Property Damage And Suing The Adjuster

Insurance law attorneys in Graford and Garner areas of Parker County need to keep up with court rulings concerning insurance issues. A recent case from a U.S. District Court, San Antonio Division is a good read. The style of the case is Spar Enterprises, LP v The Cincinnati Insurance Company and Elizabeth Ortiz.
Spar filed this case in State District Court and it was removed to Federal District Court based on Cincinnati’s allegation that Ortiz was not a proper party for defeating Federal jurisdiction.
Spar suffered storm damage and filed a claim with Cincinnati. Cincinnati assigned Ortiz to adjust the claim.
Spar’s petition alleged five causes of action. (1) Defendant’s breach of contract, (2) Cincinnati’s failing to accept or reject Spar’s claim within the statutory time frame, (3) Defendant’s violation of provisions of the Texas DTPA, (4) Defendants violated the Texas Insurance Code by unreasonable delays in their investigation, and (5) Defendant’s breached their duty of good faith and fair dealing.
Removal is proper when the parties are diverse and the amount in controversy exceeds $75,000.
Cincinnati alleges the parties are not diverse because Ortiz was improperly sued.
Cincinnati and Ortiz had to show there was no reasonable probability of Spar recovering from Ortiz to prevail in the removal.
The defendants are correct that the allegation of Ortiz breaking the contract could not be sustained because Ortiz was not a party to the contract.
Ortiz would not be liable for violation of the duty of good faith and fair dealing because that duty is non-delgable and does not extend to insurance company agents and adjusters.
However, the individual acts of adjusters can be held against them.
This Court found that the petition, construed as true and in Spar’s favor, which this Court must do, sufficiently states a claim against Ortiz. Spar alleged and Cincinnati conceded that Ortiz acted as an adjuster in investigating the claim. Spar alleged that in the course of investigating the claim, Ortiz violated numerous sections of the DTPA and Insurance Code. That Ortiz personally carried out transactions that form the core of Spar’s complaint.
Cincinnati argued that Ortiz’s role in investigation the claim was minor.
The court rejected that argument by pointing out facts in the record that showed Ortiz played a significant role in her duties as an adjuster.
In making it’s ruling, this Court stated, “In light of the Defendant’s heavy burden to show cause for removal and improper joinder, and through the lens of Texas’s fair notice pleading standard, Plaintiff’s Petition sufficiently alleges conduct by Defendant Ortiz to state a claim for violations of the Insurance Code and the DTPA.