Articles Posted in Insurance Adjusters

Here is another of the cases where the insured is suing the insurance adjuster and the insurance company is arguing the new law found in the Texas Insurance Code, Chapter 542A governs the case.  The case is from the Southern District of Texas, Houston Division.  It is styled, D.U.R. Properties LLC v. Amrisc LLC et al.

This case arises out of a storm damage claim.  DUR had insurance coverage with Certain Underwrites at Lloyd’s London (Lloyd’s).  DUR made a claim with Lloyd’s.  Amrisc adjusted the claim for Lloyd’s and DUR alleges that Amrisc did a poor job adjusting the claim.  DUR sued Lloyd’s and Amrisc in State Court and Lloyd’s had the case removed to Federeal Court based on the assertion that Amrisc, a Texas resident, was improperly joined and thus, diversity jurisdiction exists between Lloyd’s and DUR.

Fraudulent joinder – a heavy burden – requires the moving party to show either: (1) actual fraud in the jurisdictional pleadings of the facts; or (2) the plaintiff is unable to establish a claim against the non-diverse party in state court.  Lloyd’s does not assert actual fraud and instead agrees that DUR and Amrisc are Texas citizens.  Thus, the Court turns to whether Lloyd’s can show DUR is unable to establish a claim against Amrisc in State Court.

As most insurance lawyers know by now, an insurance company can accept responsibility for the conduct of it’s adjusters when the claim is caused mother-nature and by doing so will defeat diversity jurisdiction and allow a lawsuit to be litigated in a Federal Court rather than a State Court.  The law dealing with this issue is found in the Texas Insurance Code, Section 542A.006.

Another interpretation of this law was at issue in a May 2020, opinion from the Western District of Texas, El Paso Division.  The opinion is styled, Project Vida and P.V. Community Development Corporation v. Philadelphia Indemnity Insurance Company and Robert L. Betts.

Plaintiff sued Philadelphia and Betts in State Court after a dispute arose concerning the handling of Plaintiffs claim after a hail storm.  Plaintiffs allege that Philadelphia and the adjuster, Betts, mishandled the claim.  Philadelphia and Betts removed the case to Federal Court based on diversity jurisdiction and the assertion that Betts was improperly joined in the lawsuit in an effort to defeat diversity and in response Plaintiffs filed a Motion to Remand asserting that Betts was properly joined in the lawsuit..

Insurance lawyers know the insurance laws change every year and know that they have to keep up with those changes.  One significant change was when Texas Insurance Code, Section 542A was added.  While this change is to the advantage of the insurance company, there are times when the insurance company does not properly take advantage of the change.

This happened in a 2020 case in the Southern District of Texas, Houston Division, styled, Mohammad Shenavari v. Allstate Vehicle and Property Insurance Company, et al.

Shenavari, a homeowner with insurance through Allstate suffered storm damage and made a claim with Allstate.  Allstate assigned adjuster Idolina Stockert to the claim.  Stockert made an offer to Shenavari that was unacceptable and a lawsuit being filed in State Court suing Allstate and Stockert resulted.

Insurance lawyers know that suing an adjuster when it can be done, is preferable to not suing the adjuster.  There are reasons for this that have been discussed in previous blogs.  The Southern District of Texas, Brownsville Division, had a case dealing with this issue in February 2020.  The style of the case is, Faith Pleases God Church Corporation v. Philadelphia Indemnity Insurance Company, et al.

Church sued Philadelphia and VeriClaim, Inc. and adjuster John Adame stemming from underpayment of the Church’s claim for property damage resulting form a storm.  Church filed a claim with Philadelphia who assigned VeriClaim to the claim and Adame is their employee who investigated the claim.

Church alleges VeriClaim and Adame prepared an undervalued damages report allowing Philadelphia to underpay the claim.

Asserting a claim against an insurance adjuster must be done properly if the goal is to keep the adjuster in the case.

