Spring Street Apts Waco, LLC v. Philadelphia Indemnity Insurance Company

Filing 46

ORDER GRANTING 37 Motion to Dismiss for Failure to State a Claim by Crawford & Company. For the reasons stated above, Crawfords Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c) (ECF No. 37) is GRANTED and all claims as to Defendant Crawford are hereby DISMISSED. Signed by Judge Jeffrey C. Manske. (jgb)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
WACO DIVISION
SPRING STREET APTS WACO, LLC,
Plaintiff,
v.
PHILADELPHIA INDEMNITY
INSURANCE COMPANY and
CRAWFORD & COMPANY,
Defendants.

§
§
§
§
§
§
§
§
§

Case No. W-16-CA-00315-JCM

ORDER
Before the Court is Crawford’s Motion to Dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). ECF No. 37. The parties have consented to the jurisdiction of the
undersigned in accordance with the provisions of 28 U.S.C. § 626(c), Federal Rule of Civil
Procedure 73, and the Local Rules of the United States District Court for the Western District of
Texas. See ECF Nos. 15, 16 and 18.
I. BACKGROUND
This suit involves an insurance claim for damages to Plaintiff’s property. Philadelphia
Indemnity Insurance Company (“Philadelphia”) issued a Builder’s Risk insurance policy to
Spring Street Apartments Waco, LLC (“Plaintiff”) for Plaintiff’s apartment complex known as
The Hype Apartments (the “Property”), which includes coverage from May 7, 2013, to May 7,
2014 (the “Policy”). See Pl.’s Am. Compl. ¶¶ 7-8, ECF No. 29. On April 15, 2014, Plaintiff
submitted a claim to Philadelphia for roof and water damage sustained on at least 25 buildings on
the Property. Id. ¶¶ 10, 13. Plaintiff claims the damage resulted from severe weather, including
damage sustained from winds and strong gusts, which occurred on March 28, 2014, and from a
hailstorm that occurred on April 14, 2014. Id. ¶¶ 9-10.

1

In response to Plaintiff’s claim, Philadelphia engaged Crawford & Company
(“Crawford”), a national claim adjusting firm, to investigate and adjust Plaintiff’s reported loss.
Id. ¶ 11. Based on the adjuster’s inspection of the Property, Crawford retained engineers to
further inspect the Property. See id. ¶ 12. The engineers put forth their findings from the
inspection in a report referred to as the “Donan Report.” Id. Plaintiff asserts that the Donan
Report contained numerous deficiencies. Id. ¶¶ 13-17.1
The parties attempted mediation in May 2015, but were unable to resolve their dispute.
Counterclaim ¶¶ 119-20. Plaintiff filed suit in state court on June 30, 2016, and Philadelphia
removed to this Court for diversity of citizenship pursuant to 28 U.S.C. § 1332(a). ECF No. 1.
On January 5, 2017, Crawford filed a Motion to Dismiss Plaintiff’s claims against it pursuant to
Federal Rule of Civil Procedure 12(b)(6). ECF No. 37. Plaintiff responded. Crawford replied.
For the reasons stated below, the Court construes Crawford’s Motion as a Motion for Judgment
on the Pleadings pursuant to Federal Rule of Civil Procedure 12(c), grants Crawford’s Motion,
and dismisses all Plaintiff’s claims as to Crawford.
II. TIMELINESS OF CRAWFORD’S MOTION
As an initial matter, Plaintiff asserts in its Response that Crawford’s Motion to Dismiss
should be denied as untimely. Pl.’s Resp. at 5. Crawford replies that its Motion to Dismiss is not
untimely pursuant to Federal Rule of Civil Procedure 12(h)(2), which provides that a motion for
“[f]ailure to state a claim upon which relief can be granted” may be raised by a motion under

1

The alleged deficiencies included: the failure to search for reports of severe weather for the dates
preceding the date on which Plaintiff reported the damage; misrepresenting conversations that the
engineers had with Plaintiff’s representative, Mr. John Harvey; the unreasonable use of a limited
definition of what constitutes wind damage; inadequately addressed any damage to the interior of the
property; and improperly reported that long-term exposure to the elements caused the current condition of
the Property’s roofs. Pl.’s Am. Compl. ¶¶ 13-17.

2

Rule 12(c). Def.’s Reply at 1-2 (citing Fed. R. Civ. P. 12(h)(2)). The undersigned agrees with
Crawford.
The Fifth Circuit addressed this precise issue in Jones v. Greninger:
Initially, we must address the validity of the procedure that
the district court followed upon receiving the appellees’
12(b) motion. The district court treated the appellees’
motion to dismiss for failure to state a claim, filed after the
answer, as a motion for judgment on the pleadings under
Fed. R. Civ. P. 12(c). Because a rule 12(b) motion must be
filed before responsive pleadings, the appellees’ motion
was untimely. Rule 12(c) motions, however, may be filed
after the pleadings are closed. Such motions will be treated
as a motion for judgment on the pleadings based on a
failure to state a claim on which relief may be granted.
Thus, the district court did not err when it construed the
defendants’ motion as one for judgment on the pleadings.
See National Ass’n of Pharmaceutical Mfrs. v. Ayerst
Laboratories, 850 F.2d 904, 909 n. 4 (2d Cir. 1988).
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999).
Here, Crawford filed its Motion to Dismiss after filing its answer. See ECF No. 37.
Because 12(b) motions must be filed before responsive pleadings, Crawford’s 12(b)(6) motion is
untimely. See Jones, 188 F.3d at 324. However, because 12(c) motions may be filed after the
pleadings are closed, untimely 12(b)(6) motions may be treated as motions for judgment on the
pleadings. Id. Therefore, the undersigned construes Crawford’s Motion as a Motion for
Judgment pursuant to Federal Rule of Civil Procedure 12(c).
III. LEGAL STANDARD
A. Federal Rule of Civil Procedure 12(c)
A claim may be dismissed for failure to state a claim upon which relief can be granted
upon the filing of a motion for judgment on the pleadings. Fed. R. Civ. P. 12(c). “A motion for
judgment on the pleadings under Rule 12(c) is subject to the same standard as a motion to
dismiss under Rule 12(b)(6).” Ackerson v. Bean Dredging LLC, 589 F.3d 196, 209 (5th Cir.
3

2009). The “inquiry focuses on the allegations in the pleadings and not whether the plaintiff
actually has sufficient evidence to succeed on the merits.” Id.
All well-pleaded facts are viewed in the light most favorable to the plaintiff, but the
plaintiff must allege facts that support the elements of the cause of action in order to make a
valid claim. Hale v. King, 642 F.3d 492, 498 (5th Cir. 2011) (quoting City of Clinton v. Pilgrim’s
Pride Corp., 632 F.3d 148, 152-53 (5th Cir. 2010)). “To survive a motion to dismiss, a complaint
must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). A claim is facially plausible when it contains factual content that
“allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
As an initial matter, there is no dispute that the “wrongful conduct of an insurance
adjuster can give rise to personal liability even if [it] is in a subordinate relationship with the
insurance carrier.” Okenkpu v. Allstate Texas Lloyd’s, No. CIV.A. H-11-2376, 2012 WL
1038678, at *7 (S.D. Tex. Mar. 27, 2012) (citing Gasch v. Hartford Accident and Indemnity Co.,
491 F.3d 278, 282–83 (5th Cir. 2007) (holding that Texas law “clearly authorizes Article 21.21
[541.060] actions against insurance adjusters in their individual capacities.”). Rather, the issue
before the Court is whether Plaintiff’s Amended Complaint sufficiently pleads a reasonable
factual basis for recovery against Crawford. In order to sufficiently plead a cause of action
against an insurance adjuster, a plaintiff must allege “specific actionable conduct by the adjuster
and distinguish claims against the adjuster from generic, conclusory, statute-tracking claims
against the insurer.” Mt. Olive Missionary Baptist Church v. Underwriters at Lloyd’s, London,

