JAW The Pointe v. Lexington Insurance: Concurrent Causation and Coverage

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An Anti-Concurrent
Causation Contract Clause

Michael Sean Quinn, Ph.D., J.D.,
C.P.C.U, Etc.

          This is a description of the central issue in the JAW The Pointe, L.L.C. v. Lexington
Insurance Company, a case decided by the
Supreme Court of Texas on April 23, 2015(Cause Number 13-0711).*  Given the context of this case, it will be of
great importance to business property insurance along the Gulf coast for years
to come.  It is important not only to
insureds, courts, and lawyers, but to
brokers as well, so long as there are “concurrent causation” issues potentially
involved. (*Find-able on the website of the Texas Supreme Court and on the Internet at various places.)

            This
case has been heard by a trial court and
jury, before an intermediate court of appeals, and now before the Supreme Court
of Texas. By the time it got to the Supreme Court, it was technically an insurance
bad faith case based upon Texas statutes. However, since the existence of
insurer bad faith, almost always depends on the existence of coverage, the high
Court focused on coverage. I will too, and I will be even more brief.  I will leave almost all of the issues
sketched, at most, and I will refer to the insured as simply JAW; others have
referred to the entity as “The Pointe,” perhaps that brings attention to the
apartment complex that sustained the damages.

            The
JAW’s apartment at issue was damaged by both flood and wind arising out
of Hurricane Ike. The apartment complex had “all risks” [1]
property insurance, and as usual subject to exclusions. It recovered
significant amounts of money from its flood insurer, from an excess carrier and Lexington—amounts already in the many
millions. 

The Lexington policy,
however, also contained a special Lexington “Ordinance and Law Coverage”
endorsement, and JAW wanted compensation under it, since the City of Galveston
was requiring that the buildings of the relevant complex be torn down and
rebuilt.

            The
whole Lexington policy subjected its “all [fortuitous and physical] risks”
coverage to the following exclusion:

We will not pay for loss or damage caused directly or
indirectly by any of the following.  Such
loss or damage is excluded regardless of
any other cause or event that contributes
concurrently or in any sequence to the loss.

The Court states that the passage
just quoted is “at the center of the parties” dispute.

The exclusion goes on to list at
least some specifically excluded causes of loss.  One of them is “flood.”  No damage resulting from a flood to any extent is covered, even if there was something else
involved in the causal process.  Another one is the enforcement of certain types of
ordinances or law, e.g., those “regulating construction, use and repair of any
property” and those “requiring [the] tearing down of property[.]

            There
are two relevant endorsements, however. One of them is entitled “Ordinance or Law Coverage [OLC].” It states in relevant part that if a covered cause of
loss “occurs to covered  building property,” Lexington will pay
“[f]or loss or damage caused by enforcement of any ordinance or law” that meets
various requirements which are relevant here but not in dispute. The most pertinent is a Galveston code requirement
that if a commercial building, including an apartment complex, has sustained
damage of 50% or more of the market value of the building, the building(s) must
be brought into compliance with current code requirements if the ordinance
requires that a building be torn down and brought up to meet specified code
requirements.

            Now
we need to go back to the anti-concurrent cause exclusion.  As applied in
this circumstance, it entails that if both a covered cause of loss and an
excluded cause of loss induces the City to invoke the requirements of the code,
then there is no coverage; it does not matter if a covered cause of loss
participated in damaging the property, so long as the non-covered cause of loss
was involved.  In this case, the cause of loss that was not covered
was the flood waters Ike caused.

JAW spent immense
effort in arguing that since the damage caused by the winds of Ike were covered,
since that cause of loss alone might cause the building to sustain a 50%-or-more
reduction in value, and since Lexington did not prove otherwise, it (JAW) was
entitled to recover from Lexington under the OLC endorsement. 
The Court rejected this view.  It
branded it simply theoretical when what matters are
why did the City official, as a matter of actual empirical fact invoke the
requirements of the statute.  The Court
opined that the evidence conclusively showed that the flood Ike caused played
at least some role in the decision of the city. 
Once that is recognized to be true, the
case is over.

