Attorney Bad Faith Issues To Know

Bad Faith attorneys in Grand Prairie, Grapevine, Colleyville, Keller, Saginaw, Newark, Southlake, Roanoke, and other places in the DFW metroplex might find this case worth knowing.
The United States District Court, Southern District of Texas, Houston Division, issued an opinion in November 2011, in the case styled “839 East 19th Street, LP v. Lexington Insurance Company, et al.” This is a case wherein a motion for summary judgment filed by one of the defendants, Unified Building Sciences, Inc. (UBS), was granted.
Here is some background:
839 East 19th Street, LP (839) owned the Mesa Ridge Apartments which suffered damages in Hurricane Ike. 839 submitted a claim for damages to Lexington Insurance Company. Lexington hired the adjusting firm Cunningham Lindsey, which in turn hired UBS as an expert consultant. Also assisting in adjusting the claim were: a public adjustor, Gary Krone; an inspector hired by Krone to give a second opinion, Storm Management, Inc.; a roofing company hired by Needham Roofing; and an inspection company hired directly by Lexington, Grayco. Grayco opined that the Mesa Ridge roofs were in bad condition prior to Hurricane Ike and attributed only minor damage to the storm. Krone disagreed with the report. Ultimately, in its 15th report to Lexington, Cunningham Lindsey lowered the repair estimate from $1,016,016.43 to $422,559.61.
839 asserted multiple claims against multiple defendants in this lawsuit, but its only claim against UBS is under the theory of “participatory liability” for aiding and abetting Lexington’s bad faith handling of the insurance claim.
In its analysis of this case, the court pointed out that the parties are disputing whether Texas law recognizes the theory of participatory liability as set forth in THE RESTATEMENT [SECOND] OF TORTS Section 876(b) (1977).
Section 876(b) provides:
For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he ***
(b)knows that the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, ….
UBS said that its conduct in this matter was not the type of highly dangerous, deviant, or antisocial activity for which a Texas court would impose liability under 876(b), and that it did not provide substantial assistance or encouragement to Lexington, the primary alleged wrongdoer. The court agreed with the argument.
This court considered the following five factors listed in comment d of 876 in determining that the defendants did not provide substantial assistance necessary for liability:
(1) the nature of the wrongful act;
(2) the kind and amount of the assistance;
(3) the relation of the defendant and the actor;
(4) the presence or absence of the defendant at the occurrence of the wrongful act; and (5) the defendant’s state of mind.
Here, UBS merely provided an opinion on the cost of repairing or replacing the Mesa Ridge roofs. UBS was a consultant, it did not work as an adjustor on the claim. Lexington was not obligated to accept UBS’s opinion. In fact, Lexington apparently did not accept UBS’s initial estimate and sought a second opinion. There is no evidence that UBS encouraged Lexington to deny the claim of 839.
In it’s “Conclusion and Recommendation” this court said:
“Because the record establishes as a matter of law that UBS did not provide substantial assistance to Lexington of a nature that would trigger imposition of participatory liability, assuming such a claim exists in Texas, the court recommends that UBS’s motion for summary judgment be granted and plaintiff’s claim against it be dismissed with prejudice.”
One thing to be considered when filing a lawsuit is who are all the proper parties to sue and which of these parties do you want in the lawsuit. Here, 839 appears to be suing numerous parties. Attorneys for 839 may have good reason for doing this. However, other attorneys may take the position that suing just the insurance company is good enough. An experienced Insurance Law Attorney is able to discuss the options with their client. After a thorough discussion the attorney and client can then decide what is the best course of action.