4

No. CV H-16-234, 2016 WL 4494439, at *3 (S.D. Tex. Aug. 26, 2016) (citing Okenkpu, 2012
WL 1038678, at *7 (collecting cases)).
B. Federal Rule of Civil Procedure 9(b)
The Federal Rules of Civil Procedure dictate that “in all averments of fraud or mistake,
the circumstances constituting fraud or mistake shall be stated with particularity.” Fed. R. Civ. P.
9(b). Rule 9(b) “prevents nuisance suits and the filing of baseless claims as a pretext to gain
access to a ‘fishing expedition.’” United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 191
(5th Cir. 2009). The goals of Rule 9(b) are to “provide[ ] defendants with fair notice of the
plaintiffs’ claims, protect[ ] defendants from harm to their reputation and goodwill, reduce[ ] the
number of strike suits, and prevent[ ] plaintiffs from filing baseless claims then attempting to
discover unknown wrongs.” Grubbs, 565 F.3d at 190 (citing Melder v. Morris, 27 F.3d 1097,
1100 (5th Cir. 1994)).
A plaintiff pleading fraud 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.” Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 564–
65 (5th Cir. 2002); see Williams v. WMX Tech. Inc., 112 F.3d 175, 177 (5th Cir. 1997); see also
United States ex rel. Williams v. Bell Helicopter Textron, Inc., 417 F.3d 450, 453 (5th Cir. 2005)
(quoting United States, ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903
(5th Cir. 1997) (Rule 9(b)’s particularity requirement generally means, “at a minimum . . . that a
plaintiff set forth the ‘who, what, when, where, and how’ of the alleged fraud.”).
Furthermore, “claims alleging violations of the Texas Insurance Code and the DTPA and
those asserting fraud, fraudulent inducement, fraudulent concealment, and negligent
misrepresentation are subject to the requirements of Rule 9(b).” Frith v. Guardian Life Ins. Co.

5

of Am., 9 F. Supp. 2d 734, 742 (S.D. Tex. 1998); see Berry v. Indianapolis Life Ins. Co., No.
3:08-CV-0248-B, 2010 WL 3422873, at *14 (N.D. Tex. Aug. 26, 2010) (“[W]hen the parties
have not urged a separate focus on the negligent misrepresentation claims, the Fifth Circuit has
found negligent misrepresentation claims subject to Rule 9(b) in the same manner as fraud
claims.”) (internal quotations and citations omitted).
Additionally, courts are to read Rule 9(b)’s heightened pleading requirement in
conjunction with Rule 8(a)’s insistence on “simple, concise, and direct” allegations. Williams,
112 F.3d at 178. However, this requirement “does not ‘reflect a subscription to fact pleading.’”
Grubbs, 565 F.3d at 186. Failure to comply with Rule 9(b)’s requirements authorizes the Court
to dismiss the pleadings as it would for failure to state a claim under Rule 12(b)(6). United States
ex rel. Williams v. McKesson Corp., No. 3:12-CV-0371-B, 2014 WL 3353247, at *3 (N.D. Tex.
July 9, 2014) (citing Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir. 1996)).
IV. DISCUSSION
Crawford moves to dismiss Plaintiff’s claims of: (1) negligence; (2) breach of contract;
(3) breach of good faith and fair dealing; (4) Deceptive Trade Practices Act (“DTPA”)
violations; (5) Texas Insurance Code (“TIC”) and unfair insurance practices; and (6) common
law negligent misrepresentation and fraud. See Def.’s Mot. Dismiss at 4-6, 13. Plaintiff does not
contest and voluntarily agrees to dismiss its claims of: (1) negligence; (2) breach of contract; and
(3) breach of good faith and fair dealing against Crawford. Pl.’s Resp. at 6 n. 2. Therefore, the
Court will focus on the remaining claims in Crawford’s Motion.

6

A. Deceptive Trade Practices Act
Plaintiff alleges that Crawford violated numerous DTPA provisions; specifically, §§
17.46(b)(5); 17.46(b)(7); 17.46(b)(12); 17.46(b)(14); 17.46(b)(20); 17.46(b)(24); 17.50(a)(3);
and 17.50(a)(4) of the Texas Business and Commerce Code. Pl.’s Am. Compl. ¶ 44. Crawford
argues that Plaintiff’s DTPA claims: (1) fail to state a claim pursuant to Rule 12(b)(6); (2) fail to
meet the specificity requirement of rule 9(b); and (3) fail to allege detrimental reliance. See
generally Def.’s Mot. Dismiss.
1. Federal Rule of Civil Procedure 12(b)(6)
Crawford asserts that Plaintiff’s allegations: (1) fail to allege specific actionable conduct
by the adjuster; (2) fail to provide an explanation of how Crawford’s alleged conduct violated the
DTPA or damaged Plaintiff; and (3) are nothing more than a mere formulaic recitation of DTPA
provisions. Def.’s Mot. Dismiss at 6. The undersigned agrees.
a. specific actionable conduct
In order to sufficiently plead a cause of action against an insurance adjuster, a plaintiff
must allege “specific actionable conduct by the adjuster and to distinguish claims against the
adjuster from generic, conclusory, statute-tracking claims against the insurer.” Mt. Olive, 2016
WL 4494439, at *3 (internal citations omitted). Here, Plaintiff’s factual allegations are not
pleaded with enough specificity to distinguish particular facts from legal conclusions. For
example:
Plaintiff alleges:
it is entitled to recover under DTPA Sections 17.46(b)(12)
and (20), as well as 17.50(a)(2) because Defendants
breached an express warranty that damage caused by a
severe wind event would be covered under the subject
insurance policies.

