Thomas et al v. State Farm LLoyds et al

Filing 14

MEMORANDUM OPINION AND ORDER denying 7 Motion to Remand (Ordered by Judge Jane J Boyle on 11/4/2015) (Judge Jane J Boyle)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
JOHN F. THOMAS and BARBARA J.
THOMAS,
Plaintiffs,
v.
STATE FARM LLOYDS and
MAEGAN STRONGER,
Defendants.

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CIVIL ACTION NO. 3:15-CV-1937-B

MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiffs John F. Thomas’ and Barbara J. Thomas’ Motion to
Remand (Doc. 7). For the reasons that follow, the Court DENIES the Motion.
I.
BACKGROUND
John F. Thomas and Barbara J. Thomas (collectively, “Plaintiffs”) sued Defendants State
Farm Lloyds (“SFL”) and insurance adjuster Maegan Stonger (“Stonger”)1 (collectively,
“Defendants”) for allegedly mishandling Plaintiffs’ insurance claim under a Texas Dwelling Insurance
Policy (the “Policy”) issued by SFL. Doc. 1-3, Pet. ¶¶ 9–20. The claim arose out of an incident “from
within Plaintiffs’ plumbing system” that damaged Plaintiffs’ property, including the foundation and
interior and exterior structures. Id. ¶ 12. Plaintiffs sought coverage under the Policy, and SFL
assigned Stonger to serve as the adjuster for their claim. Id. ¶¶ 14–15. Stonger, however, was

1

Stonger has apparently been mis-identified as “Maegan Stronger” in the Original Petition. Doc. 10,
Def.’s Resp. ¶ 1. The Court therefore will refer to her as “Stonger.”

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allegedly “improperly trained and failed to perform a thorough investigation of Plaintiffs’ claims.” Id.
¶ 15. As a result, Plaintiffs assert that they “were considerably underpaid on their claim and have
suffered damages.” Id. ¶ 16.
Plaintiffs filed their Original Petition on April 17, 2015, in the 134th Judicial District Court
of Dallas County, Texas, asserting claims against SFL for fraud, conspiracy to commit fraud, breach
of contract, violations of chapters 541 and 542 of the Texas Insurance Code, and breach of the duty
of good faith and fair dealing. Id. ¶¶ 42–62. Regarding Stonger, Plaintiffs allege violations of chapter
541 of the Texas Insurance Code, fraud, and conspiracy to commit fraud. Id. ¶¶ 33–45. Defendants
removed the case to this Court on June 4, 2015. Doc. 1, Notice of Removal. In the Notice of
Removal, Defendants argue that the Court may exercise subject matter jurisdiction on the basis of
diversity of citizenship, because Stonger has been fraudulently joined as a defendant. Id. ¶ 2. Plaintiffs
have moved to remand the case, contending that Stonger is a proper, non-diverse defendant. Doc.
7, Mot. to Remand ¶ 9. SFL responded on July 23, 2015, and Plaintiffs replied on August 3, 2015.
Doc. 10, Def.’s Resp.; Doc. 13, Pls.’ Reply. The Motion is now ready for review.
II.
LEGAL STANDARD
A.

Motions to Remand
Motions to remand are governed by 28 U.S.C. § 1447(c), which provides that “[i]f at any

