Texas SC rules for insurer in fee-dispute class action

Rob Luke Dec. 5, 2007, 3:18pm

Justice Paul W. Green

AUSTIN -- The Texas Supreme Court will likely draw more fire from opponents accusing it of pro-business bias following an opinion last week in a class action suit against a prominent insurer.

In Mid-Century Insurance Co. v. Shefqet Ademaj (docket# 05-0016) the bench overturned an Appeals Court affirmation of a trial court ruling in favor of Ademaj and others and delivered a take-nothing judgment in favor of Mid-Century.

The SC ruling upheld a Department of Insurance (DoI) decision allowing Mid-Century to directly charge motorists a disputed fee. Ademaj had argued successfully at trial and on appeal that Mid-Century collected the fee illegally because it was not included in the company's rate filing with DoI commissioner.

"Because the commissioner made a reasonable determination that the Authority fee should be charged directly and not as part of the Article 5.101 premium, we hold that Mid-Century properly recouped the fee from Ademaj," wrote Justice Paul W. Green for the majority.

A concurring opinion written by Justice Harriet O'Neill joined by Justice David Medina, while agreeing with the majority's conclusion, disagreed with the basis of its ruling. The concurrence claimed that the state's Insurance Code does not permit insurers to charge motorists additional fees.

Lone Star State plaintiff lawyers recently expressed concern over what they consider the Supreme Court's recent record of favorable decisions for corporations, LNL reported last week.

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