Insurance lawyers need to read this November 2023, opinion from the Southern District of Texas, McAllen Division.  It is styled, Bertha Salinas v. State Farm Lloyds.
The relevant facts are undisputed,  Bertha sued State Farm for denying her claim against her homeowners policy due to a weather event on July 26, 2020.  State Farm paid some sums of money on the claim but did not pay what Bertha alleges she was owed.  On April 16, 2021, State Farm sent a letter explaining it was denying further payment on the claim.  Upon receipt of the letter, Bertha invoked the appraisal provision under the policy.  State Farm participated in the appraisal but did so under a reservation of rights.  In the appraisal process an umpire ultimately ruled against State Farm on March 30, 2023.  The attorney for Bertha sent a written inquiry about payment of the appraisal.  On June 30, 2023, State Farm stated they would not be paying the appraisal award.  State Farm argued about problems with the appraisal.  Bertha filed suit on July 18, 2023.
State Farm moved for summary judgment on the case due to the statute of limitations having run on two years after their April 16, 2021, thus, the filing date of July 18, 2023, was too late.

When can a person recover attorney fees in an insurance lawsuit?  There is not an easy answer to that question.  It is dependent on the facts of the case and the theories of law being alleged against the insurance company.
A 2024 opinion from the Southern District of Texas, Houston Division, addresses this issue when the claim is filed invoking Texas Insurance Code, Section 542A.003(a) and 542A.007(d).  The style of this opinion is, Ashley and Walter Burke v. Liberty Mutual Insurance Company.
The Burks (Plaintiffs) filed this action against Liberty for breach of contract, common law bad faith, violations sections 541 of the Texas Insurance Code, and violations of the Texas DTPA.  Plaintiffs allege that they sent a presuit letter to Liberty on January 24, 2022, outlining Plaintiffs’ alleged damages and expenses pursuant to Section 542A.003.

A typical exclusion found in accidental death policies is an exclusion for death resulting from aviation actions.  This exclusion is discussed in a 1997 opinion from the Austin Court of Appeals.  The opinion is styled, Board of Trustees of Employer’s Retirement System of Texas v. Benge.
The facts of this case show that the insured flew his plane in an air show.  When he landed, his plane went into a “ground loop,” turning completely around before coming to a stop in the neighboring runway.  Another plane collided with the insured’s plane.  The insured suffered injuries resulting in his death.  The insured’s widow sought accidental death benefits.  The carrier denied recovery based upon the policy’s aviation exclusion.  After a contested case hearing, the Board denied the claim in a Final Order.  The insured’s widow sought judicial review.  The district court upheld the Board’s finding that the insured had been engaged in air flight or travel which was excluded, but remanded on other grounds.  The Board and the insurer appealed.
On appeal, the Court of Appeals found that although the plane had landed, the insured had not disembarked and, therefore, the insured was still engaged in travel or flight.  The policy excluded “travel or flight in any vehicle or devise for aerial navigation, including boarding or alighting therefrom.”  Even though the plane was standing still on the runway, the insured had not disembarked.  The exclusion defines travel or flight as including boarding and alighting from the plane.

What if an insured is killed while committing a burglary?  Is that covered in the policy as an accident?
A 1997, Dallas Court of Appeals opinion responds to this question.  The opinion is styled, Grant v. Group Life & Health Insurance Company.
Grant used a pry bar to break into a residence of Stokes.  When Grant entered the residence Stokes shot him five times, killing him.  Grant’s wife sued Group Life to recover benefits under an accident policy for the death of her husband.  Group Life moved for summary judgment o the basis that Grant died while committing a burglary and, therefore, his death was not accidental.  The trial court granted the summary judgment and Grant appealed.

Is it suicide or an accident?  Here is a 1998, Austin Court of Appeals opinion styled, Butler v. Group Life And Health Insurance Company discussing this topic.
During a social occasion, the decedent and a number of his friends picked up an unloaded gun, and began to point the gun into their mouths and pull the trigger.  At some point, ammunition was placed into the gun.  Decedent did not know this.  After the gun was loaded, but while decedent still believed it was not loaded, decedent picked up the gun, pointed it in his mouth, pulled the trigger and killed himself.  Decedent’s beneficiary made a claim for life insurance benefits, accidental death benefits and attorney’s fees and interest under the Prompt Payment of Claims Act.  The policy in questions was issued by Group Life and Health Insurance Co. under the terms of the Texas Employees Uniform Group Insurance Act (the Act).  The Board administering the policy denied the policy because decedent died as a result of intentionally self-inflicted injuries and because his death was not accidental.  The district court affirmed and Butler appealed.
Accidental death and life benefits are payable.  The claims under the Prompt Payment of Claims Act and attorney fees remained denied.

Here is a 1999 case where the named beneficiary of a life insurance policy alleges the insured was not competent to cancel the policy.  The opinion is from the United State Northern District of Texas.  It is styled, Benbow v. All American Life Insurance Company, et al.
All American Life Insurance Company and General American Life Insurance Company each insured Daniel Benbow under whole life insurance policies that provided coverage of $100,000.  Approximately seven months before Daniel’s death, letters were sent to both carriers requesting cancellation of the policies and further requesting that the carriers remit any accumulated cash value of the policies.  Both carriers honored the request and issued checks to Daniel for the current value of the policies.  After Daniel’s death, Diana Benbow contacted the carriers and notified them that Daniel suffered from a bipolar disorder, and she requested that the carriers deem the cancellation of the policies to be invalid.  The carriers contended that the policies had been surrendered, and they refused to pay the claim for benefits.  Diana then sued both carriers in state court alleging breach of contract and violations of the Texas Insurance Code.  Thereafter the carriers moved for summary judgment on all causes of action.
The motions for summary judgment were granted.  With regard to the insurance code violations, the carriers timely acknowledged the claim for benefits.

