Properly Suing An Insurance Adjuster

Lake Worth insurance lawyers know that one way of keeping out of Federal court, which is where insurance companies prefer to litigate, and staying in State court is to be able to state a legal cause of action against an insurance adjuster. This was successfully done in a recent U.S. District Court, Western District of Texas, San Antonio Division. The style of the case is, Joyce Birch v. Stillwater Insurance Company and Jimmie Pospisil.
This law suit arises out of damage caused to Birch’s home during a hailstorm. Birch submitted a claim to Stillwater for roof and water damage that her home sustained during the storm. The adjuster was Pospisil.
Birch sued Stillwater and Pospisil alleging Pospisil improperly adjusted the claim by failing to include many of her damages, disallowing funds to cover repair and restoration expenses, and reducing the number of shingles reported as damaged. That Pospisil’s failure to properly adjust the claim resulted in a failure to pay the full proceeds of Birch’s insurance policy and adequately settle the claim. She then sued for violations of the Texas Insurance Code, Section 541.
Birch filed her suit in State Court and the defendants removed the action to Federal Court, invoking the Court’s diversity jurisdiction.
To properly join an adjuster on a Section 541 claim, a plaintiff must allege facts showing that the adjuster, as an individual, committed a violation under Section 541. The parties do not dispute that, as an insurance adjuster, Pospisil could be liable under Section 541. Instead, they dispute whether the factual allegations regarding Pospisil’s conduct give rise to a claim.
Here, Plaintiff has made the following factual allegations with respect (1) “Pospisil was the agent for Stillwater and represented Stillwater in regard to Plaintiff’s claim.”
(2) “Pospisil . . . adjusted the Plaintiff’s claim by investigating, processing, evaluating, approving, and/or denying, in whole or in part, Plaintiff’s claim.”
(3)”Pospisil improperly adjusted the Plaintiff’s claim. Defendant Pospisil conducted a substandard inspection, which is evidenced in his report, which failed to include many of Plaintiff’s damages. His estimate did not allow adequate funds to cover repairs to restore Plaintiff’s home. Without limitation, Pospisil misrepresented the cause of, scope of, and cost to repair the damage to Plaintiff’s Property, as well as the amount of and insurance coverage for Plaintiff’s claim/loss under Plaintiff’s insurance policy. Pospisil made this and other misrepresentations to Plaintiff as well as to Stillwater. Plaintiff and Stillwater both relied on Pospisil’s misrepresentations, including but not limited those regarding the cause of scope of, and cost to repair the damage to Plaintiff’s Property, and Plaintiff has been damaged as a result of such reliance.”
(4) “Pospisil’s misrepresentations caused Stillwater to underpay Plaintiff on her insurance claim and, as such, Plaintiff has not been able to properly and completely repair the damages to Plaintiff’s property. This has caused additional, further damage to Plaintiff’s property.”
(5) “Pospisil . . . advised Plaintiff as to how she could repair her Property so as to prevent further damage to the Plaintiff’s Property. This advice was negligent and false because it turns out Plaintiff could not properly repair her Property and prevent future damage by following Pospisil’s advice. Plaintiff’s Property has sustained further damages as a result.”
(6) “Stillwater and Pospisil misrepresented that the damages caused by the wind and hailstorm were below the policy deductible. However, Defendants’ representations were false because Plaintiff’s wind and hailstorm damages exceeded $33,000.00 and were caused by a covered occurrence.”
(7) “Stillwater and Pospisil knowingly disregarded their own property inspection report by misrepresenting that only seven shingles were damaged, when in fact they had already acknowledged that more than 25% of the shingles on Plaintiff’s roof were lifted from wind.”
(8) “Stillwater and Pospisil failed to properly adjust the claims and Defendants have denied at least a portion of the claims without an adequate investigation.”
In sum, the crux of Birch’s allegations against Pospisil is that, following the inspection, Pospisil failed to properly document all of Birch’s damages, including misrepresenting the shingle damage to Birch’s roof, which affected his estimate of the claim and the benefits that Stillwater ultimately paid out to Birch. Defendants are correct that a plaintiff must raise specific factual allegations that, if true, give rise to claims against an insurer and its agent individually. However, they are incorrect that Birch has failed to do so in this case. Birch makes factual allegations that specifically identify conduct that can give rise to liability under Section 541. Taken in the light most favorable to Birch, these allegations are sufficient to state a claim under Section 541 against Pospisil.
Thus the case was remanded back to State Court.