Bradley et al v. Geovera Specialty Insurance Company et al
Filing
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OPINION AND ORDER re: 6 MOTION to Remand. (Signed by Judge Micaela Alvarez) Parties notified.(bgarces, )
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
MCALLEN DIVISION
MATTHEW BRADLEY, et al,
Plaintiffs,
VS.
GEOVERA SPECIALTY INSURANCE
COMPANY, et al,
Defendants.
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§ CIVIL ACTION NO. 7:13-CV-194
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OPINION AND ORDER
Pending before the Court is Matthew Bradley and Francine Bradley’s (“Plaintiffs”)
motion to remand.1 After considering the motion, response, record, and relevant authorities, the
Court GRANTS the motion.
I.
Background
This insurance dispute was removed from state court by several defendants: GeoVera
Specialty Insurance Company; GeoVera Specialty Insurance Services, Inc.; Team One Adjusting
Services, LLC; Robert Ackerman; Phillip Pierce (“Pierce”); and Holly Wolf (collectively,
“Removing Defendants”).2
Wesley Stevenson (“Stevenson”), who Removing Defendants
asserted had not been served at the time of removal,3 has since appeared in this case by filing an
answer in this Court.4
According to Plaintiffs’ original petition, their home was damaged by a hail and/or wind
storm.5
1
Apparently dissatisfied with the handling of their insurance claim, Plaintiffs sued
Dkt. No. 6.
Dkt. No. 1.
3
Dkt. No. 1 at p. 2.
4
Dkt. No. 3.
5
Dkt. No. 1-4 at p. 5.
2
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Removing Defendants and Stevenson.6
In their original petition, Plaintiffs included the
following theories of liability: violations of Chapters 541 and 542 of the Texas Insurance Code;
fraud; conspiracy to commit fraud; breach of contract; and breach of the duty of good faith and
fair dealing.7
On May 13, 2013, Plaintiffs filed a motion to remand asserting that this Court does not
have diversity jurisdiction because Stevenson and Pierce, the non-diverse defendants, are
properly joined.8 Removing Defendants responded that the Court does have jurisdiction because
Stevenson and Pierce are improperly joined.9
II.
Analysis
The Court does not have subject matter jurisdiction under 28 U.S.C. § 1332 unless the
parties are completely diverse and the amount in controversy exceeds $75,000. It is undisputed
that the amount in controversy requirement is satisfied in this case. Thus, Removing Defendants
must prevail on the improper joinder issue in order to avoid remand.
The Court notes that “doubts regarding whether removal jurisdiction is proper should be
resolved against federal jurisdiction.”10 Here, the issue of improper joinder is before the Court.
The Fifth Circuit has stated that “[t]he doctrine of improper joinder is a narrow exception to the
rule of complete diversity, and the burden of persuasion on a party claiming improper joinder is a
heavy one.”11 “[T]he Court must resolve all ambiguities of state law in favor of the nonremoving party.”12
6
Dkt. No. 1-4 at p. 1.
Dkt. No. 1-4 at pp. 12-20.
8
Dkt. No. 6 at pp. 5-15.
9
Dkt. No. 7 at pp. 3-11.
10
Acuna v. Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000) (citation omitted).
11
Campbell v. Stone Ins., Inc., 509 F.3d 665, 669 (5th Cir. 2007) (internal quotation marks and citations omitted).
12
Id. (internal quotation marks and citation omitted).
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When the Court is considering whether a party was improperly joined, “[t]he court may
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.”13
The Court “determin[es] removal jurisdiction on the basis of claims in the state court complaint
as it exists at the time of removal.”14
The Court notes that a 12(b)(6)-type analysis is
distinguishable from a pure 12(b)(6) analysis; in the improper joinder context, the Court
evaluates the petition under the state court pleading standards.15 The Supreme Court of Texas
has stated:
In determining whether a cause of action was pled, plaintiff’s pleadings must be
adequate for the court to be able, from an examination of the plaintiff’s pleadings
alone, to ascertain with reasonable certainty and without resorting to information
aliunde the elements of plaintiff’s cause of action and the relief sought with
sufficient information upon which to base a judgment.16
In other words, the pleading must state a cause of action and give fair notice of the relief
sought.17
Although the Court is permitted to pierce the pleadings in certain improper joinder
analyses,18 it is not required to do so. The Court should do so “only to identify the presence of
discrete and undisputed facts that would preclude plaintiff’s recovery against the in-state
defendant.”19
Here, a review of Plaintiffs’ motion to remand and Removing Defendants’
response does not convince the Court that is should pierce the pleadings. This means the Court
will not look beyond the state court petition.
13
Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc) (citations omitted).
Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir. 1995).
