Roach v. Allstate Vehicle and Property Insurance Company et al
Filing
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MEMORANDUM OPINION AND ORDER granting 13 Motion to Remand. For the reasons stated above, the plaintiff's motion to remand is GRANTED. Accordingly, this case is REMANDED to the 162nd Judicial District Court of Dallas County, Texas. The c lerk shall mail a certified copy of this order to the district clerk of Dallas County, Texas. 28 U.S.C. § 1447(c). (cc mailed to 162nd Judicial District Court of Dallas County, Texas.) (Ordered by Senior Judge A. Joe Fish on 2/29/2016) (ndt) Modified event on 3/1/2016 (mcrd).
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
VAKEIA ROACH,
)
)
Plaintiff,
)
)
VS.
)
)
ALLSTATE VEHICLE AND PROPERTY )
)
INSURANCE COMPANY, ET AL.,
)
)
Defendants.
CIVIL ACTION NO.
3:15-CV-3228-G
MEMORANDUM OPINION AND ORDER
Before the court is the motion of the plaintiff, Vakeia Roach (“Roach”), to
remand this case to the state court from which it was previously removed (docket
entry 13). For the reasons set forth below, the motion is granted.
I. BACKGROUND
The causes of action in this case arise out of Roach’s insurance claim for
damage, caused by a hail and windstorm, to her real property. See Plaintiff’s Original
Petition (“Petition”) ¶¶ V (A-X) (docket entry 1-3). Roach submitted a claim for
damages to her property under an insurance policy issued by the defendant Allstate
Vehicle and Property Insurance Company (“Allstate”). Id. ¶ V (A, E). Allstate
assigned an adjuster, the individual defendant Darren Morgan (“Morgan”), to
investigate Roach’s claim. Id. ¶ V (G).
Roach asserts that Morgan “improperly adjusted” her claim, “conducted a
substandard inspection,” “misrepresented the cause of, scope of, and cost to repair the
damage” to her property as well as “the amount of and insurance coverage for” her
loss under the insurance policy. Id. ¶ V (H). Roach avers that she and Allstate relied
on Morgan’s misrepresentations, which caused Allstate to underpay her on her
insurance claim. Id. Further, Roach claims that Morgan advised her how she could
repair her property to prevent further damage, and such advice was “negligent and
false because it turns out [she] could not properly repair her [p]roperty and prevent
future damage by following Morgan’s advice.” Id.
Also, Roach maintains that Morgan misrepresented that the damages caused
by the storm were below the deductible when in fact the damages exceeded $44,000.
Id. ¶ V (I). Further, Roach avers that Morgan and Allstate violated numerous
provisions of the Texas Insurance Code. Id. ¶¶ V (O-U).
On August 26, 2015, Roach filed suit against Morgan and Allstate in the
162nd Judicial Court of Dallas County, Texas, for damages resulting from the alleged
mishandling of her insurance claim and for unfair settlement practices. Notice of
Removal (“Notice”) ¶ 1.1 (docket entry 1). On October 5, 2015, Allstate removed
the case to this court, contending that the court has subject matter jurisdiction
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because Morgan was improperly joined in the lawsuit to defeat diversity jurisdiction.
Id. ¶¶ 2.6-2.7. On November 18, 2015, Roach filed the instant motion to remand.
Allstate filed a timely response (docket entry 15), to which Roach served a timely
reply (docket entry 17). The motion is now ripe for consideration.
II. ANALYSIS
A. Legal Standards
1. Removal Jurisdiction
28 U.S.C. § 1441(a) permits the removal of “any civil action brought in a
[s]tate court of which the district courts of the United States have original
jurisdiction.” 28 U.S.C. § 1441(a). The statute allows a defendant to “remove a
state court action to federal court only if the action could have originally been filed in
federal court.” Anderson v. American Airlines, Inc., 2 F.3d 590, 593 (5th Cir. 1993).
However, the removal statute must be strictly construed because “removal jurisdiction
raises significant federalism concerns.” Willy v. Coastal Corporation, 855 F.2d 1160,
1164 (5th Cir. 1988); see also Gutierrez v. Flores, 543 F.3d 248, 251 (5th Cir. 2008).
