Aguilar v. United Property & Casualty Insurance Company

• Court: District Court, S.D. Texas
• Decided: March 6, 2023
• Docket: 7:22-cv-00423
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT March 06, 2023 SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk MCALLEN DIVISION

JOE L. AGUILAR, SR. § § Plaintiffs, § § VS. § § CIVIL ACTION NO. 7:22-cv-00423 UNITED PROPERTY & CASUALTY § INSURANCE COMPANY, § § Defendant. § §

OPINION & ORDER

The Court now considers Defendant’s notice of automatic stay.1 I. FACTUAL AND PROCEDURAL HISTORY Plaintiff initiated this suit in Texas state court on July 25, 2022,2 alleging that Defendant, United Property & Casualty Insurance Company, denied his claim or underpaid him for storm damage from Hurricane Hanna. Plaintiff brought contractual and extra-contractual claims.3 Defendant removed the case to this Court on December 12, 2022, on the basis of diversity.4 Defendant is a corporation domiciled in Florida.5 On February 16, 2023, the Florida Office of Insurance Regulation determined that grounds existed to initiate receivership proceedings against Defendant.6 It executed and filed a Consent Order, which had already been executed by

1 Dkt. No. 9. 2 Dkt. No. 1-2. 3 Id. 4 Dkt. No. 1. 5 Dkt. No. 9-1 at 4. 6 Id. at 10, ¶ 24. Defendant on February 9, to appoint the Florida Department of Financial Services as receiver for purposes of Defendant’s liquidation.7 By operation of Florida law, the filing of the petition operates as an automatic stay that prohibits the continuation of judicial proceedings against Defendant.8 Therefore, the Court finds Burford abstention9 is appropriate.

II. DISCUSSION “A federal court should abstain from exercising jurisdiction where to do so would interfere with a specialized, unified state court system of adjudication designed to avoid inconsistent adjudication of claims arising from a comprehensive, detailed, and complex regulatory scheme in a subject area involving state law.”10 Insurance is a field typically reserved for the states, and states have enacted comprensive schemes for liquidation of insolvent insurers and the treatment of their policyholders and claimants.11 Courts should abstain from adjudicating cases which would have a disruptive effect on a state’s regulatory scheme.12 Florida is no exception to the general rule. Fl. Stat. § 631.161 specifically provides for the

handling of claims of nonresidents against insolvent Florida insurers. The remainder of that chapter covers the mechanism, proof, time to file, and priority of claimants in Plaintiff’s situation.13 Because of Florida’s applicable regime, the Court will abstain—on Burford grounds—from exercising jurisdiction in this case.

7 Id. at 10, ¶ 25. 8 Id. at 1 (citing FL. STAT. § 631.041(1)). 9 Burford v. Sun Oil Co., 319 U.S. 315, 63 S. Ct. 1098 (1943). 10 Martin Ins. Agency, Inc. v. Prudential Reinsurance Co., 910 F.2d 249, 254 (5th Cir. 1990) (citing id.). 11 See Munich Am. Reinsurance Co. v. Crawford, 141 F.3d 585, 591 (5th Cir. 1998). 12 See Lac D'Amiante Du Quebec, Ltee v. Am. Home Assurance Co., 864 F.2d 1033, 1048 (3d Cir. 1988). 13 See FL. STAT. § 631. II. CONCLUSION For the foregoing reasons, the Court DISMISSES this case WITHOUT PREJUDICE. □□ All deadlines in this case are CANCELLED, including the parties’ initial pretrial conference set for March 20, 2023. The Clerk of Court is instructed to close this case. IT IS SO ORDERED. DONE at McAllen, Texas, this 6th day of March 2023. Worms Micaela Alvi : United States District Judge

14 Martin Ins., 910 F.2d at 255 (Finding “Burford-type abstention to be a valid ground for dismissal.”).

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