NO. 12-0156 - Supreme Court of Texas

Document Sample
NO. 12-0156 - Supreme Court of Texas Powered By Docstoc
					                                                               FILED
                                                               IN THE SUPREME COURT
                                                               OF TEXAS
                                                               12 March 16 P3:26
                                                                BLAKE. A. HAWTHORNE
                                                               CLERK
                               NO. 12-0156


             BEFORE THE MULTIDISTRICT LITIGATION PANEL
                             OF TEXAS




       IN RE STATE FARM LLOYDS HURRICANE IKE LITIGATION




          STATE FARM LLOYDS’ REPLY TO THERESA MOOR’S
                RESPONSE TO MOTION TO TRANSFER

Christopher W. Martin                 Murray Fogler
Texas Bar No. 13057620                State Bar No. 07207300
MARTIN, DISIERE, JEFFERSON &          BECK, REDDEN & SECREST, LLP
WISDOM, L.L.P.                        One Houston Center
808 Travis, 20TH Floor                1221 McKinney, Suite 4500
Houston, Texas 77002                  Houston, Texas 77010-2010
(713) 632-1700 – Telephone            (713) 951-6235 – Telephone
(713) 222-0101 – Facsimile            (713) 951-3720 – Facsimile
martin@mdjwlaw.com                    mfogler@brsfirm.com

                   COUNSEL FOR STATE FARM LLOYDS
                                           NO. 12-0156


                     IN THE MULTIDISTRICT LITIGATION PANEL


            IN RE: STATE FARM LLOYDS HURRICANE IKE LITIGATION
 (SUITS NOW PENDING IN THE 11th, 55th, 61st, 80th, 113th, 125th, 127th, 129th, 133rd, 151st,
152nd, 157th, 159th, 164th, 165th, 189th, 190th, 215th, 234th, 269th, 270th, 281st, 295th, 333rd, and
334th JUDICIAL DISTRICT COURTS OF HARRIS COUNTY, TEXAS; IN THE 10th, 56th,
122nd, 212th, and 405th JUDICIAL DISTRICT COURTS OF GALVESTON COUNTY, TEXAS;
IN THE 240th, 268th, 400th, and 434th JUDICIAL DISTRICT COURTS OF FORT BEND
COUNTY, TEXAS; IN THE 58th, 60th, 136th, and 172nd JUDICIAL DISTRICT COURTS OF
JEFFERSON COUNTY, TEXAS; IN THE 128th, 163rd, and 260th JUDICIAL DISTRICT
COURTS OF ORANGE COUNTY, TEXAS; IN THE 412th JUDICIAL DISTRICT COURT OF
BRAZORIA COUNTY, TEXAS; IN THE 9th, 284th, and 410th JUDICIAL DISTRICT COURT
OF MONTGOMERY COUNTY, TEXAS; IN THE 2nd JUDICIAL DISTRICT COURT OF
CHEROKEE COUNTY, TEXAS; IN THE JUDICIAL DISTRICT COURT OF TYLER
COUNTY, TEXAS; IN THE 411th JUDICIAL DISTRICT COURT OF POLK COUNTY,
TEXAS; IN THE 75th and 253rd JUDICIAL DISTRICT COURT OF LIBERTY COUNTY,
TEXAS; IN THE 88th and 356th JUDICIAL DISTRICT COURTS OF HARDIN COUNTY,
TEXAS; IN THE 12th JUDICIAL DISTRICT COURT OF GRIMES COUNTY, TEXAS; IN
THE 344th JUDICIAL DISTRICT COURTS OF CHAMBERS COUNTY, TEXAS; IN THE 23rd
JUDICIAL DISTRICT COURTS OF MATAGORDA COUNTY, TEXAS; AND IN THE 329th
JUDICIAL DISTRICT COURTS OF WHARTON COUNTY, TEXAS)


                REPLY TO RESPONSE TO MOTION TO TRANSFER

TO THE MULTIDISTRICT LITIGATION PANEL OF TEXAS:

       State Farm Lloyds (“State Farm”) files this Reply to Theresa Moor’s Response to

State Farm’s Motion Transfer. Moor’s Response will be referred to as the “Response.”

A.     There Are Not 300 State Farm Hurricane Ike Cases In Galveston.

       Moor argues that approximately 300 Hurricane Ike cases remain pending in

Galveston County. Response at 6. This is apparently based on the unsupported statement

from the Response to State Farm’s Motion to Stay that 300 Hurricane Ike cases in

Galveston “remain pending today.”



