Fort Worth insurance law attorneys will often find themselves in a position where they are suing an Allstate adjuster. One reason for doing so would be to keep a lawsuit in a State Court rather than a Federal Court which is where Allstate would prefer to litigate a case. A U.S. Corpus Christi Division of the Southern District of Texas court issued a remand in a case that Allstate had removed to Federal Court. The style of the case is, W. Ohio St. Condo Association v. Allstate Insurance Company, et al.
This is an insurance coverage dispute arising from wind and hail storm damage to W. Ohio commercial property. Allstate timely removed the case from state court on the basis of diversity jurisdiction, with its allegation that the non-diverse claims adjuster, Kevin Pakenham, was improperly joined.
Pursuant to 28 U.S.C. 1332, diversity jurisdiction requires the citizenship of all plaintiffs to be diverse from the citizenship of all defendants and the amount in controversy to exceed the sum or value of $75,000, exclusive of interest and costs. It is undisputed that the parties, with the exception of Pakenham, are diverse and that the amount in controversy exceeds the sum of $75,000. Therefore, the only issue for the Court is whether Pakenham was improperly joined such that his non-diverse citizenship may be disregarded.
Allstate argues that there is no possibility of recovery against Pakenham because the liability pleadings are factually insufficient.
Federal courts often apply Texas “fair notice” pleading rules in removal decisions. Despite newly adopted Texas Rule of Civil Procedure 91a. which provides for dismissal “on the grounds that the cause of action has no basis in law or fact,” the Texas concept of “fair notice” has not morphed into the Federal Rule of Civil Procedure 12(b)(6) standard re-defined in Twombly and Iqbal.
Under the Texas “fair notice” standard for pleading, the question is whether the opposing party can ascertain from the pleading the nature and basic issues of the controversy and what evidence will be relevant so as to prepare a defense. The “fair notice” requirement of Texas pleading relieves the pleader of the burden of pleading evidentiary matters with meticulous particularity.
After reviewing the Original Petition, the Court was of the opinion that the pleading specifies sufficient factual detail for the claim and adequately informs Allstate and Pakenham of the issues such that discovery can be conducted and evidence can be developed in a proper defense. The Court rejected Allstate’s characterization of the pleading as mere “boilerplate.” The pleading thus satisfies Texas requirements.
Allstate also argued that Plaintiff has failed to allege appropriate damages associated with causes of action against Pakenham, independent of the contractual claims related to Allstate’s policy.
Included in Plaintiff’s allegations is that “the damages caused by the covered losses have not been properly addressed or repaired in the months since the loss occurred, causing further damage to the Property, and causing undue hardship and burden to Plaintiff.” In evaluating fraudulent joinder claims, the Court must construe all matters, including the pleadings, in favor of the non-removing party. Construing the pleading in Plaintiff’s favor, it cannot be said that Plaintiff has failed to allege the potential recovery of extra-contractual damages.
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