Two Hail Storms – Two Different Insurance Companies

Layers who handle hail damage claims will frequently run into the situation where an adjuster admits there is hail damage on a roof but that the damage is old or there is old damage and new damage to the roof. The question becomes, what is the best course of action in getting a full recovery. The answer is to file claims / sue both insurance carriers. The U.S. District Court, Western District of Texas, Austin Division had this issue in a recent case. The style of the case is, Evridges, Inc. v. The Travelers LLoyds Insurance Company.
In this case, Evridges filed suit against Travelers for hail damage to its property. When evidence that some of the damage was from another storm when another insurance company and policy were in force, Evridges sought to have Travelers added to the lawsuit. This insurer is Landmark American Insurance Company.
Travelers opposed the joining of Landmark, arguing to the court that the joinder was improper under Federal Rule 20(a) because the claims against Landmark do not arise from the same transactions or occurrences as the claims against asserted against Travelers, and since the claims against Landmark do not present common questions of law or fact as the claim against Travelers, that the joinder is improper.
This cout addressed deficiencies in the claims being asserted by Evridges against Landmark. A court determining whether to grant a motion to amend to join additional parties must consider both the general principles of amendment provided by Rule 15(a) and also the more specific joinder provisions of Rule 20(a). Travelers argued that the joinder of Landmark is improper under Rule 20(a) because Eviridges seeks to assert claims against Landmark that do not arise from the same transactions or occurrences as the claims Evridges has against Travelers, and they do not present common questions of law or fact.
Claims against two or more defendants may be joined in one action if the plaintiff alleges facts that show: (1) that the right to relief asserted against the defendants arises out of the same transaction, occurrence, or series of transactions or occurrences, and (2) that a question of law or fact in common to both defendants will arise in the action. Actions arise out of the same series of transactions or occurrences if there is some connection or logical relationship between them. District courts have the discretion to refuse joinder in the interest of avoiding prejudice and delay, ensuring judicial economy, or safeguarding principles of fundamental fairness.
The court said Evridges failed to demonstrate that the joinder of Landmark is proper in this case. Evridges’ causes of actions against Travelers and Landmark involve two different insurance claims made to two separate insurers under two separate insurance policies for property damage allegedly caused by two separate storm events occurring fifteen months apart. Travelers and Landmark each independently investigated, evaluated, and determined whether to pay the claims submitted separately to them for storm events occurring 15 months apart, and decided whether to pay those claims based on their separate insurance policies. Given that there were two independent claims made on separate policies, Evridges claims against Landmark do not arise out of the same transaction, occurrence or series of occurrences as Evridges’ claims against Travelers.
Also, Evridges failed to demonstrate that the claims asserted against Travelers and Landmark share common questions of law or fact. While Evridges is asserting breach of contract claims against both defendants, those claims are based on two distinct insurance contracts with different periods of coverage. Under Texas law, Evridges has to establish coverage under each policy independently and must plead and prove facts showing that its requested damages are covered by the specific policy at issue.
Because Evridges claims against Landmark and Travelers are based upon different policies and different storms, the joinder of Landmark in this case will only complicate discovery, pretrial matters and eventually the trial in this case.