Dallas Fort Worth Insurance Lawyer Blog

Adjusters in Grand Prairie, Dallas, Irving, Richardson, Garland, Mesquite, Carrolton, Farmers Branch, Duncanville, or anywhere else in Texas, who make a mistake in their job that costs an insurance customer money, can be sued for what he cost the insurance customer. The tricky thing is doing it in the most advantageous manner.
Usually the individual adjuster does not have to be sued. Suing his employer, the insurance company, is often times just as good. But sometimes there is a legal advantage to suing the adjuster and the company. Often times, if just the company is sued, the case can be removed from the State Court in which it was filed, to a Federal Court. There are advantages to the insurance company for doing a removal. That is why they do it.
One way of defeating the attempt at removal is by suing the insurance adjuster and not just the insurance company. However, doing it this way must be done correctly.
The United States District Court, Southern District, Houston Division, issued an opinion on July 25, 2011, dealing with this issue. The style of the case is Emma Gonzales v. Homeland Insurance Company of New York, et al.
In this case, the lawsuit was filed in State Court and then Homeland had the case removed to Federal Court. Here is some background:
This is an insurance case where Ms. Gonzales alleges her house sustained roof and water damage as a result of Hurricane Ike. Her house was covered by an insurance policy issued by Homeland. She submitted a claim and Homeland assigned its employee adjuster, defendant Ball, to adjust the claim. The adjuster then hired an adjusting firm, defendant Precise, who assigned defendant Murphy, to inspect the damage. Gonzales alleged in the lawsuit that:
Defendant Murphy conducted a substandard inspection of Plaintiff's property. Murphy spent a mere twenty minutes inspecting Plaintiff's entire property for hurricane damages. This is evident in his report, which failed to include all of Plaintiff's Hurricane Ike damages noted upon inspection. Moreover, the damages that defendant Murphy actually included in his report were grossly undervalued. Defendant Ball also actively participated in the investigation of Plaintiff's claim. Specifically, she corresponded with Plaintiff regarding her claim in a letter dated October 24, 2008. Ball's letter shows that she failed to thoroughly review Murphy's assessment of the claim and ultimately approved Murphy's inaccurate report of the damages. As a result of these defendants' unreasonable investigation, Plaintiff was considerably underpaid on her claim and has suffered damages.
In discussing this case, the court stated the law wherein, after removal a plaintiff may move to remand and, if "it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." This is found at 28 U.S.C. Section 1447(c). But removal statutes are construed strictly against removal and for remand. All doubts regarding whether removal jurisdiction is proper should be resolved against federal jurisdiction. This means that once a motion to remand has been filed, the burden is on the removing party to establish that federal jurisdiction exists. This means that, "All factual allegations are evaluated in the light most favorable to the plaintiff."
The United State 5th Circuit Court of Appeals recognizes two ways to establish improper joinder when, as here, the defendant alleges that the adjuster was brought into the case for the sole purpose of defeating removal to federal court. First, that there is actual fraud in the pleading of jurisdictional facts, or second, the inability of the plaintiff to establish a cause of action against the non-diverse party in state court. Under the second test, the defendant prevails only when it establishes "that there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against an in-state defendant." A reasonable basis for state liability requires that there be a reasonable possibility of recovery, not merely a theoretical one.
In ruling against the remand and allowing this case to be removed to Federal Court the court said:
"The question here is whether there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against Precise or Murphy, the instate defendants. Defendants urge that Gonzales cannot recover from Precise or Murphy because she has failed to allege viable claims against the adjuster defendants .... Gonzales argues that defendant Murphy created a wholly deficient report as a result of his substandard inspection of the claim, which was in part, the cause of much of Plaintiff's damages complained about in this suit. Nowhere, however, does Gonzales plead any specific facts, or explain the what, where, when, and how, to support these allegations."
This writer believes the court made an incorrect ruling in this case. Maybe the decision will be reversed if it is appealed. One thing is certain. An experience Insurance Law Attorney should be consulted when contesting a denial of benefits on an insurance claim. There are many strategies to ponder in deciding the best way to proceed.

When an adjuster in Grand Prairie, Arlington, Fort Worth, Burleson, Crowley, Lake Worth, Grandview, Benbrook, Britton, Joshua, or anywhere else in Texas commits a wrong, can the insurance company be held responsible?
That question was answered in 1936, by the Beaumont Court of Appeals in the case, Love et al. v. Aetna Casualty & Surety Co. et al. Here are some facts in the case.
Tom Love, Victoria Houston, and Cora Davis were a brother and sisters of Orange Love, deceased. They brought this lawsuit to recover damages for the mutilation and unlawful dissection and autopsy performed without there knowledge or consent in and upon the dead body of their brother, Orange Love.
When Orange Love died, his sister Cora Davis sent his body to Carter & Sutton, undertakers, for burial. While the body was in the possession and charge of Carter & Sutton, it was taken possession of by Drs. Goodson and Stout and an autopsy was performed upon the corpse in which the body was thoroughly explored by opening same and taking out the heart, kidneys, liver, spleen, and bowels, and these were cut into, portions denuded therefrom and never returned, but carried off for chemical investigation. All this without the permission of his relatives, and without their knowledge and consent. After learning of he autopsy, the body was buried and this suit followed.
Prior to his death, Orange Love had been an employee of and worked for the San Antonio Compress Company, which carried compensation insurance covering its employees with Aetna Insurance Company. Love had complained that he had suffered an injury to his abdomen while handling a bale of cotton, and had made claim to the compensation board for compensation under the insurance carried by Aetna. Pending his claim before the board, he died. His relatives continued the claim. Aetna filed notice of denial of the claim and filed with the board a copy of the report on the autopsy held on the body of Love.
C. E. Klein, with an office in San Antonio, was the claim adjuster for Aetna, and received and handled the claim of Love for compensation because of his alleged injury. Klein, as the claim adjuster, went to the local Justice of the Peace to get the authority to conduct the autopsy.
Klein testified to the actions he took in investigating the claim of Love. He testified that he was taking his actions in the course of his work. That he gave the Judge the information needed to sign off on the autopsy. He arranged for payment of the bills for the autopsy by Aetna.
In this appeal, Aetna insisted that if the autopsy was illegally performed, that Klein was operating outside his scope of authority, was not within his scope of employment, and had neither express or implied authority to seek a wrongful autopsy.
Further testimony by Klein revealed that he had complete authority to make complete settlements in a case. That he was in charge of the Adjustment Department, and that his adjustments are final, unless they were submitted to the Home Office. He also testified that Aetna gave him no instructions in this case.
At the trial court level, the trial Judge allowed Aetna to get out of the case. This appeals court said that was wrong and reversed that opinion and put Aetna back in the case and remanded this case to the trial court for further disposition with Aetna.
In its ruling the court stated, "We think it plainly appears that Klein in procuring the autopsy was acting as the fully authorized agent of [Aetna], within the scope of his employment, and in the exercise of his discretion given him in the investigation of and approval or rejection of claims against his company. But if not, still [Aetna] is liable because after the autopsy was had, it approved Klein's acts and paid the doctors for their services in performing the autopsy, and accepted the benefits of same by receiving the report of the autopsy from the doctors and filing a copy of same with the Industrial Accident Board where the claim for compensation for the death of Orange Love was then pending, and which was later refused."
In this case, the autopsy had been illegally obtained and Aetna tried to distance itself from the illegal acts of their adjuster. They were unsuccessful. It is vital to get with an experienced Insurance Law Attorney when an adjuster does an act in investigating a claim that is illegal or improper.