LPHS Wins Take Nothing Defense Judgment in $66M Case

LPHS partner Sara Hollan Chelette and associate Barira Munshi secured a defense judgment from a Dallas County court on behalf of their client in a lawsuit alleging breach of contract, breach of fiduciary duty, insurance code/DTPA violations, and negligence. The lawsuit sought $22 million in damages, plus trebling under the DTPA and attorneys’ fees.

The litigation arose from the defendant premium finance company’s cancellation of its borrower’s insurance policy in 2014—a cancellation the plaintiffs claimed the finance company had agreed to hold pending payment. After the policy was cancelled and the borrower was informed of the cancellation, the borrower’s driver took a company van without permission and crashed while intoxicated, leading to the deaths of two passengers and several serious injuries among the survivors. Those survivors and the family members of those who died in the accident sued the borrower, its owner, and the driver, and the plaintiffs obtained a $17 million default judgment. In the case against LPHS’s client alleging wrongful cancellation of the insurance policy, the plaintiffs sought to recover the amount of that default judgment, including interest, as damages, and they also sought treble damages.

On the first day of trial, the court granted summary judgment on the breach of fiduciary duty claim and later granted “directed verdicts” in favor of both defendants, the LPHS client and the borrower’s insurance agent, represented by Michael Cedillo of Thompson Coe.

“It’s rare to obtain a directed verdict, but we worked diligently to develop the best defenses for our client and strategized with co-counsel before trial to clearly present the facts of the case and the rationale for denying these claims,” says Hollan Chelette, lead counsel. “We’re extremely gratified with the outcome.”