Insurance lawyers keeping up with the relatively new Insurance Code Section, 542A.006 election need to read this well reasoned case from the Northern District of Texas, Fort Worth Division. The opinion is styled, Leonard D. Morgan, et al. v. Chubb Lloyds Insurance Company of Texas.
In this a homeowner’s claim for damage due to a storm. Plaintiff’s sued their insurance company, Chubb, and the adjuster handling the claim. The lawsuit was filed in State Court wherein a claim was made against the insurer and the adjuster. At the time the lawsuit was filed in State Court, Chubb had not exercised the 542A.006 election, to take responsibility for it’s adjuster.
After the lawsuit was filed, Chubb moved to accept responsibility for the adjuster and have the adjuster dismissed from the lawsuit. The State Court allowed the election and once this was complete, Chubb removed the case to Federal Court and this motion to remand was filed by Plaintiffs.
The Judge of this Court, in a lengthy opinion, discussed Section 542A.006, 28 U.S.C., Section 1441, the improper joinder rule, the timing of the 542A election, and how other courts are handling these situations.
In the case the Judge ruled in favor of Plaintiffs and Ordered the case to be remanded. Further, this ruling was followed by the Court in a similar ruling, in the opinion styled, Kessler v. Allstate Fire and Casualty Insurance Co.
One thing of relevance in both the case and what was pointed out by this Court was that there is not yet any binding authority controlling 542A.006 removals. This is surely an issue that will be before the United States 5th Circuit Court of Appeals in the near future.