HOUSTON FEDERAL COURT FINDS HOMEOWNER MISLED STATE FARM BY SUING INCORRECT ENTITY & RULES STATE FARM SHOULD NOT HAVE TO DEFEND SAME LAWSUIT IN SECOND TRIAL

In another victory against unscrupulous forum shopping by plaintiff’s attorneys, a Houston federal court recently granted a summary judgment in favor of State Farm in Vada De Jongh v. State Farm Lloyds, Inc., No. H-14-2305 (S.D. Tex. Aug. 17, 2015). The case arose out a homeowner’s claim for damage from an April 2012 hailstorm in Alvin, Texas. After the State Farm adjuster found that covered loss was below the deductible, State Farm denied the claim and closed its file. When De Jongh asked State Farm to reopen the file to reinspect the property, another adjuster inspected the property and again found the loss was below the deductible. De Jongh sued State Farm Lloyds Inc. and the original adjuster.  State Farm timely removed the case arguing De Jongh had misidentified State Farm as State Farm Lloyds Inc., a Texas entity that was not involved in the claim. The court eventually entered a take-nothing judgment in favor of State Farm and the adjuster.

On appeal, the Fifth Circuit vacated the trial court’s judgment because it found that State Farm Lloyds, Inc., rather than State Farm, was the intended defendant. Because both De Jongh and State Farm Lloyds, Inc. were Texas residents, the trial court lacked diversity jurisdiction. After remand, despite arguing to the Fifth Circuit that she had meant to sue State Farm Lloyds, Inc., De Jongh amended her complaint to name only State Farm as a defendant.  State Farm again removed the action to federal court based on diversity jurisdiction.

Once back in federal court, State Farm moved for summary judgment on the basis that De Jongh failed to sue State Farm within the 2-year limitations period.  Judge Lynn Hughes took De Jongh at her word to the Fifth Circuit where her lawyers said she meant to sue State Farm Lloyd’s, Inc. and the Court found she misled State Farm by taking it to trial even though she possessed sufficient knowledge that “Inc.” was not her intended defendant.  Noting that allowing the case to proceed would require State Farm to defend against the exact same claims in a second trial, the Court held limitations would not relate back to the original filing date and granted summary judgment for State Farm.

Editor’s Note: State Farm’s defense in the first trial, the appeal, and the second round of litigation was handled by MDJW attorneys Chris Martin, Levon Hovnatanian, Marilyn Cayce, and Raymond Kutch.  We congratulate the State Farm team for its win.