15
For Judge Rosenthal’s thorough explanation of why the Court uses the state court pleading standards in the
improper joinder context, see Edwea, Inc. v. Allstate Ins. Co., Civ. No. H-10-2970, 2010 WL 5099607 (S.D. Tex.
Dec. 8, 2010).
16
Stoner v. Thompson, 578 S.W.2d 679, 683 (Tex. 1979) (citation omitted).
17
Tex. R. Civ. P. 45 & 47; Stoner, 578 S.W.2d at 683.
18
Smallwood, 385 F.3d at 573.
19
Id. at 573-574.
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The Court will now consider whether the state court petition states a claim against
Stevenson and Pierce, the non-diverse defendants.
The Court will first evaluate whether
Plaintiffs stated a claim against Stevenson and will only evaluate the allegations against Pierce if
Plaintiffs have not stated a claim against Stevenson. Turning to the state court petition, it
includes the following allegations by Plaintiffs:
“Defendant Wesley Stevenson is an individual residing in and domiciled in the
State of Texas.”20
“The Court has jurisdiction over Defendant Stevenson because this defendant
engages in the business of adjusting insurance claims in the State of Texas, and
Plaintiffs’ causes of action arise out of this defendant’s business activities in the
State of Texas.”21
“Plaintiffs are the owners of a Texas Homeowners’ Insurance Policy (hereinafter
referred to as ‘the Policy’), which was issued by GeoVera.”22
“Plaintiffs own the insured property . . . .”23
“On or about March 29, 2012, a hail storm and/or windstorm struck Hidalgo
County, Texas, causing severe damage to homes and businesses throughout the
area, including Plaintiffs’ residence. . . . Immediately after the storm, Plaintiffs
filed a claim with their insurance company, GeoVera, for the damages to their
home caused by the hail storm and/or windstorm.”24
“Defendant GeoVera assigned Defendant GeoVera Specialty, to oversee many
aspect (sic) of Plaintiffs’ claim. GeoVera Specialty was responsible for making
policy on adjusting insurance claims and assigning vendors that were retained to
adjust the claim.”25
“Defendant GeoVera Specialty and/or GeoVera assigned Defendant Team One to
adjust the claim. Defendant GeoVera Specialty and/or Team One and/or
Defendant GeoVera then assigned Defendants Stevenson, Ackerman, Wolf, and
Pierce as the individual adjusters on the claim. The adjusters assigned to
Plaintiffs’ claim were improperly trained and failed to perform a thorough
investigation of Plaintiffs’ claim. On or about April 7, 2012, Stevenson
20
Dkt. No. 1-4 at p. 3.
Dkt. No. 1-4 at p. 4.
22
Dkt. No. 1-4 at p. 5.
23
Dkt. No. 1-4 at p. 5.
24
Dkt. No. 1-4 at p. 5.
25
Dkt. No. 1-4 at p. 6.
21
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conducted a substandard inspection of Plaintiffs’ property. For example,
Stevenson was not cooperative, and quickly discounted any damages Plaintiffs
pointed out to him. Furthermore, Stevenson made coverage decisions and told
Plaintiffs which damages specifically would and would not be covered.
Stevenson was neither qualified nor authorized to make coverage determinations.
The inadequacy of Stevenson’s inspection is further evidenced by his report dated
April 25, 2012, over two (2) weeks after his initial inspection, which failed to
include all of Plaintiffs’ damages noted upon inspection. For example, Stevenson
omitted some of the interior damages from his report. Moreover, Stevenson both
underestimated and undervalued the cost of repairs to the damaged items that he
did include in the estimate. Specifically, Plaintiffs expressed concern over the
cost of properly repairing the roof. Stevenson and his supervisor Defendant
Pierce assured the Plaintiffs that they would estimate an amount that would cover
the cost of properly repairing the roof. Ultimately, Stevenson’s estimate did not
allow adequate funds to cover the cost of repairs to all the damages sustained.
Stevenson’s inadequate investigation of the claim was relied upon by the other
Defendants in this action and resulted in Plaintiffs’ claim being undervalued and
underpaid.”26
“Together, [Removing Defendants and Stevenson] set out to deny and/or
underpay properly covered damages. [Removing Defendants and Stevenson]
failed to provide full coverage for the damages sustained by Plaintiffs and underscoped and undervalued Plaintiffs’ damages, thus denying adequate and sufficient
payment to Plaintiffs. As a result of [Removing Defendants’ and Stevenson’s]
unreasonable investigation, Plaintiffs’ claim was improperly adjusted, and
Plaintiffs were considerably underpaid on their claim and have suffered damages.
