San Antonio Court of Appeals rewards a Plaintiff for having his Head in the Clouds. In San Antonio do not be surprised if the trial court awards attorney’s fees to the insured in a UIM case, even if the jury awards less than a pre-suit offer by the insurance carrier. The Fourth Court of Appeals reasoned that to hold otherwise would penalize an insured for refusal to settle pre-suit. However, most courts encourage pre-suit settlements. Attorney’s fees should be awarded to a carrier when a Plaintiff refuses to accept a reasonable offer. This recent decision holds just the opposite. In State Farm Mutual Automobile Insurance Company v. Valdez, the Plaintiff filed a declaratory judgment action seeking his attorneys’ fees and costs. State Farm’s pre-suit offer was more than what the Plaintiff was ultimately awarded at trial after settlement credits and offsets. In this case, the jury award was $823 less than the pre-suit offer and $20,000 was awarded to the Plaintiff in attorney’s fees. Presumably, there would have been a different outcome if the jury awarded less than the offsets to which the carrier was entitled. Evaluations of UIM cases should consider the possible award of attorney’s fees to the insured.
How many miscuts of steel does it take to find yourself in a retaliatory termination lawsuit? 3,000? Or just one back injury? The Texarkana Court of Appeals determined that a steel company fired its employee in retaliation because he filed a workers’ compensation claim against it. The Plaintiff had miscut 750 pieces of steel and was warned that if it happened again, he would be terminated. Plaintiff was subsequently injured on the job, and after filing a workers’ compensation claim, the steel company made accommodations for him at work. Plaintiff later miscut 3,000 pieces of steel and was fired. The court reasoned direct evidence of retaliation is rarely available. For this reason, it was not necessary for the Plaintiff “to show that a workers’ compensation claim was the sole motivation for the termination.” Instead, Plaintiff had to “prove a causal link between the filing of a workers’ compensation claim and subsequent discharge.” The case is Pittsburg Steel, LLC v. Palmer, 2023 WL 8534640, at *6 (Tex. App.—Texarkana Dec. 11, 2023, no pet.)
The Texas Supreme Court adopted its preliminary approval of rules for the new Business Court System. No surprise that the Texas Rules of Civil Procedure will govern procedure in the recently created Texas Business Courts. A party may file an original proceeding in a Business Court if it meets the Byzantine jurisdictional requirements. A case can be transferred to the Court, and there is a removal and remand process akin to the Federal Rules for removing a case from a state district court to a Business Court. An original petition must also plead facts to establish venue in a county in an operating division of the Business Court.
Safeco is Safe, the Plaintiff is out—after the umpire’s award, the Federal Fifth Circuit needed a backstop—give me some attorney’s fees and cracker jacks—and more baseball lingo to come. The Federal Fifth Circuit Court of Appeals recently asked the Texas Supremes the following certified question: “In an action under Chapter 542A of the Texas Prompt Payment of Claims Act, does an insurer’s payment of the full appraisal award plus any possible statutory interest preclude recovery of attorney’s fees?” The Answer to the Certified Question is….YES! Their reasoning was based upon longstanding Federal Court cases that have ruled the payment of the appraisal award plus statutory interest eliminates the possibility of an award of attorney’s fees because the insured has received payment of the appraisal award which covers his claim under the insurance policy. The case is Rodriguez v. Safeco Ins. Co. of Indiana, No. 23-0534, 2024 WL 388142, at *5 (Tex. Feb. 2, 2024).
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David E. Chamberlain and Sean B. Swords