Trying To Stay Out Of Federal Court

Commercial insurance attorneys in Dallas need to read this opinion from the Northern District, Dallas Division. The case is styled, Meritt Buffalo Events Center, LLC v. Central Mutual Insurance Company, et al.
In this case, the carrier, Central, and the adjuster were sued in State Court and Central and the adjuster removed the case to Federal Court, where this motion to remand was filed by Meritt.
According to Meritt Central initially assigned Massey to investigate and adjust the claim, and later reassigned the claim to Cagle. Meritt alleges that Massey failed to reasonably investigate the claim, incorrectly calculated the loss, and represented that Meritt was covered for business income and extra expenses, but delayed full and prompt payment; Cagle continued adjusting the claim but failed to conduct a reasonable investigation, neglected to follow the Policy and Texas law, and did not pay for the property damage; and, although Meritt’s representatives provided documentation to support the claim, some of which Massey approved, Meritt has been underpaid by more than $900,000, causing Meritt to suffer additional business loss.
Meritt alleges that Central is liable on claims for breach of contract and breach of the common law duty of good faith and fair dealing because Central failed to conduct a reasonable investigation; delayed, denied, and failed to settle Meritt’s claim; failed to provide a prompt and reasonable explanation for the denial of the claim, in violation of Tex. Ins. Code Ann. § 541.060(a)(3); failed to affirm or deny coverage or submit to Meritt a reservation of rights within a reasonable time, in violation of Tex. Ins. Code Ann. § 541.060(a)(4); and delayed payment of the claim for a period of more than 60 days, in violation of Tex. Ins. Code Ann. § 542.058(a).
Meritt asserts that Central, Massey, and Cagle failed to conduct a reasonable investigation of Meritt’s claim, in violation of Tex. Ins. Code Ann. § 541.060(a)(1); failed to attempt to fairly settle the claim, even though they were aware of their liability under the Policy, in violation of Tex. Ins. Code Ann. § 541.060(a)(2)(A); and refused to pay the claim without conducting a reasonable investigation of the claim, in violation of Tex. Ins. Code Ann. § 541.060(a)(7).
Meritt alleges that Massey and Cagle misrepresented the Policy to Meritt by making an untrue statement of material fact, in violation of Tex. Ins. Code Ann. § 541.061(1); misrepresented the Policy by failing to state a material fact necessary to make other statements not misleading, in violation of Tex. Ins. Code Ann. § 541.061(2); and misrepresented the Policy to Meritt by making a statement that would mislead a reasonably prudent person to a false conclusion of material fact, in violation of Tex. Ins. Code Ann. § 541.061(3).
Meritt alleges that Central, Massey, and Cagle violated sections of the Texas Deceptive Trade Practices-Consumer Act (“DTPA”), Tex. Bus. & Com. Code Ann. §§ 17.41-17.63, by representing to Meritt Buffalo that the Policy and adjusting services had characteristics or benefits that they did not have, in violation of DTPA § 17.46(b)(5); represented to Meritt that the Policy and adjusting services were of a particular standard, quality, or grade when they were of another, in violation of DTPA § 17.46(b)(7); represented to Meritt that the Policy and adjusting services conferred rights, remedies, or obligations that it did not have, in violation of DTPA § 17.46(b)(12); engaged in unconscionable action by taking advantage of Meritt’s lack of knowledge and experience in insurance matters, in violation of DTPA § 17.50(a)(3); acted in violation of Chapter 541 of the Texas Insurance Code, in violation of DTPA § 17.50(a)(4); Massey and Cagle represented that they would fully pay to repair the damages but failed to do so, in violation of DTPA § 17.46(b)(5), (7), and (12); and Central, Massey, and Cagle knowingly committed each of the foregoing alleged violations.
As can be seen, Meritt threw everything but the kitchen sink at Central, Massey, and Cagle. However, the Court sided with Central, Massey, and Cagle, and went through a detailed analysis as to why. This writer does not agree with Court and what is more important is that other Courts do not side with this Court. But, if an attorney is going to be in a lawsuit wherein they could possibly end up in this Court, then they need to read this opinion and the reasoning put forth by the Court, so as to avoid the same result.