Here is a 1994 opinion dealing with the Texas Slayer Statute.  The opinion is from the 14th Court of Appeals and is styled, Adams v. Aetna Life Insurance Company.
The insured was murdered in 1986.  Her husband was initially suspected of the murder, but was cleared by the county sheriff’s department.  After the husband was absolved by the sheriff’s department, Aetna paid him as the named beneficiary on the life insurance policies.  Three years later, it was established that the husband did kill the insured, and the husband was incarcerated.
The grandmother brought suit on behalf of the minor children against the life insurance carriers for wrongful payment of insurance benefits to the husband.  Pursuant to the Slayer Statute of the Texas Insurance Code, section 1103.151, the interest of the beneficiary in a life insurance policy is forfeited when the beneficiary is the principal or an accomplice is willfully bringing about the death of the insured.  The statute further provides if no contingent beneficiary is named, then the nearest relative of the insured shall receive said insurance benefits.  The Plaintiffs alleged that the insurance carriers had constructive notice of their adverse claims and that the companies had acted in bad faith by not conducting a reasonable investigation.

Here is a 1997, Waco Court of Appeals opinion that discusses an issue related to changes to the named beneficiary because of “undue influence.”
T.J. Clark could not read or write.  He relied upon Cobb, his wife’s niece, to take care of his financial affairs for over 20 years.  Clark’s will provided for the remainder of his estate passing to Cobb.  Additionally, Cobb was the beneficiary of three life insurance policies.  Over time, Clark expressed concerns about his niece, Justice, and complained about how she bothered him about his will.  When Clark was close to death from prostate and lung cancer, he was provided morphine.  Additionally, he required oxygen from a tank to help him breathe.  In the last few days of his life, Justice was able to secure a change in beneficiary under the will, as well as a change of beneficiary under the life insurance policies, substituting her for Cobb.  A jury found that Justice unduly influenced Clark to change his will and life insurance beneficiary designation.  The trial court awarded a judgment notwithstanding the verdict, and Cobb appealed claiming the trial court erred in finding no evidence of undue influence, as well as its finding that the finding of undue influence with regard to the life insurance beneficiary designation was immaterial.
The judgment of the trial court is reversed and the case remanded for entry of judgment in favor of Cobb.  The factual circumstances of the case as a whole revealed that Justice unduly influenced Clark to change his will and life insurance beneficiary designation.  A former beneficiary may bring suit to contest a change his will and life insurance beneficiary designation.  A former beneficiary may bring suit to contest a change in beneficiary on the basis that the change was accomplished as a result of undue influence exerted against the insured.  Equity may entertain jurisdiction on the suit to set aside a change and to enjoin the payment of the policy to the substituted beneficiary.  The original beneficiary may also sue the second beneficiary for damages, or charge the second beneficiary as constructive trustee of the proceeds.

What happens if the beneficiary of a policy does not have an insurable interest in the life of the insured?  Is the policy still valid?  If not, who gets the life insurance proceeds?
Here is a 1998 opinion from the Tyler Court of Appeals that addresses this issue.  The opinion is styled, Stillwagoner v. Travelers Insurance Company.
The decedent was a registered nurse employed by Advantage Medical Services, Inc.  Unbeknownst to the decedent’s family, the employer took out a $200,000 life insurance policy insuring against accidental death, dismemberment and total disability from Travelers designating Advantage as the beneficiary of the policy.  Advantage purchased such life insurance policies covering all of its employees.  The decedent was killed in a car accident while driving a company car.  Although Travelers disputed that the decedent was in the course and scope of her employment at the time of her death, Travelers eventually settled with Advantage and paid Advantage $190,000.  The decedent’s husband discovered the policy and sued Advantage and Travelers.  Judgment in favor of Advantage and Travelers is reversed and rendered.  Advantage did not have an insurable interest and, therefore, the proceeds belong to the decedent’s estate.

Failure to provide written notice of a claim to life insurance proceeds can prove fatal to being able to receive those proceeds.  This is what happened in the 1995, Fort Worth Court of Appeals opinion styled, Hunt v. Jefferson-Pilot Life Insurance Co.
Jefferson Pilot issued a life insurance policy on the life of Hunt in 1989.  Elizabeth Hunt was listed as the primary beneficiary.  In 1990, the Hunts were divorced and Ms. Hunt became Ms. Berks.  Hunt died in 1991 without making any changes to the beneficiary designation on his policy.  Eleven days later, Berks submitted a claim for proceeds under the policy.  Jefferson-Pilot paid the benefits to Berks on October 16, 1991.  Plaintiff, the heir of Hunt, brought this action against Jefferson-Pilot based on the old Section 3.632 of the Texas Family Code, which is now Section 9.301(c)(1) which states a designation of insurance benefits to a spouse is invalidated by a divorce or annulment subsequent to such designation.  The old Section 3.362 and current section also states that an insurer is not liable for payment of the proceeds of a policy to an ex-spouse unless:  (1) before payment of the proceeds the insurer receives written notice at the home of the insurer from an interested person that the designation is not effective under this section, and (2) the insurer has not interpleaded the proceeds into the Registry of the Court.
Similarly, the old art. 3.48 of the Texas Insurance Code discharges the insurer from liability under the policy in the absence of the receipt by it of notice of an adverse claim to the proceeds of the policy from one having a bona fide legal claim.  Accordingly, even if the insurer had received a copy of the divorce decree, it would have only provided Jefferson-Pilot with constructive notice which does not constitute written notice under the old Family Code or the old Insurance Code.  Therefore, Jefferson-Pilot has no liability to plaintiff.
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