Therefore, “any doubts concerning removal must be resolved against removal and in
favor of remanding the case back to state court.” Cross v. Bankers Multiple Line
Insurance Company, 810 F. Supp. 748, 750 (N.D. Tex. 1992) (Means, J.); see also
Shamrock Oil & Gas Corporation v. Sheets, 313 U.S. 100, 108-09 (1941). The party
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seeking removal bears the burden of establishing federal jurisdiction. Willy, 855 F.2d
at 1164.
There are two principal bases upon which a district court may exercise removal
jurisdiction: the existence of a federal question, see 28 U.S.C. § 1331, and complete
diversity of citizenship among the parties. See 28 U.S.C. § 1332. Here, the removing
defendants have alleged only diversity of citizenship as a basis for this court’s
jurisdiction. See Notice ¶ 2.2. The court can properly exercise jurisdiction on the
basis of diversity of citizenship after removal only if three requirements are met:
(1) the parties are of completely diverse citizenship, see 28 U.S.C. § 1332(a); (2)
none of the properly joined defendants is a citizen of the state in which the case is
brought, see 28 U.S.C. § 1441(b); and (3) the case involves an amount in controversy
of more than $75,000, see 28 U.S.C. § 1332(a). Here, Roach and Morgan are citizens
of Texas, while Allstate is a citizen of Illinois. Notice ¶¶ 2.3-2.5.
2. Improper Joinder
Even if a defendant has the same citizenship as the plaintiff, a federal court can
still exercise removal jurisdiction over an action if the court finds that the plaintiff
improperly joined the non-diverse defendant. The Fifth Circuit has recognized two
grounds on which a court can find that a defendant was improperly joined:
“‘(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff
to establish a cause of action against the non-diverse party in state court.’” Smallwood
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v. Illinois Central Railroad Company, 385 F.3d 568, 573 (5th Cir. 2004) (en banc)
(quoting Travis v. Irby, 326 F.3d 644, 646-47 (5th Cir. 2003)), cert. denied, 544 U.S.
992 (2005)).
Only the latter ground is at issue here. To satisfy the second ground for
improper joinder, the defendant must demonstrate that “there is no possibility of
recovery by the plaintiff against an in-state defendant, which stated differently means
that there is no reasonable basis for the district court to predict that the plaintiff
might be able to recover against an in-state defendant.” Smallwood, 385 F.3d at 573
(emphasis added).
When applying this test, the court does not “determine whether the plaintiff
will actually or even probably prevail on the merits of the claim [against the in-state
defendant], but look[s] only for a possibility that the plaintiff might do so.” Guillory
v. PPG Industries, Inc., 434 F.3d 303, 308-09 (5th Cir. 2005) (citing Dodson v. Spiliada
Maritime Corporation, 951 F.2d 40, 42-43 (5th Cir. 1992); B., Inc. v. Miller Brewing
Company, 663 F.2d 545, 549 (5th Cir. 1981)). Furthermore, the party seeking
removal bears the heavy burden of proving that joinder was improper. Smallwood,
385 F.3d at 574. This burden requires the trial court to resolve all “contested issues
of material fact, and any ambiguity or uncertainty in the controlling state law” in the
plaintiff’s favor. Griggs v. State Farm Lloyds, 181 F.3d 694, 699 (5th Cir. 1999). The
court can only deny the plaintiff’s motion for remand if, as a matter of law, there is
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absolutely no possibility that the plaintiff can state a valid claim against the nondiverse defendant in state court. See B., Inc., 663 F.2d at 554. If the defendant
cannot prove improper joinder, remand is mandated. Smallwood, 385 F.3d at 575.
To determine whether the plaintiff is unable to establish a cause of action
against a non-diverse defendant, the court should “conduct a Rule 12(b)(6)-type
analysis, looking initially at the allegations of the complaint to determine whether the
complaint states a claim under state law against the in-state defendant.” Id. at 573.
If the complaint survives the analysis, there is generally no improper joinder. Id.
The Fifth Circuit's use of the phrase “Rule 12(b)(6)-type analysis” does not
indicate that this inquiry requires application of the federal motion to dismiss
standard detailed in Bell Atlantic Corporation v. Twombly, 550 U.S. 544 (2007), and
Ashcroft v. Iqbal, 556 U.S. 662 (2009). In fact, “[t]he majority of courts have held
that a federal court should not look to the federal standard for pleading . . . to
determine whether the state-court petition provides a reasonable basis for predicting
that the plaintiff could recover against the in-state defendant at least when . . . the
state pleading standard is more lenient.” Edwea, Inc. v. Allstate Insurance Company, No.
