5857 Park Vista, LLC v. United States Liability Insurance Company et al

Filing 11

Memorandum Opinion and Order... The court ORDERS that plaintiff's motion to remand be, and is hereby, denied. The court further ORDERS that all claims and causes of action asserted by plaintiff against Dahlvig be, and are hereby, dismissed. The court determines that there is no just reason for delayin, and hereby directs, entry of final judgment as to the dismissal of plaintiff's claims against Dahlvig. The court further ORDERS that from this point forward, the caption of this action be, and is hereby, amended to reflect that United States Liability Insurance Company is the only defendant in the above-captioned action. (Ordered by Judge John McBryde on 12/7/2017) (wxc)

U.S. DISTRICT COURT
NORTHERN DISTRICT OF TEXAS

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IN THE UNITED STATES DISTRICT C URT
NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

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CLERK, U.S. DJSTldCT COURT

5857 PARK VISTA, LLC,

·By

§

'------D_e_;_p_uty~

§

Plaintiff,

-

... _

§
§

vs.

NO. 4:17-CV-818·A

§
§

UNITED STATES LIABILITY
INSURANCE COMPANY, ET AL.,

§
§
§

Defendants.

§

MEMORANDUM OPINION
and
ORDER
Came on for consideration the motion to remand filed by
plaintiff, 5857 Park Vista, LLC,

in the above·captioned action.

Having considered such motion, the response of defendants, United
States Liability Insurance Company and Joel Dahlvig ("Dahlvig"),
the record, and applicable legal authorities, the court concludes
that such motion should be denied and that plaintiff's claims
against Dahlvig should be dismissed.
I.
Background
Plaintiff initiated this action on August 28, 2017, by the
filing of an original petition in the District Court of Tarrant
County, Texas,

348th Judicial District.

The action arises from a

dispute as to the appropriate amount of insurance coverage for
storm damage to plaintiff's commercial property that was insured
by United States Liability Insurance Company and adjusted by

·

I

____j

Dahlvig.

On October 11, 2017, defendants filed their notice of

removal with the Fort Worth Division of the United States
District Court for the Northern District of Texas, asserting
subject matter jurisdiction based on diversity of citizenship and
alleging that plaintiff improperly joined Dahlvig to avoid
federal diversity jurisdiction.

On November 15, 2017, plaintiff

filed the instant motion to remand, urging that Dahlvig was
properly joined as a defendant in the action, that Dahlvig and
plaintiff are citizen of the same state such that Dahlvig's
presence in the action deprives this court of subject matter
jurisdiction, and that remand is therefore required.
II.
Applicable Legal Principles
A.

General Principles for Removal
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.'

"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)

1

(citations omitted).

The removal statute provides, in pertinent pmt, that: [A]ny civil action brought in a State court
of which the district comts of the United States have original jurisdiction, may be removed by the
defendant orthe 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}
2

"Moreover, because the effect of removal is to deprive the state
court of an action properly before it, removal raises significant
federalism concerns .
the removal statute."

. which mandate strict construction of
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).
B.

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
nondiverse defendant."

Campbell v. Stone Ins.,

665, 669 (5th Cir. 2007).

Inc., 509 F.3d

Because defendants have not alleged

actual fraud in the pleadings, the applicable test for improper
joinder is:
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.
Smallwood v. 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
3

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 plaintiff's claims appears to be the proper method here to
determine whether there exists a reasonable basis for a
conclusion that plaintiff might be able to recover against
Dahlvig.
C.

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) . 2

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 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 cornts have interpreted their Rule 91 a 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, pct. 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 court were to apply the Texas pleading standard.
4

the pleader is entitled to relief,"

Fed. R. Civ. P. 8 (a) (2),

"in

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
U.S. 544, 555 (2007)
omitted) .

(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
underpinnings.

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
plausible.

Igbal, 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

5

entitled to relief.

Id. at 679.

"Determining whether a

complaint states a plausible claim for relief .

[isl a

context-specific task that requires the reviewing court to draw
on its judicial experience and common sense."

Id.

Rule 9(b) of the Federal Rules of Civil Procedure 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 Equities, Inc., 540 F.3d
333, 339 (5th Cir. 2008).

Claims alleging violations of the

Texas Insurance Code are subject to the requirements of Rule
9(b)
742

Frith v. Guardian Life Ins. Co. of Am.,
(S .D. Tex. 1998).

