Oral arguments set in National Lloyds fee discovery case before Texas Supreme Court

By Karen Kidd | Sep 12, 2016

HOUSTON (SE Texas Record) – Oral arguments are scheduled for November before the Texas Supreme Court to review a lower court's ruling to compel discovery into attorney fees in multi-district litigation in a hail storm property damage coverage dispute.

HOUSTON (SE Texas Record) – Oral arguments are scheduled for November before the Texas Supreme Court to review a lower court's ruling to compel discovery into attorney fees in multi-district litigation in a hail storm property damage coverage dispute.

Texas Supreme Court Justices are scheduled to hear oral arguments in Re National Lloyds Insurance Co., Wardlaw Claims Service Inc. and Ideal Adjusting Inc., (No. 15-0591, Texas Sup.), on Nov. 10. A mandamus petition was field by property owners Aug. 10, 2015 and the court requested a full merits briefing on Dec. 18, 2015. The case was pending on merits briefs between June 6 and Sept. 2, when the writ of mandamus was granted and oral arguments were scheduled.


National Lloyds Insurance Co. alleges, with other defendant insurers in the case, that a lower court deviated from precedent when it compelled discovery of its attorney fee information. The lower court acted upon the request of plaintiff property owners who claimed insurers underpaid their damage claims.

The 13th Court of Appeals issued a split decision over whether a plaintiff can find out through discovery a defendant's attorney fee information.

"Using this opinion, any plaintiff can now seek discovery of a defense lawyer’s hourly rates, invoices, payment receipts and audits any time their claims for fees are contested," said the petition before the state high court. "Consequently, every defendant defending a claim for attorney fees will be forced to choose between stipulating to the reasonableness of the plaintiff’s fees, or producing all of their attorney fee information as the price for challenging those fees.”  

Property owners in the case argued against review by the high court, alleging the trail court had been correct in granting their request in reference to insurers' attorney fees because the requested information was not privileged from disclosure.

“As courts around the country have recognized, the discovery ordered by the trial court is not patently irrelevant,” the property owners response said.

The case originated from four property insurance cases filed by property owners who alleged they'd been underpaid on their damage claims after two hail storms in Hidalgo County in March and April 2012, according to court documents. The property owners are asking for damages and attorney fees on their breach of contract and Texas Insurance Code allegations, court documents say.

These cases were consolidated with thousands of other case into a multi-district litigation. In March 2015, property owners in the cases asked for additional discovery in reference to attorney fee information, to which defendant insurers objected.

The insurers are represented by attorneys Dale Wainwright of Bracewell LLP in Houston, Casey Low and Elizabeth Kozlow Marcum of Pillsbury Winthrop Shaw Pittman LLP in New York City, Scot G. Doyen and Alasdair A. Roberts of Doyen Sebesta Ltd LLP in Houston and Monica Valerio Wilkins, Greg Wilkins and Robert L Florance IV of Orgain Bell & Tucker LLP in Houston.

Property owners are represented by attorneys Amber Anderson and Molly Bowen of The Mostyn Law Firm in Houston, Jennifer Bruch Hogan, Richard P. Hogan and James C. Marrow of Hogan & Hogan, Randal G. Cashiola of Cashiola Law Firm in Beaumont and Gilberto Hinojosa of the Law Offices of Gilberto Hinojosa in Brownsville.

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