Dallas Fort Worth Insurance Lawyer Blog

If someone in Hurst, Euless, Bedford, Fort Worth, Cedar Hill, Crowley, Burleson, Irving, Grand Prairie, Arlington, Mansfield, or anywhere else in Texas, has to file a lawsuit because their homeowners insurance company is denying their claim, one thing they want for sure is a successful outcome. The best outcome is usually going to occur in a State or County court, not in a Federal Court. As a result of this knowledge among insurance company attorneys, they will always try to get a case moved to Federal court if there is any way possible of doing so.
This was attempted in the case styled, James N. Wofford, et al v. Allstate Texas Lloyd's and Randy Paul Johnson. The opinion in this case was signed on June 9, 2010, By Federal Judge, Kenneth M. Hoyt, a Judge in the United States District Court, S. D. Texas, Houston Division.
In this case, the homeowner, James Wofford, had a policy of insurance with Allstate Texas Lloyd's. Wofford's home was damaged by Hurricane Ike. Wofford filed a claim with Allstate and Allstate assigned adjuster Randy Paul Johnson, to handle the claim. Johnson was named as one of the defendants in the lawsuit. This case was filed in the 11th Judicial District Court of Harris County, Texas, and Allstate immediately filed papers to have the case removed to federal court.
Allstate is a business with its headquarters located outside the state of Texas. When a person or business who resides outside the state is sued in a state court the person or business sued has a right under Federal laws, to have the case removed to a Federal court. This is what Allstate was attempting to do. But these same laws say that if more than one person or business is sued and one or more of those sued is a resident of the state of Texas, then the case must remain in the District or County court in which it is filed and cannot be removed to Federal court.
What was being alleged by Allstate in this case was that the adjuster, Johnson, was improperly sued by Wofford and that the only reason Wofford sued Johnson was not because Johnson had really committed any wrong but because Wofford was just trying to keep the case in a state or county court. Allstate contended that Wofford failed to make the required "factual fit" between his asserted theories of recovery and his allegations. As a consequence, Allstate argued that there is no reasonable possibility of recovery against Johnson. Based on this arguement by Allstate, Wofford had to articulate the reasons why the allegations against Johnson were allegations that were particular to Johnson and could have been brought against Johnson by himself without the joiner of Allstate.
In response, Wofford set out the pertinent parts of Texas Insurance Code, Section 541.060 that Johnson violated as an adjuster.
Summarizing the allegations against Johnson the Federal court stated, "the plaintiff's allege in their petition that: (1) their property was damaged as a result of Hurrican Ike; (2) their property was insured at all material times hereto under a Policy issued by Allstate; (3) Allstate assigned Johnson to adjust their claim and inspect their property; and (4) Johnson allegedly mishandled their claim, by inter alia, failing to fulfill his duties in the manner prescribed by the Texas Insurance Code, including misrepresenting the extent of the Policy's coverage, failing to attempt a fair settlement, failing to explain Allstate's reasons for offering an inadequate settlement and/or denying payment. Based on these allegations, the plaintiffs allege that Johnson's conduct amounts to violations of the Texas Insurance Code for which he can be held personally liable."
Thus, Allstate's attempt to have the case removed from the State District court to the Federal Court was denied.
An experienced Insurance Law Attorney will understand what an insurance company is going to attempt prior to filing the lawsuit. Knowing this, the attorney will draft paperwork to defeat the attempts by the insurance company if there is any way possible of doing so.

There are many times where the insurance adjuster himself, commits a wrong against a policy holder. This is an important issue. Here is why. When an Insurance Law Attorney is representing a client in a claim there are a lot of strategies. One important strategy is to file a lawsuit in a court that is most favorable to achieving a favorable result. In that regard, State Court is almost always a better place to fight the insurance company than is Federal Court. Most insurance companies have home bases located out-of-state whereas 99% of adjusters will live in-state. This matters because the Federal Rules of Civil Procedure require that out-of-state defendants in a lawsuit be allowed to defend themselves in Federal Court unless there is more than one defendant and atleast one of the other defendants is an in-state resident.

For the reason explained in the first paragraph, it is important to be able to articulate a particular wrong that the in-state adjuster committed. The adjuster will be defended by an insurance company, usually the employer, thus a lawsuit against the adjuster in his individual capacity is not a futile act. Insurance company attorneys are going to always want to get the lawsuit removed to Federal Court if there is any way possible to do so. Repeating what was just said, this is because Federal Court is usually more favorable to the insurance company.

A case decided on October 27, 2009, discusses this issue. The case, Lakewood Chiropractic Clinic v. Travelers Lloyds Insurance Company and Sonja R. Victor, was a claim for benefits resulting from hurricane damages. Lakewood alleged that the adjuster, Sonja, violated several insurance statutes. Lakewood also alleged these same violations of Travelers. The problem here is that there was not a distinction made between what Sonja did and what Travelers did, that was wrong.

This is an example of where a full understanding of how the Texas Insurance Code allows for claims against an adjuster in her individual capacity. Texas Insurance Code, Section 541.151 gives guidance in this regard and points to other relevant areas in the Insurance Code and the Texas Business & Commerce Code, Section 17.46(b), that are helpful.

A failure to fully draw a distinction between the acts committed by an adjuster which are actionable in Texas, and the acts of the insurance company, will result in the case being tried in Federal Court. The advantage then will be in favor of the insurance company.

The above is just another example for why an experienced Insurance Law Attorney should be involved in any claims being made against an insurance company. Early involvement by an experienced Insurance Law Attorney is more likely to insure a favorable outcome to the policy holder.