United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED November 10, 2021 No. 20-11247 Lyle W. Cayce Clerk

Mirna Guzman,

Plaintiff—Appellant,

versus

Allstate Assurance Company,

Defendant—Appellee.

Appeal from the United States District Court for the Northern District of Texas USDC No. 2:19-CV-187

Before Davis, Elrod, and Oldham, Circuit Judges. Jennifer Walker Elrod, Circuit Judge: Saul Guzman died on January 29, 2019, after suffering a seizure. He was twenty-eight years old. Mirna, his wife and life insurance beneficiary, filed a claim with Allstate to collect the $250,000 in policy proceeds. After conducting a routine contestable-claim investigation, Allstate rescinded the policy and refused to pay. Mirna sued, and the district court granted Allstate’s motion for summary judgment. Mirna now appeals the district court’s decision. Because there is a genuine issue of material fact about whether Guzman was a smoker when he applied for life insurance, we REVERSE. Case: 20-11247 Document: 00516088684 Page: 2 Date Filed: 11/10/2021

No. 20-11247

I. Saul Guzman applied for a life insurance policy from Allstate on August 17, 2017. In his application, Guzman disclosed his history of seizures. But he denied using tobacco or nicotine products. In response to the question: “Do you currently use tobacco or nicotine?”, Guzman answered “No.” And in response to the question: “If ‘no’ . . . have you ever used tobacco or nicotine?”, Guzman also answered “No.” After receiving some of Guzman’s medical records and the results of his blood and urine tests, Allstate issued him a policy of $250,000 at a “Standard Non Tobacco” annual premium rate. Guzman made Mirna, his wife, the beneficiary. 1 Guzman died on January 29, 2019, after suffering a seizure at work. Mirna filed a claim with Allstate to recover the policy proceeds, and Allstate began a contestable-claims investigation. During the investigation, Allstate obtained additional medical records. Upon discovering that most described Guzman as a smoker, Allstate sent the records along for two “underwriting referrals” to determine whether Guzman would have been issued the same policy if he had disclosed that he was a smoker. Both underwriting referrals determined that Guzman would not have been issued the same policy. On this basis, Allstate informed Mirna that it was rescinding the contract and gave her a premium refund of $433.84. II. Mirna contended that Allstate wrongly rescinded the policy. She sued Allstate in state court for breach of contract, violation of the Texas Deceptive

1 We refer to the plaintiff as “Mirna” to distinguish her from Saul Guzman, her late husband.

2 Case: 20-11247 Document: 00516088684 Page: 3 Date Filed: 11/10/2021

No. 20-11247

Trade Practice–Consumer Protection Act (DTPA), 2 and for violation of § 542.003 of the Texas Insurance