Suing Adjusters In Hail Claims

Insurance lawyers in Irving who sue for hail claims need to know the best ways to stay out of Federal Court, unless of course that is where they want to be.
This is illustrated in a Sherman Division case styled, Lillian Elizondo v. Metropolitan Lloyds Insurance Company of Texas, Tailored Adjustment Services, Inc. and Brad Conrad.
This is a dispute that arises out of a claim for hail and wind storm damages sustained by Plaintiff, Elizondo. The insurer is Metropolitan. The adjuster is Conrad who worked for Tailored.
The lawsuit was filed in State Court alleging breach of contract, breach of the duty of good faith and fair dealing and violations of the Texas Insurance Code, and fraud. Tailored and Conrad were sued for violations of Chapter 541, fraud, and conspiracy to commit fraud.
Metropolitan had the lawsuit removed to Federal Court alleging Tailored and Conrad were improperly joined in the lawsuit to defeat diversity jurisdiction.
The party seeking removal bears the burden of establishing that federal jurisdiction exists and that removal is proper.
When assessing whether diversity jurisdiction exists, a court must disregard non-diverse citizenship of an improperly joined defendant. A defendant who contends that a non-diverse party is improperly joined has a heavy burden of proof. In making its determination the court must evaluate all of the factual allegations in the plaintiff’s state court pleadings in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff.
The removing party must prove that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court, or that there has been outright fraud in the plaintiff’s pleading of jurisdictional facts.
A determination of improper joinder must be based on an analysis of the causes of action alleged in the complaint at the time of removal.
Metropolitan correctly asserts that, under Texas law, an insured may have a valid cause of action against an insurance adjuster under the proper circumstances, but only if sufficient facts exist, and are pleaded, involving allegedly harmful conduct by the adjuster toward Plaintiff. For an adjuster to be held individually liable, they have to have committed some act that is prohibited by the Insurance Code, not just connected to an insurance company’s denial of coverage.
There are no such allegations in this case. Plaintiff’s Original Petition alleges only that Plaintiff was insured by Metropolitan, that Plaintiff’s insured property was damaged by wind or hail in April of 2014, that Plaintiff submitted a claim for that damage to Metropolitan, that Metropolitan utilized Tailored and Conrad to investigate the claim, and general allegations that Conrad was inadequately trained and failed to thoroughly investigate, conducted an outcome-oriented investigation, made misrepresentations and omissions and unfairly investigated the claim. Plaintiff alleges only boilerplate allegations that Tailored and Conrad were “improperly trained and failed to perform a thorough investigation of Plaintiff’s claims” and utilized “unfair settlement practices.” No additional facts are alleged. There are no factual allegations of misconduct on the part of Tailored or Conrad. The misrepresentation must be about the details of a policy, not the facts giving rise to a claim for coverage. General allegations that Conrad’s investigation caused Plaintiff harm because it resulted in an under evaluation of the claims is not sufficient because there are no factual allegations of independent conduct on Conrad’s part, which cause Plaintiff any harm.
The Court agrees that Plaintiff’s allegations against Tailored and Conrad have no basis in law or fact, and finds that Plaintiff has no possibility of establishing a valid cause of action against Tailored or Conrad. Plaintiff simply does not have plausible claims against Tailored or Conrad.