Lakeside FBCC, LP v. Everest Indemnity Insurance Company et al
ORDER DENYING 9 Motion to Remand to State Court Signed by Judge Xavier Rodriguez. (mgr)
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
LAKESIDE FBCC, LP,
COMPANY ET AL.,
Civil Action No. SA-17-CV-00491-XR
On this date, the Court considered Plaintiff’s Motion to Remand (Docket no. 9). After
careful consideration, the Court DENIES the motion and DISMISSES Defendant Thomas
Koralewski as improperly joined.
Plaintiff Lakeside FBCC LP purchased the Algarita Lakeside Apartments located at 8555
Laurens Lane, San Antonio, Texas 78218 in November 2015. Docket no. 5-1 at 6. Lakeside
insured property losses at the Apartments
by purchasing policies from Defendant Everest
Indemnity Insurance Company; the first policy covered a period of November 2015 to November
2016 and the second covered November 2016 to November 2017. Id. at 7, 11. An April 2016
wind and hail storm and a February 2017 tornado damaged the Apartments. Id. at 7, 11.
Plaintiff reported its losses for both storms to Everest, and Everest hired an insurance
adjusting firm, Defendant Engle Martin & Associates, Inc., to adjust the claims. Id. Defendant
Engle Martin assigned Defendant Christopher McCoy to adjust the hailstorm claim and
Defendant Thomas Koralewski to adjust the tornado claim. Id. Plaintiff retained Tice
Enterprises, Ltd. and its estimator, Patrick Burke, to assist in evaluating the damages to the
property caused by the 2017 tornado. Docket no. 5-1 at 12.
On March 27, 2017, Lakeside provided invoices for the emergency repairs performed at
the Apartments after the tornado and requested an update on the status of the claim by email. Id.
On March 31, 2017, Defendant Koralewski responded in an email that during a March 1
inspection of the property, Tice advised him that it would provide information, estimates, and an
engineer’s report for damage caused by the tornado. Id.
Plaintiff then brought this action in the 150th Judicial District Court of Bexar County,
Texas on April 27, 2017, naming as defendants Everest, Engle Martin, McCoy, and Koralewski.
Id. at 5. Plaintiff asserts a number of state law causes of action related to Everest’s insurance
policy and their coverage of the Apartments. Docket no. 5-1 at 11–20. In addition to its general
allegations, Lakeside alleges that Koralewski and the other defendants violated certain provisions
of the Texas Insurance Code and the Texas Deceptive Trade Practices Act. Id.
On June 2, 2017, Defendants Everest and Engle Martin removed the action to this Court
on the basis of diversity jurisdiction. Docket no. 1. On June 19, the Defendants filed an amended
notice of removal, clarifying their jurisdictional allegations. Docket no. 5. The amended notice of
removal states that Plaintiff is a citizen of Texas, and on information and belief, perhaps
Colorado as well. Id. at 11. The notice of removal also alleges that Everest is a citizen of
Delaware and New Jersey, Engle Martin is a citizen of Georgia, McCoy is a citizen of Georgia,
and Koralewski is a Texas citizen whose citizenship can be disregarded for purposes of diversity
jurisdiction because he has been improperly joined. Id. at 8, 11–12. The notice of removal adds
that the amount in controversy exceeds $75,000. Id. at 12.
On June 30, 2017, Plaintiff moved to remand the case to state court due to a lack of
diversity jurisdiction. Docket no. 9. Plaintiff asserts that it is a citizen of Texas and that
Koralewski is a properly joined citizen of Texas.
If Koralewski is properly joined, then his citizenship must be considered and there is no
diversity jurisdiction. Defendants argue that Plaintiff’s original complaint fails to meet proper
pleading standards with respect to Koralewski. Docket no. 5 at 8. As a result, they argue that
Koralewski was improperly joined, which means that diversity jurisdiction exists. This Court
agrees with the Defendants and finds that Koralewski’s was improperly joined.
“[A]ny civil action brought in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the defendant or 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). On motion to remand, the court must consider whether removal
was proper. In order for removal to be proper, a district court must have original jurisdiction over
the removed action. See id.
Federal district courts have original jurisdiction over civil actions if the parties are
diverse and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). There is no dispute
regarding the amount in controversy here, which is alleged to be in excess of $75,000. Docket
no. 5. Further, there are no disputes regarding the states of citizenship of any of the parties.
