Allstate accused of slipping changes into policies
Plaintiffs are waiting to find out whether a judge will allow them to combine 78 lawsuits that claim Allstate unlawfully reduced coverage.
A Rio Grande Valley, Texas, attorney is awaiting a decision from a multidistrict litigation panel on whether it will consolidate scores of lawsuits where plaintiffs allege Allstate Insurance Co. unlawfully reduced coverage.
Jason Palker, founder of a boutique law firm in Edinburg with seven attorneys, began accumulating clients in 2022 based on similar claims regarding Allstate’s alleged failure to provide a notice required by the Texas Insurance Code.
The lawsuits allege Allstate has been “slipping coverage reducing endorsements into policies on renewal.”
“Each plaintiff also claims that Allstate wrongfully denied and/or underpaid a property damage claim, and in part, has leaned on unlawful policy endorsements as a means to deprive each plaintiff of full satisfaction,” Palker asserted in the Aug. 11 motion for transfer to multidistrict pretrial court.
Dozens of Judges
The plaintiffs’ motion advises the MDL panel of 78 lawsuits, 60 of which have been filed in Hidalgo and Cameron counties.
In total, litigants have filed lawsuits in 10 counties across the state that have been assigned to 25 district court or county court at law judges, and Palker told the panel he anticipates future tag-along actions.
Palker is asking the MDL panel to locate all the cases in one Hidalgo County district court.
The attorney argues this would simplify discovery burdens, emphasizing that Allstate has provided responses with “virtually nothing but boilerplate objections.”
“To require each and every plaintiff to seek judicial intervention in dozens of courts throughout the state would be a massive waste of judicial resources which could be wholly ameliorated by MDL consolidation,” the Palker motion states.
Allstate’s Opposition
Allstate is represented by a contingent of attorneys from law firms that include Thompson Coe, Cousins & Irons; Roerig, Oliveira & Fisher; Valdez & Trevino; Lisa Chastain & Associates; and Hope & Causey.
In a Sept. 20 response, Allstate’s legal team, led by Roger D. Higgins of Thompson Coe, argued against consolidation because the cases allegedly do not meet the standard of being related, and transfers would not promote efficiency, or convenience of justice.
Allstate alleges the actual motive for plaintiffs’ motion is “one attorney’s misguided desire to create his own personal pretrial insurance court,” but the cases are not related.
To support its claim the cases are unrelated, Allstate points out the cases arise from different weather events that occurred months and years apart.
Addressing the coverage reducing endorsements, Allstate claims each policy is different and endorsements are policy-specific.
In October, plaintiffs’ reply to the Allstate response, admitting first that the weather events are unrelated.
“These arguments should be rejected,” Palker said.
What is relevant, Palker continued, is that each case involves storm damage loss, common questions of fact, and seeks common institutional discovery from Allstate related to storm damage.
“Allstate’s response oversimplifies and misconstrues what this MDL is all about: this MDL is not about any single storm event; it is about Allstate’s statewide unlawful and fraudulent underwriting practices vis-à-vis modifying its insureds’ policies without requisite notice, and ultimately, how these modifications negatively impacted its insureds’ rights to recovery,” Palker told the panel.
The briefs are currently under review.
The MDL panel is composed of David L. Evans, presiding judge for the Eighth Administrative Judicial Region; Sid Harle, presiding judge for the Fourth Administrative Judicial Region; Ninth Court of Appeals Justice Leanne Johnson; Sixth Court of Appeals Chief Justice Josh R. Morriss III; and Fourteenth Court of Appeals Justice Ken Wise.