Federal Court And Home Owners Claim

Irving insurance attorneys want to be aware of the proper ways of avoiding Federal Court to best help their clients. This is illustrated in a 2016, Southern District, Houston Division opinion styled, Hector Puente and Teresa Rivera v. Pillar Insurance Company and Matthew Greenhouse.
This case was removed from State Court by Pillar.
Plaintiffs had a homeowners policy with Pillar. They allege that Greenhouse is an independent licensed adjuster who mishandled their claim in various ways, including “failed to properly adjust the claim and summarily improperly denied the claim with obvious knowledge and evidence of serious cosmetic and structural damage.
Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree. Any state court civil action over which the federal courts would have original jurisdiction may be removed by the defendant to federal court. A removing party bears the burden of establishing both the existence of federal subject matter jurisdiction and that removal is otherwise proper.
A non-diverse defendant may be found to be improperly joined in an action if there is actual fraud in the pleading of jurisdictional facts or the removing defendant demonstrates that the plaintiff is unable to establish a cause of action against the non-diverse defendant.
The Fifth Circuit has repeatedly explained that the defendant seeking remand must demonstrate that there is no possibility of recovery by 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.
Applying the Texas “fair notice” pleading standard, the Court is unpersuaded by Pillar’s contention. Although Plaintiffs’ Petition is highly general, there are comprehensible state law claims asserted against Greenhouse. Specifically, in paragraph 12 of the Petition, Plaintiffs allege conduct that clearly pertains to the insurance adjuster. (alleging that Defendants “failed to properly adjust the claim…with obvious knowledge and evidence of serious cosmetic and structural damage”). Although Plaintiffs refer to “Defendants” in the plural, the allegations are sufficient to alert Defendants of Plaintiffs’ theory that Greenhouse, the adjuster, knowingly failed to perform his duties to identify covered damage to Plaintiffs’ home. The Petition also alleges a second pertinent claim, namely, that Defendants violated the Texas Unfair Competition and Unfair Practices Act, TEX. INS. CODE § 541.060(1), (2), by “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” and by “failing to make an attempt to settle Plaintiffs’ claim in a fair manner, although they were aware of their liability to Plaintiffs under the policy.”
These allegations give fair notice of the subjects of the claims against Greenhouse.
The presence of potentially viable claims against a non-diverse defendant, Greenhouse, deprives the Court of subject matter jurisdiction. The Court must therefore must remand the case to Texas state court.