Hail Claims And Staying Out Of Federal Court

Lawyers who handle hail claims know the insurance companies prefer to fight lawsuits in Federal Court. Hail claims lawyers know one way of defeating the insurance company desire to be in Federal Court is by suing the adjuster. The Sherman Division, Eastern District issued an opinion illustrating how to Not file a lawsuit against an adjuster. The style of the opinion is Walters v. Metro. Lloyds Ins. Co.
The Walters residence sustained hail damage. The insurance company, Metropolitan, assigned Buchanan to adjust the claim. The claim was denied and Walters sued Metropolitan and Buchanan in State Court and the case was then moved to Federal Court by Metropolitan and Buchanan.
The only question at this point in the case is whether or not Buchanan was improperly joined as a defendant to defeat diversity jurisdiction.
Part of this is governed by 28 U.S.C. Section 1332. This removal statute is to be strictly construed, and any doubt about the propriety of removal must be resolved in favor of remand.
A defendant who contends that a non-diverse party is improperly joined has a heavy burden of proof. In making its determination, the court must ordinarily evaluate all of the factual allegations in the plaintiff’s state court pleadings in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of plaintiff. The court then determines whether the plaintiff has any possibility of recovery against the party whose joinder is questioned. If there is a reasonable basis for predicting that the state law might impose liability on the facts of the case, then there is no fraudulent joiner.
An analysis of the causes of action must be conducted.
The question for the court is whether Metropolitan has shown that Plaintiffs have no possibility of establishing a valid cause of action against the non-diverse, Buchanan.
Metropolitan correctly points out that under Texas law an insured may have a valid cause of action against an insurance adjuster under the proper circumstances, but only if sufficient facts exist and are pleaded involving allegedly harmful conduct by that adjuster. Texas law does permit adjusters like Buchanan to be held individually liable according to Texas Insurance Code, Section 541.002(2). But for an adjuster to be held individually liable, they have to have committed some act that is prohibited by the section, not just be connected to an insurance company’s denial of coverage.
There were no such allegations in this case. Plaintiff’s lawsuit only alleges that Metropolitan was the insurance company and Buchanan was the adjuster hired to investigate the claim. And the lawsuit cites misdeeds and actions by Metropolitan but nothing specific that Buchanan did that was improper.
Stating Buchanan’s investigation caused Plaintiffs harm because it resulted in an undervaluation of the claims is not sufficient because there is no factual allegations of independent conduct on Buchanan’s part which caused any harm to Plaintiffs.
Based on these allegations in the lawsuit, the Court found no reason to find liability against Buchanan and thus Plaintiffs Motion to Remand was denied.