7

However, this allegation merely states a conclusion that the Policy expressly covered wind
damage.
To be actionable, Defendant’s failure to disclose must have been “intended to induce the
consumer into a transaction into which the consumer would not have entered had the information
been disclosed.” See DTPA § 17.46(b)(24) (Vernon Supp. 2001), cited in Texas v. Am. Blastfax,
Inc., 164 F. Supp. 2d 892, 901 (W.D. Tex. 2001). Plaintiff alleges:
Defendants’ collective actions constitute violations of
the Deceptive Trade Practices Act (“DTPA”), including
but not limited to Sections 17.46(b)(12), 17.46(b)(14),
17.46(b)(20), 17.46(b)(24), and Section and 17.50(a)(4)
of the Texas Business and Commerce Code.
Pl.’s Am. Compl. ¶ 44. Noticeably absent from Plaintiff’s Amended Complaint is any specific
discussion of the information Crawford failed to disclose. Not only did Plaintiff fail to
specifically describe the information, Plaintiff failed to allege what it would have done had
Defendant disclosed that information.
Concerning Section 17.50(a)(3), Plaintiff alleges:
Defendants’ actions, as described herein, were
unconscionable in that they took advantage of Plaintiff’s
lack of knowledge, ability, and experience to a grossly
unfair degree.
Pl.’s Am. Compl. ¶ 50. However, Plaintiff’s allegations merely state a conclusion without
identifying any specific acts by Crawford that took advantage of Plaintiff’s knowledge, ability,
or experience to an unfair degree.
In addition, Plaintiff’s allegations merely track the statutory language of sections
17.46(b)(5) and 17.46(b)(7) of the DTPA without alleging any case specific facts. Section
17.46(b)(5) prohibits “representing that goods or services have sponsorship, approval,

8

characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person
has a sponsorship, approval, status, affiliation, or connection which the person does not.” Tex.
Bus. & Com. Code Ann. § 17.46(b)(5) (West). Here, Plaintiff alleges that Defendants
represented to Plaintiff that the Policy and Defendants’ adjusting and investigat[ing] services had
characteristics or benefits that they actually did not have, which entitles Plaintiff to recover under
DTPA Section 17.46(b)(5). Pl.’s Am. Compl. ¶ 46.
Section 17.46(b)(7) prohibits “representing that goods or services are of a particular
standard, quality, or grade, or that goods are of a particular style or model, if they are of
another.” Tex. Bus. & Com. Code Ann. § 17.46(b)(7) (West). Here, Plaintiff alleges that it is
entitled to recover under DTPA Section 17.46(b)(7) because Defendants represented to Plaintiff
that the Policy and Defendants’ adjusting and investigat[ing] services were of a particular
standard, quality, or grade when they were of another. Pl.’s Am. Compl. ¶ 47.
Noticeably absent from Plaintiff’s Amended Complaint is any specific description of
conduct that Crawford allegedly engaged in. Specifically, Plaintiff’s Amended Complaint is void
of allegations as to specific miscalculations Crawford’s agent made in his/her report, or what
specific damages were not covered and why. The specific allegations mirror those against
Philadelphia. Thus, the allegations specified against Crawford are insufficient for Plaintiff to
state a cause of action.

9

In sum, Plaintiff’s sweeping allegations as to all “Defendants” fail to allege and
distinguish specific conduct against Crawford, the insurance adjuster, from the insurer.2 Because
Plaintiff fails to allege specific actionable conduct by the adjuster, distinguishable from the
claims against the insurer, it fails to state a claim upon which relief can be granted.
b. proximate cause and damages
Furthermore, Plaintiff fails to provide an explanation of how Crawford’s alleged conduct
violated the DTPA or caused Plaintiff damage. In order to state a valid claim under the DTPA,
Plaintiff must show that: (1) it is a consumer under the DTPA with respect to its claim against
Crawford; (2) Crawford committed a false, misleading, or deceptive act under § 17.46(b) of the
DTPA,3 breached an express or implied warranty, or engaged in an unconscionable action or
course of action; and (3) these acts were the producing cause of Plaintiff’s actual damages.
Brittan Commc’ns Int’l Corp. v. Sw. Bell Tel. Co., 313 F.3d 899, 907 (5th Cir. 2002) (citing
Brown v. Bank of Galveston, N.A., 963 S.W.2d 511, 513 (Tex. 1998)). Here, Plaintiff’s Amended
Complaint provides:
[a]s a direct and proximate cause of Defendants’ collective
acts and conduct, Plaintiff has been damaged in an amount
in excess of the minimum jurisdictional limits of this Court,
for which Plaintiff now sues . . . . All of the aboveAnother example of Plaintiff’s broad allegations as to all Defendants is paragraph 48 of Plaintiff’s
Amended Complaint:
2

[Plaintiff is] entitled to recover under DTPA Sections
17.46(b)(5), 17.46(b)(7), and 17.46(b)(12) due to Defendants
representation that it would pay the entire amount Plaintiff
needed to repair the damages caused by a severe wind event and
then failed to do so. Pl.’s Am. Compl. ¶ 48 (emphasis added).
Pl.’s Am. Compl. § 48.
3
Section 17.46(b) of the DTPA makes false, misleading, or deceptive acts or practices in the conduct of
any trade or commerce unlawful. McPeters v. LexisNexis, 910 F. Supp. 2d 981, 987–88 (S.D. Tex. 2012),
on reconsideration, 11 F. Supp. 3d 789 (S.D. Tex. 2014).

10

described acts, omissions, and failures of Defendants are a
direct and proximate cause of Plaintiff’s damages.
Pl.’s Am. Compl. ¶¶ 52-53 (emphasis added).
Plaintiff’s formulaic recitation of the statutory language and failure to distinguish
particular facts from legal conclusions is insufficient to fulfill its obligations to provide grounds
on which it is entitled to relief. See Twombly, 550 U.S. at 555 (“[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 the elements of a cause of action will not do.”); see also Papasan v.
Allen, 478 U.S. 265, 286 (1986) (“[O]n a motion to dismiss, courts ‘are not bound to accept as
true a legal conclusion couched as a factual allegation.’”). Thus, Plaintiff fails to allege any
specific conduct to state a claim for DTPA violations against Crawford that is plausible on its
face. Def.’s Mot. Dismiss at 7.
2. Federal Rule of Civil Procedure 9(b).
Even if Plaintiff pleaded sufficient facts to meet the pleading standard set forth in Iqbal
and Twombly, Plaintiff’s DTPA claims fail to meet the pleading standards required by Rule 9(b)
of the Federal Rules of Civil Procedure. Claims made under the DTPA for misrepresentation are
subject to the heightened pleading requirements of Rule 9(b). See Lone Star Ladies Inv. Club v.
Schlotzsky’s Inc., 238 F.3d 363, 368 (5th Cir. 2001) (“Rule 9(b) applies by its plain language to
all averments of fraud, whether they are part of a claim of fraud or not.”); see also Frith, 9 F.
Supp. 2d at 742 (“Claims alleging violations of the Texas Insurance code and the DTPA and
those asserting fraud, fraudulent inducement, fraudulent concealment, and negligent
misrepresentation are subject to the requirements of Rule 9(b).”). “At a minimum, Rule 9(b)
requires allegations of the particulars of time, place, and contents of the false representations, as
well as the identity of the person making the representation and what he obtained thereby.”
11

