Hail Damage Claims And Removal To Federal Court

Fort Worth insurance lawyers handling hail damage claims need to read this U.S. District Court, Northern District, Dallas Division ruling. It is styled, Angela Glidewell v. Safeco Insurance Company of Indiana, et al.
This case arises from the alleged mishandling of Glidewell’s insurance claim for damage to her home caused by a hailstorm. The case was filed in County Court, then removed to Federal Court based on Safeco’s allegation that Glidewell improperly joined the adjuster, Davis, to defeat diversity jurisdiction.
Glidewell alleges that Davis improperly adjusted the claim on the damaged property by conducting a “substandard investigation and inspection.” Davis allegedly failed to report all of the damage he observed during the inspection and “undervalued the damages.” Glidewell further alleges that Davis’s misrepresentations led Safeco to underpay on the insurance claim. In sum, Glidewell asserts that “Safeco and Davis performed an outcome-oriented investigation, . . . resulting in a biased, unfair, and inequitable evaluation” of Glidewell’s property losses.
28 U.S.C. Section 1441(a) permits the removal of “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.” The statute allows a defendant to “remove a state court action to federal court only if the action could have originally been filed in federal court.” However, the removal statute must be strictly construed because “removal jurisdiction raises significant federalism concerns.” Therefore, “any doubts concerning removal must be resolved against removal and in favor of remanding the case back to state court.”
There are two principal bases upon which a district court may exercise removal jurisdiction: the existence of a federal question, and complete diversity of citizenship among the parties. Here, the removing defendants have alleged only diversity of citizenship as a basis for this court’s jurisdiction. The court can properly exercise jurisdiction on the basis of diversity of citizenship after removal only if three requirements are met: (1) the parties are of completely diverse citizenship, (2) none of the properly joined defendants is a citizen of the state in which the case is brought, and (3) the case involves an amount in controversy of more than $75,000. In this case, both Glidewell and Davis are citizens of Texas.
Even if a defendant has the same citizenship as the plaintiff, a federal court can still exercise removal jurisdiction over an action if the court finds that the plaintiff improperly joined the non-diverse defendant. The Fifth Circuit has recognized two grounds on which a court can find that a defendant was improperly joined:
(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.
Only the latter ground is at issue here. To satisfy the second ground for improper joinder, the defendants must demonstrate that “there is no possibility of recovery by the plaintiff against an 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 seeking removal bears the heavy burden of proving that joinder was improper. This burden requires the trial court to resolve all “contested issues of material fact, and any ambiguity or uncertainty in the controlling state law” in the plaintiff’s favor. The court can only deny the plaintiff’s motion for remand if, as a matter of law, there is absolutely no possibility that the plaintiff can state a valid claim against the non- diverse defendant in state court.
Glidewell contends that Davis violated various sections of Chapter 541 of the Texas Insurance Code and the Deceptive Trade Practices Act. Texas law recognizes suits against insurance adjusters in their individual capacities under the Texas Insurance Code, Section 541.002(2).
Because Texas law recognizes claims against adjusters like Davis in their individual capacities, the relevant inquiry is whether Glidewell has properly stated a claim against Davis for his conduct as an individual adjuster. In making this determination, the question before the court is whether “there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against” Davis. If the court finds a reasonable basis to predict she can potentially recover on any of these causes of action, the court must remand the entire case.
The court found that Glidewell pleaded a potentially valid claim for relief against Davis under the Texas Insurance Code. Glidewell’s petition identifies Davis as the insurance adjuster and specifically alleges that he violated Section 541.060 (a)(1) by “misrepresenting to Plaintiff a material fact or policy provision relating to coverage at issue.” Thus, the case was remanded back to the County Court.