Persons living in Fort Worth, Dallas, Grand Prairie, Arlington, Irving, Mesquite, Garland, Richardson, Carrollton, Farmers Branch, and other places in Texas might enjoy this case. It tells us how someone who does not consult with an experienced Insurance Law Attorney is just wasting their time doing a lawsuit by themselves.
The opinion in this case was issued on June 2, 2011, by the Austin Court of Appeals. The style of the case is, Cynthia Ulett Lynch v. State Farm Mutual Automobile Insurance Company. Lynch was appealing from a summary judgment against her based on res judicata.
Here is some background.
Lynch alleges that on May 10, 2002, she was walking in a parking lot when she was struck by a vehicle driven by Cecil Vannoy and insured by State Farm. On May 7, 2004, Lynch filed a lawsuit in Bell County against Vannoy alleging negligence. Lynch’s attorney withdrew soon after. Lynch proceeded by herself and added State Farm as an actual defendant in the case.
State Farm filed a motion for summary judgment contending that Lynch had no direct cause of action against State Farm. The trial court agreed and granted State Farms’ motion. The case against Vannoy continued but State Farm was out.
Approximately six months later, Lynch filed a second lawsuit against State Farm in Williamson County. The lawsuit alleged various causes of action arising out of the 2002 automobile accident. State Farm filed another motion for summary judgment which the trial court granted. The ruling was based on res judicata.
To prevail on a res judicata defense, State Farm had to prove, (1) there is a prior final judgment on the merits by a court of competent jurisdiction (this had occurred in the Bell County lawsuit), (2) the parties in the two actions are identical or in privity with the prior parties, and (3) the claims in the second action are based on the same claims that were raised or could have been raised in the first action. These are the principles set out in the Texas Supreme Court case, Amstadt v. United States Brass Corp., a 1996 case.
In this Lynch case, all three elements of res judicata had been met.
The difference in the two cases was that in the Williamson County lawsuit, Lynch had alleged “breach of contract” and “fraud”. However, even these were not properly plead in the lawsuit papers. As the court stated, these pleadings were construed as allegations resulting from the Bell county negligence case.
There are a couple of noteworthy points to be taken out of this case. One is that an experienced attorney needs to be the one filing lawsuit papers. In this case, Lynch was pro se, in other words, representing herself. According to the judges, Lynch had not properly worded her lawsuit.
The other noteworthy point to be taken from this case is this. Very few people, this includes attorneys, have a clear understanding in the difference between a first party insurance claim and a third party insurance claim. As to attorneys, most do not really need to understand the difference because it is not the type of law they practice.
Maybe this will help to understand the difference. Whenever a person is making a claim or suing their own insurance company, that is a first party claim or lawsuit.
Whenever someone is making a claim against someone else, that is a third party claim. It is very unusual to be able to file a third party lawsuit against the insurance company. Although there are a few exceptions, when someone other than your own insurance company commits some type of wrong that causes you harm then that is a third party claim. And the claim is against whoever cause the harm. The other person’s insurance company is rarely who did anything wrong, rather it is their insured who committed the wrong and who has to be sued for the harm caused. Their insurance company provides a defense and pays the claim or lawsuit if it is determined that the insured is at fault.
This can be confusing unless it is something that is dealt with on a routine basis.
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