Lawyers entertained by tortured fights over the meaning of words need look no further than pleadings in the average insurance coverage dispute. That’s because counsel seem to deconstruct every syllable in an insurance policy then put them all back together again, all in the name of client advocacy.
Dennis Horn; Mary Horn v. State Farm Lloyds, a recent decision from the 5th U.S. Circuit Court of Appeals, is a good example of that kind of fight — except the parties are fighting over the meaning of words in an agreement they had amongst themselves.
The background, according to the 5th Circuit’s Dec. 21 decision in Horn, is as follows. After Hurricane Ike, hundreds of homeowners, many of them represented by Beaumont’s the Mostyn Law Firm (which the court refers to as the firm), filed claims against State Farm Lloyds (which the court refers to as State Farm) in Texas state court. In many of those cases, homeowners sued individual insurance adjusters in their personal capacities. State Farm removed several of those cases to federal court on diversity grounds. In 2009, the firm and State Farm entered into an agreement whereby the firm promised to abandon its clients’ claims against individual adjusters and forgo suing them in the future in exchange for State Farm’s promise not to remove “any Hurricane Ike cases” to federal court.
A year later, the opinion continues, Dennis and Mary Horn, who were represented by the firm, filed an insurance-coverage suit against State Farm in a Galveston state court. Eleven months later, the Horns restyled their case as a class action by amending their complaint to add a putative class of more than 100,000 Texas residents and property owners. State Farm then removed the case to a U.S. District Court for the Southern District of Texas on diversity grounds. The Horns moved to remand to state court on the basis of the agreement. U.S. Magistrate Judge John Froeshner wrote an opinion, later adopted by U.S. District Court Kenneth Hoyt, which concluded that the phrase “any Hurricane Ike cases” unambiguously encompassed class.
State Farm appealed to the 5th Circuit. In an opinion sprinkled with nearly as many references to dictionaries as to case law, the 5th Circuit concluded that it should affirm the trial court’s decision sending the case back to state court.
“The district court concluded, and we agree, that the negotiated contract, apparently drafted by State Farm, covers all past, present, and future lawsuits filed by the Firm against State Farm on behalf of homeowners, as individuals or part of a class, whose properties were damaged by Hurricane Ike,” wrote Judge Stephen Higginson, joined by Judges E. Grady Jolly and Ed Prado.
Mitchell A. Toups, a partner in Beaumont’s Weller, Green, Toups & Terrell who represents the Horns on appeal, did not return a call seeking comment.
Phil Supple, a spokesman for State Farm, says: “We don’t have any plans to appeal the 5th Circuit decision. And we look forward to vindicating our rights in the Texas state courts.”
— John Council
The trial court’s decision sending the case back to state court.
Posted by: calcul RCA | March 17, 2013 at 01:52 AM