Insurance Lawsuits

When someone in Weatherford, Aledo, Hudson Oaks, Peaster, Springtown, Azle, Millsap, Cool, Poolville, Whitt, or out in Mineral Wells, finds themselves in a situation where they have to hire a lawyer and file a lawsuit against an insurance company, they want to win the case. The best chance of doing that is making sure the lawsuit is in a State Court rather than a Federal Court. There are many reasons why a State Court is preferable to Federal Court. All someone really needs to know is that every time an insurance company lawyer can get a case removed from State Court into a Federal Court, they are going to do so. The other thing they need to know is to seek the advice of an experienced Insurance Law Attorney. He will know the best strategies for keeping a case in a State Court.
On January 24, 2011, the United States District Court, Southern District of Texas, Houston Division, issued an opinion in a case where the issue was discussing, in which court the lawsuit should be litigated. The style of the case is, Scott Browning v. Sentinel Insurance Company and Cavalry Construction Co.
Browning had filed the lawsuit in the 11th Judicial District Court of Harris County, Texas, alleging that Calvary, violated provisions of the Texas Insurance Code.
The lawsuit arose in the following way. Sentinel issued an insurance policy to Browning, who is a Texas resident. After his home was damaged during Hurricane Ike, Browning submitted a claim for the property damage. Browning alleges in the lawsuit that Sentinel assigned Calvary to adjust the claim. Legally, Calvary is a Texas resident and Sentinel is not a Texas resident. Uncontroverted evidence submitted establishes that Calvary is not an adjuster and merely provided an estimate for repair work for Browning’s home, thus was not a proper party to this insurance dispute.
The issue in these types of cases is called “jurisdictional.” In this case, if Calvary is out of the case then the only defendant is Sentinel, who is an out of state defendant and when the only defendant is an out of state defendant and certain other qualifications are met, the defendant can have the case removed to Federal Court.
Here is some of the language the court used in allowing the case to be removed from State Court to Federal Court: Sentinel asserts that Calvary was improperly joined. A non-diverse defendant may be found to be improperly joined if either there is “actual fraud in the plaintiff’s pleading of jurisdictional facts” or the removing defendant demonstrates that plaintiff cannot establish a cause of action against the non-diverse defendant. There is no allegation of actual fraud in Browning’s pleading of the jurisdictional facts in this case.
The test under the second prong “is whether the defendant has demonstrated that there is no possibility of recovery by the plaintiff against the in-state defendant, which stated differently means 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.” The party asserting improper joinder bears a heavy burden of persuation. Any doubt about the propriety of removal must be resolved in favor of remand. If necessary, the district court may “pierce the pleadings” and consider other evidence to determine whether, under controlling state law, the non-removing party has a basis in fact for a valid claim against the non-diverse defendant. This is particularly appropriate where the plaintiff has “misstated or omitted discrete facts” that are relevant to or dispositive of the improper joinder analysis.
The Texas Insurance Code, Section 541.002 prohibits certain practices by persons “engaged in the business of insurance.” In this case, the uncontroverted evidence establishes that Calvary is a construction company that was hired by Sentinel to provide an estimate or appraisal of repair costs for the damage to Plaintiff’s home. It is well established that Texas law does not recognize a claim under the Texas Insurance Code against independent firms who are hired to provide engineering or similar services to the insurance company. Walker has not cited any exception in which an independent construction firm hired by the insurance company to provide an estimate or appraisal of repair costs is held to be a person engaged in the business of insurance for purposes of the Texas Insurance Code.
The Court then pointed out, in this case, there is no evidence that Calvary participated in any way in the sale or servicing of Browning’s insurance policy, made representations to Browning regarding the coverage under the policy, or adjusted the claim. Instead, the uncontested evidence establishes that Calvary provided an estimate. As a result, there is no reasonable basis to predict that Browning could recover against Calvary on his Texas Insurance Code claim.
The Court then ruled: “For the foregoing reasons, the Court concludes that Calvary was improperly joined and its citizenship cannot be considered in determining whether this Court has subject matter jurisdiction based on diversity of citizenship. Because there is complete diversity between Browning and Sentinel, and because the amount in controversy exceeds the jurisdictional amount, the Court has subject matter jurisdiction in this case. It is hereb ordered that Plaintiff’s Motion to Remand is Denied.”