            JAW
seemed to think that since Lexington paid substantial sums based on wind damage,
it was obligated to ignore the
anti-concurrent causation exclusionary clause when it came to the OLC
endorsement. JAW made two related but separable mistakes.

            First,
it didn’t seem to realize that if, arising out of the same storm, wind alone caused some damages while flooding caused other damages;
then the anti-concurrent causation exclusionary rule is not triggered.  Consider the following hypothetical example.
The insured’s building is five stories
tall.  Suppose that water rolls into the
ground and the second floor. Suppose further that wind tears off the roof; rain
comes in; additionally, the wind breaks
some windows on floors four and five though there is no flood damage. Clearly
there is coverage for damages on floors four and five, and there is no coverage
for damages on floors one and two. 

Now finally suppose that some flood
waters lapped up and through the broken windows on the south side of the
building but nothing of the sort happens on the north side.  What was covered and what was not would have
to be divided up, and where the matter was indeterminable and not to be settled, a jury would have to answer.
What’s important to notice here is that that wind caused some damage, and flood
waters caused another. All this was done
separately; there is no concurrent causation problem.

            Second, however, the action of the
city in invoking the ordinance is entirely different.  The decision of the city is the direct cause of JAW’s loss.  Unless the
city ruled that the building had to be torn down and redone,  the loss at issue—the money JAW’s was going to
have to spend, having been legally ordered to spend it—there would be no loss.
The decision of the city is the cause of the loss covered by the OLC
endorsement.  The question now becomes, “What
caused the city to make the decision it did?” To the extent flood, as a matter
of fact, played any role in that decision of the City, then all amounts of
money the City’s decision requires to be spent are not covered. The Court
thought that the evidence “conclusively” showed that exactly this happened. QED
[as we used to say in high school].

                                                              Closing
Remarks

The
courts says that the evidence demonstrates something conclusively.  This is true if and only if the sole focus of
the Court’s attention is on the nature of basis for the City’s decision. Notice
that if that is the only issue, it does not matter whether what the government
decided was reasonable or unreasonable. 
It does not even matter if the government’s decision was based on
bribery and therefore criminal.

It
must be kept in mind that Texas now has two quite distinct concurrent-causation
rules. One is for tort actions, and the other one is for contract, such as
insurance policies.

Insurers
will be attracted to using no-coverage-for-concurrently-caused-losses, where
one of the causes is excluded.  This is
most obvious in damages policies where flood is one of the sources of damages,
but it can be any two or more causes of losses. 
Not all insurance policies are like this, and that is an important fact.

 Michael Sean Quinn, Ph.D., J.D., C.P.C.U. . .
.

The Law Firm of Michael Sean Quinn et

Quinn and Quinn

                                 1300 West Lynn Street, Suite 208

                                             Austin,
Texas 78703

                                                 (512)
296-2594

                                            (512)
344-9466 – Fax

                                E-mail:  mquinn@msquinnlaw.com

[1]
Often these are called “all risk” policies. 

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Lusitania Catastrophe and Workers Compensation Insurance Part VIII

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Lusitania Disaster—Part VII

A Workers Compensation Controversy

Michael Sean Quinn

(See below.)

Systems of compensation for worker/employee death or injuries are ancient.  In some cases, as old as insurance itself—or older even.

In the modern age, however, sophisticated and complex versions of them became ever more accepted beginning in the fourth quarter of the 19th century. Such systems were usually created by central governments, and in the United States this was by state governments. For various reasons, the United States ran a bit behind Europe in creating these systems.

None of the U.S. systems involved the government systematically providing compensation for the employees of private companies, and private companies could purchase special insurance or pay for it themselves. (Or they could be what is called, “self-insured” up to a point, and then an insurance policy[1] and its issuer would take over.  That is more or less how things are today.  Case law based on statutory interpretation began developing immediately. Still, by the time the Lusitania was torpedoed on May 7, 1915, the law was not an old body of law.

