Insurance attorneys usually learn the hard way, the correct way to file lawsuits to stay out of Federal Court. Many times there is no way to stay out of Federal Court but when there is, it is usually to the client’s advantage to do so. A Southern District, McAllen Division opinion shows the wrong way. It is styled, Ada Carmona Elizondo v. Great Lakes Insurance SE.
This case arises out of a wind and hail storm damage to Ada’s property and the subsequent claim with Great Lakes. Dissatisfied with the adjustment and payment of the claim, Ada filed suit against Great Lakes in State Court and the adjuster Lopez. The case was removed to Federal Court. Lopez filed a motion to dismiss and Ada filed a motion to remand. Both motions concern whether Lopez is a proper party to the suit.
Under Federal Rule 15(a), a party may amend his pleadings once as a matter of course within 21 days after serving it, or if the pleading requires a responsive pleading, within 21 days after a responsive pleading is served. Thereafter, a party may amend only with written consent of the opposing party or by leave of the Court. Since Ada cannot amend as a matter of course and does not provide written consent of the defendants, Ada requires leave of Court to amend.
Ada’s response to Lopez’s motion to dismiss includes a request for leave to amend. Ada specifically requests leave if the Court finds her original petition “either (a) fails to meet the pleading sufficiency standards under the Federal Rules or (b) fails to state a claim upon which relief can be sought.” Since this request arises in response to a motion to dismiss a defendant for improper joinder, the request may be futile to grant because a complaint amended post-removal cannot divest a federal court of jurisdiction. Here, Ada has failed to attach a proposed amended complaint or even indicate what amendments she would make beyond “addressing any deficienties identified by this Court.” Thus, it appears to the Court that Ada seeks amendment to defeat diversity. The Court will first evaluate the complaint at the time of removal. If jurisdiction exists, the Court will not grant leave for the purpose of providing Ada an opportunity to destroy diversity jurisdiction.
Ada’s original petition alleges that Lopez violated Section 541 and 542 of the Texas Insurance Code, as well as one provision of the Texas Administrative Code.
Here, Ada fails to state any Texas Insurance Code claim in accordance with the federal pleading standards. Ada largely tracks the statutory language of each respective provision asserted, and insofar as this is the case, Ada’s allegations are conclusory and will be ignored because they are not entitled to the assumption of truth.
This Court then discussed each specific allegation and how they were insufficient. After doing so, the Court dismissed Lopez and denied the motion to remand.