The mishandling of Plaintiffs’ claim has also caused a delay in Plaintiffs’ ability
to fully repair their home, which has resulted in additional damages. To this date,
Plaintiffs have yet to receive the full payment they are entitled to under the
Policy.”27
“[Removing Defendants and Stevenson] misrepresented to Plaintiffs that the
damage to the Property was not covered under the Policy, even though the
damage was caused by a covered occurrence.”28
“Defendants Stevenson . . . and Pierce are each individually liable for their unfair
and deceptive acts, irrespective of the fact each was acting on behalf of GeoVera
because each is a “person” as defined in TEX. INS. CODE §541.002(2).”29
“As previously mentioned, the damages caused by the March 29, 2012, hail storm
and/or windstorm have not been properly addressed or repaired in the months
since the storm, causing further damages to the Property, and causing undue
26
Dkt. No. 1-4 at pp. 6-7.
Dkt. No. 1-4 at pp. 7-8.
28
Dkt. No. 1-4 at p. 9.
29
Dkt. No. 1-4 at p. 13.
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hardship and burden to Plaintiffs. These damages are a direct result of [Removing
Defendants’ and Stevenson’s] mishandling of Plaintiffs’ claim in violation of the
laws set forth above.”30
The petition also alleges that Stevenson violated Section 541.060 of the Texas Insurance Code.31
Section 541.060 states in part:
(a) It is an unfair method of competition or an unfair or deceptive act or practice
in the business of insurance to engage in the following unfair settlement practices
with respect to a claim by an insured or beneficiary: (1) misrepresenting to a
claimant a material fact or policy provision relating to coverage at issue; . . . .32
The Court will now consider Removing Defendants’ arguments that the petition does not state a
claim against Stevenson.
First, the Court notes that Removing Defendants urge the Court to apply the federal court
pleading standard. The Court notes that district courts are split on this issue of which pleading
standard applies in improper joinder analyses. Some courts apply the federal court pleading
standards in improper joinder analyses, and others apply the state court pleading standards. As
stated above, this Court applies the state court pleading standard. This approach has significant
ramifications in this case. For example, Removing Defendants would have the Court apply
Federal Rule of Civil Procedure 9(b)’s heightened pleading requirement to Plaintiffs’
misrepresentation claims.33 Because the Court is applying the state court pleading standards, the
Court will not evaluate Plaintiffs’ misrepresentation claims under Rule 9(b).
Second, Removing Defendants argue that “Plaintiffs fail to offer any actionable facts in
support of their claims against Pierce and Stevenson and therefore they fail to make the required
‘[f]actual fit between (her) (sic) allegations and the pleaded theory of recovery.’”34 But here,
30
Dkt. No. 1-4 at p. 20.
Dkt. No. 1-4 at pp. 9-10, 12-15.
32
Tex. Ins. Code Ann. § 541.060 (West Supp. 2012).
33
Dkt. No. 7 at pp. 8-10.
34
Dkt. No. 7 at p. 4 (quoting Griggs v. State Farm Lloyds, 181 F.3d 694, 701 (5th Cir. 1999)) (alterations in
original).
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Plaintiffs’ original petition sets out discrete factual allegations against Stevenson. These factual
allegations have been recited above. Additionally, Plaintiffs allege that Stevenson is engaged in
the business of insurance and participated in adjusting their claim. They further allege that
Stevenson is a “person” who may be held individually liable under the insurance code. That is
sufficient to allege that Stevenson is a “person” subject to the insurance code.35 Plaintiffs also
alleged that Stevenson “misrepresented to Plaintiffs that the damage to the Property was not
covered under the Policy, even though the damages was caused by a covered occurrence.” There
is a sufficient nexus between the factual allegations and the legal claim that Stevenson violated a
portion of § 541.060 of the Texas Insurance Code. Finally, Plaintiffs claims that Stevenson
caused them to suffer damages. Thus, the Court finds that the state court petition states a cause
of action against Stevenson and gives Stevenson fair notice of the relief sought.
That is
sufficient to state a claim against Stevenson under the state court pleading standards. Ultimately,
the Court finds that Removing Defendants have not met their burden of demonstrating that
Stevenson, the non-diverse defendant, is improperly joined.
35
See Tex. Ins. Code Ann. § 541.002 (West Supp. 2012); see also Gasch v. Hartford Accident & Indem. Co., 491
F.3d 278, 280 & n.2, 282-83 (5th Cir. 2007) (citing Liberty Mut. Ins. Co. v. Garrison Contractors, Inc., 966
S.W.2d 482, 484-86 (Tex. 1998)).
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III.
Conclusion
After considering the motion, response, record and controlling authorities, the Court finds
that Responding Defendants have not met their burden of demonstrating that Wesley Stevenson
is improperly joined. Therefore, the Court GRANTS Plaintiffs’ motion to remand. This case is
REMANDED to the 389th Judicial District Court, Hidalgo County, Texas.
IT IS SO ORDERED.
DONE this 31st day of May, 2013, in McAllen, Texas.
_______________________________
Micaela Alvarez
UNITED STATES DISTRICT JUDGE
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