Guaranty Federal Savings Bank v. Horseshoe Operating Co.

2 Analyses of this case by attorneys

  1. Texas Venue Battles: Misjoinder and Motions to Sever Claims in the Insurance Realm

    Segal McCambridgeOctober 5, 2023

    diversity jurisdiction. However, a closer look can sometimes reveal that the defendants and causes of action asserted have been joined to defeat diversity jurisdiction. In Texas, the proper tool to combat this is a motion to sever claims for misjoinder.Texas Rules of Civil Procedure 41 governs misjoinder of parties. Under Rule 41, a court may sever parties and actions which have been improperly joined on such terms as are just. The appropriate course of action to assert misjoinder of parties is a motion to sever claims. The goal being to have the causes of action asserted against the insurer or diverse defendants severed from the causes of action asserted against the non-diverse defendants. Once successfully severed, the causes of action asserted against the diverse defendants are ripe for removal under diversity jurisdiction.Severance Motions in the Insurance Context The Texas Supreme Court provided a three-prong test for severance in Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W2d 652, 658 (Tex. 1990). Severance is appropriate when (1) the controversy involves more than one cause of action, (2) the severed claim could be independently asserted in a separate lawsuit, and (3) the severed claim is not so interwoven with the remaining action that it involves the same facts and issues. Id. In first party insurance disputes, the first prong is almost always satisfied. Plaintiffs virtually never assert a single cause of action against insurers and co-defendants in these types of disputes. The second prong provides more of a hurdle to overcome. The test of whether a claim is independent is whether a lawsuit against the state court defendant(s) could be brought separately, and the suits could result in separate, final judgements. Martinez v. Humble Sand & Gravel, Inc., 875 S.W.2d 311, 312 (Tex. 1994). This prong will obviously hinge on the cause of action asserted against the state court defendant. This prong is most clearly satisfied when (1) the cause of action asserted against the state

  2. Local and National Environmental Groups Seek to Intervene in Denton Fracking Case

    Baker & Hostetler LLPJustin ScottDecember 9, 2014

    Tex. R. Civ. P. 60. Although a Texas trial court has broad discretion in determining whether an intervention should be stricken, it is an abuse of discretion to strike a plea in intervention if (1) the intervenor could have brought some or all of the same action in his own name, or if the action had been brought against the intervenor, he could have defeated the action in whole or in part; (2) intervention would not complicate the case by excessive multiplication of the issues; and (3) intervention is almost essential to protect the intervenor’s interest. Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990). The Joint Petition in Intervention asserts that a judgment for the Texas Oil & Gas Association would “seriously prejudice” the Denton Drilling Awareness Group and Earthworks due to the “close, continuous, and integral role that Intervenors played in the sponsorship of the initiative and passage of the Ordinance.”