Suing The Insurance Adjuster

Insurance Law Attorneys in Grand Prairie, Irving, Duncanville, De Soto, Lancaster, Mesquite, Garland, Richardson, Farmers Branch, or anywhere else in the state of Texas will usually want to sue the adjuster who handled the claim in addition to suing the insurance company when a claim is denied. There are reasons for this. But the insurance company will fight the issue.
The United States District Court, Southern District, Galveston Division, issued an opinion in a case on August 10, 2011, wherein the court allowed the adjuster to be sued over the objections of the insurance company. The style of the case is, Juan Jose Cruz, Lidia Cruz and Griselda Cruz v. Allstate Lloyds and Pilot Catastrophe Services, Inc. It is property damage claim following Hurricane Ike.
In this Federal Court case, the Cruz’s filed a “Motion for Leave to File Amended Complaint” for the purpose of adding to the lawsuit the individual adjuster who handled the investigation of the claim. Of relevance to the court was that by adding the adjuster the case still remained in Federal Court whereas often times the addition of the adjuster causes the case to be remanded to State Court.
The insurance company position was that the adjuster should not be added to the lawsuit because the Cruz’s amended complaint fails to state a claim under applicable state law. The insurance company stakes its position on a 2007, United States Supreme Court case, Bell Atlantic Corp. v. Twombly, wherein the Court set a very high standard for reviewing the pleading of plaintiffs, making sure that the pleading clearly stated a claim under applicable law.
In the Twombly case, the Supreme Court sought to ensure that in complex litigation the substantial burden of discovery would not be placed on a defendant based on implausible allegations. On controverting argument however is that the height of the pleading requirement should be relative to the circumstances of the case at hand. The court then said that this case, and the multitude of others like it are noncomplex, straight-forward property damage claims involving allegations of substandard adjustment practices; the cases are unique only because the properties differ. In such cases, all that need be alleged are “facts that, if proven, could make it reasonably possible for a Texas court to find” that a defendant violated certain provisions of the Texas Insurance Code. Allegations against an adjuster like failing to perform a thorough investigation; failing to include all damages pointed out by Plaintiffs; disregarding damages; undervaluing damages; underpricing the costs of repairs; misrepresenting to Plaintiffs that the damage to the property was not covered under the policy, even though the damage was caused by a covered occurrence; failing to make an attempt to settle Plaintiffs’ claims in a fair manner, although aware of liability under the policy; failing to explain to Plaintiffs’ the reason for the offer of an inadequate settlement; failing to affirm or deny coverage within a reasonable time; and performing an outcome oriented investigation of Plaintiffs’ claim are sufficient.
Then this Court said that surely, the Defendants in this and similar cases can, without much intellectual effort, divine from Plaintiffs’ allegations that the adjuster is being accused of intentionally or negligently cheating Plaintiffs out of legitimately owed insurance proceeds. If, through discovery, these “factual allegations” prove to be true, there is a reasonable possibility that the Plaintiffs could establish some violations of the Texas Insurance Code committed by the adjuster, if not, summary judgment would be the appropriate way to resolve the issue on the merits.
This case is a victory for people needing to sue an insurance company and its adjusters.