10-CV-2970-H, 2010 WL 5099607, at *5 (S.D. Tex. Dec. 8, 2010) (citing, e.g.,
Warren v. State Farm Mutual Automobile Insurance Company, No. 3:08-CV-0768-D,
2008 WL 4133377, at *4 (N.D. Tex. Aug. 29, 2008) (Fitzwater, C.J.) (“Because state
court plaintiffs should not be required to anticipate removal to federal court, the
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court assesses the sufficiency of the factual allegations of [the plaintiff's] complaint
under Texas's notice-pleading standard.”)).
The Fifth Circuit recently held that Texas’s notice pleading standard applies
when federal courts decide whether a defendant has been properly joined.
International Energy Ventures Management, L.L.C. v. United Energy Group, Limited, 800
F.3d 143, 149 (5th Cir. 2015); Mainali Corporation v. Covington Specialty Insurance
Company, No. 3:15-CV-1087-D, 2015 WL 5098047, at *3 n.2 (N.D. Tex. Aug. 31,
2015) (Fitzwater, J.). Furthermore, “the decision as to the sufficiency of the
pleadings is for the state courts, and for a federal court to interpose its judgment
would fall short of the scrupulous respect for the institutional equilibrium between
the federal and state judiciaries that our federal system demands.” Henderson v.
Washington National Insurance Company, 454 F.3d 1278, 1284 (11th Cir. 2006).
Thus, Texas’s fair notice pleading standard applies.
3. Pleading Standard under Texas Law
Rules 45 and 47 of the Texas Rules of Civil Procedure detail the pleading
standard under Texas law. In relevant part, Rule 45 requires a complaint to “consist
of a statement in plain and concise language of the plaintiff’s cause of action . . . .
That an allegation be evidentiary or be of legal conclusion shall not be grounds for an
objection when fair notice to the opponent is given by the allegations as a whole.”
TEX. R. CIV. P. 45(b). Rule 47 reiterates the essential element of Texas’s pleading
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regime: the text of the complaint must be “sufficient to give fair notice of the claim
involved.” TEX. R. CIV. P. 47(a). A party satisfies this pleading standard if “an
opposing attorney of reasonable competence, with the pleadings before him, can
determine the nature of the controversy and the testimony that would probably be
relevant.” Coffey v. Johnson, 142 S.W.3d 414, 417 (Tex. App.--Eastland 2004, no
pet.). This standard does “not require that the plaintiff set out in [her] pleadings the
evidence upon which [s]he relies to establish [her] asserted cause of action.”
Paramount Pipe & Supply Company, Inc. v. Muhr, 749 S.W.2d 491, 494-95 (Tex. 1988)
(citing Edwards Feed Mill v. Johnson, 158 Tex. 313 (1958)).
Allstate contends that Texas’s fair notice standard “has been brought in line
with the federal pleading standard” since the Texas Supreme Court adopted TEX. R.
CIV. P. 91a. Response at 6 (citing Oldham v. Nationwide Insurance Company of America,
No. 3:14-CV-0575-B, 2014 WL 3855238, at *9 (N.D. Tex. Aug. 5, 2014) (Boyle,
J.)). The Supreme Court of Texas has not articulated the effect TEX. R. CIV. P. 91a
has on the pleading standard under TEX. R. CIV. P. 45(b) and TEX. R. CIV. P. 47(a).
Both Texas state appellate courts and federal courts interpreting TEX. R. CIV. P. 91a
disagree on its impact on Texas’s fair notice pleading standard. Compare Wooley v.
Schaffer, 447 S.W.3d 71, 76 (Tex. App.--Houston [14th Dist.] 2014, pet. denied)
(concluding that courts are to apply the fair notice standard in a Rule 91a motion to
dismiss context) and Mainali Corporation, 2015 WL 5098047, at *3 n.2 (concluding
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that Rule 91a leaves the fair notice pleading standard unaltered) with GoDaddy.com,
LLC v. Toups, 429 S.W.3d 752, 754 (Tex. App.--Beaumont 2014, pet. denied)
(concluding that Rule 91a is analogous to FED. R. CIV. P. 12(b)(6) and petitions must
state a claim to relief that is plausible on its face) and Bart Turner & Associates v.
