Insurance lawyers need to be keeping up with the way courts are interpreting the new Texas Insurance Code, Section 542A. This is discussed in this 2021 opinion from the Northern District of Texas, Amarillo Division. The opinion is styled, Ashlee Green v. Allstate Vehicle and Property Insurance Co.
Here, Plaintiff had a property coverage policy with Allstate and alleges she suffered damage caused by a severe storm. The adjuster, Steven Buchert, found $4,005.17 of damages while Plaintiff seeks damages that totals to $46,472.15. A lawsuit was filed in State Court suing Allstate and Buchert for various violations of the Texas Insurance Code, Chapters 541 and 542.
Allstate filed its Written Notice of Election of Legal Responsibility for Agent pursuant to Section 542A.006, accepting liability for Buchert’s actions or omissions related to the case. The state court dismissed Buchert with prejudice and Allstate filed it’s notice of removal.
Plaintiff has filed a Motion to Remand. Normally, a case that was initially non-removable may only become removable by a voluntary act of the plaintiff, which is not the case here. Allstate counters that an exception to this rule arises when a defendant is improperly joined. The legal question is whether a dismissal of a non-diverse defendant by the post-filing operation of Section 542A can convert an undisputedly properly joined defendant at the time of filing into an improperly joined defendant for the purposes of removal and diversity jurisdiction.
Much ink has been spilled by the federal district courts in Texas in how to resolve this matter. The opinion can be read to see that discussion. The Court reviewed these opinions and agreed with those courts finding the voluntary-involuntary rule did not apply and granted the remand.
For insurance lawyers facing this situation dealing with Section 542A.006, this case does an excellent job articulating it’s decision.