                                                 1
       There are not 300 Hurricane Ike/State Farm cases pending in Galveston County.

Only fourteen (14) Hurricane Ike cases from Galveston County are the subject of State

Farm’s Motion to Transfer. In fact, there are currently only 266 Ike cases in Texas that

are implicated by State Farm’s Motion to Transfer.

       Moor argues that since so many cases have settled in Galveston County, this Panel

should deny State Farm’s motion to transfer because everything is running very

efficiently. Response at 6. This Panel has never looked to the number of cases being

settled to determine whether cases are “related” under Rule 13 or whether a motion to

transfer should be granted. Moreover, the fact that some cases have been settled in one

county is not relevant to the determination of whether to transfer cases from 16 different

counties.

       The fact that some cases have settled does not address the critical issues of

duplicative discovery, inconsistent rulings, or the problem of a trial court overruling a

county (non-MDL) pretrial court’s rulings. Moor nowhere addresses these issues in her

Response. Finally, the existence of previously settled cases in Galveston does not change

the fact that there are still 14 non-settled cases in Galveston that are related and should be

transferred to a single pretrial court. The fact that other cases not before this Panel have

previously settled has no relevance to whether the remaining cases actually before this

Panel are “related” and should be transferred.

       That other cases are purportedly being handled efficiently (resulting in

settlements) has no relevance to the determination of whether a transfer is proper under

Rule 13. The argument that cases have been handled efficiently without a transfer to a


                                              2
pretrial court has been previously rejected by this Panel. In re Ford Motor Co., 285

S.W.3d 185, 191 (Tex. M.D.L. Panel 2008). This Panel expressly rejected the argument

that “the cases were being handled efficiently and without significant disagreement.” Id.

Rule 13 “does not require proof that witnesses have already been inconvenienced; it

looks ahead and focuses on whether transferring cases to a pretrial judge would serve the

convenience of the parties and witnesses by preventing inconveniences in the future.” In

re Silica Prod. Liab. Litig., 166 S.W.3d 3, 6 (Tex. M.D.L. Panel 2004); see also In re

Ford Motor Co., 285 S.W.3d at 191. In other words, it is irrelevant whether cases were

handled efficiently in the past. The relevant question is whether the future transfer of the

cases to a single pretrial court will “promote the just and efficient conduct of the cases.”

TEX. R. JUD. ADMIN. 13.3(a)(2).

        Looking forward, a transfer will consolidate discovery and ensure that conflicting

rulings are a thing of the past in this litigation. Regardless of the efficiency of cases in

the past, the transfer of the cases to a single pretrial court will “promote the just and

efficient conduct of the cases” moving forward. See TEX. R. JUD. ADMIN. 13.3(a)(2).

B.      Moor’s Case Is “Related.”

        Theresa Moor offers several arguments why her case is not “related” to the other

cases and should, therefore, not be transferred. Each argument is without merit.

     1. Moor’s “standard practices” argument misconstrues the law.

        Moor argues that “the Panel has found that multiple cases were ‘related’, and

transfer proper, where the plaintiffs’ extra-contractual claims were based on allegations

that the defendants’ acted pursuant to their standard practices and procedures.” Response


                                             3
at 2 (citing In re Delta Lloyds, In re Texas Windstorm, In re Ocwen). Moor then

concludes that her case and others are not “related” because Moor has not alleged that

“State Farm’s actions were based on its standard practices and procedures, its ‘general

business practice’, or an ‘unfairly designed’ process.” Response at 3. This argument

fails for several reasons.

       First, the authority cited by Moor fails to support her theory. Moor concludes that

the transfer in In re Delta Lloyds was based on the purported fact that the pleadings in

that case alleged that the insurers were engaged bad acts committed with such frequency

that they constituted a “general business practice.” Response at 3. Specifically, Moor

quotes a footnote from In re Delta Lloyds (which summarizes the claims against the

insurers in that case) discussing “a general business practice of [the insurer].” Response

at 3. Moor takes that quote and claims that the transfers granted in In re Delta Lloyds

were based solely on this “general business practice of [the insurer].” Response at 3.