Krenke, No. 3:13-CV-2921-L, 2014 WL 1315896, at *3 (N.D. Tex. Mar. 31, 2014)
(Lindsay, J.) (“The standard for pleading in Texas is still fair notice; however, fair
notice must now be judged in the context of Rule 91a.”).
TEX. R. CIV. P. 91a permits state courts to dismiss claims under an analysis
similar to federal courts’ analysis, interpreting FED. R. CIV. P. 8(a), when considering
a FED. R. CIV. P. 12(b)(6) motion to dismiss. GoDaddy.com, 429 S.W.3d at 754; City
of Dallas v. Sanchez, 449 S.W.3d 645, 655 (Tex. App.--Dallas), reh’g overruled (Dec. 29,
2014), pet. for review filed (Mar. 9, 2015). While TEX. R. CIV. P. 91a does not
expressly change either TEX. R. CIV. P. 45(b) or TEX. R. CIV. P. 47(a), a state court
petition is now susceptible to dismissal under TEX. R. CIV. P. 91a. Therefore, some
courts have held that the fair notice standard “must now be judged in the context of
Rule 91a.” Krenke, 2014 WL 1315896, at *3. TEX. R. CIV. P. 91a requires that
allegations have a “basis in law and fact” and forbids consideration of evidence
outside the pleadings and exhibits attached thereto. See TEX. R. CIV. P. 91a.1 (“[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 law if the allegations, taken as true, together
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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.”).
Under International Energy Ventures Management, L.L.C., 800 F.3d at 149, this
court applies the Texas fair notice pleading standard to interpret whether Roach’s
claim against Morgan is sufficient. Since there is no clear interpretation from Texas
state courts on Rule 91a’s effect on the fair notice pleading standard, and the court is
to defer to state courts for the interpretation of state law, Erie R. Co. v. Tompkins, 304
U.S. 64, 78-80 (1938), the court does not determine Rule 91a’s effect on the fair
notice pleading standard. Since there is “ambiguity or uncertainty” regarding Rule
91a’s effect on Texas’s fair notice pleading standard, the court must resolve the issue
in the plaintiff’s favor. Griggs, 181 F.3d at 699. Therefore, the court applies Texas’s
fair notice pleading standard unaltered by Rule 91a. See Wooley, 447 S.W.3d at 76;
Mainali Corporation, 2015 WL 5098047, at *3 n.2.
4. Liability under Texas Insurance Code
Roach contends, among other claims, that Morgan, an individual insurance
adjuster, violated various sections of Chapter 541 of the TEX. INS. CODE and the
Deceptive Trade Practices Act (“DTPA”), TEX. BUS. & COMM. CODE ANN. § 17.41, et
seq. See Petition 7-18. Texas law recognizes suits against insurance adjusters in their
individual capacities under the TEX. INS. CODE, see TEX. INS. CODE § 541.002(2), and
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the Texas Supreme Court has “specifically held that ‘[t]he business of insurance
includes the investigation and adjustment of claims and losses.’” Centaurus Unity v.
Lexington Insurance Company, 766 F. Supp. 2d 780, 787 (S.D. Tex. 2011) (quoting
Vail v. Texas Farm Bureau Mutual Insurance Company, 754 S.W.2d 129, 132 (Tex.
1998)) (other citation omitted). The Fifth Circuit has also held that an adjuster who
services insurance policies for an insurer engages in the business of insurance, is
subject to the TEX. INS. CODE, and may be found liable under it. Id. (citing Gasch v.
Hartford Indemnity Company, 491 F.3d 278, 282 (5th Cir. 2007) (collecting cases
holding that individual adjusters are subject to the TEX. INS. CODE)). Furthermore,
the TEX. INS. CODE allows an insured to file a claim through its tie-in statute, see TEX.
INS. CODE ANN. § 541.151(2), for deceptive acts or practices listed in Section
17.46(b) of the DTPA, see TEX. BUS. & COM. CODE § 17.46(b). Id. at 787-88.
