FEDERAL COURT DISMISSES INSURED’S CAUSES OF ACTION AGAINST INSURER FOR NOT BEING PLED WITH SPECIFICITY BUT GIVES INSURED SECOND CRACK AT BAT

A federal court in San Antonio recently granted an insurer’s partial motion to dismiss because the insured failed to plead certain causes of action with factual particularity. Janssen v. Allstate, 2021 WL 42000618, Case No. SA-21-CV-00750-JKP centered on a coverage dispute arising from a hailstorm that allegedly damaged the insured’s home. The insured filed suit in state court, asserting causes of action for breach of contract, violations of the Texas Insurance Code (TIC), breach of the duty of good faith and fair dealing, violations of the Texas Deceptive Trade Practices Act (DTPA), and common law fraud against the insurer. Once the case was removed to federal court, where stricter pleading requirements apply to Causes of action based on fraud, the insurer moved for dismissal of the fraud-related claims in the insured’s petition because he did not plead any specific facts to support his claim.

The Court noted it had the power to dismiss such claims if a review of the pleadings called for dismissal, but the Court was also required to allow the party a change to amend his pleading to cure his defects—unless the defects could not be cured, or the party failed to amend after being given an opportunity to do so. Here, the insured’s petition did not allege specific facts to support the insured’s causes of action for common law fraud, Texas Insurance Code and DTPA violations; however, the Court concluded that a more careful or detailed drafting might overcome the deficiencies, so it was appropriate to allow the insured the opportunity to address the defects. As such, the Court granted the insured leave to amend his petition within twenty days; if the insured failed to do so, the motion would be granted in full and the causes of action would be dismissed.