Insured Can’t Sit on a Lawsuit to Punish the Defendant
Post 4866
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Almost every litigating lawyer has tried to get an appellate court to grant a writ of mandate to overturn an error or abuse by a trial court. Successful writs of mandate are as rare as a snowstorm in the Sahara.
Regardless, Allstate Texas Lloyd’s (Allstate) tried by a petition for writ of mandamus, where relators Allstate and James Stabler contend that the trial court abused its discretion by refusing to dismiss the underlying insurance coverage dispute for want of prosecution.
In In Re Allstate Texas Lloyd’s And James Stabler, No. 13-24-00395-CV, Court of Appeals of Texas (August 26, 2024) surprised all and granted the writ of mandate.
BACKGROUND
On July 13, 2017, real parties in interest Julio and Rachel de la Garza filed suit against relators for denying or underpaying their claim for property damages sustained to their home as a result of a 2015 storm. The de la Garzas alleged that Stabler was the adjuster on the claim, and they asserted various causes of action including breach of contract, violations of the insurance code, deceptive trade practices, and bad faith.
On August 10, 2017, relators filed their original answer to the de la Garzas’ lawsuit. On May 3, 2019, relators filed a motion to dismiss the case for want of prosecution on grounds that the de la Garzas had not instituted any activity in the case since 2017. Relators alleged that the de la Garzas had not taken any action to lift the abatement by filing a controverting affidavit regarding their alleged failure to give notice, or by providing the required notice, and had otherwise taken no steps to prosecute the case.
On June 17, 2019, the trial court held a hearing on relators’ motion to dismiss for want of prosecution. Relators assert that, at this hearing, the trial court ordered the de la Garzas to provide relators with the requisite statutory notice by July 1, 2019, and the de la Garzas did so on July 3, 2019.
On December 11, 2023, the trial court set the case for hearing on its dismissal docket; however, no notice of this hearing was provided to the parties. Nevertheless, that same day, the de la Garzas filed a verified motion to retain the case on the docket.
On March 22, 2024, relators filed their second motion to dismiss the case for want of prosecution. On April 24, 2024, the parties mediated the case; however, mediation was unsuccessful. On April 25, 2024, the de la Garzas filed a second motion requesting the trial court to retain the case on its docket.
THE RESPONSE
Aside from filing their lawsuit in 2017 and propounding initial discovery, the only action the de la Garzas have taken to prosecute their case has been filing a motion to mediate on January 31, 2020, filing a Motion to Retain on December 11, 2023, and engaging in unsuccessful mediation on April 24, 2024. The de la Garzas provided no excuse – much less a reasonable excuse for delay for any of the time periods this case has been pending.
On May 1, 2024, the trial court signed an order which granted the de la Garzas’ second motion to retain the case and denied relators’ second motion to dismiss the case for want of prosecution. This original proceeding ensued.
MANDAMUS
Mandamus is an extraordinary and discretionary remedy. The relator must show that (1) the trial court abused its discretion, and (2) the relator lacks an adequate remedy on appeal. The trial court abuses its discretion if it reaches a decision that is so arbitrary and unreasonable as to amount to a clear and prejudicial error of law
Mandamus relief is appropriate when a trial court abuses its discretion.
Dismissals for Want of Prosecution
The plaintiff has a duty to prosecute its lawsuit to a conclusion with reasonable diligence, and if that duty is not fulfilled, the trial court may dismiss the case for want of prosecution. A delay of an unreasonable duration if not sufficiently explained, will raise a conclusive presumption of abandonment of the plaintiff’s suit. This conclusive presumption justifies the dismissal of a suit under the trial court’s inherent power.
The Texas Rules of Judicial Administration require district and statutory county courts to ensure, so far as reasonably possible, that civil cases in which a jury has been demanded, other than those arising under the Family Code, are brought to trial or final disposition within eighteen months of the appearance date.
ANALYSIS
The de la Garzas filed their original petition against relators on July 13, 2017; thus, their lawsuit has been pending more than seven years. This period far exceeds the eighteen-month time frame for disposition of the case as set forth in the administrative rules.
The de la Garzas assert that the case is set for trial in less than six months and, considering the circumstances, they have been reasonably active pursuing this case.
In July 2017, the de la Garzas filed their original petition, including requests for disclosures, and in September 2017, they responded to relators’ requests for disclosures.
Although the record indicates that the de la Garzas occasionally engaged in brief periods of activity on the case, the record also indicates that there are several extensive periods of inaction. Actions taken after a motion to dismiss is filed, including the obtaining of a trial setting or filing of a jury demand, do not enter into the analysis of whether diligence has been exercised.
The de la Garzas’ proffered reasons for the delay do not offer a reasonable explanation or otherwise establish good cause for the delay. Accordingly, the Court of Appeals concluded that they failed to prosecute their lawsuit against relators to a conclusion with reasonable diligence, and the trial court abused its discretion by refusing to grant relators’ second motion to dismiss for want of prosecution. Relators lack an adequate remedy by appeal and the Court of Appeals sustained the sole issue presented in this original proceeding and granted the petition for writ of mandamus and directED the trial court to vacate its May 10, 2024 order denying relators’ second motion to dismiss and to enter an order granting that motion.