Turner v. AmericaHomeKey, Inc., No. 3:11-CV-0860-D, 2011 U.S. Dist. LEXIS 91173, 2011
WL 3606688, at *2 (N.D. Tex. Aug. 16, 2011).
Crawford argues that Plaintiff’s DTPA allegations against it fail to identify: (1) the
content of any alleged misrepresentation by Crawford; (2) the time and place of any alleged
misrepresentation; (3) who made the misrepresentation: (4) to whom the misrepresentation was
made; and (5) what the maker of the misrepresentation allegedly obtained thereby. Def.’s Mot.
Dismiss at 8. In response, Plaintiff points to paragraphs 11, 12, 29, 30, and 32 of its Amended
Complaint to support its contention that its pleading sufficiently meets Rule 9(b)’s contextspecific standard. Pl.’s Resp. at 7-8. Specifically, Plaintiff alleges in paragraph 11 that Crawford
was assigned to adjust Plaintiff’s claim and did adjust it by investigating, processing, evaluating,
approving and/or denying, in whole or in part, the claim. Id. (citing Pl.’s Am. Compl. ¶ 11).
Plaintiff also points to paragraphs 12, 29, 30, and 32 of its Amended Complaint. Pl.’s Resp. at 78. Plaintiff alleges that Crawford, while adjusting, improperly evaluated the extensive losses,
completed a substandard inspection of the property, retained an inadequate engineer, failed to
conduct a fair investigation, failed to properly request information, failed to respond to requests
for information, failed to timely evaluate and estimate Plaintiff’s claim, and failed to timely and
properly report and make recommendations to Philadelphia regarding the claim. Id. (citing Pl.’s
Am. Compl. ¶¶ 12, 29, 30, 32). Plaintiff further contends:


The facts are sufficient to give Crawford notice of the time
(the period of its investigation), place (at the property
where it inspected), and content (its failures and
improprieties listed above) of its DTPA violations.



Plaintiff also has put Crawford on notice of its objections to
Crawford’s inadequacies as early as 2014.



Plaintiff is not required to allege each and every specific
deficiency with Crawford’s investigation.
12



It simply needs to allege specific facts to put Crawford on
notice, which it has done.

Pl.’s Resp. at 8.
Contrary to Plaintiff’s assertion, Plaintiff is required to allege specific facts that go
beyond a mere notice pleading. Plaintiff fails to state the name of the agent, or contents of the
agent’s purported fraudulent statements and misrepresentation as required by Rule 9(b).
Although Plaintiff generically describes Crawford’s fraudulent acts, Plaintiff fails to discuss the
conduct and/or statements of the unidentified Crawford agent who purportedly improperly
evaluated, made a substandard inspection, retained an inadequate engineer, failed to conduct a
fair investigation, failed to properly request information, failed to respond to requests for
information, failed to timely evaluate and estimate Plaintiff’s claim, and failed to timely and
properly report and make recommendations to the insurer. (citing Pl.’s Am. Compl. ¶¶ 12, 29,
30, and 32). Rather, except for the retention of an inadequate engineer, Plaintiff’s Amended
Complaint reads as though the engineer Crawford allegedly hired committed the above acts.
Because Plaintiff failed to plead the particulars of the time, place, and contents of the false
representations, or even the identity of the person making the representation and what he or she
obtained thereby, Plaintiff’s DTPA claims do not meet the pleading requirements set forth in
Rule 9(b).

13

B. Texas Insurance Code and Unfair Insurance Practices
Crawford also moves to dismiss Plaintiff’s claims for Texas Insurance Code violations
(Count IV) and unfair insurance practices (Count VI), contending that Plaintiff’s Amended
Complaint fails to allege facts specific as to Crawford.4 Def.’s Mot. Dismiss at 8. Specifically,
Crawford asserts that Plaintiff globally alleges “Defendants’ actions constitute violations of the
Texas Insurance Code, including but not limited to, Sections 541.060, 541.061, and 542.058.” Id.
Plaintiff responds that it has alleged a valid cause of action against Crawford and “has plead
more than enough facts to put Crawford on notice of its Texas Insurance code allegations.” Pl’s
Resp. at 10.
First, Plaintiff extensively briefs the issue regarding whether adjusters can be held liable
under Chapter 541. Id. at 10-13. It is well settled that an adjuster may be found liable in his
individual capacity for deceptive or misleading acts in violation inter alia of the Texas Insurance
Code. See Garrison Contractors, 966 S.W.2d at 486; see also Griggs v. State Farm Lloyds, 181
F.3d 694, 701 (5th Cir. 1999). However, to be held liable, the adjusting company must have
committed some act that is prohibited by the Texas Insurance Code, not just be connected to an
insurance company’s denial of coverage. See McClelland v. Chubb Lloyd’s Ins. Co., 2016 U.S.
Dist. LEXIS 136087, at*5 (W.D. Tex. Sep. 30, 2016) (citing Messersmith v. Nationwide Mut.
Fire Ins. Co., 10 F. Supp. 3d 721, 724 (N.D. Tex. 2014)). Thus, the sole issue before this Court is
whether Crawford has shown that there is no reasonable basis to predict that state law would
allow recovery against Crawford. Put another way, Crawford must show that Plaintiff failed to

Plaintiff’s allegations as to unfair insurance practices are premised on the alleged violations of Texas
Insurance Code Chapter 541. Pl.’s Am. Compl. ¶ 68. Thus, as Crawford points out, the analysis for both
counts are the same. Def.’s Mot. Dismiss at 9. Therefore, the undersigned will analyze Plaintiff’s Texas
Insurance Code Chapter 541 and unfair insurance practices claims together.
4

14

assert factual allegations against Crawford sufficient to form an independent cause of action
from those alleged against Philadelphia.
Plaintiff argues that Texas courts have held that allegations similar to those before the
Court were sufficient to state a claim under the Texas Insurance Code for misrepresenting the
policy. Pl.’s Resp. at 13. Plaintiff relies upon three district court cases concerning motions to
remand for improper joinder. See id. at 13-15. However, the courts in all three cases applied the
Texas “fair notice” standard rather than the “more stringent” federal pleading standard when
determining whether the plaintiff stated a claim for relief against the claims adjuster. See Esteban
v. State Farm Lloyds, 23 F. Supp. 3d 723, 732 (N.D. Tex. 2014) (“[t]hus, this Court will apply
the Texas pleading standard to determine whether Esteban has stated a claim for relief against
Galvan.”); see also Campos v. American Bankers Ins. Co. of Florida, No. H-10-0594, 2010 WL
2640139 (S.D. Tex. June 30, 2010) (noting “the fact that the pleadings do little more than recite
the elements of the statutory claims might be viewed as pleading insufficiency in federal court
and might be the basis for an order granting leave to amend. But this court cannot conclude that
there is no reasonable basis to predict that Campos might recover against Castilleja in state
court.”); Harris v. Allstate Tex. Lloyd’s, No. H–10–0753, 2010 WL 1790744 (S.D. Tex. Apr.
30, 2010) (“[t]o establish that a nondiverse defendant has been improperly joined for the purpose
of defeating diversity jurisdiction the removing party must prove either that there has been actual
fraud in the pleading of jurisdictional facts or that there is no reasonable possibility that the
plaintiff will be able to establish a cause of action against that party in state court.”) (emphasis
added) (internal citations omitted). Thus, the Court finds Plaintiff’s reliance on Esteban,
Campos, and Harris unpersuasive.

