Rufina Reyes Yanez v. American General Life Insurance Company
04-15-00548-CV
| Tex. App. | Nov 18, 2015Background
- Rufina Reyes Yanez (beneficiary) sued Old Line/American General for $1,000,000 life‑insurance proceeds after Julio A. Yanez died on May 29, 2001; policy No. MM0112648 issued Oct. 13, 2000.
- Plaintiffs allege insurer knew of insured’s risk (smoker, hypertension), induced consolidation of prior coverage, and later denied the claim alleging material misrepresentations in the application (answers about high blood pressure).
- Causes pleaded: breach of contract, detrimental reliance/ fraudulent inducement/estoppel, DTPA and Texas Insurance Code violations (unfair settlement practices), common‑law bad faith (breach of duty of good faith and fair dealing), negligence, and claims for statutory penalties, treble/DTPA damages, exemplary damages, interest, and attorneys’ fees.
- Procedural history: extensive pretrial discovery and motion practice in Webb County (2002–2005). Later, a summary‑judgment order (May 13, 2015) was entered for defendant and a motion to set aside was denied (July 13, 2015). Appellant filed a timely notice of appeal (Sept. 3, 2015) and moved to reinstate the appeal, alleging clerks’ record omissions (docket sheet and a July 10, 2015 motion for judicial notice showing insurer received notice of insured’s death in 2001).
- Appellant contends the District Clerk omitted key records that show insurer learned of the insured’s death in 2001 (contradicting insurer’s claim it learned in 2003), and asks the appellate court to reinstate the appeal rather than lose appellate rights on procedural technicalities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Coverage: whether policy proceeds are payable despite insurer’s asserted misrepresentations | Yanez: insurer knew insured’s health risks, induced consolidation, insurer should not rescind after causing insured to lapse prior coverage; coverage owed | Old Line: insured made material, fraudulent misstatements (re: treatment for high blood pressure) that void or permit rescission of the policy | Trial court granted summary judgment for defendant (policy rescinded/coverage denied); appellant seeks review on appeal (reinstatement motion ongoing in supplement) |
| 2) Misrepresentation defense: whether insurer can rely on alleged misstatements as a defense | Yanez: any false answers were innocent or immaterial; insurer had knowledge of risks and issued policy regardless, so cannot later deny on that basis | Old Line: insured intentionally or fraudulently misrepresented medical history; insurer relied on application to underwrite and may deny | Texas law requires insurer to plead and prove misrepresentation and intent; factual dispute over insurer’s knowledge and reliance presented (trial court resolved in favor of insurer on summary judgment) |
| 3) Extra‑contractual claims (DTPA/Insurance Code/bad faith): are plaintiffs entitled to statutory, treble, and exemplary damages for unfair practices and bad faith? | Yanez: denial and the claims handling were unfair, deceptive, and in bad faith; entitles plaintiffs to DTPA, Insurance Code penalties, treble/additional and exemplary damages | Old Line: denial was legally justified by application misstatements and reasonable investigation; liability not reasonably clear | Plaintiffs pleaded statutory and common‑law bad faith; the trial court disposed of claims in defendant’s favor on summary judgment; appellate reinstatement seeks review of that disposition |
| 4) Appellate procedure / Clerks’ Record omissions: whether appellant’s appeal must be reinstated because the clerk’s record omitted documents material to timeliness/grounds for relief | Yanez: clerk omitted docket sheet and a July 10, 2015 motion for judicial notice showing insurer was notified in 2001 — omission threatens loss of appeal; reinstatement appropriate under equitable principles (cites Verburg) | Clerk/Respondent: procedural rules and timelines govern appeals; omissions do not automatically toll deadlines absent showing of harm or excusable neglect | Appellant moved to reinstate the appeal and provided exhibits; court cited Verburg (equitable relief against hyper‑technical forfeiture). The supplement asks the appellate court to reinstate; outcome not resolved in the supplement record provided |
Key Cases Cited
- Verburg v. Dormer, 959 S.W.2d 615 (Tex. 1997) (courts may provide relief from procedural forfeiture in appropriate circumstances to prevent loss of substantial rights).
- Mayes v. Massachusetts Mut. Life Ins. Co., 608 S.W.2d 612 (Tex. 1980) (elements insurer must prove to rescind for misrepresentation).
- Darby v. Jefferson Life Ins. Co., 998 S.W.2d 622 (Tex. App.—Houston [1st Dist.] 1999) (insurer’s knowledge of falsity defeats reliance defense; fraud/misrepresentation defenses require proof of intent).
- Estate of Diggs v. Enterprise Life Ins. Co., 646 S.W.2d 573 (Tex. App.—Houston [1st Dist.] 1982) (intent to deceive cannot be presumed from material misstatements absent warranty or collusion).