Stating A Claim Against An Insurance Adjuster

Claims for violations of the Texas Insurance Code must be stated properly against an insurance company adjuster.  One way of doing this is talked about in this Western District of Texas, San Antonio Division, opinion styled, Jeanette Kotzur, David Kotzur v. Metropolitan Lloyds Insurance Company of Texas, Bryant Tullous, Michael Esmay.

This case involves a claim for damages arising out of a wind and hailstorm that is alleged to have caused damages to property owned by the Kotzur’s.  Metropolitan is the insurance company and the adjusters were Tullous and Esmay.

The Kotzur’s sued Metropolitan and the adjusters in State Court.  Metropolitan removed the case to Federal Court asserting the amount in controversy exceeds $75,000, that the Kotzur’s are citizens of Texas and Metropolitan is a citizen of states other than Texas.  Metropolitan also asserts that the adjusters should be disregarded for citizenship purposes because the adjusters were improperly joined in the lawsuit in an effort to defeat diversity of citizenship.  Metropolitan asserts that the Kotzur’s have not properly asserted claims against the adjusters.  The Kotzur’s assert that they have properly asserted claims against the adjusters.

The Federal district courts have jurisdiction under 28 U.S.C., Section 1332(a), when the parties are citizens of different states and where the amount in controversy exceeds $75,000.

When improper joinder is asserted, the asserting party bears the heavy burden of proving their case.  Courts in the Fifth Circuit apply a Rule 12(b)(6) type of analysis to determine whether there is a reasonable basis for recovery against the non-diverse defendants.

In evaluating a motion to remand, a court must resolve all factual allegations, all contested issues of substantive fact, and all ambiguities in the controlling state law in the plaintiff’s favor.  Stated another way, any doubt about the propriety of removal must be resolved in favor or remand.  The court’s evaluation is based on the pleading at the time of the petition for removal.

In their Original Petition, the Kotzur’s allege that the adjusters Tullous and Esmay violated the Texas Insurance Code, Sections 541.060 and 542.003(b)(5), and the Texas Administrative Code 21.203(5).  Texas law permits adjusters like Tullous and Esmay to be held individually liable for violations of Section 541.  For an adjuster to be held individually liable, the adjuster must have committed an act prohibited by the section, not just be connected to an insurance company’s denial of coverage.

The Kotzur’s allege that Tullous was assigned to adjust their claim and conducted an inspection of their property on February 1, 2019.  In doing so, the Kotzur’s allege Tullous “ignored covered damages to the property” and “conducted an outcome-oriented investigation in order to deny coverage.  The Kotzur’s allege that Tullous’ inspection formed the basis of Metropolitan’s February 5, 2019, denial of coverage letter which stated damage was the result of “wear and tear, aging, and deterioration of the shingles.”  The Kotzur’s allege Esmay conducted an inspection of their property on February 27, 2019 where he indicated to the Kotzur’s representative that there were covered damages by circling hail hits on the roof, that he marked what he believed to be hail related damages on their roof, and that he reported his findings to Metropolitan.  The Kotzur’s further allege that either Metropolitan ignored Esmay’s findings or that Esmay misrepresented to the Kotzur’s that there were covered damages to the property.  The Kotzur’s allege that Esmay presented information to Metropolitan that formed the basis of their second letter denying coverage to Plaintiffs.

Metropolitan asserts the above allegations are insufficient to establish a cause of action against the adjusters.   This court disagreed and the motion to remand was granted.