time before final judgment it appears that the district court lacks subject matter jurisdiction, the case
shall be remanded.” 28 U.S.C. § 1447(c). When considering a motion to remand, “[t]he removing
party bears the burden of showing that federal jurisdiction exists and that removal was proper.”
Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002). Furthermore, “any
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doubt about the propriety of removal must be resolved in favor of remand.” Gasch v. Hartford
Accident & Indem. Co., 491 F.3d 278, 281–82 (5th Cir. 2007).
The federal removal statute, 28 U.S.C. § 1441(a), permits a defendant to remove any civil
action to federal court that falls within the original jurisdiction of the district courts. One such grant
of authority is found in 28 U.S.C. § 1332. That statute provides the district courts with original
jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of
$75,000 . . . and is between . . . citizens of different States.” 28 U.S.C. § 1332(a)(1). Removal is only
proper in such cases, however, if there is complete diversity of citizenship among the parties at the
time the complaint is filed and at the time of removal. Mas v. Perry, 489 F.2d 1396, 1398–99 (5th
Cir. 1974). Moreover, none of the parties properly joined and served as defendants may be citizens
of the state in which the action is brought. See 28 U.S.C. § 1441(b); Gasch, 491 F.3d at 281.
That being said, a non-diverse defendant may be disregarded for the purpose of analyzing
complete diversity if the non-diverse defendant was improperly joined. Cuevas v. BAC Home Loans
Servicing, LP, 648 F.3d 242, 249 (5th Cir. 2011) (citing McDonal v. Abbott Labs., 408 F.3d 177, 183
(5th Cir. 2005)). The burden to establish improper joinder is on the removing party, and it is a heavy
one. Cuevas, 648 F.3d at 249. The removing party must establish either “(1) actual fraud in the
pleading of jurisdictional facts, or (2) the inability of the plaintiff to establish a cause of action against
the non-diverse party in state court.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir.
2004) (en banc). Here, SFL does not assert that Plaintiffs engaged in fraud. Thus, to establish
improper joinder, SFL must demonstrate that there is no possibility of recovery by Plaintiffs against
Stonger. Id. Under this prong, “the [C]ourt must determine whether ‘there is arguably a reasonable
basis for predicting that state law might impose liability.’” Campbell v. Stone Ins., Inc., 509 F.3d 665,
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669 (5th Cir. 2007) (quoting Ross v. Citifinancial, Inc. 344 F.3d 458, 462 (5th Cir. 2003)). “This
means that there must be a reasonable possibility of recovery, not merely a theoretical one.” Ross, 344
F.3d at 462.
Courts determine whether there is a possibility of recovery in one of two ways. One way is to
conduct a “Rule 12(b)(6)-type analysis,” looking to the face of the complaint to assess whether it
states a claim against the non-diverse defendant. Smallwood, 385 F.3d at 573. The other way is to
“pierce the pleadings” and conduct a Rule 56-type analysis. Id. The latter approach, however, is only
appropriate where the summary judgment evidence reveals that the plaintiff has withheld facts
relevant to the propriety of joinder. Id. Because that is not the case here, the Court proceeds with
a Rule 12(b)(6)-type analysis of Plaintiffs’ Original Petition.
In conducting this Rule 12(b)(6)-type analysis of a petition originally filed in Texas state
court, this Court applies state court pleading standards. Oldham v. Nationwide Ins. Co. of Am., No.
14-CV-0575, 2014 WL 3855238, at *4 (N.D. Tex. Aug. 5, 2014). Traditionally, Texas courts have
applied a more liberal pleading standard than the federal one, upholding a petition as long as it
provides “fair notice of the claim involved.” Tex. R. Civ. P. 45(b). In March 2013, however, the
Texas Supreme Court adopted Rule 91a of the Texas Rules of Civil Procedure, which provides in
pertinent part:
[A] party may move to dismiss a cause of action on the grounds that it has no basis
in law or fact. A cause of action has no basis in the law if the allegations, taken as
true, together with inferences reasonably drawn from them, do not entitle the
claimant to the relief sought. A cause of action has no basis in fact if no reasonable
person could believe the facts pleaded.
Tex. R. Civ. P. 91a. While not identical to the Rule 12(b)(6) standard, the Texas Courts of Appeals
have interpreted Rule 91a as essentially calling for a Rule 12(b)(6)-type analysis and have relied on
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the Rule 12(b)(6) case law in applying it. See Wooley v. Schaffer, 447 S.W.3d 71, 76 (Tex.
App.—Houston [14th Dist.] 2014, pet. denied); GoDaddy.com, LLC v. Toups, 429 S.W.3d 752, 754
(Tex. App.—Beaumont 2014, pet. denied). Accordingly, this Court will do the same.
B.

