McClenny Moseley & Associates is not Responsible for All Case Failures
Post 5059
Court Concludes There is No Excuse for Failure to Promptly Serve a Governmental Agency
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In Jimmie Legros v. Weston Property & Casualty Insurance Co, No. 6:22-CV-04401, United States District Court, W.D. Louisiana, Lafayette Division (April 3, 2025) after Weston became insolvent the suit was amended to change the defendant to the Louisiana Insurance Guaranty Association (“LIGA”) late.
LIGA moved to Dismiss and the Magistrate judge concluded that the evidence, the law, and the arguments of the parties, recommended that the Motion to Dismiss be granted.
FACTS AND PROCEDURAL HISTORY
Plaintiff filed the present action on August 25, 2022, against Weston Property & Casualty Insurance Company after suffering property damage during Hurricane Laura. The case was stayed from October 21, 2022, to March 30, 2023, due to the suspension and termination of Plaintiff’s prior counsel. On November 30, 2023, Plaintiff’s current counsel enrolled and on February 5, 2024, Plaintiff filed a Motion to Substitute party requesting that LIGA be substituted as Defendant for Weston Property & Casualty Insurance Company which was granted on May 22, 2024.
LIGA moved to dismiss because they were not properly served until 134 days after their substitution in violation of Federal Rule of Civil Procedure 4(m). Plaintiff conceded that LIGA was not served within 90 days as required by Rule 4(m) but requests the Court to deny LIGA’s Motion as Plaintiff can establish good cause of the delayed service as this case was due to Plaintiff’s prior counsel.
LAW AND ANALYSIS
Federal Rule of Civil Procedure 4(m) provides that “[i]f a defendant is not served within 90 days after the complaint is filed, the court-on motion or on its own after notice to the plaintiff-must dismiss the action without prejudice against that defendant or order that service be made within a specified time.” The district court has broad discretion in determining whether to dismiss an action for insufficient service under Rule 12(b)(5).
It is undisputed that LIGA was not served within the required 90 days once it was substituted as Defendant. To establish good cause, a litigant must demonstrate at least as much as would be required to show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance of the rules usually does not suffice.
Plaintiff contends he can establish good cause for delayed service. Specifically, per Plaintiff, this matter was previously handled by McClenny Moseley & Associates (“MMA”) and upon their dismissal by the various courts in multiple jurisdictions many clients were left without representation for extended periods of time.
According to Plaintiff, the delay in effecting service was due to the extraordinary circumstances resulting from MMA having to withdraw from the handling of thousands of files. While the Court was sympathetic to the plaintiffs who were left without representation following MMA’s suspension and the need for additional time to organize, sort, and process the multitude of cases, it does not excuse Plaintiff’s delay in service or failure to properly request an extension.
LIGA was substituted as Defendant well after MMA was removed from this case and after Plaintiff had secured new counsel. It was not until May 22, 2024 that LIGA was substituted as Defendant for Weston Property & Casualty Insurance Company after their insolvency in August 2022. For the next four months, the record shows that no action was taken to advance this matter. No request for an extension of time to effect service was made; rather, LIGA was served on October 3, 2024 – 134 days after it was substituted as Defendant.
The Court concluded that Plaintiff failed to establish the requisite good cause to excuse his failure to effect service in a timely manner. Plaintiff’s counsel entered their appearance in this matter almost a full year before effecting service. Accordingly, the Court recommends that LIGA’s Motion to Dismiss be granted.
ZALMA OPINION
LIGA is a governmental agency easy to serve with a complaint. For reasons known only to counsel it took almost twice the time required by Federal Rules, 134 days to serve the defendant. New counsel tried to blame old counsel, MMA, for the delay, even though they had successfully moved to change the name of the defendant to LIGA from Weston and then did nothing to effect the service for 134 days when it could have been done immediately. That violation of the rules required dismissal and for once the fault did not belong to MMA who is now in bankruptcy. The plaintiff Jimmie Legros is not without a remedy since the court has already found the dismissal was due to the failure to act of current counsel.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Jury’s Findings Interpreting Insurance Contract Affirmed
Post 5105
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Madelaine Chocolate Novelties, Inc. (“Madelaine Chocolate”) appealed the district court’s judgment following a jury verdict in favor of Great Northern Insurance Company (“Great Northern”) concerning storm-surge damage caused by “Superstorm Sandy” to Madelaine Chocolate’s production facilities.
