the 2019, Western District of Texas, Austin Division, opinion styled, Susan Swire and Philip Swire v. Alyssa Kempf f/k/a Alyssa Hodge and Geico County Mutual Insurance Company.  The case was filed in State Court and then removed to Federal Court based on diversity jurisdiction.  The Swire’s argued that Kempf is in fact a Texas citizen and therefore, removal is improper.

Lawyers who handle ERISA cases always have to explain to their clients that in ERISA cases, the administrative process has to be completed before a lawsuit can be filed.  This is illustrated in this 2019 opinion from the Southern District of Texas, Houston Division case styled, Lisa K. Bunner v. Dearborn National Life Insurance Company, et. al.

This case arises out of denial of long-term disability benefits to Lisa contained in her employee welfare benefit plan.  This case is governed by the Employee Retirement Income Security Act of 1974 (ERISA).

The details of this case can be read in the opinion.  What is relevant here is the Court stating / emphasizing the requirement that the administrative process be exhausted prior to filing a lawsuit.

Insurance companies prefer to litigate cases in Federal Court.  Insurance lawyers representing insureds prefer to litigate their cases in State Court.  In the appropriate situation, here is a way to stay in State Court.

This is from the Southern District of Texas, Houston Division, and the case is styled, WEN WIRELESS, INC. d/b/a Cell Spot, Kick Back Wireless v. Amguard Insurance Company.

Wen sued Amguard in County Court and Amguard timely removed the case to Federal Court based on diversity jurisdiction.  Wen filed a Motion for Remand under 28 U.S.C., Section 1441(a) asserting that the Court did not have federal jurisdiction.

The Law Office of Mark S. Humphreys, P.C. is pleased to announce the settlement of a life insurance case wherein Mark was able to recover life insurance benefits for his client.

Mark’s client was the common-law wife of man who had a life insurance policy through his employer.  Texas recognizes these informal marriages in the Texas Family Code, Section 2.401.

Upon the death of the man, Mark’s client made a claim for the life insurance proceeds.  No one had been named as the beneficiary of the life insurance policy  This claim was denied.  The employer asserted there was no formal marriage and any life insurance proceeds went to the estate of the employee.  This man did not have kids and his parents were deceased.  If this man were married to Mark’s client, then all the proceeds would go to Mark’s client.

The Southern District of Texas, Houston Division was presented with an issue that is not seen very often in insurance cases except cases involving uninsured motorist benefits.  The case is styled Lamar Donald, Sr. and Diane Cottrell Donald v Metropolitan Lloyds Insurance Company of Texas.

Lloyds filed a Motion to Sever and Abate.  This Court denied the motion.  Here is why.

Plaintiff’s assert that Lloyds improperly denied or paid their claim for benefits after suffering damage from Hurricane Harvey.  The Plaintiff’s sued sued for breach of the insurance contract and for extra-contractual claims based on the Texas Insurance Code.