Rule 12(b)(6) Standard
Rule 12(b)(6) authorizes the court to dismiss a plaintiff’s complaint for “failure to state a

claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6)
motion to dismiss, “[t]he court accepts all well-pleaded facts as true, viewing them in the light most
favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.
2007)(quoting Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir.
2004)). Furthermore, the court will “not look beyond the face of the pleadings to determine whether
relief should be granted based on the alleged facts.” Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.
1999), cert. denied, 530 U.S. 1229 (2000).
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead “enough facts to state
a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,
do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a
‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted
unlawfully.” Id. When well-pleaded facts fail to achieve this plausibility standard, “the complaint has
alleged—but it has not shown—that the pleader is entitled to relief.” Id. at 679 (internal quotation
marks and alterations omitted).
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III.
ANALYSIS
Plaintiffs contend that the allegations against Stonger in their Original Petition are sufficient
to withstand the Court’s Rule 12(b)(6) analysis, thereby meriting remand. They argue that the Texas
Supreme Court and the Fifth Circuit have both recognized that an insured individual or entity may
state a claim against an adjuster under the Texas Insurance Code. Doc. 8, Pls.’ Br. in Supp. ¶ 14.
Furthermore, Plaintiffs assert that this Court has previously remanded cases where other plaintiffs
made similar allegations against adjusters. Doc. 12, Pls.’ Reply ¶¶ 16–17. SFL, on the other hand,
contends that the Texas Insurance Code applies primarily to insurers, and that Plaintiffs have not
stated any viable claims against Stonger. Doc. 11, Def.’s Br. in Supp. ¶¶ 12–26. It also argues that
Plaintiffs’ fraud allegations do not contain the specificity required by Federal Rule of Civil Procedure
9(b). Id. ¶¶ 27–31.
A.

Texas Insurance Code Claims
1.

Texas Insurance Code § 541.060(a)(1)

The first claim against Stonger is for a violation of § 541.060(a)(1) of the Texas Insurance
Code, which prohibits “misrepresenting to a claimant a material fact or policy provision relating to
coverage at issue.” Tex. Ins. Code § 541.060(a)(1). To support this claim, Plaintiffs allege that
Stonger failed to conduct a reasonable investigation, understated the amount of damage to Plaintiffs’
property, used her own statements as a basis for denying or underpaying on Plaintiffs’ claim, failed
to provide an adequate explanation for the denial of Plaintiffs’ claim, and represented that the
damage was not covered when it was caused by a covered event. Doc. 1-3, Pet. ¶¶ 21, 36. This Court
has previously found that such allegations do not fall within the scope of this section of the Texas
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Insurance Code “because they do not relate to the ‘coverage at issue.’” Mainali Corp. v. Covington
Specialty Ins. Co., No. 15-CV-1087, 2015 WL 5098047, at *4 (N.D. Tex. Aug. 31, 2015);
Messersmith v. Nationwide Mut. Fire Ins. Co., 10 F. Supp. 3d 721, 724 (N.D. Tex. 2014). Contrary
to Plaintiffs’ insistence that Texas law does not support the outcome of these cases, the Court finds
Texas Mutual Insurance Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012), to be instructive. There, the
Texas Supreme Court concluded that a dispute between the insured and the insurer as to whether
a “claim was factually within the policy’s terms” did not constitute a misrepresentation of the policy
itself. 381 S.W.3d at 446. In other words, an insurer does not misrepresent a policy when it disagrees
with the insured party as to whether the policy covers a claim. Although Ruttiger construed a
different section of the Texas Insurance Code, the Court believes that its logic applies just as
forcefully here. There is, therefore, no “reasonable basis for predicting that state law might impose
liability” on Stonger under this section. Campbell, 509 F.3d at 669.
2.