       This completely misconstrues the quoted language from In re Delta Lloyds. First,

this quote comes from the dissent/concurrence. In re Delta Lloyds, 339 S.W.3d 384, 391

n.1 (Tex. M.D.L. Panel 2008).1        Second, the language summarizing the plaintiffs’

pleadings was prefaced by a sentence referring to all the insurers that were the subject of

that motion to transfer, both those that prevailed and those that lost their motions to


1
       The majority opinion was authored by Justice Hanks and joined by Justices Lang and
       Stone. The dissent/concurrence was authored by Judge Peeples and joined by Justice
       McClure. Ironically, the dissent/concurrence only disagreed with the majority with
       regard to the denial of the third motion to transfer, and stated that they would have
       granted the last motion to transfer on the ground that “one disaster caused every bit of
       damage in these cases makes them related.” In re Delta Lloyds, 339 S.W.3d at 391.


                                              4
transfer.   Id.   As such, the language summarizing the pleadings (“general business

practice”) is not tied to the cases that were transferred, but to all the cases that were

before the Panel, both winners and losers. In other words, there is nothing in this

language or the context of this portion of the Panel’s opinion from In re Delta Lloyds that

links the language “general business practice” from the pleadings in every case to the

conclusion that the prevailing cases were related “and would involve the same

discovery,” as alleged by Moor. In fact, a proper overview of this case demonstrates why

the instant cases should be transferred to a single pretrial court.

       In re Delta Lloyds involved three separate motions to transfer surrounding the

denial of claims stemming from Hurricane Rita. Id. at 385. The first motion brought by

Delta Lloyds sought to consolidate four cases. Id. The second motion brought by

Southeast Surplus Underwriters sought to consolidate twelve cases. Id. The third motion

was brought by five carriers and underwriters seeking to consolidate six cases. Id.

       The Panel held that the Delta Lloyds cases were related because “the claims

against Delta all arise from standardized policy language used by Delta and from the

same standard practices and procedures allegedly followed by Delta with respect to each

plaintiff’s claims.” Id. at 388. The same justification supported the holding that the

Southeast Surplus Underwriters’ cases were related as well. Id.

       However, the third motion to transfer was denied because the pleadings did not

show that the “claims against them are based on standard practices and procedures

common to all [the cases] in handling the claims, or that the claims arise from the same

standardized policy language.” Id. at 389. In other words, there was no evidence that


                                               5
these five carriers and underwriters all had similar practices and procedures or that they

all involved similar policy language. That analysis stands in contrast to the cases at bar.

       Here, the cases are all against one carrier, State Farm, and all arise from Hurricane

Ike, State Farm’s handling of those claims, denial or acceptance of benefits by only State

Farm, and coverage involving nearly identical policy language from policies issued only

by State Farm. Simply put, the instant case has much more in common with Delta Lloyds

and Southeast Surplus Underwriters (the motions that were granted) than with the motion

not granted that was brought by multiple carriers and underwriters.

       Other MDL opinions help illustrate the point that these cases are related. In In re

Standard Guaranty Insurance Company, this Panel addressed a motion to transfer

involving only three insurance coverage cases arising from Hurricane Rita.             In re

Standard Guar. Ins. Co., 339 S.W.3d 398, 398 (Tex. M.D.L. Panel 2009).                  The

respondents argued that the cases were not related because they involved “different

individual plaintiffs and separate and distinct pieces of real property located in three

different counties.” Id. at 399-400. The Panel held that the cases were related because

each case shared “common questions of fact regarding Standard Guaranty’s alleged

conduct in adjusting the individual insurance claims and the alleged contractual basis for

denying each plaintiff’s claims.” Id. at 400. The only two factors that this Panel looked

to in determining that the cases were related was the fact that these cases all involved

similar conduct (claims handling) and the similar contractual basis (similar policy

language).    The cases were transferred in the absence of any claims of “standard

practices” that Moor believes is so critical to a transfer.


                                               6
       In In re Texas Windstorm, this Panel was faced with a similar motion to transfer

arising from Hurricanes Rita and Humberto claims handling suits.               In re Texas

Windstorm Ins. Assoc., 339 S.W.3d 401, 401 (Tex. M.D.L. Panel 2009). That case

involved a motion to transfer 38 Rita cases and 4 Humberto cases. After this Panel

rejected the argument that the cases were not related because of different storms or

different types of policies (residential v. commercial), the court held that the cases were

related because:

       [E]ach case arises from [1] hurricane damage, [2] involves the same
       insurance coverage, and [3] involves the same or similar extra-contractual
       claims and discovery discussed above.

