Claims Denial And Suing The Insurance Adjuster

Claims denial attorneys usually see situations where a claim is denied and it was the adjuster who acted improperly in his handling of the claim.

Allegations that the adjuster acted improperly were alleged in this 2021, opinion from the Northern District of Texas, Dallas Division.  The opinion is styled, Beverly Oderbert v. State Farm Lloyds and Richard Kundee.

Oderbert had a plumbing issue wherein she made a claim against her home insurer, State Farm.  State Farm assigned as the adjuster, Kundee.

Oderbert ended up suing State Farm and Kundee in State Court for various violations of the Texas Insurance Code.  State Farm removed the case to Federal Court alleging that Kundee had been improperly joined in the lawsuit in an effort to defeat diversity jurisdiction.  This motion to remand followed.

There are two ways to establish improper joinder: (1) show actual fraud in the
pleading of jurisdictional facts, or (2) show the inability of the plaintiff to establish a cause of action against the non-diverse party in state court.
To do this, the court can either conduct a Rule 12(b)(6) analysis or, in its discretion, pierce the pleadings and
conduct a summary inquiry.

In this context, the federal pleading standard applies over state rules, and the  focus is on the validity of joinder, not the merits of the plaintiff’s case. A suit lacking in merit is not the same as a suit involving improper joinder.  Considering a motion to remand with regard to improper joinder, if the plaintiff has stated a claim to relief that is plausible on its face, more than a recitation of elements of an action, then remand of the action is proper.  Furthermore, if a party alleges fraud or mistake, that party must plead “the who, what, when, where, and how” of the events constituting fraud or mistake.

The Court only asks whether Oderbert pled enough facts to overcome the 12(b)(6) hurdle against Kundee.

The Court finds that Oderbert properly pled in line with what Duncan (Duncan v. Safeco Insurance Company of Indiana) outlines.  In Duncan, the plaintiff pled that the adjuster performed a substandard inspection and that both the insurer and adjuster “mishandled claims and caused further and additional damages.” Duncan also claimed both the insurer and adjuster “failed to conduct a full, fair, prompt, and reasonable investigation” of Duncan’s covered damages. And Duncan alleged specific violations of the Texas Insurance Code against the adjuster. Oderbert’s complaint follows Duncan’s guidance.  She pleads
that State Farm and Kundee:

(1) “falsely claimed that [Oderbert] never notified State Farm of any additional
damage nor gave State Farm the opportunity to inspect [her property].”

(2) “violated Section 541.051 of the Texas Insurance Code by making
statements misrepresenting the terms and/or benefits of [Oderbert’s

(3) “engaged, and continue to engage, in unfair claim settlement practices
prohibited by Section 541.060(a) of the Texas Insurance Code.”

4) “made materially false representations to [Oderbert] with the knowledge of
their falsity or with reckless disregard of the truth with the intention that
such representations be acted upon by [Oderbert] to her detriment.”

This level of specificity is sufficient to plausibly state a claim against Kundee.

Here, Oderbert claims fraud against both defendants.  Therefore, Rule 9(b) is
implicated.  State Farm cites a previous Northern District of Texas case as an
authority supporting dismissal of the motion to remand for failure to allege facts
constituting enough for a fraud claim. In that case, the court found that the adjuster was improperly joined because the plaintiff failed to allege facts for the “who, what, when, where, and how” of the claim against the adjuster.
But here, Oderbert alleged facts to back up her claims against Kundee.  For instance, Oderbert pled that Texas Restoration found additional damages to her property that Kundee did not observe or include in his inspection.  After reviewing the pleading, the Court finds that Oderbert pled the who, what, when, where, and how sufficiently to plead a fraud claim against Kundee, as required under Rule 9(b).

The motion to remand was granted.

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