Texas Insurance Code § 541.060(a)(2)(A)

Plaintiffs’ next claim arises under § 541.060(a)(2)(A) of the Texas Insurance Code. That
section forbids “failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement
of . . . a claim with respect to which the insurer's liability has become reasonably clear.” Tex. Ins.
Code § 541.060(a)(2)(A). As Plaintiffs correctly note, this Court has concluded that an adjuster may
be held liable for violations of this section. See Denley Grp., LLC v. Safeco Ins. Co. of Ind., No. 15-CV1183, 2015 WL 5836266, at *4 (N.D. Tex. Sept. 30, 2015) (Boyle, J.); Linron Props., Ltd. v. Wausau
Underwriters Ins. Co., No. 15-CV-0293, 2015 WL 3755071, at *5 (N.D. Tex. June 16, 2015) (Boyle,
J.). That conclusion, however, does not relieve Plaintiffs of their responsibility to “plead[] factual
content that allows the [C]ourt to draw the reasonable inference that the defendant is liable for the
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misconduct alleged.” Iqbal, 556 U.S. at 678. Both Denley and Linron turned on the meaning of the
word “effectuate” in the Texas Insurance Code—the Court found that adjusters as well as insurers
had a role to play in “bringing about a prompt, fair, and equitable settlement of a claim.” Denley,
2015 WL 5836226, at *4. The Court thus concluded that this section applies to conduct that
precedes the settlement of a claim; consistent with that understanding, the plaintiffs in both cases
made specific factual allegations regarding the adjuster’s supposed actions prior to the settlement.
See id. (plaintiff alleged, inter alia, that adjuster did not “obtain a legal opinion on the legal obligation
owed to” the plaintiff and unreasonably delayed her investigation of its claim); Linron, 2015 WL
3755071, at *5 (plaintiff alleged that adjuster “retain[ed] an engineer and contractor who were
known for arriving at findings that favored insurance companies”). By contrast, the only specific
factual allegation2 that Plaintiffs have made with respect to Stonger’s conduct is that she did not
adequately explain the reasons for denying or underpaying Plaintiffs’ claim. See Doc. 1-3, Pet. ¶ 15.
Even if true, this action necessarily occurred after the settlement had already been decided, and
therefore could not have adversely impacted its effectuation. Without further factual support, this
claim also fails to support remand.
3.

Texas Insurance Code §§ 541.060(a)(3) and 541.060(a)(4)

Plaintiffs also assert that Stonger is liable for violating sections 541.060(a)(3) and
541.060(a)(4) of the Texas Insurance Code. The first punishes the failure to promptly provide a

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The Court believes that Plaintiffs’ other allegations are “nothing more than legal conclusions
couched as factual allegations, which the [C]ourt need not consider” when deciding a motion to remand.
Weldon Contractors, Ltd. v. Fireman’s Fund Ins. Co., No. 09-CV-0165, 2009 WL 1437837, at *4 (N.D. Tex.
May 22, 2009). Though the Court is mindful that “detailed factual allegations” are not required to survive
a Rule 12(b)(6) inquiry, the allegations supporting this claim tend more toward “labels and conclusions.”
Twombly, 550 U.S. at 555.

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reasonable explanation of the basis in a policy for the denial of a claim, Tex. Ins. Code §
541.060(a)(3), while the second prohibits failing to affirm or deny coverage of a claim within a
reasonable time, or submit a reservation of rights to the policyholder, Tex. Ins. Code §
541.060(a)(4). This Court has found that an adjuster cannot be liable under either section because
she has neither the responsibility nor the authority to comply with them. Mainali, 2015 WL 5098047,
at *4; accord Slabaugh v. Allstate Ins. Co., No. 15-CV-0115, 2015 WL 4046250, at *4–5, 10 (E.D.
Tex. June 30, 2015). Furthermore, Plaintiffs’ allegations are simply “formulaic recitation[s] of the
elements,” which “will not do.” Twombly, 550 U.S. at 555. Regarding § 541.060(a)(3), Plaintiffs
assert that Stonger “failed to offer Plaintiffs adequate compensation, without any explanation why
full payment was not being made,” “did not communicate that any future settlements or payments
would be forthcoming to pay for the entire losses covered under the policy,” and did not “provide any
explanation for the failure to adequately settle Plaintiffs’ claim.” Doc. 1-3, Pet. ¶ 23. These are all
just different ways of saying that Stonger “fail[ed] to promptly provide to [the] policyholder[s] a
reasonable explanation of the basis in the policy . . . for the insurer’s denial of a claim.” Tex. Ins.
Code § 541.060(a)(3). Likewise, Plaintiffs’ allegation that they “did not receive timely indication of
acceptance or rejection, regarding the full and entire claim, in writing from Defendants” merely
rephrases § 541.060(a)(4). Doc. 1-3, Pet. ¶ 24. The Court concludes that such “[t]hreadbare
recitals” are insufficient to justify remanding this case. Iqbal, 556 U.S. at 678.
4.

