Fernandez et al v. Allstate Texas Lloyds et al
MEMORANDUM OPINION AND ORDER: The court ORDERS that plaintiffs' 12 motion to remand be, and is hereby, denied. The court further ORDERS that plaintiffs' claims against McGraw be, and are hereby, dismissed without prejudice. The court d etermines that there is no just reason for delay in, and hereby directs, entry of final judgment as to the dismissal of plaintiffs' claims against McGraw. The court further ORDERS that the caption of this action be, and is hereby, amended to reflect that Allstate is the sole defendant. (Ordered by Judge John McBryde on 10/27/2017) (tln)
IN THE UNITED STATES DISTRICT
NORTHERN DISTRICT OF TEXA
FORT WORTH DIVISION
CHERYL FERNANDEZ, ET AL.,
ALLSTATE TEXAS LLOYDS, ET AL.,
MEMORANDUM OPINION AND ORDER
Came on for consideration the motion of plaintiffs, Cheryl
Fernandez and Joel Fernandez, to remand. The court, having
considered the motion, the response of defendant Allstate Texas
Lloyds ("Allstate"), the record, and applicable authorities,
finds that the motion should be denied.
On August 11, 2017, plaintiffs filed their original petition
in the 153rd Judicial District Court of Tarrant County, Texas,
asserting claims against Allstate and its adjustor, Bobby McGraw
("McGraw"), arising out of the alleged failure to pay all damages
plaintiffs said arose from a wind and hail storm that occurred on
or about January 15, 2017. Doc. 1 1, Ex. A. On September 8, 2017,
Allstate filed its notice of removal, bringing the action before
this court. Allstate alleged the existence of diversity
"reference is to the number of the item on the docket in this action.
jurisdiction, noting that McGraw (who, like plaintiffs, is a
citizen of the State of Texas) had been improperly joined. Doc. 1
Plaintiffs allege that they are insureds under a property
insurance policy issued by Allstate; that their property suffered
damage as a result of a storm; and that Allstate failed to pay
the full amount of their loss. As for McGraw, plaintiffs plead:
McGraw "assisted with adjusting the claim." Doc. 13, App. 8.
McGraw was improperly trained and failed to perform a thorough
investigation, spending no more than 30 minutes inspecting the
roof and exterior of their home. Id. at 10. McGraw verbally
misrepresented that there was limited damage attributable to the
storm. Id. Further:
McGraw misrepresented the value of Plaintiffs' damages
in his estimate when he underpaid Plaintiffs' loss.
McGraw further misrepresented the value of Plaintiffs'
loss, on his own behalf and on behalf of Allstate in
writing to Plaintiffs in a letter dated February 26,
2017 when they failed to include damages obviously
covered under their policy and underpaid their loss.
Id. at 10-11.
Plaintiffs assert claims against Allstate for breach of
contract, violation of the prompt payment provision of the Texas
Insurance Code, unfair settlement practices in violation of the
Insurance Code and Texas Deceptive Trade Practices-Consumer
Protection Act, Tex. Bus. & Comm. Code
17.41-.63. and breach
of duty of good faith and fair dealing. They assert claims
against McGraw for unfair settlement practices under Tex. Ins.
Ground of the Motion
Plaintiffs say that Allstate cannot show the existence of
diversity jurisdiction because they have stated claims against
McGraw, the non-diverse defendant.
Applicable Legal Principles
Under 28 U.S.C. § 1441(a), a defendant may remove to federal
court any state court action of which the federal district court
would have original jurisdiction. 2 "The removing party bears the
burden of showing that federal subject matter jurisdiction exists
and that removal was proper."
Ins. Co., 276 F.3d 720, 723
Manguno v. Prudential Prop. & Cas.
(5th Cir. 2002)
"Moreover, because the effect of removal is to deprive the state
court of an action properly before it, removal raises significant
federalism concerns .
. which mandate strict construction of
The removal statute provides, in pe1tinent pa1t, that: [A]ny civil action brought in a State comt
of which the district comts of the United States have original jurisdiction, may be removed by the
defendant or the defendants, to the district court of the United States for the district and division
embracing the place where such action is pending. 28 U.S.C. § 1441(a) (emphasis added).
the removal statute." Carpenter v. Wichita Falls Indep. Sch.
Dist., 44 F.3d 362, 365-66 (5th Cir. 1995). Any doubts about
whether removal jurisdiction is proper must therefore be resolved
against the exercise of federal jurisdiction. Acuna v. Brown &
Root Inc., 200 F.3d 335, 339 (5th Cir. 2000).
Fraudulent or Improper Joinder
To determine whether a party was fraudulently or improperly
joined to prevent removal,
"the court must analyze whether (1)
there is actual fraud in pleading jurisdictional facts or (2) the
plaintiff is unable to establish a cause of action against the
Campbell v. Stone Ins., Inc., 509 F.3d
(5th Cir. 2007).
Because Allstate has not alleged
actual fraud in the pleadings, the applicable test for improper
whether the defendant has demonstrated 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.
Ill. Cent. R.R., 385 F.3d 568, 573
To answer this question, the court may either:
(5th Cir. 2004).