15

The present case is similar to Hutchins Warehouse Ltd. Partners v. Am. Auto. Ins. Co., et.
al., and Sanchez v. Allied Prop. & Cas. Ins. Co. In Hutchins, the plaintiff pleaded the following:
1. [McMillan] . . . made numerous errors in estimating the
value of plaintiff’s claim;
2. “McMillan did not conduct a thorough investigation of
plaintiff’s claim . . . . [His] substandard inception failed to
include all of Plaintiffs strum damages noted upon
inspection”;
3. “The Damages included in the estimate were grossly
undervalued”;
4. “defendant McMillan failed to thoroughly review and
properly supervise the inspection of The Property”;
5. “Further, defendant McMillan knowingly and intentionally
overlooked damages at The Property and used their own
inadequate and biased investigation as the basis for
erroneously denying a portion of plaintiff’s claim.”
Hutchins Warehouse Ltd. Partners v. Am. Auto. Ins. Co., et. al., No. 3:16-cv-3336-G, 2017 WL
588657 *4 (N.D. Tex. Feb 14, 2017) (Fish, J.). The court found that the allegations fell short of
describing the loss, “such as how McMillan specifically committed any of the above acts.” Id.
Thus, the court held that the lack of factual support was “nothing more than legal conclusions
couched as factual allegations which the court need not consider in determining a motion to
dismiss.” Id. (quoting Weldon, 2009 WL 1437837, at *4).
Here, Plaintiff’s Amended Complaint, in relevant part, provides:
1. Defendants engaged in certain unfair or deceptive acts or
practices including, but not limited to the following:
a. Failing to attempt, in good faith, to effectuate a prompt,
fair, and equitable settlement of a claim with respect to
which the insurer’s liability has become reasonably clear;
b. Failing to provide promptly to a policyholder a
reasonable explanation of the basis in the policy, in
16

relation to the facts or applicable law, for the insurer’s
denial of a claim or for the offer of a compromise
settlement of a claim;
c. Refusing to pay a claim without conducting a reasonable
investigation with respect to the claim;
d. Forcing Plaintiff to file suit to recover amounts due
under the policy by refusing to pay all benefits due;
e. Misrepresenting an insurance policy by failing to
disclose any matter required by law to be disclosed,
including a failure to make such disclosure in accordance
with another provision of this code; and/or
f. Failing to pay a valid claim after receiving all
reasonably requested and required items from the
claimant.
2. Crawford adjusted Plaintiff’s claim by investigating,
processing, evaluating, approving, and or denying, in whole or
in part, plaintiff’s claim
3. Crawford . . . conducted a substandard inspection of Plaintiff’s
property.
4. Crawford failed to properly inspect the Property and their
related damages, failed to properly request information, failed
to properly investigate the claims, failed to respond to requests
for information from Plaintiff, failed to timely evaluate the
claims, failed to timely estimate the claims, and failed to
timely and properly report to Philadelphia and make
recommendations to it with regard to Plaintiff’s claims.
5. Crawford failed to properly adjust the claims and the losses.
6. Defendants have further failed to affirm or deny coverage
within a reasonable time.
7. As a result of the above issues, Plaintiff did not receive the
coverage for which it had originally contracted with
Philadelphia. Unfortunately, Plaintiff has therefore been
forced to file this suit in order to recover damages arising from
the above conduct, as well as from the unfair refusal to pay
insurance benefits.

17

Pl.’s Am. Compl. ¶¶ 11, 12, 29, 30, 32, and 35.
Similar to the allegations in Hutchins, Plaintiff’s allegations fall short of describing the
cause of the loss, such as how Crawford specifically committed any of the above acts. The
closest Plaintiff comes to making factual allegations is its statement that Crawford through its
substandard inspection “[hired] an inadequate engineer.” Pl.’s Resp. at 11. However, this
allegation, like the unsuccessful allegation in Hutchins that “[McMillan’s] June 7, 2016 report . .
. failed to include all of the plaintiffs’ storm damages noted upon inspection,” lacks factual
support.
Moreover, Plaintiff’s allegations against Crawford merely track the statutory language
under which Plaintiff purports to bring its claims against Crawford. A pleading offering “labels
and conclusions” or “a formulaic recitation of the elements of a cause of action” will not suffice.
Twombly, 550 U.S. at 555. Nor does a complaint comply with the standard if it tenders “naked
assertion[s]” devoid of “further factual enhancement.” Id. at 557. Evaluating the plausibility of a
claim is a context specific process that requires a court to draw on its experience and common
sense. Iqbal, 556 U.S. at 663–64.
In Sanchez v. Allied Property, Sanchez alleged that the insurance company, Allied, and
the insurance adjuster, Williams, violated 541.060(a)(7) by “ ‘fail[ing] to properly investigate
Plaintiff's claim and fail[ing] to attempt in good faith to settle the claims once Defendant Allied’s
liability became reasonably clear.’” Sanchez v. Allied Prop. & Cas. Ins. Co., No. 1:16-CV-176LY, 2016 WL 1669989, at *2 (W.D. Tex. Apr. 18, 2016). The court held that Sanchez “failed to
plead any facts relating to Williams’ conduct that rose above the level of conclusory allegations.”
Id. Specifically, the court noted that Sanchez pleaded “no more than a recitation of provisions of
the Texas Insurance Code.” Id. Therefore, “the complaint [did] not include any specific factual

18

content that allow[ed] the court to draw the reasonable inference that Williams was liable for the
misconduct alleged.” Id. Thus, the court found that Sanchez failed to state a claim for relief
under the Texas Insurance Code. Id.
Here, like in Sanchez, Plaintiff’s allegations merely track the statutory language of
sections 541.060, 541.061, and 542.058 of the TIC without alleging any case specific facts.
Section 541.060(a)(2) prohibits:
failing to attempt in good faith to effectuate a prompt, fair,
and equitable settlement of a claim with respect to which
the insurer's liability has become reasonably clear.
Tex. Ins. Code Ann. § 541.060(a)(2) (West). Plaintiff alleges:
Defendants fail[ed] to attempt, in good faith, to effectuate a
prompt, fair, and equitable settlement of a claim with
respect to which the insurer’s liability has become
reasonably clear.
Pl.’s Am. Compl. at ¶ 57. Section 541.060(a)(3) prohibits:
failing to promptly provide to a policyholder a reasonable
explanation of the basis in the policy, in relation to the facts
or applicable law, for the insurer's denial of a claim or offer
of a compromise settlement of a claim.
Tex. Ins. Code Ann. § 541.060(a)(3) (West). Plaintiff alleges:
Defendants fail[ed] to provide promptly to a policyholder
a reasonable explanation of the basis in the policy, in
relation to the facts or applicable law, for the insurer’s
denial of a claim or for the offer of a compromise
settlement of a claim.
Pl.’s Am. Compl. at ¶ 57. Section 541.060(a)(7) prohibits:
refusing to pay a claim without conducting a reasonable
investigation with respect to the claim.
Tex. Ins. Code Ann. § 541.060(a)(7) (West). Plaintiff alleges:
Defendants refus[ed] to pay a claim without conducting a
reasonable investigation with respect to the claim.
19