There are two ways to establish improper joinder: “(1) the plaintiff has stated a claim
against a diverse defendant that he fraudulently alleges is non[-]diverse, or (2) the plaintiff has
not stated a claim against a defendant that he properly alleges is non[-]diverse.” Int’l Energy
Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 199 (5th Cir. 2016) (citing
Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir. 2004) (en banc)) (emphasis in
original). Because Plaintiff and Koralewski are in fact non-diverse, the second type of improper
joinder is at issue, and the court must determine whether Plaintiff has stated a cause of action
against him. See id.
The burden of demonstrating improper joinder is a heavy one and is placed on the party
seeking removal. See McDonal v. Abbott Labs., 408 F.3d 177, 183 (5th Cir. 2005). In order to
meet this burden, the removing party must show that there is no reasonable basis to predict that
the plaintiff might be able to recover against a non-diverse defendant. See Int’l Energy, 818 F.3d
at 199; see also Smallwood, 385 F.3d at 573 (“[T]he test for fraudulent joinder is whether the
defendant has demonstrated that there is no possibility of recovery by the plaintiff against an instate defendant.”).
The Fifth Circuit requires that “decisions about removal . . . be made on the basis of
federal law, not state law”; therefore, courts use a Rule 12(b)(6)-type analysis when determining
whether a plaintiff may reasonably recover. Int’l Energy, 818 F.3d at 202; see Smallwood, 385
F.3d at 573 (“If a plaintiff can survive a Rule 12(b)(6) challenge, there is no improper joinder.”).
Further, the court must resolve “all . . . factual allegations,” “all contested issues of substantive
fact,” and “all ambiguities in the controlling state law” in the plaintiff’s favor. Guillory v. PPG
Indus., Inc., 434 F.3d 303, 308 (5th Cir. 2005) (quoting B., Inc. v. Miller Brewing Co., 663 F.2d
545, 549 (5th Cir. 1981)) (internal quotation marks omitted). In other words, “any doubt about
the propriety of removal must be resolved in favor of remand.” Gasch v. Hartford Acc. & Indem.
Co., 491 F.3d 278, 281–82 (5th Cir. 2007).
Plaintiff brings claims against Koralewski for violations of the Texas DTPA, unfair
insurance practices in violation of Chapter 541 of the Texas Insurance Code, and violations of
Chapter 542 of the Texas Insurance Code. The Court will first provide additional context by
analyzing the factual allegations contained throughout Plaintiff’s complaint before explaining
why there is no reasonable basis to predict that Plaintiff might recover from Koralewski on any
of its three causes of action against him.
Plaintiff’s general allegations do not support a cause of action because they are
A. Plaintiff alleges that Koralewski and Engle Martin are biased towards
Plaintiff alleges that “Everest hires Engle Martin and Koralewski because they are biased
for the insurance companies and will give the insurer favorable, result-oriented investigations,
estimates, and reports based on which the insurer can deny and/or low-ball an insured’s claim.”
Docket no. 5-1 at 11. Plaintiff makes the exact same allegations against Everest, Engle Martin,
and insurance adjuster Christopher McCoy. Id. at 7.
In the improper joinder context, “[m]erely lumping diverse and non-diverse defendants
together in undifferentiated liability averments of a petition does not satisfy the requirement to
state specific actionable conduct against the non-diverse defendant.” Stephenson v. Standard Ins.
Co., Cv. No. SA:12-CV-01081-DAE, 2013 WL 3146977, at *13 (W.D. Tex. June 18, 2013)
(quoting King v. Provident Life and Accident Ins. Co., No. 1:09-CV-989, 2010 WL 2730890, at
*3 (E.D. Tex. June 4, 2010) (emphasis in original)). Plaintiff argues that it has “lumped” these
defendants together throughout its complaint because Engle Martin and Everest are also
responsible (under a theory of vicarious liability or respondeat superior) for many of the offenses
committed by Koralewski. Docket no. 16 at 4. Regardless of Plaintiff’s reasons for structuring its
complaint in this way, this first allegation against Koralewski is legally deficient for other
In Walters v. Metro. Lloyds Ins. Co. of Tex., No. 4:16-CV-307, 2016 WL 3764855, at *3
(E.D. Tex. July 14, 2016), the plaintiffs alleged that an insurance adjuster was “inadequately
trained and failed to thoroughly investigate, conducted an outcome-oriented investigation, made
misrepresentations and omissions and unfairly investigated the claim.” The plaintiffs also alleged
that the adjuster defendant was “‘improperly trained to handle claims of this nature and
performed an unreasonable investigation of Plaintiffs’ damages,’ and utilized ‘unfair settlement
practices.’” Id. Plaintiff alleged no additional facts or specifics to support these allegations
against the adjuster. See id. The court determined that the plaintiffs had no possibility of
establishing a valid cause of action against the adjuster. Id. (citing Messersmith v. Nationwide
Mut. Fire Ins. Co., 10 F. Supp. 3d 721, 723 (N.D. Tex. 2014)).
