Rules For An Insurance Lawsuit To Survive In Federal Court

Insurance lawyers will often times find themselves in Federal court. When this happens it is necessary that the lawsuit pleadings be in proper form. An opinion from the Sherman Division of the Eastern District of Texas is instructive. The style of the case is, Cathy Broxterman v. State Farm Lloyds.
This case arises out of a dispute between a policyholder and her insurer regarding the extent of damages and amount of loss suffered to her property. State Farm issued a homeowners’ policy to Plaintiff, effective December 1, 2003, through December 1, 2014. On or about April 3, 2014, the Property suffered damage due to storm-related conditions.
On or about April 26, 2014, prior to reporting her claim to State Farm, Plaintiff signed document for representation by her public adjuster, John Bellerose, and the Voss Law Firm, to whom Bellerose referred her. On May 1, 2014, Bellerose’s company, Aware Owner, issued an estimate for the storm damages totaling $15,015.09. On or about May 27, 2014, Jesse Corona of the Voss Law Firm reported Plaintiff’s insurance claim to State Farm.
State Farm assigned the claim to adjuster Gary Hodge, who inspected the Property on May 30, and prepared an estimate for damages totaling $5,425.52. State Farm issued payment in accordance with Hodge’s estimate on June 11, 2014. State Farm issued payment to the Voss Law Firm, as had been requested at the time the insurance claim was reported.
State Farm removed the case to this Court under diversity jurisdiction. On October 24, the Court ordered the parties “to replead as necessary to comply with the Federal Rules of Civil Procedure and the Court’s Local Rules.” On November 10, Plaintiff filed her First Amended Complaint.
In her First Amended Complaint, Plaintiff contended that that State Farm failed to adequately compensate her for damages to the Property, and she sought to recover damages based on the following claims: (1) breach of contract, (2) violations of the Texas Deceptive Trade Practices Act and Tie-In Statutes, (3) violations of the Texas Insurance Code, (4) breach of the common law duty of good faith and fair dealing, (5) unfair insurance practices, and (6) intentional or negligent misrepresentation.
On September 30, State Farm filed its motion for partial summary judgment. On October 16, Plaintiff filed her response. On October 28, Defendant filed its reply.
The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. Pursuant to Federal Rule 56(a), Summary judgment is proper if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law. A dispute about a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. The trial court must resolve all reasonable doubts in favor of the party opposing the motion for summary judgment. The substantive law identifies which facts are material.
The party moving for summary judgment has the burden to show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. If the movant bears the burden of proof on a claim or defense on which it is moving for summary judgment, it must come forward with evidence that establishes beyond peradventure all of the essential elements of the claim or defense. Where the nonmovant bears the burden of proof, the movant may discharge its burden by showing that there is an absence of evidence to support the nonmovant’s case. Once the movant has carried its burden, the nonmovant must respond to the motion for summary judgment by setting forth particular facts indicating there is a genuine issue for trial. The nonmovant must adduce affirmative evidence. No mere denial of material facts nor…unsworn allegations nor arguments and assertions in briefs or legal memoranda will suffice to carry this burden. Rather, the Court requires “significant probative evidence” from the nonmovant in order to dismiss a request for summary judgment supported appropriately by the movant. The Court must consider all of the evidence, but must refrain from making any credibility determinations or weighing the evidence.
Defendant moves for partial summary judgment on Plaintiff’s extra-contractual claims, Plaintiff’s claim for violation of the Texas Insurance Code, and Plaintiff’s claim for violation of the Deceptive Trade Practices Act, and Plaintiff’s fraud claims for intentional or negligent misrepresentations. In her response, Plaintiff voluntarily dismisses her extra-contractual claims for breach of the common law duty of good faith and fair dealing, bad faith, and misrepresentation.
In Texas, an individual who has been damaged by unfair methods of competition or unfair or deceptive acts or practices in the business of insurance may bring a cause of action under the Texas Insurance Code, Section 541.151, against the person or persons engaging in such acts or practices. The prohibited conduct includes failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect to which the insurer’s liability has become reasonably clear. A violation of Chapter 541 of the Texas Insurance Code is also a violation of the DTPA, Section 17.50(a).
The court then reviewed the pleading and applied the above law to those pleading in reaching it’s determination. Understanding how the court does this is vital to an insurance law attorney.