Brock insurance lawyers who help people with hail and storm claims need to read this opinion from the McAllen Division. The opinion is styled, Claudia Cavazos, et al v. Sussex Insurance Company, et al.
Brian Ring was an adjuster assigned by Sussex to investigate a hail and storm damage claim asserted by Cavazos. Cavazos filed a lawsuit alleging various claims rooted in underpayment of the claim. The lawsuit was filed in State Court and removed to Federal Court by Sussez. Sussex alleged improper joinder of Ring.
The 5th Circuit recognizes two manners by which improper joinder may occur: (1) actual fraud in the pleading of jurisdictional facts, or (2) the inability of a plaintiff to establish a cause of action against the non-diverse party in state court. The 5t Circuit has interpreted the second manner to mean that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant. The removing party bears the burden of proving improper joinder.
There are no allegations of fraud in pleading the jurisdictional facts, so Sussex instead argues that Cavazos actions against Ring are inadequately plead under federal pleading standards. Sussex states that Cavazos allegations against Ring do nothing more than track statutory language of his Insurance Code causes of action; they are bare bones, conclusory, and over-generalized boiler-plate allegations devoid of substantive facts. This Court agreed.
Cavazos plead as follows:
Ring failed to perform a thorough investigation;
Ring failed to include all of the damages;
Ring underestimated and undervalued the cost of repairs;
Ring improperly adjusted the claim;
Ring misrepresented that the damage to the property was not covered under the policy.
These statements do not render Cavazos Section 541 claims well-plead because they are merely naked assertions devoid of further factual enhancement. For example, Cavazos did not explain in even an elementary fashion how Ring failed to perform a thorough investigation, what damages Ring omitted from the estimate, why such damages should have been included, or what specific misrepresentations Ring made to Cavazos and why they were misrepresentations. Consequently, the above listed allegations are inadequately plead because they are conclusory. As another court has stated under similar circumstances, these factual allegations are not pled with enough specificity to distinguish particular facts from legal conclusions.
This Court then explained in even more detail the inadequacy of the pleadings. It is good reading for lawyers who know an insurance company is going to try to have the case tried in Federal Court.