Insurance Court Fights

Sometimes the fights put up by insurance companies seem unnecessary. It is nice when a court agrees. This was the case in a Southern District, Houston Division case. It is styled, Houston Granite & Marble Ctr., LLC v. Mesa Underwriters Specialty Ins. Co.
Houston sued Mesa in State Court and Mesa had the case removed to Federal Court over an insurance coverage dispute. Houston, soon thereafter, filed a motion for non-suit without prejudice because its president had recently undergone triple by-pass heart surgery and would be unable to respond to discovery or assist in prosecuting the case, plus, the president is a material witness in the case.
Mesa responded by stating there must be conditions placed on the non-suit. One, that Mesa be reimbursed for expenses it had incurred including attorney fees. Two, that any re-filing of the lawsuit be in the Southern District of Texas. Three, that upon re-filing, Granite fully comply with Mesa’s requests for production and answer interrogatories.
As to attorney fees, imposition of costs and attorney’s fees are permissible conditions of a voluntary dismissal. But, they are not always justified. Here, Mesa did not articulate any reason why attorney’s fees should be awarded, apart from the fact that it incurred those fees and would incur more if Granite later refiled the case. However, these circumstances are present in every case and cannot alone justify an award of attorney’s fees.
As to the re-filing restriction, this type of condition is rare because the intended effect of a voluntary dismissal is to put the plaintiff in a legal position as if he had never brought the first lawsuit. A re-filing restriction does not return the plaintiff to the same legal position that he occupied before suit. There may be situations where this restriction is permissible, but this is not one of those situations.
As to the discovery conditions, Granite has stated that it will continue to supplement discovery responses and will make a good faith attempt to voluntarily provide Mesa with ample documentation, including financial balance sheets, financial statements and statements of financial condition on the date of the loss to enable Mesa to evaluate Granite’s claim prior to litigation. Therefore, did not find that discovery conditions were necessary.