This is the context in which the case of Foley v. Home Rubber Company., 40 N.J.L. 80, 99 A. 624 (N.J. 1917) arose. (The “A” stands for “Atlantic Reporter,” while “N.J.L.” refers to the state’s official reporter.) Arthur F. Foley was employed by Home as a salesman who traveled and a supervisor or manager of other salesmen.  He was on the Lusitania going to England on company business. He was killed, and his wife Thirza Ann Foley sued to recover. The trial court, the Court of Common Pleas for Montgomery County, handed victory to Home Rubber, based upon agreed stipulations as to relevant facts the employer, and Ms. Foley appealed. The New Jersey Supreme Court reversed and remanded.

The trial court explicitly based its decision on the fact that the employer could not be found to have been negligent with respect to Mr. Foley’s death.  The Supreme Court virtually opens its opinion by stating that no such thing is required by the statute. 

How a competent court could have made this mistake is beyond me, and—no doubt—it was beyond the Supreme Court as well.  A central purpose of workers compensation insurance and the public policy behind it is to transfer risk-costs of work-related injuries from the worker to the employer (and its insurance provider). Requiring that employers be held negligence as a necessary condition for workers being compensated would defeat the whole purpose of the system.  This fact was widely known to the public and lawyers before 1915.

The question of the case, as the Supreme Court put it, was “whether the destruction of the Lusitania in consequence was an accident arising out of the employment [of Mr. Foley].” The Court divides this question into two. First, was the sinking of the Lusitania something that a reasonable employer would have expected? And second, was what happened related to Mr. Foley’s job. The court answers the first of these “No,” even though it knew there were extra risks while answering the second one “Yes.”

Said the Court:

It may be well said that those whose employments require them to travel by land or sea are known by their employers to be subject to the common perils that such traveling incurs. The risk is inherent in the employment itself. The manner in which the accident is brought about is not at all of the essence of the matter; the vital question always being: Was the accident connected with the employment? If it was, then it arose out of the employment, provided it occurred in the course of the employment. [2]

Obviously, the death arose out of the decedent’s employment.  He was on his way to London to tend to the company’s business. The trip was authorized by the company.  The fact that the German sub was violating international law and custom is irrelevant. The fact that what sunk the ship was not one of the usual perils of the sea is also irrelevant.

Perhaps the most important thing to notice is that there was no war risk exclusion contract of insurance, if there was one, or in the applicable  New Jersey law—or, for that matter—in the state’s public policy regarding insurance.

Michael Sean Quinn, Ph.D., J.D., c.p.c.u. . . .

The Law Firm of Michael Sean Quinn et

Quinn and Quinn

                                 1300 West Lynn Street, Suite 208

                                             Austin, Texas 78703

                                                 (512) 296-2594

                                            (512) 344-9466 – Fax

                                E-mail:  mquinn@msquinnlaw.com

[1] The word “policy” in this context has two different meanings. An “insurance policy” may refer to a contract of insurance.  In addition, an “insurance policy” may refer to governmental public policy regarding the regulation of the insurance industry.

[2]If employees are horsing around, this may not be employment related. If a worker is killed by an outsider because the worker is known to be sleeping with the outsider’s wife, that event is not employment related. The relevant New Jersey cases indicated that the courts already understand this principle, though my concrete examples are their theirs. 

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Lusitania Catastrophe: Workers Compensation Part VII

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Lusitania Disaster—Part VII

A Workers Compensation Controversy

Michael Sean Quinn

(See below.)

Systems of
compensation for worker/employee death or injuries are ancient.  In some cases, as old as insurance itself—or
older even.

In the modern age,
however, sophisticated and complex versions of them became ever more accepted
beginning in the fourth quarter of the 19th century. Such systems were
usually created by central governments, and in the United States this was by
state governments. For various reasons, the United States ran a bit behind
Europe in creating these systems.

None of the U.S.
systems involved the government systematically providing compensation for the
employees of private companies, and private companies
could purchase special insurance or pay
for it themselves. (Or they could be what is
called, “self-insured” up to a
point, and then an insurance policy[1] and its issuer
would take over.  That is more or less
how things are today.  Case law based on
statutory interpretation began developing immediately. Still, by the time the
Lusitania was torpedoed on May 7, 1915, the law was not an old body of law.