Pl.’s Am. Compl. at ¶ 57.Section 541.061(f) prohibits:
failing to disclose a matter required by law to be disclosed,
including failing to make a disclosure in accordance with
another provision of this code.
Tex. Ins. Code Ann. § 541.061(5) (West). Plaintiff alleges:
Defendants misrepresent[ed] an insurance policy by
failing to disclose any matter required by law to be
disclosed, including a failure to make such disclosure in
accordance with another provision of this code.
Pl.’s Am. Compl. at ¶ 57. Section 542.058 prohibits:
an insurer, after receiving all items, statements, and forms
reasonably requested and required under Section 542.055,
[from] delay[ing] payment of the claim . . . .
Tex. Ins. Code Ann. § 542.058 (West). Plaintiff alleges:
Defendants fail[ed] to pay a valid claim after receiving
all reasonably requested and required items from the
claimant.
Pl.’s Am. Compl. at ¶ 57.
Plaintiff makes indiscriminate allegations against “Defendants.” When Plaintiff does
make allegations against Crawford specifically, Plaintiff fails to plead with enough specificity to
distinguish facts from legal conclusions. Plaintiff’s purported factual allegations are “nothing
more than legal conclusions couched as factual allegations, which the court need not consider in
determining a motion to dismiss.” See Weldon Contractors, Ltd. v. Fireman’s Fund Insurance
Company, No. 4:09-CV-0165-A, 2009 WL 1437837, at *4 (N.D. Tex. May 22, 2009) (McBryde,
J.).
Moreover, Plaintiff’s formulaic recitation of the statutory language and failure to
distinguish particular facts from legal conclusions is insufficient to fulfill its obligations to
provide grounds on which it is entitled to relief. See Twombly, 550 U.S. at 555. Furthermore,
20

merely parroting the statutory language, without attempting to connect specific conduct of the
defendant to the refusal to pay a claim, “is simply a recitation of the statutory language, and thus
is conclusory and fails to state a claim.” See DTND Sierra Invs., LLC v. Bank of Am., N.A., 871
F. Supp. 2d 567, 580 (W.D. Tex. 2012).
C. Misrepresentation and Fraud
Plaintiff also brings common law negligent misrepresentation and fraud claims against
Crawford. Under Texas law, a claimant alleging negligent misrepresentation must show the
following:
(1) the representation is made by a defendant in the course
of his business, or in a transaction in which the defendant
has a pecuniary interest; (2) the defendant supplies “false
information” for the guidance of others in their business;
(3) the defendant did not exercise reasonable care or
competence in obtaining or communicating the
information; and (4) the plaintiff suffers a pecuniary loss by
justifiably relying on the representation.
Ellis v. Bank of N.Y. Mellon Trust Co., No. 4:11-CV-049, 2012 WL 359673, at *3 (E.D. Tex.
Feb. 2, 2012) (citing Fed. Land Bank Ass’n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991)). Under
Texas law, a plaintiff can demonstrate common law fraud when:
(1) a material representation was made; (2) the
representation was false; (3) when the representation was
made the speaker knew it was false or made it recklessly
without any knowledge of its truth and as a positive
assertion; (4) the speaker made the representation with the
intent that it should be acted upon by the party; (5) the
party acted in reliance upon the representation; and (6) the
party thereby suffered injury.
Shakeri, 816 F.3d at 296 n. 5 (citing Eagle Props., Ltd. v. Scharbauer, 807 S.W.2d 714, 723
(Tex. 1990). Crawford moves to dismiss Plaintiff’s claims of negligent misrepresentation and
fraud, alleging that these claims: (1) consist of “vague, general conclusions without any factual

21

support as to Crawford”; and (2) fail to comply with the specificity requirements of Federal Rule
of Civil Procedure 9(b); and (3) Plaintiff alleges other facts that negate Plaintiff’s alleged
reliance. The undersigned will discuss each in turn.
1. Federal Rule of Civil Procedure 12(b)(6)
Crawford moves to dismiss Plaintiff’s claims of negligent misrepresentation and fraud,
alleging that these claims consist of “vague, general conclusions without any factual support as
to Crawford.” Def.’s Mot. Dismiss at 13 (citing Pl.’s Am. Compl. at ¶¶ 74-83). Crawford further
contends that Plaintiff’s Amended Complaint fails to identify any specific misrepresentation that
Crawford allegedly made to Plaintiff and; therefore, Plaintiff’s Amended Complaint is void of
allegations regarding how Plaintiff relied on any such alleged misrepresentation or how any
misrepresentation damaged Plaintiff. Def.’s Mot. Dismiss at 13.
Plaintiff rebuts by pointing to paragraphs 12, 26, 29, 30, 33, and 35 of its Amended
Complaint, arguing that these paragraphs sufficiently allege that Plaintiff relied on Crawford to
assist its repair process by conducting a fair investigation and bringing about a proper settlement,
as well as showing that Crawford conducted an improper, substandard and biased investigation,
inspection and evaluation of the Property to Plaintiff’s detriment. Pl.’s Resp. at 15 (citing Pl.’s
Am. Compl. ¶¶ 12, 26, 29, 30, 33, and 35).
This case is similar to Young v. Travelers Pers. Sec. Ins. Co., No. 4:16-CV-235, 2016
WL 4208566, at *3–5 (S.D. Tex. Aug. 10, 2016).5 In Young, the plaintiff pleaded the following:


Defendant Finley made numerous errors in estimating the
value of Plaintiff’s claim, all of which were designed to
intentionally minimize and underpay the loss incurred by

5

Though the question in Young was whether the claims adjuster was improperly joined, the court applied
the same 12(b)(6) analyses as the undersigned does in this case to determine if the allegations in the
complaint were factually sufficient to support a cause of action against the claims adjuster. See Young,
2016 WL 4208566, at *3–5.

22

the Plaintiff . . . As a result of Defendant Finley’s conduct,
Plaintiff’s claim was underpaid.


Defendant Finley’s conduct constitutes multiple violations
of the Texas Insurance Code, Unfair Settlement Practices . .
..



Defendant Finley is individually liable for his unfair and
deceptive acts, irrespective of the fact he was acting on
behalf of Defendant Travelers . . . .



Defendants knowingly or recklessly made false
representations, as described above, as to material facts
and/or knowingly concealed material information from
Plaintiff.

Id. at *3-4. The court found that these statements were “conclusory and lack[ed] the specificity
necessary to state a claim. The statements [were] nothing more than a formulaic recital of the
statutory elements.” Id. at 4.
The allegations in Young are very similar to those pleaded in this case. Here, the relevant
portions of Plaintiff’s Amended Complaint provides:
12. Crawford, through its agents, conducted a substandard
inspection of Plaintiff’s property. The inadequacy of
Crawford’s inspection can be seen in many areas, including
the report done by the engineers hired by Crawford (the
“Donan Report”).
26. In the aftermath of the severe weather event, Plaintiff
relied on Philadelphia and Crawford and its adjusters to
help begin the slow and painful repair process. By and
through the Policy with Philadelphia, Plaintiff was
objectively insured for the subject losses in this matter.
29. In the months following the filing of its claim, Plaintiff
provided information to Philadelphia and Crawford, and
gave Philadelphia and Crawford opportunities to inspect
the Property. Crawford, however, failed to conduct a fair
investigation into the damage to the Property. Crawford
failed to properly inspect the Property and their related
damages, failed to properly request information, failed to
properly investigate the claims, failed to respond to
23