(1) conduct a Rule
12(b) (6)-type analysis or (2) in rare cases, make a summary
inquiry "to identify the presence of discrete and undisputed
facts that would preclude plaintiff's recovery against the instate defendant.''
Id. at 573-74.
A Rule 12(b) (6)-type analysis
of plaintiffs' claims appears to be the proper method here to
determine whether there exists a reasonable basis for a
conclusion that plaintiffs might be able to recover against
The Pleading Standard to be Used in the Rule 12[b) (6)Type Analysis
Although there has been some uncertainty as to the pleading
standard to be applied, the Fifth Circuit has most recently held
that federal courts should use the federal court pleading
standard when conducting the Rule 12(b) (6)-type analysis of an
improper joinder claim in a motion to remand to determine if the
plaintiff has stated a claim against a nondiverse defendant.
Int'l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd.,
818 F. 3d 193, 208
(5th Cir. 2016). 3 Rule 8 (a) (2) of the Federal
Rules of Civil Procedure provides, in a general way, the
applicable standard of pleading. It requires that a complaint
contain "a short and plain statement of the claim showing that
the pleader is entitled to relief,
Fed. R. Civ. P. 8 (a) (2),
order to give the defendant fair notice of what the claim is and
the grounds upon which it rests,'' Bell Atl. Corp. v. Twombly, 550
The court notes that Texas now has a failure-to-state-a-claim rule that is substantially the same
as the federal rule and that Texas courts have interpreted their Rule 9la as requiring a Federal Rule
12(b)(6)-type analysis and have relied on federal case law in applying Rule 9la. See. e.g., Wooley v.
Schaffer, 447 S.W.3d 71, 76 (Tex. App.-Houston [14'" Dist.] 2014, pet. denied); GoDaddy.com, LLC v.
Toups, 429 S.W.3d 752, 754-55 (Tex. App.-Beaumont 2014, pet. denied). Thus, the outcome would be
the same if the comt were to apply the Texas pleading standard.
U.S. 544, 555 (2007)
(internal quotation marks and ellipsis
Although a complaint need not contain detailed factual
allegations, the "showing" contemplated by Rule 8 requires the
plaintiff to do more than simply allege legal conclusions or
recite the elements of a cause of action.
555 & n.3.
Twombly, 550 U.S. at
Thus, while a court must accept all of the factual
allegations in the complaint as true, it need not credit bare
legal conclusions that are unsupported by any factual
See Ashcroft v. Igbal, 556 U.S. 662, 679 (2009)
("While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations.").
Moreover, to survive a motion to dismiss for failure to
state a claim under Rule 12(b) (6), the facts pleaded must allow
the court to infer that the plaintiff's right to relief is
Iqbal, 556 U.S. at 678.
To allege a plausible right
to relief, the facts pleaded must suggest liability; allegations
that are merely consistent with unlawful conduct are
insufficient. Id. In other words, where the facts pleaded do no
more than permit the court to infer the possibility of
misconduct, the complaint has not shown that the pleader is
entitled to relief. Id. at 679.
"Determining whether a complaint
states a plausible claim for relief .
task that requires the reviewing court to draw on its judicial
experience and common sense."
Rule 9(b) sets forth the heightened pleading standard
imposed for fraud claims: "In alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake." The Fifth Circuit requires a party asserting
fraud to "specify the statements contended to be fraudulent,
identify the speaker, state when and where the statements were
made, and explain why the statements were fraudulent." Hermann
Holdings, Ltd. v. Lucent Techs., Inc., 302 F.3d 552, 564-65 (5th
Cir. 2002) (internal quotations and citations omitted). succinctly
stated, Rule 9(b) requires a party to identify in its pleading
"the who, what, when, where, and how" of the events constituting
the purported fraud. Dorsey v. Portfolio Eguities, Inc., 540 F.3d
333, 339 (5th Cir. 2008). Rule 9 (b) applies to all cases where
the gravamen of the claim is fraud even though the theory
supporting the claim is not technically termed fraud. Frith v.
Guardian Life Ins. Co. of Am., 9 F. Supp. 2d 734, 742
1998). Claims alleging violations of the Texas Insurance Code and
the Texas DTPA as well as those for fraud, fraudulent inducement,
fraudulent concealment, and negligent misrepresentation are
subject to the requirements of Rule 9(b). Berry v. Indianapolis
Life Ins. Co.,
608 F. Supp. 2d 785, 800
(N.D. Tex. 2009); Frith,
9 F. Supp. 2d at 742.
This is but another in a long line of cases where plaintiffs
join an insurance adjustor in an attempt to defeat federal court
jurisdiction. 4 Plaintiffs say that they have stated claims
against McGraw but they have done little more than track
statutory language of the Insurance Code. Plaintiffs' obligation
to provide the grounds of their entitlement to relief requires
more than a formulaic recitation of the elements of a cause of
action or mere labels and conclusions. Igbal, 556 U.S. at 678.