This
is the context in which the case of Foley v. Home Rubber Company., 40 N.J.L.
80, 99 A. 624 (N.J. 1917) arose. (The “A” stands for “Atlantic Reporter,” while
“N.J.L.” refers to the state’s official reporter.) Arthur F. Foley was employed by Home as a salesman who traveled and a supervisor or manager of other
salesmen.  He was on the Lusitania going
to England on company business. He was killed, and his wife Thirza Ann Foley
sued to recover. The trial court, the Court of Common Pleas for Montgomery
County, handed victory to Home Rubber, based upon
agreed stipulations as to relevant facts the employer, and Ms. Foley appealed.
The New Jersey Supreme Court reversed and remanded.

The trial court
explicitly based its decision on the fact that the employer could not be found to have been negligent with respect to
Mr. Foley’s death.  The Supreme Court
virtually opens its opinion by stating that no
such thing is required by the statute. 

How a competent
court could have made this mistake is beyond me, and—no doubt—it was beyond the
Supreme Court as well.  A central purpose
of workers compensation insurance and the public policy behind it is to
transfer risk-costs of work-related injuries from the worker to the
employer (and its insurance provider). Requiring that employers be held
negligence as a necessary condition for workers being compensated would defeat
the whole purpose of the system.  This
fact was widely known to the public and lawyers before 1915.

The question of the
case, as the Supreme Court put it, was “whether the destruction of the Lusitania
in consequence was an accident arising out of the employment [of Mr. Foley].”
The Court divides this question into two. First, was the sinking of the
Lusitania something that a reasonable employer would have expected? And second,
was what happened related to Mr. Foley’s job. The court answers the first of
these “No,” even though it knew there were extra risks while answering the second one “Yes.”

Said the Court:

It may be well said
that those whose employments require them to travel by land or sea are known by their employers to be subject to the common perils that such traveling incurs. The
risk is inherent in the employment itself. The manner in which the accident is
brought about is not at all of the essence
of the matter; the vital question always being: Was the accident connected with the employment? If it was, then it arose out of the employment, provided
it occurred in the course of the employment.
[2]

Obviously, the death
arose out of the decedent’s employment. 
He was on his way to London to tend to the company’s business. The trip
was authorized by the company.  The fact that the German sub was violating
international law and custom is irrelevant. The
fact that what sunk the ship was not one of the usual perils of the sea is also
irrelevant.

Perhaps the most important thing to
notice is that there was no war risk exclusion contract of insurance, if there
was one, or in the applicable  New Jersey
law—or, for that matter—in the state’s public policy regarding insurance.

Michael Sean Quinn, Ph.D.,
J.D., c.p.c.u. . . .

The Law Firm of Michael Sean Quinn et

Quinn and Quinn

                                 1300 West Lynn Street, Suite 208

                                             Austin,
Texas 78703

                                                 (512)
296-2594

                                            (512)
344-9466 – Fax

                                E-mail:  mquinn@msquinnlaw.com

[1]
The word “policy” in this context has two different meanings. An “insurance
policy” may refer to a contract of insurance. 
In addition, an “insurance policy” may refer to governmental public
policy regarding the regulation of the insurance industry.

[2]If employees
are horsing around, this may not be employment related. If a worker is killed
by an outsider because the worker is known to be sleeping with the outsider’s
wife, that event is not employment related. The relevant New Jersey cases
indicated that the courts already understand this principle, though my concrete
examples are their theirs. 

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Lusitania Catastrophe: Part VI — Accident Insurance — State Regulation

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The Lusitania
Disaster and Insurance Regulation—Part VI

Michael Sean Quinn*

          I know.  Just
when you thought you were done, another insurance case pops up. There will be a
few more, one of them really unusual and fascinating, and a couple of probate
cases. In the end, there will be a couple of deep sea diving cases in which
insurance plays some role.

