Insurance Law Case – A Laugh At The End

Maybe the title of this blog should be a little different but for insurance lawyers dealing with insurance companies all the time the comment by the Judge at the end of the case is worthwhile.

As all insurance lawyers know, the insurance companies prefer to litigate denied claims in Federal Court rather than the State and County Courts.  It’s really simple to understand, the rules and handling of cases in Federal Court tend to favor insurance companies.

The case here is from the Northern District of Texas, Fort Worth Division.  It is styled, Gina Lewis et al. v. Safeco Insurance Company of Indiana et al.

Here, the plaintiffs had a hail damage claim that was denied by Safeco.  A lawsuit was filed in a local State Court suing the adjuster who handled the claim (Speed) and Safeco.  Safeco immediately removed the case to Federal Court claiming they had properly accepted liability for any of the wrongful acts that may have been committed by Speed and sought dismissal of Speed.  This acceptance of liability for the acts of Speed was done in compliance with Texas Insurance Code, Section 542A.006.

Plaintiffs then filed a motion seeking remand of the case back to the local court and Safeco filed a response to that motion.  Plaintiff sought to distinguish the actions involved in this case from other cases in such a way as to make Safeco’s acceptance of liability for Speed inapplicable to this situation.  A reading of the opinion will explain what happened.

Now to the part from which the title of this blog refers.

The Judge granted the motion to dismiss Speed and denied plaintiff’s motion for remand.  In doing so the Judge wrote a footnote.  The footnote reads:

Although the Motion to Remand is denied, the Court has serious concerns as to whether, as a practical matter, this simple hail-storm insurance coverage case should have been removed to federal court rather than remained in the state court. Certainly, the judges and juries in Parker County, Texas are much more well-equipped to handle this basic dispute in a quick, fair, and efficient manner. Diversity jurisdiction or not, the clogged dockets of the federal courts should not be the reflexive jurisdiction of choice to resolve every dispute between a homeowner and their insurance company. As the old-saying goes, “don’t make a federal case of it.”The Free Dictionary by Farlex, (last visited April 5, 2021); see THE FEDERALIST NO. 17 (Alexander Hamilton) (writing as “Publius”) (explaining that under the Constitution, “the ordinary administration of criminal and civil justice” would be left to the states).

Maybe you have to be an attorney who deals with issue on a routine basis to understand and appreciate what the Judge has said but it is good to understand the Judges don’t like this gamesmanship by the insurance companies any more than the lawyers who try to help insureds.

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