Insurance Lawsuits Need To Be Specific

Lawsuits need to be specific when claiming what an insurance company, adjuster, or agent did that caused harm to their insured.  This is illustrated in an Eastern District opinion styled, Scott Jengemuhle and Ty Properties, LLC v. Acceptance Indemnity Insurance Company and Robert Saucier.

This case relates to an insurance claim for storm related damages to Plaintiffs’ business and property.  Plaintiffs file suit in State Court and Defendants removed the case to Federal Court.  Plaintiffs allege that Acceptance did not provide coverage sufficient to complete necessary repairs to the property.  Saucier is the adjuster assigned to the claim.  Acceptance asserts that Saucier was improperly joined in the lawsuit and thus, his joinder should be disregarded for purposes of diversity.  Plaintiff asserts that he has sufficiently alleged causes of action against Saucier to maintain the claim against him.

To establish fraud in joining a non-diverse defendant, the removing party must establish the plaintiffs’ inability to establish a cause of action against the non-diverse party in state court.  The Court must decide whether there is a reasonable basis for predicting that Plaintiffs might be able to establish liability on the pleaded claims in state court.

As explained by the 5th Circuit:

To determine such possibility of state court recovery, a court may analyze the sufficiency of a plaintiff’s pleading alone; or, in its discretion, pierce the pleadings and conduct a summary inquiry.  The focus is on plaintiff’s pleadings at the time of removal; post removal filings may be considered only to the extent they amplify or clarify facts alleged in the state court complaint, with new claims or theories of recovery disregarded.

Plaintiffs contend they have a possibility of recovery against Saucier under Texas law, and, thus, they are able to survive the Court’s 12(b)(6) type analysis to determine improper joinder.  Plaintiff’s only cause of action against Saucier is “Noncompliance with Texas Insurance Code: Unfair Settlement Practices.”  Plaintiffs assert that Saucier is individually liable for “multiple violations” of Texas Insurance Code, Section 541.060(a) “irrespective of the fact Saucier was acting on behalf of Acceptance.”

For an insurance adjuster to be held individually liable, they have to have committed some act that is prohibited by the section — not just connected to an insurance company’s denial of coverage.

There are no such allegations in this case.  Plaintiff’s only generally assert that Saucier was the adjuster and he was improperly trained and that he conducted a substandard inspection of Plaintiffs’ property.

There are no factual allegations of misconduct on the part of Saucier.  General allegations that Saucier’s investigation caused Plaintiff’s harm because it resulted in an undervaluation of the claims is not sufficient because there are no factual allegations of independent conduct on Saucier’s part, which cause harm to Plaintiff.

Here, Plaintiff alleges only boilerplate allegations against Saucier:

He was improperly trained and performed an outcome oriented and unreasonable investigation of Plaintiffs’ damages.  Saucier did not properly assess all damages caused by the storm and omitted covered damages from the report including the full extent of damage to the roof.  Saucier refused to fully compensate Plaintiffs for the full amount Plaintiffs are entitled under the Policy.  The outcome oriented investigation of Plaintiffs’ claim resulted in a biased evaluation of Plaintiffs’ damages to the Property and the estimated damages were severely underestimated.

Plaintiffs’ original petition makes the following factual allegations specific to Saucier:

  1.  He failed to conduct a reasonable inspection and investigation of Plaintiffs’ damages;
  2.  He stated that Plaintiffs’ damages were less severe that they in fact were;
  3.  He used their own statements about the non-severity of the damages as a basis for denying properly covered damages and/pr underpaying damages; and
  4.  He failed to provide an adequate explanation for the inadequate compensation Plaintiffs received.

The Court agrees that Plaintiffs’ allegations against Saucier have no basis in law or fact, and finds that Plaintiffs have no possibility of establishing a valid cause of action against Saucier.