Procedural
History

            The
case to be described here is an accident policy with a life insurance
component. Hopkins v. Connecticut General
Life Insurance Company, 225 N.Y. 76, 121 N.E. 465 (N.Y. 1918). (For the
“outsider,” remember that the New York Court of Appeals (“N.Y.”) is the highest
state court in the state.) In this case, the Court of Appeals. The Court of
Appeals reversed the Supreme Court, Appellate Division (the immediate-level
appellate court) 174 A.D. 23, 160 N.Y.S. 247 (July 1916), which decided the
case in favor of the insured and had reversed the trial court. 158 N.Y.S. 79
(March 1916), that had decided the case in favor of the insurer.  (Normally, these days, where there is a “West
Cite” one doesn’t mother citing official state reporters. Since there are three
reported cases here, I thought I best to cite the official reporters.  They may be obtained directly from various
judicial clerk offices of the State of New York—again on the Net. Incidentally,
New York is one of a relatively few state that has some reported opinions from
trial courts.)

Cast of
Lawyer Characters: Justice Hughes

            One
of the things that makes this case intriguing is that Charles E[vans] Hughes
argued the case before the high court on behalf of the insurance company. We
all know who he is, don’t we. Well, if I’m wrong about that. Here’s what’s good
to know. Charles was on the U.S. Supreme Court from 1910 to 1916, when he ran
for President and lost to Wilson in a squeaker, and then back to the Supreme
Court as Chief Justice from 1930 to 1941, where he was often a swing vote in
the constitutional wars during the New Deal period.  

In between rendering Supreme Court services he was
Secretary of State (1921-25), among other things. And there’s more. Suffice it
to say for now that Hughes was a paradigm of what Anthony Kronman, called the
“lawyer-statesman” in his brilliant and now classic 1993 study of legal ethics
and excellence, THE LOST LAWYER.  (It
looks like before Justice Hughes went to join the faculty of the Cornell Law
School he practiced at a law firm with the name “Cravath” in it, so he may have
been a predecessor law firm to the now Cravath, Swaine and Moore a 200 year old
paradigmatic “blue stocking” New York firm. For a bit more on Justice Hughes public life, see the “Post Script” at the end.

Cast of
Lawyer Characters: Van Slyke

The lawyer for the Hopkins, apparently all the way
through was Warren C. Van Slyke.  He was
not as famous a lawyer as Hughes or one rendering such notable public service. However, in some of the literature he is called “a prominent New York lawyer.”

More significantly from an historical point of view, he
married, as her third husband, one Ruth Coles. Before marring Van Slyke, she had
inherited a substantial sum property on Fox Mountain above Le Grande Lake. Her
second husband was building an estate there, and it was named “Foxcroft.” The
name has stuck. Warren and Ruth lived on Long Island, during which period of
time he argued at least a few Lusitania cases. (During WWI, he had been
assistant to the chief of naval intelligence.) After Warren’s death in 1925,
Ruth lived on Foxcroft full time.  After
her death, the estate has an unrelated history of decline, but eventually became
an informal tourist “Mecca,” for those who like to walk in the more-or-less
woods and see Manhattan buildings off in the distance. Part of the property was
and still is called the “Van Slyke” castle—hence, the story told her.  (It may be that the Castle is located on property in the Ramapo Mountains. I am not sufficiently familiar with the geography of Northern New Jersey to be sure.)

Come
Facts

This case involves an “accident policy” issued by
Connecticut General Life, the insurer, to Albert L. Hopkins (“ALH”) the husband
of May Davies Hopkins (MDH). She was the beneficiary under the $40,000 policy
and the plaintiff in the underlying case. It insured ALH for death caused by
the “burning or wrecking of a vessel on which he was a passenger.” The policy
was purchases on April 29, 1905, just a few days before the Lusitania sailed
with ALH on board, and—you guessed—ALH was killed.

Attached to the policy, unfortunately was a “rider,”
aka an endorsement that set forth war risk exclusion. It was attached to the
policy and the policy could be delivered to ALH only if he agreed to the rider,
and that agreement was to the effect that “the policy would not cover any loss
caused directly or indirectly by an act of the belligerent nations engaged in
the present European War.” ALH signed the rider.