In this first allegation, Plaintiff makes the conclusory and boilerplate statement that
Koralewski shows bias by providing favorable, result-oriented investigations, estimates, and
reports to the insurance. Docket no. 5-1 at 11. However, Plaintiff provides no specific details or
factual information to support this allegation. See id. Plaintiff’s first allegation here is very
similar to the allegation made against the insurance adjuster in Walters, at least with respect to
the lack of specific details about actionable behavior on the part of Koralewski. As was the case
in Walters, Plaintiff here has not pled sufficient facts in its first allegation against Koralewski.
See 2016 WL 3764855, at *3; see also Elizondo v. Metro. Lloyds Ins. Co. of Tex., No. 4:16-CV306, 2016 WL 4182729, at *3 (E.D. Tex. Aug. 8, 2016).
B. Plaintiff alleges that Koralewski has not assisted in addressing the damage to
Plaintiff next alleges that:
[t]o date, Everest, Engle Martin, and Koralewski have done nothing to assist [Plaintiff] in
addressing the extensive damage to the Algarita property from the tornado even though
the claim was reported more than 60 days ago. As an experienced adjuster, Mr.
Koralewski knew or should have been able to recognize the extensive damage to the
Algarita property and should have taken aggressive action to ensure the damages were
addressed in a timely manner as required under [Plaintiff’s] insurance policy and Texas
Docket no. 5-1 at 13.
Again, the allegations made by Plaintiff here are unsupported and conclusory. Plaintiff
claims that Koralewski has done nothing to assist in addressing the extensive damage to the
property. Id. But as Defendants point out, Plaintiff does not identify specific actions that
Koralewski has failed to perform. Further, Plaintiff’s own complaint casts doubt on this
allegation. Plaintiff alleges that Koralewski did in fact inspect the property on March 1, 2017. Id.
at 11. Koralewski then followed this inspection with an email request to Tice for more
information. Id. at 12. These actions, alleged by Plaintiff, run counter to the broader allegation
that Koralewski has done “nothing to assist” Plaintiff. Consequently, this allegation too is
C. Plaintiff alleges that Koralewski misrepresented Lakeside’s duties under the
Plaintiff then alleges that “instead of properly investigating and adjusting the claim as the
policy requires, Koralewski failed to adjust the claim, halted his investigation and requested that
[Plaintiff] provide him with the ‘necessary documentation to substantiate [its] claim for
damages.’” Docket no. 5-1 at 12. Plaintiff alleges that Koralewski “misrepresented both Everest
and [Plaintiff’s] duties under the 2017 policy by intimating that [Plaintiff] had a duty to
investigate and prove its claim under the 2017 policy” when “[u]nder the terms, of the 2017
policy, Everest has the duty to properly investigate and adjust [Plaintiff’s] insurance claim.” Id.
at 13. Plaintiff claims that Koralewski made this misrepresentation in a March 31, 2017 email,
although Plaintiff did not attach that email to its complaint. Id. at 12-13.
This misrepresentation claim is more specific than Plaintiff’s other pleadings and
allegations. However, the actual content of the email (which was attached by Defendants in
response to Plaintiff’s motion to remand) disproves Plaintiff’s misrepresentation allegations. See
Docket no. 15 at 8–10. Where a plaintiff states a claim but misstates or omits discrete facts that
would determine the propriety of joinder, the district court may, in its discretion, pierce the
pleadings and conduct a summary inquiry. Smallwood, 385 F.3d at 573.
Exercising discretion to conduct such an analysis, the Court turns to the March 31 email,
sent from Koralewski to Plaintiff’s representative, Cary Krier:
During our inspection Ms. Coleman of Tice Enterprises advised that they would
provide our office with estimates for the repairs to the roofs and interior areas of
the water damaged unit(s). Additionally, she was to forward photographs of items
which could not be inspected during our initial site visit. She was also to provide a
copy of your engineers evaluation of any potential storm related damage related to
this event. It is imperative that we separate any visible damage that occurred
related to this event from the pre‐existing damages that occurred approximately
one year prior.