Texas Insurance Code § 541.060(a)(7)

The final Texas Insurance Code claim against Stonger is that she “refused to pay a claim
without conducting a reasonable investigation with respect to the claim.” Tex. Ins. Code §
541.060(a)(7); see also Doc. 1-3, Pet. ¶¶ 25, 40. Plaintiffs argue that Stonger violated this provision
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by “perform[ing] an outcome-oriented investigation of Plaintiffs’ claim, which resulted in a biased,
unfair, and inequitable evaluation of Plaintiffs’ losses on the [p]roperty.” Doc. 1-3, Pet. ¶ 25. Stonger
also purportedly “did not properly inspect the [p]roperty and failed to account for and/or
undervalued many of Plaintiffs’ exterior and interior damages, although reported by Plaintiffs to
[SFL].” Id. ¶ 40. Like several of Plaintiffs’ other claims, the Court is not persuaded that adjusters can
be held liable under this section, as the violation is the failure to pay—which is not within the
adjuster’s authority—rather than the failure to conduct a reasonable investigation. See Mainali, 2015
WL 5098047, at *4 (quoting Messersmith, 10 F. Supp. 3d at 725). As well, Plaintiffs have again only
recited the elements of the cause of action. Consequently, this claim also provides no “reasonable
basis” to predict that Plaintiffs would recover from Stonger. See Campbell, 509 F.3d at 669.
B.

Fraud and Conspiracy to Commit Fraud Claims
In addition to their Texas Insurance Code claims, Plaintiffs allege that Stonger committed

fraud and that she conspired with SFL to commit fraud. Doc. 1-3, Pet. ¶¶ 42–45.
1.

Fraud

Under Texas law, the elements of a fraud claim are (1) the defendant made a material
representation that was false; (2) she knew the representation was false or made it recklessly as a
positive assertion without any knowledge of its truth; (3) she intended to induce Plaintiffs to act
upon the representation; and (4) Plaintiffs actually and justifiably relied upon the representation and
thereby suffered injury. Ernst & Young, L.L.P. v. Pac. Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex.
2001). Additionally, Federal Rule of Civil Procedure 9(b) requires a plaintiff alleging fraud to “state
with particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b). This, in turn, demands
that the plaintiff “specify the statements contended to be fraudulent, identify the speaker, state when
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and where the statements were made, and explain why the statements were fraudulent.” Herrmann
Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 564–65 (5th Cir. 2002). Plaintiffs have not met this
threshold—they simply argue, in conclusory fashion, that Stonger misrepresented the amount of
damage to Plaintiffs’ property and that the damage was not covered by the policy when, according
to Plaintiffs, it was. Doc. 1-3, Pet. ¶ 36. Plaintiffs point to no specific statements that Stonger made,
nor do they identify when any such statements were made, or even why they were fraudulent (other
than the bare assertion that Stonger’s evaluations of the damage were wrong).
Moreover, Plaintiffs have entirely failed to show how they relied on any of Stonger’s alleged
misrepresentations. They state only that the mishandling of their claim “caused a delay in their ability
to fully repair their [p]roperty,” which has apparently caused unspecified additional damage. Id. ¶ 17.
Absent from the Original Petition, however, is any explanation of how Plaintiffs would have acted
differently if Stonger had not made the alleged misrepresentations. See, e.g., Provident Am. Ins. Co.
v. Castaneda, 988 S.W.2d 189, 200 (Tex. 1998), overruled on other grounds by Crown Life Ins. Co. v.
Casteel, 22 S.W.3d 378 (Tex. 2000) (finding that an insurer’s misrepresentation that the policy at
issue covered a particular medical procedure was not actionable where there was no evidence that
the insured would not have had the procedure absent the misrepresentation). Plaintiffs also assert
that they have been “forced to retain the professional services of the attorney and law firm who are
representing them.” Doc. 1-3, Pet. ¶ 31. This action was taken, however, not in the belief that
Stonger’s representations were true (i.e., in reliance upon them), but rather in the belief that they
were false. See id. (“As a result of Defendants [SFL]’s and [Stonger]’s wrongful acts and omissions,
Plaintiffs were forced to retain the professional services of the attorney and law firm who are
representing them.” (emphasis added)). For these reasons, Plaintiffs’ fraud claims against Stonger are
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insufficient to merit remand.
2.

