When an insurance attorney is representing someone suing an adjuster, there have to be specific acts alleged against the adjuster and those acts have to be detailed. This is illustrated in a Southern District, Houston Division opinion. The opinion is styled, Gregory Young v. Travelers Personal Security Insurance Company and Robert Finley.
This a hail / storm damage claim wherein Young was insured by Travelers and the adjuster assigned to the claim was Finley.
The case was filed in State Court but Travelers had the case removed to Federal Court alleging that Finley was improperly joined in the case in order to defeat diversity jurisdiction. Travelers claims that the allegations against Finley do not meet pleadings standards and thus Finley should be dismissed and the Federal Court has jurisdiction over the case.
Young contends multiple allegations in the Original Complaint are factually sufficient to support a cause of action against Defendant Finley. The relevant portions of the Complaint state:
Defendant Finley made numerous errors in estimating the value of Plaintiff’s claim, all of which were designed to intentionally minimize and underpay the loss incurred by the Plaintiff…As a result of Defendant Finley’s conduct, Plaintiff’s claim was underpaid.
Defendant Finley’s conduct constitutes multiple violations of the Texas Insurance Code, Unfair Settlement Practices….
Defendant Finley is individually liable for his unfair and deceptive acts, irrespective of the fact he was acting on behalf of Defendant Travelers…
Defendants knowingly or recklessly made false representations, as described above, as to material facts and/or knowingly concealed material information from Plaintiff.
These statements are conclusory and lack the specificity necessary to state a claim. The statements are nothing more than a formulaic recital of the statutory elements. With regard to the common law fraud claim, Plaintiff merely points to the same conclusory allegations by referring to the same actions “as described above.” Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice” under Rule 12(b).
The relevant portions of the Tex. Ins. Code § 541.060 state:
(a) It is an unfair method of competition or an unfair or deceptive act or practice in the business of insurance to engage in the following unfair settlement practices with respect to a claim by an insured or beneficiary:
(1) misrepresenting to a claimant a material fact or policy provision relating to coverage at issue;
(2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of:
(A) a claim with respect to which the insurer’s liability has become reasonably clear; […] (3) failing to promptly provide to a policyholder a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for the insurer’s denial of a claim or offer of a compromise settlement of a claim; (4) failing within a reasonable time to:
(A) affirm or deny coverage of a claim to a policyholder; or (B) submit a reservation of rights to a policyholder; […]
(7) refusing to pay a claim without conducting a reasonable investigation with respect to the claim[.]
Here, Young identified no specific act misrepresentations by the adjuster. Without a valid cause of action, there is no reasonable basis for the Court to predict that the Plaintiff might be able to recover against Defendant Finley. Without a reasonable basis, Defendant Finley was improperly joined. When a defendant is improperly joined, the party must be dismissed without prejudice. Accordingly, Defendant Finley is dismissed.
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