Id. at 403.

       The same is true here. The lawsuits against State Farm all arise from Hurricane

Ike damage (including Moor’s), involve the same insurance coverage from State Farm

(including Moor’s), and all involve the same or similar extra-contractual claims

(including Moor’s). In fact, Moor’s petition asserts extra-contractual claims against State

Farm, just like all the other cases at issue here, including claims for violations of chapter

541 of the Texas Insurance Code, common law duty of good faith and fair dealing, and

fraud. This Panel has held that cases were “related” under Rule 13 “[b]ecause of the

extra-contractual claims, . . . even though some of them involve a different policy and a

later hurricane in the same area.” Id. Just like Standard Guaranty, the cases in Texas

Windstorm were transferred in the absence of any allegations of “standard practices” that

Moor claims is so critical to a transfer. Likewise, the Ike cases against State Farm should

also be transferred.


                                             7
   2. Moor confuses disasters with policies.

      Moor argues that cases arising out of the same disaster “does not mean ipso facto

that they are ‘related’ for purposes of Rule 13.” Response at 4 (quoting In re Delta

Lloyds, 339 S.W.3d at 387). Moor then goes on to conclude that “even if the policies are

the same, that would not ipso facto make all claims made under them ‘related’ for Rule

13 purposes. Response at 4 (emphasis added). Moor tries to improperly apply the

language from In re Delta Lloyds regarding the same disaster to her analysis regarding

the same policy. This misconstrues this Panel’s language from In re Delta Lloyds. In

fact, this Panel in that same case looked to the fact that the claims arose from the “same

policies” in holding that the cases were “related.” In re Delta Lloyds, 339 S.W.3d at 388.

                                    CONCLUSION

      For these reasons, State Farm requests that the Panel grant the Motion to Transfer

all cases listed in Appendix A to State Farm’s Motion to Transfer.


                                  Respectfully submitted,

                                  By:     /s/ Christopher W. Martin
                                        Christopher W. Martin
                                        Texas Bar No. 13057620
                                        MARTIN, DISIERE, JEFFERSON & WISDOM, L.L.P.
                                        808 Travis, 20th Floor
                                        Houston, Texas 77002
                                        (713) 632-1700 – Telephone
                                        (713) 222-0101 – Facsimile
                                        martin@mdjwlaw.com

                                        Murray Fogler
                                        State Bar No. 07207300
                                        BECK, REDDEN & SECREST, LLP
                                        One Houston Center


                                            8
1221 McKinney, Suite 4500
Houston, Texas 77010-2010
(713) 951-6235 – Telephone
(713) 951-3720 – Facsimile
mfogler@brsfirm.com

ATTORNEYS FOR STATE FARM LLOYDS




    9
                             CERTIFICATE OF SERVICE

       I hereby certify that on this 16th day of March, 2012, a true and correct copy of
the foregoing instrument was sent via certified mail, return receipt requested, to the
following the following counsel:

J. Steve Mostyn                               Sylvester Anderson
The Mostyn Law Firm                           Regency Square Tower
3810 West Alabama Street                      6200 Savoy, Suite 250
Houston, TX 77027                             Houston, Texas 77036
Counsel of record who is designated under     Counsel for Theresa Moor
Rule 13.3(h) to serve documents on parties
who are not aligned with State Farm
Lloyds

MDL Panel Members: (via US Mail)              Hon. Carolyn Wright
Hon. David Peeples                            Justice, Fifth Court of Appeals
Fourth Administrative Judicial Region         George L. Allen, Sr. Courts Bldg.
Bexar County Courthouse                       600 Commerce3 Street, 2nd Floor
100 Dolorosa, 5th Floor                       Dallas, Texas 75202-4658
San Antonio, Texas 78205

Hon. Jeff Brown                               Hon. Catherine Stone
Justice, Fourteenth Court of Appeals          Justice, Fourth Court of Appeals
301 Fannin, Room 245                          300 Dolorosa, Suite 3200
Houston, Texas 77002                          San Antonio, Texas 78205

Hon. Ann McClure
Justice, Eighth Court of Appeals
500 East San Antonio, Room 1203
El Paso, Texas 79901



                                       /s/ Christopher W. Martin
                                       Christopher W. Martin




                                             10

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:0
posted:2/26/2013
language:Unknown
pages:11