In Which County Can An Insurance Company Be Sued

The issue of which county is a proper county to file a lawsuit against an insurance company is not normally an issue.  However, a 2020, Beaumont Court of Appeals had this issue before them in a mandamus action styled, In Re Mountain Valley Indemnity Company, Shane Waddell, Lonnie Tidwell, National General Insurance Company, and Prostar Adjusting.

Plaintiff sued the above Defendants, including the insurance company and adjusters and agents in a lawsuit arising out of homeowners insurance policy claim wherein Plaintiff’s home suffered property damage.  Plaintiff filed the lawsuit in Jefferson County, where some of the acts complained of occurred, and then Defendants filed a motion to have the case transferred to Montgomery County, where the home is located,  pursuant to Texas Civil Practices & Remedies Code, Section 15.011.  The Judge in the case denied the Defendants motion to transfer the case and this mandamus action ensued.

Defendants argued that Section 15.011 is a mandatory venue provision and since the property was located in Montgomery County, it was mandatory that the case be heard there.  They also argue that Section 15.032, a permissive venue statute applies because Montgomery County is where the insured property is located.

Defendants argue that Section 15.011 is a mandatory venue provision that required the trial court to transfer Plaintiffs’ suit to Montgomery County because his action seeks damages to real property, Plaintiffs’ home.  In simple terms, Defendants equate the damages Plaintiff seeks under his homeowner’s policy as damages to real property.

This Court disagreed with the underlying premise of the Defendants’ argument, which equates an action for recovery of damages to real property subject to the mandatory venue rules in section 15.011 with an action for claims from the alleged breach of an insurance policy in which the insurer contractually agreed to pay certain property damages claims. Plaintiff’s action is for damages under a contract, not to recover damages the Defendants inflicted on Plaintiff’s home.  Plaintiff has not sued Defendants claiming they damaged any real property that he owns.

The arguments in the Defendants’ petition also ignore what appears to be a fatal flaw with their argument about the intended reach of Section 15.011.  That’s because section 15.032, one of the venue statutes the Defendants relied on in the trial court, is a permissive venue provision that created permissive venue for a homeowner’s suit against a homeowner’s carrier to be filed in more than just the county where the property is located.  Thus, the Court cannot agree that the Legislature intended to create a mandatory rule for suits against fire insurance carriers like Mountain Valley for benefits under the policy given the fact that the Legislature opted in section 15.032 to allow homeowners more than one county in which to file the suit.

The conclusion that section 15.011 is not a mandatory venue provision that applies to Plaintiffs’ claims that arose under the homeowner’s policy issued by Mountain Valley resolves the arguments the parties have raised in a way that is consistent with the Code Construction Act, Texas Government Code, Section 311.025(b) and 311.026.

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