ZALMA OPINION
Many people think that if they sue an insurance company for bad faith the insurance company will open its checkbook and pay off the plaintiff as it demands. That is not true and it wasn’t true with regard to the de la Garzas’ suit against Allstate. Doing nothing much for seven years is not just sloth it is ridiculous and forced an appellate court to do something it does not like to do, grant a petition for mandamus and order the trial court to dismiss the suit.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Concealing a Weapon Used in a Murder is an Intentional & Criminal Act
Post 5002
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In Howard I. Rosenberg; Kimberly L. Rosenberg v. Chubb Indemnity Insurance Company Howard I. Rosenberg; Kimberly L. Rosenberg; Kimberly L. Rosenberg; Howard I. Rosenberg v. Hudson Insurance Company, No. 22-3275, United States Court of Appeals, Third Circuit (February 11, 2025) the Third Circuit resolved whether the insurers owed a defense for murder and acts performed to hide the fact of a murder and the murder weapon.
FACTUAL BACKGROUND
Adam Rosenberg and Christian Moore-Rouse befriended one another while they were students at the Community College of Allegheny County. On December 21, 2019, however, while at his parents’ house, Adam shot twenty-two-year-old Christian in the back of the head with a nine-millimeter Ruger SR9C handgun. Adam then dragged...
Renewal Notices Sent Electronically Are Legal, Approved by the State and Effective
Post 5000
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Washington state law allows insurers to deliver insurance notices and documents electronically if the party has affirmatively consented to that method of delivery and has not withdrawn the consent. The Plaintiffs argued that the terms and conditions statement was not “conspicuous” because it was hidden behind a hyperlink included in a single line of small text. The court found that the statement was sufficiently conspicuous as it was bolded and set off from the surrounding text in bright blue text.
In James Hughes et al. v. American Strategic Insurance Corp et al., No. 3:24-cv-05114-DGE, United States District Court (February 14, 2025) the USDC resolved the dispute.
The court’s reasoning focused on two main points:
1 whether the ...
Rescission in Michigan Requires Preprocurement Fraud
Post 4999
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Lie About Where Vehicle Was Garaged After Policy Inception Not Basis for Rescission
This appeal turns on whether fraud occurred in relation to an April 26, 2018 renewal contract for a policy of insurance under the no-fault act issued by plaintiff, Encompass Indemnity Company (“Encompass”).
In Samuel Tourkow, by David Tourkow v. Michael Thomas Fox, and Sweet Insurance Agency, formerly known as Verbiest Insurance Agency, Inc., Third-Party Defendant-Appellee. Encompass Indemnity Company, et al, Nos. 367494, 367512, Court of Appeals of Michigan (February 12, 2025) resolved the claims.
The plaintiff, Encompass Indemnity Company, issued a no-fault insurance policy to Jon and Joyce Fox, with Michael Fox added as an additional insured. The dispute centers on whether fraud occurred in...
Insurance Fraud Leads to Violent Crime
Post 4990
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CRIMINAL CONDUCT NEVER GETS BETTER
In The People v. Dennis Lee Givens, B330497, California Court of Appeals, Second District, Eighth Division (February 3, 2025) Givens appealed to reverse his conviction for human trafficking and sought an order for a new trial.
FACTS
In September 2020, Givens matched with J.C. on the dating app “Tagged.” J.C., who was 20 years old at the time, had known Givens since childhood because their mothers were best friends. After matching, J.C. and Givens saw each other daily, and J.C. began working as a prostitute under Givens’s direction.
Givens set quotas for J.C., took her earnings, and threatened her when she failed to meet his demands. In February 2022, J.C. confided in her mother who then contacted the Los Angeles Police Department. The police ...
Police Officer’s Involvement in Insurance Fraud Results in Jail
Post 4989
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Von Harris was convicted of bribery, forgery, and insurance fraud. He appealed his conviction and sentence. His appeal was denied, and the Court of Appeals upheld the conviction.
In State Of Ohio v. Von Harris, 2025-Ohio-279, No. 113618, Court of Appeals of Ohio, Eighth District (January 30, 2025) the Court of Appeals affirmed the conviction.
FACTUAL BACKGROUND
On January 23, 2024, the trial court sentenced Harris. The trial court sentenced Harris to six months in the county jail on Count 15; 12 months in prison on Counts 6, 8, 11, and 13; and 24 months in prison on Counts 5 and 10, with all counts running concurrent to one another for a total of 24 months in prison. The jury found Harris guilty based on his involvement in facilitating payments to an East Cleveland ...
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To Dispute an Arbitration Finding Party Must File Dispute Within 20 Days
Post 4988
EXCUSABLE NEGLECT SUFFICIENT TO DISPUTE ARBITRATION LATE
In Howard Roy Housen and Valerie Housen v. Universal Property & Casualty Insurance Company, No. 4D2023-2720, Florida Court of Appeals, Fourth District (January 22, 2025) the Housens appealed a final judgment in their breach of contract action.
FACTS
The Housens filed an insurance claim with Universal, which was denied, leading them to file a breach of contract action. The parties agreed to non-binding arbitration which resulted in an award not
favorable to the Housens. However, the Housens failed to file a notice of rejection of the arbitration decision within the required 20 days. Instead, they filed a motion for a new trial 29 days after the arbitrator’s decision, citing a clerical error for the delay.
The circuit court ...
