Here is a case to watch closely. The case is from the Eastern District of Texas, Sherman Division, and is styled, Charlotte Stephens v. Safeco Insurance Company of Indiana and Damon Edward Baker.
Stephens sued Safeco and Safeco’s adjuster, Baker, after a hail storm claim which resulted in a lawsuit being filed in State Court. Safeco removed the case to Federal Court and invoked Texas Insurance Code, Section 542A.006.
542A.006 authorizes an insurer to elect to accept full responsibility of an adjuster’s acts or omissions and mandates that the adjuster be thereafter dismissed from any action to which they are a party. This amendment spawns a novel question regarding removal based on diversity of citizenship under 28 U.S.C., Sections 1332(a), 1441(a), and 1446. Namely, whether an action instituted in state court against a diverse insurer and a non-diverse adjuster — nonremovable to federal court due to the lack of diversity of citizenship — becomes removable upon, and solely because of, the diverse insurer’s election to accept complete liability of the nondiverse adjuster. This Court found it did Not and remanded the case to State Court. In this case, the Court found that the original joinder of the adjuster was proper. Had the original joinder been improper the result would have been different.