Insurance lawyers would prefer to fight their cases in State Court rather than Federal Court. The opposite is true for insurance companies. Unfortunately, the insurance companies win most these battles for which court the case should be contested. A U.S. District Court, Galveston Division opinion illustrates some of the arguments. The case is styled, Lopez v. United Prop. & Cas. Ins. Co.
Lopez sued United in State Court alleging his home sustained water damage and that United failed to fully cover the damages. Suit was filed for violations of the Sections 541 and 542 of the Texas Insurance Code.
In order to defeat diversity jurisdiction, Lopez sued the adjuster, Bibiana Aguilar, assigned to handle the claim also.
The allegations against Aguilar were that Aguilar originally agreed to pay some damages, then did not “follow through” and then accused Aguilar of intentionally tearing carpet out of Lopez’s home and that Aguilar failed to properly assess the claim.
United caused the case to be removed to Federal Court, claiming the accusations against Aguilar were improper and a sham. Next, Lopez filed a Motion to Remand the case back to the State Court.
To determine whether removal of a case was proper, the Court looks to the plaintiff’s state court pleadings at the time of removal. Ambiguities and or doubts are to be construed against removal and in favor of remand.
United says Aguilar was improperly joined solely to defeat diversity and claims that, based on the pleadings, there is no way for Lopez to prevail against Aguilar.
Although Lopez’s State Court pleadings are 16 pages long, his allegations against Aguilar were sparse. While it is true that Texas law may permit adjusters to be found individually liable for certain violations of the Texas Insurance Code, “for an adjuster to be held individually liable, they have to have committed some act that is prohibited by the section, not just connected to an insurance company’s denial of coverage.”
In his complaint, Lopez did not articulate specific acts committed by Aguilar. For example, claims for Section 542 violations are only applicable to companies, not to individual agents. Also, an agent cannot be held liable for affirming or denying coverage, only the company has that authority.
In this case, Lopez alleges that Aguilar’s evaluation of the damage to his home was grossly unreasonable and inadequate, but he does not point to any specific statements that would satisfy Rule 9(b)’s requirements and allow the Court to find that he has adequately alleged a claim against Aguilar.
The Court found that United demonstrated that Aguilar had been improperly joined as a defendant in this case and the motion to remand was denied.
A reading of the case provides good analysis as to the standards the Federal Courts look to when deciding these types of cases.
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