B. Application
1. Roach adequately alleged that Morgan violated
TEX. INS. CODE § 541.060(a)(2)
Because Texas law recognizes claims against adjusters like Morgan in their
individual capacities, the relevant inquiry is whether Roach has properly stated a
claim against Morgan for his conduct as an individual adjuster. In making this
determination, the question before the court is whether “there is no reasonable basis
for the district court to predict that the plaintiff might be able to recover against”
Morgan, the non-diverse, in-state defendant, for violations of Chapter 541 of the
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TEX. INS. CODE, the DTPA, breach of duty of good faith and fair dealing, fraud,
conspiracy, aiding and abetting the alleged torts, and negligent misrepresentation.
See Smallwood, 385 F.3d at 573. The court need not decide whether Roach has
sufficiently pleaded each cause of action; rather, if the court finds a reasonable basis
to predict she can potentially recover on any of these causes of action, the court must
remand the entire case. Smith-Manning v. State Farm Lloyds, No. 3:13-CV-3056–M,
2013 WL 5637539, at *2 (N.D. Tex. Oct. 14, 2013) (Lynn, J.) (quoting Gray ex rel.
Rudd v. Beverly Enterprises-Mississippi, Inc., 390 F.3d 400, 412 (5th Cir. 2004)) (“[The]
holistic approach to removal mandates that the existence of even a single valid cause
of action against in-state defendants (despite the pleading of several unavailing
claims) requires remand of the entire case to state court.”).
Roach focuses her contention that she has pleaded a claim against Morgan on
her claim that Morgan’s misrepresentation -- that the amount of hail and wind
damage to her property was less than the policy deductible -- violated TEX. INS. CODE
§ 541.060(a)(2). See Plaintiff’s Brief in Support of her Opposed Motion to Remand
at 9-11 (docket entry 14); Plaintiff’s Reply in Support of her Motion to Remand at 48 (docket entry 17). As previously stated, individual insurance adjusters may be held
liable for violations of TEX. INS. CODE § 541. Liberty Mutual Insurance Company v.
Garrison Contractors, Inc., 966 S.W.2d 482, 486 (Tex. 1998). Numerous courts have
concluded that an insurance adjuster may be held personally liable for engaging in
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unfair settlement practices under TEX. INS. CODE § 541.060(a)(2). See Denley Group,
LLC v. Safeco Insurance Company of Indiana, No. 3:15-CV-1183-B, 2015 WL 5836226,
at *3-4 (N.D. Tex. Sept. 30, 2015) (Boyle, J.); Progressive Island, LLC v. Scottsdale
Insurance Company, No. 3:13-CV-0741-M, 2013 WL 6065414, at *2-3 (N.D. Tex.
Nov. 18, 2013) (Lynn, J.); Lopez-Welch v. State Farm Lloyds, No. 3:14-CV-2416-L,
2014 WL 5502277, at *8 (N.D. Tex. Oct. 31, 2014) (Lindsay, J.); Shade Tree
Apartments, LLC v. Great Lakes Reinsurance (UK) PLC, No. A-15-CA-843-SS, 2015 WL
8516595, at *6 (W.D. Tex. Dec. 11, 2015).
Despite significant case law supporting adjuster liability under
§ 541.060(a)(2), a few courts have recently concluded that an insurance adjuster
cannot be held liable under § 541.060(a)(2). See One Way Investments, Inc. v. Century
Surety Company, No. 3:14-CV-2839-D, 2014 WL 6991277, at *4 (N.D. Tex. Dec. 11,
2014) (Fitzwater, J.); Messersmith v. Nationwide Mutual Fire Insurance Co., 10 F. Supp.
3d 721, 724 (N.D. Tex. 2014) (Solis, J.). In the above cases, the courts reason that
the adjuster cannot be liable for “failing to attempt in good faith to effectuate a
prompt, fair, and equitable settlement of” a claim because the adjuster “does not have
settlement authority on behalf of [the insurance company]” and his“sole role is to
assess the damage.” Messersmith, 10 F. Supp. 3d at 724 (internal quotations omitted);
see also One Way Investments, 2014 WL 6991277, at *4 (citing Messersmith, 10 F.
Supp. 3d at 724).
