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In re Great Lakes Insurance SE

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

December 16, 2019


          On Petition for Writ of Mandamus.

          Before Justices Benavides, Longoria, and Perkes


          GINA M. BENAVIDES, Justice [1]

         Relator Great Lakes Insurance SE filed a petition for writ of mandamus in the above cause number on November 12, 2019. Through this original proceeding, relator contends that the trial court erred in allowing discovery beyond that allowed by the Texas Citizens Participation Act (TCPA). See Tex. Civ. Prac. & Rem. Code Ann. §§ 27.001-.011.[2] We deny the petition for writ of mandamus.

         I. Background

         According to their first amended original petition, real parties in interest Juan Lambrecht and Rosa Cortez filed suit against relator for breach of contract because relator insured their residential property at 1003 East 31st Street in Mission, Texas, but failed to pay for damage sustained to the property by a severe storm.

         Relator filed a third amended counterclaim against real parties and other counter-defendants for fraud, fraud by nondisclosure, negligent misrepresentation, and conspiracy, and relator alleged that the real parties' lawsuit constituted a frivolous action under the insurance code. See Tex. Ins. Code Ann. § 541.153. The other parties delineated as counter-defendants include Cord Largo, David Poynor, Poynor Group, Under Paid Claim, LLC, and Martha Guerra, who were generally involved in inspecting the property and adjusting the claim. According to the allegations in relator's third amended counterclaim: the real parties entered a contract with the other counter-defendants to report the insurance claim to relator for damages that allegedly occurred on March 26, 2015; the counter-defendants inspected the property on or about August 11, 2015; these parties changed the date of loss from March 26, 2015, to August 19, 2015; and the parties nevertheless submitted a claim to relator for damages allegedly sustained on August 19, 2015, without reinspection of the property. This counterclaim specifically recites, in relevant part:

10. Lambrecht signed a contract with public adjuster Martha Guerra on or about July 16, 2015 wherein he authorized Guerra, Cord Largo and/or Under Paid to report an insurance claim to Great Lakes for damages to his property located at 1003 East 31st Street, Mission, Texas 78574 that had allegedly occurred on March 26, 2015.
11. Largo, Guerra, and/or Under Paid then engaged Poynor and Group to inspect the subject property and prepare an Xactimate estimate for the cost of repairs. The purpose of utilizing Xactimate was to submit this estimate to Great Lakes in conjunction with a request for payment of insurance proceeds. Poynor and Group allegedly prepared this estimate and conducted their inspection on or before August 11, 2015. Poynor and Group knew Largo, Guerra, and/or Under Paid were in the business of public adjusting and received all or a substantial portion of their incomes by obtaining insurance proceeds from insurance companies. Poynor and Group also knew that the cause of damages, and when those respective damages occurred, were necessary components to whether Largo, Guerra, and/or Under Paid were entitled to receive any insurance proceeds. Therefore, Poynor and Group manipulated those necessary issues in order for their estimate to remain adaptable for Largo, Guerra, and/or Under Paid's purposes.
12. After Poynor and Group completed their estimate and inspection . . . Lambrecht, Largo, Guerra, and/or Under Paid then elected to alter their contract to change, among other things, the date of loss from March 26, 2015 to August 19, 2015. This means that neither Poynor nor Group saw the property after, nor could they offer an opinion regarding, the August 19, 2015 date of loss.
13. Largo, Guerra, and/or Under Paid nevertheless submitted this altered contract to Great Lakes requesting Great Lakes open a claim and investigate the property for damages that had allegedly occurred on August 19, 2015. Great Lakes investigated the claim, found that the property had not sustained hail or wind damages on August 19, 2015, and promptly issued a claim disposition letter denying the claim.
14. On or about January 29, 2016, Plaintiffs' attorney, Blayne Fisher, then sent Great Lakes a demand letter again alleging that the subject property was damaged by a covered peril on August 19, 2015. Poynor and Group's damage estimate was included for support of the demand letter; notably the estimate stated it was prepared on August 11, 2015, yet Fisher represented those damages had occurred on August 19, 2015. In fact, neither Poynor, Group, Largo, Guerra, nor Under Paid has ever inspected the property for damages that could have occurred on August 19, 2015. Great Lakes responded to Fisher on or about February 24, 2016, informing Fisher that her allegations lacked a logical basis. Fisher's law firm, Phipps, LLP, ignored this information and chose instead to file this frivolous lawsuit.

         In response to the counterclaim, the real parties subsequently filed a lengthy and detailed "Plaintiffs' Motion for Sanctions for Filing Frivolous Pleading." This fifty-page motion, including evidentiary support and accompanied by an affidavit, alleged, in summary, that relator's counterclaim constituted a frivolous pleading and sought sanctions against relator under Chapter 10 of the Texas Civil Practice and Remedies Code and Rule 13 of the Texas Rules of Civil Procedure. See Tex. Civ. Prac. & Rem. Code Ann. § 10.001; Tex.R.Civ.P. 13; see also Nath v. Texas Children's Hosp., 446 S.W.3d 355, 362 (Tex. 2014). The real parties alleged, inter alia, that relator insured their property throughout 2015; there were two separate storms on March 26, 2015, and August 19, 2015, and the date of loss was changed at the direction of relator's agent, McClelland & Hine, Inc.

         Relator filed a motion to dismiss the real parties' motion for sanctions under the TCPA. It argued that its counterclaim constituted an exercise of its right to petition under the TCPA, and therefore, the motion for sanctions should be dismissed under the TCPA. The motion to dismiss was set for hearing in the trial court; however, the real parties requested to continue the hearing so that they could conduct limited discovery under the TCPA. The real parties alleged:

6. Plaintiff[s] respectfully request[] that the hearing on Defendant's TCPA Motion to Dismiss be continued to conduct Limited Discovery pursuant to Section 27.006(b) of the Texas Civil Practices and Remedies Code ("Texas Citizens Participation Act" or "TCPA"), so that Plaintiff[s] can be provided limited discovery on the issues relating to Great Lakes's allegations contained in its TCPA Motion to Dismiss relating to the right to petition and the good faith of Great Lakes's Counsel and Great Lakes in filing its Third Amended Counter-Claim. The evidence required to prove such fraudulent intent in the filing of the Great Lakes's Third Amended [Counterclaim] is exclusively within the possession of the Defendant and its counsel, and a corporate representative for Great Lakes concerning motive concerning policy renewals, commissions, claims, denial of claims and the financial incentives to pay or not pay claims. . . . Plaintiffs believe that the specified and limited discovery sought can be conducted so as to not unduly delay the hearing and ruling on Defendant's Motion and can be accomplished within the 120-day time limit provided by the TCPA. Tex. Civ. Prac. & Rem. Code § 27.004(c). To that end, Plaintiffs request that-in the unlikely event Defendant is able to both prove applicability of the TCPA and disprove the exemption from the TCPA under the commercial speech and bodily injury exemptions-the Court reset the hearing on Defendant's motion to permit time for necessary discovery as permitted by the TCPA. Tex. Civ. Prac. & Rem. Code § 27.006(b).
7. Additionally, Plaintiffs were first served with a response to Plaintiffs' Motion for Sanctions late yesterday evening and based upon that response and the objections lodged to evidence submitted by Plaintiffs on [their] Motion for Sanctions, Plaintiffs' Request a Continuance of this matter on all pending motions before the Court and that all motions, TCPA Motion to Dismiss, Plaintiffs' Motion for Sanctions and all Summary Judgment Motions be heard at the same time since the issues presented in each ...

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