BEAUMONT – The Ninth Court of Appeals recently stayed a Hurricane Rita lawsuit brought against the Texas Windstorm Insurance Association, finding temporarily relief should be granted to prevent “undue prejudice.”
Around a decade ago, plaintiff David James, who is represented by Houston attorney Steve Mostyn, filed suit against TWIA, Brush County Claims and adjuster David Gutierrez, alleging the defendants underpaid his Rita claim.
According to court records, on Sept. 13 TWIA and the other two defendants filed a petition for a writ of mandamus, seeking to compel Judge Gary Sanderson, 60th District Court, to vacate an August 29 ruling, which ordered them produce photographs and estimates for all Hurricane Rita property claims within a one-mile radius of James’ property.
The following day, the Ninth Court issued an order, finding “temporary relief is necessary to prevent undue prejudice.”
The case has been stayed until justices issue an opinion.
In their petition, TWIA and the other defendants argue the discovery request is the same type of “overly broad, unduly burdensome and irrelevant” request that the Texas Supreme Court held as such in the case of In re National Lloyds.
“This case follows what has become a familiar pattern of discovery abuse in bad faith insurance lawsuits: the plaintiff-insureds convince the trial court to let them ‘dredge the lake’ of their insurer’s claim files on the tenuous allegation that they may uncover something useful,” TWIA’s petition states.
When Hurricane Rita struck Jefferson County on Sept. 24, 2005, James had windstorm and hail insurance on his Groves home. James and his wife Sue filed a claim for damages and TWIA assigned Brush Country Claims.
Brush sent its adjuster, David Gutierrez, to inspect the James’ property, court records show.
According to the petition, Gutierrez and other Brush adjustors tried to inspect the house multiple times. However, despite the James’ claim for interior damage, they repeatedly refused permission for the adjusters to enter the house.
A year later, the James finally gave a Brush adjuster permission. Upon entering, the adjuster discovered that with the exception of one room, the interior had been completely gutted down to the studs with all the drywall, wood trim, fixtures and other elements removed.
As a result, the Brush inspectors were never able to observe the house’s interior condition following Hurricane Rita, nor did the James ever provide any photographs of the interior’s condition, the petition states.
Brush submitted an estimate to TWIA that, despite the couple’s refusal to let adjusters inspect the interior, included interior damages.
TWIA rejected the estimate of interior damages as speculative and unreliable, due to the adjusters’ inability to perform an actual inspection of the claimed interior damages, but paid the couple for the exterior damage, the petition states.
“The James intentionally refused to permit any interior inspections of their house until after they had removed all the evidence, if any, of storm damage by gutting it down to the studs,” the petition states.
“In an effort to salvage their own misdeeds, the James seek discovery of other Hurricane Rita claims filed with TWIA in hopes of using other claimants’ interior damages as some indication of the damage to the interior of their house.”
TWIA and the other defendants argue discovery is “not a tool to ‘fish’ for information,” and that the plaintiffs “are not entitled to engage in overbroad and irrelevant discovery in an effort to create a basis for their claims.”
The defendants further argue the plaintiffs’ experts have no foundation for their opinions on the alleged damage caused by Rita.
“The Texas Supreme Court held that discovery regarding one insurance claim does not justify a search into other claims in the hopes of finding something supportive of one’s lawsuit,” the petition states.
“Yet that is exactly what the Trial Court ordered in this case. Ignoring the on-point guidance of In re National Lloyds and this Court’s prior holdings, Respondent subjected TWIA to overbroad, unduly burdensome and irrelevant discovery.
“Mandamus is the proper remedy in such situations, and TWIA therefore petitions this Court for relief.”
The defendants are represented by Beaumont attorney James Old Jr., as well as David Slayer, April Marburger and Jocelyn Holland, attorneys for the Galveston law firm McLeod, Alexander, Powel & Apffel.
In addition to Mostyn, the plaintiffs are represented by Randal Cashiola of the Beaumont law firm Caashiola & Bean.
Appeals case No. 09-16-00331-CV
Jefferson County District Court case No. B-183464