Suing The Adjuster

Arlington insurance attorneys can tell you that it is sometimes hard to sue an adjuster. Federal Courts look at these situations really close. This is illustrated in the 2014, US Northern District Court, Dallas Division, case, One Way Investments, Inc. v. Century Surety Company, et al. Here is some information from that case.
One Way sued the insurance company and the adjuster, Mattoni. One Way asserts that its own roofing contractor and public adjusters determined, after conducting a thorough inspection of the exterior and interior, that hail had caused extensive damage requiring urgent repairs and replacement of the roof and building appurtenances, and that Mattoni under-scoped the damages during his investigation. One Way also avers that Century, VeriClaim, and Mattoni misrepresented that the damage to the property was not covered under the Policy, even though the damage was caused by a covered occurrence, thereby violating Section 541.060(a)(1); failed to make an attempt to settle One Way’s claim in a fair manner, although they were aware of their liability under the Policy, thereby violating Section 541.060(a)(2)(A); failed to affirm or deny coverage of One Way’s claim within a reasonable time, thereby violating Section 541.060(a)(4); refused to fully compensate One Way under the Policy, even though Mattoni failed to conduct a reasonable investigation, thereby violating Section 541.060(a)(7); and knowingly or recklessly made false representations as to material facts and/or knowingly concealed all or part of material information from One Way. One Way sued Mattoni under Section 541.151 based on the alleged violations of Section 541.060(a). The case was filed in State Court and the insurance company had the case removed to Federal Court.
Ome Way filed for remand back to the State Court.
Mattoni says his inclusion in the lawsuit is an unsubstantiated attempt to beat Federal Jurisdiction over this matter.
Improper joinder is established by showing that there was either actual fraud in the pleading of jurisdictional facts or that the plaintiff is unable to establish a cause of action against the nondiverse defendant in state court.
One Way would have a claim against Mattoni only if his actions caused an injury that is separate from an injury arising from the insurer’s duties under the policy.
The Court ruled that Mattoni met their heavy burden of demonstrating that there is no reasonable basis for the court to predict that One Way might be able to recover against Mattoni.
One Way alleges that Mattoni and the other two defendants “misrepresented to One Way that the damage to the Property was not covered under the Policy, even though the damage was caused by a covered occurrence.” This conclusory allegation necessarily relates to the assertions that Mattoni failed to conduct a reasonable investigation and concluded that there was no wind or hail damage to the building caused by the storm; that although he observed damage to the roof and interior units, he attributed the damage to other factors, including water intrusion through every other opening besides the roof; and that he substantially underestimated the damages to the building, that is, that “Mattoni under-scoped the damages during his investigation.” In other words, as pleaded, One Way is alleging that Mattoni misrepresented that the damage to the property was not covered under the Policy by representing that the wind and hail damage to the building was far less extensive than it actually was and that it was caused by factors that did not trigger coverage under the Policy. But those statements are of a type that this court has held are not within the scope of 541.060(a)(1) because they do not relate to the “coverage at issue.”
The misrepresentation must be about the details of a policy, not the facts giving rise to a claim for coverage. One Way does not allege that Mattoni made misrepresentations about the details of the Policy.
One Way cannot recover against Mattoni under § 541.060(a)(2)(A). As case law explains, 541.060(a)(2), which prohibits failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of claims where the insurer’s liability is reasonably clear . . . forces insurance companies to pay a claim when the evidence is reasonably clear. An adjuster cannot be held liable under this section because, as an adjuster, he does not have settlement authority on behalf of the insurer. His sole role is to assess the damage.
Finally, One Way cannot recover against Mattoni under 541.060(a)(4)(A), which provides that it is an unfair settlement practice to fail[ within a reasonable time to . . . affirm or deny coverage of a claim to a policyholder. The court has located no case under 541.060(a)(4)(A) or its predecessor statute indicating that it applies to adjusters. Cases that discuss this section refer to the obligations of insurers.