MDH sought coverage, but the claim was denied, as one
might expect.  One of the central issues
in this case was the fact that the rider had not been filed with the relevant
state regulatory agency, which had therefore not approved it, although the rest
of the policy had been filed and approved.  MDH’s view that the rider was invalid because
of the lack of a required filing, which the insurer’s view was that everything
was just fine.

The trial court dismissed the case reasoning that
since the rider did not contradict anything in the policy, although there had
been a minor violation of established law, it need not be declared invalid or
for some statutorily based reason ignored. In addition, since the rider—an
endorsement—was part of the policy, if it were ignored, the  whole contract would have to be ignored and
then there would be no policy at all.

Today this kind of point might be made this way. ALH signed
the rider when he obtained the policy. He was therefore required to understand
what the whole policy said. Consequently, if he bought it, he was stuck with it
as it read. Parties to contracts are presumed to have read and understood what
they have agreed to and this applies to contracts of insurance as well as any
other type of contract.

The Supreme Court—Appellate Division reversed the
trial court, with one judge dissenting. Remember, this case is about insurance
regulation should work.  The kinds of
regulations at issue in this case are widely used all over the country, and
cases at least somewhat similar to this one are litigated to this day. (Often
they apply to surplus line carriers, since it is not uncommon for admitted
carriers, when issuing policies for members of the general population—real
persons doing ordinary things—to be tightly controlled as to usable forms.  One of the meanings of “surplus lines carrier”
is an insurer not licensed in a given state.)

Here is the most important thing the intermediate
appellate court said: The purpose of the relevant statute was to

carry out the public policy of the state to take
control of the forms of insurance contracts and prevent insurance companies
from issuing any form of policy not approved by the superintendent of
insurance. That part of the policy which had been approved by the
superintendent of insurance clearly covers a loss such as occurred in this
case. . . . The rider in question here cut down this risk so as to exclude
death by accident caused by any belligerent in the present was. In a very
substantial particular, it changed the form as approved by the state. The
issuance of a policy in this form without the approval of the superintendent of
insurance. . . if absolutely forbidden. The trial court held that
notwithstanding the law had been violated in issuing the policy; it was
nevertheless a valid policy as to all its provisions.

The decision of the appellate division
was to reverse the trial court.  It did
not remand the case, however. It decided the case on the spot in favor the
plaintiff. Today that could probably not be done in most courts in response to
a trial court’s order of dismissal. It could however be done in if the trial
court’s judgment was a summary judgment, and I suspect that is what happened
here, which a change of vocabulary.

The Court of Appeals reversed the
decision of the appellate court and affirmed the judgment of the trial court,
based on pretty much the same reasoning.The way it put one of its reasons is
that the rider is part of the policy. It wasn’t an add-on. There was,
therefore, nothing in the policy it contradicted since it was part of the
policy right from the start.  In
addition, there was nothing in the policy that said “We cover risks of war,” so
there was nothing actually contradicted.

The way it puts another one is this:

The policy which is valid is the contract as the
parties have agreed upon it, so far as it is consistent with the statute—not
the contract as changed and altered by the excision of some of its provisions.
What if no part of a policy defining the risks insured against had been filed?
Are only the standard provisions which the law says shall be inserted in every
policy to be enforced? In themselves they form no complete policy. 
. . .
Further, the policy was not changed. At its inception it included the rider.
All the papers together constitute the policy, and it is as agreed by the
parties. This is the agreement the agent was expressly authorized to make, and
he was prohibited from making any other. 
The policy never had any existence except as it contained the agreement
in the rider.

It seems to me that the lower appellate
court had the better position.  The war
risk exclusion in the rider did cut back on an existing coverage, namely “We
insured death from the wrecking of a ship.” The policy with the rider was
substantially different from the one without it.

The “what if” argument given by the
Court of Appeals is just that: a hypothetical. 
It had nothing to do with the existing Hopkins case before it, since no
such issue was at stake. The Court’s “what if” argument can be undermined by an
opposite argument. What if the rider said, “None of the rest of the policy upon
which this clause is riding applies in any way at all, and the only provisions
of the policy are those which are to be fund herein.”  Interestingly, the Court of Appeals scorns exactly
this situation. 