With the exception of the invoice you provided we have receive [sic] no
additional documentation from Ms. Coleman. Could you please request that they
provide our office with the necessary documentation to substantiate your claim
for damages. We appreciate your assistance with regard to this matter.
Docket no. 15-2.
In the context of insurance and Texas Insurance Code Section 541.060, a
misrepresentation must be both specific and affirmative to be actionable. See Metro Hosp.
Partners, Ltd. v. Lexington Ins. Co., 84 F. Supp. 3d 553, 573 (S.D. Tex. 2015). Moreover, “[t]he
misrepresentation must be about the details of a policy, not the facts giving rise to a claim for
coverage.” McClelland v. Chubb Lloyd’s Ins. Co. of Tex., No. 5:16-CV-00108, 2016 WL
5791206, at *4 (W.D. Tex. Sept. 30, 2016) (quoting Messersmith v. Nationwide Mut. Fire Ins.
Co., 10 F. Supp. 3d 721, 724 (N.D. Tex. 2014)).
Plaintiff’s complaint does not allege an actual or specific policy provision that is
misrepresented by Koralewski. The email itself shows that Koralewski made no specific
statements regarding the details or terms of the policy itself; nor did Koralewski make
representations regarding Plaintiff’s coverage under the policy. See Docket no. 15-2. Koralewski
merely asked for previously requested documentation Tice previously promised. Id. Koralewski
made this request so that he could conduct a proper inquiry into the damages caused by the 2017
tornado. See id. In asking for the documentation, Koralewski made no misrepresentations about
Plaintiff’s duties under the policy.
In fact, Plaintiff itself seems to misrepresent—or at least misinterpret—the policy. More
specifically, the terms of the policy require the insured to cooperate with the insurer in the
investigation of the claim. Docket no. 15-3 at 57. The policy also requires the insured to give a
description of “how, when, and where the loss occurred,” and to submit a sworn proof of loss
containing information requested by the insurance company. Id. As such, Koralewski’s request
for documentation would not have been a misrepresentation of duties even if Tice had not
already promised to provide the documentation. See id. Ultimately, the 2017 policy gave both
parties certain investigatory duties, including Plaintiff’s duty to submit the requested information
to Koralewski and Everest. See id.
Plaintiff also fails to allege how it relied upon or was damaged by Koralewski’s alleged
misrepresentation. See Partain v. Mid-Continent Specialty Ins. Servs., Inc., 838 F. Supp. 2d 547,
561 (S.D. Tex. 2012), aff’d sub nom. Graper v. Mid-Continent Cas. Co., 756 F.3d 388 (5th Cir.
2014) (granting 12(b)(6) motion to dismiss when the plaintiff failed to plead reliance and
causation on allegedly false statements).
For these reasons, the March 30, 2017 email from Koralewski to Krier is not an
actionable misrepresentation. As a result, Plaintiff would not be able to recover against
Koralewski for the email.
There is no reasonable basis to predict that Plaintiff would recover from
Koralewski on any of its three claims against him.
