Removal To Federal Court

Anytime an insurance company is sued from conduct arising from insurance policy and the investigation of a claim, the insurance company is going to seek to have the case heard in a federal court.  This is seen again in the 2018, opinion from the Western District of Texas, San Antonio Division, styled, Electro Grafix, Corp. D/B/A Aetna Sign Group, LTD., D/B/A Aetna Sign Company, Inc. v. Acadia Insurance Company, and Marlin Douglas Odermatt.

This is a lawsuit filed in State District Court arising out of claim for property damage wherein Acadia claims there was no damage or minimal damage to Aetna’s property.  Marlin was an engineer assigned to investigate the claim by Acadia.  Aetna claims Acadia has not accepted responsibility for the conduct of Marlin and thus Marlin is being sued in his individual capacity.

Acadia had the case removed to federal court and Aetna is filing this motion remand based on Marlin being improperly joined.

Aetna argues that Acadia did not properly remove the case because Acadia cannot show that Marlin consented to the removal as required by 28 U.S.C. Section 1446(b)(2)(A).

But as Acadia points out, consent of an improperly joined party is not necessary for removal to be procedurally proper.  If there is no need to obtain the consent of the improperly or fraudulently joined defendant, it follows that the defendant need not explain the absence of consent.  Thus, at this stage, the Court does not find removal to be defective.

Acadia states that on May 17, 2018, before Marlin was served with lawsuit, Acadia provided written notice that it accepted whatever liability Marlin might have to Aetna for Marlin’s acts or omissions related to the claim.

Under the Texas Insurance Code,  Section 542A.006, “if a claimant files an action to which this chapter applies against an agent and the insurer thereafter makes an election under Subsection (a) with respect to the agent, the court shall dismiss the action against the agent with prejudice.”
Given that the claim Aetna makes against Marlin will be dismissed under Section 542A.006, the Court finds that Acadia has met its burden to show that there is no reasonable basis to predict that Aetna might be able to recover against Marlin.  Accordingly, the Court finds that Marlin is improperly joined.  Thus, the other requirements for Federal Court jurisdiction being met, the motion for remand is denied.