6

9 F. supp. 2d 734,

III.
Analysis
Plaintiff asserts claims against Dahlvig based of Dahlvig's
role as a claims adjuster for United States Liability Insurance
Company, thus joining a long line of cases in which a plaintiff
attempts to join as a defendant an insurance adjuster or other
non-diverse party in an effort to defeat removal jurisdiction.'
Plaintiff alleges that Dahlvig •conducted a substandard
investigation and inspection of the property, prepared a report
that failed to include all of the damages that he noted during
the inspection, and undervalued the damages he observed during
the inspection," and that his •unreasonable" and •outcomeoriented investigation of [p]laintiff's claim .

. resulted in a

biased, unfair and inequitable evaluation of [p]laintiff's losses
on the property.•

Doc.' 4, Ex. 2 at 3, ' ' 11-13.

asserts that Dahlvig is liable for violations of
of the Texas Insurance Code.

Plaintiff
§§

541 and 542

Having reviewed the legal

3

Examples of cases in which the comts ruled that the improper joinder of an insurance adjuster
or other representative or employee of an insurance company was improper (fraudulent) are Griggs v.
State Farm Lloyds, 181 F.3d 694 (5th Cir. 1999); Fernandez v. Allstate Fire and Casualty Ins. Co., No.
3:15-CV-2689, 2015 WL 6736675 at *4 (N.D. Tex. Nov. 4, 2015); Plascenscia, 2014 U.S. Dist. LEXIS
135081, at *l (N.D. Tex. Sept. 25, 2014); Okenkpu v. Allstate Tex. Lloyds, No. H-11-2376, 2012 WL
1038679 (S.D. Tex. Mar. 27, 2012). The comt does not mean to suggest that there are not comt
decisions that have held that there was no improper joinder in similar situations. Examples of opinions
holding that the joinder was not improper are cited in Weldon Contractors, Ltd. v. Fireman's Fund Ins.
Co., No. 4:09-CV-165-A, 2009 WL 1437837, at *4 (N.D. Tex. May22, 2009).
4

The "Doc.

" reference is to the number of the item on the docket in this action.
7

authorities applicable to such claims, the court concludes that
plaintiff has failed to state a plausible claim for relief
against Dahlvig under any of these theories of recovery.
Here, plaintiff fails to provide any facts to support its
position that Dahlvig may be held legally responsible for denying
the claim or otherwise causing harm to plaintiff.
liability for a violation of

§

While

541 may extend to an adjuster who

undertakes a proscribed settlement practice, mere nonpayment by
the insurer of a claim cannot, by itself, create liability for
the adjuster who handles the claim.

Simply reciting the

statutory elements for a claim under

§

541 fairs no better.

Instead, a plaintiff must spell out the who, what, when, where,
and how of the purported violations.

Plaintiff's conclusory

allegations fail to do so.
Plaintiff also asserts liability under§ 542.

Plaintiff,

however, provides no authority to support its position that an
adjuster, as opposed to an insurer, is subject to a duty of good
faith in the claims resolution process.
that no such authority exists.
§

542. 003

(West)

The court is satisfied

Compare Tex. Ins. Code Ann.
. may not engage in an unfair

("An insurer .

claim settlement practice.") with Tex. Ins. Code Ann.
(West)

§

541.003

in a trade practice that

("A person may not engage

is defined in this chapter as or determined under this chapter to

8

be an unfair method of competition or an unfair or deceptive act
or practice in the business of insurance."); see also Messersmith
v. Nationwide Mut. Fire Ins. Co., 10 F. Supp. 3d 721, 723
Tex. 2014).
§

Thus, plaintiff's claims against Dahlvig

(N.D.

under

542 also fail.
Accordingly, the court concludes that plaintiff has failed

to state a claim against Dahlvig, that Dahlvig was improperly
joined to prevent this court from obtaining jurisdiction over the
matter, that Dahlvig's citizenship should be disregarded for
purposes of determining whether this court has subject matter
jurisdiction over the claims asserted by plaintiff against United
States Liability Insurance Company, that Dahlvig should be
dismissed from the action, and that plaintiff's motion to remand
should be denied.
IV.
Order
The court ORDERS that plaintiff's motion to remand be, and
is hereby, denied.
The court further ORDERS that all claims and causes of
action asserted by plaintiff against Dahlvig be, and are hereby,
dismissed.

9

The court determines that there is no just reason for delay
in, and hereby directs, entry of final judgment as to the
dismissal of plaintiff's claims against Dahlvig.
The court further ORDERS that from this point forward,

the

caption of this action be, and is hereby, amended to reflect that
United States Liability Insurance Company is the only defendant
in the above-captioned action.
SIGNED December

,rt(

2017.

E

United States

10