Conspiracy to Commit Fraud

Finally, Plaintiffs’ conspiracy to commit fraud claim also falters. To prevail on a claim for
conspiracy, Plaintiffs must show the following: (1) two or more persons; (2) an object to be
accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more
unlawful, overt acts; and (5) damages as a proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex.
2005). Conspiracy is a derivative claim, meaning that “a defendant's liability for conspiracy depends
on participation in some underlying tort for which the plaintiff seeks to hold at least one of the
named defendants liable.” Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). The Court has
already disposed of the underlying tort claim (fraud) against Stonger; Plaintiffs, however, also claim
that SFL engaged in fraud, and that Stonger participated in the conspiracy. Doc. 1-3, Pet. ¶¶ 42–45.
The Court need not decide whether Plaintiffs have stated a cause of action for fraud against SFL,
though, because Plaintiffs have not sufficiently alleged the existence of a conspiracy. Plaintiffs’
Original Petition establishes, at best, that SFL employed Stonger to adjust Plaintiffs’ claim, and that
Defendants’ combined actions resulted in Plaintiffs’ claim being underpaid or denied. The closest
Plaintiffs come to alleging a meeting of the minds is stating that “[t]ogether, Defendants [SFL] and
[Stonger] set about to deny and/or underpay on properly covered damages.”3 Id. ¶ 17. This sparse,
conclusory statement is “inadequate to allege the meeting of the minds necessary to sustain a civil
conspiracy claim.” Breitling v. LNV Corp., No. 15-CV-0703, 2015 WL 5896131, at *8 (N.D. Tex.
Oct. 5, 2015). The Court therefore cannot reasonably predict Stonger’s liability for this claim, either.

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Plaintiffs also recite the elements of conspiracy. Doc. 1-3, Pet. ¶ 45. For reasons already explained,
the Court need not consider such statements in reaching its decision.

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The upshot of all this is that SFL has met its heavy burden to show that Plaintiffs have
improperly joined Stonger as a defendant in this case. All of the claims considered here fail either
because they do not reach conduct by an adjuster4 or because the allegations do not “raise a right to
relief above the speculative level.” Twombly, 550 U.S. at 555. The possibility that Plaintiffs will
recover against Stonger is therefore “theoretical” only, meaning that remand would be inappropriate.
See Ross, 344 F.3d at 462.
IV.
CONCLUSION
Based on the foregoing, the Court DENIES Plaintiffs’ Motion to Remand.

SO ORDERED.
SIGNED: November 4, 2015.

_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE

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The Court acknowledges that the Texas Insurance Code’s definition of a “person” includes an
adjuster. Tex. Ins. Code § 541.002(2). It does not follow from this fact, however, that an adjuster is capable
of violating every section of the Code. Notably, § 541.060 only uses the term “person” once, and it does not
appear in any of the subsections that Stonger allegedly violated.
The Court also disagrees with Plaintiffs’ assertion that, to deny their Motion, it must find that “the
Texas Legislature gave insurance policyholders the express right to sue insurance adjusters under the Code
but no way to actually do it.” Doc. 12, Pls.’ Reply ¶ 15 (footnote omitted). Rather, the Court need only
conclude—and does only conclude—that Plaintiffs have not succeeded in stating claims under the Code in
this particular instance.

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