Here, plaintiffs have done nothing more than make conclusory
allegations without any plausible facts to support them. Unlike
the cases they cite 5 , where specific facts were pleaded to
supplement the recitation of statutory elements, plaintiffs have
'See, e.g., Aguilarv. State Farm Lloyds, No. 4:15-CV-565-A, 2015 WL 5714654 (N.D.
Tex. Sept. 28, 2015); Parish v. State Fann Lloyds, No. 4:15-CV-339-A, 2015 U.S. Dist. LEXIS
79293 (N.D. Tex. June 18, 2015); Ogden v. State Farm Lloyds, No. 4:15-CV-139-A, 2015 WL
3450298 (N.D. Tex. May 28, 2015); Gonzalez v. State Farm Lloyds, No. 4:15-CV-305-A, 2015
WL 3408106 (N.D. Tex. May 27, 2015); Vann v. Allstate Texas Lloyds, No. 4:15-CV-277-A,
2015 WL 2250243 (N.D. Tex. May 12, 2015); SYP-Empire L.C. v. Travelers Cas. Ins. Co. of
Am., No. 4:15-CV-213-A, 2015 WL 2234912 (N.D. Tex. May 12, 2015); Davis v. Metropolitan
Lloyds Ins. Co., No. 4:14-CV-957-A, 2015 WL 456726 (N.D. Tex. Feb. 3, 2015); Plascencia v.
State Farm Lloyds, No. 4:14-CV-524-A, 2014 WL 11474841 (N.D. Tex. Sept. 25, 2014).
made no attempt to spell out the who, what, when, where, and how
of the purported statutory violations. And, in any event, the
purported misrepresentations relate only to the investigation and
scope of damage.
Plaintiffs do not allege any facts regarding
misrepresentations about the details of the policy. See Mainali
Corp. v. Covington Specialty Ins. Co., No. 3:15-CV-1087-D, 2015
WL 5098047, at *3
(N.D. Tex. Aug. 31, 2015).
As for the alleged claim pursuant to Tex. Ins. Code
541.060(a) (2) (A), regarding the failure to attempt in good faith
to effectuate a prompt, fair, and equitable settlement of a claim
with respect to which liability has become reasonably clear,
Allstate notes that the provision does not apply to adjustors,
such as McGraw.' Doc. 15 at 8 n. 25. Meritt Buffalo Events Ctr.,
L.L.C. v. Cent. Mut. Ins. Co., No. 3:15-CV-3741-D, 2016 WL
931217, at *4
(N.D. Tex. Mar. 11, 2016); McClelland v. Chubb
Lloyd's Ins. Co., No. 5:16-CV-00108, 2016 WL 5791206, at *3
Tex. Sept. 30, 2016). Likewise,
541.060 (a) (3). Id. n.28.
McClelland, 2016 WL 5791206, at *3; Mainali Corp., 2015 WL
5098047, at *4. In any event, plaintiffs did not plead any facts
to show that liability under the policy had become reasonably
The comt is not persuaded by cases to the contraty. See Roach v. Allstate Veh. & Prop. Ins. Co.,
No. 3:15-CV-3228-G, 2016 WL 795967 (N.D. Tex. Feb. 29, 2016)(decided under the Texas pleading
standard). In any event, in this case, plaintiffs have not pleaded that McGraw had authority to effectuate
any settlement. Rather, they plead that he "assisted with adjusting the claim," Doc. 13, App. 8, and "was
tasked with the responsibility ofconducting [the] investigation" of their claim. Id., App. 15.
clear; nor have they pleaded any facts to support the failure to
promptly provide a reasonable explanation for the determination
Finally, there can be no recovery for extra-contractual
damages for mishandling claims unless the complained of acts or
omissions caused an injury independent of those that would have
resulted from a wrongful denial of policy benefits. Parkans Int•l
LLC v. Zurich Ins. Co., 299 F.3d 514, 519 (5th Cir. 2002). In
other words, the manner in which the claim was investigated must
be the proximate cause of the damages alleged. Provident Am Ins.
Co. v. Castaneda, 988 S.W.2d 189, 198-99 (Tex. 1998). Here,
plaintiffs have not alleged such a separate injury.
After a study of plaintiffs' state court pleading, and a
review of applicable authorities, for essentially the same
reasons given in the cases cited in footnote 4 why the claims
adjustors were improperly joined in those cases, the court
concludes that plaintiffs named McGraw as a defendant in this
action for the purpose of attempting to defeat federal court
jurisdiction. This defendant was improperly joined. None of the
claims asserted against him would survive a motion to dismiss for
failure to state a claim upon which relief may be granted, with
the consequence that his citizenship should be disregarded in
determining whether diversity jurisdiction exists.
court has concluded, for the same reason, that the claims against
McGraw should be dismissed.
The court ORDERS that plaintiffs' motion to remand be, and
is hereby, denied.
The court further ORDERS that plaintiffs' claims against
McGraw be, and are hereby, dismissed without prejudice.
The court determines that there is no just reason for delay
in, and hereby directs, entry of final judgment as to the
dismissal of plaintiffs' claims against McGraw.
The court further ORDERS that the caption of this action be,
and is hereby, amended to reflect that Allstate is the sole
SIGNED October 27, 2017.
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