A. Plaintiff’s DTPA claims fail.
Plaintiff alleges several causes of action against Koralewski and the other defendants
under the Texas DTPA. Docket no. 5-1 at 16-17. These allegations state that:
A. By their acts, omissions, failures, and conduct that are described in this petition,
Defendants EVEREST, ENGLE MARTIN, and THOMAS A. KORALEWSKI
have violated Sections 17.46(b)(5), (7), (12), and (20) of the DTPA. In this
respect, Defendants’ violations include, without limitation, (1) their unreasonable
delays in the investigation, adjustment and resolution of Plaintiff’s claim, (2) their
failure to properly investigate Plaintiff’s claim, (3) Everest’s use of a biased
adjuster to obtain result-oriented conclusions to assist the insurer in denying
Plaintiff’s insurance claim, and (4) their failure to pay for the proper repair of
Plaintiff’s property on which Defendants’ liability had become reasonably clear;
B. As described in this petition, Defendants EVEREST, ENGLE MARTIN, and
THOMAS A. KORALEWSKI represented to Plaintiff that the subject insurance
policy and Defendants’ adjusting and investigative services had characteristics or
benefits that it did not have, which gives Plaintiff the right to recover under
Section 17.46(b)(5) of the DTPA;
C. As described in this petition, Defendants EVEREST, ENGLE MARTIN, and
THOMAS A. KORALEWSKI represented to Plaintiff that the subject insurance
policy and Defendants’ adjusting and investigative services were of a particular
standard, quality, or grade when they were of another in violation of Section
17.46(b)(7) of the DTPA;
D. As described in this petition, Defendants EVEREST, ENGLE MARTIN, and
THOMAS A. KORALEWSKI represented to Plaintiff that the subject insurance
policy and Defendants’ adjusting and investigative services conferred or involved
rights, remedies, or obligations that they did not have, including but not limited to
Koralewski’s March 30, 2017 misrepresentation of [Plaintiff’s] duties under the
policy, which gives Plaintiff the right to recover under Section 17.46 (b)(12) if the
E. By representing that Defendants would pay to repair the damages caused by
tornado and then not doing so, Defendants have violated Sections 17.46(b)(5), (7),
and (12) of the DTPA;
F. Defendants have breached an express warranty that the damage caused by wind
and hail storm would be covered under the subject insurance policy. This breach
entitles Plaintiff to recover under Sections 17.46(b)(12) and (20) and 17.50(a)(2)
of the DTPA;
G. Defendants’ actions, as described in this petition, are unconscionable in that they
took advantage of Plaintiff’s lack of knowledge, ability, and experience to a
grossly unfair degree. Defendants’ unconscionable conduct gives Plaintiff the
right to relief.
H. Defendants’ conduct, acts, omissions, and failures, as described in this petition,
are unfair practices in the business of insurance in violation of Section 17.50(a)(4)
of the DTPA.
DTPA claims are subject to the requirements of Federal Rule of Civil Procedure 9(b). See
Sparling v. Doyle, No. EP-13-CV-00323-DCG, 2014 WL 2448926, at *12 (W.D. Tex. May 30,
2014) (citing Berry v. Indianapolis Life Ins. Co., 608 F. Supp. 2d 785, 800 (N.D. Tex. 2009)).
Under Rule 9(b), the Fifth Circuit requires “specificity as to the statements (or omissions)
considered to be fraudulent, the speaker, when and why the statements were made, and an
explanation of why they were fraudulent.” Plotkin v. IP Axess, Inc., 407 F.3d 690, 696 (5th Cir.
2005); see also Southland Secs. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 362 (5th Cir.
2004). In other words, Rule 9(b) requires a complaint to allege answers to “newspaper questions”
(“who, what, when, where, and how”) of an alleged fraud. Melder v. Morris, 27 F.3d 1097, 1100
n.5 (5th Cir. 1994). The pleader must “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.” Williams v. WMX Techs., Inc., 112 F.3d 175, 179 (5th Cir. 1997) (quoting
Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)).
Although Plaintiff acknowledges these Rule 9(b) standards in its briefing, Plaintiff’s
complaint fails to satisfy them. Plaintiff lists a number of undifferentiated liability allegations
here, and most of these allegations contain only boilerplate, conclusory language taken directly
from the text of the DTPA. See Docket no. 5-1 at 16–17. None of the allegations contains enough
specificity or supplemental factual information to answer the “newspaper questions” required by
Rule 9(b). In other words, none of the allegations sufficiently “specif[ies] the statements
contended to be fraudulent, identify the speaker, state when and where the statements were
made, and explain why the statements were fraudulent.” See Williams, 112 F.3d at 179.
For example, Paragraph F quoted above states that Defendants have breached an express
warranty; however, Plaintiff never states where this express warranty comes from or when it
actually arose. Similarly, Plaintiff does not specifically or sufficiently explain how Koralewski’s
actions breached this express warranty. Without more specificity, these DTPA claims suffer from
the same defects as Plaintiff’s other allegations.
B. Plaintiff’s claims for unfair insurance practices fail.
Plaintiff then alleges numerous causes of action for unfair insurance practices against
Everest, Engle Martin, and Koralewski. Docket no. 5-1 at 20. According to Plaintiff, these
Defendants are guilty of:
A. Engaging in false, misleading, and deceptive acts or practices in the
business of insurance in this case;
B. Engaging in unfair claims settlement practices;
C. Misrepresenting to Plaintiff pertinent facts or policy provisions relating to
the coverage at issue;
D. Not attempting in good faith to effectuate a prompt, fair, and equitable
settlement of Plaintiffs claim on which Defendants’ liability has become
E. Failing to affirm or deny coverage of Plaintiff’s claim within a reasonable
F. Refusing to pay Plaintiffs claim without conducting a reasonable
investigation with respect to the claim; and
G. Failing to provide promptly to a policyholder a reasonable explanation of
the basis in the insurance policy, in relation to the facts or applicable law,
for the denial of a claim or for the offer of a compromise settlement.
