Dallas Partners Obtain Appellate Victory in Fifth Circuit Court of Appeals
On March 18, 2020, Dallas Partners Roger Higgins and Elizabeth Lee Thompson obtained a significant appellate victory in the United States Fifth Circuit Court of Appeals for Elephant Insurance Company.
Elephant Insurance Company sought to uphold the district court’s dismissal of two policyholders’ putative class action complaint against Elephant Insurance Company. The policyholders claimed that Elephant Insurance Company was liable for breach of contract and for violating provisions of the Texas Insurance Code that required prompt payment of claims when it failed to pay them sales tax and fees on their total loss vehicles. The district court dismissed the complaint on Elephant Insurance Company’s motion, ruling that the policy did not require payment of sales tax and fees with actual cash value payments, and that plaintiffs therefore failed to state a claim for breach of contract. The policyholders appealed.
The Court of Appeals ruled that, while each of the policyholders was entitled to the fair market value of their pre-loss vehicle, that fair market value does not include the sales tax and fees remitted to the state in connection with purchasing a replacement vehicle. As a result, the Court concluded that the district court correctly dismissed the breach of contract claim. Because plaintiffs had no contract claim, the Court further affirmed that they failed to state a claim under the Texas Insurance Code.
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