Making a claim against the adjuster handling the claim is an advantage in lawsuits, or at least that is what many attorneys believe. A proper analysis of making a claim against an adjuster is discussed in this 2023 opinion from the Eastern District of Texas, Sherman Division. The opinion is styled, Lawrence Family Fund, LLC v. Westchester Surplus Lines Insurance Company, et al.
This is a property damage claim alleged to have occurred when Lawrence incurred a theft. A claim was made against Westchester and the adjuster Westchester hired to adjust the claim, Frederick Achala. The lawsuit filed in State Court and Westchester removed the case to Federal Court asserting that Achala was improperly joined in the lawsuit in an effort to defeat diversity jurisdiction under 28 U.S.C. Section 1441 and 28 U.S.C. Section 1332. Lawrence then filed this motion to remand claiming that Achala had not been improperly joined.
The statute permits the removal of any civil action brought in a State court of which the district courts of the United States have original jurisdiction.
Here is a 2023 opinion that finds the suing of the insurance adjuster was improper. The opinion is styled, Hang Nguyen, et al v. AmGuard Insurance Company, et al. The opinion is from the Eastern District of Texas, Sherman Division.
Plaintiffs own a homeowners insurance policy with AmGuard. After a hail and windstorm that caused damage to their property, the Plaintiffs submitted a claim under the policy for repairs. The adjuster assigned to the case is Shawn Mitchell. Coverage was eventually denied.
The Plaintiffs eventually sued AmGuard for breach of contract and both faith causes of action and various violations of the Texas Insurance Code. They sued Mitchell for civil conspiracy and various violations of the Insurance Code. After the action was filed, AmGuard filed an Election of Legal Responsibility, accepting any liability on behalf of Mitchell.
Suing insurance adjusters has been made clearer after the courts have made rulings interpreting Texas Insurance Code, Rule 542A.006(b). This is addressed further in a 2022, magistrate’s ruling from the Northern District of Texas, Abilene Division. The opinion is styled, David Buttross d/b/a FL20, Inc. vs. Great Lakes Insurance SE.
Valdez does not attack the sufficiency of the factual allegations in Plaintiff’s Complaint, but rather argues that the Plaintiff’s claim against her is foreclosed by state law, specifically because of Great Lakes’s election under Section 542A.006. As a general matter, the Fifth Circuit has determined that Rule 12(b)(6) motions to dismiss typically cannot be granted on affirmative defense grounds unless a successful affirmative defense appears clearly on the face of the pleadings.
Bad Faith Insurance Lawyers learn early on that the preferred places to litigate claims against insurance companies are State and County Courts, not Federal Court. Here is a 2022, opinion from the Northern District of Texas, Dallas Division, wherein the insureds prevailed in their attempt to litigate in State Court. The opinion is styled, Searcy Ferguson and Hanna Ferguson v. Cincinnati Insurance Company and John W. Schuster.
This is a claim for residential property insurance coverage after a hail storm. Plaintiffs suffered hail damage and filed a claim with their insurer, Cincinnati. Cincinnati assigned Schuster to adjust the claim.
Schuster issued a report denying Plaintiffs claim for benefits based on an engineering from EDT, an engineering firm. Plaintiffs hired their on engineer to provide Schuster and Schuster turned the report over to EDT. EDT determined there was some damage but that the damage was minimal compared to Plaintiffs report.
Bad Faith insurance claims are common complaints when dealing with claims being denied. When fighting these cases a common tactic is to sue the adjuster for the wrongs the adjuster did in causing the claim to be denied. When suing an adjuster the insurance company is going to always claim that the adjuster is not a proper party to be sued in the case. The relevance of whether the adjuster is sued or not often determines whether the case will be litigated in a State Court or in Federal Court.
Properly suing an adjuster was discussed in this 2022 opinion from the Northern District of Texas, Dallas Division. The case is styled, Art Dallas, Inc. v. Federal Insurance Company and Derek Franks.
In this case, ADI made a claim for wind and hail damage. The insurance company, Federal, sent it’s adjuster, Franks, to inspect the claim. Franks determined the damage from wind and hail was minimum and that the roof damage was due to “wear and tear.”
Claims against adjusters for violations of the Texas Insurance Code must be very specific. This is illustrated in a 2021, opinion from the Eastern District of Texas. The opinion is styled, Fred Vernon, II v. Palomar Specialty Insurance Company, Wellington Claim Services, Inc., One Call Claims, David Cardenas, and Tanya Spalding.
This case was filed in State Court and Palomar caused the case to be removed to Federal Court asserting that the adjusting companies were improperly joined in an effort to defeat diversity jurisdiction. Vernon filed a motion to remand which is the subject of this opinion.
Pursuant to 28 U.S.C., Section 1332, in removed cases where, as here, there is no suggestion that a federal question is involved, subject matter jurisdiction exists only if there is complete diversity among the parties and the amount in controversy exceeds $75,000.00.
Insurance lawyers time and time again have a difficult time properly suing insurance adjusters when their case is in Federal Court. This is illustrated in a June 16, 2021, opinion from the Northern District of Texas, Dallas Division. The opinion is styled, Thomas Paredes and Kerry Paredes v. The Cincinnati Insurance Company and John Schuster.
The Paredes had their property insured through Cincinnati. They incurred a hail storm loss properly reported it. Cincinnati assigned adjuster, Schuster to the claim. The Paredes were dissatisfied with the way the claim was handled and filed the present suit. The lawsuit was timely removed to Federal Court on the basis that Schuster (the Adjuster) was improperly joined and that without the Adjuster, diversity jurisdiction existed. The Paredes filed a motion to remand which is the subject of this opinion.
Cincinnati says the Adjuster was improperly joined in the lawsuit because the Paredes have not stated a cause of action against him.
Insurance lawyers keeping up with the relatively new Insurance Code Section, 542A.006 election need to read this well reasoned case from the Northern District of Texas, Fort Worth Division. The opinion is styled, Leonard D. Morgan, et al. v. Chubb Lloyds Insurance Company of Texas.
In this a homeowner’s claim for damage due to a storm. Plaintiff’s sued their insurance company, Chubb, and the adjuster handling the claim. The lawsuit was filed in State Court wherein a claim was made against the insurer and the adjuster. At the time the lawsuit was filed in State Court, Chubb had not exercised the 542A.006 election, to take responsibility for it’s adjuster.
After the lawsuit was filed, Chubb moved to accept responsibility for the adjuster and have the adjuster dismissed from the lawsuit. The State Court allowed the election and once this was complete, Chubb removed the case to Federal Court and this motion to remand was filed by Plaintiffs.
Yet another case after the passage of Texas Insurance Code, Section 542A.006, dealing with suing the adjuster in storm damage claims. This is an issue that will eventually be addressed by the 5th Circuit. For now, this case is from the Northern District of Texas, Dallas Division, and is styled, Grant Stowell v. United Property & Casualty Insurance Company and Samantha Jenkins.
Stowell has a policy of insurance with United Property (UPC). Stowell suffered property damage after a hail storm and filed a claim with UPC. UPC assigned the claim to Jenkins. Stowell was not happy with the way the claim was handled in sued UPC and Jenkins in State Court for various violations of the Texas Insurance Code.
After the lawsuit was filed, UPC filed it’s election of responsibility, pursuant to Section 542A.006(c), in the State Court. UPC then removed the case to this Federal Court. Both Stowell and Jenkins are Texas citizens and thus, the joinder of Jenkins in the lawsuit beats diversity jurisdiction and thus, renders a lack of jurisdiction for this Federal Court.