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The court respectfully disagrees with the recent line of cases concluding that
insurance adjusters cannot be held liable under § 541.060(a)(2) because this court
finds such a reading unduly narrows the scope of the provision, as it renders the term
“effectuate” superfluous. Webster’s Dictionary defines the word “effectuate” by
reference to the definition for “effect,” meaning “to cause to come into being” or “to
bring about.” Effectuate, MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY 367-68 (10th
ed. 1999). The Texas legislature’s decision to use the word “effectuate” instead of the
word “finalize” indicates that § 541.060(a)(2)’s “prohibition extends to all persons
who play a role in bringing about a prompt, fair, and equitable settlement of a claim.”
Denley Group, LLC, 2015 WL 5836226, at *4.
Further, the insurance adjuster, as the person primarily responsible for
investigating and evaluating insurance claims, has the ability to affect or bring about
the “prompt, fair, and equitable settlement” of claims, because it is upon his
investigation that the insurance company's settlement of a claim is generally based.
See Arana v. Allstate Texas Lloyds, No. 3:13-CV-0750-D, 2013 WL 2149589, at *5
(N.D. Tex. May 17, 2013) (Fitzwater, Chief J.) (“Adjusters play a role in the
investigation, estimation, and settlement of insurance claims.”); Vargas v. State Farm
Lloyds, 216 F. Supp. 2d 643, 648 (S.D. Tex. 2002) (noting that the adjuster “engages
in the business of insurance by investigating, processing, evaluating, approving, and
denying claims”); Denley, 2015 WL 5836226, at *4 (“[A] delay in an adjuster’s
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investigation will undoubtedly cause a delay in the payment of the claim, and an
insufficient investigation may well lead to a less than fair settlement of a claim.”).
Also, in the context of a motion to remand, the split in authority regarding the
scope of an insurance adjuster's liability under the TEX. INS. CODE must be resolved in
favor of remand. See African Methodist Episcopal Church v. Lucien, 756 F.3d 788, 793
(5th Cir. 2014) (holding that “any ambiguities of state law must be resolved” in favor
of remand); see also Hood ex rel. Miss. v. JP Morgan Chase & Co., 737 F.3d 78, 84 (5th
Cir. 2013). The court declines to usurp the authority of Texas courts to determine
whether Texas law provides the requested relief against adjusters as a matter of law
and instead only asks whether there is a reasonable basis to predict that Roach might
be able to recover against Morgan. Smallwood, 385 F.3d at 573; Shade Tree
Apartments, 2015 WL 8516595, at *6.
Here, Roach asserts that Morgan failed to attempt to effectuate an equitable
settlement by “conduct[ing] a substandard inspection,” “fail[ing] to include many” of
Roach’s damages in his report, “misrepresent[ing] the cause of, scope of, and cost to
repair the damage” to Roach’s property, and “ma[king] these and other
misrepresentations” to both Roach and to Allstate. Original Petition ¶ V (H). Roach
maintains that she and Allstate relied on these misrepresentations and as a result
Allstate’s proposed settlement was inadequate, caused Allstate to underpay her on her
insurance claim, and caused further damage to her property. Id.
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The court finds that Roach has pleaded a potentially valid claim for relief
against Morgan under the TEX. INS. CODE § 541.060(a)(2). Roach’s petition
identifies Morgan as the insurance adjuster, Original Petition ¶ V (G), and specifically
alleges that he and Allstate violated § 541.060(a)(2). Id. ¶ V (O). Although Roach
recites the statutory provision, “a near-verbatim recitation . . . does not preclude the
possibility of recovering” against the adjuster so long as the plaintiff has also alleged
sufficient facts describing actionable conduct by the adjuster. Hernandez v. Stillwater
Insurance Company, No. 3:14-CV-1560-G, 2014 WL 3700577, at *3 (N.D. Tex.
