Defendants want insurance cases moved to federal court

Marilyn Tennissen May 3, 2007, 6:00am

After Hurricane Rita left thousands of residences damaged throughout Southeast Texas, many homeowners have turned to the local courts with complaints against their insurance carriers.

Now as companies like Allstate and State Farm respond to the lawsuits, many of the defendants are questioning whether the state district courts are the appropriate venue for the cases.

In the last week of April alone, at least three contract suits filed originally in Orange County contain defense requests to have the cases heard in the U.S. Courts of the Eastern District of Texas.

Daniel Anderson vs. Allstate Texas Lloyds, is one of the cases and is an example the argument defense lawyers give to support a transfer to federal court.

The original plaintiff's petition was filed in Orange County court on Feb. 28. Anderson, an Orange resident, filed a claim with Allstate for roof damage, water damage and wind damage.

"Allstate wrongfully denied the plaintiff's claim for repairs of the property, even though the policy provided coverage for losses such as those suffered by plaintiff," the original petition states.

Anderson is seeking maximum recovery of $74,999.

On April 20, defense attorney Roger Higgins of Dallas denied "each and every allegation in the original petition" and filed a notice of removal to U.S. District Court.

As a basis of removal, the defendant argues the diversity of citizenship of the parties in the case.

While the plaintiff is a resident of the state of Texas, the defendant, Allstate Texas Lloyds, is an association of underwriters whose individual members are all residents and citizens of Illinois and Virginia.

"The U.S. Supreme Court has consistently upheld for over 100 years that the citizenship of an unincorporated association (such as Allstate) is determined � solely by the citizenship of its members," the notice of request for removal states. "Accordingly, Allstate is a citizen of Illinois and Virginia."

Or as the defendant stated in Judie Fields vs. State Farm Lloyds, the case should be removed to federal court "pursuant to 28USC 1441b in that it is a civil action between different states."

Higgins and his associates have been successful at moving many cases from Orange and Jefferson Counties to the federal court in recent months.

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