Here is a case involving a plumbing leak. What is a little unusual about this case is the insurance company is attempting to sue Texas Insurance Code, Section 542A.006(c), to have this case heard in Federal Court rather than the State Court in which the case was filed. The style of the case is James A. Macari, et al. v. Liberty Mutual Insurance Company, et al. The case is from the Southern District of Texas, Houston Division.
Liberty had issued a homeowners insurance policy to Macari. Macari experienced a plumbing leak and damage from the leak. Macari made a claim against the Liberty policy and Liberty assigned adjuster David Meaders to adjust the claim. The claim was denied and Macari sued Liberty and Meaders. This lawsuit was filed in State Court and then removed by Liberty to Federal Court.
After the lawsuit was filed, Liberty gave written notice pursuant to Chapter 542A of the Insurance Code assuming any liability Meaders might have to Macari.
Macari filed a Motion to Remand, arguing that the Court lacked subject matter jurisdiction because Macari and Meaders are citizens of Texas.
Pursuant to 28 U.S.C., Section 1441(a), any “civil action brought in a State court of which the district courts … have original jurisdiction, may be removed by the defendant ….” Pursuant to 28 U.S.C., Section 1332(a)(1), Federal district courts have original jurisdiction over lawsuits between citizens of different states where the matter in controversy exceeds $75,000.00, exclusive of interest and costs.
A lawsuit involving a non-diverse defendant may be removed if the non-diverse defendant is improperly joined. Joinder is improper if there is no reasonable basis for the district court to predict that the plaintiff might be able to recover against the non-diverse defendant in state court. In conducting improper joinder inquiries, the focus must remain on whether the non-diverse party was properly joined when joined.
Under the Texas Insurance Code, an insurer may “elect to accept whatever liability an agent might have to the claimant for the agent’s acts or omissions related to the claim by providing written notice to the claimant ” pursuant to Section 542A.006(a). Where the election is made after the lawsuit is filed, “the court shall dismiss the action against the agent with prejudice” pursuant to Section 542A.006(c).
Here, Liberty made its Section 542A election after the lawsuit was filed. As a result, Macari’s claims against Meaders were not barred by Section 542A.006 at the time he was joined in this suit. Liberty’s election, made after the lawsuit was filed, does not retroactively render Meaders an improperly joined party.
Macari’s Motion to Remand was Granted.