Is It Really Insurance – Insurance Denial Attorneys

Insurance Lawyers, here’s one you probably never heard about.  This is a 2022,case from the Northern District of Texas, Dallas Division.  The opinion is styled, Emmy Von Der Ahe and Thomas Von Der Ahe v. 1-880-Pack-Rat, LLC and Zippy Shell Inc.  This case involves allegations that the moving company damaged goods.

While many people will think this is about insurance, it is not, but it’s importance is realizing that it is not or the lawyer can end up making a big mistake.  Here, the Ahes had purchased a “contents-protection policy insurance contract” at the time of the move.

The Ahes sued the Defendants in an amended complaint asserting a claim under the Carmack Amendment and violations of the DTPA, violations of the Texas Insurance Code, and breach of the duty of good faith and fair dealing.  The Ahes assert the claim is in two phases, 10 the storage phase of the relationship, and 2) under the “contents-protection policy insurance contract.”

The Defendants filed a Rule 12(b)(6) motion alleging the Ahes did not file a proper lawsuit under Federal Rule of Civil Procedure 8(a)(2).

First: the storage phaseIn its first Memorandum Opinion and Order, the Court explained
why the Ahes’ claims arising out of the storage phase are preempted by the Carmack
Amendment.  The Court explained that “the Von Der Ahes’ ‘fixed and persisting intent . . . at the time of shipment’ was an interstate shipment of the goods from Alabama to multiple locations in Texas” and that the latter, intrastate phases of the move, including storage in between the Texas deliveries, were therefore part of the larger interstate shipment.  For
the same reason, the Court finds that a DTPA claim based on storage-phase misrepresentations is preempted by the Carmack Amendment.

Second: the separate Contents Protection Plan contract. “[T]he Carmack Amendment . . .
provide[s] the exclusive cause of action for loss or damages to goods arising from the interstate
transportation of those goods by a common carrier.”

Here, the Ahes seek compensatory damages, “including economic damages, out of pocket damages, cost of mitigation, lost time, and mental anguish damages,” as well as punitive
damages under the DTPA, attorneys’ fees, court costs, and pre- and post-judgment interest, based in part on misrepresentations made in the purportedly separate contract for the Contents Protection Plan. Doc.  Specific to the Contents Protection Plan, they allege that “when Plaintiffs made claims . . . , Defendants refused to provide [the] protection” it represented the policy provided.  Zippy Shell argues that all of the Ahes’ pleaded damages—even those arising from the Contents Protection Plan—are directly based on the loss of property shipped in interstate commerce, because but for the loss or damage to their goods, the Ahes would not have a claim under the policy and therefore the DTPA.

The Court finds that even assuming that the Contents Protection Plan contract was separate
from the contract for interstate shipment of goods, the injuries based on that plan are not “separate and apart” from the loss of those goods.  Thus, the Ahes’ DTPA claim based upon misrepresentations regarding the Contents Protection Plan is preempted.

The Ahes also bring two insurance-related claims based on Zippy Shell’s alleged failure to comply with the Contents Protection Plan: one under Texas common law and another
under the Texas Insurance Code.  The Ahes first allege that the Contents Protection Plan was an “insurance contract” and that Zippy Shell breached the common law duty of good faith that arises from the “special relationship” an insurance contract creates between an insurer and the insured.  Zippy Shell argues that the Ahes’ claim should be dismissed because it relies on a legal conclusion that the Contents Protection Plan is an insurance contract and because the Contents Protection Plan is not a separate insurance contract, but part of the same contract for interstate shipment that is preempted under the Carmack Amendment.

Assuming without deciding that the Contents Protection Plan is an insurance contract, the
Court finds that this claim based on the common law duty of good faith is preempted because the injury alleged is not separate and apart from the loss or damage to their goods.  That is, but for the damage to and loss of goods, the Ahes would have no cause of action for breach of the duty of good faith based on the Contents Protection Plan.

The Ahes also bring a claim under Texas Insurance Code, Section 541.151.  Under this statute, a person or entity “engaged in the business of insurance” may be liable to another for unfair or deceptive trade practices pursuant to Sections 541.151 and 541.002.  Looking at Section 541.002, the statute does not define what it means to be “engaged in the business of insurance.”

The Ahes allege that Zippy Shell sold them an insurance policy—the Contents Protection Plan—thereby engaging in the business of insurance.  Zippy Shell argues that it merely provided claims-handling services, which does not make it an insurance provider or engaged in the business of insurance.  Moreover, Zippy Shell points to other cases in which courts have rejected plaintiffs’ attempts to avoid preemption by re-framing an insurance-related claim against a motor carrier as a separate insurance claim.

Assuming without deciding that Zippy Shell engaged in the business of insurance by selling
the Contents Protection Plan and that the Texas Insurance Code provides a private cause of action against Zippy Shell for deceptive practices, the Court finds that this claim is preempted for the same reasons as the claims discussed above—lack of a separate injury.

The lesson learned from this case is that buying an “insurance policy” when moving does not mean you have insurance.



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