My guess is that we are looking at a
near to the last gasp discourse by the high Court. Insurance regulation was
relatively new in New York and the other states at the time of the decision. In
New York, first party fire regulation was already much more developed that life
insurance regulation was in 1918. Today, I think most court would be inclined
to accept the reasoning of the lower appellate court and avoid the sophistries
of the upper court.  In any case, this
opinion may have come at a watershed point in the history of insurance law and
so have a significance all its own.

We would also be more conscious about
for whom the agency was the agent. And we would be interested on how all this
happened. Surely if ALH was racing through the city in a hurry to get to the
docks (or something of the sort) that might make a difference as to how the
case was decided. It is perfectly clear from the opinions in the lower courts
that the agency-insurer relationships were a mess, though exactly how this is
true is not so clear.

Post Script

Here is the opening of the preface of  Samuel Hendel’s biography entitled CHARLES EVANS HUGHES AND THE SUPREME COURT. Columbia U. Pr. 1951. P. vii. “The public career of Charles Evans Hughes began very early in the twentieth century and ended just before Pearl Harbor. In that career is written a vital segment of the history of our century. It was a career in which of personal eminence, diversity of experience and significance of American society few men have ever rivalled.  In its course, Charles Evans Hughes was governor of the State of New York, an Associate Justice of the Supreme Court of the United States, acknowledged leader of the American bar, Secretary of State, a Judge of the Permanent Court of International Justice, and Chief Justice of the [Supreme Court of the] United States.”

Michael Sean Quinn, Ph.D.,
J.D., c.p.c.u. . . .

The Law Firm of Michael Sean Quinn et

Quinn and Quinn

                                 1300 West Lynn Street, Suite 208

                                             Austin,
Texas 78703

                                                 (512)
296-2594

                                            (512)
344-9466 – Fax

                                E-mail:  mquinn@msquinnlaw.com

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Lusitania Catastrophe: Life Insurance Probate Litigation — Who Died First?

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Lusitania, Insurance, War Risk Exclusion – Part V

Michael Sean Quinn*

(*See more below)

            The sinking of the Lusitania produced a number of legal actions. This series of blogs discusses some of them, principally ones related to insurance problems and several in the same ball-park as insurance, sort of: to wit, probate related cases, more or less. The case described here is one from the highest court in New York State, and it involves the sinking of the Lusitania, life insurance, and a probate problem.

            The case is McGowin v. Menken, 119 N.E. 877 (N.Y. 877). In it a married couple, the Tassons (“H” and “W”),  perished in the sinking of the Lusitania. At that time, H had three life insurance policies each to be paid to W, if living, but if not then to his executors, administrators, or assigns. The life insurer paid the money into the court since was not sure what should be done under New York law.  The problem was that W’s estate said it had a claim too.

            But under the express terms of the policy, if survivorship cannot be proved, the payment of the policy goes to the estate of the policyholder. The court does not say so specifically but the right way to do this is under contract law. Life insurance policies are contracts. W was not a party to the contract, and H had a right under the contract to change the beneficiary(ies) as he saw fit.  Hence the insurer had a contract duty to pay the monies due under the contract in accordance with it, namely, to the estate (or administrators thereof). W had no property interest in assets related to the contract, so neither she nor her estate had any right to the proceeds.

            For those having any interest in this matter, one of the cases the court cited is Hildenbrandt v. Ames, 66 S.W. 128 (Tex. Civ. App.—1901, writ refus’d), a storm case.

Michael Sean Quinn, Ph.D., J.D., c.p.c.u. . . .

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A balanced life is a good life and maybe the best kind of life. No single value can always do the needed work to make a life flourish..  There are two additional problems. alas. It is not easy to find what is balanced, and it is difficult to maintain balance without dedicated practice, and not even they succeed all the time, party because most of life’s tendencies tend to drift and change. The only values that are unassailable and permanent are love and beauty. Wisdom, if one has it,  is often good thing, if one can recognize it.~Michael Sean Quinn, PhD, JD, CPCU, Etc.Tweet

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