requests for information from Plaintiff, failed to timely
evaluate the claims, failed to timely estimate the claims,
and failed to timely and properly report to Philadelphia and
make recommendations to it with regard to Plaintiff’s
claims.
30. Despite the Defendants’ improprieties, Plaintiff
continued to provide information regarding the losses and
the related claims to Crawford and Philadelphia. Further,
Plaintiff made inquiries regarding the status of the losses,
and payments. Regardless, Crawford failed to properly
adjust the claims and the losses. As a result, to this date,
Plaintiff has not received proper payment for the claims,
even though notification was provided shortly after the
loss.
33. Philadelphia has, to date, refused to fully compensate
Plaintiff under the terms of the Policy that Plaintiff paid
for, even though it was Philadelphia that failed to conduct a
reasonable investigation. Despite Plaintiff pointing out
deficiencies in Defendants’ investigation, Defendants
continue to rely solely on their own unreasonable
investigation. Ultimately, Defendants performed a resultoriented investigation of Plaintiff’s claims that resulted in
an unfair, biased and inequitable evaluation of Plaintiff’s
losses.
35. As a result of the above issues, Plaintiff did not receive
the coverage for which it had originally contracted with
Philadelphia. Unfortunately, Plaintiff has therefore been
forced to file this suit in order to recover damages arising
from the above conduct, as well as from the unfair refusal
to pay insurance benefits. As indicated below, Plaintiff
seeks relief under the common law, the Deceptive Trade
Practices-Consumer Protection Act and the Texas
Insurance Code.
74. Defendants did not inform Plaintiff of certain
exclusions
in
their
policy.
Defendants
made
misrepresentations about the Policy with the intention that
they be relied upon and acted upon by Plaintiff, who relied
on the misrepresentations to its detriment.
75. Defendant made negligent misrepresentations regarding
the Policy and Plaintiff’s coverage, which Plaintiff relied
upon to its detriment.
24

76. As a direct and proximate result of Defendants’
misrepresentations, Plaintiff suffered damages, including
but not limited to loss of their businesses, loss of use of
their businesses, mental anguish and attorney fees.
Defendants are liable for these actual consequential and
penalty-based damages.
78. Defendants, individually or collectively, perpetrated
fraud by misrepresentation (either intentionally or
negligently) by falsely representing a fact of materiality to
Plaintiff, which relied upon such representations. Such
representations ultimately resulted in its injuries and
damages. Alternatively, Defendants fraudulently concealed
material facts from Plaintiff, the result of which caused
damage to Plaintiff that was foreseeable.
79. Specifically, and as a proximate cause and result of this
fraudulent
concealment,
fraud
and
negligent
misrepresentation, all of which was perpetrated without the
knowledge or consent of Plaintiff, Plaintiff sustained
damages far in excess of the minimum jurisdictional limits
of this Court.
80. By reason of Plaintiff’s reliance on Defendants’
individual and/or collective fraudulent representations,
negligent misrepresentations and/or fraudulent concealment
of material facts as described in this complaint, Plaintiff
suffered actual damages.
81. Because Defendants individually and/or collectively,
knew that the misrepresentations made to Plaintiff were
false at the time they were made, such misrepresentations
are fraudulent, negligent or grossly negligent on the part of
Defendants, individually and/or collectively, and constitute
conduct for which the law allows the imposition of
exemplary damages.
Pl.’s Am. Compl. ¶¶ 12, 26, 29, 30, 33, 35. 74-76, and 78-81.
Like Young, these allegations do not sufficiently describe the actionable conduct of an
adjuster. For instance, though Plaintiff alleges that “Defendants did not inform Plaintiff of
certain exclusions in their policy and Plaintiff’s coverage,” Plaintiff fails to allege what specific

25

misrepresentations Crawford made. Plaintiff’s allegations amount to nothing more than the
unadorned “defendant unlawfully harmed me” accusation. Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 555).
Martines v. State Farm Lloyd and Manziel v. Seneca Ins. Co., Inc, are examples of cases
where courts found that the plaintiff pleaded enough facts against an insurance adjuster to state
an independent cause of action. Martinez v. State Farm Lloyd’s, No. 3:16-CV-00040-M, 2016
WL 4427489 at *1 (N.D. Tex. Aug. 22, 2016); Manziel v. Seneca Ins. Co., Inc., 3:15-CV-03786M, 2016 WL 3745686 at *1 (N.D. Tex. July 13, 2016). In Martinez, the insured, Martinez (“the
plaintiff”), filed suit in state court against the insurer, State Farm (“the insurer”), and the
adjuster, Williams (“the adjuster”), alleging that they improperly denied his claim. Martinez,
2016 WL 4427489 at *1. The court held that the allegations in the plaintiff’s complaint met the
Twombly pleading standard. Id. at *3. The court noted that the petition contained specific
descriptions of how the adjuster’s inspection was inadequate. Id. The court further noted that the
petition explicitly alleged that the inspection only took 20 minutes, it undervalued the cost of
repairs, it omitted some of the plaintiff’s damages, and finally the petition alleged how the
adjuster applied depreciation in excess without explanation. Id. The court reasoned that this
specificity created a reasonable basis in which the plaintiff may recover from the adjuster. Id.
In Manziel, the insured, Manziel and Oil Place Inc. (“the plaintiffs”), had property
insured by Seneca (“the insurer”). Manziel, 2016 WL 3745686 at *1. After the property
sustained wind and hail damage, the insurer assigned a third-party adjuster to the claim who in
turn assigned Keefer, a resident of Texas, to adjust the claim. Id. After receiving no payment, the
plaintiffs sued the insurer, the third-party adjusting company, and the adjuster, Keefer. Id. The
court found that the petition alleged facts against Keefer that were independent of those asserted

26

against the other defendants. Id. at *3 Specifically, the court noted that the plaintiffs alleged that
Keefer represented that there was no damage to the property, that Keefer hired an inadequate
engineer to assess the damage to the property, that Keefer refused to send a report to the
plaintiffs, and that Keefer failed to respond to emails or provide updates to the plaintiffs. Id.
Given the specificity in the petition, the court held that there was a reasonable basis to predict
that the plaintiffs may recover from Keefer. Id.
Unlike Martinez and Manziel, the statements in Plaintiff’s Amended Complaint are
conclusory and lack the specificity needed to state a claim. The statements are nothing more than
a formulaic recital of the statutory elements. With regard to the common law fraud claim,
Plaintiff merely points to the same conclusory allegations by referring to the same actions “as
described above.” “[T]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements do not suffice” under Rule 12(b). Iqbal, 556 U.S. at 668. Thus, concerning
its claims of fraud and negligent misrepresentation, Plaintiff fails to plead “enough facts to state
a claim that is plausible on its face.” See Twombly, 550 U.S. at 570.
2. Fed R. Civ. P. 9(b)
Even if Plaintiff’s Amended Complaint met the 12(b)(6) standard, it fails to meet the
specificity requirements of Rule 9(b) of the Federal Rules of Civil Procedure. See Grubbs, 565
F.3d at 186 (“Rule 9(b) supplements, but does not supplant Rule 8(a)’s notice pleading”).
Crawford argues that Plaintiff’s negligent misrepresentation and fraud claims also fail to comply
with the specificity requirements of Federal Rule of Civil Procedure 9(b), which requires, at a
minimum, identification of the “who, what, when, where, and how” of the alleged fraud. Def.’s
Mot. Dismiss at 13. (citing Together 6, LLC, 2015 U.S. Dist. LEXIS 118700, at *11). Plaintiff
contends that it sufficiently pleaded the particulars of the time, place and content of the

27

circumstances constituting fraud, as required by Rule 9(b). Pl.’s Resp. at 15. The following is a
summary of Plaintiff’s arguments in support of its contention:


Paragraph 26: Plaintiff alleges that it relied on
Crawford to assist it in the repair process.