Often times suing the insurance company for the acts of the adjuster is good enough to properly maintain a lawsuit.  Other times the adjuster needs to be brought into the lawsuit.  This is particularly important when the insured wishes to maintain the case in State Court rather than litigating the case in Federal Court.

One example of properly suing the adjuster was discussed in the 2020 opinion, Hill Country Villas Townhome Owners’ Association, Inc. v. Everest Indemnity Insurance Company, et al.  This opinion is from the Western District of Texas, San Antonio Division.

The courts interpretation of the new rules regarding suing an insurance adjuster need special attention.  This is illustrated in the 2019, opinion from the Northern District of Texas, Wichita Falls Division.  The case is styled, Barnes Burk Self Storage, LLC v. United Fire & Casualty Company and Traci McCormick.

Barnes sued United and McCormick in State Court for claims arising from a wind and hail storm.  McCormick is a Texas resident and her presence in the lawsuit defeats diversity jurisdiction.

On December 7, 2018, Barnes sued United and McCormick in state court for violations of Texas law relating to its insurance claim.  On January 25, 2019, United informed Barnes that it had assumed any liability McCormick would have to Barnes in the case.  On February 7, 2019, United removed the case to federal court, alleging that diversity existed between Barnes and United and that this Court should disregard McCormick’s citizenship due to United’s assumption of McCormick’s liability pursuant to Texas Insurance Code, Section 542A.006.  On May 23, 2019, this Court rejected this argument and remanded the case.

Claims for violations of the Texas Insurance Code must be stated properly against an insurance company adjuster.  One way of doing this is talked about in this Western District of Texas, San Antonio Division, opinion styled, Jeanette Kotzur, David Kotzur v. Metropolitan Lloyds Insurance Company of Texas, Bryant Tullous, Michael Esmay.

This case involves a claim for damages arising out of a wind and hailstorm that is alleged to have caused damages to property owned by the Kotzur’s.  Metropolitan is the insurance company and the adjusters were Tullous and Esmay.

The Kotzur’s sued Metropolitan and the adjusters in State Court.  Metropolitan removed the case to Federal Court asserting the amount in controversy exceeds $75,000, that the Kotzur’s are citizens of Texas and Metropolitan is a citizen of states other than Texas.  Metropolitan also asserts that the adjusters should be disregarded for citizenship purposes because the adjusters were improperly joined in the lawsuit in an effort to defeat diversity of citizenship.  Metropolitan asserts that the Kotzur’s have not properly asserted claims against the adjusters.  The Kotzur’s assert that they have properly asserted claims against the adjusters.

Here is a situation where a lawsuit to which Texas Insurance Code, Section 542.006 applies.  The remedy this Court applied to the case appears to be a distinction without a difference.

The case is a 2019, Southern District of Texas, Laredo Division, opinion.  The case is styled, Axel Brokers, Inc. v. United Fire & Casualty Company and David S. Walton.

This case concerns alleged liability for storm damage to a commercial building insured by United Fire.  Axel sued United Fire, the insurer, and Walton, the adjuster, for various violations of the Texas Insurance Code.

As stated before, the insurance companies prefer to litigate cases in Federal Court.  One of the ways to stay out of Federal Court when suing the adjuster for an insurance company is to clearly articulate the wrongs that the insurance adjuster committed.  This is illustrated in a 2019, opinion from the Northern District of Texas, Dallas Division.  The case is styled, David Williams v. Allstate Vehicle And Property Insurance Company.

Williams filed suit against Allstate and Allstate’s adjuster, Murray McKay, alleging that McKay violated various sections of the Texas Insurance Code when adjusting Williams claim for storm damage to his home.  Allstate removed the lawsuit to Federal Court pursuant to 28 U.S.C., Section 1441(b), alleging that McKay had been improperly joined in the lawsuit, thus, the requirements of diversity were satisfied.  Williams sought a remand to the State Court based on 28 U.S.C., Section 1447(c).

The Federal Court conducts a Rule 12(b)(6) type analysis to determine whether a plaintiff has failed to state a claim against a nondiverse defendant, in this case, the defendant being McKay.