Homeowners' suit over insurance policy to return to state court

By Devastasha Beaver | Aug 9, 2018

Homeowners who claim they were misled regarding their insurance policy were granted their motion to remand the case to state court recently.

The plaintiffs filed a claim with QBE Specialty Insurance Co. for mold throughout their house in September 2016.   File photo

NEW ORLEANS – Homeowners who claim they were misled regarding their insurance policy were granted their motion to remand the case to state court recently.

Plaintiffs Allen T. Jackson and Claire Zimmerman Jackson filed suit against QBE Specialty Insurance Co. (QBE) and provider Terrebonne Insurance Agency in September 2017, claiming that Terrebonne failed to inform them that the policy lacked mold coverage.

According to court documents, plaintiffs “learned that almost all of the policies similar to theirs in the Houma area contain a mold rider when the adjuster told them that information on Oct. 7, 2016.”

The plaintiffs allege that when they purchased the policy in July 2016, Terrebonne agents did not review the policy with them, nor did they make recommendations based on the plaintiffs’ specific needs.

While QBE argued that Louisiana law does not require insurance agents to review policies or make recommendations to buyers at the time of purchase, the plaintiffs claim that Terrebonne regularly did so as part of its standard procedure.

The lawsuit was filed in the 32nd Judicial District Court for the Parish of Terrebonne on Sept. 15, 2017, and in November 2017, QBE removed the case to the U.S. District Court Eastern District of Louisiana. QBE claimed that Terrebonne was fraudulently joined as a defendant, according to court documents.

Chief Judge Nannette Jolivette Brown found “that QBE has failed to carry its heavy burden of establishing that Terrebonne has been fraudulently joined to this action. Because this court lacks subject matter jurisdiction in this case, remand to state court is appropriate.”

Brown granted the plaintiffs’ motion to remand on July 13.

The plaintiffs filed a claim with QBE for mold throughout their house in September 2016, which was denied. According to court documents, the plaintiffs were made aware of Terrebonne’s policy of discussing coverage in October 2016.

Louisiana law requires that any action against insurance companies regarding insurance services must be filed within a one-year peremptive period. The plaintiffs state that the preemptive period begins when they discovered, or should have discovered, Terrebonne’s “negligence.”

“Plaintiffs allege they learned of Terrebonne’s policy of discussing coverage with clients on Oct. 11, 2016,” according to court documents. “Therefore, plaintiffs contend that they filed this suit well within the one year peremptive period.”

Defendants QBE and Terrebonne argue the plaintiffs filed the lawsuit after the peremptive period was up, stating that the peremptive period began when the plaintiffs received a copy of the policy in August 2016.

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