As Defendants point out, these are all boilerplate, conclusory allegations of wrongdoing
taken directly from Chapter 541 of the Texas Insurance Code. Plaintiff provides no other specific
details to supplement or support these allegations. In fact, the exact same list of allegations is
brought against Everest, Engle Martin, and Christopher McCoy on page 15 of the Original
Petition (this time with respect to the 2016 hailstorm rather than the 2017 tornado). Id. at 19.
With respect to Rule 12(b)(6), “a plaintiff’s obligation to provide the ‘grounds’ of his
‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of a
cause of action's elements will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007).
Further, “merely asserting a laundry list of statutory violations without factual support as to how
a non-diverse defendant violated the statute will not suffice.” Calvary United Pentecostal
Church v. Church Mut. Ins. Co., No. 4:15–CV–365, 2015 WL 5354827, at *3 (E.D. Tex. Sept.
14, 2015). As a result, Plaintiff’s allegations here are insufficient to satisfy a Rule 12(b)(6)-type
inquiry. See Twombly, 550 U.S. at 545; Calvary, 2015 WL 5354827, at *3; Doucet v. State Farm
Fire & Cas. Co., No. 1:09-CV-142, 2009 WL 3157478, at *5 (E.D. Tex. Sept. 25, 2009)
(“Similarly, it inevitably follows that merely asserting a laundry list of statutory violations
without factual support as to how a non-diverse defendant violated the statute will not suffice”)
(emphasis in original).
In short, Plaintiff’s unfair insurance practice claims against Koralewski are simply a
“laundry list of statutory violations” void of any specificity. As such, these unfair insurance
practice allegations against Koralewski raise no possibility of recovery.
Causes of Action for Violation of Chapter 542 of the Insurance Code
Finally, Plaintiff alleges that certain defendants, including Koralewski, have violated
Chapter 542 of the Texas Insurance Code. Docket no. 5-1 at 15. More specifically, Plaintiff
Everest and Koralewski have failed to adjust the claim within the timeframe
mandated by Chapter 542 of the Texas Insurance Code. Specifically, they have
not accepted/rejected [Plaintiff’s] claim within 36 days after receiving notice of
the claim, failing to pay [Plaintiff] within 75 days of receiving notice, and failing
to pay within 20 business days after making a claims determination. Everest
therefore owes [Plaintiff] eighteen percent per annum interest as damages under
Chapter 542 of the Texas Insurance Code for failing to promptly pay [Plaintiff’s]
claim. As a result, [Plaintiff] has incurred actual damages of at least $767,839.53
to repair the Algarita property damage caused by the tornado, plus the eighteen
percent per annum interest on that amount as damages under Section 542.060 of
the Texas Insurance Code, engineering and investigative costs incurred during the
claim process and reasonable attorney’s fees.
As an insurance adjuster, however, Koralewski cannot be held liable for violating
Chapter 542. See TEX. INS. CODE § 542.002; Lopez v. United Prop. & Cas. Ins. Co., 197 F. Supp.
3d 944, 951 (S.D. Tex. 2016) (citing Mainali Corp. v. Covington Specialty Ins. Co., 3:15-CV1087–D, 2015 WL 5098047, at *6 (N.D. Tex. Aug. 31, 2015)). Chapter 542 applies only to
insurers and not to insurance adjusters, and Koralewski is an insurance adjuster. See Mainali,
2015 WL 5098047 at *6 (“Chapter 542 only applies to specifically listed ‘insurers,’ and
Summers, an adjuster, is not an insurer.”). As a result, a Chapter 542 claim cannot properly be
brought against him. Id. For this reason, Plaintiff’s Chapter 542 cause of action against
Defendant Koralewski must be dismissed as well.
For the reasons discussed above, there is no reasonable basis to predict that Plaintiff
might recover against the non-diverse defendant Koralewski. As a result, Plaintiff’s claims
against Koralewski are DISMISSED and diversity jurisdiction exists. Accordingly, Plaintiff’s
motion to remand (Docket no. 9) is DENIED. This case is to remain open pending the resolution
of Plaintiff’s claims against all other defendants.
It is so ORDERED.
SIGNED this 10th day of August, 2017.
UNITED STATES DISTRICT JUDGE
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