Paragraphs 12, 29, 30, 33: Crawford completed a
substandard and biased investigation of the damage to
Plaintiff’s property during the claims handling process.



Paragraph 11: Specifically, Plaintiff alleges that Crawford
was assigned to adjust Plaintiff’s claim and did adjust it by
investigating, processing, evaluating, approving and/or
denying, in whole or in part, the claim. Id. at ¶ 11.



Paragraphs 12, 29, 30, 32: Plaintiff further alleges that
Crawford improperly evaluated the extensive losses,
completed a substandard inspection of the property,
retained an inadequate engineer, failed to conduct a fair
investigation, failed to properly request information, failed
to respond to requests for information, failed to timely
evaluate and estimate Plaintiff’s claim and failed to timely
and properly report and make recommendations to
Philadelphia regarding the claim.



Paragraphs 35, 55, 61, 76, 82: Due to these
misrepresentations, Plaintiff’s settlement has been delayed,
it has not receive the coverage it had contract for, and had
to retain claims consultants, engineers and an attorney to
protect and pursue the claim, and has suffered damages
including, but not limited to loss of business, loss of use of
business, mental anguish, attorney’s fees.

Pl.’s Resp. at 15-16.
When claims of fraud are dismissed as insufficiently pleaded, any statutory claims
depending on the same facts must also be dismissed Cf. Lone Star Ladies Inv. Club v.
Schlotzsky’s Inc., 238 F.3d 363, 368–69 (5th Cir. 2001) (suggesting that statutory claim
containing fraud invokes Rule 9(b) and insufficiently pleaded claim requires dismissal).
Although scienter may be alleged generally, “simple allegations that defendants possess

28

fraudulent intent will not satisfy Rule 9(b).” Mt. Olive, 2016 WL 4494439, at *5 (citing Dorsey,
540 F.3d 339).
Plaintiff’s claims based on fraud fall short of this standard. As discussed above, Plaintiff
merely alleges that Defendants—“misrepresented the insurance policy” and represented that the
damage to the roof was man-made. Notably absent from Plaintiff’s Amended Complaint is any
specific discussion as to how Plaintiff relied upon the misrepresented statements. Therefore,
Plaintiff’s Amended Complaint fails to state a claim for fraud. Moreover, due to these same
deficiencies, Plaintiff fails to allege sufficient facts to support its claim for negligent
misrepresentation.
In sum, all of Plaintiff’s claims against Crawford: (1) DTPA violations; (2) TIC and
Unfair Insurance Practices; and (3) common law negligent misrepresentation and fraud claims
fail to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure
12(b)(6). Furthermore, Plaintiff fails to meet the heightened pleading requirement of Rule 9(b) as
to Plaintiff’s DTPA, and common law negligent misrepresentation and fraud claims. Because
Plaintiff has failed to meet the requirements of Rule 12(b)(6) and alternatively Rule 9(b), this
Court need not address the issue of reliance. Because a motion for judgment on the pleadings
under Rule 12(c) is subject to the same standard as a motion to dismiss under Rule 12(b)(6),
Defendant’s Motion for Judgment on the Pleadings pursuant to Federal Rule of Civil Procedure
12(c) is hereby GRANTED.

29

D. Opportunity to Amend
At the tail end of its response to Crawford’s Motion to Dismiss, Plaintiff requests that the
Court, if it holds that Plaintiff failed to plead sufficient facts as to Crawford, allow Plaintiff to
file a third complaint. Pl.’s Resp. at 16-17. Plaintiff requests to “add in the minimal additional
details that Crawford alleges it is lacking.” Id. On October 31, 2016, Judge Robert Pitman
entered a scheduling order requiring the parties to file any motions to amend pleadings on or
before November 30, 2016. See ECF No. 13. Pursuant to that directive, Plaintiff amended on
November 30, 2016. ECF No. 25.
“[A] party seeking to amend its pleadings after a deadline has passed must demonstrate
good cause for needing an extension.” Hull v. City of New Orleans, No. 16-30316, 2016 WL
7118474, at *1 (5th Cir. Dec. 6, 2016) (citing E.E.O.C. v. Serv. Temps Inc., 679 F.3d 323, 333–
34 (5th Cir. 2012)) see Squyres v. Heico Companies, L.L.C., 782 F.3d 224, 238 (5th Cir. 2015)
(“because [Plaintiff] sought to amend his pleadings after the deadline set in the scheduling order,
[Plaintiff] had to satisfy Rule 16(b)’s standard and again demonstrate that he could not
reasonably have met this deadline despite exercising diligence.”). Requesting leave to amend
without showing good cause ensures denial of any such request. See id. Here, Plaintiff does not
even attempt to establish good cause. This failure, standing alone, warrants denial of Plaintiff’s
request for leave to file a third complaint.
Plaintiff had multiple opportunities to establish good cause for an extension to amend its
pleading. However, Plaintiff chose not to do so. Now, four months later, Plaintiff makes a
perfunctory, one-sentence request to amend at the end of its response to Defendant’s Motion to
Dismiss. Plaintiff already amended its complaint on the last possible day permitted by the
scheduling order. Moreover, under the local rules of the Western District of Texas CV-7(b),

30

when filing a motion for leave to amend, an executed copy of the proposed pleading must be
filed as an exhibit to the motion for leave. Loc. R. CV-7(b). Here, Plaintiff attaches nothing to its
request for leave, effectively blocking the Court from evaluating the merit of any proposed
amendment.
Plaintiff made the strategic decision to forego any meaningful attempt to demonstrate
good cause; rather, Plaintiff chose to rest on its First Amended Complaint and have this Court
divert its resources to evaluating the Motion to Dismiss and Plaintiff’s response thereto. By
doing so, Plaintiff stands firmly on the pleadings set forth in its First Amended Complaint.
Because Plaintiff: (1) fails to show good cause; and (2) fails to attach a proposed amendment or
make any meaningful attempt to re-plead and correct its pleading errors, the Court DENIES
Plaintiff’s request for leave to file its Second Amended Complaint.
IV. ORDER
For the reasons stated above, Crawford’s Motion for Judgment on the Pleadings pursuant
to Federal Rule of Civil Procedure 12(c) (ECF No. 37) is GRANTED and all claims as to
Defendant Crawford are hereby DISMISSED.

SIGNED April 6, 2017.

_ __________________________________
JEFFREY C. MANSKE
UNITED STATES MAGISTRATE JUDGE

31