In Madelaine Chocolate Novelties, Inc., d.b.a. The Madelaine Chocolate Company v. Great Northern Insurance Company, No. 23-212, United States Court of Appeals, Second Circuit (June 20, 2025) affirmed the trial court ruling in favor of the insurer.
BACKGROUND
Great Northern refused to pay the full claim amount and paid Madelaine Chocolate only about $4 million. In disclaiming coverage, Great Northern invoked the Policy’s flood-exclusion provision, which excludes, in relevant part, “loss or damage caused by ....
Failure to Name a Party as an Additional Insured Defeats Claim
Post 5104
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Contract Interpretation is Based on the Clear and Unambiguous Language of the Policy
In Associated Industries Insurance Company, Inc. v. Sentinel Insurance Company, Ltd., No. 23-CV-10400 (MMG), United States District Court, S.D. New York (June 16, 2025) an insurance coverage dispute arising from a personal injury action in New York State Supreme Court.
The underlying action, Eduardo Molina v. Venchi 2, LLC, et al., concerned injuries allegedly resulting from a construction accident at premises owned by Central Area Equities Associates LLC (CAEA) and leased by Venchi 2 LLC with the USDC required to determine who was entitled to a defense from which insurer.
KEY POINTS
Parties Involved:
CAEA is insured by Associated Industries Insurance Company, Inc. ...
Exclusion Establishes that There is No Duty to Defend Off Site Injuries
Post 5103
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Attack by Vicious Dog Excluded
In Foremost Insurance Company, Grand Rapids, Michigan v. Michael B. Steele and Sarah Brown and Kevin Lee Price, Civil Action No. 3:24-CV-00684, United States District Court, M.D. Pennsylvania (June 16, 2025)
Foremost Insurance Company (“Foremost”) sued Michael B. Steele (“Steele”), Sarah Brown (“Brown”), and Kevin Lee Price (“Price”) (collectively, “Defendants”). Foremost sought declaratory relief in the form of a declaration that
1. it owes no insurance coverage to Steele and has no duty to defend or indemnify Steele in an underlying tort action and
2. defense counsel that Foremost has assigned to Steele in the underlying action may withdraw his appearance.
Presently before the Court are two ...
ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:
Health Care Fraud Trial Results in Murder for Hire of Witness
To Avoid Conviction for Insurance Fraud Defendants Murder Witness
In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...
Professional Health Care Services Exclusion Effective
Post 5073
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This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.
In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:
Insurance Coverage Dispute:
Travelers issued a Commercial General Liability ...
A Heads I Win, Tails You Lose Story
Post 5062
Posted on April 30, 2025 by Barry Zalma
"This is a Fictionalized True Crime Story of Insurance Fraud that explains why Insurance Fraud is a “Heads I Win, Tails You Lose” situation for Insurers. The story is designed to help everyone to Understand How Insurance Fraud in America is Costing Everyone who Buys Insurance Thousands of Dollars Every year and Why Insurance Fraud is Safer and More Profitable for the Perpetrators than any Other Crime."
Immigrant Criminals Attempt to Profit From Insurance Fraud
People who commit insurance fraud as a profession do so because it is easy. It requires no capital investment. The risk is low and the profits are high. The ease with which large amounts of money can be made from insurance fraud removes whatever moral hesitation might stop the perpetrator from committing the crime.
The temptation to do everything outside the law was the downfall of the brothers Karamazov. The brothers had escaped prison in the old Soviet Union by immigrating to the United...