July 25, 2014) (Fish, J.). Roach alleged that Morgan performed specific acts,
including conducting a substandard investigation, Original Petition ¶ V (H), failing to
include in his report all of the damages noted during his inspection, id., undervaluing
the damages he observed during the inspection as below the policy deductible-$589.65, id. ¶¶ V (H-I); Exhibit A to the Original Petition at 4--when the damages
exceed $44,000.00, Original Petition ¶ V (I), unreasonably delaying the investigation,
Original Petition at 9, and failing to properly adjust the claims, id. ¶ V (J) (all of
which led to the underpayment of Roach’s claim and an inequitable evaluation of
Roach’s losses). Therefore, Roach has sufficiently stated her claim that Morgan
misrepresented the amount of damage to her property, a material fact related to the
coverage at issue. See Rodriguez v. Standard Guaranty Insurance Company, No. 10-CV3065-H, 2010 WL 4877774, at *6 (S.D. Tex. Nov. 23, 2010) (remanding a case
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where allegations “resembl[ing] mere formulaic recitations of certain provisions of the
[TEX. INS. CODE]” were “clarified and explained by” other allegations in plaintiff’s
petition specifically directed at the non-diverse defendant); Warren v. State Farm
Mutual Automobile Insurance Company, No. 3:08-CV-0768-D, 2008 WL 4133377, at
*4 (N.D. Tex. Aug. 29, 2008) (Fitzwater, J.) (holding that factual allegations largely
mirroring statutory language are sufficient to state a claim against the insurance
adjuster individually); Cardona v. ASI Lloyds, No. 3:14-CV-3736-G, 2015 WL 93470,
at *6 (N.D. Tex. Jan. 6, 2015) (Fish, J.).
2. Plaintiff’s original petition satisfies Texas’s
fair notice pleading standard
Allstate contends that Roach’s petition is insufficient under the Texas fair
notice pleading standard because Roach “lumps” Allstate and Morgan together in her
allegations within her petition. Response at 7-8 (citing Studer v. State Farm Lloyds,
No. 4:13-CV-413, 2014 WL 234352, at *4 (E.D. Tex. Jan. 21, 2014) (citing Griggs,
181 F.3d at 699)). In both Studer, 2014 WL 234352, at *4, and Griggs, 181 F.3d at
699, the plaintiff did not allege that the insurance adjuster committed any
independent acts that would support violations of the TEX. INS. CODE. Here, Roach’s
allegations clearly distinguish between Morgan and Allstate, leaving no question that
Morgan, rather than Allstate, allegedly conducted a substandard inspection of the hail
and wind damage, allegedly misrepresented the damages to Allstate and Roach, and
allegedly, negligently advised Roach how to repair the current damage to her home to
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prevent further damage. See Original Petition ¶¶ V (H-I). Roach sufficiently alleged
that Morgan’s independent actions violated provisions of the TEX. INS. CODE.
The court concludes that Roach’s allegations are sufficient, under the Texas fair
notice pleading standard, to support a claim against Morgan in his individual capacity
for violating TEX. INS. CODE § 541.060(a)(2)(A). Upon reviewing Roach’s petition,
an opposing attorney of reasonable competence could ascertain the nature of the
controversy and the probable relevant testimony. See Coffey, 142 S.W.3d at 417.
Therefore, Allstate has failed to establish that there is no reasonable basis to predict
Roach’s recovery against Morgan.
Having found Roach could potentially recover against Morgan for violations of,
at a minimum, § 541.060(a)(2)(A), the court finds Morgan was not improperly
joined. Exchange Services, Inc. v. Seneca Insurance Co., No. 3:15-CV-1873-M, 2015 WL
6163383, at * 6 (N.D. Tex. Oct. 16, 2015) (Lynn, J.) (“Whether or not [Roach] will
ultimately prevail on [her] claims against Morgan is irrelevant. It is not the court’s
role to evaluate the merits of the claims at this stage of the litigation.”). Because
Roach has asserted a potentially valid claim against Morgan, Morgan has been
properly joined. Morgan’s status as a Texas citizen for purposes of 28 U.S.C. § 1332
destroys diversity jurisdiction and therefore requires the court to remand the action.
See 28 U.S.C. § 1447(c).
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III. CONCLUSION
For the reasons stated above, the plaintiff’s motion to remand is GRANTED.
Accordingly, this case is REMANDED to the 162nd Judicial District Court of
Dallas County, Texas. The clerk shall mail a certified copy of this order to the
district clerk of Dallas County, Texas. 28 U.S.C. § 1447(c).
SO ORDERED.
February 29, 2016.
___________________________________
A. JOE FISH
Senior United States District Judge
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