Suing an insurance properly is not as easy as it might first seem. This is illustrated in a recent opinion from the Western District of Texas, San Antonio Division. The opinion is styled, Finger Oil & Gas, Inc. v. Mid-Continent Casualty Co., Et Al.
Finger Oil sued Mid-Continent, Marsh USA, Inc., and Karen Olivia in State Court. Mid-Continent removed the case to Federal Court alleging that the non-diverse defendant, Olivia, was improperly joined and thus her citizenship may be disregarded. Finger Oil filed this motion to remand contending that Olivia is not improperly joined.
Finger Oil’s original petition alleges that one of its oil wells blew out and that it contacted Desiree Scrimger, the commercial lines account manager with Marsh, Finger Oil’s insurance agent. Scrimger allegedly advised Shelli Finger and others that blowout and cratering were included within the limit of insurance of $1,000,000 and sent an email from the underwriter, Olivia, confirming the coverage. Finger Oil alleges that, based on that representation, costs were incurred for services totaling approximately $641,000. However, Mid-Continent later issued reservation of rights letters and denied coverage. Finger Oil sues under Texas Insurance Code, Section 541.051 for misrepresentation of the benefits or advantages of the insurance policy in question, as well as violations of the DTPA §17.46(b) for representing that the policy coverage had characteristics it did not have, representing the policy conferred or involved rights, remedies, or obligations that it did not have, and breaching the duty of good faith and fair dealing.